There is big money in keeping the horse business on track

Updated: Tuesday February 25, 2014 MYT 9:59:42 AM

Horse trading: There is big money in keeping the horse business on track



Dr Mahadevan, the Keeper of the Malaysian Stud Book is still active in horse trade.

To go back to the roots of the horse industry, one should refer to the General Stud Book kept in the Malayan Racing Association.

Currently believed to be in its 42nd volume, each about 1,000-page thick, it is a comprehensive listing of the sire of thoroughbreds going back no less than seven generations.

Believed to date as far back as 1967, the task of keeping records currently falls on the Keeper of the Stud Book, Tan Sri Dr Mahadevan Mahalingam, former director ofHospital Bahagia Ulu Kinta, Perak and committee member of Perak Turf Club.

Dr Mahadevan, now 85, remembers how he trotted into the scene.

Bright and London-trained, what was there to stop the young doctor from going off in search of better pay and work conditions abroad?

According to Dr Mahadevan, it was his mother who made him stay. Knowing his passion for horses, she gave him a piece of land to start a horse ranch.

The seven-stable ranch started with five stallions purchased from the Poonawalla Stud Farm, India’s foremost thoroughbred breeder. Located next to the National Stud Farm, Madhuban Ranch was eventually sold in 1990 after a Chinese businessman owed him 10 years of back rent.

In terms of ringgit and cents, 37-year-old Dharmarajan Thevarasa aka Frankie Junior of Race Horse Equine and Quarantine gives a current estimate of what it takes to bring in a horse today.

“To import a race horse, you’d have to be prepared to pay anywhere from AUS$10,000 (RM 29754.20) to as high as AUS$250,000 (RM743,980), depending on the dame and sire. I also know of owners who can pay as much as US$500,000 (RM1,647,250) for a jumping horse from Argentina.

“Then there is the quarantine period fee of RM2,000 for 14 days in KLIA and transport. Per horse, it is RM150 from KLIA to Kuala Lumpur.

“A trip to Ipoh is RM350 and to Penang, it’s RM480. If it’s going south to Johor, it’s RM480. Should a border crossing to Singapore be required, it’s the same amount but in Singapore currency,” lists Dharmarajan.

In a month, Race Horse Equine and Quarantine sees no less than 70 to 90 horses being imported in for racing, jumping, leisure riding and polo. At current, the 30-year-old business has a 90% hold of the local market.

According to handicapper for the Malayan Racing Association Jason Prime Jnanaprakasam, 37, there are 990 race horses registered with the Malaysian turf clubs currently.

To counter the stresses of a high performing life, owners may see it fit to pamper their investments with meditation therapy to relax the animal. Let’s not forget treatments to counter sports-related injuries.

An infra-red session to soothe tired muscles alone can cost the owner close to RM400 per session.

For returns, race horse owners may enter their hooved charges in any one of the 11 races taking place at the turf clubs in Penang, Selangor or Perak. A good thoroughbred may last for 10 years but owners should be reminded a horse may not peak till the fifth or sixth year. There is also a chance for the horse to drop out by the fifth or seventh year.

Two race events offering the highest prizes at current are the Coronation Cup in Perak with a purse of RM700,000 and Malaysian Magic Million in Penang with a purse of RM1mil.

Distribution between owner, trainer and jockey for first placing is based on a percentage of 50%, 6% and 5%.

Azhar Ismail, 50, a jockey for the past 29 years reportedly took home a pay of RM100,000 last year.

Not surprisingly, hero worship in the industry has inspired young hopefuls to pay as much as RM25,000 to learn the ropes of the sport. Perak Turf Club general managerSoo Lai Kwok affirms some six applicants will go under the mentorship of the club’s trainers every year.

However, the job has its spills. Jockeys are liable to get suspended should officials suspect foul play.

“Should they discover the horse has been pulled back or I have not gone all the way during the race, I could be suspended from racing for the next 15 months,” says Azhar, a seven-time champion who has ridden over 900 winners.

While the biggest money in the horsing arena may be in racing, chief handicapper ofMalayan Racing Association, Rosalind Lim, reveals that the sport is far from rosy.

While target sales for tickets at each turf club on race day is between RM2mil and RM3mil, the sport, says Lim, is bleeding badly.

“In the past, turf clubs reported ticket sales of RM8mil to RM9mil a day,” reveals Lim.

Horse racing, she says, is in a state of limbo. This is because the recent sale of Pan Malaysian Pools, in which the 3+1 Da Ma Cai number betting system has been contributing to the sport, has been sold to Genting Group for RM 2.1bil in 2011. The agreement, says Lim did not include the racing part, leaving a big question mark where funding is concerned.

Illegal betting has also compromised the integrity of the sport.

“In the past, trainers were giving ‘instructions’ to jockeys.

“But jockeys are now calling the shots. This is how bad the situation has become,” reveals Lim, alluding to the lack of legal enforcement and cooperation.

“If we close down, not only will the betting rings lose their source of income, the authorities too would be missing out on the taxes. As it is, government tax for each ticket is about 15%,” Lim says.

Then there is the question of housing.

At the Iskandar Polo Club in Tambun, Perak, ungulate mammals enjoy some 40 acres of vastness fringed by a landscape of limestone hills. The place comes with a pond (for horsy to go swimming in) banked by shady trees complete with polo field and riding school. According to manager Amreek Singh, the club has been at its present location since 1972. The land is estimated to be worth some RM100psf.

Boasting a capacity of 89 stables, housing rates remain friendly here. Rental rate per stable is RM50 per month. A minimal charge of RM goes for water and electricity and animal fodder is RM800 per month.

The club also offers ‘hotel’ services for horses-in-transit, at a rate of RM7 a day. To cater to the ‘residents’ needs, grooms are on hand at a rate of RM300 per horse.

The senior’s advice to budding entrepreneurs in the field is to start slow in the face of rising feed prices.

“Start with one or two horses first, then build up from there,” says Amreek.

Owners on a budget can definitely find a better deal with Don Johnson, the 80-year-old riding instructor who also trades and provides horse floating services. Johnson who started horse trading upon request from the club’s regular riders says the selling price for a rejected race horse in the 80s was only between RM500 and RM2000.

Today, prices are between RM1,500 to RM30,000. One record sale brought in RM80,000. Johnson sells about 80 horses in a month.



About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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