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Sunday, January 22, 2006

Celebrating Chinese New Year.

Please be informed that there will be no posting for the next two weeks in preparation and celebrating Chinese New Year. I hereby wish all my chinese reader and those who celebrate chinese New Year have a:

Happy and prosperous Chinese New Year

Malaysia Blogsites List

10 Days Course : Guide To Trading With Discipline & Confidence (Advertorial)


Friday, January 20, 2006

Rumour on Digi & Telenor investment

DiGi shares price increase almost 5 sen per day since the beginning of the year. However, it's shares price on a decreasing trend at the end of last week and has been stagnant for the past few days.

Last few days, some of my reader has post comment on my blog to inform that there is a rumour in the market saying that DiGi minght not get the 3G license. Consumer in Malaysia will lose out if 3G license never grant to DiGi. The biggest beneficiary would be Government Link Company Celcom as it is less competitive compare to the other two telco.

Oriental Daily reported today that Energy, Water and Telecommunication Ministry want to standardize all telephone charges among the 3 telco. This mean consumer would not get the benefit of the price war rate they currently enjoy now. Again, the biggest loser is consumer and the biggest beneficiary is government control celcom. I feel government should let the market and each respective company to determine the price. Let the "invisible hand" to do the job rather than interference by the government.

Today, The Edge Daily reported that Telenor ASA, holding company of Digi Berhad announced that the company would invest RM45 million over the next three years to develop research and innovation (R&I) facility in Cyberjaya, the first outside Norway. This might be the reaction of Telenor against the rumour of DiGi not getting the 3G License. With so much money invest in cyberjaya. Would government reject the 3G license DiGi apply for?

It would be foolish for government to turn away such FDI in Multimedia Supercorridor (MSC)


Wednesday, January 18, 2006

South Korea, Singapore, Hong Kong and Malaysia

I come across an article written by a journalist with The Edge FinancialDaily Kevin Tan title: Shopping for growth model published on The Sun dated 7 January 2006. Kevin Tan was commenting a blog post by Jeff Ooi.

The debate : Does South Korea really offer a better model of development for Malaysia than our neighboring Singapore.

Jeff Ooi is correct by pointing out that South Korea has relatively a vast population, while Singapore is a tiny red dot.

Thus, I feel it is difficult to compare South Korea with Singapore.

Comparison with Singapore : Hong Kong

People used to compare Singapore & Hong Kong. They have similar population and size and both are financial centre and their port is shipping hub in world trade.

Malaysia benchmark against Singapore?

Although constantly denied by the authority. I feel Jeff Ooi is correct that Malaysia government is benchmark against Singapore in term of government policy.

1) Merger of Bank

Singapore government has merge it country bank into 4 bank to ease control. It would be more easy for central bank to monitor 4 banks than say 20 banks. Thus, more easy work for central bank audit team. Similary, Malaysia has merge it bank to 10 anchor bank few years ago.

Hong Kong, however, is a free market. It never dictate how many bank the territory is needed. audit team do not have difficulties monitor the banking industry.

2) Dominate by Government Link Company (GLC)

Singapore Stock Exchange is dominance by GLC like Singapore Airline (SIA) and Singapore Telecom (SingTel). Malaysia, after Asia financial crisis, has change it policy from nurturing bumiputra entrepreneur to become operate as GLC. Like Renong Group, now UEM World and others.

Whereas Hong Kong do not lack of entrepreneurs like Li Ka-Shin etc.

Both of the above policy has cause the diminish of bumiputra entrepreneur. Whereas GLC has been excluded in calculating bumiputra ownership under New Economic Policy (NEP). The cause bumiputra unable to meet the 30% ownership under NEP objective. In fact, bumiputra might control more than 50% of Malaysia economy if GLC is classified as bumiputra.

Under government merger policy. All Express Bus company run by individual bumiputra has been merge to become a company call Konsortium Express Bus (KEBS). All mini bus license has been take back and give to one company call Intrakota. All Teksi license has been take back and issue to few teksi company.

In fact, transport business is less competitive business and it is an easy business to nurture entrepreneur especially bumiputra entrepreneur. By merging all entrepreneur under one company. It look like Malaysia has shift from Hong Kong policy to follow Singapore policy. Then how government going to nurture bumiputra entrepreneur to achieved NEP target.

Really, I don't understand why it call Ministry of entrepreneur Development as it never develop entrepreneur at all. It should call it old name: Public Enterprise Ministry!

I feel government need not re-implement New Economic Policy. Government can just change it policy by following Singapore policy to become a Hong Kong free entrepreneur policy.

In private sector, we do not lack entrepreneur that similar to South Korea entrepreneur. Robert Kwok, Malaysia Sugar King same with Samsung founder start with Sugar refinery. But Samsung invest the profit from sugar into manufacturing like electronic whereas Malaysia's Robert Kwok invest in Hotel industry.

Similarly, if you read Genting's founder Tan Sri Lim Goh Tong Biography, you would find he is like Hyundai founder who like to work in contruction site. Hyundai, like Samsung, invest their money in manufacuring, to be specific, automobile manufacturing. Whereas Genting group focus on hotel and casino again.

It is sad that Malaysia entrepreneur like invest in leisure industry. If they venture in manufacturing industry like their South Korea counterpart. Malaysia might have Chaebols as large as South Korea.

Related read : Benchmarking of Asia Country

Next : Samsung of Malaysia
Hyundai of Malaysia


Tuesday, January 17, 2006

The battle between Thailand Prime Minister & media tycoon

Thailand Prime Minister Thaksin Shinawatra face anti-government rally on Saturday demanding his resignation. The rally was lead by media tycoon Sondhi Limthongkul. Both Thaksin and Sondhi are chinese decent.

Media tycoon Sondhi Limthongkul come to limelight when he launch a pan-Asian newspaper Asia Times in 1995 to rival Asia Wall Street Journal. He claim that Asia Wall Street Journal published western view point and Asia required it own paper to published Asia view point. His definition of Asia: excluding Japan and Korea, more narrow than Malaysia ex-Prime Minister Tun Mahathir definition of Asia which only excluding Australia and New Zealand. Asia Times went down in flames when the financial crisis erupted in 1997. One of Sondhi Limthougkul's monthly magazine Asia Inc has been taken over and run by by Malaysia's The Edge.

Sondhi Limthougkul said he only seeking freedom of speech so that newspaper control by him able to published news on abusing power, cronyism and corruption. But the reaction of Thanksin's government has force him to battle with the government to protect his own interest.

Thanksin has withdraw a legal action against Sondhi's newspaper under the advise of King.

Nanyang Siang Pao on 16 Jan 2006 commented that the battle is a conflict of business interest between family of Thanksin and Sondhi. Nanyang further commented that Thanksin ruling party won more than 80% of the parliament seat during election held on February last year make him the only Prime Minister to have two term in office in history of Thailand. Thus, Sondhi organized rally, despite reasonable, difficult to stand on legal ground.

Today's Nanyang reported that teacher in Thailand has joint the rally to protest the Prime Minister.

Update: Thai PM defends record after five years in power


Monday, January 16, 2006

Republished of Dr Ng Seng's letter

I come across a blog post that republished the letter of Dr Ng Seng (Dr Unsuccessful) with the title : PLEASE READ dated 26 December 2006. I get some click link from that blog which mean it is active recent post.


Sunday, January 15, 2006

Healthy cash flow company listed on Mesdaq

A senior manager of corporate finance department in Horwath (Chartered Accountant), Miss Teh Su-Ching published an article on current issue of The Edge this week.

She analyze company listed on Malaysian Exchange of Securities Dealing and Automated Quotation Market ( Mesdaq ) using cash flow rather then profit. She laud the Singapore Exchange in it listing guildlines say, inter alia," The group must be in a healthy financial position, having regard to whether the group has a positive cash flow from operating activities?"

She view that our Malaysia listing guidlines are profit-driven although there is a reference to "sufficient level of working capital at the point of listing." which she feel is quite easy to meet since the main consequence os listing is often a healthy bank balance (Other than some recent listings that only RM3million gross proceeds)

Only half of the company that reported profit has positive cash flow (net of research and development expenses), of which, only three(3) companies had receivable days of less than 100.

The three company is:

Online One RM249,000 ( 6 months )
I-Power RM728,000
Kannaltec RM1,077,000

Online One (ERP)come in to limelight when the company on 31 August 2005 announced that it would acquire FTEC (a Make in Malaysia's PC brand ) and CBS technology Bhd(e-security).

Kannaltec, is a container service company or a logistic company for me rather than a software company as describe by Teh Su-Ching. If your company dealing with import/export and container in Malaysia. You probably heard of Kannaltec before. The company CEO is an ex-Financial Controller of North Port. The company is planning to duplicated it success in the regional country.

I-Power, which claim it client included e-Genting Sdn Bhd (first client), Amway (Second) and now we have a portfolio of established clients.

I-Power is working on three new products at present: the I-Power ePos, eFinancial, and a data-mining engine based on artificial intelligence.

The company was in the process of doing a parallel run of its ePos, a point-of-sale solution for Esthetics and had already implemented the eFinancial, an accounting solution, for Ni Hsin while the data mining engine solution was still being developed.

I-Power other client included Sony (M) Sdn Bhd, Sdn Bhd and Teledynamics (M) Sdn Bhd.


Friday, January 13, 2006

Food for knowledge economy

In Asia, people usually eat rice, which is food for agriculture economy. Rice provided energy for people to work in farm. When Asia countries like Malaysia transform from agriculture economy to industrial economy. Rice as a major food still suitable for blue collar worker.

However, when we transfer from industrial economy to knowledge economy. Does rice, which provide energy rather than brain power still suitable for us?

I remember when I was a child. I read an article written by a Nanyang Siang Pao's correspondent in United State Mr Leong. He mentioned than he only able to read an English book per week whereas his friend in American,who is a professor in an US's University able to read a similar thick book within a day.Mr Leong told the professor that may be he is not English educated and English is his second language and this cause him takes more time to digest an English book than the professor.

The professor told him that this is because of food. He eat rice, which provide energy that do not required by white collar worker but unable to provide nutrition to brain. Professor advise him to try to eat western food instead and see what is the outcome.

Mr Leong feel that there is no harm trying. He eat western food like "set lunch" and "set dinner" provide by western restaurant in US. Which is much cheaper than western food in Asia country like Malaysia.Mr Leong also eat western breakfast like half broil egg.

After one week of eating western food. Guess what? He able to read and finished an English book within one day, as fast as the professor which English language is his first language.

At that point of time. Fast food like MacDonald is not that popular like now in Malaysia. Thus, western food does not mean fast food. Mr Leong has pass away but he has published a set of books, which is a collection of all articles publish in his column in Nanyang over the years. However, his book is selling fast and I unable to find such particular article again on book available in bookstore.

I rarely find his book in bookstore now a days. May be all near to sold out.

I think Malaysian and Asia country might want to change their eating habit if want to success in knowledge economy.

Update: Global Voice Online


Monday, January 09, 2006

Bumiputra CEO and continuity of GLC

In 26 June 2004, Finance Minister II Nor Mohamad Yakcop said that there were enough highly qualified bumiputras with the right credentials to join the senior ranks of non-bumiputra-controlled private sector companies or even as CEOs.

"The private sector, like the Government-Linked Companies (GLCs), must get the best and the brightest personnel to join them, and there are many bumiputras who fit this description," he said.

However, over the years, GLC has removed more bumiputra CEO that cause continuity problem of strategy in Government Link Company (GLC).

First, in June 2004 itself, Kumpulan Guthrie Bhd's former chief executive Tan Sri Abdul Khalid Ibrahim has failed to get re-elected to the board of the plantation group, which he has been associated with over the last 23 years.

Tan Sri Ibrahim left PNB in 1994 to lead Guthrie after the former granted him an option to buy up to 20% stake in the plantation group for RM3 a share. He is the person who help Kumpulan Gutherie to gain control of large plantation land in Indonesia.

He has taken Permodalan Nasional Bhd (PNB) and Bank Islam Malaysia Bhd, Labuan (BIMB) to court, claiming he had been denied the right to buy the remaining 135 million Guthrie shares.

Market rumours said that Tan Sri Abdul Khalid ousted because he disagree with the the merger plan, not because he is incompetent. Howeve although Golden Hope Plantation Bhd and I&P has merge their plantation and property group respectively. The merger did not involve Kumpulan Gutherie after 2 years the CEO has been ousted.

Second is MAS managing director Datuk Ahmad Fuaad Dahlan. His, resignation, which announced simultaneously with the report of first quarter losses.

Yet, year end issue of The Edge quoted " to blame Fuaad solely for the airline's trouble is terribly unfair. Malaysia Airlines' failure is a result of adultering what was meant to be a private company with social and political agendas. And that is collectively the fault of its owners and manager."

Third , Most controversial one is Proton Holdings Bhd's chief executive officer Tengku Tan Sri Mahaleel Tengku Ariff contract not renew. His departure lead to Proton disposed off MV Agusta at nominal value of only one Euro which Mahaleel acquired at 70 million Euro (RM315 million). His departure cause no continuity of his strategy to revive MV Agusta claim by open letter by Mahathir and Mahaleel.

I do not feel that constant removal of bumiputra CEO at GLC is the right strategy as it cause discontinuity of strategy. Especially the reason of removal is not incompetent. But merely have disagreement with certain people.

I agree with the view point of "letter to Editor" published by The Star dated 10 Jan 2006 that the GLC should have good succession planning practice by multi-national corporations like General Electric.


Fair Value Accounting and Proton disposal of MV Agusta at one Euro

Malaysia's national car manufacturer Proton has bought a motorcycle manufacturer at 70 million Euro (RM315 million). Under the newly implemented Fair Value Accounting. The investment have RM Nil fair value and thus, Proton has write off the investment at the last quarter result.

I do not feel a motorcycle manufacturer has a synergy with car manufacturer. Thus, I do not agree Proton purchase of MV Agusta in the first place. ( The money can be used to acquire a business that have synergy like Mitsubishi)

Advantages or disadvantages of Fair Value Accounting

However, by disposing MV Agusta at nominal sum of one Euro. It appear that the company has taken the easy way out without explore the brand value of the company as claim by open letter by Mahathir and Mahaleel.

Fair Value Accounting might be good to financial market. As Proton shares prices increase after the announcement of the disposal.

However, Fair Value Accounting also fail to reflect a Loss on Disposal of Investment amounting to more than RM315 to RM500 million by the company. Which the old Accounting Standard do.

Under Fair Value Accounting, such loss only reflected on Management Account if the management keep one. I doubt the Proton management keep a management Accounts. Even if they do, Management Accounts do not have a Standard like financial accounts.

The open letter stated that the debt would not realize in 3 years. However, the management choose not to make used of the 3 years to maximize the disposal price of MV Agusta.

Clearly, Fair Value Accounting promote shortermism. It emphasis on short term result of the company rather than long term plan of the company in performance measurement and decision making.

Fair Value Accounting Vs Inflation Accounting

During 1970 when inflation rate was high cause by high petroleum price. Accounting fraternity has introduce a Standard base on what they call Inflation Accounting to reflect the drop in purchase power. However, few people in accounting profession really understand the figure, not to mention layman on the street. It is an Accounting Standard but few company follow and prepare another set of Inflation Accounting.

Would Fair Value Accounting has the same fate of Inflation Acounting is yet to be tested

Too earlier of harmonization

Fair Value Accounting is new even on international basis. We have not seen the impact, precedence, weakness of such accounting standard implemented in other country. Are we too early to jump into the bandwagon?


Sunday, January 08, 2006

I was outstation

I was outstation on Tuesday and Wednesday. Thus, less posting for this week. My finding on my outstation trip has been posted on my another blog Beauty Biotech. Read my posting here


Friday, January 06, 2006

Bumiputra at SJK(C) Sin Chung in Kepala Batas, Pulau Pinang

With the Chinese language become more and more important as a required skill to obtain job opportunity in Malaysia.

We do not lack of bumiputra study in "Sekolah Jenis Kebangsaan" to improve their competitiveness.

With the government policy not to construct new chinese school. Chinese have to compete with non chinese to obtain a place to study in Sekolah Jenis Kebangsaan.

Yet, a developer obtain a court order to demolish one of the limited available Sekolah Jenis Kebangsaan.

A lot of pupil are crying when their school is being demolish. Including bumiputra pupils, Mohd Nazran Yahya, Mohamad Faizal Jamil and their mother Rosnah Said.

Government please protect a "non-Wawasan School" that promote national unity!

Update : Developer ordered to stop earthworks around school

Oriental Daily reported on 7 January 2005 that the school has 46 pupils, of which 18 is bumiputra

Related link :


Thursday, January 05, 2006

Outsourcing Vs Partnership

When a freelancer want to scale a business. Usually they opt for partnership like a lawyer firm or some accounting firm. This is a western style of scaling a business. For accounting firm, They have grow into Big 4 international accounting firm.

However, for chinese or asia culture. This always doesn't work.

Indian community like to do small business. They operate their own newspaper retail outlet, a Money changer, a mamak stall, or which we call "Kacang Putih" business. Such small business approach resulted a statistic showing they control less than 3% of Malaysia's economy. Which I feel is not true.

Chinese in Malaysia, Hong Kong and Taiwan (not Singapore) are more entrepreneur. Their partnership is less successful than outsoucing.

I heard a story from Hong Kong:

Two of a long term friend form a partnership. One partner is good at marketing and like to deal with people. The other is good at production. As they complement each other skill. Business has prosper. Then, relationship between partner turn sour when they have dispute over remuneration of partners. Later, the situation become worst when one partner hire a relative of him under to work in the partnership, without the consent of the other. They have dispute over the staff salary as well. Eventually, they have a great fight and they agreed to cease the partnership and operate on their own.

Business turn bad after that. The one who is good at marketing unable to hire a good production staff. Thus, the quality of the work was not as good as before. This has turn customer away. Whereas the other who is skillful in production unable to get enough business as marketing is not his strength. He might be not have the contact or unable to negotiate the best price or unable to provide the good customer service as before. Business turn bad and their separation is prove to be a lose-lose situation.

However, as both of them has bad experience with each other. It is unlikely they become partner again as they have dispute on hiring and numerous other matter.

One of the partner happen to know a amateur business consultant and he seek his advice. The amateur consultant advice them to work together, but not in partnership nor in same company.

They operate under two company. Which they can hire their own staff and control their own expenses. However, they operate as a separate independent business entity. They can work in the same office or have their office next to each other.

One company with good marketing skill get the business. Then they outsource the work to another company at an agreed price. The other company concentrate on production and quality control.

Initially, the partner sceptical about the suggestion. But when he approach the other partner who has quarrel with him before. The other partner was just figuring how to solve the problem of declining sales. He immediately agree to cooperation again.

After few months of operation. Business has prosper again.

This indicate that sometime, outsoucing is better than partnership.

But how to scale the business?

Then you have to read Robert T. Kiyosaki's "Rich Dad, Poor dad" Series. You have to read "Before you quit your job" first. Then, if you want more indept advise. You have to add "The ABC of Building Business Team that Win"

Update: In Taiwan, outsourcing and small business approach has turn the country into on of the largest business cluster in personal computer industry which able to overtake South Korea giant like Samsung LG and Hyundai

Link : Ehlite


Who heard Satsun before in Sarawak?

I like to enquire who has heard of Satsun Herbal Medicated Oil before?

The product was manufacture by CHS Medical (M) Sdn Bhd and they claim the product has been in the market for well over 48 years, primarily in the Borneo states especially Sarawak and with recent expansion the product also can be found in Brunei, Sabah, Singapore and Hong Kong.

They claim the reason the said oil is relatively unknown in the west Malaysian states was due to the fact that in the past the production, which was a “back yard” type operation, was small. Whatever that was produced was all taken by the Borneo States, leaving little or no surplus for sales to the west Malaysian states.

Is it true?

Those who have info on such product. Please email to me or post a comment on my blog.

Your feedback is much appreciated.


Monday, January 02, 2006

Loser in Malaysia stock market in year 2005

1. Datuk Chin Chan Leong, Fountain View Development Bhd

Fountain View Development shares prices fell from RM5 to 40 sen in the space of three weeks, wiping out RM1.8billion in value and triggering mild panic amongst investors, stockbrokers and banks. The fall of shares price has affected the business of Bukit Cerakah project of the company. His case with Securities Commission is pending.

2 Tan Sri Datuk Lau Ban Tin

Tan Sri Datuk Lau Ban Tin is a property developer in Klang and Shah Alam. He has acquired two Sarawak base company BIG Industries Bhd and Ngiu Kee Corp (M) Bhd.

Both BIG and Ngiu Kee shares price hit limit down after Fountain View incident above.

Tan Sri Lau Ban Tin theaten to sue the bank of withdrawer of facilities but no news after that.

Being a property developer and control an industrial gas company. This is just like the beginning of IOI group where IOI was a industry gas company at one point of time. The limit down and force selling definitely put his ambitious to become another IOI group on hold.

3 Tan Sri Chan Ah Chye, Talam

Tan Sri Chan Ah Chye of Talam Group, is still in negotiation to disposed of part of his shares in Kumpulan Europlus Berhad to IJM Group. However, his private company Intelbest Sdn Bhd is still recruiting staff agressively since the first half of 2005! Thus, I feel is still too early to write him off.

4. Teoh brothers of Kumpulan Emas

Teoh brothers, who started from Summit Square project in Selayang has control a few company under Kumpulan Emas Group. Plaza Summit in Subang and South City Plaza in Seri Kembangan are the group properties. Kumpulan Emas has an 11.28% stake in property developer Meda Inc Bhd and a 23% stake in SEGi. In June, the group disposed of its 32.48% stake in water engineering firm Salcon Engineering Bhd. Salcon is considered as one of the group's best asset.

On Nov 11, Datuk Hii Chii Kok, the chief executive officer of SEG International Bhd (SEGi), announced that as at Nov 8, he owned 32.85 million Kumpulan Emas shares, or a 5.05% stake.

On Dec 23 2005, Kumpulan Emas Bhd shareholders will vote at an annual general meeting on a proposal to rename the company EcoFirst Consolidated Bhd.

5. Datuk Johari Abdul Ghani,
Ex-Managing Director,
KFC Holdings and QSR Brands

Datuk Johari Absul Ghani, depite losing control of fast food KFC Holdings Bhd which hold Kentucky chicken franchise in Malaysia, still control CI Holding Bhd. Which hold pepsi franchise in Malaysia.

Update: Finanicial Planning Malaysia