CIMB May Miss Break-Even Target on RBS Banking Units Buy

By Sanat Vallikappen - Aug 23, 2013

CIMB Group Holdings Bhd. (CIMB), Malaysia’s second-largest bank by assets, may not break even as planned by the end of this year on its 2012 purchase of most of Royal Bank of Scotland Group Plc (RBS)’s Asia-Pacific investment banking assets.

As stocks and currencies slide, “I don’t know” if the businesses will cover costs associated with the acquisition, Chief Executive Officer Nazir Razak said in an interview with Bloomberg TV’s Haslinda Amin yesterday.

CIMB bought most of RBS’s Asia-Pacific cash equities and investment banking units last year for 88.4 million pounds ($138 million) to extend its regional reach. The Malaysian lender and larger rival Malayan Banking Bhd. (MAY) have been expanding abroad as the Association of Southeast Asian Nations further opens the region’s markets to create an economic zone modeled after the European Union by 2015.

“Investment banking business is a function of markets,” said Nazir, speaking in Singapore. “If the markets are effectively much slower than what we forecast, it might not meet the original target.”

The MSCI Asia Pacific Index fell 0.8 percent yesterday, extending its six-day slump to 4.7 percent as the prospect of reduced U.S. monetary stimulus and Asia’s faltering growth outlook fueled a sell-off. The Philippine Stock Exchange Index tumbled 6 percent, the most in two months, as trading resumed after a three-day closure. Indonesia’s (JCI) benchmark fell 1.1 percent, dropping 20 percent from a record three months ago.

Currency Slide

Thailand’s baht and the Malaysian ringgit slumped to three-year lows against the dollar yesterday and the Indonesian rupiah sank to the lowest since 2009.

“Currencies have depreciated significantly, interest rates are about to rise, and where borrowers and companies haven’t quite factored this situation in or didn’t quite believe it would come so soon, some would have to feel some pain,” the bank’s chief executive said.

Investment banking contributes 5 percent of CIMB’s annual profits and any delay in breaking even on the RBS acquisition is “not going to rock the boat,” said Nazir, the younger brother of Malaysia’s Prime Minister Najib Razak.

Shares of CIMB fell 0.1 percent at 7.57 ringgit in Kuala Lumpur as of 12:25 p.m. today, compared with a 0.4 percent gain for the benchmark FTSE Bursa Malaysia KLCI Index. The stock has declined 0.9 percent this year.

Southeast Asia

On June 10, CIMB said it won approval from Bursa Malaysia Securities Bhd. to sell shares on the Stock Exchange of Thailand. Subsidiary CIMB Thai Bank Pcl (CIMBT), which has 150 branches in the country is “very small,” Nazir said.

“Banking is a business of size” and the listing will allow customers to perceive CIMB as “a much bigger bank” in the country, he said.

In other Southeast Asian countries such as Cambodia and Vietnam, the bank will seek to start fresh operations, he said.

In the Philippines, where CIMB in June had to scrap a plan to buy 60 percent of Bank of Commerce from San Miguel and other shareholders for 12.2 billion pesos ($276 million), it will pursue acquisitions. “We will revisit Philippines and try and find other opportunities,” said Nazir.

CIMB’s April 2012 purchase included RBS’s cash equities units in Australia, China, Hong Kong, Taiwan, the U.S. and the U.K., and equity capital markets and mergers and acquisitions divisions in Australia, China, Hong Kong, Indonesia, Malaysia, Singapore, Taiwan and Thailand.

CIMB retained more than half of the 600 staff employed by RBS in the region, Nazir said in an interview in June 2012.

Economic ministers agree to establish Asean+6 FTA by 2015

The Nation

Publication Date : 23-08-2013

The 16 economic ministers of Asean+6 have agreed to finalise the Regional Comprehensive Economic Partnership by 2015, when the Asean Economic Community takes full effect.

"The ministers agreed that this free-trade agreement should be a single schedule of commitment that should not be separately negotiated by some countries," Thai Commerce Minister Niwatthumrong Boonsongpaisan said yesterday.

The ministers from 16 countries joined their first ministerial meeting and the 45th Asean Economic Ministers Meeting in Brunei this week.

The RCEP will become the largest free-trade area with 3.35 billion people, or more than half of the world population. Its gross domestic product would be US$17.1 trillion, or 27 per cent of global GDP. Combined trade is worth $740 billion, he said.

The RCEP comprises the 10 Asean nations and China, South Korea, Japan, India, Australia and New Zealand.

The second round of RCEP negotiations by officials is set for September 23-27 in Brisbane, Australia.

During the AEM meeting in Brunei, Asean member states also agreed to encourage each country to cut at least one non-tariff barrier a year.

Malaysia and Indonesia were urged to reduce their high duties on alcoholic beverages by 2015. If both countries do not want to cut import tariffs, they should at least lower excise taxes to show their sincerity in dismantling trade barriers.

Vietnam and Cambodia have been called on to minimise duties on petrochemical products.

Asean countries have been advised to accelerate integration plans for the AEC. The ministers also agreed to the 10th pact of service business liberalisation among Asean members.

The Failed Promise to Cambodia

Dennis P. Halpin

August 23, 2013

The National Interest 

The deeply flawed July 28 general election in Cambodia attracted scant international attention. This is in sharp contrast to 1993, when the United Nations Transitional Authority in Cambodia (UNTAC), with a $1.5 billion budget, administered the first election carried out by a UN agency following the 1948 UN-supervised Constitutional Assembly election in South Korea.

UNTAC was established by the 1991 Paris Peace Agreements. It was created as part of the “survivors' guilt” over the failure of the international community to intervene to prevent the genocide carried out by the Khmer Rouge. The “killing fields” period, in which up to two million Cambodians perished, stood as a stark reminder of the failure of the UN and other international organizations to prevent mass murder even after the Holocaust. UNTAC was established to restore the credibility of the international community by transforming a Cambodia emerging from civil war, genocide and foreign invasion into a model for democracy and human rights—and to allow a graceful UN exit from the country. Two decades later, as witnessed on July 28th, the world appears to little remember or even care about the pledge to restore and revitalize Cambodia.
One of the great historic ironies is that, despite these international efforts, a former Khmer Rouge cadre, Hun Sen, now sits at the center of power in Phnom Penh. A member of the group of henchmen responsible for the greatest genocide in post-World War II history continues to unilaterally call the shots on the political future of Cambodia. This is a country which, with its demographics of an extremely young population and its location at the heart of the dynamic Asian “economic miracle,” could have the potential for fulfilling all the promise of UNTAC's previous efforts.

Instead, a dark shadow again extends over Cambodia. International press reported on August 9 the movement of armored vehicles and troops into the vicinity of the capital of Phnom Penh, due to reports of planned opposition protests over the election results. The domestic crisis deepened on August 17 when the country’s National Election Committee (NEC) rejected the opposition complaints regarding voting irregularities, stating that "many of them didn't warrant further investigation." The results, reporting that Hun Sen’s ruling party, the Cambodian People’s Party (CPP), had taken 48.79% of the vote in the July 28 poll and had won 68 out of 123 parliamentary seats, enough for a parliamentary majority, still stand. The opposition Cambodia National Rescue Party (CNRP) claims that, without the irregularities, it would have won at least 63 seats, enough for its own parliamentary majority. In frustration, its representatives walked out of their last meeting with the NEC.

The final recourse lies with the Constitutional Council, which held a meeting on August 20th to consider nineteen separate allegations of election irregularities. The Council reportedly has seventy-two hours to complete its investigation. Only time will tell whether a last-minute agreement, reached by the ruling and opposition parties in the National Assembly, to jointly investigate allegations of voting irregularities will have any bearing on the Constitutional Council's final ruling on the matter. Win or lose, the strong opposition showing in the elections was a slap in the face to strongman Hun Sen. He is used to having his way during twenty-eight years of continual rule and does not hesitate to use strong-arm tactics when necessary. The ruling party decision to join the opposition in an investigation, therefore, could prove little more than a gambit by the Hun Sen faction to buy time to allow popular furor over the discredited election results to die down.
The opposition remains ready to take to the streets if the current impasse is not resolved in what is popularly perceived as an equitable manner. The American Embassy in Phnom Penh responded to the ongoing impasse by publicly stating that "we still say that an investigation into irregularities needs to happen. The outcome of these electoral disputes needs to be something that Cambodian people as a whole will be happy with."
Reports of voting irregularities on July 28 include the removal of eligible voters from the voting lists, the inclusion of multiple names on some voting lists, and indications that some pro-Cambodian People's Party (the ruling party) voters were allowed to cast their ballots multiple times. State Department spokeswoman Jen Psaki had commented on these reports on July 29, noting that "we call for a transparent and full investigation of all credible reports of irregularities. We urge all parties and their supporters to continue to act in an orderly and peaceful manner in the post-election period."

Sam Rainsy, head of the opposition CNRP, has called for a return of a United Nations role to address election issues as UNTAC once did. Rainsy returned to Cambodia just prior to the July elections after receiving a royal pardon from the king for his conviction on previous trumped-up charges. His name did not, however, appear on the voter rolls and he was not eligible for candidacy in the elections. Rainsy, in an August 5 letter to UN Secretary General Ban Ki-moon, stated that “under the terms of the Paris Peace Agreements ... both the UN and the Kingdom of Cambodia have a legal obligation to ensure that our country’s ‘liberal and pluralist democracy’ be grounded in ‘free and fair elections’...“We believe that numerous irregularities in electoral processes produced an outcome that does not properly reflect the will of the people.”

It should provide the United Nations little comfort that, after all the time and treasure expended on creating “a liberal and pluralist democracy” in Cambodia that the country will likely remain, as cited above, in the hands of an infamous former Khmer Rouge cadre. Hun Sen carries a permanent physical reminder of his Khmer Rouge ties in the form of a glass eye, the result of a wound he sustained while participating in the Khmer Rouge's final assault on Phnom Penh in 1975. Hun Sen broke with the Khmer Rouge not out of any moral conviction but because, as Battalion Commander in the country's eastern region, near the Vietnamese border, he was targeted in a 1977 party purge as an underperformer. He fled with his battalion to the rival Vietnamese before he too could become a victim of the killing fields. He returned to Cambodia in 1979 with the invading Vietnamese army. On that occasion, Prince Norodom Sihanouk famously referred to him as “a lackey” of the Vietnamese.

Hun Sen might have abandoned his Khmer Rouge colleagues, but he did not put aside their murderous tactics. In 1987 Amnesty International called his regime to account for the torture of thousands of political prisoners using "electric shocks, hot irons and near-suffocation with plastic bags.” He defiantly refused to honor the 1993 UNTAC-sponsored election results, refusing to step down from the post of prime minister but instead brokering a deal that left him in place as “second prime minister” to Prince Ranariddh's “first prime minister.” By 1998 he had managed to push Ranariddh aside and resume his position as sole prime minister.

Extra-judicial killing of those who represent an inconvenience to the regime is the modus operandi in Hun Sen's Cambodia. In April 2012 environmental activist Chut Wutty was shot dead by a military-police officer while investigating illegal logging in western Cambodia in the vicinity of a Chinese hydropower construction site. His murder was still the talk of the town when I visited Phnom Penh last summer. More recently, in April of this year, Houn Bunnith, a staffer with the legal-aid NGO International Bridges to Justice (IBJ) was shot in the neck and killed by a military-police officer in Kandal province.

This is all a far cry from the Cambodia envisioned by the United Nations and the international community at the time of the supervised elections two decades ago. The question now is this: what will be the international response to the recent flawed elections and the continued, extensive human-rights abuses in a land that already suffered so much at the bloody hands of the Khmer Rouge?

Dennis P. Halpin was the Cambodia analyst in the Department of State's Bureau of Intelligence and Research from 1985 to 1987.

Cautious China endorses Cambodia poll result

By Asia Sentinel Aug 23, 2013

Hun Sen still stays out of the action, reports Asia Sentinel’s James Pringle
China appeared Wednesday to endorse the Cambodian People’s Party’s narrow July 28 election victory, while at the same time calling for a swift resolution to the country’s perilous political situation, which has raised the real possibility of violence in the streets.

Ending a situation where he had vanished from the political scene for almost three weeks and become a virtual recluse, Prime Minister Hun Sen was on hand to welcome Chinese Foreign Minister Wang Yi after the election produced a 68-55 seat victory for the CPP, representing Hun Sen’s largest fall in support since UN-supervised elections in 1993.

Cambodian Prime Minister Hun Sen. Pic: AP.

Diplomats said that Wang, in background talks with Hun Sen, probably warned his Cambodian ally of the dangers ahead, with an opposition rally scheduled for next Monday by the Cambodia National Rescue Party (CNRP) of former French banker Sam Rainsy. Sam Rainsy was permitted to return to Cambodia from exile just 10 days before the election, although he was not allowed to stand for office.

The Chinese, though they are close allies and backers of the seemingly endlessly-lasting Cambodian regime, usually take a pragmatic view of politics and are doubtless alive to the dangers. That’s why it took almost three weeks for Wang to actually come here.

Military officials said Wednesday if violence were to occur at the forthcoming rally, fire trucks and thousands of military police and civilian police would be on hand, “and we are ready to crack down if any violence occurs.”

Cambodia’s long-ruling leader has spent significant time off the radar, and people wondered what he was doing. After all, the 61 year old strongman, who has been in power for 28 years, is a man who was seldom more than a day out of being the cynosure of all eyes. But he has remained a virtual recluse, surrounded by bodyguards in his mansion-like residence in downtown Phnom Penh or in his nearby prime ministerial offices.

Continue reading at Asia Sentinel

Cambodia’s lost city

The Star

The statue of the sleeping Buddha at Phnom Kulen, Cambodia. - Photo from Wiki Commons

A new archaeological project in Cambodia has revealed a vast ancient city around Angkor Wat that is exciting the archaeological world and has captured travellers’ imaginations.

IT’S 7am at Angkor Wat and there’s not a tourist in sight. It’s blissfully quiet, the first clear June morning after two days of torrential rains. The only souls around are a small group of Buddhist pilgrims, lighting incense at the rear of the spectacular Khmer temple.

I’m not here for sightseeing, however, I’m heading further into the forest surrounding the stupendous temple complex with Australian archaeologist Dr Damian Evans to meet the archaeologists from Cambodia, the Philippines and the United States, who are working on new excavations.

The release in June by the US National Academy of Sciences of a report on the results of a high-tech survey of Khmer Empire sites, undertaken in April 2012, has rocked the archaeological world and captured travellers’ imaginations.

A monumental, sophisticated, densely populated urban landscape, which dates back more than 700 years, has been identified. It includes and connects Angkor cities such as Angkor Wat, Angkor Thom and Bayon, with the rarely visited medieval city ruins of Phnom Kulen, Beng Mealea and Koh Ker, over 100km away.

Evans was one of the report authors and the lead archaeologist and director of the project, which only became known outside local and archaeological circles with the release of the report this month.

As we make our way through dense vegetation, he explains how eight key archaeological groups, including the Cambodian government’s Apsara Authority, which manages archaeological sites, collaborated on the project. It began with the survey using an airborne laser scanning instrument called Lidar, strapped to a helicopter, to search for ruins and other structures (the size of the area covered by the helicopter doing the survey was 320 sq km). Developed in the 1990s, it’s only recently that the technology has matured to the level where it can penetrate dense vegetation and provide extremely detailed models of the forest floor.

“For archaeologists, these lumps and bumps that we see in the forest, each has a meaning,” Evans explains, pointing out gentle mounds. “These are all the traces of the civilisation of the city associated with Angkor Wat that has disappeared. It’s these contours that we study.”

Smoke wafts from the fires lit to keep mosquitoes at bay. Dotted between the mounds are several rectangular holes in the ground where Dr Miriam Stark from the University of Hawaii and her team are at work.

“We’re really interested in understanding residence patterns, where and how people lived and who they were,” Stark explains excitedly, showing me X-ray-like images of the area we’re in. “Before, it took more than three intensive weeks of (preparation) before we knew where to dig. Now, with Lidar, it’s as if you just peel a layer off and it’s there!”

Scholars have based their idea of all medieval cities around the world on European cities, explains Professor Roland Fletcher, director of the Greater Angkor Project. But now, it seems there was a colossal low-density urban sprawl here, a conurbation of different places with massive working citadels with enormous infrastructure.

“This is a highly managed system, the most extensive pre-industrial city in the world,” he says, though referring to its complexity rather than its size. “The Lidar results show there were three cities [here] at the end of the 9th Century – the largest was on top of Mount Kulen, creating an (equivalent to) industrial 19th-Century Britain.”

The city is so enormous it is unlikely to ever exist as one excavated site, but tourism here is likely to increase. There’s talk of a cutting-edge museum presenting the exciting new discoveries, new archaeological sites in the future, and greater interest in little-visited outlying temples already accessible to the public.

We decide to head to one of these Phnom Kulen, a site rarely visited by tourists, with just a few companies offering expeditions and treks there.

“Phnom Kulen is a sacred mountain,” Tat, our guide from Backyard Travel tells us en route. His ancestors called this place Mahendraparvata, or the Mountain of Indra, King of the Gods. “We call it the Mountain of the Lychees now. Look, you can see it here,” he says, pointing to a long, low, flat plateau that barely rises above the palms, banana plants and rubber trees that skirt the road.

Mahendraparvata was never really “lost” – the mountain has long been known as the location of the sandstone quarries that built Angkor’s cities, as well as the source of water for a complex system that irrigated the vast empire.

When we visit, people are wading in the River of A Thousand Lingas, a section of the stream boasting stone carvings on its floor. Villagers frequently stumble across finds, recently some bronze, copper and sandstone statues of Hindu gods. But the Lidar survey confirmed that Mahendraparvata was part of a city, and much larger than suspected – maybe as big as present-day Phnom Penh.

We leave our air-conditioned four-wheel drive behind and soon we’re bouncing along muddy tracks on the back of motorbikes behind guides familiar with the landmine-riddled mountainside, that was the last stronghold of the Khmer Rouge.

They lead us towards the summit. It’s a slow journey, over narrow, bumpy dirt trails – only the most intrepid travellers come here. Scattered across the mountain are ruined, foliage-covered temples, ancient highway markers and, at Sras Damrei or Elephant Pond, massive statues of an elephant and lions. The thought that more sites like this could soon be discovered is thrilling.

Back in Siem Reap we take to the air in a helicopter to get a better idea of what this urban landscape might have looked like. Had I taken the flight two weeks’ ago, I would have gasped at the magnificence of the isolated temple structures with their imposing walls and moats.

Now, I see patterns of bumps and lines on the vast floodplain as beautiful remnants of an immense, effervescent city that technology and archaeology are finally bringing to life.

While many believe this site will become one of Asia’s greatest wonders, and tourism bodies are eager to see excavations progress quickly and more archaeological sites opened up to visitors, the extraordinary size of the area means work will be costly and take years.

In the meantime, however, the intrepid can play at being Indiana Jones at undeveloped sites on Phnom Kulen, and temple cities such as Beng Mealea and Koh Ker – and let their imaginations run wild.

Backyard Travel (www.backyardtravel.com) offers one-day expeditions to Mount Kulen for US$136 (RM433) per pax, and day trips to Koh Ker and Beng Mealea for US$126 (RM401). HeliStar (helistarcambodia.com) offers flights over Angkor, including Mount Kulen and Koh Ker, starting from US$90 (RM287) per pax. - Guardian News & Media

Prime Minister Hun Sen of Cambodia Meets with Foreign Minister Wang Yi Saying that Cambodia and China Share a High Degree of Mutual Trust

On Aug. 21, 2013, the Cambodian Prime Minister Hun Sen met with Chinese Foreign Minister Wang Yi in Phnom Penh, capital of Cambodia. 

Hun Sen said that Cambodia and China are close neighbors, with a high degree of mutual trust. This year marks the 55th anniversary of the establishment of diplomatic relationship between Cambodia and China and for the "Cambodia-China Year of Friendship". The two sides should take this opportunity to deepen mutual trust and cooperate more closely with each other to bring the bilateral comprehensive strategic partnership up to a new high. Hun Sen as well briefed Wang Yi the latest development of domestic situation in Cambodia. He stressed that the Cambodian People's Party is willing to smoothly go through the post-general-election transitional period and form a new Congress and Government through friendly consultations as soon as possible, abide by the constitution and the laws.

Wang Yi said, Cambodia recently finished the general election smoothly, and the preliminary results showed that the People's Party got a majority in the Congress. The Chinese leaders sent out at the first minute the congratulations to the People's Party. 

In recent years, under the leadership of the Prime Minister Hun Sen, Cambodia is committed to maintaining social stability, promoting economic development and improving people's livelihood, and has made great achievements in various fields. China and Cambodia are good neighbours, good friends, good partners and brothers. The most important characteristics of China-Cambodia relationship are mutual understanding, mutual trust and mutual support, especially at crucial moments. My visit this time is to carry forward all these good traditions. 

The Chinese government under the new leadership attaches great importance to relations with Cambodia. We will unswervingly develop friendship with Cambodia, and deepen the comprehensive strategic partnership. We will support Cambodia ruling out external interference to pursue a development path in line with its own national conditions and the interest of the people. We will provide firm support to the Cambodian government for the efforts to safeguard stability, to develop economy and to improve the livelihood of the people.

Wang Yi said, as a good friend of Cambodia, we hope and believe that all political parties of Cambodia will give priority to national stability, unity and the people's interest, resolve differences through negotiation and start a new session of Congress and the Government as soon as possible.

Chinese tourists to Cambodia up 55 pct in H1

 2013-08-19 
Xinhua  
Web Editor: qindexing

Some 231,000 Chinese visited Cambodia in the first six months of the year, up 55 percent compared with 149,000 over the same period last year, a report of Cambodia's Tourism Ministry showed Monday.

China is the third largest tourist source to Cambodia after Vietnam and South Korea, the report said.
Kong Sopheareak, chief of the statistics and planning department of the Tourism Ministry, attributed the remarkable growth to direct flight connection, attractive Cambodian tourism sites, and friendly relationships between the two countries.

"Close relationships between the Cambodian government and the Chinese government have encouraged more Chinese tourists, investors and businesspeople to Cambodia," he told Xinhua over telephone on Monday.

The Southeast Asian nation received 334,000 Chinese visitors in 2012, up 35 percent year-on-year.
In June, the Tourism Ministry unveiled its five-year strategic plan to attract at least 1.3 million Chinese visitors by 2018.

Under the plan, the country would prepare entry-exit application forms and announcements at airports in Chinese language, write signs on main roads in Chinese, conduct studies to establish China Towns and train more Chinese speaking tour guides.

Tourism Minister Thong Khon said it was vital to encourage owners of hotels, restaurants and tourism resorts to use three languages, Khmer, English and Chinese, on billboards, or promotional leaflets or brochures.
"Chinese are rich now, more and more Chinese visit abroad," he said. "Cambodia and China have had very good diplomatic ties, which are favorable for us to attract more Chinese to Cambodia."

Tourism is one of the major sectors supporting the Cambodian economy. Last year, the country received 3.58 million foreign tourists, up 24 percent year-on-year, and generated a total revenue of about 2.2 billion U.S. dollars, or 12 percent of the gross domestic product (GDP). said the Tourism Ministry.

The country is a destination for ecological and cultural tourism, and is well-known for its 12th century Angkor Wat Temple, a world heritage site, and the 11th century Preah Vihear Temple, another world heritage site.

Besides, it has a pristine coastline stretching in the length of 450 kilometers in four provinces of Koh Kong, Preah Sihanouk, Kampot and Kep. The coastline was recognized as one of the world's most beautiful bays in May, 2011.