AMP Selling Life Insurance Arm

Australia largest wealth manager, AMP Ltd, said on Thursday it would sell its life insurance arm at a discount and its funds were haemorrhaging cash, as it struggles to rebuild its reputation following revelations of systemic wrongdoing.

The company said it would offload its life insurance and wealth protection business to British Resolution Life for A$3.3 billion ($2.3 billion) - almost a fifth below book value - and sell part of its New Zealand wealth protection businesses in an initial public offering.

It also revealed a sharp rise in client withdrawals from its Australian wealth management division in the three months to September, after it admitted in a public inquiry to charging thousands of customers for advice they never received.

Taken together, it underscores the depth of the financial problems now facing the 170-year-old stalwart of Australian finance, the highest profile casualty from the ongoing government-ordered inquiry which has revealed malpractice and poor governance across the industry.

"This is all very messy, it will take the market a while to digest this," said David Walker, an analyst at Clime Asset Management, adding that in the current climate the insurance price could have been even lower.

"It's a motivated seller. It'll never rerate again until they get rid of this stuff ... the life insurance has been an awful business."

AMP shares fell nearly 10 percent to a 15-year low as the broader market dropped 2 percent, and have shed 43 percent since the inquiry began in February.

The wealth manager, which had flagged business sales as part of a portfolio review months ago, said London-based Resolution Life would pay A$1.9 billion in cash for AMP's life insurance business, with another A$1.1 billion in non-cash considerations.

Separately, AMP has reinsured its New Zealand income protection business and said it planned to float its New Zealand wealth management business.

AMP said client withdrawals from its tarnished Australian wealth management division soared to about A$1.5 billion in the third quarter, from A$243 million in the second, after its shocking admissions to the powerful Royal Commission of inquiry.

The division had total assets under management of A$132.6 billion at the end of the quarter.

The inquiry heard the company had charged thousands of customers for financial advice it never gave, then doctored a supposedly independent report to the corporate regulator about it, which could lead to criminal charges.

Seven senior officials, including the chairman and chief executive, have now left the firm and its business model of licensing external advisers to distribute products is under extreme pressure. 
Incoming Chief Executive Francesco De Ferrari, hired from Credit Suisse, begins on Dec. 1 and the company reports annual results on Feb. 14.

Flip-flop On Car Clamping

All clamping operations in Kuala Lumpur will be suspended indefinitely from next month. 

This is following a directive from Kuala Lumpur mayor Datuk Nor Hisham Ahmad Dahlan. 

This is the second time that DBKL wants to suspend clamping operations; the first instance was in May right after the general election this year following requests by Kuala Lumpur MPs.

According to the source, the mayor made the decision after witnessing an altercation between a motorist and DBKL officers in Taman Tun Dr Ismail recently. Apparently, the motorist, whose car was clamped, was seen berating the officer incessantly and the mayor, who witnessed the incident, was embarrassed by it.

The mayor said he felt he was the one being scolded by the resident, and the incident made DBKL look bad, so he decided to suspend clamping. When contacted, Mahadi did not deny or confirm the news, merely saying there was talk about it and it was not confirmed yet.

FWD Bought PT Commonwealth Life

FWD Group, led by Hong Kong billionaire Richard Li, will buy control of an Indonesian life insurance venture from Commonwealth Bank of Australia for A$426 million (US$300 million) as it seeks to expand across Asia.

The transaction is the latest of several in Southeast Asia's insurance sector with buyers lured by lower insurance penetration levels and robust growth rates for insurance premiums.

The deal was hotly contested. At least five insurers, including Britain's Prudential and Canada's Sun Life had bid for CBA's 80% stake in the Indonesian insurance unit, PT Commonwealth Life, sources have said.

FWD has also agreed to buy HSBC Holdings Plc's stake in a Malaysian insurance joint venture, sources familiar with the matter said in August.

The two deals will add to businesses in Singapore, Japan, the Philippines, Thailand, and Vietnam as well as FWD's home market.

CBA's sale of its 80% stake comes as most big Australian banks, under intense scrutiny from a powerful inquiry into misconduct in the country's financial sector, streamline their operations to focus on lending.

"The transaction aligns with CBA's strategy to focus on its core banking businesses and to create a simpler and better bank," the bank said in a statement on Tuesday.

CBA said the deal valued the Indonesian entity at three times its book value as of June 30. It added that its Indonesian banking business PT Bank Commonwealth would enter a 15-year life insurance distribution partnership with FWD.

Other insurance deals in Indonesia include Zurich Insurance's plan to acquire an 80% stake in Indonesia's Adira Insurance from PT Bank Danamon Indonesia and a minority investor for at least around US$414 million.

FWD is moving closer to a stock market listing, plans for which were in early stage and likely to be worked out over the next two years, sources said last month.

LGBT Causes Earthquake

Opposition leader Datuk Seri Ahmad Zahid Hamidi expressed concerns about efforts needed to stem lesbian, gay, bisexual and transgender (LGBT) activities in the country, saying a recent earthquake in Indonesia was caused by such behaviour.

Speaking at the Dewan Rakyat today during Question Time, Ahmad Zahid said he was worried that Malaysia might similarly incur the wrath of Allah due the LGBT community’s activities here.

“We look at the situation in Malaysia, we are worried because we know what happened in Palu recently where there was an earthquake and tsunami. It was reported that there were more than 1,000 members of their community who were involved in such (LGBT) activities.

“As a result the entire area was destroyed. This is the punishment of Allah. My question is whether Jakim's programmes (to rehabilitate the LGBT) is successful because data shows that in the middle of the year more than 1,000 (LGBT) joined these programmes.

“We need to ensure that Malaysia and those who are against LGBT are spared Allah's punishment,” said Ahmad Zahid.

English Is Not An Intellectual Language

Citing examples of ancient civilizations and conquerors, a Barisan Nasional (BN) parliamentarian arrived at the conclusion that "English is not an intellectual language that develops the mind and brain".

In today's debate on the 11th Malaysia Plan (11MP) Mid-Term Review (MTR) in Parliament, Datuk Seri Hasan Arifin (BN-Umno-Rompin) made this observation with regard to the role of the international lingua franca in building civilizations and fostering global trade.

Hasan pointed out that modern economies like Japan, Taiwan and non-English speaking European countries do not use English in their journey to become developed nations. He cautioned Malaysians against deifying the English language as according to him, English speakers never created great civilizations.

"(Ancient civilizations) Rome, Persia, Arabia, China and India built their civilizations on their respective languages. English-speakers have never created (past) global civilizations. English is not an intellectual language that develops the mind and brain. The Sanskrit language from India is superior. The Urdu and Arab languages are superior. The Chinese language is superior," he said.

During the debate, Hasan had used Bahasa Malaysia while selectively using English words like 'superior' to describe the non-English languages.

The Dewan erupted in laughter when Noor Amin Ahmad (PH-PKR-Kangar) asked Hasan whether there there was a Bahasa Malaysia word equivalent to the English word 'superior'.

Looking momentarily embarrassed, a smiling Hasan looked around sheepishly and asked for a Bahasa Malaysia equivalent to 'superior', to which he then used the Bahasa Malaysia word 'lebih unggul' (more superior) to describe the 'superior' quality of non-English languages.

"When India, Pakistan and Bangladesh was colonised (and the colonisers) used the English language (in those areas that have become independent countries today), they (India, Pakistan, and Bangladesh) became under-developed," Hasan ploughed on.

Hasan explained that developed economies like Japan, China, France, and Germany advanced themselves without relying on the English language.

"I agree that one needs to know English to sell computers, but computers have never been manufactured by countries that use the language (English). Even though one needs to know English to sell cars, cars have never been produced by countries that use English (as their main national languages)," Hasan claimed.

He was earlier debating on the need for Malaysia to emulate the policies and practices of developed countries to progress economically among others.

Plastic Waste In Exchange For Bus Ride

Indonesia's second-largest city has come up with a novel way to encourage its residents to recycle waste: giving free bus rides in exchange for used plastic bottles.

Under the scheme launched by Surabaya in April, commuters can ride red city buses by dropping off plastic bottles at terminals or directly 'paying' a fare with bottles.

A two-hour bus ticket costs 10 plastic cups or up to five plastic bottles, depending on their size, which the city hopes will help it meet an ambitious target of becoming free of plastic waste by 2020.

Surabaya is the first city in Indonesia to implement this scheme.

"Garbage, like plastic bottles, piles up in my neighbourhood, so I brought it here so the environment is not only cleaner but also to help ease the workload of garbage collectors," said Surabaya resident Linda Rahmawati.

City data shows that 15 percent, or nearly 400 tonnes, of Surabaya's daily waste is plastic.

A bus can collect up to 250 kg (550 lb) of plastic bottles a day, or roughly 7.5 tonnes in a month, the data shows.

After collection, labels and bottle caps are removed from the waste and it is auctioned off to recycling companies.

Money earned from the auction goes towards running the bus operations and to fund green spaces in the city, located on the eastern tip of Java, Indonesia's main island.

The world's fourth-most populous country is home to the largest expanse of tropical rainforest in Asia, but also struggles with grid-locked traffic in its congested cities.

"Indonesia is one of the biggest contributors in the world for plastic waste, and through this initiative, we hope to raise public awareness on the environment, especially issues that relate to plastic trash," said Irvan Wahyu Drajad, the head of Surabaya's transportation department.

Indonesia, an archipelago of thousands of islands, is estimated to be the world's second-largest contributor of plastic pollutant in the oceans after China, according to a 2015 study published in "Science" journal.

Another Surabaya resident also welcomed the scheme.

"We can reduce trash so it doesn't pile up at home because we can just bring them in and make good use of it. It is a win-win situation," said Sulastri, who, like many Indonesians, uses one name.

PH Healthcare - Not Sustainable

The Penang Institute has urged the health ministry to channel funds into developing public hospitals instead of implementing the healthcare scheme for low-income earners pledged in the Pakatan Harapan (PH) election manifesto.

Lim Chee Han, a senior analyst at the think tank, acknowledged that the Skim Peduli Sihat (SPS) would alleviate the burden of the bottom 40 (B40) group but warned that it lacked elements of sustainability.

Under PH’s 100-day manifesto, the SPS is scheduled to be launched nationwide in January 2019. Speaking to FMT, Lim suggested that the government use the funds to enhance public healthcare and facilities instead of spending some RM1.4 billion on the SPS programme.

“It is better if the government uses a large chunk of the budget (and channels it) into its development expenditure to build up the capacity of health ministry hospitals,” he said, adding that the public healthcare sector was both underfunded and under-resourced. If the health ministry doesn’t start giving more attention to the public healthcare sector, especially public hospitals, things could get dangerous just like the two hospital fires which happened in the last two years. This would not instil public confidence.”

Lim was referring to the fire in March which destroyed a portion of the Kuala Lumpur Hospital’s forensics department. It was caused by a short circuit at its store. In the other incident, a sealer machine caught fire at the packing room of an operation theatre at Sultanah Aminah Hospital (HSA) in September 2017.

Another fire which broke out at the intensive care unit of the HSA in 2016 killed six patients. According to news reports, that fire was caused by a faulty capacitor in one of the ceiling lights.

Lim said first and foremost, the government must ensure enough investments for the development and upgrading of public healthcare services.

“Although the SPS programme is stated as one of the promises in PH’s general election manifesto, the original Selangor state government’s model it proposed is a more populist and less beneficial model,” he said.

He suggested that more thorough cost-benefit studies on the current “takaful” model of the SPS programme be carried out, with public consultations with larger groups of stakeholders. He said the health ministry needed to understand both the positive as well as the negative impact of the programme on the country’s public health sector, especially for the retainment of specialists and allied health practitioners.

“We applaud the health ministry for emphasising primary care and preventive healthcare. As such, the government should spend more to strengthen healthcare services at the community level. The much-discussed community care based on the family doctor concept should be implemented and the government should address the rise in non-communicable diseases in the country.”

In July, the health ministry set up a task force to work on the implementation of the SPS. Its minister Dzulkefly Ahmad reportedly said the SPS programme would benefit some 2.6 million lower-income families or 10.4 million people nationwide.