Very briefly, the awards are based on three categories: highest growth in profit after tax; highest return on equity (ROE); and highest returns to shareholders over a three-year period for each of the Bursa Malaysia sectors. It is simple and transparent. Two out of three winners in all previous The Edge Billion Ringgit Club awards, since its inception in 2010, have gone on to outperform the FBM KLCI by an average return of 44% over a period of three years. Notably, all the winners of the BRC Company of the Year Award — the company that outperformed not only in the three financial criteria on profits, ROE and returns to shareholders but also in terms of corporate responsibility programmes — except for one, have outperformed by 70%, on average.
Meritocracy matters. In fact, it is essential. For the winners of The Edge Billion Ringgit Club awards, the recognition and validation are motivation for the continued pursuit of excellence. There is pride in achievement, and competition drives excellence. The importance of meritocracy goes well beyond the corporate sector, encompassing the public sector and individuals pursuing education and career development. Meritocracy ensures fairness and equality of opportunities, builds trust and credibility, and fosters motivation, innovation and maximum potential productivity that drive economic growth and prosperity. We do not think anyone will dispute this statement. Obviously, meritocracy requires transparency and clarity of objectives and mandates, so that performances can be measured.
Last week, we wrote about the Urban Renewal Act (URA), which was expected to be debated in parliament during the current session (scan the QR code to read the article). Much of the criticism and our own concerns stem from the lack of details in how redevelopment projects are to be identified and executed, and specifically what are the guardrails to ensure the protection of all homeowners and that the URA will not ultimately favour developers. The lack of transparency erodes the public’s trust, creating scepticism, suspicions and pushback.
We often point to similar policy successes in Singapore, whether it is in terms of urban redevelopment or, say, its state-owned entities (SOEs or, as they are called in Malaysia, government-linked companies [GLCs]). We called this “Singapore whitewashing”, or SWW. As we explained last week, the urban redevelopment framework in Singapore is very different from that of Malaysia. In Singapore, all redevelopment plans are initiated by homeowners and there is clear legal framework for collective sales, including mandatory public tender for the project. There is no state intervention in the entire process, except where the Strata Titles Boards (STB), which has no vested interest in the redevelopment, is called to mediate any objection to the sale.
Singapore’s GLCs operate on a “state-led but market-disciplined” model. The state mostly sets rules, builds capability and invests through commercially run vehicles — while keeping politics and subsidies at arm’s length. The Economic Development Board sets pragmatic industrial policies with open markets, in a context of free trade and ease-of-doing business. Singapore does not choose the winners.
State-owned investment company Temasek Holdings’ portfolios are run with explicit commercial mandates, professional boards and a clear separation between the government as owner and the firms as operators. The GLCs focus on commercial goals — while national-developmental-welfare mandates are performed by social foundations such as the HDB (Housing and Development Board) and CPF (Central Provident Fund).
This clarity of objectives is why Singapore’s GLCs have historically performed as well as, if not better than, private enterprises. The chart shows the ROE, earnings before interest and taxes (Ebit) margins and share prices performance between GLCs and the private sector in the property investment and industrial sectors (where there are sufficient entities of similar sizes for comparison) over the past 10 years. In banking, DBS Group Holdings has clearly performed extremely well. The opposite is the case for Malaysia — in both clarity of mandates and actual performance.
See also: When the stock market gives you more than free money, and revisiting Aokam Perdana
A transparent methodology and clarity on the criteria (in the case of The Edge Billion Ringgit Club awards), of mandates and objectives (in the case of Singapore’s GLCs), as well as a meritocratic reward system that is based on performance lead to better decision-making. It always has and always will!
There are reasons that The Edge chose simple, widely used performance metrics for the BRC awards. Complexities do not mean intelligence — if anything, it is the opposite. Often, the purpose is to create confusion that camouflages and hides truths and inferior outcomes. Coupled with a lack of transparency in the selection process, it will lead to real or perceived favouritism.
We have written extensively in this column about the state of education in Malaysia and the pressing need for reforms. Human capital is the single most important resource of a nation — the most important determinant of productivity, competitiveness, wages and income, and economic prosperity.
It is not about allocating more money in the coming Budget. If you are cycling on the wrong path, giving you a motorcycle only serves to amplify your mistake. What you really need is a cheap GPS, not an expensive motorcycle. Understandably, you want a motorcycle.
Malaysia’s total spending on education is comparable to that of our neighbours. But our students are not only faring poorly in comparison in international assessments such as OECD’s PISA (Programme for International Student Assessment), but we are also backsliding, scoring worse than we did in the past. And, yet, our students are performing better in local exams such as the SPM (Malaysian Certificate of Education) and STPM (Malaysian Higher School Certificate), with a rising percentage of students scoring all A’s — so much so that even getting perfect scores will not assure you of a place in local public universities.
To most Malaysians, this is incomprehensible. Even less comprehensible is the recent controversy where a student with perfect 4.0 CGPA in STPM was rejected by six Malaysian public universities to study an accounting course. He got a 99.9% merit score because he “only” managed a 9.9 out of 10 score for co-curricular activities (which account for 10% of the total merit score). As a result, he ranked 1,129th among all the applicants competing for 85 available places for an accounting course in Universiti Malaya. (The Ministry of Higher Education added that the student ranked 1,724 out of 4,154 in Universiti Pertanian Malaysia for the 100 spots available for an accounting programme; 1,288 out of 2,595 in Universiti Utara Malaysia for 350 spots; and 1,062 out of 2,292 in Universiti Teknologi Malaysia for 55 spots.)
This implies that a 0.1% score separates him from 1,128 other students. Our question is this — how, then, are these 1,128 students ranked? It is mathematically impossible to split 0.1% between them, at least based on the scoring system as we understand it. We are certain that all the students who worked so hard for the exams — and all those to come — would appreciate some clarity. We certainly stand to be enlightened.
For more stories about where money flows, click here for Capital Section
The point is that we do not know the answer — because there is no transparency on how an A or A- or B+ or any other grade is awarded. Is it based on a range of absolute marks or predetermined percentiles of a distribution curve? And since students from both STPM and Matriculation programmes are selected for courses by a centralised university admission system, is an A or a perfect 4.0 CGPA in STPM equivalent to an A and 4.0 CGPA in Matriculation, especially given the differences in the two programmes?
Matriculation is a one-year, fast-track pre-university programme established in 1999 under the Ministry of Education. It has limited recognition by foreign universities. The 18-month STPM course, on the other hand, is internationally accepted, accredited by the Cambridge Assessment (UK) and considered equivalent to GCE A-Levels. According to parliamentary replies from the Ministry of Higher Education, 16% of Matriculation students achieved a 4.0 CGPA compared to just 3% in STPM in 2023.
Let us be crystal clear: We are not questioning the quota system. But why the need for subterfuge of an “unofficial quota system”? Transparency builds trust.
But transparency also demands courage — because failure to perform is then simply failure to perform. Transparency means there is no room to “fudge” the results on, say, the basis of having to perform conflicting commercial and social obligations or having to explain to the public the intentions and actions behind each major decision. Transparency forces accountability and improves governance, resulting in better allocation of economic resources. That, in turn, leads to higher productivity, increased competitiveness and stronger growth, all of which are critical to the success of a nation. Even the quota system works better and fairer with more transparency.
Singapore has spent years building on a transparent ecosystem. You know exactly where you stand, how and what you need to do to get what you want, and the repercussions of breaking the law regardless of who you are. Critically, its government has a track record of fairness, so people trust the process. The truth is that we simply cannot say the same for Malaysia — as much as we wish to do so.
The Malaysian Portfolio fell 0.2% for the week ended Oct 8. United Plantations (+2.2%), LPI Capital (+2.0%) and Kim Loong Resources (+1.3%) were the top gainers while Insas Bhd – Warrants (-25.0%), Hiap Teck (-5.1%) and Southern Cable Group (-1.7%) were the three losing stocks for the week. Total portfolio returns now stand at 186.7% since inception. This portfolio continues to outperform the benchmark FBM KLCI, which is down 11.1% over the same period, by a long, long way.
The Absolute Returns Portfolio, on the other hand, gained 0.2%. The gains lifted total portfolio returns to 44.8% in the 19 months since inception. The top three gainers were SPDR Gold Minishares (+4.6%), ChinaAMC Hang Seng Biotech ETF (+3.9%) and CrowdStrike (+2.0%). Trip.com (-7.6%), JP Morgan (-2.1%) and Goldman Sachs (-1.1%) were the biggest losers last week.
The AI Portfolio had another good week, up 1.5%. Total portfolio returns now stand at 10.5% since inception, in May 2025 (five months). The top three gaining stocks were Twilio (+11.1%), Datadog (+7.5%) and SAP (+2.5%). At the other end, RoboSense (-3.6%), Intuit (-3.2%) and Horizon Robotics (-1.2%) were the notable losers for the week.
This is a personal portfolio for information purposes only and does not constitute a recommendation or solicitation or expression of views to influence readers to buy/sell stocks, including the particular stocks mentioned herein. It does not take into account an individual investor’s particular financial situation, investment objectives, investment horizon, risk profile and/or risk preference. Our shareholders, directors and employees may have positions in or may be materially interested in any of the stocks. We may also have or have had dealings with or may provide or have provided content services to the companies mentioned in the reports.
