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SMRT: Still no hati-kiri meh?

In Infrastructure, Political governance on 26/04/2016 at 3:07 pm

(Update at 4.30 am on 27 April: Came across a great comments on Facebook: When train services were disrupted in 2012, the Board said it hold the CEO and management responsible. A COI was subsequently called. Now trains break down ever so often plus the fact that two staff died on the job, What has the Board of SMRT got to say?

And this: Minister Khaw made a Facebook post about the 100 day achievement but has been oddly silent after the repeated breakdowns right after

But let’s be fair: maybe he realised that his previous “100 day” comment provoked Nemesis to punish him for his hubris. He didn’t want us to suffer because he talks cock.)

Let alone a deep bow of apology?

Mitsubishi Motors President Tetsuro Aikawa bows during a press conference on April 20, 2016 in Tokyo, Japan

(Japanese CEO of Mitsubishi Motors recently apologising for corporate misbehaviour )

Yesterday, when the SMRT reported what went wrong when two trainees died and where thetr was a massive failure of train services, I was reminded that the PAP administration talks the talk of about following Japanese values; while not walking the talk,

GCT was keen to stress Jap values so long as they didn’t apply to the PAP administration and Khaw only when they applied to the WP.

Where was GCT’s and Khaw’s Jap style of responsibility from the head of SGH and the senior official in MoH?

And why no bowing at SMRT?

Actually this is this the kind of Jap behaviour the PAP administration prefers? CEO takes cover.

But I’ll end on a constructive, nation-building note

Here’s something from the BBC on how to admit mistakes without admitting that one has personally made a mistake. PAP ministers and others should take note.

Going back further still, in 1961 John F Kennedy faced a news conference days after the failed CIA-sponsored invasion at the Bay of Pigs in Cuba.

Despite saying he had no more to add on the debacle beyond an initial statement, a reporter asked about conflicting information surrounding a “certain foreign policy situation”.

“There’s an old saying that victory has 100 fathers and defeat is an orphan,” Kennedy said in his reply.

That neither he nor his administration had anything more to say at the time was not to conceal responsibility, he said, because “I’m the responsible officer of the government”.
All in the wording.

Admitting fault is a political minefield. As political scientist Daniel W Drezner wrote in the Washington Post last year, it brings few benefits: an admission is unlikely to change critics’ minds and could damage supporters’ confidence.

While some commentators on the BBC website praised Mr Obama’s candour, others said he should have chosen the healthcare reforms as the focus of his contrition: something he instead picked as a highlight of his presidency.

And long before the 24-hour news cycle, presidents were careful when acknowledging faults.

In a 1876 report on his presidency, marred by political and financial scandals, Ulysses S Grant said “mistakes have been made, as all can see and I admit it”, according to Safire’s Political Dictionary.

Or in other words: “Mistakes have been made. But not necessarily by me.”

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2 of Temasek’s Fab 5 looking sickly?/ Meng Seng’s financial counterpart

In Energy, Financial competency, Temasek on 13/01/2016 at 5:14 am

In 2013, I recommended investing in Temasek’s Fab 5 for KS types. Last June I pointed out problems at two of them Keppel  and SembCorp Marine because of lower oil prices.

The rot continues as Bloomberg reports

The last time Singapore’s marine services industry was staring at what would eventually turn out to be an 18-year drought in demand for oil rigs, Mr Ronald Reagan was starting his second term as US President.

Jack-up rigs, used to drill for oil in shallow waters, saw orders evaporate between 1985 and 2003. As Macquarie notes, rampant overcapacity means such a prolonged slump could well occur again. That definitely would not be good news for the rig-building industry’s two Singaporean leaders – Keppel Corp and Sembcorp Marine.

After a decade-long boom, there were zero new orders globally for jack-up rigs last year. With oil prices swooning, and rigs’ daily rental rates having crashed to US$92,000 (S$132,000) from US$130,000 in 2014, there’s a risk that 70 per cent of Keppel and SembMarine’s order book might get cancelled, especially if the Petrobras bribery scandal in Brazil deepens, Macquarie analysts Somesh Kumar Agarwal and Justin Chiam wrote this week.

… rig-builders’ shares may have to give back much of the China-induced exuberance of the past decade. That could be quite painful for investors, including Temasek.
… owns a little less than half of SembMarine’s parent, Sembcorp Industries, and 21 per cent of Keppel, Bloomberg data shows. It can’t be feeling very chuffed about the 47 per cent slump in SembMarine over the past year, or Keppel’s 26 per cent slide.  

And there might be more trouble ahead. Since early 2004, the two stocks have returned about 300 per cent, thanks primarily to hefty dividends. Those might now start thinning out. According to analyst estimates compiled by Bloomberg, Keppel’s dividends will shrink by as much as 11 per cent over the next three years, compared with annualised growth of 3 per cent over the past three.

No orders coming in doesn’t augur well for shareholders, who will be far behind debtholders in getting paid, and the latter will have substantial claims. Oil- and gas- linked companies with outstanding Singdollar-denominated bonds have to refinance or repay some $625 million of notes this year, a further $390 million in 2017 and $700 million in 2018, Bloomberg-compiled data shows.

The other big risk comes from the duo’s Brazilian yards. Japanese shipbuilders like Mitsubishi Heavy are cutting their losses and exiting as the Petrobras saga drags on. 

Stock in Ensco, the London-based owner of shallow and deepwater rigs, has been hit after Petrobras said it was scrapping a contract in the US Gulf of Mexico because, it claims, Ensco knew about improper payments between a shipbuilder and a consultant when the drillship was constructed, a charge Ensco denies.

Analysts are being predictably slow in sounding the alert. Their median price estimate predicts a 25 per cent jump over the next year in Keppel shares, and a 15 per cent climb in SembMarine.

So far factual or fair comment. But I think the Indian FT* writing for Bloomberg is talking rubbish when he talks of Temasek selling out. Our rig-builders are market leaders, not has-beens like NOL And the oil sector is a cyclical sector, not a declining sector.

Were that triumph of hope over experience to prove elusive, what might Temasek do? It recently decided to sell shipping company Neptune Orient Lines to CMA CGM at $1.30 a share, after having paid as much as $2.80 in 2004 to acquire a part of its 67 per cent stake.

If the Macquarie analysts are right about Keppel and SembMarine eventually trading below book value, like South Korean yards do, then there may not be much point in Temasek’s hanging on to the rig-builders either.

http://www.bloomberg.com/gadfly/articles/2016-01-07/keppel-and-sembcorp-marine-may-bear-the-brunt-of-vanishing-demand

What strholders of SembCorp Marine should be concerned is that SembCorp privates Marine. About 15 yrs ago Keppel did that to FELS.

———

*He’s the analyst equivalent of Goh Meng Seng (three GEs, three different parties, and a declining share of the vote). This FT has in the same period worked for Bloomberg, MediaCorp, Reuters and now Bloomberg again. Oh and the last time this FT was working for Bloomberg, he and Bloomberg had to pay damages to one of the Lees, can’t remember which.

As Goh Meng Seng is an exemplar of the traditional oppo politican, this FT shows that T can stand for “Trash”.

 

The truth about consultants/ Can PwC be trusted?

In Corporate governance on 26/08/2014 at 4:18 am

“When bank executives pressure a consultant to whitewash a supposedly ‘objective’ report to regulators – and the consultant goes along with it – that can strike at the very heart of our system of prudential oversight.”
Benjamin M. Lawsky, New York State’s financial regulator, on a settlement deal with PricewaterhouseCoopers.

PwC was asked in June by Bank of Tokyo-Mitsubishi UFJ, part of Mitsubishi UFJ Financial Group Inc 2007 to review the bank’s dollar- clearing activity from April 1, 2006, to see whether any should have been blocked or reported under rules by the Treasury Department’s Office of Financial Asset Control.

PwC edited the report at the bank’s request “in ways that omitted or downplayed issues of material regulatory concern,” including cutting out English translations for instructions to strip references to “doing business with ‘enemy countries’ of the US,” according to the settlement. The Historical Transaction Review report was finished in June 2008 and filed to US regulators and became the “cornerstone” for the 2013 deal with Bank of Tokyo-Mitsubishi, according to the accord with PwC. The two partners responsible for supervising the review have retired from PwC.

Con persons not professionals.

Japan keeps Asean’s economies motoring along

In Indonesia, Japan, Private Equity, Vietnam on 27/07/2013 at 5:26 pm

Asean round-up

Gd summary from FT on Japan’s reemergence in region

China’s slowdown and the prospect of less easy US money have sent a chill through southeast Asia. Benchmark indices in Jakarta, Bangkok and Manila have lost almost half of the one-fifth gains they had made this year to mid-May. The real economy is weakening, too. Last week the Bank of Thailand cut its growth forecast below 5 per cent and recent comments from Bank Indonesia suggest it accepts growth will slip below 6 per cent. Hardly a disaster then, but nor is it what these countries or their followers are used to. Enter Japan and, crucially, its direct investment. In terms of trading with the region, Japan’s significance has slipped over the past decade as its economy stagnated, but at a shade over $200bn it commands the same share as China. Its FDI of $60bn into the region over that period, however, is 10-times greater than its giant neighbour, according to HSBC. Japan is either the largest or second-largest investor in each country.

 During the past two months, Japanese banks and insurers have spent almost $6bn buying stakes in their southeast Asian counterparts. More deals are expected as they try to escape a weak and ageing home market.

Background

Meiji Yasuda Life Insurance Co is expected to acquire a 15% stake in Thai Life Insurance Co. in what would be one of the biggest investments ever in Asia by a Japanese life insurer With the planned investment worth about ¥70 bn (US%700bn), Meiji Yasuda wants to make the major Thai insurer into an equity-method affiliate and dispatch executives, the sources said.

Like other Japanese insurers, Meiji Yasuda is looking to expand overseas earnings, especially in Asia, amid sluggish business at home due to the aging of society.

Sumitomo Life Insurance Co. has made a ¥28 bn investment in Vietnam’s top insurance group, while Dai-ichi Life Insurance Co. in June announced a ¥34.3 bn investment in Indonesia. Sumitimo which lost out to Yasuda is now looking to Indonesia where Bank Negara is looking to sell up to 40% of its life business for up to $800m, according to the FT.

Japanese banks have been active too. https://atans1.wordpress.com/?s=Mitsubishi

Cambodia’s growing

Low labour costs and Cambodia’s proximity to key markets such as China and other emerging economies in South East Asia are attractive to foreign investors.

And with wages in countries such as Thailand and China on the rise, Cambodia is likely to become even more attractive.

http://www.bbc.co.uk/news/business-23429693

Vietnam R private equity

http://blogs.reuters.com/breakingviews/2013/07/18/vietnam-is-back-in-the-game-for-buyout-firms/

Haze over, Indons start two-timing again

In Indonesia, Insurance on 20/07/2013 at 5:15 am

Asean round-up

Indonesia

This two-timing was predicted:

Despite Indonesia committing to ratify the regional pact on transboundary haze pollution by early next year, at the latest, and agreeing to share digitised concession maps with other governments, Singapore’s Minister for the Environment and Water Resources Vivian Balakrishnan left yesterday’s regional meeting on the haze problem “disappointed (but) not surprised”, in his own words …

Only two of the four outcomes that Singapore had sought were fully met after the four-hour meeting: Getting the participating countries — Singapore, Malaysia, Indonesia, Brunei and Thailand — to involve high-level officials from all relevant ministries and agencies from each country in the MSC process, and getting a commitment from Indonesia to ratify the ASEAN Transboundary Haze Pollution Agreement “expeditiously”.

Singapore was unable to get an agreement from Indonesia to renew their collaboration to reduce forest fires at Jambi and other provinces if possible, with Indonesia issuing a noncommittal response to offers of bilateral collaborations from Malaysia and Singapore.

While it welcomed the offers, Indonesia is “currently identifying the areas of cooperation which will maximise and bring mutual benefits for all parties concerned”, a press released issued after the meeting said.

Singapore had also hoped to get the participating countries to submit their concession maps and agree a date for the public launch of the ASEAN Sub-Regional Haze Monitoring System (HMS) platform to enable identification errant companies engaging in slash-and-burn practices.

Maps from the Indonesian govt are the only way S’pore can establish whether S’pore-based companies are telling the truth about where the fires are burning. If the accounts of the S’porean (mostly controlled by Indonesians) are taken at their face value, the fires are almost always anywhere except on their land. Note that despite the allegations by Indon officials that S’pore companies started fires , only one co, a M’sian co,has been charged.

Related post: https://atans1.wordpress.com/2013/06/26/why-plan-suffocate-sporeans-failed/

Thailand/ Insurance

Meiji Yasuda Life Insurance Co is expected to acquire a 15% stake in Thai Life Insurance Co. in what would be one of the biggest investments ever in Asia by a Japanese life insurer With the planned investment worth about ¥70 bn (US%700bn), Meiji Yasuda wants to make the major Thai insurer into an equity-method affiliate and dispatch executives, the sources said.

Like other Japanese insurers, Meiji Yasuda is looking to expand overseas earnings, especially in Asia, amid sluggish business at home due to the aging of society.

Sumitomo Life Insurance Co. has made a ¥28 bn investment in Vietnam’s top insurance group, while Dai-ichi Life Insurance Co. in June announced a ¥34.3 bn investment in Indonesia.

Sumitimo which lost out to Yasuda is now looking to Indonesia where Bank Negara is looking to sell up to 40% of its life business for up to $800m, according to the FT.

Japanese banks have been active too. https://atans1.wordpress.com/?s=Mitsubishi

Asean round-up

In Uncategorized on 06/07/2013 at 6:42 am

Japan’s Mitsubishi UFJ Financial Group (MUFG) is planning to buy a controlling stake in Thailand’s Bank of Ayudhya.Japan’s biggest lender has agreed to buy a 75% stake in the Thai bank for up to US$5.6bn.

If the deal goes through (Thai regulatory approval is needed) it would be the biggest purchase in South East Asia by a Japanese bank. The deal would also see General Electric end its investment in Ayudhya, which goes back to 2007 when it bought a 33% stake in the bank.

Attracted by bright growth prospects (more lending to its corporate clients expanding into the region, and tapping the retail market of the new middle class), Japanese financial firms have been expanding in South East Asia.In May, Sumitomo Mitsui Financial Group’s bought a US$1.5bn stake in Indonesia’s Bank Tabungan Pensiunan Nasional.

China’s Asean infrastructure fund

http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid=617206358-18071-7059834598

 

Asean round-up

In Airlines, Banks, India, Indonesia on 09/03/2013 at 7:09 am

The Mitsubishi UFJ Financial Group “is among banks considering a purchase of TPG Capital’s $1.6 billion stake in Indonesia’s PT Bank Tabungan Pensiunan Nasional, two people with knowledge of the matter said,” Bloomberg News reports.

A bid by Malaysian low-cost carrier, AirAsia, to set up an airline in India has won approval from the Indian government.

It would be the first foreign company to try to capture the rising demand in India’s aviation sector.

AirAsia India would be a joint venture with the well-known Tata Group, based in Chennai in South India.

India’s aviation industry, which has suffered major losses, was opened to foreign investment last year.

The government now allows foreign companies to own up to 49% of a local airline.

AirAsia, which is Asia’s largest low-cost carrier, will make an initial investment of 800m rupees ($15m; £10m) and will own 49% of the new airline, while Tata Sons will have a 30% stake. Part of BBC report

Jappo banks step up presence in ASEAN region

In Banks, Japan, Vietnam on 29/12/2012 at 10:09 am

This week:

— Mitsubishi UFJ (MUFJ), Japan’s biggest bank, bought a 20%  stake worth US$743m  in state-owned VietinBank, the largest-ever merger or acquisition deal in Vietnam’s banking sector. The deal aims to boost “support for Japanese companies operating in Vietnam”, Bank of Tokyo-Mitsubishi UFJ president Nobuyuki Hirano said, and to tap South-east Asian markets; after seeing its profits tumble this year, like other Jappo banks.

The Japanese bank last month reported profit in the six months to September dived 58 per cent year on year to US$3.6 billion, due partly to declines in stock holdings.

VietinBank, or Vietnam Joint Stock Commercial Bank for Industry and Trade, said State Bank of Vietnam will still own the majority of its shares. For the record, it is Vietnam’s second largest bank by asseys.

— SMFG said it plans to expand its consumer finance business to target the growing middle classes in South-east Asia.

The new Greater East Asia Co-Prosperity Sphere?

BANZAI!

No ASEAN round-up this hols week.

Around Asean: recent financial news

In Indonesia, Malaysia on 14/10/2012 at 6:51 am

Shares in the London-listed Indonesian coal miner Bumi rise sharply for a second day after a proposal from Indonesia’s powerful Bakrie family to split from the firm. The dynastic Indonesian Bakrie family has proposed a split from Bumi that they helped to create with the British financier Nathaniel Rothschild. Wonder what the guy who bot at 11 thinks?

A.I.A. to pay US$1.7bn for ING’s Malaysia business. A.I.A. said the acquisition will catapult it to the No. 1 position in Malaysia’s lucrative life insurance market. For the Dutch insurer ING, it is the first major deal in its plan to divest its Asian assets.

The founders of Malaysia’s AirAsia, Tony Fernandes and Kamarudin Meranun, are set to launch three IPOs in 2013 worth more than US$500 million (S$614 million).

Tune Group, a financial services-to-discount hotel conglomerate owned by Fernandes and Kamarudin, is expected to launch US$65 million IPO of its insurance arm, Tune Insurance, not later than the first quarter of 2013, according to two sources with direct knowledge of the deal.

Meanwhile, AirAsia’s long-haul arm, AirAsia X, recently hired CIMB, Malayan Banking Bhd and Credit Suisse Group for a US$250 million IPO expected early next year.

The group is looking to list its Indonesia operations, Indonesia AirAsia, by the first quarter of next year in a deal that could raise up to US$200 million.

The listing plans also come at a time when Fernandes is stepping down as the chief executive officer of the Malaysian-listed airline to focus on regional growth through Indonesia. The group’s plan to buy up to 100 Airbus jets, potentially worth about US$9 billion, is designed to fuel the growth of what is becoming a cluster of related airlines under Fernandes, who placed a record order for Airbus jets last year.

With an operating fleet of more than 116 aircraft, AirAsia has ordered a total of 375 Airbus jets as part of dramatic expansion plans that include the acquisition of Indonesia’s Batavia Air.

DBS Group, South-east Asia’s largest lender, is selling more than half of its 20.3% stake in The Bank of Philippine Islands (BPI) to conglomerate Ayala Corp for 25.6 billion pesos (S$757.3 million). “With the divestment of a 10.4 per cent interest in BPI, DBS will hold an aggregate 9.9 per cent investment in the bank. DBS will continue to have representation on the BPI board.”.

DBS, which has been a strategic investor in BPI since 1999, would realise a gain of about S$450m against the carrying value of the investment.

Ayala is the biggest shareholder in BPI, the Philippines’ largest bank by market capitalisation.

DBS is selling the stake at a time when the Philippines stock market is among the best performing markets in South-east Asia. The Philippines main index has gained some 23% this year, with BPI 42%.

Nice little profit in a rising market. Can’t blame DBS for not trusting the bullishness that the Philippines has got its act together finally.  It’s cyclical, juz like another peace treaty signed with Muslim rebels in the South.

Japan intends to start lending Burma money aiming to help transform Burma into a production and investment hub to rival Vietnam.  “Japan’s big trading companies are at the forefront of the investment effort. Mitsubishi, Marubeni and Sumitomo have signed an agreement with the Myanmar government to develop the initial phase of Thilawa, a 2,400-hectare site close to the southern port of Yangon, which will feature housing, commercial space and an industrial park,” reports FT