IN BRIEF

Myanmar’s top monks

say not linked to group

YANGON — The body representing Myanmar’s top monks has distanced itself from a vocal Buddhist nationalist group, in an unprecedented blow to the anti-Muslim network blamed for a surge in sectarian violence across the country. The Sangha Maha Nayaka Committee, which represents the upper echelons of the clergy in the overwhelmingly Buddhist country, issued a statement late on Tuesday saying it has never endorsed the ultra-nationalist “Ma Ba Tha”. The Ma Ba Tha is a noisy monk-led group that has been at the forefront of anti-Muslim protests in Myanmar in the three years since it was founded. It recently said it was established under Sangha rules, a claim refuted by the country’s top monks, putting clear water between the mainstream Buddhist clergy and the hardline group for the first time. — AFP

Pokemon Go fans told

not to play in museum

WASHINGTON — The US Holocaust Memorial Museum has told Pokemon Go fans not to play the popular new mobile game in its premises, describing it as “extremely inappropriate” in a memorial dedicated to the victims of Nazism. The game involves using a mobile device to find and capture virtual Pokemon characters at real life locations, including apparently inside the Washington-based museum. The idea of players roaming its halls, eyes glued to phones in search of the computerised figures, shocked many after an image was posted online showing one of the characters located outside the doors to the museum’s Helena Rubinstein Auditorium. “We are attempting to have the museum removed from the game,” the museum’s communications director, Andy Hollinger, said in a statement.
— Reuters

Aussie expat fired for

anti-Singapore rant

SINGAPORE — An Australian expat has been sacked for insulting Singaporeans in a rant triggered by the unavailability of the smartphone game Pokemon Go in the city-state. Sonny Truyen, who had been working for just a week as a search-engine consultant with property listings site 99.co, had complained on Facebook about Singapore not being one of the launch markets for the Nintendo game, which has become hugely popular worldwide. “You cant f****** catch pokemon in this piece of f****** s*** country,” Truyen posted in a thread at the weekend. The comment triggered a backlash in Singapore, where a number of foreigners have lost their jobs over social media posts seen as offensive to locals. The company’s chief executive, Darius Cheung, fired Truyen and apologised for the Australian’s behaviour. — AFP

Goodbye Cameron, hello May

LONDON — Theresa May prepared to become Britain’s second ever female prime minister yesterday after David Cameron stepped down following a seismic referendum to leave the European Union that sent shockwaves round the world and wrecked his career.

Cameron was to hold his final weekly question-and-answer session in parliament before tendering his resignation to Queen Elizabeth II at Buckingham Palace.

The monarch would then call on May, previously the interior minister, to form a government, and the newly-anointed prime minister would make a statement outside her new Downing Street residence.

European leaders have asked the government to move quickly to formalise its divorce from the EU but May has indicated she will not be rushed into triggering the formal procedure for Brexit.

The 59-year-old vicar’s daughter, who will be Britain’s second female premier after the steely Margaret Thatcher with whom she is often compared, must also attempt to bridge Conservative Party divisions and deal with a potential economic downturn.

Her other daunting challenges include keeping pro-EU Scotland from bidding for independence in order to stay in the 28-nation bloc, and weaving new global trade and diplomatic alliances to prepare for a post-Brexit future.

For The Guardian daily, “she comes to office at a time that would have challenged a Churchill”.

May campaigned, albeit quietly, with Cameron for Britain to stay in the EU and she will have to convince eurosceptics within her party and the country at large that she has no intention of ducking out of implementing the June 23 vote to quit the bloc.

“Brexit means Brexit — and we’re going to make a success of it,” the politician, who is reputed for being a tough negotiator, has said.

After six years in office, Cameron announced he would resign the day after the vote. He will chiefly be remembered for organising a referendum aimed at stopping his party “banging on about Europe” and then spectacularly failing to clinch it.

He sought to deflect that criticism in an interview with the Daily Telegraph yesterday, saying: “As I leave, I hope people will see a stronger country, a thriving economy and more chances to get on in life.

“It has been a privilege to serve the country I love.”

May’s bid for his job accelerated as key proponents of Britain’s EU withdrawal, including charismatic former mayor of London Boris Johnson, stepped back in a head-spinning round of political bloodletting.

The vote exposed deep inequalities in British society, which May has promised to address, and upended the political scene, tipping her Conservatives and the main opposition Labour Party into turmoil.

May was expected to begin announcing her cabinet picks later yesterday, including a Brexit minister in charge of leading negotiations with the EU.

Women were expected to scoop several top jobs. Among those tipped for senior roles were energy minister Amber Rudd, foreign minister Philip Hammond, Brexit campaigner Chris Grayling, who is the Conservatives’ House of Commons leader, and Justine Greening, international development secretary.

May has been a tough-talking interior minister for the past six years and is something of an unknown quantity internationally, although she has received ringing endorsements from party colleagues and a normally sceptical British tabloid press.

She is also liked in and around Maidenhead, the well-to-do commuter town west of London that she has represented in parliament since 1997.

“She will get this country back on its feet,” said 69-year-old Jim Charlesworth, a neighbour of May and her banker husband Philip. — AFP

Second candidate challenges Corbyn for Labour leadership

LONDON — A second candidate joined the race yesterday to try to unseat Britain’s opposition Labour leader Jeremy Corbyn, who is battling a party revolt in the wake of the Brexit vote.

“I will stand in this election and I will do the decent thing and fight Jeremy Corbyn on the issues,” Labour lawmaker Owen Smith told the BBC.

He will join fellow MP Angela Eagle in trying to wrest the party leadership from the veteran socialist, who has refused to quit despite a major rebellion by his MPs.

The winner of the contest, which will formally get under way with an announcement of the timetable today, is expected to be crowned in September.

Smith said he had decided to stand after seeing a “dramatic collapse of faith and confidence in Jeremy” over the last couple of weeks.

Many moderate Labour MPs have never reconciled themselves to Corbyn’s election as leader last September, secured thanks to strong support among ordinary party members.

They moved against him in the wake of Britain’s shock June 23 vote to leave the European Union — an outcome deplored by most of the parliamentary party.

Three-quarters of Labour MPs backed a vote of no confidence in Corbyn on June 28, accusing him of lacklustre leadership in the campaign which culminated with many longtime Labour voters in underprivileged areas defying the party line and backing Brexit.

Many party grandees also fear he would be unable to win a general election if one were called early, although incoming prime minister Theresa May has ruled out an early vote.

Late on Tuesday, Corbyn won a first victory over his critics after the party’s executive committee ruled he would automatically be included on the leadership ballot.

The decision means that — unlike his challengers — he does not need the required 51 nominations from Labour MPs or members of the European Parliament (MEPs) to stand.

Smith, a former BBC radio producer seen as more centrist than Corbyn, has only been a member of parliament since 2010, representing the Welsh constituency of Pontypridd.

But the 46-year-old has been a member of the Labour party since he was 16, and was special adviser to Paul Murphy, the Labour government minister in charge of Wales and then Northern Ireland, between 2002 and 2005.

After a stint working as a media adviser to pharmaceutical group Pfizer, he became an MP when Labour moved into opposition, and became its spokesman on Welsh affairs. — AFP

FROM ACTING TO SAVING RHINOS

CELEBRITIES lending their star power to causes such as refugee welfare, health, environment and so on is nothing new. However, in some cases the celebrities stick to their causes and actually do some good.

One of them is Arrow star Paul Blackthorne. He is actively involved in the conservation of rhinoceros and efforts to shut down poaching as well as the sale of rhino horns.

He is a familiar face on many popular television series such as 24 Hours (2004), Lipstick Jungle (2009) and CSI: Miami (2010) before landing his most successful television gig to date — Arrow.

The series is a modern retelling of the DC comic character Green Arrow, starring Stephen Amell in the titular role, who leads a double life as billionaire playboy Oliver Queen in Star City. Blackthorne plays the role of Quentin Lance, the police captain who is in constant pursuit of Queen.

Although he is not a superhero in real life, the 47-year-old actor is a champion to the animals he seeks to protect.

He has created several T-shirt campaigns to raise awareness about elephant and rhino poaching. Just last year, he raised over US$60,000 (RM240,000) from his social media following with the “Poach Eggs, Not Elephants” campaign.

The funds went to the Lindbergh Foundation’s Air Shepherd Initiative, an organisation that uses drones to help combat illegal poaching of endangered species in Africa.

This year he has another T-shirt campaign with friend and fellow wildlife lover Arsenal club footballer Aaron Ramsey.

“Save the Rhino Vietnam” is aimed at raising awareness on rhino poaching in the country. With Arrow having wrapped up filming its fifth season, the English actor wasted no time and took a trip to Hanoi with Save the Rhino International last month.

“When I discovered that 90 per cent of rhino horns poached in Africa end up in Vietnam, I felt compelled to come here to help raise awareness on the issue, and try to change how people view rhino horns.”

The driving force behind the illegal trade of rhino horns in Vietnam appears to be two-fold — one, as traditional medicine and second, as a symbol of status.

The demand for horns has escalated in the last 10 years, and it is expected that more rhinos will die as a result of poaching.

Blackthorne said the critically endangered rhinos could not afford to be poached any more as there were only 30,000 of them left, a far cry from 900,000 about 100 years ago.

“I see it more as a symbol of greed and ignorance. This incredible species has been around for 55 million years and it’s insane to think we could be the generation that witness its extinction, especially for such futile reasons.”

During his 10-day stay in Hanoi, Blackthorne held meetings with students, NGOs and enterprises to discuss the protection of rhinos.

He also visited Cuc Phuong National Park, Bao Son Paradise Park and Van Long Nature Reserve in the northern province of Ninh Binh to learn about diversity of the local ecosystem.

“I’ve been well looked after locally and feel like I’ve got a good sense of Vietnamese culture. It has been quite an experience. It’s an amazing country with some extraordinary wildlife.

“Filming the latest season of Arrow was truly all-consuming but once that was over, I immediately started the T-shirt campaign and planned the trip to Vietnam.

“Because for me to sit back and say, ah, I’ve just finished filming a TV show, I’d need a nice long holiday, seems redundant to me.”

When asked if celebrities are obligated to give back, Blackthorne said: “I think human beings as a whole have a responsibility to give back — not just actors or those in the public eye.”

He added that co-star Amell is known for his fair share of charitable projects.

“I’m lucky to be in a position to do something about it, especially given the timeline that we’re looking at for the plight of the rhinos.

“If the current rate of killing continues, they have only 10 years left before extinction is a reality. Talk about a ticking clock — it’s like a Hollywood plot!”

For details on the campaign, visit represent.com/savetherhinovietnam.

Re-runs of Arrow season four starts July 25, every Monday to Friday at 6.30pm on Warner TV HD (HyppTV Ch. 613).

More space adventures in ‘Star Trek Beyond’

The USS Enterprise crew is back for more space adventures in Star Trek Beyond, the latest episode in the film reboot of the popular science fiction series that marks its 50th birthday this year.

The television show, which introduced characters like Captain James T. Kirk and Mr. Spock, the half-human, half-Vulcan first officer, followed the crew’s missions and has spawned movies and other series since debuting in 1966.

In Star Trek Beyond” Chris Pine and Zachary Quinto return as the younger Kirk and Spock alongside Simon Pegg as Scotty and John Cho as Hikaru Sulu and this time, they face a new enemy when they are shipwrecked on an unfriendly planet.

“This movie has definitely a retro vibe to it,” Quinto said at the film’s London premiere on Tuesday. “It’s pretty remarkable for something like this to last for half a century and we’re all really proud to be a part of it at this significant, celebratory milestone.”

Quinto was joined by his co-stars, including Pegg who had the additional role of co-writer.

“It was a big responsibility, Star Trek is precious,” Pegg said. “We wanted to do it justice in the most faithful way but we approached it like you would any writing job … studiously and carefully and never taking it for granted.”

The movie made headlines ahead of its release after Cho said Sulu is openly gay and married in the new film. Actor George Takei, who portrayed the character in the original show and is gay in real life, has said he was “delighted” the movie included a gay character, but the new version of Sulu does not reflect the original vision of late series creator Gene Roddenberry.

“I had spoken to (Takei) and I knew that was coming … I hope that if he sees the film and sees the way it’s treated … that maybe he’ll see some of the positives in time,” Cho said.

“Maybe he’ll warm to it and realise that maybe young people are going to see this, young gay people, LGBT people in the closet perhaps and be encouraged by it.”

Last month, Star Trek Beyond actor Anton Yelchin was killed after he was crushed by his car. Cast and crew have been paying tribute to him.

The movie is the third film in a recent relaunch following 2009’s Star Trek and Star Trek Into Darkness in 2013.

Asked if he would be on board for more, Pine said: “Yeah, of course … If this one does well and they choose to do another one … As long as all my friends are back, I’ll be back.” — Reuters

Star Trek Beyond hits Malaysian cinema next Thursday

Jazz siren

HL: Life is a song for Laura Fygi

It’s one thing listening to Laura Fygi croon romantic jazz tunes and quite seriously another when you meet her in person.

Firstly, that unmistakable raspy voice greets you, followed by a warm hand shake and a hearty laugh that makes even the most serious of personalities chuckle along – the picture of joie de vivre.

The ‘queen of jazz’ was in town for a three-day whirlwind trip to perform at the recent Popular Bookstore 11th Bookfest, held at the Kuala Lumpur Convention Centre.

“They’ve asked me to sing two little sets and while I’m here, I’ll do some promotion.

“My schedule is so full, I have no time for sightseeing – only rehearsals and interviews,” she quips.

Luckily, Fygi is no stranger to Malaysia. She’s been here so many times she can barely recall if this was her tenth or eleventh visit.

She was last here in 2012, when she performed at the Dewan Filharmonik Petronas with the Malaysian Philharmonic Orchestra’s big band. Although a concert was planned last year, it was cancelled by promoters for reasons unknown.

The multi-genre songstress said a new album is in the works, having signed with Universal Music Singapore. Fygi is in the midst of recording a new album and hopes to swing by Kuala Lumpur for a concert tour end of the year or in early 2017.

The album she says, will be full of “beautiful romantic songs” and though she has already made her selection, the 60-year-old is keeping mum about the song titles.

The multilingual entertainer who speaks Dutch, English, French, German and Spanish also sings in Portuguese and Chinese.

Having travelled far and wide over two decades, Fygi is like fine wine, getting better with age.

“I’m more experienced, I have more knowledge of countries and cultures and my voice is huskier and but for the rest, I’m still enjoying it as much as 26 years ago,” she quipped.

Not one to peg herself to any genre, Fygi described herself as an explorative person, full of curiosity.

“Of course once you get married and you have children, you’re more careful but I would bungee jump, take on challenges, do things that are not good – I was kind of a rebel,” the mother of three young adults said.

Before her solo venture took off, Fygi shot to fame in the ’80s, as one-third of Centrefold, a popular Dutch girl band known for their risqué image.

“You are at a certain age where you would love to do that but if you ask me now, there’s no way I’m going to be on stage with garter belts and sexy lingerie,” she mused.

“I’m very grateful to Centrefold because during that time I got discovered and that’s how got my solo album so it all came out right.”

Born in the Netherlands to a Dutch father and an Egyptian mother, Fygi said it might have been unusual to see a Dutch-Egyptian couple back then but Holland has always been a mixed nations because of former colonies like Indonesia and Suriname.

“It’s not like ‘Oh my god, it’s a woman with black hair!’,” she said with a chortle.

Growing up, Fygi said her dad was the strict one while her mum was more outspoken.

“My father wasn’t musical at all and he couldn’t dance. My mother was very artistic – she knew all the songs and dances but didn’t have a nice voice.”

She revealed her mother stopped working as a belly dancer because of her father’s high ranking position at Philips.

“A belly dancer wife – that doesn’t do any good so she had to stop,” said Fygi.

She added that her late father would not have allowed her to pursue a singing career.

“My father died when I was eight, so I could do whatever I want,” she said laughing.

Her mother loved it and was proud of her; even handing her down an elaborate belly dancer costume.

“I inherited all her genes.

“When she had to stop being a belly dancer and my father told her to get rid of all her costumes, she had beautiful costumes, she did, except for one. She gave that one to me and we hid it from him,” said Fygi.

Sadly, her mother passed away in Fygi’s first year as a solo artiste.

“That’s a shame, she would have loved it,” Fygi said.

When she’s not singing, Fygi loves tending to the garden in her countryside home in Utrecht, a city central Holland.

“I live in a very little village with 1,100 people in middle of the woods, huge gardens and the only thing you hear is birds – it’s lovely and so peaceful,” she said.

When she’s out gardening, the nature lover cherishes her time alone, switching off her phone and laptop.

“Nobody can reach me – I’m not picking up the phone, this is my day and it’s such a wonderful feeling.”

And no, she does not sing to her plants, nor does she listen to music at home.

“Everybody goes in and out, music makes it so noisy and with the dog barking, there’s always something going on in the house; and with my eldest son upstairs with Rammstein, Metallica and Marilyn Manson – it sounds like hell up there,” said the animated singer.

The only time she listens to music is in the car, when she is alone.

“I put on the local station and they play a lot of Motown, soul and pop songs from my era – that’s what I like.”

ends

no images were found

A hard day’s night

A MALAYSIAN FIRST — The Beatles are in town! Or certainly the next best thing.

Meet John, Paul, George and Ringo — or Michael Gagliano, Neil Candelora, JT Curtis and Chris McBurney — the musicians behind the worldwide popular Let It Be celebration musical.

They’ve been performing the classic songs from the most influential pop rock band of all time since 2012 with the exception of Candelora who joined last year.

There were plans to play here in 2014 when they visited Singapore but cancelled in respect of MH370’s disappearance and a country in mourning.

Enjoying the “serene” surroundings of their hotel in the capital, the quartet discussed the show which enjoyed huge successful runs on London’s West End and Broadway, New York for Beatles lovers and unfamiliar ears.

“Even if you’ve never heard The Beatles come see the show and you’ll love them by the end of it,” said Curtis.

“Or people won’t know much about The Beatles but hear these songs and all of a sudden: ‘This was The Beatles? I know this!’” said McBurney.

In person the four are very much like the characters they immerse — Curtis as the quieter, reserved George Harrison with Gagliano plenty to say much the same as John Lennon did in his day.

Cool McBurney sat back cross-legged and doe-eyed Paul McCartney-like and Ringo Starr in the shape of Candelora equally quirky and laidback.

Gagliano represents the only Briton in the group while the remaining three hail from the Unites States.

“I’m very proud to be doing this — culturally, The Beatles are a British heirloom. Our parent’s generation fed it to us and we’re feeding it to the next.

“It’s interesting as we experience The Beatles and all their fantastic power but realistically we absorb them differently,” said Gagliano.

“America embraced the sensational, new import aspect of The Beatles,” said Candelora.

“They filled a hole in rock and roll — Buddy Holly just died and Elvis was in the army — it was the British invasion that lasted a decade,” said Curtis.

The crazed, heady fandom of Beatlemania and its subsequent impact on pop culture was one of the defining moments of the 1960s.

The band aren’t greeted with those deafening screams on airport runways as they travel though do encounter a collection of fans still infatuated with the seminal sounds of the group. The more intense followers they term ‘Beatles police’.

“Everyone has their own interpretation of The Beatles and that’s why they were, and still are, a global phenomenon,” said Gagliano.

Curtis said: “There’s always somebody who says: ‘Don’t you think the 15th take of Savoy Truffle is better than the 18th?’ — I’ve no idea!”

“It’s nice people out there take an interest in what you do,” Candelora politely said.

“But in the same way they’re just as fanatical as we are,” Gagliano continued before adding they still listen to the albums every day.

McBurney said: “People ask if we’re bored with the music itself but it never gets boring — there’s always new recordings and stuff surfacing online too.”

“When we started we were given isolated, stripped-down files of the songs like Lucy in the Sky with Diamonds just the vocals or bass. It’s a modern concept of analysing the band,” said Gagliano.

“We’re like archaeologists with these tools, dissecting the records, but it ruins it in a mystical way. We can’t put the album on and listen to it as an entity anymore, we just hear our stripped-down bits.

“The Beatles is not just the music, it’s the romance of the story too — four Liverpool boys who came together and changed pop music for generations to come.”

They’re unaware if any of the living Beatles have ever visited for a show. They say McCartney has a habit for venturing out in disguise and once heard through the singer’s daughter Stella he’s more inclined to watch on laptop.

As they carry on the legacy of the musical greats, they uncannily grace the stage of another.

The cast attest to one of biggest and best shows was toward the end of their recent US tour at Fox Theatre, Atlanta. Just days prior Prince performed for a final time before his untimely death.

Let It Be runs tonight, tomorrow and Saturday at 8.30pm with matinee shows on Saturday and Sunday at 3.30pm at Plenary Hall, KLCC. Tickets for Sunday are sold out.For details visit www.ticketcharge.com.my

Southeast Asian film financing platform opens for submissions

SINGAPORE — ScreenSingapore, in partnership with the Southeast Asian Audio-Visual Association (SAAVA), has launched a call for submissions for its second edition of the Southeast Asian Film Financing (SAFF) Project Market 2016 yesterday.

It aims to match promising feature-length projects with a global network of media financiers,

distributors, and collaborators who can bring these projects to fruition.

Due to its previous edition’s success, which saw an overwhelming 148 entries, SAFF Project Market 2016 will feature up to 15 projects, from 10 in its inaugural year.

To be held at Marina Bay Sands from Dec 7 to 9, the platform will include a financing conference and a cross-cultural Europe/Asia co-producing workshop.

In addition to connecting producers and their promising in-development projects with commissioners, investors, and co-production partners, SAFF also aims to facilitate best practices in content production, financing and distribution.

SAAVA executive director Justin Deimen said last year proved that Southeast Asia was ready for its own platform.

“Half of the projects selected last year have attached financiers and partners, while the rest made great strides in their development,” he said.

Producer of Happiness Revolution and winner of last year’s Grand Prize, the Silver Media Award William Lim said: “Through SAFF, my project will be completed this year so I’ve definitely found SAFF to be most relevant and beneficial. It has enabled me to engage and connect with financiers, producers and festivals from around the world.”

The world’s most powerful stock pickers are not fund managers

NEW YORK — MSCI Inc isn’t usually a name that springs to mind when one thinks of the most powerful players in the global equity market.

The New York-based index compiler doesn’t have BlackRock Inc’s trillions under management, Morgan Stanley’s army of financial advisers or UBS Group AG’s storied history. At US$7.7 billion (RM30.7 billion), MSCI’s market value is too small to crack the top 300 of global financial firms, and its payroll of about 2,700 pales in comparison to that of Franklin Resources Inc, one of America’s biggest fund managers.

Yet thanks to the surging popularity of passive investing, MSCI and a handful of its rivals — including FTSE Russell and S&P Dow Jones Indices — are quietly replacing the giants of money management as the most important arbiters of where the world’s stock investments flow. The average proportion of equity funds in the US, Europe and Asia that mimic index providers’ security and country allocation decisions has doubled over the past eight years to about 33%, according to Morningstar Inc.

That growing heft was on full display this year in China, where authorities enacted some of the nation’s most far-reaching market reforms in hopes of gaining entry into MSCI’s global stock gauges last month. The country’s ultimately unsuccessful campaign cemented the index compiler’s status as one of the few companies worldwide with the ability to influence the policy decisions of China’s ruling Communist Party.

“They have an awful lot of power,” said George Cooper, the chief investment officer at Equitile Investments Ltd in London. “Fund managers and investors are slavishly following these indices.”

With the China assessment, MSCI said it tried to consult with investors overseeing a majority of the roughly US$10 trillion of assets benchmarked to its indexes. The firm published consultation papers on the proposal, formed a working group with the local securities regulator and issued press releases to update investors on the nation’s progress.

Policy makers in the world’s second-largest economy moved to address at least nine of MSCI’s concerns for entry — including revised rules on trading halts and relaxed curbs on investor withdrawals — though the firm ultimately concluded that the country had more work to do. MSCI’s announcement came two days after a senior Chinese official called inclusion a “historical certainty” at a panel discussion in Shanghai.

“Countries who want to expand and deepen their own financial markets by seeking global capital flows have to submit to what is required,” said Scott Colyer, chief executive officer (CEO) of Advisors Asset Management in Colorado. “China is asking MSCI for inclusion. MSCI has no obligation to oblige.”

Index providers aren’t stock pickers in the same sense as active money managers, who attempt to beat the market by choosing only the best securities. Most of the criteria used by MSCI and its peers are measures of investability, such as market capitalisation and daily volume, rather than anything purporting to generate above-average performance.

The index firms say they’re merely channeling the collective feedback of their clients, who include active investors using benchmarks to gauge relative performance and passive managers who need them to deliver the market return.

“International investors will not blindly follow any decision we make,” said Mark Makepeace, the London-based CEO of FTSE Russell.

But there is a degree of subjectivity that goes into developing a benchmark index, particularly when deciding on contentious issues, such as which countries to classify as developed, emerging and frontier.

MSCI’s decision to leave domestic Chinese equities out of its global gauges in June surprised many forecasters, while its upgrade of Pakistan to emerging-market status the same month sent shares in Karachi surging to a record — a sign that investors had failed to price in the move.

What’s more, index providers are starting to encroach on the traditional turf of active managers with the rise of “smart beta,” an investing style that uses gauges built around factors other than market capitalization. Assets in smart beta exchange-traded funds will probably climb to US$1 trillion by 2020 from US$282 billion at the end of March, according to BlackRock, the world’s largest money manager.

“The index provider is becoming more of a stock picker,” said Rodney Comegys, head of investments for Asia Pacific at Vanguard Group, which oversees more than US$3 trillion in mostly passive funds. “In some ways, they’re replacing the active manager.”

Indexes have played a key role in stock markets since the days of Charles Dow, who created the Dow Jones Industrial Average in the 1890s to track blue-chip US stocks. What’s different now is that the gauges no longer just serve as a yardstick for money managers, they’re increasingly being used to determine the makeup of investor portfolios via index-tracking mutual funds, exchange-traded funds and derivatives.

Global passive equity funds and exchange-traded funds, which charge fees as low as 0.01%, attracted US$227 billion of net inflows in the 12 months ended June 15, versus US$92 billion of outflows for active funds, which have an asset-weighted management fee of 0.62%, according to data compiled by Bloomberg on funds with at least US$300 million of assets.

Passive investments are becoming more important in the bond market, too, though they still make up just 15% of funds in the US, Europe and Asia on average, Morningstar data show.

One concern about the spread of index-tracking investments is that they’ll create market distortions, with money moving into or out of shares because of their status in key indexes, instead of anything to do with the securities’ underlying value, according to Equitile Investments’ Cooper.

“This can lead to a problem where the markets are not anchored by fundamentals,” said Cooper, who chooses stocks without regard to their index weightings.

Aberdeen Asset Management Plc’s Hugh Young has a slightly different take, saying the influence of index funds has created opportunities for active managers to find mispriced shares.

“We’re perversely happy with powerful indices,” said Young, a Singapore-based managing director at Aberdeen, which oversees about US$420 billion. “They ignore the qualities we look for.”
— Bloomberg

(US$1 = RM3.99)

China risks reputation damage in rejecting UNCLOS ruling

The international arbitration tribunal under the United Nations Convention on the Law of the Sea (UNCLOS) has ruled in favour of the Philippines in its historic case against China over the West Philippine Sea.

While the smaller nations in contention against China in the South China Sea (SCS) conflict expressed their support for the ruling, Beijing remained defiant, saying it will not recognise the ruling while Xinhua news agency said the ruling was ill-founded.

The tribunal said China violated the Philippines’ sovereign rights in its exclusive economic zone (EEz) when it constructed artificial islands in disputed areas, prevented Filipinos fishermen from fishing in the areas while allowing Chinese fishermen.

“The tribunal concluded that there was no legal basis for China to claim historical rights to resources within the sea areas falling within the ‘nine-dash line’,” the tribunal said in a statement.

The tribunal altogether rejected China’s fabricated generation of an EEZ, declaring that certain sea areas are within the EEZ of the Philippines because those areas are not overlapped by any possible entitlement of China.

China is called upon by all parties to respect the ruling, and to act accordingly, by following the Court’s decision despite its outright rejection of the ruling.

However, the ruling is binding, and it could lead to a form of militarisation of the SCS by major global super powers, said observers, who added that it is something that should be averted.

In an editorial in globaltimes.cn, the portal said so far, none of the concerned parties want a military confrontation. But all parties are ratcheting up their military preparations. The SCS has been clouded by unprecedented tensions and it’s uncertain where the situation will head towards.

A day before the ruling, Chinese vessels were patrolling the disputed zones, taunting the Philippines and other claimants with its military might and apparently showing its decision not respect the Hague court ruling anytime soon. It has been carrying out exercises near the disputed Paracel islands, in what was seen as the biggest and most aggressive military exercise in the region.

China’s controversial claims in the disputed SCS, which met with protests and contest from a host of nations including members of Asean, saw its day in court thanks to the Philippines which argued Beijing’s activities in the region were against international law.

Chonnam National University Department of Sociology professor George Katsiaficas said the world should expect the United States to sacrifice corporate profits for the sake of military positioning in the Asia Pacific region.

He said to Malay Mail the United States has been doing everything possible to surround and isolate China both militarily and politically. This may seem disingenuous in as far as the economies of the two countries are massively intertwined, he said when commenting on the expectations on the ruling favouring the Philippines.

American foreign policy of late has less to do with economics than with military strategy, Katsiaficas said.

China claims about 90% of the South China Sea, including reefs and islands, claimed by others.

China said it does not recognise the tribunal and has refused to take part in the court sessions, though it (and the Philippines) signed the UNCLOS.

Observers said China risks damaging its reputation by rejecting the ruling and that it could act more aggressively, with enhanced military presence and further occupation of the disputed islands claimed by the Philippines in particular.

The case was brought to the UNCLOS tribunal in 2013, with Manila contesting China’s claims and activity in the SCS.

The Philippines authorities said Chinese maneuvers in the seas were contrary to international law and that China was interfering with fishing — an important source of food for many of the claimant nations against China — with its dredging of sand to build artificial islands and endangering ships. China, in short, is accused of abusing its powers in the region, as well as bullying smaller states that are unable to fight back militarily.

The Philippines has also asked the tribunal to reject China’s claims to sovereignty over waters within “nine-dash line” — the dotted boundary that Beijing claims as its own with as much as 90% of the South China Sea — that appears on official Chinese maps.

A rejection by China will put Asean in a difficult situation since the association does not have enforcement powers altogether and will have to depend on foreign intervention in the SCS.

The United States has already sent an aircraft carrier and fighter jets to mark its presence in what it calls “international” waters, thus reinforcing its right of navigation arguments.

But China rejects all foreign intervention, claiming the seas are under its control since its capture of various islets and territories from Vietnam, and occupying land claimed directly by the Philippines.

The Chinese have taken advantage of overlapping claims by Asean members, as well as the long absence of global superpowers in the region, to reinforce its military and political powers in both the SCS and the Asean region.

While China has indicated it is gearing its military to confront any foreign intervention in the SCS, the Asean’s division does not help the US or its allies.

The Asean is divided into two main camps, one that is pro-US intervention and the other, pro-negotiation, which could oppose any form of military intervention.

An outright rejection by China of the UNCLOS ruling could have dire economic, political and military consequences for the entire region, as it could drag global superpowers in the disputed seas.

This, in turn, would endanger the economic activities within the SCS, including the shipping lines that cross the region ferrying goods to and from global markets.

Observers said there are trillions of dollars of business at stake in the SCS conflict, not forgetting the disruption of livelihood of the millions of people who lives in the coastal areas of the SCS.

They said China should act responsibly and it should negotiate with Asean on finding a clear-cut solution to a problem that has been dragging for far too long.

It is imperative for Asean to use this ruling as a platform to unite against any potential rejection of the ruling by China.

All Asean members should have a common voice on the SCS issue.

Asean should continue pushing Beijing to abide by a code of conduct that the Southeast Asian states have established and eliminate all signs of division among the member states.

At least, Asean should show some unity that would bring the world powers to support their views and assist them in managing the SCS conflicts.

This unity is needed for Asean to maintain its economic clout, one that has helped the region gain much in terms of foreign direct investment.

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