More is expected of Boustead


  • Business
  • Tuesday, 11 Feb 2003

BY K.P. LEE

IT IS perhaps with big dollops of artistic licence that a company which has been experiencing an erratic growth track record over the past five years and suffered a loss in 2001 should fashion itself as “one of Malaysia’s fastest growing corporations”. 

Indeed, that is how BOUSTEAD HOLDINGS BHD welcomes visitors to its website (www.boustead.com.my). “One of Malaysia’s fastest growing corporations with substantial interests in various sectors of the Malaysian economy,” it trumpets. 

An investor who has been holding the company’s shares since 1990 may, however, know better and would probably be a little more circumspect in advertising his gains. 

For one lot of Boustead shares bought at RM2.40 apiece on the first trading day of 1990 would be worth RM1.65 each on Dec 31, 2002, resulting in a loss of 75 sen. 

After accounting for RM1,133 in dividends over the 13-year period, the investor would have made a marginal gain of RM383. Hardly the sort of reward worth the effort and risk, especially when keeping money in fixed deposits yields a higher return. 

Boustead, which is one of the oldest companies in the country, hasn’t done badly over the years; it just could have done better. 

After all, it was a recognised name as one of the early conglomerates, having listed on the KLSE in 1961 and its core businesses then were in trading, plantations and property. Few companies could have been better set up for growth that the country was about to offer ambitious public companies through the 1990s. 

After the company was bought over by Lembaga Tabung Angkatan Tentera in 1990, financial services was added to the fold when Boustead acquired a 30% stake in AFFIN HOLDINGS BHD

Today, Boustead still has interests in plantations, financial services, trading, property development and construction, as well as manufacturing, transport and education services. 

The plantation interests are held under listed subsidiary, Kuala Sidim Bhd with plantations in Peninsular Malaysia, Sabah and Sarawak. 

The majority of the group’s residential, industrial and commercial properties together with plantation properties with development potential are housed under SCB Developments Bhd, also a listed company. Some of the property development projects undertaken by the group are Mutiara Rini in Johor and Taman Jernih in Bukit Mertajam. 

The group still earns a large proportion of its profits from property development and plantations – staples which have helped cushion the group from the losses arising from loan loss provisions from the consolidation of Affin Bank Bhd and BSN Commercial Bank Bhd. 

Ultimately, it is up to shareholders to judge how their company has performed. If this company, which can trace its history to 1828 when it was founded in colonial British Malaya, truly believes in its mission statement, which starts with “We will protect the interest of our shareholders and will strive to provide an attractive return on their investments”, then it has so far failed its new millennium Malaysian shareholders. 


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