It’s a media owner’s nightmare (I ought to know). TV3, the TV arm of Malaysian media conglomerate Media Prima, recently apologised for describing Vice-President-Elect Kamala Harris as a daughter of an “illegal foreign immigrant” (or more literally, a “foreign arrival without permission”) from India.
Is this a simple mistake or does it betray something more insidious?
Well for one, there was no wire news or other news outlet that described Kamala Harris’ mother as an illegal immigrant. So this descriptor originated from TV3. Ouch.
Was it intentional? No, I don’t think so. It’s actually worse.
In Malaysia, we are used to prefixing the word “immigrant” with the word “illegal”. That’s because there are probably at least 2 million undocumented foreign workers in Malaysia. And we have used it so much in the context of domestic issues that we forget 2 things:
First, we do have legal foreign workers in Malaysia who have working and residency status in Malaysia. So let’s not assume that just because someone is brown and foreign, he is an illegal immigrant (yes, we never have that assumption when someone is white and foreign).
Second, foreign workers, whether legal or illegal, are an important contributor to the Malaysian economy. Instead of demonising them for everything (crimes, jobs, Covid-19), let’s recognise them for their contributions and make their path to being legal painless. They are just trying to earn a living and feed their families like the rest of us, and need us to protect them from the rogue elements of Malaysian police and immigration personnel. With proper documentation, we can funnel them to sectors where Malaysians do not want to work in, so there’s no displacement of Malaysian workers.
It does not help that Malay supremacist politicians in Malaysia use the Malay word “pendatang”, which loosely means “immigrant” (but more literally means “arrivals”), to describe fellow Malaysians who are from non-Malay descent. It normalises the word, resulting in the current situation describing Kamala Harris as a “pendatang asing tanpa izin” or a “foreign immigrant/arrival without permission”.
The American presidential election hasn’t finished yet, but it really feels that the leader of the free world is now becoming more Malaysianesque in its politics. Here are some observations so far that resonate:
1. Rhetoric trumps facts
Call Biden a socialist often enough, and you get the almost half the population believing you. It’s a visceral reaction among the Cuban Americans in Miami-Dade county and first-generation Vietnamese-Americans. Leave alone the fact the Donald Trump dodged fighting for the Southern Vietnamese government in the Vietnam war. Lesson for Malaysia: The rhetoric that DAP is a Chinese chauvinist party will always plague the DAP, unfairly, in my view.
2. Race-based politics is now a feature in American politics
It’s not outwardly spoken, but race-based politics are taking hold in the US (just check out Senator David Purdue’s racist interpretation of Kamala Harris’s name). Demographic changes are soon making whites the minority population in the United States, and this seems to have made a certain segment of the white population fearful and defensive. In Malaysia, although there really should be no fear of Malay Malaysians being the minority population, the age-old visceral fears about Chinese Malaysians (which is largely rhetoric) remain.
3. There is a huge world view divide among rural and urban voters
Urban counties in the US voted for progressiveness, rural counties voted for conservatism. Sometimes, this phenomenon is framed in language that says urban elite looking down on their rural counterparts. In Malaysia, we have the same phenomenon too, rural voters fear the unknown, and prefer the familiar, whereas urban voters want an agenda for change to progress ahead. What is clear though, that in both US and Malaysia, the onus is on the urban progressives to understand the fears of their rural counterparts, and address them. And they have to do this not from the urban enclaves of Arlington, Virginia or Bangsar, but from Granger, Iowa and Pendang, Kedah.
4. Rural votes carry more weight than urban votes
The US electoral system is designed by the original conception of the “United States” (where the individual state is the primary entity). So the US states, regardless of its current population, gets a certain number of historical electoral votes that count towards the presidential election. Win the state, and for the most part, you win all the votes which the state is allocated.
This has a familiar ring with Malaysian politics. It doesn’t matter what the population of our constituency is, each constituency delivers one federal MP. So whereas in Igan, Sarawak, 19,592 registered voters vote in 1 federal MP, in Bangi, Selangor, it takes 178,790 registered voters to vote in 1 federal MP. Simply put, the weight of the Igan vote is about 9 times than that of Bangi vote.
5. Winning the popular vote is irrelevant
This is not a new lesson, the US has experienced this in the 2000 Gore vs Bush presidential campaign and more recently, the 2016 Trump vs Clinton. Same for Malaysia’s Barisan Nasional since the 2013 elections. And now, they are part of the Malaysian Perikatan Nasional government even though they only won 36% of the popular vote in 2018.
6. Use all means to manipulate the vote
The Americans are beginning to use the same techniques that Malaysia has perfected over the years: How to increase your chances by gerrymandering, particularly with delineation of the American equivalent of our constituencies. But in addition, the Republican party pulls out all the stops to suppress votes in certain battleground states, e.g not allowing ex-felons to vote in Florida, and after that law was repealed, not allowing people who owe fines to vote.
Let’s bid welcome to the United States of America to the League of Developing Democracies!
The A= Alibaba Group, T=Tencent, and M=Meituan-Dianping. Alibaba and Tencent’s potential is long well-known (and I have been an investor in them for some time), but I was intrigued by Meituan-Dianping.
Think Meituan-Dianping as a super app, that allows users to order food, travel services, and more. Like Grab or Gojek but without the ride-sharing part.
But unlike Grab/Gojek, it’s profitable. It also has a positive (and growing) operating cash flow.
Their stock price has almost quadrupled since the March lows, but I’ll be watching, and gnawing…
According to Singapore’s Straits Times, Lim Kok Thay, head-honcho of the Genting Malaysia Berhad. just pledged all his shares in Genting Hong Kong Limited, his cruise ship business, to guarantee loans. Straits Times has also pointed out he has pledged 32 per cent of his holdings in Genting Malaysia Berhad.
What does this mean for you, if you’re an investor?
Should you invest in companies whose owner/founder have pledged their shares to guarantee their company’s loans?
Aside from the fundamentals of investing in a cruise ship business right now (or a company that has openly declared a moratorium on paying its creditors), a dangerous investing situation arises when a founder/majority owner pledges their shares to guarantee company loans. If the stock price of the company continues to fall, the bank lenders might force-sell the pledged shares, triggering a wave of selling that might trigger a sudden downward spiral of the stock price.
I experienced this personally in the case of KNM Bhd, the Malaysian oil services company, listed on Bursa Malaysia. I had initially enjoyed supra-normal stock price returns from 2006 to 2008, but the stock then suddenly started tanking mid-2008. I found out from my broker later that this was due to KNM’s banks force-selling the pledged shares of the founder. I wish I had known of this pledging arrangement earlier, it certainly ratcheted the stock price downwards suddenly. Thankfully, I managed to sell the stock early enough to obtain a decent return, but I lost about one year’s worth of appreciation.
Sources told me that this happened to My E.G Bhd too in May 2018 when disastrous election results for Barisan Nasional triggered a share price drop for MyEG, which opened the threat of forced selling by banks on shares pledged by the founder.
Although, as an entrepreneur, I will resist pledging my shares in my company to guarantee a bank loan, sometimes, we do not have a choice. To obtain growth capital from banks, we will be asked to pledge our shares so that our company will be given loans. And if things go to plan, it is not an issue. Loans get paid back and our shares get unpledged.
But if things do not go to plan, then the entrepreneur runs the danger of losing control of her company. And the investor risks losing his shirt.
So when you see an owner/founder of a public company pledge her shares to guarantee her company’s loans, you should think about heading for the exit door.