TEMCMB-22.07.22

ECB HIKES FASTER THAN FLAGGED IN RACE TO TAME INFLATION p2

F R I DAY, J U LY 2 2 , 2 0 2 2 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 414/2022

CEOMorningBrief
HOME: TH buys London property for RM1.3 bil from SGX-listed Sinarmas p4
Tengku Zafrul: 1MDB debt at RM32.08 bil as of June 30 p6

High Court rejects Najib’s bid to hire Queen’s Counsel for final SRC appeal p12
WORLD: China’s credit market rocked by more debt delays, plunging bonds p14
Russian gas flows to Germany again; Moscow eyes giant Ukrainian power plant p16

THE EDGE FILE PHOTO

Cahya Mata sues
former ED, five
others for alleged
fiduciary duty

breaches

Report on Page 3.

FRIDAY JULY 22, 2022 2 THEEDGE CEO MORNING BRIEF

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ECB hikes faster than flagged
in race to tame inflation

FRANKFURT (July 21): The European BY BALAZS KORANYI & The new bond purchase scheme, called
Central Bank raised interest rates by more FRANCESCO CANEPA the Transmission Protection Instrument
than expected on Thursday, as concerns Reuters (TPI), is intended to cap the rise in bor-
about runaway inflation trumped growth rowing costs across the currency bloc as
considerations, even while the euro zone The ECB had for weeks guided mar- policy tightens.
economy reels from the impact of Russia’s kets to expect a 25 basis point increase
war in Ukraine. but sources close to the discussion said 50 “The scale of TPI purchases depends
basis points was put in play shortly before on the severity of the risks facing policy
The ECB raised its benchmark deposit the meeting, as indicators pointed to a fur- transmission,” the ECB said in a state-
rate by 50 basis points to zero percent, break- ther deterioration of the inflation outlook. ment. “TheTPI will ensure that the mon-
ing its own guidance for a 25 basis point etary policy stance is transmitted smoothly
move as it joined global peers in jacking up See related story on Page 20 across all euro area countries.”
borrowing costs. It was the euro zone central With inflation already approaching dou-
bank’s first rate hike for 11 years. ble-digit territory, it is at risk of getting As ECB rates rise, borrowing costs in-
entrenched well above the ECB’s 2% tar- crease disproportionately for countries like
Policymakers also agreed to provide ex- get, with any gas shortage over the coming Italy, Spain or Portugal as investors de-
tra help for the 19-country currency bloc’s winter likely to push prices even higher, mand a bigger premium to hold their debt.
more indebted nations — among them It- perpetuating rapid price growth.
aly — with a new bond purchase scheme Economists polled by Reuters had pre- “The ECB is capable of going big for
intended to cap the rise in their borrowing dicted a 25 basis point increase but most that,” Lagarde said.
costs and so limit financial fragmentation. said the bank should actually hike by 50
basis points, lifting its record-low minus The ECB’s commitment on Thursday
Ending an eight-year experiment with 0.5% deposit rate to zero. comes as a political crisis in Italy is already
negative interest rates, the ECB lifted its The euro climbed as much as 0.8% to weighing on markets, following the resig-
main refinancing rate too, to 0.50%, and US$1.0261, having traded at US$1.0198 nation of Prime Minister Mario Draghi,
promised more hikes possibly as soon as just before the statement but turned neg- who was Lagarde’s predecessor at the ECB.
its Sept 8 meeting. ative on the day as Lagarde spoke.
Going big? The yield spread between Italian and
At a news conference, ECB President German 10-year bonds widened to 246.5
Christine Lagarde fielded repeated ques- basis points during Lagarde’s news confer-
tions about how the ECB came to diverge ence, not far from the 250 basis point level
from its original plans for tightening, and that triggered an emergency ECB policy
how the new yield-capping tool fitted into meeting last month.
its core inflation-fighting mandate.
The ECB’s 50 basis point hike still
“Price pressure is spreading across more leaves it lagging its global peers, par-
and more sectors,” Lagarde said.“We expect ticularly the US Federal Reserve, which
inflation to remain undesirably high for some lifted rates by 75 basis points last month
time.” She listed driving factors including and is likely to move by a similar mar-
higher food and energy costs, and wage rises. gin in July.

Lagarde said ECB policymakers had But the euro zone is more exposed to
unanimously decided that the increasingly the war in Ukraine and a threatened cut off
evident “materialisation” of inflation risks in gas supplies from Russia could tip the
to the economy, together with their agree- bloc into recession, leaving policymakers
ment to support indebted nations if need- with a dilemma of balancing growth and
ed, justified the bigger rate hike. inflation considerations.
Read also: Euro, bond yields jump as
“We decided on balance that it was ap- ECB delivers big rate hike
propriate to take a larger step towards ex-
iting from negative interest rates.”

FRIDAY JULY 22, 2022 3 THEEDGE CEO MORNING BRIEF

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Cahya Mata sues
former ED, five
others for alleged
fiduciary duty

breaches

BY IZZUL IKRAM (From left) Datuk Syed Ahmad Alwee Alsree, Syed Hizam Alsagoof and Goh Chii Bing.
theedgemarkets.com

KUALA LUMPUR (July 21): Cahya Mata edly breached the fiduciary duties owed Lack of due diligence
Sarawak Bhd (CMS) is suing its former ex- to the group and Samalaju Industries in Last year, following an allegation of possi-
ecutive director Datuk Syed Ahmad Alwee respect of the development of the plant. ble financial mismanagement in relation to
Alsree and five others for alleged breaches the company’s investments and operations
of fiduciary duties in respect of the con- “The defendants were regarded as the — which led to then CFO Syed Hizam’s
struction of an integrated phosphate addi- trustee and are expected to protect the in- suspension in May 2021 — CMS appoint-
tives plant in Samalaju, Sarawak. terest of CMS and Samalaju Industries and ed KPMG to conduct a special review on
not to place themselves in the position of certain projects in associates, subsidiaries
In a bourse filing, CMS said the suit conflict. CMS and Samalaju Industries con- and joint ventures from 2011 to 2020.
was filed in the High Court in Kuching by tend that the defendants have either jointly
the group and its wholly-owned subsidiary or severally committed various breaches of The consultant found that there was a
Samalaju Industries Sdn Bhd. the fiduciary duties owed to CMS and Sa- lack of due diligence and stakeholder man-
malaju Industries,” the group added. agement on the joint venture partner’s risk
Samalaju Industries had in 2013 of the integrated phosphate additives plant
formed a joint venture company — Ma- According to the filing, CMS is seek- project, and the reporting structures by man-
laysian Phosphate Additives (Sarawak) Sdn ing a court declaration that the defend- agement to the board were not adhered to
Bhd (MPAS) — with Malaysian Phosphate ants are jointly and severally liable to the and compiled within the project.
Additives Sdn Bhd on a 70:30 basis for the group for their breaches in fiduciary and
purpose of building the plant in Samalaju. statutory duties. In addition, it said there were gaps in
the contract management and bidding
However, due to a lack of due diligence In addition, the group is claiming spe- processes, which contributed to the pro-
undertaken, CMS incurred RM67.57 mil- cial damages of RM52.685 million, gener- ject’s losses.
lion in losses (as at Sept 26, 2021), accord- al damages, and any other relief the court
ing to a special review report by appointed deems fit. KPMG added that there was a lack of
consultant KPMG Management & Risk monitoring on hedging transactions by the
Consulting Sdn Bhd. Meanwhile, CMS said it has also filed board of an associate company for a cer-
a suit against MPAS’ former managing di- tain project, which led to losses owing to
Besides Syed Ahmad, those being sued rector Lim LeeWan for alleged breaches of adverse currency exchange movements.
are CMS’ former chief financial officer fiduciary duties owed to the development
Syed Hizam Alsagoff, former chief execu- of the phosphate additives plant. CMS said the realised losses incurred
tive officer Goh Chii Bing, former non-ex- had been accounted for in the past finan-
ecutive director Datuk Isaac Lugun and The group said Lim failed to “act dili- cial results of the group.
former group general counsel Ling Koah gently and honestly” in the best interest of
Wi, as well as Samalaju Industries’ former MPAS and therefore, breached the fiduci- Shares in CMS finished one sen or
senior general manager Goh ChiiYew. ary duties he owed the company. 1.11% higher at 91 sen onThursday (July
21), giving the group a market capitalisa-
CMS said the six defendants had alleg- “As a result, MPAS suffered losses and tion of RM977.68 million.
was put to loss and damage,” it added.

KUALA LUMPUR (July 21): Scomi En- Scomi Energy W.L.L. and its 25% interest in Continen-
ergy Services Bhd (SESB) is proposing to plans disposals talWire Cloth (M) Sdn Bhd, as well as its
dispose of its 48% stake in Scomi KMC worth RM21 mil Dataran Prima property and its inventories
Sdn Bhd and 100% equity interest in and equipment to the same party.
Scomi Oilfield Ltd (SOL) to Cahya Mata to CMS
Oiltools Sdn Bhd, a 75%-owned subsidi- The disposals will be for a total cash
ary of Cahya Mata Sarawak Bhd. Bernama consideration of RM21 million, said
SESB, adding that SOL also intends to
Meanwhile, Scomi Oiltools Sdn Bhd sell 100% of its equity interest in iden-
(SOSB) has proposed to dispose of its tified companies to Falcon Residences
4.0% stake in Scomi KMC Sdn Bhd (to- Sdn Bhd for a nominal cash considera-
gether with 25 million redeemable prefer- tion of RM1.
ence shares in the company) to Oiltools
International Sdn Bhd, a wholly-owned “The proposed disposals would result
subsidiary of Cahya Mata Oiltools. in a one-off pro forma gain of RM134.0
million to our company,” it said in a cir-
SOSB is also planning to dispose of cular to shareholders filed with Bursa Ma-
its 25% interest in Scomi Oiltools Gulf laysia on Thursday (July 21).

FRIDAY JULY 22, 2022 4 THEEDGE CEO MORNING BRIEF

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BAT M’sia 2Q
profit rises 2%,

pays 25 sen
dividend

TH’s newly acquired property (outlined in red) was bought from Sinarmas Land for RM1.32 billion. BY HAILEY CHUNG
theedgemarkets.com
TH buys London TH’s group managing director and
property for chief executive officer Datuk Seri Am- KUALA LUMPUR (July 21): British
rin Awaluddin said the fund will ensure AmericanTobacco (Malaysia) Bhd’s (BAT
RM1.3 bil from that its property investment could pro- Malaysia) net profit for the second quarter
SGX-listed vide immediate returns to sustain an- ended June 30, 2022 (2QFY22) increased
Sinarmas nual hajj costs and distributions, while by 2.3% to RM73.25 million, up from
being able to deliver long-term stable RM71.62 million a year ago, driven by
BY CHESTER TAY and safe returns for the sustainability marginally higher revenue and gross prof-
theedgemarkets.com of TH and its depositors. it margin coupled with lower tax expenses.

KUALA LUMPUR (July 21): Lembaga TH is actively surveying opportu- Revenue in 2QFY22 grew 7% to
Tabung Haji (TH) has bought a proper- nities to increase its real estate invest- RM637.5 million compared with RM595.8
ty, known as Great Minster, situated at 33 ments abroad in its bid to diversify its million a year earlier.
Horseferry Road in London that houses investment portfolio as it is deemed to
the country’s Department of Transport, be the best way of obtaining compet- Earnings per share (EPS) also gained
for £247.5 million (about RM1.32 billion) itive and consistent return for its 8.5 to 25.7 sen per share, from 25.1 sen per
from Singapore-listed Sinarmas Land Ltd. million depositors, he said. share a year before.

TH did not disclose the acquisition price TH allocates about 11% of its RM88 The group declared a second interim
in its press statement. billion fund for property investment do- dividend of 25 sen per share — payable
mestically and abroad, Amrin added. on Aug 18 with an ex-date on Aug 4 —
Sinarmas, the vendor, in its filing with adding to a total of 42 sen for FY2022.
the Singapore Stock Exchange (SGX) dated This is the first investment deal by The second interim dividend amounting
July 13 announced that the group’s subsid- TH in five years, and also the first by to RM71.38 million represents a payout
iary SML Victoria Ltd is selling the entire Amrin, who took office in May 2021. ratio of 97%.
issued share capital of Horseferry Proper-
ty Ltd, which owns the freehold property, Pursuant to the sale and purchase According to BAT Malaysia’s income
to LTH Property Holdings 3 Ltd, a whol- agreement, Sinarmas said a cash de- statement in a bourse filing on Thursday
ly-owned unit of TH for £247.5 million. posit of 20% was received upon the (July 21), the gross profit margin grew
signing of the agreement, with the bal- slightly to 26% in 2QFY22, an improve-
In a statement,TH said the property is ance payable upon completion, which ment from 25% in 2QFY21.
expected to generate long-term return due is expected to take place in early Au-
to its long-term rental contract, annual rent- gust this year. As for its first half of 2022 (1HFY22),
al reversion, and stable market value, while BAT Malaysia recorded a decline of 6.8%
the maintenance costs are totally borne by Sinarmas bought the property for in its net profit to RM125.5 million, down
the tenant. £188.6 million five years ago in June from RM134.7 million in 1HFY21.
2017, according to the company’s fil-
The pilgrims’ fund said the latest acqui- ing earlier. In a separate statement, BAT Malaysia
sition is in line with its objective to diver- managing director Nedal Salem said the
sify the types of assets and locations of its Sinarmas is 70.3%-owned by Flam- company will continue its particular em-
investments. bo International Ltd, which also owns phasis on tobacco harm reduction.
50.6% stake in SGX-listed palm oil gi-
ant Golden Agri-Resources Ltd. “We are encouraged by the govern-
ment’s commitment to regulate the vape
Flambo is an investment vehicle industry in Malaysia.We strongly urge the
controlled by TheWidjaja family Mas- government to adopt policies that are ev-
ter Trust (2), according to annual re- idence-based and data-driven, to ensure
ports of both Sinarmas and Golden the over one million Malaysian vape us-
Agri. ers have access to reduced-risk products
that are compliant with quality and safety
standards,” he said.

Nedal opined that the government must
continue its push towards curbing the to-
bacco black market in Malaysia.

On Thursday, BAT Malaysia’s share
price closed 16 sen or 1.5% higher at
RM10.52, valuing the group at RM3 bil-
lion.Year to date, the counter has fallen by
25%. It is currently trading at a historical
price-earnings ratio of 10.9 times, while
offering a dividend yield of about 9%.

FRIDAY JULY 22, 2022 5 THEEDGE CEO MORNING BRIEF

FRIDAY JULY 22, 2022 6 THEEDGE CEO MORNING BRIEF

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Total debt-to-GDP ratios across Household debt- China’s household debt ratio has risen with
the Asia-Pacific (APAC) re- to-GDP ratios the property markets, it amounts to just 60%
gion have remained well above in Malaysia, of GDP, versus South Korea’s figure above
pre-pandemic levels, although 100%. Further, the current downturn in
some countries such as Singapore, Ma- Thailand among China’s property market will likely lead to
laysia and Indonesia did record lower debt highest in some reduction of China’s household debt
ratios in 2021 compared with 2020. This ratio in coming quarters. Japan’s household
was due partly to the success of contain- Southeast Asia debt looks much like China’s in terms of its
ing domestic Covid-19 cases while keeping ratio to GDP and the increase since the end
production lines open. On the other hand, BY STEVEN COCHRANE, ERIC CHIANG of 2019.The main difference is that Japan’s
Thailand,Vietnam and the Philippines had & HARRY MURPHY CRUISE household debt includes consumer debt and,
trouble containing total debt in 2021 due Moody’s Analytics thus, is less concentrated in mortgages.
to tightened Covid-19-related restrictions
through much of the year. outbreak of the pandemic than in any oth- Households face similar concerns in Aus-
er country in the IIF database, including tralia and New Zealand. Property prices in
Household debt both advanced and emerging economies. Australia and New Zealand have soared over
Government fiscal policies across Southeast This debt is largely mortgage debt, which the past two decades, pushing each country’s
Asia have offered support to stabilise house- is fuelled by strong demand for homeown- household debt-to-GDP ratio to be among
hold debt in 2021. However, the household ership and very high house price appreci- the highest in the world. Property prices
debt-to-gross domestic product (GDP) ra- ation. Indeed, the Bank of Korea has rec- have grown further through the pandem-
tios in Malaysia andThailand remain among ognised this issue, as it was one of the first ic, supported by record-low interest rates
the highest in Southeast Asia and are at risk central banks in the region to begin raising and government programmes targeting new
of non-performance as interest rates nor- interest rates post-pandemic. In doing so, homebuilding. As global interest rates rise,
malise. Elevated household debt remains a the bank explicitly cited the need to rein in the burden of repayments on this household
major problem despite a recent slowdown mortgage lending and the accompanying debt will similarly lift. Adding to that, real
in the pace of household debt growth. Many runaway house prices. wages across both countries are falling in
Southeast Asian countries are also facing sky- the face of rising prices.The central banks of
rocketing housing prices as hot money and Similarly, in China, mortgages make up Australia and New Zealand expect that extra
speculation continue to push up prices. a large share of household debt. And while savings accumulated through the pandemic
will offset some of this burden. Household
Within North Asia, the greatest risk re- savings were boosted by generous govern-
garding household debt is in South Korea. ment payments, while extended lockdowns
Its household debt-to-GDP ratio is high prevented spending for long periods of the
at 106% and rose more quickly since the last two years.

Tengku Zafrul: 1MDB debt at RM32.08 bil as of June 30

KUALA LUMPUR (July 21): The re- Bernama “It not only involves collaboration be-
maining debt commitment of 1Ma- tween several local and foreign agencies,
laysia Development Bhd (1MDB) was REUTERS but it also involves both legal and nego-
RM32.08 billion as of June 30, with an tiation settlement processes.”
estimated foreign exchange rate of US$1 Tengku Datuk Seri Zafrul Abdul Aziz
to RM4.50, Finance Minister Tengku However, the finance minister said the
Datuk Seri Zafrul Abdul Aziz said. “These funds have been and will be government remains committed to using
used for the purpose of paying off 1MDB’s legal action or negotiations to continue
Between April 2017 and May 2022, the debt. As of June 30, RM10.84 billion had efforts in recovering all funds embez-
government channelled financial assistance been used to repay 1MDB’s debt. zled and that the main goal is to max-
totalling RM10.85 billion in the form of imise returns to pay off 1MDB’s debt
loans or advances via the Ministry of Fi- “This fund still has a balance of RM8.83 and reduce the government’s financial
nance (MOF) and Minister of Finance billion currently (including hibah, and fo- burden.
Inc to pay off 1MDB’s debt commitments rex gains or losses).” Read also:
and interests, according toTengku Zafrul. Malaysia scores well in five out of eight
He also said the process to recover 1MDB key sovereign risk indicators — EIU
“Besides the government’s direct fi- funds is ongoing and that it is a complicated Budget 2023 to focus on sustainable
nancial assistance, 1MDB’s debt inter- and lengthy process which could take years. subsidies, boosting country’s resilience,
est is also being financed using 1MDB’s says Tengku Zafrul
asset recovery funds kept in a trust ac- Implementation of 30 projects worth
count under the MOF, known as the RM100 mil to be shelved, says Mustapa
Asset Recovery Trust Account,” he said
in a written reply to parliament.

As of June 30, 1MDB’s total funds
recovered amounted to RM19.28 billion
in various foreign currencies, including
US dollar, Singapore dollar, and Aus-
tralian dollar, according to the finance
minister.

friday juLY 22, 2022 7 TheEdge CEO morning brief

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MAA ups Malaysia’s car sales volume
forecast, cites ‘pent-up’ demand

KUALA LUMPUR (July 21):The Malaysian by Justin Lim & Izzul Ikram “June 2022TIV could have been higher,
Automotive Association (MAA) has raised theedgemarkets.com if not for the shortages of chips and compo-
its 2022 Malaysian automotive total indus- nents which had affected certain [car] makes.”
try volume (TIV) forecast by 5% to 630,000 TIV Jan-June 2022 vs 2021
units, from the previously estimated 600,000, Aishah said the country’s June 2022
following the pent-up demand for new vehi- 80000 (unit) TIV 2021 TIV 2022 new car sales volume of 63,366 units was
cles in the first half of 2022 (1H22), taking the second highest monthlyTIV achieved
into account the country’s economic recovery 73,244 63,366 during 1H22.
from the impact of Covid-19-driven move-
ment restrictions,which had hurt vehicle sales 60000 57,545 The “all-time-high monthly TIV” re-
after the pandemic began in early 2020. 64,876 corded by the Malaysian automotive indus-
50,634 try was March 2022, during which 73,244
MAA president Datuk Aishah Ahmad 40000 41,533 45,064 58,329 47,207 new vehicles were sold.
said the continued recovery of the Malay- 43,448
sian economy and the Ministry of Finance’s “The rush for deliveries by MAA members
(MOF) decision to extend the passenger car 33,392 having their financial year ending on March
registration deadline to March 31, 2023 to 31, 2022 and a longer working month could
enable car buyers, who booked their vehicles 20000 have contributed towards this achievement.”
by June 30, 2022, to enjoy sales tax exemp-
tion, are among factors leading to the up- 0 Jan Feb Mar 1,926 Looking ahead,Aishah cautioned that the
ward revision of the MAA’s 2022 Malaysian Apr May June ongoing automotive component shortages
automotiveTIV forecast. may dampen automotive production and that
y-o-y 24 4 13 -1 7 3,190 Bank Negara Malaysia’s decision to increase
“This measure (deadline extension) is change (%) the overnight policy rate by 25 basis points to
indeed a positive one as it will help the 2.25% may dampen consumer confidence.
automotive industry fulfil [the backlog of] Source: MAA
orders while at the same time allow the She also warned of other global and do-
rakyat (people) to enjoy lower-priced cars,” Aishah said the MAA’s Malaysian au- mestic uncertainties that may affect con-
Aishah said onThursday (July 21) during a tomotive TIV forecast for 2023 is set at sumer demand for new vehicles.
virtual press conference on the Malaysian 636,300 new units, followed by 649,030
automotive sector’s 1H22 performance. new units for 2024. “Businesses may hold back investments
in view of the ongoing uncertainties at the
The introduction of new car models For 2025 and 2026, the country’s new ve- global level as well as our domestic political
besides factors such as promotional cam- hicle sales volume figures are seen at 662,660 scene, [with] many analysts expecting that
paigns by car manufacturers and distribu- and 677,240 units, respectively, she said. the 15th general election [in Malaysia] will
tors as well as efforts to fulfil the backlog of take place within the year (2022).
orders may help boost car sales in 2H22. Looking back at 1H22, Malaysia’s new
car sales rose to 331,386 units then from “Events arising from geopolitical ten-
The MAA’s revised 2022 Malaysian 249,178 a year earlier. sions, escalating oil prices, inflationary con-
automotive TIV forecast of 630,000 new cerns, increase in food prices, increase in
vehicles is higher than the 508,911 new For June 2022, she said the country’s logistics and shipping costs, and supply
vehicles sold in 2021, Aishah added. new vehicle sales jumped to 63,366 units chain disruptions may dampen our coun-
from 1,926 a year earlier. try’s economic growth outlook, and in turn,
Meanwhile, the MAA also introduced consumers’ demand for new vehicles.”
its Malaysian automotiveTIV forecasts for “This big increase inTIV can be attribut- Read also: Industry group sees faster
2023 to 2026. ed to the pent-up demand for new vehicles in growth for petrochemical sector
the 1H22 and also partially due to low base
effect, [for example] low TIV for 1H21 as
a result of the implementation of [the] Full
Movement Control Order in June 2021.

bloomberg

FRIDAY JULY 22, 2022 8 THEEDGE CEO MORNING BRIEF

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KUALA LUMPUR (July 21): Samsung REUTERS “With the support from the Malaysian
SDI Co Ltd said the South Korean com- state government and partner companies
pany on Thursday (July 21) held a cere- Samsung SDI for best quality, we will be able to realise
mony to mark the ground-breaking for its breaks ground the vision much faster,” he said.
1.7 trillion won (about RM5.8 billion) sec- for RM5.8 bil
ond cylindrical battery production facility battery factory Meanwhile, Aminuddin said Samsung
(Plant 2) in Seremban, Negeri Sembilan in Seremban SDI’s investment in Malaysia is integral
to meet the rising demand for cylindrical to Malaysia’s vision of driving robust eco-
batteries, which will be used in applica- BY SULHI KHALID nomic growth in the country and Negeri
tions including electrical tools and electric theedgemarkets.com Sembilan as outlined in the Malaysia Vi-
vehicles (EVs). sion Valley 2.0 plan.
day’s ground-breaking ceremony will serve
“Company held a ground-breaking as a starting point for realising our vision “Not only is this [a] testament to our
ceremony of Plant 2 in Malaysia on July to become a global top-tier company by economic potential in Negeri Sembilan,
21 with a plan to start mass production 2030. but also the investment-friendly policies
of PRiMX 21700 cylindrical batteries in implemented by the state.
2024,” Samsung SDI said in a statement “With successful completion and ear-
on Thursday (July 21). ly stabilisation of Plant 2, we will make “Samsung [SDI’s] investment to be the
SDIEM the centre of the global battery pioneer in EV battery cell manufacturing
According to Samsung SDI, the com- industry. in Seremban will continue to create jobs
pany undertakes its Malaysian operations for the youth and spur more opportunities
via Samsung SDI Energy Malaysia Sdn for local businesses,” he said.
Bhd (SDIEM).
According to Samsung SDI’s state-
Established in 1991, SDIEM was the ment, the global cylindrical battery mar-
first overseas business entity of Samsung ket is forecast to grow from 10.17 billion
SDI, according to Samsung SDI. cells in 2022 to 15.11 billion in 2027 for
an annual average growth rate of 8% as
“The company (SDIEM) started off demand expands for usage in electrical
with producing braun tubes in its early tools, micromobility to EV and energy
years before shifting to batteries in 2012,” storage systems.
Samsung SDI said.
“Samsung SDI’s decision to construct
Samsung SDI added the ground-break- the second factory in Malaysia comes as
ing ceremony for Plant 2 of SDIEM was a strategy to meet the rising demand for
attended by, among others, Samsung SDI cylindrical batteries recently.
president and chief executive officerYoon-
ho Choi and Negeri Sembilan Menteri “The batteries from Plant 2 will be used
Besar Datuk Seri Aminuddin Harun. in various applications ranging from elec-
trical tools, micromobility, to EV,” Sam-
Choi said in his opening remarks: “To- sung SDI said.

KUALA LUMPUR (July 21):The Asian ADB lowers inflation in the region, amid higher prices
Development Bank (ADB) lowered its growth forecast for food and fuel.
economic growth forecast for Malaysia for Malaysia to
to 5.8% for 2022 and 5.1% for 2023. The report said developing Asia and
5.8% for 2022 the Pacific is continuing its recovery from
In ADB’s Asian Development Out- the Covid-19 pandemic.
look (ADO) 2022 Supplement released BY SURIN MURUGIAH
on Thursday (July 21), the bank said theedgemarkets.com It said many countries are easing mo-
increased uncertainty and weaker glob- bility restrictions, which is strengthening
al growth are dampening Malaysia’s expected to be only a third of the pre-pan- economic activity.
prospects. demic level, despite the country reopen-
ing its borders to international visitors in However, it said growth has slowed in
It said the growth of 5% in the first April. China, the region’s largest economy, due
quarter of 2022 (1Q22) was underpinned to disruption from new Covid-19 lock-
by strong private consumption and in- Meanwhile, the bank lowered its eco- downs, as well as weaker global demand.
creased government assistance through nomic growth forecast for developing Asia
the Bantuan Keluarga family assistance and the Pacific to 4.6% this year due to ADB chief economist Albert Park said
programme. slower expansion in China, more aggres- the economic impact of the pandemic has
sive monetary tightening in advanced declined across most of Asia, but countries
“But business confidence and the PMI economies, and fallout from the contin- are far from a full and sustainable recovery.
(Purchasing Managers’ Index) continue ued Russian invasion of Ukraine.
to soften in step with weaker global pros- “On top of the slowdown in China,
pects and supply disruptions from cities In ADB’s ADO 2022 Supplement, fallout from the war in Ukraine has add-
in China that were locked down to tackle the outlook compares with a projection ed to inflationary pressure that’s causing
Covid-19 outbreaks. of 5.2% issued by ADB in April. central banks around the world to raise
interest rates, acting as a brake on growth.
“Agriculture growth remained margin- The bank also raised its forecast for
al in 1Q due to adverse weather condi- “It’s crucial to address all these global
tions and input-cost shocks from the war uncertainties, which continue to pose risks
in Ukraine,” it said. to the region’s recovery,” he said.
Read also: Allegation of racial imbalance
ADB said tourism is making a slow re- in civil service baseless, says CUEPACS
covery, adding that arrivals this year are

FRIDAY JULY 22, 2022 9 THEEDGE CEO MORNING BRIEF

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NEWS IN BRIEF

CIMB Thai’s 6MFY22 net profit soars 122% y-o-y to 2.12b baht Newly-listed Unitrade declares
KUALA LUMPUR (July 21): CIMB Group Holdings Bhd’s 94.83%-owned subsidiary maiden dividend
CIMB Thai Bank PCL’s net profit for the cumulative six months ended June 30, 2022
(6MFY22) jumped 122% year-on-year (y-o-y) to 2.12 billion baht from 1.16 billion baht. The KUALA LUMPUR (July 21): Homegrown
improvement was mainly attributed to better cost control with a 7.4% decrease in operating building materials wholesaler and
expenses and a 63.7% decrease in expected credit losses, according to a statement to the distributor Unitrade Industries Bhd, which
local bourse on Thursday (July 21). CIMB Thai president and chief executive officer Paul made its debut on the ACE Market of
Wong Chee Kin said the bank’s 6MFY22 operating income went down slightly by 1.3% to Bursa Malaysia on June 14, has proposed
7.11 billion baht from 7.2 billion baht, attributed to the drop in net interest income which a first and final single-tier dividend of 0.82
fell 8.2% amid lower interest income on loans and hire purchase business. “Other operating sen per share for its financial year ended
income increased by 143.5 million baht or 9.9%, mainly attributed to gains on financial March 31, 2022 (FY22). In a statement on
instruments measured at fair value through profit or loss and other income, offset by higher Thursday (July 21), Unitrade Managing
losses on investments,” he said. Net interest margin over earning assets stood at 2.8% in Director Nomis Sim Siang Leng said the
6MFY22, compared with 3.2% in the same period of the previous year, resulting from lower maiden post-listing dividend, amounting
interest income on loans and hire purchase business. — by Syafiqah Salim to RM12.8 million — subject to approval
at the forthcoming inaugural annual
Read the full story general meeting — is aligned with the
company’s dividend policy to distribute up
Widad proposes RM86.85 mil UOA REIT 2Q rental income slips to 30% of its profit after tax and minority
private placement to RM21.72 mil, declares 4.3 sen interest. Looking ahead, Sim said Unitrade
distribution income remains cautiously upbeat on the building
KUALA LUMPUR (July 21): Widad Group materials industry, as the Government
Bhd, one of the largest ACE Market-listed KUALA LUMPUR (July 21): UOA Real has just given reassurance that mega
firms on Bursa Malaysia, plans to raise fresh Estate Investment Trust (UOA REIT) saw projects such as the Mass Rapid Transit
capital of RM86.85 million via a private its net rental income for the second quarter Line 3 (MRT3), East Coast Rail Link (ECRL)
placement exercise at an indicative issue ended June 30, 2022 (2QFY22) slip by 1.5% and Pan Borneo Highway will proceed as
price of 33.5 sen per share. In a filing with to RM21.72 million, from RM22.06 million planned. Unitrade raised RM100 million
the local bourse on Thursday (July 21), the a year ago. According to the commercial from its initial public offering (IPO). — by
construction group said the placement REIT’s Bursa Malaysia filing on Thursday Hailey Chung
exercise entails issuance of up to 259.25 (July 21), its gross rental declined by
million new shares — representing about 1.7% to RM28.49 million in 2QFY22, as Apli Yusoff is new PTPTN chairman
9.42% of its share base — to investors to be compared to RM28.97 million a year earlier.
identified later. The indicative issue price Earnings per unit, however, rose to 2.23 sen KUALA LUMPUR (July 21): Universiti
of 33.5 sen represents a discount of 9.5% in 2QFY22, up from 2.21 sen a year before. Sultan Zainal Abidin board member Apli
to the five-day volume weighted average For the six-month period (1HFY22), its Yusoff has been appointed as the new
market price (VWAMP) of 37 sen. Widad, net rental income slid by 1.8% to RM43.95 chairman of the National Higher Education
which is also involved in integrated facilities million from RM44.75 million a year ago, Fund Corporation (PTPTN) for a period of
management (IFM) services, intends to while gross rental dropped by 1.5% year- two years, effective July 18. In a statement
earmark RM46.4 million of the proceeds on-year to RM57.59 million from RM58.47 on Thursday, PTPTN said that Apli, 52,
for potential acquisitions, RM45 million to million. The REIT declared an interim holds a Degree in Materials Engineering
partially repay its bank borrowings, with income distribution of 4.3 sen per unit for from Universiti Sains Malaysia and is also
the balance RM1.4 million to be used for the quarter, which is to be paid on Aug 30, a board member of MARA Incorporated
general working capital. — by Sulhi Khalid with an ex-date of Aug 4. — by Sulhi Khalid Sdn Bhd. He is also the president of the
Squash Racket Association of Terengganu,
MARC foresees total corporate bond issuances to hover between RM100b vice-president of the Terengganu State
and RM110b in 2022 Football Association, a Supreme Council
member of the National GAGASAN, a
KUALA LUMPUR (July 21): MARC Ratings Bhd foresees total corporate bond non-governmental organisation and
issuances to hover in the range of RM100 billion to RM110 billion in 2022, driven by has held important positions in several
robust economic recovery in the second half of 2022 (2H22). Notwithstanding this, local companies. On July 12, Wan Saiful
the elevated level of government debt and stretched public finances derived from the confirmed that he is no longer PTPTN
pandemic will weaken quasi-government debt issuances on top of the hawkish interest
rate environment, said the rating agency in a statement on Thursday (July 21). Foreign chairman after his contract
inflows into the local bond market would remain pressured for the rest of the year, said of service expired on
MARC, amid market expectations of interest rate hikes by the US Federal Reserve and June 17 and was not
narrowing yield premium between US Treasury and Malaysian Government Securities extended. — Bernama
(MGS). While there could be renewed turbulence, the rating agency believes the rise
in local government bond yields would not be too significant given the critical support Read also: BDO
from local institutional investors. Thus, MARC expects the 10-year MGS yield to rise to voluntarily resigns
a peak of 4.4% by the end of 2022. — by Syafiqah Salim as Gabungan AQRS’
auditor

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MAHB may need 2022, and with annual operating cash flow Kenanga trims
to raise more of more than €200 million starting this FY22 net profit
borrowings to year, it will be able to repay €375 million
in bank borrowings due by 2025 and €383 forecast for
repay debts, says million in concession fees by 2025. Pharmaniaga
CGS-CIMB
But, the uncertainty lies in the terms of by 9%
by syafiqah salim the payment of €230 million in concession
theedgemarkets.com fees deferred from 2021-2022, on whether by syafiqah salim
theTurkish government will insist on full pay- theedgemarkets.com
KUALA LUMPUR (July 21): Malaysia Air- ment or give a partial waiver, as well as the
ports Holdings Bhd (MAHB) may need to timing of that payment, said CGS-CIMB. KUALA LUMPUR (July 21):
raise more borrowings to repay debts due this Kenanga Research has trimmed
year, according to CGS-CIMB Research. “We forecast that ISG will have sufficient Pharmaniaga Bhd’s net profit fore-
funds to repay €230 million in full in 2025, casts by 9% for the financial year
“MAHB’s Malaysia business had a cash but that would leave ISG with a rather low ending Dec 31, 2022 (FY22) since
balance of RM1 billion as at March 31,2022, cash balance and make it susceptible to un- most of the Sinovac Covid-19 vac-
which was topped up by RM800 million expected economic shocks,” it added. cine delivery has been completed.
sukuk raised in April 2022 to RM1.8 billion.
CGS-CIMB reiterated its ‘hold’ call on For the full FY21, Pharma-
“After deducting planned capex of MAHB with a lower target price of RM6.76, niaga’s net profit jumped to
RM400 million, the cash balance may from RM6.93 previously, as it trimmed the RM172.15 million from RM27.49
be insufficient to repay RM1.5 billion of country’s traffic forecasts for 2022, partial- million in the previous year, un-
sukuk due Dec 16, 2022 if [its] Malaysia ly offset by higher ISG international traffic. derpinned by higher contributions
[business] fails to generate positive oper- from the logistics and distribution
ating cash flows for the rest of the year,” it It said Malaysia’s international pas- and manufacturing divisions. An-
said in a note Wednesday (July 20). sengers have so far lagged the domestic nual revenue surged 76.7% to
pick-up, slowing down earnings recovery RM4.82 billion from RM2.73
“[However], we have confidence that as depreciation is calculated based on to- billion, largely due to the sales of
MAHB will be able to successfully raise the tal passengers. Sinovac Covid-19 vaccines to the
necessary debt refinancing; MAHB con- Health Ministry and the private
tinues to reiterate that an equity rights is- “While we forecast Malaysia’s FY22F sector.
sue is not on the table,” said CGS-CIMB. international pax (passengers) to rise by
14.63 million year-on-year, domestic traffic For the full FY22, Kenanga is
According to the research firm, Istan- may rise by an even greater 29.65 million forecasting the group to deliver a
bul Sabiha Gokcen International Airport pax, leading to a dilution in the average net profit of RM85.9 million on a
(ISG) had a cash balance of €266 million revenue per pax. revenue of RM3.66 billion.
(about RM1.2 billion) as of March 31,
“Regardless, depreciation expense will However, the research firm said
rise proportionately with the increase in it likes the pharmaceutical group
total pax traffic. for its recurring earnings backed
by concessions signed with the gov-
“These two factors combine to con- ernment and the fact that Pharma-
strain MAHB’s earnings recovery in FY22 niaga is in the midst of finalising
as we forecast depreciation to rise as a per- the logistics and distribution con-
centage of revenue,” said CGS-CIMB. tract extension agreement with the
Health Ministry, slated to be com-
KUALA LUMPUR (July 21): Hong Le- HLIB Research pleted by the fourth quarter of 2022
ong IB (HLIB) Research has maintained lowers target (4Q22) as well as its high dividend
its “buy” rating on Hibiscus Petroleum yield of 6%.
Bhd at 82.5 sen with a lower target price price for Hibiscus
(TP) of RM1.54 (from RM1.73) after the to RM1.54 “[We] maintain [our] ‘market
Sabah state government recently demand- perform’ [call]. No change to our
ed Hibiscus to pay a total sum of RM97.3 by surin murugiah TP [target price] of 64 sen that
million, comprising RM66 million in state theedgemarkets.com is based on 11 times FY23E EPS
sales tax and RM31.3 million in penalty [earnings per share], at a 25% dis-
incurred for late payment. “We maintain ‘buy’ on Hibiscus Petro- count to peers’ average due to its
leum with a lower TP of RM1.54 after smaller market capitalisation.
In a note on Thursday (July 21), the re- increasing the WACC for both its FIPC
search house said this development occurred Kinabalu Oil and North Sabah assets to “Key risks are: (i) non-renewal
on the heels of a few events, namely Hibiscus 15% (from 10% previously) from this de- of concessions with the government,
has not paid SST for its North Sabah assets velopment,” it said. (ii) unsold Covid-19 inventory, and
since the implementation of the tax in April (iii) increased competition from
2020, and recently on June 8, 2022. Read also: CGS-CIMB: Construc- both local and overseas players,”
tion sector facing several headwinds said Kenanga in a note on Thurs-
“Hibiscus announced publicly that its in 2H22F day (July 21).
newly-owned FIPC Kinabalu assets will
not continue to pay SST under protest.

“Post-briefing, we came to an opinion
that the entire debacle will require more
time to solve and is inconclusive at the mo-
ment, pending further negotiations with
the Sabah state government.

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High Court rejects Najib’s bid to hire
Queen’s Counsel for final SRC appeal

KUALA LUMPUR (July 21): The High BY TIMOTHY ACHARIAM The Federal Court is scheduled to hear
Court here had on Thursday (July 21) re- theedgemarkets.com Najib’s appeal in two stages over 10 days.
jected former prime minister Datuk Seri It was reported that the first stage is sched-
Najib Razak’s application to have Queen’s THE EDGE FILE PHOTO uled for Aug 15 to 19 while the second
Counsel Jonathan Laidlaw represent him stage has been fixed for Aug 22 to 26.
in the final appeal at the Federal Court Datuk Seri Najib Razak
against his July 2020 conviction involving Also present during Thursday’s court
ex-1Malaysia Development Bhd (1MDB) Ahmad Kamal dismissed Najib’s law- proceedings were Datuk Dr Gurdial Sin-
subsidiary SRC International Sdn Bhd. yer’s argument that Laidlaw, because of his gh Nijar, who represented the The Kuala
special qualifications, will deal with “nov- Lumpur Bar Committee and Datuk Bas-
Justice Datuk Ahmad Kamal Md Sha- el and complex issues”, which may arise tian Vendargon, who represented the Bar
hid said Najib’s application should be dis- during the appeal at the Federal Court. Council Malaysia (Malaysian Bar).
missed because there are no issues of com-
plexity, novelty or seriousness that require The High Court had on Thursday dis- The Kuala Lumpur Bar Commit-
Laidlaw’s expertise at the Federal Court missed Najib’s application without costs. tee, Malaysian Bar and Attorney Gen-
appeal. eral’s Chambers Malaysia (AGC) are
On July 28, 2020, the High Court sen- also against Najib’s application to have
“The appeal is one that can quite com- tenced Najib to 12 years in jail and fined Queen’s Counsel Laidlaw represent him
petently be handled by local advocates and him RM210 million after he was found in the final appeal at the Federal Court
solicitors,” Justice Ahmad Kamal said, not- guilty by High Court Judge Datuk Mohd against his July 2020 conviction involv-
ing that there are genuine concerns and Nazlan Mohd Ghazali of seven charges ing SRC.
doubts about the admission by Najib’s law- involving SRC.
yers that Laidlaw handling the case will The Kuala Lumpur Bar Committee,
benefit the local legal fraternity. The seven charges comprised one count Malaysian Bar and AGC had on July 6,
of abuse of power involving Retirement 2022 made submissions at the High Court
Representing Najib during Thursday’s Fund (Inc)’s (KWAP) RM4 billion loans against Najib’s application.
virtual court proceedings were lawyers to SRC, three counts of criminal breach
Rahmat Hazlan and Muhammad Farhan of trust involving RM42 million and three On Thursday, Ahmad Kamal said the
Muhammad Shafee. Also present was lead counts of money laundering. High Court agreed withThe Kuala Lum-
prosecutor Datuk V Sithambaram. pur Bar Committee, Malaysian Bar and
The Court of Appeal on Dec 8, 2021 AGC that Malaysia has a plethora of com-
There is no evidence, which suggests upheld the High Court’s July 28, 2020 petent advocates and solicitors to handle
that “Laidlaw has knowledge or much ex- decision which found Najib guilty of the Najib’s appeal against his conviction.
perience in the local laws, compared to the seven charges involving SRC.
local advocates and solicitors in Malaysia”, “I agree with submissions by the AGC,
said the judge, adding Laidlaw does not On March 16, 2022, the Federal Court Malaysian Bar andThe Kuala Lumpur Bar
have any experience in handling cases, pro- dismissed Najib’s appeal against the Court Committee that the appeal can quite com-
viding legal advice or expert legal services of Appeal’s Dec 7, 2021 decision to reject petently be handled by local advocates and
within the jurisdiction of Malaysia. his application to adduce more evidence to solicitors,” he said.
the SRC case to overturn his conviction. Read also:
He said Laidlaw does not have special Apex court fixes Sept 21 to hear Najib
qualifications or experience in conducting Following the High Court’s decision on and son’s bid to stay judgements in
criminal trials like Najib’s trial. Thursday, Najib and his legal team can ap- income tax case
peal against Justice Ahmad Kamal’s ruling Najib’s application to adduce further
The High Court finds that Laidlaw at the Federal Court when the hearing of evidence is seen ‘to demonise Justice
“does not have special qualifications or Najib’s final appeal against his July 2020 Nazlan in the public opinion’, says
experience in conducting criminal trials conviction begins on Aug 15, 2022. prosecution
and appeals like the charges against the MARA Corp senior officers charged for
appellant (Najib), namely [under] Section taking bribes
23 of the Malaysian Anti-Corruption Com- Defence contends that MACC’s delay in
mission (MACC) Act 2009, Section 409 charging Syed Saddiq was to pressure him
of the Penal Code and Section 4 of the Court: Public free to comment on Syed
Anti-Money Laundering, Anti-Terrorism Saddiq trial ‘but don’t go overboard’
Financing and Proceeds of Unlawful Ac-
tivities Act 2001”.

The fact that Laidlaw has conducted
several cases including those involving
business crimes, financial services and
criminal defence in the UK as well as oth-
er jurisdictions except for Malaysia “could
not be said to mean that there are no advo-
cates and solicitors in Malaysia, that does
not possess the said skills and success in
conducting trials (in Malaysia)”, Justice
Ahmad Kamal said.

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Main committee istration for cannabidiol-related products SC adds one
set up for by the end of this year. potential clone
entity to Investor
development of Meanwhile, Khairy said the Bill aimed
cannabis, ketum at — among other things — providing Alert List
flexibility in the handling of poisons by
industry, says allowing the use of documents in elec- BY SURIN MURUGIAH
Khairy tronic form, as well as increasing several theedgemarkets.com
penalties in Act 366 regarding the use
Bernama of poisons and psychotropic substances. KUALA LUMPUR (July 21):The Secu-
rities Commission Malaysia (SC) has up-
KUALA LUMPUR (July 21):The main The Poisons (Amendment) Bill 2022 dated its Investor Alert List.
committee for the development of the was passed by a majority vote.
cannabis and ketum industry has been In an alert onWednesday (July 20), the
set up to look at the latest evidence on Khairy said the proposal to increase commission said the following persons/
the use of the substances, especially for the penalty in the provisions of the law entities had been added to the list:
medical purposes, says Health Minister was not made arbitrarily but with full ○ Potential clone entity — Aberdeen
Khairy Jamaluddin. responsibility and awareness, so as not
to punish any party. Standard Investment
Khairy — who is also the chairman of The Investor Alert List contains a list
the committee — when winding up the “This is not the ‘spirit’ behind the
debate on the Poisons (Amendment) Bill amendment to the Poisons Act. After we of unauthorised websites, investment
2022 in the Dewan Rakyat on Thursday engaged with enforcement agencies and products, companies and individuals,
(July 21) said the first meeting would be all stakeholders, we found that the exist- including:
held on July 25. ing punishment was not commensurate ○ Persons carrying on or holding them-
to preventing offenders from repeating selves out as carrying on the following
“After this committee gets the views their offences, and it did not serve as a regulated activities without a licence
of experts on whether ketum or cannabis lesson or be a deterrent to others from from the SC:
can be used safely for certain purposes, committing wrongdoing. ○ dealing in securities
especially medicine, then we will issue a ○ dealing in derivatives
framework for the registration of such “The main principle underlying the ○ fund management
products. amendment to this Act is to protect the ○ advising on corporate finance
people, the environment and the country ○ investment advice
“This will also make a difference to from the very harmful effects of poisons, ○ financial planning and
ketum growers in Malaysia who may the harmful effects of improper, irregular ○ dealing in private retirement
be able to gain revenue from the sale of and unorganised handling of poisons and schemes
their ketum crops,” he said in response psychotropic substances.This is a matter ○ Persons operating a recognised market
to a suggestion by Datuk Seri Shamsul of life and death,” he said. without authorisation
Iskandar @Yusre Mohd Akin (PH-Hang ○ Persons issuing or offering securities
Tuah Jaya) on the federal government’s Khairy said the proposal on the steep without approval, authorisation or rec-
roadmap to legalise the use of ketum for increase in penalties was made with re- ognition
medical purposes in the country. gard to the harmful impact of abuse and ○ Persons misusing the SC’s logo and mis-
misappropriation of controlled substanc- representing the SC
Khairy said he had previously hint- es under the Act, while the quantum of
ed there was a strong possibility that the the fine was in line with the fines of other Read also:
ministry would issue a framework for reg- Acts enforced by the Ministry of Health Parliament passes Employees’ Social
and other ministries. Security (Amendment) Bill 2022

Section 30 of the PoisonsAct was amend- Tommy Thomas, 12 others fail in bid
ed to increase the penalty from a fine not to strike out malicious prosecution
exceeding RM10,000 or imprisonment for suit by Sundra Rajoo
a period not exceeding four years, or both,
to a fine not exceeding RM100,000 or im- Dhaya Maju officially withdraws suit
prisonment not exceeding five years,or both. against Govt over KVDTII project

KUALA LUMPUR (July 21): A total Smoking in
of 30,311 notices for offences related public places:
to smoking in public places were issued 30,311 notices
from January to June this year, said issued in 1H2022
Health Minister Khairy Jamaluddin.
Bernama
“Congratulations to the KKMPu-
trajaya Inspectorate and Legal Unit to last year, which saw a total of 57,268
enforcement personnel. Insya’Allah, notices for smoking in public places is-
enforcement will be ramped up from sued in 2018; 50,946 (2019); 34,338
July-December! #GEG #NoSmoking,” (2020) and 15,163 (2021).
he tweeted on Thursday (July 21).

The notices were issued under Sec-
tion 32B of the Control of Tobacco
Products Regulations (PPKHT) 2004.

In the same post, Khairy also shared
PPKHT Enforcement data from 2018

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China’s credit market rocked by
more debt delays, plunging bonds

by Wei Zhou & Dorothy Ma
Bloomberg

(July 21): China’s credit market is now show- jor developers likeVanke and Seazen Hold- mortgage payments,”Goldman Sachs Group
ing stress on an almost daily basis, as a wors- ings Co dropping out of its top 10 holdings. Inc analysts wrote in a risk report. “We be-
ening property crisis shatters assumptions lieve further policy changes are needed to
about safe borrowers and even Chinese in- There was some relief later in the day. improve confidence and ensure the issues
vestors turn against troubled debtors. The nation’s banking and insurance around mortgage repayments is addressed.”
watchdog pledged that regulators will work
The country’s junk dollar bonds were on with local authorities to ensure delivery of As the rout in credit markets intensifies,
the brink of record lowsThursday, as a state- property projects, which have stalled as China’s local investors, who have until recent-
backed developer sought payment delays developers run out of cash. ly been remarkably receptive to distressed
on US$1.6 billion of dollar notes. In other It’s asking banks to facilitate completion firms’ attempts to delay bond repayments or
signs of stress, the debt of a private builder of real estate projects, while ChinaVanke was reorganize debt, are getting impatient.
deemed healthy just months ago sank, while also able to sell 3 billion yuan (US$444 mil-
creditors spurned a restructuring plan by lion) of debt at 3%, the middle of an indicative Brilliance Auto Group Holdings Co,
the parent of BMW AG’s China partner. range.Bonds of Country Garden also jumped. parent of German automaker BMW’s
Repayment risks in China Inc have China joint-venture partner, failed to get
Taken together, the incidents point to spread to unprecedented levels. China approval from some creditors on its re-
a credit market in a new phase of turmoil South City, which focuses on commercial structuring plan. The state-run company
as stress spreads from cash-starved pri- projects in sectors like logistics, had warned entered a court-led restructuring in late
vate developers to those with government that if the so-called consent solicitation isn’t 2020 after defaulting on some 6.5 billion
backing and companies outside the housing successful, it might not be able to repay yuan of obligations.
sector. Chinese investors pushing back on principal or interest on its dollar bonds
debt reprieves or unfavorable restructuring and that might lead to an event of default. The creditor revolt came on the heels of
plans also suggest dwindling confidence in If the proposed amendments become bondholders’ rejection of China Evergrande
Beijing’s ability to pull off a fast economic effective, a Shenzhen entity which in May Group’s proposal earlier this month to ex-
turnaround. bought a 29% stake in China South City tend a yuan note, a rare move that may result
would enter a type of credit protection called in a landmark onshore default. The devel-
“Sentiment in China’s high-yield mar- a keepwell deed involving all the dollar bonds. oper, which remains at the epicenter of the
ket deteriorated on China South City’s That seemed to be enough to boost the price property debt crisis, has already suffered dol-
surprising extension,” said Ting Meng, of the bonds maturing next year at least 8.7 lar bond delinquencies and aims to unveil a
senior Asia credit strategist at Australia & cents, set for the largest gain in months. preliminary overhaul plan by the end of July.
New Zealand Banking Group Ltd. “It will But broader concerns persist, as the still Read also:
be very challenging for developers in the deeply distressed price levels reflect. The Distressed developer China South
second half as we’re not seeing the real es- builder suffered a record drop in the Au- City seeks delay on dollar debt
tate sector bottom yet. Even if the industry gust dollar bond earlier this week, high- China’s top steel mill adds its voice to
bottoms, the recovery of HY bonds will be lighting investor worries about imminent industry’s alarm
time consuming and painful.” debt deadlines at property firms. Numer- China to repay more depositors to
ous developers this year have sought exten- defuse rural bank scandal
The day began with China South City sions on local and offshore bond payments.
Holdings Ltd proposing changes to its dol- “Despite property sales improving, de-
lar bonds, including extending maturities velopers are finding it difficult to secure fi-
and paying principal in instalments. A slide nancing and continue construction, prompt-
in the securities — which were near par ing reports of homebuyers refusing to make
just two months ago after a bailout — has
rattled investors who had bet its state links
would help insulate it.

Prices of Chinese high-yield dollar
notes, a market dominated by developers,
have neared record lows this week.While
prices of some property notes edged up
Thursday on short covering, the absolute
levels remain in distressed territory.

The selloff has engulfed even invest-
ment-grade peers including China Vanke
Co. Another builder previously seen as rel-
atively safe, Country Garden Holdings Co,
had trading of one of its yuan bonds briefly
suspendedThursday after the security fell
22% to 54 yuan. China’s top-performing
mutual fund this year is among a growing
list of investors cutting exposure, with ma-

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China fines Didi Global US$1.2 bil, fuelling
hopes of thaw in regulatory crackdown

Reuters

by Julie Zhu, Yingzhi Yang & Kane Wu
Reuters

HONG KONG/BEIJING (July 21): Chi- before paring most of its gains and ending June 30, 2021. It also ordered app stores
na’s cybersecurity regulator on Thursday the day up 0.12%. to remove 25 apps operated by Didi and
fined Didi Global Inc US$1.2 billion, con- told the firm to stop registering new users,
cluding a probe that forced the ride-hail- “The fine should mark the end of Di- citing national security and public interest.
ing leader to delist from NewYork within a di’s regulatory troubles,” said analystTravis
year of its debut and made foreign investors Lundy at Quiddity Advisors who publishes The regulator did not say in itsThursday
wary about China’s tech sector. on research platform Smartkarma. statement whether or when it would allow
the apps to return to app stores or allow
Didi ran afoul of the Cyberspace Admin- “If there were more, they’d have waited new user registration to resume.
istration of China (CAC) when it pressed until those were understood and addressed
ahead with its US stock listing even though to levy the fine,” he said, adding the devel- Didi previously said it would need to
it was urged to wait while a cybersecurity opment should allow Didi to move towards apply for the apps to be restored and three
review of its data practices was conducted, listing in Hong Kong. sources told Reuters that the company has
sources previously told Reuters. updated the apps to ensure they are com-
Didi, which delisted from NewYork last pliant once a relaunch is allowed.
The CAC said Didi had violated three month, previously aimed to list in Hong
major laws concerning cybersecurity, data Kong by June. It put such plans on hold in- One company source said managers
security, and personal information protec- definitely after failing to win approval from convened meetings with Didi teams after
tion, a regime that the country revised and Chinese regulators, Reuters has reported. the announcement of the fine, during which
expanded last year as part of efforts to reg- they were told that there was still little clar-
ulate its cyberspace and require companies App relaunch ity on when the apps could be restored to
to improve their handling of data. Didi’s fine would be the largest regulatory app stores.
penalty imposed on a Chinese technology
The regulator also said its investigation company since Alibaba Group Holding Ltd Didi did not immediately respond to a
found Didi had illegally collected millions and Meituan were fined US$2.75 billion request for comment on the apps.
of pieces of user information over a sev- and US$527 million respectively last year
en-year period starting in June 2015 and by the antitrust regulator. A Didi investor, who was not authorised
carried out data processing activities that to speak with media and so declined to be
seriously affected national security. Alibaba’s fine equated to about 4% of identified, said the fines should conclude
its 2019 domestic sales, while Meituan’s the CAC’s investigation into Didi so the
It fined Didi 8.026 billion yuan (US$1.2 was equivalent to 3% of its 2020 domestic company should be allowed to resume its
billion) and, in an unusual move, said sales. In comparison, Didi’s fine would be apps and normal businesses.
founder and chief executive Cheng Wei equal to about 4.6% of the firm’s US$25.7
and president Jean Liu were responsible billion revenue last year. The restrictions have hit Didi badly,
for the violations and imposed penalties chipping away at its dominance and al-
of one million yuan each. Under China’s Personal Information lowing rival ride-hailing services operat-
Protection Law, companies can be fined ed by automakers Geely and SAIC Motor
“Didi’s violations of laws and regula- up to 5% of their past year’s turnover or Corp Ltd to gain market share.
tions are serious... and should be severely 50 million yuan, while the maximum fine
punished,” it said. for individuals seen to be responsible for Didi stock soared in the NewYork initial
the violations is one million yuan. public offering, giving the company a val-
Didi, backed by investors including US uation of US$80 billion and marking the
peer Uber Technologies Inc and Japan’s The CAC announced its inquiry into biggest US listing by a Chinese firm since
SoftBank Group Corp, in a statement on its Didi shortly after its New York debut on 2014. By the time of delisting, the stock
Weibo account said it accepted the CAC’s had lost over 80% in value.
decision and would conduct comprehensive
self-examination and rectification.

The regulatory action against Didi was
part of a wider and unprecedented crack-
down by authorities on violation of antitrust
and data security rules, among other issues,
targeting some of China’s best-known cor-
porate names.

Authorities have in recent months
changed their tone towards the crackdown
as they seek to boost an economy hurt by
Covid-19 containment measures.The shift
has raised hope for companies and investors
that the worst is over, though jitters remain.

Chinese technology stocks rose after the
Didi announcement, with the Hang Seng
Tech Index over 1% in afternoon trade,

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Russian gas flows to Germany again;
Moscow eyes giant Ukrainian power plant

by Nina Chestney & Natalia Zinets
Reuters

LONDON/KYIV (July 21): Russian gas Intense shelling Reuters could not independently verify
began flowing to Europe via a major pipe- The Ukrainian military reported heavy the reports.
line onThursday after a 10-day pause but and sometimes fatal Russian shelling in Heavy losses
fears of broader supply cuts remained and the east and south of the country amid CIA Director William Burns said on
Russian forces in Ukraine were seen eyeing what its said were largely failed attempts Wednesday that the United States esti-
the capture of the country’s second biggest by Russian ground forces to advance in the mated that Russian casualties in Ukraine
power plant. eastern Donetsk region. had so far reached around 15,000 killed
and perhaps 45,000 wounded and that
Russian troops shelled cities across east- Donetsk regional governor Pavlo Ky- Ukraine has suffered what he called sig-
ern and southern Ukraine, Ukrainian offi- rylenko said Russian missile strikes had de- nificant losses too.
cials said, and hit two schools as Moscow’s stroyed two schools in the cities of Kram-
forces carried out limited ground opera- atorsk and Kostiantynivka and had also Russia classifies military deaths as state
tions in preparation for what is seen as a hit the city of Bakhmut but there was no secrets even in times of peace and has not
wider offensive. information yet on casualties. updated its official casualty figures fre-
quently during the war.
Reuters was unable to immediately verify “Russia is intentionally destroying our
Ukrainian assertions about Russian shell- cities and towns. Do not expose yourself to Scotching persistent speculation that
ing, which they said has been intense for danger — evacuate,” he wrote onTelegram. Putin may be suffering from health prob-
several weeks, and it was not immediately lems, Burns also said that the Kremlin
clear if anyone had been hurt in the strikes Russia said it does not deliberately target chief was healthy as far as he knew.
on the schools. civilians and uses high precision weapons to
degrade Ukrainian military targets, but the British military intelligence said on
The resumption of gas flows via the war has flattened cities, particularly in Rus- Thursday that Russian forces were like-
Nord Stream 1 pipeline to Germany end- sian-speaking areas in the east and south- ly closing in on Ukraine’s second biggest
ed a nerve-jangling 10 days for Europe in east of Ukraine. power plant atVuhlehirska, 50 kilometres
which politicians expressed concern Rus- north-east of Donetsk.
sia might not restart them at a time when The mayor of Kharkiv, Igor Terekhov, in
alternative energy supplies are tight and hisTelegram channel said that one of the most “Russia is prioritising the capture of
prices high. densely populated areas of the city was being critical national infrastructure, such as
shelled and asked people not to leave shelters. power plants,” the ministry, which sup-
The pipeline has traditionally carried Oleh Synehubov, governor of the Kharkiv ports Ukrainian forces, said in a regular
more than one-third of Russia’s gas exports region, said two people had been killed and bulletin.
to Europe but was operating at only 40% 19 wounded, four of them seriously.
of its capacity after Kremlin-controlled It said taking the power plant, a Sovi-
Gazprom cut gas exports in a row over Vitaly Kim, governor of the southern et-era coal-fired facility, was also proba-
the repair of a turbine. Mykolaiv region, said the region had been bly part of Russia’s attempt to regain mo-
targeted with seven S-300 missiles. One mentum as it tried to advance towards the
“In view of the missing 60% [capac- person had been wounded, he said, and key cities of Kramatorsk and Sloviansk in
ity] and the political instability, there is infrastructure, energy facilities, and stor- eastern Ukraine.
no reason yet to give the all-clear,” Klaus age facilities damaged.
Mueller, president of Germany’s network Read also: European gas prices fall as
regulator, wrote on Twitter. Multiple blasts were also heard in the Nord Stream restart brings relief
Russian-controlled southern region of
European Commission President Ur- Kherson overnight and into Thursday,
sula von der Leyen has accused Russia of Russian news agency TASS reported.
trying to blackmail Europe by using energy
as a weapon, something Moscow, which
is unable to swiftly redirect all of its gas to
other markets, has denied.

Moscow has criticised EU and US
sanctions on Russia over its Feb 24 in-
vasion of Ukraine and military help to
Kyiv, saying it had to undertake what it
called a “special military operation” to
prevent the North Atlantic Treaty Or-
ganization from using Ukraine to threat-
en Russia.

Ukraine said it needs the weapons to
defend itself against what it and the West
cast as an unprovoked imperial-style war
of aggression designed to steal its land and
erase its national identity.

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Oil falls amid “Exhaustion is settling in on the oil trade,” news In brief
signs of languid said Ed Moya, senior market analyst at Oan-
demand as Libya da Corp. “Oil is no longer the easiest trade reuters
increases output on Wall Street and that has many traders
abandoning their bullish bets.” Indonesia bucks tightening trend
by Julia Fanzeres as rate held at record low
Bloomberg After rallying for most of the first half (July 21): Indonesia’s central bank kept its
of the year, oil prices have erased almost borrowing costs unchanged to support
(July 21): Oil slumped as rising Covid cases all of their post-war gains in recent weeks economic growth, while signaling it wasn’t
in China and stalling rates of US gasoline due to fears of recession, Central Bank in a hurry to join the global interest-rate
consumption ignited demand fears, while tightening, and a broad move by inves- tightening cycle given muted domestic
low trading volumes continued to exacer- tors away from commodities. Prices have price gains. Bank Indonesia left the seven-
bate market moves. swung sharply at times this week as vola- day reverse repurchase rate at a record
tility reigns over the market. low 3.5% on Thursday, as predicted by 22
West Texas Intermediate tumbled to- of 36 economists in a Bloomberg survey.
wards US$96 a barrel, falling as much as The softness in gasoline in particular The rest expected policy makers to deliver
5.3% on Thursday. The slump comes as can be seen in prices.The fuel’s premium a 25 basis-point hike. The country’s
China’s virus cases hover at a two-month over US crude was more than US$60 a benchmark stock index closed 0.15%
high, posing a challenge to the oil-consum- barrel at one point in June, and is now less lower, while the rupiah extended losses
ing country’s Covid Zero strategy. Open than half that. At the same time, retail fuel to 0.3% at 15,033 against the dollar after
interest across the main futures contracts prices in the US have fallen for 37 con- Governor Perry Warjiyo cited within-
hovers around six-year lows, leaving the secutive days. target core inflation to justify the case for
market vulnerable to sharp moves. continuing with the easy policy. — Reuters
Traders also tracked events in Europe
Compounding bearish sentiment, Lib- as Russia’s biggest gas pipeline to the Read the full story
ya is restoring production with output continent restarted after a 10-day main-
rising above 700,000 barrels a day after tenance period. While there had been BOJ retains easy policy, governor
restrictions on exports were lifted. Out- concern that a failure to restore the flows shuns chance of near-term rate
put is expected to return to 1.2 million would roil energy prices, pipeline op- hike
barrels a day within a week to 10 days. erator Nord Stream AG said Moscow TOKYO (July 21): The Bank of Japan
The premium of the nearest crude fu- had started sending gas through, bring- (BOJ) projected inflation would exceed its
tures contract over the next month eased, ing some relief to markets. target this year in fresh forecasts issued
indicating cooling concerns about mar- on Thursday, but maintained ultra-low
ket scarcity. In Asia, China’s persistence with its interest rates and signalled its resolve
strategy of trying to eradicate Covid-19 to remain an outlier in a wave of global
has acted as a drag on energy usage and central banks’ policy tightening. BOJ
slowed regional growth.The Asian Devel- governor Haruhiko Kuroda brushed aside
opment Bank cut its forecast for gross do- the chance of near-term policy tightening,
mestic product growth in developing Asia saying he had “absolutely no plan” to raise
as Beijing’s approach to the virus creates interest rates or hike an implicit 0.25%
ripple effects. cap set for the bank’s 10-year bond yield
target. “The economy is in the midst of
(July 21): Applications for US state unem- US jobless claims recovering from the pandemic. Japan’s
ployment insurance rose for a third week hit eight-month worsening terms of trade are also leading
to the highest since November, as more high as labour to an outflow of income,” Kuroda told
companies announce job cuts, suggesting a news conference. “As such, we must
some softening in the labour market. market cools continue with our easy policy to ensure
rising corporate profits lead to moderate
Initial unemployment claims increased by Maria Paula Mijares Torres wage and price growth,” he said. As widely
by 7,000 to 251,000 in the week ended & Olivia Rockeman expected, the BOJ maintained its -0.1%
July 16, Labor Department data showed Bloomberg target for short-term rates and that of 10-
Thursday. The figures coincide with the year bond yields around 0%. — Reuters
reference period for the July jobs report increased to 248,991 last week. Unadjust-
that’s due early next month. The median ed claims in Massachusetts rose by more Read the full story
estimate called for 240,000 applications in than 14,000. California, South Carolina
a Bloomberg survey of economists. and Georgia also posted increases. New
York claims fell last week after jumping in
Continuing claims for state benefits rose the prior period, when there were more
51,000 to 1.38 million in the week ended layoffs in transportation and warehous-
July 9, the biggest weekly increase since ing, health care and educational services.
November.
Read also: Microsoft, Google are latest
Unemployment claims are rising, as tech giants to hit brakes on hiring
more companies announce job cuts amid
increasing fears of a recession. The trend
may continue as the Federal Reserve ratch-
ets up its fight against rampant inflation
with some of the largest interest-rate hikes
in decades, which could ultimately curb
demand for workers.

On an unadjusted basis, initial claims

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reuters news In brief

Tesla profit tops that they see “near-term margin headwinds Hyundai Motor’s 2Q profit at
target; Musk due to (new) challenges with ramping new eight-year high on weak won,
production, particularly in Berlin”. strong demand
sees no demand SEOUL (July 21): Hyundai Motor Co
problem Tesla executives acknowledged some con- turned in its best quarterly profit in
tinuing tightness in supplies of older-genera- eight years on Thursday as a weak won
by Hyunjoo Jin & Nivedita Balu tion microchips, but said there were no major lifted the value of its earnings abroad
Reuters problems in supplies of chips and batteries and demand stayed strong for the
barring unforeseen Covid-related shutdowns. South Korean automaker’s high-margin
(July 21):Tesla Inc onWednesday (July 20) sport-utility vehicles (SUVs). Although
reported a smaller-than-expected drop in The EV maker posted an adjusted profit a chip shortage is easing, one of the
quarterly profit as a string of price increases of US$2.27 per share for the quarter versus world’s biggest automakers, including
on its electric vehicles (EVs) helped offset analysts’ consensus estimates of US$1.81. affiliate Kia Corp, pointed to challenges
production challenges caused by Covid-19 This was down from US$3.22 in the preced- such as demand crimped by inflation,
lockdowns in China. ing quarter. higher marketing costs amid tougher
competition, and supply woes. Net
Chief financial officer Zachary Kirkhorn Its automotive gross margin fell to 27.9%, profit rose to 2.8 trillion won (US$2.13
said Tesla was still pushing to reach 50% down from a year earlier and the preceding billion) for the April-June period from
growth in deliveries this year, adding that quarter, amid inflationary pressure. 1.8 trillion won a year earlier, beating an
while the target had become more difficult, average analyst forecast of 2.2 trillion
“it remains possible with strong execution”. Tesla’s total revenue fell to US$16.93 bil- won from Refinitiv SmartEstimate. “A
lion in the second quarter from US$18.76 robust sales mix of SUV and Genesis
Chief executive Elon Musk said he ex- billion a quarter earlier, ending its streak of luxury models, reduced incentives
pects inflation to start easing by end-2022 posting record revenue in recent quarters. from a lower level of inventory,
and most commodity prices to stabilise. and a favourable foreign exchange
Analysts were expecting revenue of environment helped lift revenue in the
Tesla does not have a demand problem, US$17.1 billion, according to IBES data second quarter (2Q),” the firm said in a
but a production problem, Musk told a con- from Refinitiv. statement. — Reuters
ference call. He dismissed the idea that global Bitcoin to cash
economic problems were hurting interest in Tesla said it had converted approximately Read the full story
Tesla, despite vehicle prices’ rising to what 75% of its bitcoin purchases into fiat curren-
he called “embarrassing levels”. cy, which added US$936 million of cash to Baidu unveils autonomous vehicle
its balance sheet. without steering wheel
The US price of Tesla’s Model Y long- BEIJING (July 21): China’s search engine
range version, now US$65,990, is up more Musk said the sale was made to increase giant Baidu Inc on Thursday unveiled
than 30% since the start of 2021. liquidity whenTesla was uncertain about how its new autonomous vehicle (AV) with
long the Covid lockdown in China would a detachable steering wheel, with plans
Shares of Tesla were up about 1% in af- continue.Tesla has not sold any of its hold- to put it to use for its robotaxi service in
ter-hours trade.The shares are down about ings of the Dogecoin cryptocurrency. China next year. Cost per unit will drop
40% from their peak in November. to 250,000 yuan (US$37,031.55) for
“This should be not taken as some ver- the new model, compared with 480,000
Tesla’s China factory ended the second dict on bitcoin,” he said, adding that Tesla yuan for the previous generation, Baidu
quarter with a record monthly production was open to increasing its cryptocurrency said in a statement. “This massive cost
level. Musk said new factories in Berlin and holdings in the future. reduction will enable us to deploy tens
Texas aimed to produce 5,000 cars a week of thousands of AVs across China,”
by the end of the year, adding that Berlin Musk had said in May last year thatTesla Baidu’s chief executive Robin Li said at
produced 1,000 cars a week in June. would not sell its bitcoin. the Baidu World conference. “We are
moving towards a future where taking a
Musk previously had said the new fac- “The bitcoin losses point out an impor- robotaxi will be half the cost of taking a
tories were “gigantic money furnaces” and tant part of theTesla investment case — its taxi today.” The new vehicle will possess
that he had “a super bad feeling about the eccentric owner. While Musk’s impressive autonomous Level 4 capabilities that
economy”. innovation has served the company well, his need no human intervention, with eight
personal flair is starting to raise governance lidars and 12 cameras alongside the car.
Morgan Stanley analysts said in a re- questions,” said Laura Hoy, analyst at Har- Lidars are detection systems, similar
port after Tesla’s earnings announcement greaves Lansdown. to radars, which use pulsed laser light
rather than radio waves. — Reuters
Read also:Tesla sold most of its Bitcoin to
shore up carmaker’s liquidity Read the full story

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Crypto woes exempted payment service provider permit, Korean prosecutors
spread as Celsius, rather than a full licence under the central raid crypto
bank’s new regime for cryptoasset firms.
Babel links hit exchanges, homes
another exchange Zipmex cited “volatile market conditions, inTerra probe
and the resulting financial difficulties of our key
business partners” as reasons for its decision, by Hooyeon Kim & Sangmi Cha
according to a tweet it sent outWednesday.The Bloomberg
company later partially eased the withdraw-
al for its users trading products inThailand. (July 21): South Korean prosecutors are
stepping up their investigation intoTerr-
by Philip Lagerkranser Due to a combination of circumstances beyond aform Labs, whose stablecoinTerraUSD
& Anuchit Nguyen our control including volatile market condi- collapsed in May, setting off a rout in
Bloomberg tions, and the resulting financial difficulties cryptocurrency markets.
of our key business partners, to maintain the
(July 21): Zipmex, a cryptocurrency ex- integrity of our platform, we would be pausing A team of investigators from the Seoul
change that operates in Singapore and withdrawals until further notice. Southern District Prosecutors Office be-
Thailand, has halted withdrawals as the gan seizing transaction records and oth-
fallout from a series of defaults spreads fur- — ZIPMEX (@zipmex) July 20,2022 er material from seven local exchanges at
ther throughout the digital-assets industry. Zipmex’s troubles underscore the perils 5:30pm local time onWednesday, the of-
of leveraged bets permeating in a closely fice said in a message.
The Asian platform is the latest to suc- interconnected industry between crypto
cumb to financial difficulties stemming exchanges, lenders, investors and hedge Prosecutors also conducted raids on
from exposure to troubled crypto lend- funds which has seen Celsius,Voyager and eight other places, including the homes
ers Babel Finance and Celsius Network Three Arrows Capital file for bankruptcy. and offices of people who are under in-
Ltd, according to Zipmex (Thailand) chief Among Zipmex’s products is ZipUp+, an vestigation. The office declined to pro-
executive AkalarpYimwilai. account that pays yields as high as 10% on vide more information on those raids,
deposits of tokens such as Bitcoin, Ether and citing investigation security.
The exchange is currently in talks with Litecoin, and those customers will no longer
new investors to raise funds for a “bailout”, be allowed to withdraw their assets and mon- TerraUSD crashed from its dollar
Akalarp said in a video on the company’sYou- ey. Zipmex said on its website that prospec- peg in early May, when the complex al-
Tube channel that has since been removed. tive users aren’t protected, as the company gorithm-based system involving the sister
isn’t licensed by the Singapore’s central bank. Luna token that was meant to safeguard
Zipmex joins other struggling crypto “This means that you will not be able to the peg failed to work as planned.The im-
firms with operations in Singapore, includ- recover all the money or DPTs you paid to plosion rendered Luna almost worthless.
ingThree Arrows Capital andVauld, even Zipmex if Zipmex’s business fails,” a no-
as the regulators in the city state tighten tice on the website says, referring to digital Some Luna investors filed a complaint
rules to ring-fence retail investors from payment tokens. with South Korean prosecutors in May,
volatile digital assets. The Monetary Au- Zipmex began operating in September alleging Terraform Labs founder Do
thority of Singapore (central bank) said 2019 and is based on both Singapore andThai- Kwon and his company had committed
this month it will broaden cryptocurrency land, according to its website.The company’s fraud and engaged in illicit fund-raising.
regulations to cover more activities amid a native ZMT token has tumbled about 93%
series of business failures in the industry. from its all-time high, CoinGecko data shows. Yonhap News Agency reported earlier
that payment app Chai Corp was among
Zipmex has a licence for digital-asset companies being searched, along with
trading from the Securities and Exchange local crypto exchanges such as Upbit,
Commission of Thailand, according to its Bithumb, Coinone, as well as unidenti-
website. In Singapore, the platform holds an fied venture capital funds that invested
in the Terra blockchain project.

Spokespeople for Upbit, Bithumb and
Gopax confirmed that raids took place
Wednesday evening at their offices, and
that prosecutors seized transaction re-
cords. Chai and Coinone didn’t imme-
diately respond to requests for comment.

In June, authorities banned current
and former employees ofTerraform Labs
from leaving the country. KBS TV re-
ported that prosecutors had summoned
a former official at a unit of Terraform
Labs, while Yonhap said prosecutors were
probing whether Kwon evaded taxes
by moving profits from cryptocurren-
cy transactions to an offshore account.
Read also: Finland liquidates seized
Bitcoin stash amid crypto bust

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REUTERS NEWS IN BRIEF

Mario Draghi Biden tests positive for Covid, has
mild symptoms, White House says
Draghi resigns as Italy’s problems reached a boiling point (July 21): President Joe Biden tested
PM, leaving Italy last week when the Five Star Movement, positive for Covid-19 on Thursday
in political chaos a key coalition partner, boycotted a confi- and is experiencing mild symptoms,
dence vote. Draghi said he no longer had according to a White House statement.
BY ALESSANDRO SPECIALE broad backing and threatened to resign Biden, 79, has begun taking Pfizer Inc’s
& CHIARA ALBANESE unless all the members in the unity gov- Paxlovid treatment for the disease,
Bloomberg ernment pledged their support. Press Secretary Karine Jean-Pierre
said, and will isolate at the White
(July 21): Mario Draghi resigned as Italy’s Instead, Matteo Salvini’s League and House while continuing his duties.
prime minister, throwing the country into Silvio Berlusconi’s Forza Italia joined Five “He has been in contact with members
turmoil and putting it on course for snap Star in abandoning Draghi onWednesday of the White House staff by phone
elections as soon as early October. after a heated Senate debate, leaving the this morning, and will participate in
prime minister few options other than to his planned meetings at the White
The former European Central Bank quit his post. House this morning via phone and
chief delivered his decision to President Zoom from the residence,” Jean-Pierre
Sergio MattarellaThursday morning.The Italian governments are notoriously un- said in the statement. The president
government will continue in a caretaker stable and Draghi led the 67th government returned this week from a trip to
role to handle ongoing business but its the country has had in just over 75 years. Saudi Arabia and Israel, and traveled
influence will be minimal. And while Draghi will likely remain care- Wednesday to Massachusetts to
taker prime minister until the next vote, promote executive actions he was
Mattarella, who accepted the resignation, the government will be dramatically weak- undertaking to address climate change.
will meetThursday afternoon with the Speak- ened, putting its legislative agenda at risk. Biden is fully vaccinated and has
ers of both Houses of Parliament to agree on received two booster shots. First lady
the next steps, which will likely include an ‘Perfect storm’ Jill Biden tested negative for Covid, her
emergency vote after the summer.The ballot Paolo Gentiloni, the EU’s economy com- spokesperson said. — Bloomberg
may take place on Oct 2. Fall elections are missioner, warned lateWednesday that “a
unprecedented in Italy, a time when Parlia- perfect storm” could lie ahead for Italy.The Tokyo hits pandemic record on rise
ment is usually preparing the annual Budget. EU will have to assess how the political of new Covid subvariants
upheaval will affect the country’s planned (July 21): Tokyo reported its highest
Investor reaction was clear, with the reforms and whether it can unlock its pan- number of Covid cases for the entire
yield on the Italy’s 10-year note jumping demic aid according to the agreed timeline. pandemic on Thursday, driven by the
as much as 21 basis points to 3.6%, its spread of more infectious variants
highest since June.The spread over equiv- Tensions had been mounting between just as Japan started reopening to
alent German bonds, a common gauge of the premier and Five Star leader Giuseppe tourists. The city recorded 31,878 new
risk, rose to 233 basis points. Italy’s bench- Conte, a former prime minister who’s been daily infections, eclipsing the previous
mark stock index fell 2.2%. critical of Draghi’s response to the eco- record of 21,562 cases set on Feb 2.
nomic crisis and the government’s stance The numbers show a Covid resurgence
The resignation throws the country into on shipping weapons to Ukraine. Five has taken hold in the Japanese capital
turmoil just as Europe is bracing for a re- Star splintered last month when members ahead of the summer holidays, when
cession and Italians are contending with a couldn’t agree on how much support to travel and activity levels typically soar.
brewing energy crisis. Lawmakers — now give Kyiv. The rising case counts are forcing
without the discipline imposed by the political and health care leaders to
ex-central banker — will need to agree on Italian parties have now entered cam- reconsider what steps, if any, are
reforms in order to unlock 200 billion euros paign mode. Based on current polls, a needed to contain the outbreak. The
(US$205 billion) in European Union aid. right-wing tie-up led by Giorgia Meloni’s same conundrum is facing countries
Brothers of Italy would win a snap election across the globe, as the arrival of more
The collapse of Draghi’s government if its members stick together. infectious Omicron subvariants has led
was inevitable after three of his coalition to higher infection rates even as testing
partners withdrew their support in a con- Even though Five Star triggered the col- in most areas is on the decline. Many
fidence vote Wednesday. lapse by withdrawing government support countries that focused on eliminating
last week, its influence is poised to wane. the virus early in the pandemic are
The party’s popularity has plummeted finding it difficult to reimpose strict
since it entered government and it would mitigation measures in response
likely lose seats in a new election. to rising rates after they embraced
widespread vaccination and began
living with it within the past year. —
Bloomberg

Read the full story

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news In brief

Indonesia energy firm Indika eyes Sri Lanka swears in new president amid reuters
US$2 bil EV venture with Taiwan’s economic meltdown, soaring inflation
Foxconn COLOMBO (July 21): Veteran politician Ranil Wickremesinghe being sworn in as the
Ranil Wickremesinghe was sworn in as new president of Sri Lanka at the parliament
JAKARTA (July 21): Indonesia’s PT Indika Sri Lanka’s new president on Thursday, a
Energy is considering jointly investing day after winning a vote in parliament and in Colombo, Sri Lanka on July 21, 2022.
US$2 billion with Taiwan-based Foxconn urging the island nation to come together
on electric vehicle (EV) manufacturing, to find a way out of its worst economic protests over his handling of the economy.
batteries and energy storage, a top Indika crisis in decades. The country of 22 million The swearing-in ceremony was conducted
executive told Reuters on Wednesday. people has been crippled by a lack of foreign in parliament and presided over by the
Indika, like many energy companies, has currency, triggering shortages of fuel, food, country’s chief justice. — Reuters
been diversifying its businesses beyond and medicines as prices soar. Inflation hit
coal amid a global push to end use of an annual 59% in June, according to the India may allow more sugar exports
fossil fuels. A partnership was established statistics department. Wickremesinghe, to prevent defaults — sources
between Foxconn, Indika and three other a six-time prime minister, succeeded (July 21): India may allow sugar mills to
entities earlier this year in a memorandum Gotabaya Rajapaksa who fled Sri Lanka and export more than previously permitted to
of understanding to collectively resigned from his post last week after mass help them prevent defaults on contracts,
invest US$8 billion in EV and battery according to people familiar with the matter.
manufacturing in Indonesia. A feasibility Indonesia plans wholesale digital The government is considering giving the
study for the Foxconn-Indika venture currency to improve transfers green light to additional sales of as much
should conclude by the fourth quarter (July 21): Indonesia’s central bank is on track as 1.2 million tonnes of sugar for the year
this year, at the latest, Indika’s group CEO to issue its own digital currency for banks ending Sept 30, said the people, who asked
Azis Armand said in an interview.”The to use, while considering ways to ensure to remain anonymous citing confidential
main interest is Indonesia’s large domestic it would be exchangeable across borders. matters. That’s on top of the current quota
market, which relatively has a low adoption Bank Indonesia will release the conceptual of 10 million tonnes. India, the world’s
rate ... though we’re not ruling out export design of digital rupiah by the end of this year, second-biggest sugar producer, restricted
markets like Vietnam and China,” Azis said. Governor Perry Warjiyo said in a briefing on exports in May to safeguard its food
Foxconn did not immediately respond Thursday. “The principle of digital rupiah will supplies. Now, with inventories appearing
to requests for comment on the Indika be the same as paper money, which is to be sufficient to satisfy domestic consumption,
partnership. — Reuters the only legal currency for digital transactions growers have asked to increase shipments.
in Indonesia,” he said. The central bank has Any additional exports this year may
Capitaland, Link REIT are vying for been studying the digital rupiah since last pressure global prices. — Bloomberg
US$3 bil Singapore malls year to get ahead of the global adoption Read the full story
of cryptocurrency as a payment method.
(July 21): Capitaland Integrated Other monetary authorities are looking reuters
Commercial Trust (CICT) and Link Real into blockchain technology to improve
Estate Investment Trust (Link REIT) are transfers and settlements, with the central A contruction worker drinks water in
among bidders vying for NTUC Enterprise banks of the Philippines and Australia also temperatures that have reached well above
Co-operative Ltd’s S$4 billion (US$2.9 considering such wholesale digital currencies. triple digits in Palm Springs, California, US
billion) portfolio of shopping malls in — Bloomberg
Singapore, people with knowledge of the July 20, 2022.
matter said. CICT is sounding out sources Record-breaking US heat wave bakes
of financing for the prospective transaction, Americans activity in peak heat hours and reminded
while Hong Kong’s Link REIT is working BOSTON (July 21): Some 100 million people to stay hydrated. — Reuters
with an adviser on a potential bid, said the Americans from New York City to Las Read the full story
people, who asked not to be identified as Vegas are under heat warnings this week
the information is private. The assets are as temperatures rise well above 100
also drawing interest from other players in degrees Fahrenheit (38 degrees Celsius),
Singapore including Frasers Property Ltd part of a trend of extreme weather made
and Far East Hospitality Trust, the people worse by climate change. New York City
said. Non-binding bids are due by the end temperatures are expected to reach 99°F
of this month, they added. Mercatus Co- and temperatures are also expected to
operative Ltd, a unit of NTUC that holds break daily records across Texas, Louisiana
the properties, is working with a financial and Arkansas, the National Weather Service
adviser on the potential sale, Bloomberg (NWS) said on Wednesday (July 20). An
News reported last month. Mercatus NWS advisory for Dallas, Texas, where the
manages assets worth more than S$10 high temperature was forecast to reach
billion and is one of the largest mall owners 112°F (44.4°C), cautioned against strenuous
by floor space in Singapore, according to its
website.Deliberations are ongoing and the
companies could decide not to proceed with
offers, the people said. — Bloomberg

Read the full story

F R I D A Y J U LY 2 2 , 2 0 2 2 22 T H E E D G E C E O M O R N I N G B R I E F

MARKETS

CPO RM 3,720.00-215.00 OIL US$ 102.38-4.54 RM/USD 4.4583 RM/SGD 3.1967 RM/AUD 3.063 RM/GBP 5.3221 RM/EUR 4.5396

Top 20 active stocks

NAME VOLUME CHANGE CLOSE YTD MARKET
(MIL) (RM) CHANGE CAP
(%) (RM MIL)

MMAG HOLDINGS BHD 167.10 -0.005 0.045 -40 76.6

FOCUS DYNAMICS GROUP BHD 70.60 0.005 0.025 -37.50 159.3

BINTAI KINDEN CORP BHD 44.70 -0.015 0.105 -51.16 89.5

TOP GLOVE CORP BHD 43.10 0.010 1.000 -61.39 8,007.2

DAGANG NEXCHANGE BHD 37.80 0.015 0.765 0.66 2,414.6

HIBISCUS PETROLEUM BHD 35.90 0.025 0.850 4.29 1,710.6

MY EG SERVICES BHD 33.50 0.000 0.775 -27.57 5,723.8

INFOLINE TEC GROUP BHD 32.30 0.005 0.285 0.00 103.5

WIDAD GROUP BHD 31.60 0.005 0.380 4.11 1,046.0 World equity indices

ATA IMS BHD 31.20 0.015 0.300 -50.82 360.9

CYPARK RESOURCES BHD 31.00 0.040 0.355 -60.99 209.0 CLOSE CHANGE CHANGE CLOSE CHANGE CHANGE

SEDANIA INNOVATOR BHD 26.80 0.005 0.430 -16.50 149.4 (%) (%)
DOW JONES 31,874.84 47.79 0.15 INDONESIA 6,864.13 -10.61 -0.15
SAUDEE GROUP BHD 23.80 0.005 0.050 -9.09 49.6

NWP HOLDINGS BHD 23.50 0.000 0.255 4.08 134.2 S&P 500 3,959.90 23.21 0.59 JAPAN 27,803.00 122.74 0.44

BERJAYA CORP BHD 22.20 0.000 0.245 -2.00 1,357.8 NASDAQ 100 12,439.68 190.26 1.55 KOREA 2,409.16 22.31 0.93

MQ TECHNOLOGY BHD 20.90 -0.005 0.030 -40.00 37.5 FTSE 100 7,229.15 -35.16 -0.48 PHILIPPINES 6,256.17 -18.63 -0.30

JADE MARVEL GROUP BHD 20.90 -0.005 0.840 27.27 275.5 AUSTRALIA 6,794.28 35.07 0.52 SINGAPORE 3,152.30 -17.99 -0.57

SENTORIA GROUP BHD 18.90 -0.005 0.140 -20 78.1 CHINA 3,272.00 -32.72 -0.99 TAIWAN 14,937.70 204.48 1.39

DATASONIC GROUP BHD 15.90 0.030 0.505 23.17 1,446.5 HONG KONG 20,574.63 -315.59 -1.51 THAILAND 1,546.31 6.99 0.45

MESTRON HOLDINGS BHD 14.90 0.005 0.340 0.00 316.4 INDIA 55,681.95 284.42 0.51 VIETNAM 1,198.47 4.33 0.36

Data as compiled on Jul 21, 2022 Source: Bloomberg Data as compiled on Jul 21, 2022 Source: Bloomberg

Top gainers (ranked by %) Top losers (ranked by %)

NAME CLOSE CHANGE VOLUME YTD MARKET NAME CLOSE CHANGE VOLUME YTD MARKET
(%) (‘000) CHANGE CAP (%) (‘000) CHANGE CAP
(%) (RM MIL) (%) (RM MIL)

AE MULTI HOLDINGS BHD 0.020 33.33 155.2 -33.33 43.3 VSOLAR GROUP BHD 0.005 -50.00 183.5 -66.67 24.2

DGB ASIA BHD 0.020 33.33 3,075.1 -33.33 34.0 EA HOLDINGS BHD 0.005 -50.00 89.8 -75.00 32.3

TALAM TRANSFORM BHD 0.025 25.00 500.5 25.00 107.4 MQ TECHNOLOGY BHD 0.030 -14.29 20,897.9 -40.00 37.5

FOCUS DYNAMICS GROUP BHD 0.025 25.00 70,623.2 -37.5 159.3 SYCAL VENTURES BHD 0.180 -14.29 31.3 2.86 74.9

MCLEAN TECHNOLOGIES BHD 0.205 20.59 3,667.5 -14.58 40.4 ALDRICH RESOURCES BHD 0.030 -14.29 355.9 -25.00 33.4

ALAM MARITIM RESOURCES BHD 0.030 20.00 728.2 20.00 46.0 BINA PURI HOLDINGS BHD 0.035 -12.50 30.4 -22.22 55.9

SANICHI TECHNOLOGY BHD 0.030 20.00 782.7 20.00 42.1 BINTAI KINDEN CORP BHD 0.105 -12.50 44,675.5 -51.16 89.5

NETX HOLDINGS BHD 0.090 20.00 1,120.9 -37.93 75.2 GIIB HOLDINGS BHD 0.070 -12.50 2,219.5 -46.15 41.4

JERASIA CAPITAL BHD 0.030 20.00 3.1 -81.25 2.5 KANGER INTERNATIONAL BHD 0.040 -11.11 1,092.1 -80.00 24.1

ZEN TECH INTERNATIONAL BHD 0.065 18.18 8,791.1 -43.48 52.5 THRIVEN GLOBAL BHD 0.125 -10.71 5.0 -13.79 68.4

OVERSEA ENTERPRISE BHD 0.100 17.65 163.4 -16.67 113.5 SECUREMETRIC BHD 0.085 -10.53 116.0 -22.73 49.0

LIEN HOE CORP BHD 0.400 15.94 26.3 9.59 133.0 PUC BHD 0.045 -10.00 3,865.8 -68.97 73.1

ACO GROUP BHD 0.210 13.51 2,193.6 -17.65 72.9 DOLPHIN INTERNATIONAL BHD 0.045 -10.00 1,221.0 -35.71 47.5

CYPARK RESOURCES BHD 0.355 12.70 30,999.2 -60.99 209.0 LKL INTERNATIONAL BHD 0.045 -10.00 333.0 -35.71 43.7

ZELAN BHD 0.050 11.11 48.9 -37.500 42.2 MMAG HOLDINGS BHD 0.045 -10.00 167,105.8 -40.00 76.6

SAUDEE GROUP BHD 0.050 11.11 23,757.6 -9.09 49.6 LAMBO GROUP BHD 0.050 -9.09 208.2 -41.18 77.0

TURIYA BHD 0.170 9.68 10.1 -17.07 38.9 TRIVE PROPERTY GROUP BHD 0.055 -8.33 579.3 83.33 69.5

SOUTH MALAYSIA INDUSTRIES 0.340 9.68 1,812.2 70.00 71.4 ZECON BHD 0.360 -7.69 0.1 -11.11 53.1

K-ONE TECHNOLOGY BHD 0.115 9.52 1,027.9 -23.33 95.7 CRG INC BHD 0.185 -7.50 15.0 42.31 149

DESTINI BHD 0.115 9.52 7,060.6 -36.11 191.3 CATCHA DIGITAL BHD 0.200 -6.98 427.6 25 26.9

Data as compiled on Jul 21, 2022 Source: Bloomberg Data as compiled on Jul 21, 2022 Source: Bloomberg

Top gainers (ranked by RM) Top losers (ranked by RM)

NAME CLOSE CHANGE VOLUME YTD MARKET NAME CLOSE CHANGE VOLUME YTD MARKET
(RM) (‘000) CHANGE CAP (RM) (‘000) CHANGE CAP
(%) (RM MIL) (%) (RM MIL)

NESTLE MALAYSIA BHD 134.40 0.800 66.9 0.15 31,516.8 PADINI HOLDINGS BHD 3.090 -0.130 268.6 10.36 2,032.9

PANASONIC MANUFACTURING 26.68 0.780 6.2 -7.68 1,620.7 HENGYUAN REFINING CO BHD 4.110 -0.090 1,105.3 6.20 1,233.0

UNITED PLANTATIONS BHD 14.64 0.640 421.8 6.81 6,050.7 SHANGRI-LA HOTELS MALAYSIA 3.250 -0.070 24.2 -2.11 1,430.0

BATU KAWAN BHD 22.60 0.580 6.4 -0.44 8,894.5 MALAYSIA SMELTING CORP BHD 1.910 -0.070 1,631.5 -41.23 802.2

VITROX CORP BHD 7.47 0.290 377.4 -25.00 7,056.5 JCBNEXT BHD 1.210 -0.060 1.0 -12.32 159.8

HONG LEONG INDUSTRIES BHD 8.95 0.280 18.8 -2.51 2,859.3 KOTRA INDUSTRIES BHD 4.000 -0.050 13.8 26.58 591.9

AJINOMOTO MALAYSIA BHD 12.08 0.280 4.1 -21.56 734.4 HARRISONS HOLDINGS MALAYSIA 5.440 -0.050 19.4 13.33 372.5

HAP SENG CONSOLIDATED BHD 7.50 0.260 255.1 -2.60 18,672.5 KESM INDUSTRIES BHD 6.450 -0.050 18.0 -47.48 277.4

HONG LEONG BANK BHD 20.32 0.240 767.5 9.13 44,048.0 ALLIANZ MALAYSIA BHD 12.840 -0.040 2.7 -0.16 2,285.0

FRASER & NEAVE HOLDINGS BHD 20.82 0.220 14.7 -15.84 7,636.3 PETRON MALAYSIA REFINING 4.740 -0.040 182.2 8.22 1,279.8

AMWAY MALAYSIA HOLDINGS BHD 5.24 0.220 14.5 -2.22 861.4 CRESCENDO CORP BHD 1.090 -0.030 54.8 -9.92 304.6

CARLSBERG BREWERY MALAYSIA 22.68 0.200 57.3 12.95 6,934.4 AMLEX HOLDINGS BHD 0.450 -0.030 92.2 28.57 120.7

PETRONAS DAGANGAN BHD 23.00 0.200 415.0 11.65 22,849.4 SYCAL VENTURES BHD 0.180 -0.030 31.3 2.86 74.9

CHIN HIN GROUP BHD 3.90 0.200 1,663.9 49.43 3,450.4 MAGNA PRIMA BHD 0.500 -0.030 50.0 21.95 199.6

GENTING PLANTATIONS BHD 6.59 0.180 61.5 -0.03 5,912.5 TRANSOCEAN HOLDINGS BHD 2.170 -0.030 14.1 -30 141.3

HONG LEONG FINANCIAL GROUP 18.54 0.180 52.6 6.92 21,232.8 KPS CONSORTIUM BHD 0.505 -0.030 1.8 -5.61 74.7

TEXCHEM RESOURCES BHD 2.85 0.170 908.5 145.69 337.2 ZECON BHD 0.360 -0.030 0.1 -11.11 53.1

PETRONAS CHEMICALS GROUP BHD 8.72 0.170 9,931.9 -2.24 69,760.0 MALAYSIAN GENOMICS RESOURCE 1.010 -0.020 8,711.2 -12.93 125.5

BRITISH AMERICAN TOBACCO 10.52 0.160 417.1 -24.75 3,003.8 MAGNUM BHD 1.640 -0.020 405.7 -13.68 2,357.0

BONIA CORP BHD 2.28 0.150 1,324.9 137.64 457.0 UEM EDGENTA BHD 1.280 -0.020 114.8 -20.99 1,064.5

Data as compiled on Jul 21, 2022 Source: Bloomberg Data as compiled on Jul 21, 2022 Source: Bloomberg