Rightways to Success

Monday 17 July 2023

New Zealand PM's speech outlines China policy; much focus on importance of stabilizing ties with China

National flags of China and New Zealand on Tiananmen Square in Beijing on June 25, 2023 Photo: VCG

New Zealand Prime Minister Chris Hipkins' latest remarks on China's Taiwan and South China Sea are clichés echoing the US' strategy toward China, but the essence of his speech is to stress the significance of stabilizing relations with China, which has been deliberately downplayed by some Western media, Chinese analysts said, after some reported Hipkins' "concerns" over China's increasing influence being the driver behind the "increasing competition in the Indo-Pacific."

In a speech to the China Business Summit on Monday, Hipkins expounded New Zealand's connections with China. He noted that "It's normal for states to pursue their interests and to use all the tools at their disposal to exert influence regionally and internationally… but China's rise and how it seeks to exert that influence is also a major driver of the increasing strategic competition, particularly in our wider home region, the Indo-Pacific," according to a transcript the New Zealand government released.

China is a member of the Asia-Pacific and has always worked with regional countries to practice true multilateralism and defend regional peace and stability. Based on mutual respect, China will have dialogue with all parties, including New Zealand, to jointly contribute to regional prosperity and stability, Chinese FM spokesperson Mao Ning said at a routine press conference on Monday.

Mao also noted that the Taiwan question is China's internal affair and the most significant safeguard for cross-Straits stability is upholding the one-China principle. Also, there are no issues on the South China Sea and it is hoped that the relevant countries will respect regional countries' efforts to defend the stability of the South China Sea.

Hipkins' speech, which outlined the New Zealand leader's China policy after his first visit to China in June that helped expand cooperation in economy, trade, education, technology, tourism and other fields, was overlooked by some Western media. The Guardian on Monday highlighted Hipkins' remarks on China's increasing influence as "a major driver of the increasing strategic competition" particularly in the Indo-Pacific.

Hipkins' remarks on the Taiwan question and South China Sea were a repeat clichés echoing the US' strategy toward China. However, compared to the rhetoric used by other US Western allies, the New Zealand leader's words were "much more toned down," and the essence of Hipkins' speech is stabilizing China-New Zealand relations, Chen Hong, director of New Zealand Studies Centre in East China Normal University, told the Global Times on Monday.

During the Monday speech, Hipkins took more time to talk about the economic and people-to-people connections between China and New Zealand, and the importance of continuing to engage with China, which has been deliberately underplayed by these Western media, said analysts.

Chen said that Hipkins' Monday speech is more like a comprehensive overview of his China policy after being sworn in as New Zealand's prime minister in January, and it shows that New Zealand has shifted from putting the US at the center of its foreign policy, a stance that has also been taken by Au

stralia, making China a focus of its diplomacy. The speech, as well as Hipkins' visit to China in June, also showed that he has put much emphasis on stabilizing and improving relations with China, as it meets New Zealand's national interests and will help him lead the Labour Party to win the upcoming general election, said Chen.

While New Zealand is pursuing stable relations with China, analysts also warned that it should also remain vigilant for some hawkish politicians pushing for a tougher China stance as well as pressure from Australia and the US to sow discord and disturb bilateral relations.

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Rt Hon Chris Hipkins

Prime Minister's speech to the China Business Summit

https://www.beehive.govt.nz/minister/biography/chris-hipkins

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Malaysia’s secularism based on Constitution, Alliance Memorandum, its secularism shoudn't be open to misinterpretation

Malaysia's secularism based on Constitution, Alliance ...

PETALING JAYA: Malaysia’s secularism is evidenced in the Federal Constitution and the Alliance Memorandum 1956, says MCA.

It said MCA, as a member of the Alliance Coalition, played a significant role in shaping the Alliance Memorandum submitted to the Reid Constitutional Commission on Sept 27, 1956.

“The memorandum explicitly stated that ‘the religion of Malaya shall be Islam... and shall not imply that the state is not a secular state’,” it said in a statement on Tuesday (July 11).

MCA also emphasised that Islam and the position of Malay Rulers as heads of Islam in their states are protected by the Federal Constitution.

“Article 4 of the Federal Constitution establishes the Constitution as the supreme law of the land, thereby protecting the position of Islam and the Malay Rulers,” it said.

MCA said it unequivocally takes the position that Malaysia is a democratic and secular state with Islam as the official religion - a position that the country has not changed in the last seven decades.

Explaining, MCA said that a secular state is one where the source of law is secular.

“In Malaysia, religious authorities derive their source of authority from secular laws enacted by the Malaysian Parliament.

“Islam is enshrined in Article 3 of the Federal Constitution, which is itself a secular document and forms the foundation of our nation.

“This is unlike a theocratic state like Saudi Arabia, where religious laws and scriptures are the primary source of legislation, rather than the Constitution, Parliament, or the Court,” it added.

MCA said secularism can take different forms, and it is not unusual for secular nations, such as the United Kingdom, to integrate religion into their systems.

“This can be observed through the presence of their state church led by the monarchy, a characteristic that mirrors Malaysia's approach,” it said.

The Barisan Nasional component party said their statement was necessitated by instances where leaders from different political parties often conflate Malaysia's secularism with the notion of "complete separation of state and religion".

“It is our earnest hope that political leaders exercise greater responsibility when discussing Malaysia's legal and constitutional nature to avoid any misinterpretation of their words.

“The resulting confusion could cause unnecessary anxiety among the public and undermine international confidence in Malaysia,” it added. Source link

Malaysia can’t be a totally secular state, says PM

PETALING JAYA: Malaysia’s secularism is evidenced in the Federal Constitution and the Alliance Memorandum 1956, says MCA.

As one of the founding members of the Alliance (the precursor to Barisan Nasional), MCA played a significant role in shaping the Alliance Memorandum submitted to the Reid Constitutional Commission on Sept 27, 1956.

According to the National Archives, the commission was formed on March 21, 1956, to review and recommend the Constitution of the Federation of Malaya in preparation for Malaya’s independence on Aug 31, 1957.

“The memorandum explicitly stated that the religion of Malaya shall be Islam ... and shall not imply that the state is not a secular state,” it said in a statement yesterday.

MCA also emphasised that Islam and the position of Malay rulers as heads of Islam in their states are protected by the Federal Constitution.

“Article 4 of the Federal Constitution establishes the Constitution as the supreme law of the land, thereby protecting the position of Islam and the Malay Rulers,” it added.

MCA also unequivocally took the position that Malaysia is a democratic and secular state with Islam as the official religion, adding that it did not change its position on this in the last seven decades.

MCA also said that a secular state is one where the source of law is secular.

“In Malaysia, religious authorities derive their source of authority from secular laws enacted by the Malaysian Parliament.

“Islam is enshrined in Article 3 of the Federal Constitution, which is itself a secular document and forms the foundation of our nation.

“This is unlike a theocratic state like Saudi Arabia, where religious laws and scriptures are the primary source of legislation, rather than the Constitution, Parliament or the Court,” it added.

MCA said secularism can take different forms, and it is not unusual for secular nations, such as the United Kingdom, to integrate religion into their systems.

“This can be observed through the presence of their state church led by the monarchy, a characteristic that mirrors Malaysia’s approach,” it said.

The Barisan Nasional component party said their statement was necessitated by instances where leaders from different political parties often conflate Malaysia’s secularism with the notion of “complete separation of state and religion”.

“It is our earnest hope that political leaders exercise greater responsibility when discussing Malaysia’s legal and constitutional nature to avoid any misinterpretation. The resulting confusion could cause unnecessary anxiety among the public and undermine international confidence in Malaysia,” it added.

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Saturday 15 July 2023

The economics of the sport of golf, a game of patience as well as strategy

MST Golf's is a one-of-a-kind listing and therefore would enjoy a scarcity premium.

THERE is a joke in the golfing community, ask a man to wake up before sunrise, there will be a million excuses.

Ask a man to tee off at dawn, he will be right on time. In the years I have played the game, I have witnessed the laziest people putting the utmost effort into improving their golf swing.

The amount of money spent on equipment, coaching, practice rounds in the driving range, club membership fees, travel and flight expenses to overseas golfing trips is mind-boggling.

This sport is by no means cheap and compared to other equipment sports like ping pong, it is incomparable.

However, once you start the game, you will be hooked for life. Every single round of golf is different.

The experience of playing with different people and courses makes it even more interesting.

So, what has all this got to do with business or the stock market?

Well, we have a highly anticipated

Main Market initial public offering (IPO) coming soon, which is the MST Golf Group Bhd listing.

For those who play the game, MST is a household name for golfers. It has been around for as long as I was born.

Over the years, MST has grown from a single retail store to controlling more than 51% of the local golf equipment retail and distribution market in Malaysia.

It is also the second largest golf retailer in Singapore. Although some older establishments such as RGT Golf, Desa Golf House, Transview Golf and others still exist in the market, none of them have seen the growth rate and expansion the way MST has done through the years.

A game of passion

Golf as a sport has been growing tremendously in the past century since its founding in Scotland in the 1860s. Today, there are over 80 million golfers and 30,000 golf courses globally.

The United States, Japan and South Korea are the top three countries which dominate global golf participation.

Based on the World Golf Report 2023 data, worldwide golf equipment and apparel market hit Us$20bil (Rm93bil) in 2022 of which Us$11.1bil (Rm51bil) was in equipment sales and Us$8.9bil (Rm41bil) in apparel sales.

There was also a major surge in worldwide sales in 2021 with an annual increase of more than Us$5bil (Rm23bil).

The sport is so popular that a seismic change in the golfing landscape occurred in 2022 when a new professional golf tour funded by the Public Investment Fund (sovereign wealth fund of Saudi Arabia) known as LIV Golf started and challenged the historic PGA Tour.

The prize fund up for grabs for a single season tournament reached a staggering Us$400mil (Rm1.8bil). Top-ranked golfers were offered hundreds of millions just to join LIV.

The PGA Tour reacted by banning professional golfers who played on the LIV golf circuit and multiple legal suits were filed between the two organisations.

Ultimately, a resolution appeared to be in sight following the news that a potential merger will go ahead between the two franchises. A Netflix documentary on golf, called Full Swing, depicts the sport’s evolution.

Golf as a sport has a huge market not only in terms of the annual growth rate of the number of players, but it remains the most lucrative sport in terms of the prize money and sponsorship deals.

We can see the continuous sponsorship of Rolex and other premium brands plastered all over golfing events.

Market leadership

MST’S IPO was oversubscribed by 5.28 times. This is a good performance considering it is a Main Market listing looking to raise Rm130mil for expansion.

At the IPO price of 81 sen, the market cap upon listing is expected to be Rm665mil. This is a rather huge IPO and not comparable to smaller ACE Market listings.

The question on some retail investors’ minds is that recent Main Market listings have been disappointing such as DXN Holdings Bhd, Radium Development Bhd and more recently Skyworld Development Bhd.

Some are concerned that the sentiment may impact this IPO as well. I am of lesser concern because the true value of the company lies not only in which market it lists but also its business itself.

Apart from the clear market leadership position of MST, many from the investment fraternity have used MR DIY as a peer comparison. I have also seen some other commentary using other retailers such as Innature, Senheng, Padini and others which are in the consumer retail space.

This led to the misconception that MST is listing at a very steep valuation. MST in fact is a specialty retailer and distributor of equipment for a global sport catering to the segment of consumers with the highest disposable income.

MST is very different from the other above-mentioned consumer retail companies which target the masses.

Furthermore, due to its track record and entrenched market share, we are unlikely to come across another golf equipment retailer and distributor company listing on Bursa Malaysia in the years to come. This is a one-of-a-kind listing and therefore, would enjoy a scarcity premium.

Ideally, I would like to see MST perform as well as MR DIY on listing day and the weeks to come.

However, the distinguishing factor that I believe would see MST sustain and do better for the longer horizon is because the MR DIY listing does not include the businesses in its other foreign markets which it expanded to such as Indonesia and the Philippines, etc.

For MST, the listing of the group includes all markets and MST is only starting to venture into Indonesia and Thailand; both are huge golfing markets by the sheer number of their population, popularity of golf tourism and burgeoning middle class.

A better peer comparison in terms of the valuation for MST would be Us-listed Topgolf Callaway Brand Corp.

It is one of the most popular golf equipment brands with a long history of being golfers’ favourite. Callaway has historically traded at an average forward price earnings (PE) valuation of 31 times. The immediate forward PE valuation is 23 times.

On the premise of the same valuation metrics, the likely intrinsic fair value for MST in 2024 is not too far off from TA Research’s recent report.

I often likened investing in the stock market to playing the game of golf. It is a game of patience, prudence and strategy.

A lot of practice and dedication is required to be good at the game.

Additionally, this is one sport where the biggest competitor is yourself and not your opponents. Consistency is the key, and one swallow does not make a summer. It is a long game.

Investing in the right company within a short span of time is meaningless if you cannot maintain the performance over a long duration of time.

Ultimately, the one who is regarded as a good investor, like a good golfer, is someone who consistently beats the market and surpasses their own performance over a long duration.

Golf is one sport that has a long-life span. It is a game that one can play until a ripe old age. Unlike badminton, football or basketball, the cardio element and companion requirements limit the longevity of the sport.

If your elderly parents are still insisting on playing badminton on a regular basis at the age of 70 and above, I would recommend you asking them to slow down.

Golf, on the other hand, would be one that requires little concern. If anything, the long outdoor session followed by the after-game chit chat session bodes well for the elderly who enjoy companionship.

Now, for those who have subscribed to the MST Golf IPO or are planning to invest on “Gong” day, I hope my article is able to shed some light on the economics of golf both for the uninitiated and for those who enjoy the game as much as I do.

But I must put forth a disclaimer; as an avid golfer myself, my views may be coloured by an inherent bias and lack the objectivity required for a fund manager.

Whether my love for the game would help with my investment or otherwise, we shall find out on July 20.

My best wishes to all fellow golfing aficionados, hopefully we can all reap the rewards of the long game. In the event this IPO goes out of bounds at tee off, we can always try asking Bursa for a Mulligan.

Ng zhu hann