RAM reaffirms UOB Malaysia’s AAA rating

KUALA LUMPUR — RAM Ratings reaffirmed United Overseas Bank (Malaysia) Bhd’s AAA rating with a stable outlook, as well as an AA1/stable rating for the bank’s RM1 billion tier-2 subordinated bonds.

“The one-notch difference between UOB’s long-term financial institution rating and the issue rating reflects the subordination of the debt facility to the bank’s senior unsecured obligations,” RAM said in a statement yesterday.

The ratings are premised on UOB’s sturdy credit metrics as well as its established franchise in property mortgages and small and medium enterprise financing. The ratings also incorporate RAM’s expectation that the bank will remain highly strategic to its parent, United Overseas Bank Ltd and that the group will readily provide extraordinary support if needed, the ratings agency added.

Notably, UOBM is the group’s largest asset and profit contributor outside Singapore.

“The bank’s asset quality is still deemed sound, although its gross impaired-loan (GIL) ratio had inched up to 1.7% as at end-March (end-December 2014: 1.6%), which is slightly higher than the industry average of 1.6%.

“At the same time, its GIL coverage ratio stood at a strong 102.8% (end-December 2014: 104.1%) while its credit-cost ratio stayed moderate at 0.4% (annualised) in the first quarter

“Nonetheless, the bank’s sizeable exposure to residential and non-residential property loans — which constitute about half of its lending — renders it vulnerable to a severe downturn in this sector, although this scenario is deemed unlikely at the moment,” RAM said.

UOB’s liquidity coverage ratio stood strong as at the end of last year, well above the minimum requirement of 70%.

The bank also has a strong retail deposit base, which made up 52.1% of the group’s total deposits as at end-March.

“While we observed some improvement in the bank’s loans-to-deposits ratio (end-March: 91.6%), it remained higher when compared to the industry’s of 86.3%. Meanwhile, UOB’s capitalisation is robust relative to its risk profile.

“Its common-equity tier-1 and total capital ratios were kept sturdy at 13.5% and 17.%, respectively, as at end-March (end-December 2014: 14.5% and 17%),” the ratings firm said.

Property, construction hottest investment bets, says analyst

KUALA LUMPUR — Investors should look at property and construction, which should be the hottest portfolios, when they consider investing in bonds and equities for the next half of the year, said an analyst.

The analyst said investors should have a 50/50 portfolio approach when investing, in order to boost their income generation.

Fundsupermart Malaysia (FSM) general manager Wong Weiyi said his team of fund managers has started to recognise the downward trend in the economy earlier this year, thus recommending a balanced investment of 50% in bonds and 50% in equity.

“There are times where we’re more confident with the equity market so we may advise to go overweight with equity investment but for now, we advise a balanced profile,” Wong said.

FSM analyst Chin Ru Shin said Malaysia’s economic growth is not independent from global developments, which meant it needed government initiatives to be sustained.

Chin said a major beneficiary from such government initiatives will be the construction industry, which made the property sector — especially in the affordable housing segment — as the hot sector to invest in at the moment.

This sentiment was supported by Maybank IB analyst Chan Li Shin who said construction players with solid execution capabilities and healthy balance sheets would continue to outbid their competitors, and enhance their order books.

“Construction job awards picked up strongly in the first half of the year (1H16), led by two key infrastructure projects — Klang Valley MRT 2 and Pan Borneo Sarawak Highway. Based on the value of jobs awarded to the major listed construction players, the total infrastructure job awards in 1H16 increased seven fold as compared to 1H15,” Chan said.

Hong Leong Investment Bank equity analyst Jason Tan said affordable housing remains the bright spot, this can be seen by the launch of Elmina Valley Phase 1 and 2 (within the RM600k range) which recorded above 90% of take up rate within a day.

“The recent launch of MyDeposit scheme from government will provide first home buyers with grants up to RM30,000, for household income of below RM10,000 and properties below RM500,000,” Tan said

“Major sectors that are jittery in terms of performance are the financial and plantation sectors, as there is moderation in growth for the financial sector and despite prices of commodity rebounding, there will still be downward pressure on the sectors,” Chin said.

Wong said although the dynamics for the oil and gas (O&G) sector appeared balance, with the cut in supply and the comeback in demand, there are still pressures on the sector.

“A strong conviction on the direction of O&G is apparent, especially with the price of WTI and Brent crude oil prices, there might be good counters to invest but it will take time,” he said.

Analyst Yeap Kar Chun said it was evident that major oil and gas players such as Petronas have not been awarding projects for exploration and together with capital expenditure cuts, downstream players in O&G do not have incoming projects to boost their earnings.

YTL asked to pay market price for TNB land

KUALA LUMPUR — YTL Power International Bhd will have to pay the market rate for land lease of two power plants, based in Terengganu and Johor, before the renewal of its power purchase agreement (PPA) with Tenaga Nasional Bhd (TNB).

The land lease is the core reason for the dispute that erupted between TNB and YTL, which revolves around a small amount YTL is said to have paid for the land lease in Paka, Terengganu and Pasir Gudang, Johor under the old PPA.

The industrial lease rate for the Pasir Gudang area was three to five times more than what YTL Power had paid under the previous PPA.

The exact price of land leased to YTL Power is not disclosed. The dispute has prompted the national utility company to file for a judicial review on July 4, challenging the direction issued by the Energy Commission (EC) to sign a new PPA with YTL.

TNB said the expiry of a 21-year power purchase agreement last year meant YTL Power Generation Sdn Bhd would no longer export power to its grid from Oct 1, 2015.

However, in the same month (October), the government announced an extension for the Paka power concession from March to Dec 2018. YTL Power is the only independent power producer (IPP) to have a power-generating plant on TNB land.

Any termination of the PPA will impact the Paka and Pasir Gudang power stations.

TNB said the agreement it signed with the independent power producer was the only PPA that was based on a take-or-pay mechanism for a period of 21 years.

It said the total capacity of the power station in Paka was 780 megawatt (MW), consisting of two blocks of 390MW combined-cycle gas-fired generation facility.

The capacity of the power station in Pasir Gudang was 390MW, consisting of one block of combined cycle gas-fired generating facility, it said.

The gas-fired combined cycle power plants in Paka and Pasir Gudang has combined generation capacity of 1,212 megawatts.

In 2014, all four workers’ unions of TNB came together in a rare show of unity to urge the government-owned entity to severe all ties with YTL Corp.

They alleged that YTL muscled in and profited handsomely from a nationally important power sector. They wanted TNB not to renew YTL’s power purchase agreement when it was to expire last year.

They also want TNB to stop working with YTL Power on Track 4A, a new proposal for a power plant in Pasir Gudang, Johor, which was recently awarded by the EC.

It was the first time the TNB Junior Officers Union had brought up such a protest in 67 years.

California ill-prepared for Big One, experts say

BEYOND the sunshine, the palm trees and Hollywood, if there is one certainty in California, it’s that a massive earthquake will strike at some point.

But when the Big One hits, a recent report says, the western state is ill-prepared and local officials as well as major businesses need to face that reality to “prevent the inevitable disaster from becoming a catastrophe.”

Drafted by a group of business and policy leaders, the report identifies several key areas that need to be addressed before a quake as strong as a magnitude eight happens, notably aging infrastructure, water supplies and the risk of catastrophic fires.

One of the biggest vulnerabilities, the report states, relates to the Cajon Pass, a narrow mountain pass where the mighty San Andreas Fault intersects with key lifelines, including freeways, railway lines, gas and petroleum pipelines as well as electric lines.

A major earthquake in the San Andreas, one of California’s most dangerous faults, would cut most lifelines in and out of southern California, preventing critical aid from reaching some 20 million people and hampering recovery efforts, experts say.

The quake would also rupture flammable pipelines, triggering explosions and fires that could burn out of control.

“Anything that comes into southern California has to cross the San Andreas Fault to get to us — gas, electricity, water, freeways, railways,” said seismologist Lucy Jones, who acted as adviser for the Southern California Disaster Risk Reduction Initiative committee, which issued the report.

“Most of the water we get has to cross the fault to reach us but when the earthquake happens, all of the aqueducts will be broken at the same time,” Jones, known as California’s “earthquake lady,” said.

She said one way to get around this dependency was to look at alternative water sources, including from contaminated aquifers beneath the Los Angeles area which could be cleaned up, albeit at a massive cost.

“The best defence against a broken aqueduct is to not need an aqueduct,” Jones said.

Installing automatic shutoff valves on natural gas and petroleum gas pipelines that run near the San Andreas Fault could also help prevent major fires, according to the report.

As for maintaining communication with the outside world once the Big One strikes and disrupts energy grids, Jones said solar power could be one answer.

Also addressed in the report is the vulnerability of many homes and buildings in southern California, where local communities have yet to follow the example of the city of Los Angeles in requiring that structures that risk collapsing be retrofitted.

In addition, experts say, building codes need to be reviewed to make sure not only will structures not kill people but will remain standing and usable after a major quake.

“Today, we are building in a huge financial vulnerability,” Jones said.

“We are not going to kill people with these buildings but we are not going to be able to use them afterwards and that’s a big deal.

“For one to two per cent more of the cost, we could most likely make buildings still usable,” she said.

Computer simulations by the US Geological Survey (USGS) suggest a magnitude 7.8 quake at the southern end of the San Andreas fault would cause shaking for some two minutes, killing at least 1,800 people, injuring 53,000 and causing US$213 billion (RM844.113 billion) in damage.

The largest recorded earthquake in California was the 1857 Fort Tejon quake which ruptured the San Andreas for 225 miles (360km).

Scientists say pressure and seismic energy has since furiously been building along the fault, which constitutes the boundary between two moving tectonic plates — the North American and Pacific plates.

“It is inevitable we will have a big earthquake because that pressure needs to be released,” USGS seismologist Robert Graves said.

He said given the certainty disaster will strike, California needs to address head-on vulnerabilities to minimise the impact.

“We need to get people to recognise an event like this is a community event and we are at the beginning of that process,” Roberts said.

“This is more than say me, as an individual, making sure my building is going be safe.

“If all the other buildings in my neighbourhood are knocked down and the water delivery system and power aren’t working, it won’t matter my building is safe,” he said.

“So, we are in this together.” — AFP

India needs more technocrats in Cabinet

Last week’s Cabinet reshuffle in India was a virtual jobs programme for government officials. Prime Minister Narendra Modi expanded the body to 78 members — just a few short of the legally mandated maximum — largely for electoral reasons. Several new inductees are from the large states of Uttar Pradesh and Gujarat, which go to the polls in a few months. Many others are members of lower caste and minority communities whose votes Modi’s Bharatiya Janata Party is seeking.

In some cases, performance has been rewarded: Dynamic energy czar Piyush Goyal has added the Ministry of Mines to his portfolio. But other changes revive questions about just how much the Indian government values expertise in its top officials.

Investors were particularly dismayed by the shunting out of the Finance Ministry of its junior minister, Jayant Sinha — a Harvard MBA, former consultant and venture capitalist who spoke their language and was seen to represent their interests. Moved over to the Civil Aviation Ministry, Sinha becomes the second high-profile technocrat distanced from the controls of India’s economy in recent weeks, after respected central banker Raghuram Rajan announced he would be returning to academia this fall.

It’s true India’s government has always had a problem with embracing outside experts. Few prime ministers have appointed to positions of real influence those with successful careers outside politics or the bureaucracy.

But the problem seems to be growing. Forget about ministerial posts, Modi has disbanded even such pools of external expertise as the Prime Minister’s Council of Economic Advisers and the National Security Advisory Board. One government think tank remains, the National Institution for Transforming India or Niti, nominally led by the Columbia economist Arvind Panagariya. But even here, leadership has actually been handed over to a career bureaucrat.

Given the scale of the changes needed to transform India into a middle-income country, it’s simply not realistic to rely exclusively on government insiders. Yet although Modi recognises the size of the task, he has dismissed the possibility “experts” can tell him what needs to be done. Instead, he has turned increasingly to career bureaucrats for advice, even to formulate out-of-the-box reform proposals.

The cost of this bias should be obvious. In a country where excessive regulation is a key hindrance to growth, the bureaucrats who gain the most from red tape are unlikely to remove it. Just recently, a policy meant to reform civil aviation in India wound up featuring a complicated government-administered subsidy regime. Bureaucrat-framed rules that were supposed to allow companies like Apple Inc. open stores in India in fact leave too much discretion to officials to work properly.

More importantly, as one of India’s most respected economic journalists put it, bureaucrats are trained to follow rules and precedents; they’re a poor source of new ideas. And India’s bureaucracy — where one’s rank and posts depend crucially on an examination candidates take in their 20s — is almost uniquely unsuited to dealing with the problems thrown up by an economy doubling every few years.

The sectors that lead Indian growth such as telecommunications, healthcare and finance are most in need of regulatory expertise from outside the government. In telecom, for instance, the government has struggled to deal with poor service quality, born of its inability to frame supportive rules for allocating radio spectrum. Such sectors badly need the sort of focus and creative thinking a small team of professionals in the last government led by software billionaire Nandan Nilekani brought to the digital enrolment of welfare recipients.

Indeed, India’s history shows when governments have turned to technocrats for help, the economy has generally done well. In the 1950s, a cadre of scientists and economists recruited by independent India’s first prime minister Jawaharlal Nehru helped raise India’s growth from one per cent to over four per cent. After a long period of statist stagnation, India began to grow again in the 1980s when then-prime minister Rajiv Gandhi tapped the expertise of technocrats such as US-trained engineer Sam Pitroda. And India’s high-growth phase from the 1990s onward was kicked off by the most prominent technocrat of them all, the economist Manmohan Singh, who rose to become Modi’s predecessor as prime minister.

In stump speeches in 2014, Modi famously said the Indian economy needed “hard work, not Harvard.” His ability to squeeze greater effort out of his cadre of generalists isn’t in question. Pushing them to be more reformist and creative is another matter. For that, what India needs is a lot more Harvard-trained technocrats like Jayant Sinha. — Bloomberg

Emulate Sattar’s humanitarian legacy

ABDUL Sattar Edhi, of Pakistan, one of the world’s most devoted humanitarian workers, died last week aged 88.

Pakistan’s Prime Minister Nawaz Sharif, in a glowing tribute, called Sattar “the greatest humanitarian servant”.

Indeed, for over six decades, Sattar dedicated his life caring for the poor, widows, orphans, abandoned infants, refugees and displaced persons and helping victims of injustice and exploitation and those in prisons and their families. Single-handedly, he changed the face of welfare in Pakistan.

I was privileged to have known and be associated with his work and his organisation in the 1990s, when I headed the United Nations/International Labour Organisation office in Pakistan.

As a teenager, Sattar had to flee with hundreds of thousands of Muslims at the time of partition from India in 1947, and came to live in Karachi in the newly-independent Pakistan.

Coming from a poor family, Sattar was deeply moved by what he saw in his new homeland. So many sick and despised, lying on the pavement needing help and there was no one to care and treat them.

So he set up benches and got medical students to volunteer. Being penniless, he begged for donations on the streets. And people gave. He bought a small room where he established a free, makeshift “dispensary” to provide basic care for the sick and ailing and whatever available medicines.

Sattar did not finish school, he would say that the world of suffering was his great tutor.

The needy and their needs were simply overwhelming but Sattar unrelentingly carried on. Some years later, he set up a foundation and later a trust, with an initial sum of a five thousand rupees (RM296). It both carried his name, despite his reluctance, as that was a requirement for registration.

Regarded as a “guardian for the poor”, Sattar never held back, personally pleading for more help and support, which he received and which allowed him, over the years, to expand his services.

Today, the Edhi Foundation provides 24-hour emergency assistance and welfare services for the needy across Pakistan and abroad.

It manages shelters for the destitute, especially women and children, orphanages, free hospitals and clinics, drug rehabilitation, help for the mentally and physically challenged, basic education and vocational training for street children and other rescued and rehabilitated persons, blood and drug banks, and the world’s largest ambulance service operating 1,500 vehicles (Sattar himself drove an ambulance for many years), and air, marine and coastal services.

The foundation has run relief operations in Africa, the Middle East, the Caucasus region, Eastern Europe and the United States where it provided aid following Hurricane Katrina in 2005. In times of disaster, it has brought much needed help and assisted in reconstruction in Southeast Asia, among others.

An outstanding feature of Sattar’s work, based on his strict philosophy, is that no one needing help is ever turned away, regardless of ethnicity, religious sect or beliefs or even their political leaning. The same applied to countries where emergency help is needed.

Sattar was known for his ascetic humble lifestyle, owning only two pairs of traditional clothes, never taking a salary from his organisation and living in a modest apartment next to his organisation’s office with his wife Bilquis, a qualified nurse, and their four children.

His wife and family have increasingly taken on more responsibilities for operations and management along with employed professionals and scores of volunteers from diverse ethnic and faith backgrounds.

Sattar never wanted any credit for himself, despite a plethora of honours bestowed on him by nations and institutions at home and abroad; shunned publicity and instead directed all the attention to the ever-growing demands for help and the unfinished work.

He had been referred to as Pakistan’s version of Mother Teresa, and the BBC wrote that he was considered “Pakistan’s most respected figure and was seen by some as almost a saint”.

What a wonderful, caring world we will have with more Abdul Sattar Edhi’s.

RUEBEN DUDLEY

PETALING JAYA

Step up security at airports

THE blast at Istanbul’s Ataturk Airport recently which left scores dead and injured should be a stark reminder that security at airports cannot be taken for granted.

Malaysia Airports Holdings Berhad should seriously look at stepping up security at the entrances to major entry points in the country, especially at KLIA and klia2.

One way is to allow into the passenger terminal only those who are flying. This can be done by checking the flight itinerary (air ticket) and passport at the entrance of the terminal.

This will not only reduce congestion inside the terminal but also shorten the queues at check-in counters as some family members join in to see their loved ones off. An added security check would be to scan at the entrance all hand luggage and luggage to be checked in before travellers proceed into the terminal to airline counters.

This is exactly what airports in the Philippines have been doing for many years now, even at the smallest of terminals; Terminal 4 at Ninoy Aquino International Airport in Manila.

We may not be seen as a security risk, but we cannot take safety for granted. It is better to be safe than sorry.

On another note, airlines must strictly enforce the one piece of hand luggage per passenger with a maximum weight of 7kg for economy class. There should be no compromise. It is a common sight on certain flights out of KLIA to see some passengers with two heavy pieces of hand luggage.

The no-parking and no-waiting at KLIA and klia2 at arrival and departure levels should be strictly enforced. It is common to see some vehicles double-park and some even have the audacity to pick up friends or family members in the same area as the airport limousine.

Vehicles left unattended should be towed away just as unattended luggage at a passenger terminal is removed by the airport security. This is one way to discipline the owner/driver.

Vehicle owners should not complain about the parking rates at KLIA and klia2. They should be civic-minded enough to adhere to the law.

Security should be heightened for the safety of property and lives.

WILLIAM DENNIS

Subang Jaya

China’s lucrative football betting business

China is mad for football, and the proof is with the bookies. In just the past month, police have seized tens of millions of dollars and arrested more than 500 people in crackdowns on gambling rings that surged in popularity during the UEFA European Championships. If they’d wanted to arrest more, they probably could have. China’s illegal gambling industry is worth a staggering $600 billion (RM2.38 trillion) annually, according to one estimate, making it by far the world’s largest.

Those numbers would be troubling in any country. But they’re particularly so in China, where tycoons are busy buying up some of the world’s most storied clubs and talented players, and even proposing a well-funded alternative to the Champions League. China’s history of corruption in its own leagues, combined with all that illicit betting, is leading to legitimate worries that those acquisitions might further taint the global business of football.

Addressing this problem will require more than periodic crackdowns on bookies. Instead, China needs to make peace with its love of gambling — and legalise it.

For two decades, football and corruption have been largely synonymous in China. Its domestic leagues, and their underpaid players and referees, have long been easy marks for organised crime and well-heeled punters. It was no secret, either. For years, whenever a Chinese team failed to perform up to expectations, fans and even state-owned media would simply assume somebody was paid off.

They weren’t necessarily wrong. In 2009, the government began a multi-year crackdown that resulted in dozens of referees, sports officials and players getting convicted — including two stars from the 2002 national team that reached the World Cup. Xi Jinping, who oversaw the crackdown prior to becoming China’s top leader, didn’t see it simply as a matter of law enforcement. He saw it as laying the groundwork for China to build a world-class football programme. Since 2012, Xi has tried to boost youth and amateur leagues while tacitly encouraging the country’s new tycoons to pour money into the top-level Chinese Super League. Those tycoons haven’t let him down, with everyone from Alibaba’s Jack Ma to Wanda’s Wang Jianlin buying teams.

In theory, all that state-approved money should’ve made its way into the pockets of players, referees and officials, thereby reducing the financial incentive to fix matches. But things still aren’t as clean as China might like. In March, the Hong Kong Jockey Club, the city’s official gambling operator, announced that it had banned bets on Chinese Super League (CSL) matches, citing the need to “safeguard the interests” of its customers. Meanwhile, an official with the International Centre for Sports Security, a watchdog group in Qatar, flatly stated that “we still see suspicious betting on some matches”.

The solution to this shadiness is to bring the gambling business into the light. Since 1989, China has had a national “sports lottery” that allows small bets on international matches, but not on the Chinese Super League. That might not have been a problem when the CSL was a football backwater. But as the league becomes a destination for top players, punters should be allowed to bet on it as easily as they can on European leagues.

That would be a crucial, if counter-intuitive, first step toward cleaning up the sport. Illegal bookies and their untraceable cash are far more likely to fix matches than regulated bookmakers who have a stake in keeping the marketplace clean. And for punters, the prospect of a legal, transparent transaction — including a guaranteed payout — should be incentive enough to shift money from dirty bookies and the crime syndicates behind them.

Gamblers should also be able to place bets online. Last year, the government banned doing so due to fraud in several Internet lotteries. In the absence of legal options, and in search of convenience and anonymity, Chinese punters have gone digitally underground and formed thousands of illegal groups where they make (theoretically) untraceable bets. In recent weeks, WeChat, China’s most popular social media service, has restricted more than 8,000 groups suspected of gambling, and placed limits on online payment systems to control wagers.

That’s a losing battle. Better that the government legalise the whole enterprise and keep a watchful eye on it. That won’t erase all doubts about the integrity of Chinese football. But a commitment to go beyond periodically purging bad actors, and to sensibly regulate the source of the problem, would alleviate the worst concerns. As China continues its push to become a football superpower, that’s a goal that everyone in the game should want to score. — Bloomberg

Women to fore in changing of guard

PETALING JAYA — These might seem to be remarkable times for female political leadership across the world.

Many have wondered whether any other woman leader would be her country’s Iron Lady, the likes of Margaret Thatcher and Angela Merkel.

Can Theresa May be a duplicate of the German Chancellor?

Like Merkel, German TV commentator Wolfram Weimer noted last week that May “operates in an aloof and sombre way, but … always knows what she wants”.

But she is also, of course, a woman, and in a piece for the German daily newspaper Die Welt, writer Mara Delius expressed an increasingly widespread sense:

That May, along with Merkel and Scotland’s first minister, Nicola Sturgeon, represent part of a new femokratie, coming to “clean up the mess created by the men”.

They were, Delius said, “post-modern Elektras in trouser suits and rubber gloves”.

The piece suggested, Europe looked at last to be in safe (female) hands.

There are other women who have stamped their authority on British politics:

  • Angela Eagle has finally mounted a challenge on Jeremy Corbyn for the Labour leadership.

  • Aside from Sturgeon, the Conservative and Labour party leaders in Scotland, the first minister of Northern Ireland and the leader of Plaid Cymru are all women.

  • The Green party has been led by a woman for almost a decade and its former leader, Caroline Lucas, is running again as a job-share candidate.

Internationally, Hillary Clinton is the favourite to take the US presidency in November, and could even pick another woman, Elizabeth Warren, as her running mate.

The head of the International Monetary Fund and the US attorney-general are women, and the next UN secretary-general, due to be chosen later this year, may well be, too.

The Guardian newspaper asked:

  • Is this all a happy coincidence?

  • Has the glass ceiling blocking female power finally been smashed?

  • Or is the world in such a parlous state that troubled nations have realised they need a woman to clear things up?

As Iceland’s first female prime minister, Johanna Sigurdardottir, suggested in an article in response to the Brexit result, quoting lines by the Icelandic poet Ingibjorg Haraldsdottir: “When all has been said /when the problems of the world / have been dissected discussed and settled … a woman always arrives / to clear the table / sweep the floor and open the windows / to let out the cigar smoke / It never fails.”

That explanation finds resonance with the Conservative peer Lady Jenkin of Kennington who, with May, founded their party’s campaign to elect more female Tory MPs, Women 2 Win.

That two of the most favoured candidates for the party’s leadership were women, she said: “I think the whole country feels rather relieved … I think there is a feeling of, ‘Yes, nanny, please come and tell us what to do.’

“I think they feel at a time of turmoil, a woman will be more practical and a bit less testosterone-driven in their approach,” she said.

“More collaborative, more willing to listen to voices around the table, less likely to have an instantly aggressive approach to things.”

See also Page 40

Without elephants, Ringling Bros circus goes on

CALIFORNIA — The wrinkled leading ladies of the Ringling Bros and Barnum & Bailey circus, wearing sequined headpieces and holding each other’s tails, performed their last routine in May. It was the end of an era: Animal-rights laws had finally made elephants, the 134-year symbol of the American circus, economically unviable as travelling entertainment.

Traditionalists were sad. Activists were happy. And Feld Entertainment, which owns Ringling, was left to reinvent one of the hoariest forms of family amusement — a corporate high-wire act if there ever was one, as the Feld family learned the hard way in a disastrous 2006 modernisation attempt.

The new Ringling show, Out of This World, produced by Alana Feld, 36, premiers today in Los Angeles. But it first stopped in this dusty Central Valley city for a test run. Would new elements — an ice floor, an elaborate narrative, a smartphone app — make audiences forget to miss the elephants? Or would the Greatest Show on Earth prove a little less grand without its prancing pachyderms?

Judging from the zealous applause during a two-hour performance on Saturday and interviews with patrons afterward, Feld’s vision has its fans. “It didn’t feel like the same old circus which comes every year, and we really liked that,” Amber Ford, 28, said as she left the Selland Arena with her three-year-old son, Braden, and her mother, Esther Adams.

A reporter baited her: Did she find anything missing — something strongly associated with the circus experience, perhaps?

“Yes,” Ford said, emphatically. “There were no acrobats on trampolines.”

The show does, indeed, go on.

Work on Out of This World began roughly two years ago, long before Feld Entertainment announced in March last year it would phase out elephants nationwide because so many cities (Los Angeles among them) had banned the use of related training equipment. “We saw this as an opportunity to evolve the Ringling Brothers brand,” Feld said in an interview. “We have always changed our show, adding new themes and bringing in new performers. But this was about doing something drastic.”

She quickly said the company paid attention “to the tradition of circus, which is about seeing these incredible humans and animals coming together to show audiences what’s possible.”

Modernisation efforts are never easy, especially when the product being updated relies on nostalgia for a great deal of its appeal. Ringling’s customers tend to be parents wanting to pass along a rite from their own childhoods — the smell of the sawdust, the drippy snow cone, the booming voice of the ringmaster. Too much change too fast could upend a form of live entertainment which remains an enormous draw, particularly among working-class families. About 10 million people go to a Ringling circus each year.

Feld Entertainment, which also produces Disney on Ice, Disney Live and Monster Jam arena shows, knows this tightrope all too well. In 2006, Feld’s older sister tried a circus update which eliminated the three-ring model, added giant video screens and vanquished the tiger tamer and other classic acts. Audiences and critics recoiled, and Ringling quickly backtracked.

Perhaps learning from that mistake, Out of This World relies on tried-and-true circus acts (clowns having a snowball fight, a trainer kissing a leopard on the lips) while layering on a story line, adding the element of ice and speeding up the pacing.

The show begins quietly. There is no ringmaster shouting “Ladies and gentlemen! Children of all ages!” Instead, the darkened arena is made to look like outer space using video of stars and constellations projected on the ice and the arena walls. An eerie science-fiction soundtrack plays as fake fog envelops a contraption in the centre ring which slowly spins like a satellite. Aerialists dressed as astronauts (white suits, bubble helmets) soon perform a series of slow-motion balancing tricks on it.

Then comes a blow-your-hair-back opening that sets up the tale: Tatiana, an evil galactic queen, has kidnapped the circus stars and hidden them on fictional planets, requiring the ringmaster and others to race against time to find them. Fireworks pop and comets streak across video screens. Out race nine clowns, 16 ice skaters, 12 stunt riders on horseback, 10 unicyclists and a half-dozen motorcycle show-offs, among other performers, including a dwarf.

And that’s just the humans. Out of This World includes about 80 animals, such as lions, tigers, dogs, pigs and a kangaroo. (Some acts were stronger than others in the Fresno trial run. While the snarling tigers held the audience rapt, a performance by donkeys — they hopped over sedentary llamas — lacked a how-did-they-do-that theatricality.)

The show, which requires 56 railroad cars to transport, incorporates technology in new ways. A free app has features like push notifications designed to engage the audience before the show and during intermission. Toy swords, telescopes and blasters sold in the arena aisles and corridors before show time change colours during the performance, based on the storyline. (Everything turns green, for instance, when Queen Tatiana emerges.)

Sensors that create computerised spotlight effects are sewn into costumes, in particular those worn by stunt skaters from China, who zoom across the ice on stilts. “Nothing can replace the elephants,” Feld said. “This wasn’t about trying. This was about creating a new genre of circus, with acts seamlessly transitioning from floor to air to ice.”

And if anyone misses the elephants, which first joined the circus in 1882 when P.T. Barnum added one named Jumbo to his line-up, there is always the concession stand. Feld sells US$16 (RM64) snow cones in plastic cups shaped like elephants. They sit on yellow, red and blue drums with their trunks and front feet held gamely in the air. The hinged head tilts back to reveal pineapple, cherry and raspberry-flavoured ice.

Slurp. — The New York Times

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