Unico Holdings Bhd

UHB was formed in 1984 under the auspices of the Associated Chinese Chamber of Commerce and Industry of Malaysia. Its purpose was to pool the resources of the Chinese community for investment in the country. It was supposed to be run by reputable and experienced businessmen for the benefit of the 22,000 shareholders.

It has been 23 years since its formation. There has not been much success in its investments. The only successful venture is Unico-Desa Plantations Bhd. When UDPB went public, UHB shareholders were alloted some shares. Other than the above reward, UHB shareholders have not got much returns on their investment. There is only a paltry dividend of about 5% annually to speak of.

You wonder if the directors of the company really have the interest of the shareholders at heart. They are all successful business people. Why are they not able to make a success of UHB? Are they making use of their position in UHB to advance their own interest?

Now, there is a proposal to distribute the values in UDPB to shareholders of UHB. I think it is about time. However, the people involved cannot agree on how it should be done. Law suits have even been filed against some people for slander.

I think what is of upmost importance is the well being of the shareholders. They should be rewarded the maximum possible. Directors should not be selfish and greedy. Execute the matter amicably and expeditiously. Forget about the law suits. Otherwise, this issue may make the Chinese community the laughing stock again.

Auditor-General's report

The 2005 Auditor-General's report revealed massive abuse of fiduciary authority by the civil service officials. Items were purchased at up to ten times the market price. This is a blatant waste of the tax payers' money.

Why is there such a widespread abuse of the public funds. First, we must examine the culture and mentality of the civil service. Allocations are given to each department for development and maintenance. For maintenance funds, normally no specific projects are mentioned. The warrant-holder is free to spend the money as he deems fit. By a strange twist of thinking, maintenance allocations, which are non-revotable, are thought to be wasted if not utilized by the end of the year. Hence, there will be a big rush to spend this money comes Christmas. No emphasize is place on the quality of the expenditures. All is fine as long as treasury rules are followed.

Development funds could be abused too. Even though these funds are given for specific projects, many sundry expenditures could be hiden under the projects.

The politicians always lament that the allocations given are not fully utilized. The department heads will be pressuring the officers to finish the funds. At one time, one head of department told his officers that their performance appraisal would be based on the percentage of utilization of the allocations. Again, nobody bothered about the quality of the spending.

Given the wide power the government officers possess, for the more greedy ones, a stretch of their authority could result in further abuse of the public funds. As a result, we have the cases highlighted in the AG's report.

Peak oil

Crude oil price has been hovering around the US$70 level for the last three weeks. It has been over $50 a barrel for at least two year now. Whither crude price?

Experts on oil think that we have reached or are near peak oil i.e. the demand for oil outpaces production. What this means is that the day of cheap oil is over. Don't expect oil to be in the 20s and 30s range anymore.

The world is consuming about 84 milion barrels of the black stuff a day. It is expected to grow at a rate of at least 2%. No big new oil field has been found in this decade. Besides, some old fields have reached their own peak production. Hence, it would be difficult for supply to meet demand in a few years time.

What about alternatives? Alternatives like solar power, windmill, fuel cell technology and nuclear power all need oil in their construction / production. Also, oil is needed to power them. Biofuel also needs oil to produce and besides that, it is robbing the people of much needed food. Even Canada's oil sands needs oil in its extraction. It takes about half a barrel of oil to produce a barrel from the tar.

So what will happen when the supply of oil starts declining? One thing is for sure - oil price will go up further. A lot of adjustment will take place. The price of oil will reach a level where the alternatives become viable. There will be a more mixed use of energy.

Subprime mortgage woes

It all started with the bursting of the dotcom bubble. To stimulate the US economy, the Fed lowered its discount rate to 1.75% in 2001. That fueled investment and also comsumption. The housing market took off.

Developers were having a good time. They offered free money to purchasers for down payment. The mortgage firms were doing a roaring business. Everybody could and were buying houses - even the less credit worthy ones. Loans to this group were called subprime.

The investment firms gave the subprime mortgages a spin and created a derivative out of them called Collateralised Debt Obligations (CDO). The CDO is a leveraged instrument. This debt is then sold to hedge funds, banks and other investment houses.

The Fed increased its discount rate to 5.25% in 2004. This increased the mortgage payments. The inevitable happened. What goes up must come down. The housing market softened. Subprime borrowers started to default on their loan payments. This triggered a selldown on the CDOs. At its worst, nobody wanted the CDOs. As such, there was no market price for the instrument.

Redemption of the CDOs were stopped. Bear Stearns declared two CDOs worthless. A german bank was bailed out. This caused a world wide credit crunch. Central banks pumped in hundreds of billions to shore up liquidity.

Sentiment turned sour. The unwiding of carry trades caused a currency turmoil. Exchange rates swinged wildly. Share markets also got hit. Billions of wealth was destroyed. Everybody gets poorer. What a sad episode.

Wrong Watts

For years they have talked about supplying electricity from Bakun to west Malaysia. Just last month there was news of plans to set up a factory to produce the undersea cables needed to connect Bakun to the peninsula.

Suddenly, someone from SEB comes up and says that the 2400 MW Bakun would not be able to meet the energy needs of Sarawak when it is completed in 2010. Further, he thinks that Sarawak needs another 3 Bakuns by 2020.

How did everybody get the watts so wrong. Or did the situation in Sarawak changed so fast and so drastically.

In the same breath, this guy also talked about exporting electricity to Indonesia, Brunei, Sabah and yes, West Malaysia. Makes you wonder if it is just a lot of hot air.

NEP's role

So the gauntlet has been thrown down for the non-Malay leaders in Barisan Nasional to explain to their respective communities the necessity for having and supporting the New Economic Policy. Go ahead, explain in good details and as widely as possible. The people need to understand the policy fully.

You must be honourable in your political endeavour. You need to be transparent with the voters. Explain to them the NEP and tell them about your stand. If the voters believe in you and the NEP principles, they will vote for you. Don't keep the voters in the dark because you are afraid to lose votes.

As to whether the non-Malays accept the NEP now, the next general election will be the best test. If the non-Malay candidates win en masse, it testifies that the non-Malay communities support the NEP. However, if the non-Malay candidates fared badly, then the reverse must be true.

People too must be responsible for their security

V K Chin's Comment in the Star on 12.7.07 said that JB people expect policeman to be guarding every street or even every house. This, I don't think is true.


The security situation in JB was quite bad untill recently. Snatching of handbags, extortion of valuables, break-ins and rapes are quite rampant. The first two crimes are conducted openly and in broad daylight. I was in a police station reporting a snatch thief case some time ago. In the same room, there were at least three other people making reports on snath thieves. Isn't that bad?


I don't think JB residents expect the town to be completely free of crimes. However, when you don't feel safe to walk in the streets in town in the day, then there is a problem. We only want the police to be more conspicious so that would be crimminals are deterred from committing their crimes. Don't let them think that this place is lawless. Reduce the incidences of crimes.


The other aspect the police has to work hard on is solving the crimes. Bring the criminals to book. One criminal booked is one less on the street. The efficiency in solving the cases will also be a deterrent to other bad hats.


Increase the police force so that these two objectives are met. As to the actual numbers needed, the top management of the force should know. Mr. Chin cannot be of any help here too.


Self help is a good idea. Rukun Tetangga was implemented in the early 80s. However, it was found to be not too effective. Only break-in cases were reduced. Also, there is a cost involved in the scheme. All employees were given a day off after their overnight duty. The cost involved must have been found to outweigh the benefits and the scheme was stopped after some time.


The police cannot be in a no-win situation. They must always be in a win-win position. Otherwise, the criminals will rule and it will be a sad day for the country. Any success by the police must be appreciated. But, there should not be a case of a medal for each crime solved. After all, it is their job to look after security.

The mighty Yen

Don't be mislead by the weakening exchange rate of the Yen against the other major currencies into thinking that the Japanese economy is doing badly. On the contrary, the Japanese economy is on positive growth. The weak exchange rate is just an aberration caused by the exceptional low interest rate in Japan. At the current exchange, the Yen is very much undervalued.

The official lending rate in Japan is only 0.5% - the lowest among the major economies. There is a substantial interest rate differential between Japan and the other countries, especially New Zealand. This has encouraged huge outflow of funds in so called carry trades. Japanese are, in droves, using margin accounts to borrow Yen and place deposits in higher yielding foreign currencies. This has caused the higher yielding currencies like the Kiwi and Aussie dollars to rise.

Hedge funds have also been borrowing Yen to invest in higher yielding assets like Chinese stocks. The unwinding of the carry trade on Chinese stocks was blamed for nearly causing a global market meltdown in late Febraury this year.

The Japanese government is expected to raise interest rates later this year. What happens when the local interest rate is deemed high enough and the Japanese start to unwind their carry trades. Will it cause a tremor in the global financial market. Lets hope that this unwinding will be done gradually and hence not cause too much of a ripple in the market.

Makes no economic sense

This is one strange incidence where the government wants the manufacturer / retailer to increase the price of the good. Yes, I am talking about cigarettes. It is as though the cigarette companies are not making enough money.


The logic for the action is not very convincing. If the tax on a pack of 20 is RM3 and the companies are selling them at RM3.50 or RM3.80, very good. And if you want to set a minimum price of RM5 to discourage smoking, then just increase the tax to say RM4.50 per pack. Why force the tobacco firms to make extra profits.


The extra tax collected could definitely be put to good use. Public health services could surely use more funding.


If setting the minimum price of cigarettes too high would encourage smuggling, then you just have to tackle the smuggling problem. Beef up your anti-smuggling units and impose heavier penalty on those caught smuggling. You can't say you wouldn't increase the price of cigarettes because you are scared of the smugglers.

Time to run?

I suppose the smart money (foreign funds) is getting out of the KL market now. This is evidenced by two occurences.

One. The Ringgit is losing ground to the US dallar. It was trading at RM 3.18 to 1 USD late last month. Now it is close to RM3.42 to 1 USD. This could be due to foreign funds liquidating their stocks and converting their Ringgit to US dallars and transferring their USD out.

Two. The premium on the foreign tranche of shares on the Bursa is shrinking. Misc-F is trading at par with the local shares now. The premium on PBbank-F is only about 30 sen. This points to more selling than buying by foreigners.

Greed

Greed is a dirty word. In fact, it is slanted on the evil side.

Greed is what brought an ex prime minister into exile. Greed is what made the China stock market bubble and its subsequent collapse. It is the emotive force that drives rogue lawyers to run away with their client's money. It is what causes CEOs to engineer their company's accounts.

Then again, we live in a very materialistic world. Success is in part measured by the material possessions one holds. Thus, we are tempted to be greedy. The only difference is the degree you embraces greed. I suppose the extend of your greediness defines the standard you live your life.

The Transmile saga

The extend of the overreporting of the revenue for Transmile shocked many. What is worst is that the overreporting is not only for the accounts of financial year 2006 but also for 2005.

Its external auditors were suspicious of revenues of about RM300 millions (prorated for 18 of the 20 companies whose receivables were in doubt) for 2006. However, they (whether the same company or not I don't know) certified the accounts for 2005. It is now discovered that there was probably an overstatement of revenue of RM197 millions for 2005. So, how did they miss a doubtful revenue of close to RM200 millions?

This brings me to the next question. Are there any more 'Transmiles' out there? There were many companies on Bursa which recorded very good growths during the last few years. Were their CEOs all honest? Did their auditors all do a good job and not miss out on doubtful figures? This, only time will tell.

KL-Singapore air route

For too long now, MAS & SIA have been ripping-off travellers flying between the two destinations due to their duopolistic arrangement. This should not be allowed to continue further.

Low cost carriers like Air Asia and Tiger Airways have shown that air travel should not be so expensive. They want the KL-Sinagpore route opened so that they can offer travellers cheaper options for flying between the two cities. This should be done as soon as possible.

Before the sky is opened, MAS & SIA should do the right thing of lowering the fares for flights between the two cities now. This would only be fair to travellers. In any case, they would have to lower the fares once the route is opened. So why continue exploiting the travellers.

Cause of poor maintenance

Everything needs maintenance. Maintenance is important. More importantly, proper and correct maintenance must be done. This means maintenance must be done by professionally qualified people.

We all know this with our cars. We send our cars to well equipped and professionally manned workshops for servicing. These workshops may charge a little bit more but they look after the cars well. We don't mind paying the slightly higher fee.

Things may start to go wrong when maintenance is done by non-qualified personnel. Because of the lack of training, they don't see the root cause of problems. They may give surface or superficial treatments only. Soon, the real problem surfaces.

Another problem with non-professionals handling maintenance money is that very frequently, maintenance money is diverted to beautification work. A beautifully carpeted floor may be nice to look at and comfortable to walk on. But, when the roof leaks, the carpet is ruined. Similarly, a beautifully landscaped roadside will not appease the motorists when the road itself is riddled with potholes.

Also, when the allocation of funds is controlled by non-technical people, the importance of maintenance is often overlooked. More fund is often ploughed into new projects and insufficient amount allocated for maintenance. Without the required funds, proper maintenance cannot be carried out.

Uncouth MPs

Taiwan's parliament is well known for its fist fights and brawls. Malaysia's is known for its verbal faux pas. Whilst the former's punching is a result of heated debate and argument, the latter's is more of a deliberate attempt to belittle other people. After all, what is the relationship between a leaking building and the menstrual period of a woman.

A parliament's standing is measured by its quality of debate and articulation of arguments. With such utterances, the standard of the deliberations cannot be of very good quality. Also, it does not reflect the advancement of a nation. The elected representatives are not living up to the expectations of their constituencies.

The way to overcome this is to have a more stringent scrutiny of the candidates for election. When mischief is made, the perpetrator should be punished. Party colleagues should not throw their support blindly. They should not encourage unbecoming behaviour.

The money tree

Up, up and up. Everyday the share market is going higher. New records are set consecutively. This trend is not happening only in one place. It is a world wide phenomenon.

Stock investers, speculators and whoever that buys shares is making money. It is easy picking. Everybody is getting richer. People all round are happier.

Security analysts and financial journalists are all working overtime. They are trying hard to discover undervalued stocks. Everytime a report on an undervalued stock is published, the share price of the counter jumps. This must make the writer very proud and happy. He may have made money buying the stock himself too.

One contrarian analyst is Mr. Ooi Kok Hwa. In an article on personal investing published in The Star on 9 May 2007, he warned of a bubble in the stock market. He advises on caution and capital preservation.

It is summer now and the tree is growing well and the branches are covered with leaves. Soon, it will be winter and the leaves will drop leaving behind a bare tree. The only problem is nobody knows exactly when winter will come. You guess is as good as mine.

The Favoured Civil Servants

So the civil servants are getting a big salary raise. They should be very happy. Life is good for them. They get good salaries, 5 days week, good perks and lots of leaves. There is even pension to look after them after retirement.

Unfortunately, the employees in the private sector are not so lucky. They have to slog hard for not much better pay. They have much less job security and enjoy much lesser perks. They compare badly to the civil service.

This makes the civil service the choice employer. The civil service position is a coveted picking. However, only limited people can belong to this group.

To help the majority of the work force, more effort need to be made to build the economy. A robust and expanding economy will ensure that the private companies can flourish. They will then be able to pay their employees well. Also, the stardard of living need to be raised so that all citizens can enjoy their daily life.

A Damned Prioject

This is a hugh project. The engineering arm of the concessionaire group is the main contractor. They engage and manage the subcontractors. The consulting arm of the group designed the project and acts as adviser for the construction.

Due to cost saving, the main contractor does not have enough people on the ground overseeing the subcons. The key personnel running the show at site are a bit junior and they are preoccupied with office work. They seldom go to the site and check on their subordinates. As such, the junior engineers and supervisors are left pretty much on their own. Most of them prefer to take life easy. This leaves the contractor quite free to do what is convenient and easy for him. As a result, the project suffers.

The consulting arm has no authority over the subcons. They can only raise matters with the main contractor if they see anything that is not right. A lot of times, the issues raised are ignored by the main contractor. Thus, they become the frustrated lot.

Paul Wolfowitz

Why is it so difficult to fire Paul Wolfowitz? The President of the world bank has practised favouritism in the organization. That should be good enough reason for his dismissal.

There must be something wrong with the setup of the organization. Why is the board unable to remove him? Imagine what further damage he could do with impunity. He could very well bankrupt the bank.

The USA should not be so insensitive and unreasonable as to support a person who obviously has done wrong. National pride should not be at play here. Paul himself should just swallow his pride and bow out. That is the honourable thing to do.

Big China

China is big - with lots of people. When you live in a place that has a lot of people, you tend to be impersonal. You live in a world of your own. You do your own things and you don't care what others do and what they think of you.

China is attracting a lot of tourist now. The local people need to brush-up on their social etiquette so as not to offend the visitors. Things like talking loudly over the phone in public places, spitting in public buses and restaurants and digging the nasal passage in public are still quite common. The authorities should launch campaigns to let the people know that such behavior is not polite.

Another things tourist may find difficulty in is getting the Yuan (Renminbi). They are no or very few legal money changers in town. The banks don't make it easy for you to change your foreign currencies too. They require you to produce a copy of your passport and join in the long queues. You get put-off by that. You inevitably go back to your hotel and get your money changed there. Obviously, the rate you get is not so favourable. This is one service that almost every tourist will make use of. The authorities should make it convenient for tourist to avail this service.

JB city

There is still a lot of work to be done to improve the transport infrastructure in the city. In particular, the roads in the town need closer maintenance. Very often, potholes (some big ones) are found on the roads. Drains need to be maintained too so that the roads don't get flooded whenever it rains.

Jalan Wadi Hana is a road that is in serious need of attention. Walkways have been constructed on both sides of the road. This has blocked the drainage there. Whenever it rains, the road itself becomes a water course. The road proper is full of potholes and has not been paved at the sides near the walkways.

Jalan Wakaf has become a construction waste dumping site. All sorts of unwanted material is dumped there. This has attracted scavengers who set fire to burn off rubber coatings so as to salvage scrap metal. The burning rubber gives out a foul ordour and the smoke from the fire is polluting the air.

The drain in Jalan Sipi has collapsed near the sump as a result of erosion and underscouring. Some maintenance work is urgently needed now.

A different family

This is a upeer class household. The grandparents are intelligent professionals. The parents are smart and intellectuals too. They have two children - advised by the grandparents.

The parents and grandparents are strict displinarians. They have rules that you cannot litter, cannot spit and must flush the toilet after using it.They taught the children to be obedient, hard working, law abiding and honest people. The children behaved well and did well in school too. They feel safe and well cared for by the parents.

Then came the time for them to go to college. They have to leave home and be on their own. One of the children couldn't cope with life on his own. He was lost without the guidance of the parents. The other one took a differnt route. He enjoyed his freedom. In fact, he lost control of himself and went wild. He started burning his underwears and tried drugs. Obviously both did not do well in their studies.

Meanwhile, the parents felt lonely without the children. They regretted having only two of them. They vowed to advise the children to have more kids.

Bad taxi experiences

Case 1
It was a rainy afternoon. I was trying to get a taxi to the airport. I approach one and agreed on the price with the driver. My schedule was quite tight.

Immediately after moving, the driver said that he has to fill up the tank. He took some time at the pump as his vehicle runs on LPG. Then he took the wrong route and has to turn back. This wasted further time. A little distance further, he saw an airport taxi stopped by the road side. He stopped his car near it and came down to talk to the driver. ( The rain has stopped by this time.) Apparently, he was trying to sell my trip to the other taxi. They couldn't reach a deal. He then grudgingly travels to the airport. I was already very late by this time.

All the way, he was on his cellphone talking loudly to someone. Worst still, his car was shaking badly beyond a certain speed. I sat nervously at the back and prayed that I will reach the airport safely.

I reached the airport way past the check-in time. Luckily, the flight was delayed and I managed to check-in and got home. However, the trip left me a bad memory.


Case 2
I hailed a taxi and told him my destination. (I am not familiar with the place.) He seemed not sure about the place too. He asked me to telephone the destination and he spoke to the other side. Still, he seemed uncertain. He took me to a wrong place ( a short detour). After that he seemed to know the place and brought me there.

While in the car, I noticed that the meter is blocked by a towel placed over the gear knob. I did not suspect anything. When the meter was revealed at the destination, I was a bit shocked by the amount. I paid the stated fare.

On the return journey, the fare was less than half of the earlier trip. Then, I knew for sure that I was ripped off by the first driver.


Generally, taxis all over the place are not happy with the fare they are supposed to receive. They always come up with some trick to sqeeze some extra dollars from the passenger. Why?

Virginia Tech shooting tragedy

The shooting down of 32 students in VT campus is such a pitiful tragedy. 32 innocent lives were lost for no apparent reason at all. Why?

It is the same situation for victims of snatch thieves. Many of them lost their lives for just being at the wrong place at the wrong time. You can say that the society we live in is a cruel one.

I was told that in Guangzhou, China, a lot of snatch theives were committed by riders of motorcycles. To curb this criminal act, the authorities there banned all motobikes from the CBD. What happens outside the CBD, I don't know.

So the parallel from the Guangzhou case is that there should be greater control on the ownership of arms in USA. Everybody knows that. Still, there is no action from the authorities. Why?