230823rr20px

CEOMorningBrief WEDNESDAY, AUGUST 23, 2023 ISSUE 624/2023 theedgemalaysia.com THAKSIN ALLY SRETTHA ELECTED NEW THAI PM, ENDING THREE-MONTH POLITICAL IMPASSE p15 Wealth is… having your golden years taken care of. If you’re looking for stable returns, explore our Shariah-compliant solutions. With more than 140 years of global financial services expertise and close to 30 years of local experience, we’ve been helping discerning investors like yourself in Malaysia achieve their long-term retirement goals. Reach out to our Financial Consultants or Bank Distributors for more info. For All It’s WorthSM Disclaimer: The information contained herein is intended for general information only on investment matters and should not be considered as a comprehensive statement on any matter and should not be relied upon as such. The information contained herein does not consider an investor's investment objectives, particular needs, or financial situation. Investors should understand the risks involved, compare and consider the fees, charges and costs involved, make their own risk assessment and seek professional advice, where necessary. This material has not been reviewed by the Securities Commission of Malaysia. Conventional and Shariah solutions: Unit Trust | Private Retirement Schemes www.principal.com.my HOME: Strategic domestic direct investments can boost FDI, drive economic growth — Anwar p2 Iris disputes ‘unlawful’ termination of immigration contract p4 Court sets aside almost RM4 bil tax assessment on TNB p6 WORLD: China ramps up fight with yuan bears to stop sell-off from spiralling p17 Losses on BOE’s quantitative easing programme cost UK taxpayers almost £30 bil in past year p18 Report on Page 4. Zafrul: New Industrial Master Plan 2030 to be presented to Cabinet on Wednesday SAM FONG/THE EDGE Fahmi to meet telcos on higherthan-expected 5G retail price Report on Page 3.

WEDNESDAY AUGUST 23, 2023 2 THEEDGE CEO MORNING BRIEF published by ( 2 6 6 9 8 0 - X ) tel . 603-77218000 Level 3, Menara KLK, 1 Jalan PJU 7/6, Mutiara Damansara, 47810, Petaling Jaya, Selangor, Malaysia publisher + ceo . Ho Kay Tat editor-in-chief . Kathy Fong chief commercial officer . Sharon Teh chief operating officer . Lim Shiew Yuin editors . Jenny Ng . Tan Choe Choe Lam Jian Wyn to contact editors: [email protected] to advertise: [email protected] the edge ceo morning brief Read from desktop or mobile device. You can print in A4 to read. Set print mode to fit or shrink oversize page. to get on emailing list [email protected] Strategic domestic direct investments can boost FDI, drive economic growth — Anwar KUALA LUMPUR (Aug 22): The government has set domestic direct investment (DDI) as a key performance indicator (KPI) for growing the country’s total investment given strategic DDI’s potential in attracting more foreign direct investment (FDI), Prime Minister Datuk Seri Anwar Ibrahim said. The government, particularly via the Ministry of Investment, Trade and Industry (Miti), is committed to achieving a good balance between FDI and DDI for ensuring sustainable and balanced development throughout the country, he said in a statement issued after chairing the second National Investment Council (MPN) meeting on Tuesday (Aug 22). Besides the decision to make DDI a KPI, the MPN meeting also, among others, discussed the best mechanism to streamline the country’s investment promotion agency (IPAs) landscape by Jan 1, 2024, he said. Hence, MPN has decided to reactivate the Investment Coordination Committee between Miti and all IPAs. “Strategic DDI has the potential to attract more FDI because foreign investors usually consider DDI as a benchmark for domestic investors’ confidence and commitment towards government policies for strengthening the nation’s investment and business landscape,” he said. Anwar, who is also finance minister, said that having a more strategic domestic industry ecosystem is crucial for generating more sustainable gross domestic product growth. It would also empower the domestic economy’s ecosystem in weathering global challenges such as climate change as well as various post-pandemic and geopolitical challenges that have led to supply chain disruption, rising raw material prices and high global inflation rate, he said. Bernama HOME Read also: Miti, agencies to focus on domestic direct investment Anwar said while the government has implemented various initiatives to spur DDI growth, it is of the view that efforts to increase DDI should be even more comprehensive. In that regard, the MPN meeting also stressed one of the Madani Economy messages announced on July 27, 2023, which is the importance of cooperation and strategic involvement of government-linked investment companies and government-linked companies to enhance DDI. GLICs today manage investment assets worth more than RM1.7 trillion and play an important role not only to drive critical infrastructure development and enable the growth of various sectors in the new economy, but also helping to attract foreign investors to Malaysia. “MPN acknowledges the interdependent and complementary relationship between DDI and FDI. FDI is important for accelerating economic growth while DDI is important for strengthening the national economy. “Although studies have confirmed the benefits that FDI bring to the country, it is equally important to step up and further facilitate high-quality domestic investments in driving the national economy and expanding the industry chain structure, especially in the development of micro, small and medium enterprises,” he said. For 2022, a total of 4,517 projects involving investments of RM267.7 billion were approved in the services, manufacturing and primary sectors, which are expected to create 140,440 job opportunities. DDI contributed RM104.4 billion or 38.9% of the total. For the first quarter of 2023, the ratio was 52.5% for FDI and 47.5% for DDI, with committed investments totalling RM71.4 billion (a year-on-year growth of 59.7%). The increase in DDI percentage reflects higher confidence among local companies and businesses in the present government’s policies, Anwar said. Tuesday’s meeting was also attended by Miti Minister Tengku Datuk Seri Zafrul Abdul Aziz, Economy Minister Rafizi Ramli and Treasury secretary general Datuk Johan Mahmood Merican. Also present were corporate personalities such as Employees Provident Fund chief executive officer (CEO) Datuk Seri Amir Hamzah Azizan, Permodalan Nasional Bhd CEO Ahmad Zulqarnain Onn and Khazanah Nasional Bhd managing director Datuk Amirul Feisal Wan Zahir.

WEDNESDAY AUGUST 23, 2023 3 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 22): The Madani Economy policy plan requires determination and implementation to free Malaysia from the middle-income trap and head towards a high-income country, said Bank Negara Malaysia (BNM). Governor Datuk Abdul Rasheed Abdul Ghaffour said the Malaysian economy is at a crossroads, and today’s economic and financial policies will determine the direction and trajectory of the country’s development in the future. “The gap between the rich and the poor is widening, and it needs to be addressed and balanced with the development of a society that is inclusive, fair and equitable that maintains social integrity,” he said at the iTEKAD Cooperation Networking Council here on Tuesday (Aug 22). “BNM aims is to develop a progressive, robust, transparent and responsible financial sector and be able to contribute to more fair, equal, meaningful and inclusive progress for the people of this country,” he added. Abdul Rasheed said the iTEKAD programme was developed by highlighting social finance as an important component of the financial ecosystem in Malaysia, to catalyse a more balanced socioeconomic development. He added that social finance emphasisBNM governor: Madani Economy plan needs determination to free Malaysia from middle income trap KUALA LUMPUR (Aug 22): Communications and Digital Minister Fahmi Fadzil has scheduled a meeting with local mobile network operators (MNOs) to discuss the matter of them levying extra charges for migrating subscribers to the 5G network, which would ultimately increase the retail price of the service. “Not all of them charge extra, I know YTL doesn’t. I will be meeting with the CEOs soon, to coordinate this matter. We understand that there might be some onboarding process for them, but we hope that they can address some of these concerns,” he told reporters after officiating the Islamic Digital Economy Industry Conference 2023 on Tuesday (Aug 22). Certain MNOs in Malaysia have required subscribers to pay an additional premium, ranging between RM3 and RM20, on top of existing phone bills, to gain access to the 5G network. “My wife is hesitant about taking up 5G, because she says when we converted from 3G to 4G, we didn’t have to pay anything, but now why do we have to pay? It is a valid question, and one asked by the minister’s wife to the minister, so I have to find an appropriate answer,” said Fahmi. Nonetheless, MNOs are slated to announce a series of affordable 5G packages come National Day on Aug 31, according to him. “I have not yet met with the CEOs, but we have been very focused on getting both the 5G access agreement as well as equity participation in DNB (Digital Nasional Bhd) to completion. “Going forward, these are some of the discussions that we intend to have, including, Insyaallah, on Aug 31, on National Day, the MNOs will be announcing their respective [5G Rahmah packages]. We hope by that time, some of these things will also be addressed,” he said. Malaysia’s 5G network retail prices are expected to be cheaper than current 4G internet plans given that the infrastructure was built under single wholesale network (SWN) provider DNB, and is shared among all MNOs. The shared infrastructure model, which lowered the capital expenditure requirement to build up the 5G network in Malaysia by preventing duplication of infrastructure, was expected to cost less than the current 4G network, where MNOs with spectrum ownership build their own set of infrastructure. Under the SWN model, DNB owns the 5G spectrum and network assets, and leases Fahmi to meet telcos on higherthan-expected 5G retail price BY CHESTER TAY theedgemalaysia.com Bernama es creating a positive social impact, apart from financial returns. Since its launch in 2022, the iTEKAD initiative has now grown to include 11 financial institutions, more than 50 implementing partners and has benefitted more than 3,000 participants. The governor explained that iTEKAD has mobilised more than RM40 million in social finance funds so far, and has provided significant benefits to its participants. “Social finance is able to give a new dimension to the socio-economic development of the people by applying the principles of an inclusive financial system, considering the long-term impact and uniting all stakeholders,” he said. “Bank Negara remains committed to highlighting social finance in the Malaysian financial ecosystem, including leading the development of the next iTEKAD programme,” he added. them to MNOs with a reference access offer of RM30,000 per Gbps per month, translating into 13 sen per gigabyte, according to Deputy Communications and Digital Minister Teo Nie Ching’s statement to Parliament in March. “We believe as our 5G network achieves wider coverage, our internet prices can be reduced further,” said Teo, according to the Dewan Rakyat’s Hansard. In May this year, Putrajaya has announced a policy shift, to replace the SWN with a dual network (DN) model once coverage of populated areas (COPA) hit 80%, saying it wants to avoid having the entire nation’s 5G network rely on a single point. On Tuesday, Fahmi said under the DN model, DNB will serve half of the nation’s MNOs, while the remaining half of the industry will rely on services provided by an Entity B, which has yet to be determined. “Right now, we are on track, we anticipate reaching 80% COPA by end of this year or at the latest by early next year, and once that has been reached, then we will enable two entities to operate 5G. “The first one is DNB, in which half of the MNOs will work with DNB, and another half will work with an Entity B that is to be announced. Entity A is DNB,” he said. Malaysian MNOs’ 5G plan comparisons Brands Top-up for existing users to access 5G Postpaid Prepaid Postpaid Prepaid Maxis/Hotlink RM5-RM11 RM70 RM45 RM30 RM25 Celcom RM0-RM20 RM98 RM48 RM40 RM35 Digi RM0-RM20 RM90 RM48 RM40 RM20 U Mobile* N/A RM38 RM25 N/A N/A Unifi Mobile* N/A RM39 RM28 N/A N/A YES (YTL)* N/A RM35 RM30 N/A N/A Note: *Offers 5G across the board without additional charges Sources: Companies’ websites Cheapest monthly 5G plan Cheapest monthly pass without 5G

WEDNESDAY AUGUST 23, 2023 4 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 22): Iris Corp Bhd has written to the Home Ministry (KDN) to dispute the “invalid and unlawful” termination of the group’s contract for the National Integrated Immigration System (NIISe). Iris said the letter was issued on Tuesday (Aug 22) through its wholly owned subsidiary, Iris Information Technology Systems Sdn Bhd (IITS), after the group obtained independent legal advice. “IITS firmly disputes the termination as stated in the notice of termination and will take necessary actions to protect its interest and exercise its legal rights in relation to the NIISe contract,” Iris said in a filing with Bursa Malaysia. The group announced on Aug 14 that IITS had received the notice of termination dated Aug 10. Three months earlier, the ministry had extended the NIISe contract by 12 months from Sept 1, 2025 to Aug 31, 2026. The contract worth RM1.16 billion was first awarded to IITS in January 2021 for a period of 54 months, from March 1, 2021 to Aug 31, 2025. NIISe is an initiative under KDN to upgrade the IT infrastructure system at Iris disputes ‘unlawful’ termination of immigration contract KUALA LUMPUR (Aug 22): The New Industrial Master Plan (NIMP) 2030 is set to be presented to the Cabinet on Wednesday (Aug 23) for approval, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz. He said after being briefed on the plan at the Ministry of Investment, Trade and Industry (Miti) here on Tuesday, Prime Minister Datuk Seri Anwar Ibrahim, who is also finance minister, agreed for the plan to be tabled by the end of the month. The prime minister, who was briefed on NIMP 2030 by Zafrul for more than half an hour, also shared his input with the team who were involved in the preparation of the plan. “The outcome of the briefing will be presented to the Cabinet tomorrow,” Zafrul said Zafrul: New Industrial Master Plan 2030 to be presented to Cabinet on Wednesday Bernama BY SYAFIQAH SALIM theedgemalaysia.com the Immigration Department by implementing the latest digital applications to improve service delivery, and strengthen safety and security at the nation’s borders. Home Minister Datuk Seri Saifuddin Nasution Ismail had earlier said that there was a possibility that the NIISe contractor would be replaced if the company was unable to implement the project. Prior to the contract extension, Saifuddin had said that the project had not achieved adequate progress as of March. Iris is in the midst of selling an 80% stake in IITS for RM70 million to Tass Tech Technologies Sdn Bhd, with the proceeds to be used for the group’s working capital and future business expansion. For the financial year ended March 31, 2023 (FY2023), Iris posted a net profit of RM21.9 million, more than six times the RM3.41 million reported for FY2022, as revenue jumped 65.35% to RM348.87 million from RM210.99 million, mainly due to higher delivery of cards and e-passports for overseas projects. Iris’ share price closed flat at 7.5 sen on Tuesday, valuing the group at RM244.72 million. The stock has fallen 46.43% since the beginning of this year. to reporters after accompanying Anwar in looking at the final preparations for the plan. Also present were Economy Minister Rafizi Ramli, Miti Deputy Minister Liew Chin Tong and Treasury Secretary General Datuk Johan Mahmood Merican. NIMP 2030 is a comprehensive framework covering the mission, priority and action plan to transform the country’s industrial sector. According to a statement, NIMP 2030 is a joint effort by various ministries and stakeholders that will improve the Malaysian industry’s position in the global value chain. The national initiative is aimed at transforming the industrial sector to help Malaysia achieve higher economic complexity; aggressive digitisation/automation efforts; zero-carbon goals and a more equitable and inclusive economy. “This, in turn, will enhance our industries’ operational and environmental, social and corporate governance (ESG) capacity to make Malaysia more competitive in terms of attracting investments, with positive spillover effects to the economy. “This is especially in terms of improving the position of Malaysian small and medium enterprises (SMEs) in the global value chain and providing higher paying jobs for the people,” Miti said. It added that the plan would catalyse more sustainable and inclusive economic growth and transform Malaysia into a high-income country. THE EDGE FILE PHOTO

WEDNESDAY AUGUST 23, 2023 5 THEEDGE CEO MORNING BRIEF is your company one of them? honouring Malaysia’s outstanding corporate performers TM Main Sponsor Official Car Supporting Sponsor

WEDNESDAY AUGUST 23, 2023 6 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 22): Lynas Malaysia Sdn Bhd (Lynas Malaysia) has been granted leave to challenge the government’s decision regarding the operational and licensing terms imposed on the company. The Australian rare-earths producer company had filed two separate judicial reviews in July this year, naming the Ministry of Science, Technology and Innovation (Mosti) and the Atomic Energy Licencing Board (AELB) as respondents. The company’s legal action comes after Minister of Science, Technology, and Innovation Chang Lih Kang in May this year dismissed the company’s two appeals to reconsider the operating and licensing conditions, affirming AELB’s previous decision. Leave was granted before High Court judges Datuk Amarjeet Singh Serjit Singh and Datuk Wan Ahmad Farid Wan Salleh, after the Attorney General’s Chambers (AGC) did not object to the applications. During the proceedings on Tuesday (Aug 22), Lynas was represented by a group of lawyers led by Tan Sri Cecil Abraham, while the AGC was represented by senior federal counsel (SFC) Ahmad Hanir Hambaly, Shamsul Bolhassan and federal counsel Sallehudin Md Ali. Abraham also mentioned during the proceedings on Tuesday that they will file an application for both judicial reviews to be heard before Wan Ahmad Farid. In one of the judicial reviews, Lynas is looking to, among other matters, challenge Lynas Malaysia secures leave to challenge govt’s decision on its operating and licensing terms KUALA LUMPUR (Aug 22): The High Court on Tuesday (Aug 22) granted Tenaga Nasional Bhd’s judicial review application to set aside RM3.977 billion in tax assessment for the years 2015 to 2017. High Court judge Datuk Wan Ahmad Farid Wan Salleh agreed with TNB’s argument that it is in the business of manufacturing electricity and hence entitled to claim reinvestment allowance on the capital expenditure that it incurred, including for the three assessment years, to expand, modernise and automate its business. It is understood that this is one of the biggest tax disputes decided by the courts. The energy company was also successful in its judicial review application in February last year to set aside a tax assessment of RM1.812 billion from IRB for 2018, on similar reinvestment allowance provisions. TNB filed the judicial review application to challenge the RM3.977 billion assessment in Dec 2019, and obtained leave in May 2020 to have the merits of its application be heard. In judicial review proceedings, leave (permission) has to be gained first before Court sets aside almost RM4 bil tax assessment on TNB BY HAFIZ YATIM theedgemalaysia.com BY TARANI PALANI theedgemalaysia.com the full merits of the case are heard. This is to ensure the application filed is not frivolous, vexatious and an abuse of the court process. the ministry’s decision that it can no longer import “naturally occurring radioactive material” to Malaysia from Jan 1, 2024, and that its cracking and leaching (C&L) plant overseas should be operational from Jan 1, 2024. In May, Chang said that the government had decided to extend the period for the factory to carry out its C&L activities for another six months, in order to avoid affecting the supply chain of rare-earth globally. The extension, he said, was also to give Lynas time to complete the company’s C&L plant in Australia, which is still under construction. In a press statement issued last month, Lynas said that the conditions imposed were a “significant variation” from the previous conditions set when the company decided to invest in Malaysia. “Further, the conditions do not follow the recommendations of the Malaysian Government’s 2018 Executive Review Committee report on Lynas Malaysia’s operations, the AELB’s own audits of Lynas Malaysia’s operations or any of the other three prior independent expert scientific reviews of Lynas Malaysia’s operations. “Lynas has made significant investments in its Malaysian facility and will seek review through these legal processes in respect of the licence conditions that have been imposed by the Mosti minister, to ensure that Lynas is treated fairly and equitably as a foreign direct investor and as a significant employer and contributor to the Malaysian economy,” the statement said. REUTERS FILEPIX TNB, in its application, sought a certiorari order to quash the notices of additional assessment for 2015, 2016 and 2017, and to have the decision considered illegal, void, unlawful and in excess of authority, irrational and unreasonable. Furthermore, it wanted a declaration that it is entitled to claim reinvestment allowance under Schedule 7A of the Income Tax Act, for years 2015, 2016 and 2017. Schedule 7A stipulates that a resident Malaysian company, which has been in operation for not less than 12 months and has incurred capital expenditure on a factory, plant or machinery shall be given for that year of assessment a reinvestment allowance of an amount equal to 60% of that expenditure. TNB was represented by S Saravana Kumar and Nur Amira Azhar from Messrs Rosli Dahlan Saravana Partnership, while Ashrina Ramzan Ali appeared for the Inland Revenue Board. IRB had issued a notice dated Nov 28, 2019 stating that TNB owed additional tax of RM1.429 billion for 2015, RM1.245 billion for 2016 and RM1.302 billion for 2017, resulting in this challenge.

WEDNESDAY AUGUST 23, 2023 7 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 22): IOI Corp Bhd’s net profit dropped 93.13% to RM37.2 million in its fourth quarter ended June 30, 2023 (4QFY2023), from RM541.8 million a year earlier, mainly due to lower contribution from both its plantation as well as resource-based manufacturing segments. The lower net profit was also due to higher net foreign currency translation loss on foreign currency denominated borrowings which tripled to RM175.7 million from RM58.3 million previously. Earnings per share fell to 0.6 sen from 8.72 sen in 4QFY2022, its bourse filing showed on Tuesday (Aug 22). Group revenue shrank 47.86% to RM1.95 billion from RM3.74 billion. It declared a second interim dividend to be paid on Sept 22 of five sen per share, down from the eight sen it announced for the same quarter last year, bringing yearto-date dividend for FY2023 to 11 sen, versus FY2022’s YTD of 14 sen. According to the group, its plantation segment’s profit halved to RM250.1 million in 4QFY2023 from RM502.7 million in 4QFY2022, amid lower crude palm oil (CPO) and palm kernel (PK) prices, while production costs climbed. The average CPO price realised fell to RM3,906 per tonne from RM5,260, while PK price fell to RM2,099 per tonne from RM3,850. “The lower segment profit reported was also due mainly to lower share of associates results of RM76.9 million (4QFY2022: RM126.9 million),” the group said. As for its resource-based manufacturing segment, profit fell 83.8% to RM47.4 million from RM292.6 million, following a drop in the fair value gain on derivative financial instruments to RM12.6 million from RM103.6 million. Excluding that, the resource-based manufacturing segment reported an underlying profit of RM34.8 million for 4QFY2023, 82% lower than the underlying profit of RM189.0 million for 4QFY2022, mainly due to lower margins from oleochemical and refining sub-segments, the group said. For the full year FY2023, the group’s net profit fell 35.42% to RM1.14 billion from RM1.73 billion in FY2022, as revenue dropped 25.64% to RM11.58 billion from RM15.58 billion. Looking ahead, IOI Corp foresees CPO price to remain range-bound between RM3,500 and RM4,000 per tonne until the end of the year, before moving higher as a result of overall lower palm fruit production due to the effects of the El Nino weather phenomenon, which is expected to intensify in the coming months. Nevertheless, the group itself is expecting a moderate increase fresh fruit bunch production for FY2024. “The growth would be achieved primarily through increased efficiency from our fully replenished new workers in Peninsular Malaysia and higher production from the young palm trees in our Indonesian plantations,” it added. It also expects production cost to be considerably lower due to the higher palm fruits yield and a decline in fertiliser as well as diesel costs, compared to FY2023. “All things considered, we are optimistic of a satisfactory financial performance for the plantation segment in FY2024,” it said. IOI Corp’s 4Q profit slumps on lower plantation, manufacturing contributions; pays five sen dividend KUALA LUMPUR (Aug 22): Petronas Chemicals Group Bhd’s (PetChem) net profit slumped 66% to RM628 million for the second financial quarter ended June 30, 2023 (2QFY2023), from RM1.87 billion a year ago, in line with lower earnings before interest, tax, depreciation and amortisation and share of profit from joint ventures and associates. Revenue for the quarter rose to RM7.11 billion, versus RM6.58 billion previously, largely due to higher sales volumes and inclusion of revenue from a recently acquired subsidiary. Earnings per share dipped to eight sen per share from 23 sen. PetChem declared a first interim dividend of eight sen per share to be paid on Sept 21. For the cumulative six months ended June 30, 2023, net profit dropped to RM1.16 billion from RM3.95 billion a year earlier, despite posting higher revenue of RM14.67 billion from RM13.22 billion. Reviewing its performance, the group said it recorded a higher plant utilisation rate of 89%, compared with 79% previously, as there was no statutory turnaround, and lower plant maintenance activities during the period resulted in higher production and sales volumes. On its prospects, PetChem said the results of its operations are expected to be primarily influenced by global economic conditions, petrochemical product prices — which have a high correlation with PetChem says 2Q net profit down 66% to RM628 mil, declares dividend of eight sen crude oil prices, particularly for the olefins and derivatives segment — utilisation rates of production facilities, and foreign exchange rate movements. “The utilisation of our production facilities is dependent on plant maintenance activities and sufficient availability of feedstock as well as utilities supply. “The group will continue with its operational excellence programme and supplier relationship management to sustain plant utilisation levels at above the industry benchmark. “The group anticipates product prices for [its] olefins and derivatives [segment] to improve slightly, supported by restocking activities prior to China’s Golden Week holiday (Oct 1 to 7). “Fertiliser and methanol product prices are forecast to stabilise amid short supply in the region. For specialties, the group expects weaker sales and earnings development moving forward, in view of slower industrial growth impacting demand,” it said. At the midday break on Tuesday (Aug 22), PetChem was 3.19% or 22 sen higher at RM7.12 a share, with 2.58 million shares done, giving the group a market capitalisation of RM56.96 billion. BY JUSTIN LIM theedgemalaysia.com BY SURIN MURUGIAH theedgemalaysia.com CONTINUES ON PAGE 8

WEDNESDAY AUGUST 23, 2023 8 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 22): Star Media Group Bhd’s net profit more than halved to RM791,000 or 0.11 sen per share in the second quarter ended June 30, 2023 (2QFY2023) compared with RM1.81 million or 0.25 sen per share recorded in the previous year’s corresponding quarter. A filing by the publisher of the nation’s largest English-language newspaper showed that the group’s operating cost for the quarter rose 11.3% to RM60.95 million from RM54.75 million a year ago, increasing at a faster pace than revenue growth. Revenue for 2QFY2023 advanced 7.7% to RM58.02 million from RM53.87 million. The print, digital and events segment posted a lower profit before tax (PBT) of RM100,000 for the quarter from RM400,000 a year earlier due to an increase in newsprint costs. “2QFY2023 revenue [however] increased by 7% against 2QFY2022,” said Star Media. PBT of the radio segment was RM400,000 in 2QFY2023, down 85.2% from RM2.7 million in the previous year, impacted by seasonal factors and thus lower revenue contribution from commercial airtime. Revenue from the segment slumped 15% to RM7.3 million for the quarter, as compared to RM8.6 million in 2QFY2022. Meanwhile, the property development and investment segment recorded a PBT of RM400,000 versus a RM1.1 million loss before tax a year ago. Revenue jumped to RM2.9 million from RM700,000, mainly attributed to the launching of the Star Business Hub project. For the first half ended June 30 (1HFY2023), Star Media’s net profit dropped 55.48% to RM1.93 million from RM4.33 million while revenue rose slightly to RM110.01 million from RM106.55 million. On prospects, Star Media said it remains financially prudent and will continue to focus on its revenue enhancement initiatives and operational efficiency improvements. “The group continues to increase its range of products such as the BM print publication, Majoriti 7, launched in 2022 and the recent introduction of its weekly business print publication, Star Biz7. “Based on the prevailing market conditions, the group remains cautiously optimistic on its future outlook, while striving to sustain its financial performance,” said Star Media. Star Media’s share price, which has risen over 28% year-to-date, finished at 38.5 sen on Tuesday. This gives the group a market capitalisation of RM280.61 million. The Edge and its owner, Tan Sri Tong Kooi Ong, is a substantial shareholder of Star Media, after buying a 5.42% stake in the group in April. KUALA LUMPUR (Aug 22): AEON Co (M) Bhd’s net profit declined 36.15% to RM30.18 million for its second quarter ended June 30, 2023 (2QFY2023) from RM47.28 million a year earlier, mainly due to lower revenue and higher operating costs. Quarterly revenue slipped 5.7% to RM1.03 billion from RM1.1 billion last year after its retail business’ topline decreased, mainly due to pent-up spending for the festivities in the corresponding quarter in FY2022, according to the department store and supermarket operator’s Bursa Malaysia filing. Earnings per share fell 2.15 sen in 2QFY2023 from 3.37 sen a year ago. No dividend was declared during the quarter under review. For the cumulative six months ended June 30, 2023, net profit dropped 9.26% to RM68.37 million from RM75.35 million in the same period last year, due to lower gross margin and higher operating costs. Star Media’s 2Q net profit drops on higher operating cost AEON 2Q slumps 36% on lower revenue, higher operating costs BY SYAFIQAH SALIM theedgemalaysia.com BY ANIS HAZIM theedgemalaysia.com Meanwhile, revenue for the period rose 2.03% to RM2.14 billion from RM2.09 billion last year on the back of higher revenue from retail business — contributed by the new IOI Putrajaya store and Southern region stores — and higher revenue from the property management services segment due to improve in occupancy rate and rental rate renewal. Moving forward, the group said that it will continue to leverage its ecosystem in partnering and collaborating with its tenant partners, suppliers and AEON group of companies to optimise the value in consumer spending and enhance the value of its assets. “The company continues to offer promotions, enhance product assortments, optimise tenant mix, and cautiously manage the operating expenses. Furthermore, the company is committed to enhance the effectiveness of its plan to accelerate the digital shift, establish private brands that captures diverse customer values, create AEON Living Zone in the local community and implement sustainability initiatives,” it said. AEON shares ended two sen or 1.74% higher to RM1.17 on Tuesday (Aug 22), giving it a market capitalisation of RM1.64 billion. Year-to-date, however, the counter has fallen 15.83%. As for its refinery and commodity marketing sub-segment, the group expects to continue to face low or negative refining margins due to stiff competition from Indonesian refiners who benefit from their country’s CPO export duty policy. Still, IOI Corp said its refineries’ efficient cost structure and capability in producing oil blends with low contaminants will give it a competitive advantage in the challenging operating environment. Meanwhile, outlook for its oleochemical sub-segment remains subdued, in light of the weak global economic environment and rising geopolitical tensions that undermined global trade. “Despite these challenges, the expected better demand from China will help to alleviate some of the slowdown in global demand. Our new fatty acid and soap noodle plants will also help to lower our production cost and give us the flexibility to tailor our products to meet customer requirements,” it said. For its specialty fats sub-segment under its associate company, Bunge Loders Croklaan, IOI Corp said the segment’s performance is less dependent on global economic growth as demand for food is more resilient. Hence, it anticipates an improved FY2024, driven by its newly acquired refinery facility in North America and the introduction of innovative product applications. IOI Corp’s share price closed one sen or 0.25% lower at RM4.05, giving the group a market capitalisation of RM25.46 billion. FROM PAGE 7

WEDNESDAY AUGUST 23, 2023 9 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 22): Chin Hin Group Property Bhd saw its net profit risen 91 times to RM5.83 million in the second quarter ended June 30, 2023 (2QFY2023), from RM64,000 a year ago, due mainly to higher work progress of the construction projects. According to its filing to Bursa Malaysia on Tuesday (Aug 22), its earnings per share ballooned to 1.18 sen in 2QFY2023, from 0.01 sen a year before. The construction segment’s profit before tax (PBT) surged more than seven-fold to RM8.42 million compared to RM1.16 million previously, as revenue increased more than six times to RM135.72 million, from RM22.08 million previously, said the group. The higher net profit also coincided with its commercial vehicles and fleet management segment posting a higher PBT of RM1.8 million, versus RM898,000 a year before, on the back of a higher revenue of RM19.07 million compared to RM12.49 million previously. The segment’s better results were due to higher demand for rebuilt commercial vehicles. Meanwhile, its property development segment’s loss before tax widened to RM3.88 million in 2QFY2023, from RM1.64 million a year before, due to higher marketing costs incurred to prepare for new launch projects, despite revenue having improved to RM12.97 million, from RM1.28 million previously. Quarterly revenue was higher at RM58.74 million, from RM35.85 million a year before. No dividend was declared during the quarter under review. For the cumulative six months of FY2023, its net profit jumped more than 14 times to RM19.51 million, from RM1.37 million. On prospects, the integrated builder conglomerate said its construction segment is expecting a gradual improvement in contract flows. The division’s outstandChin Hin Group Property’s 2Q net profit surges to RM5.8 mil due to higher construction work progress KUALA LUMPUR (Aug 22): Solarvest Holdings Bhd’s net profit rose by 56.54% to RM6.70 million for the first quarter ended June 30, 2023 (1QFY2024), from RM4.28 million a year earlier, due to higher revenue contributions from progress of Large Scale Solar 4 (LSS4) projects. Earnings per share for the quarter increased to one sen from 0.6 sen for 1QFY2023, said the group in a bourse filing on Tuesday (Aug 22). Quarterly revenue more than doubled to RM143.39 million from RM52.66 million, primarily due to higher progress of LSS4 projects. Solarvest said that the outlook for renewable energy (RE) in Malaysia remains positive, underpinned by the government’s effort to increase RE capacity to 70% of the country’s total energy mix from 40%, and achieve net zero by 2050. Additionally, the group, via its wholly-owned subsidiaries, is part of the three consortiums selected by the Energy Commission under the Corporate Green Power Programme (CGPP), with total generation capacity of nearly 90 MW. “The three CGPP solar plants scheduled to be commissioned in 2025 will Solarvest’s 1Q earnings up 57% on higher revenue from LSS4 projects BY SUFI MUHAMAD theedgemalaysia.com BY JUSTIN LIM theedgemalaysia.com add to the current RE asset portfolio of the group, contributing positively to its net earnings in the long run,” said Solarvest. Solarvest added that as at June 30, its unbilled order book stood at RM457 million, which will be progressively recognised in FY2024 and FY2025. It will continue to grow its order book and capitalise on the imminent awards of up to 800 MW CGPP projects and the National Energy Transition Roadmap or NTER. Meanwhile, under the Powervest programme, the group has secured cumulative capacity of 83.6 MW from multiple corporate power purchase agreements. This is expected to contribute RM37 million in annual recurring revenue upon full completion within the next 12 to 18 months, said Solarvest. “Barring any unforeseen circumstances, the board is of the view that the group’s overall performance would remain satisfactory for the coming financial year.” At Tuesday’s noon break, Solarvest shares had fallen one sen or 0.78% to RM1.27, valuing the group at RM848.04 million. ing order book stands at RM1.16 billion. For its rebuilt commercial vehicles division, it said the market for commercial vehicles is anticipated to experience continuous challenges, coupled with the weak ringgit exerting pressure on the segment’s profit margin. Nevertheless, the group remains cautiously optimistic about the prospect of this segment due to the strong demand for light/big truck models and prime movers from the logistics and food delivery businesses. As such, the group will continue to explore more options available and expand its sales and marketing for the Cergas Van, which was targeted for the tourism & commercial industry. As for its property development segment, the group is expected to launch its commercial development, the Solarvest Tower at KL Gateway, with an estimated gross development value (GDV) of RM234.78 million. The group is also planning two new launches in 2023, being Avantro Residences in Bandar Kinrara and Ayanna Resort Residences in Bukit Jalil, with a total GDV of RM1.14 billion. Chin Hin Group Property’s share price closed up 0.5 sen or 0.5% to RM1 on Tuesday, valuing the group at RM551 million. Over the past 12 months, the stock has risen 16% from 86 sen.

WEDNESDAY AUGUST 23, 2023 10 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 22): Analysts have kept “buy” calls on AMMB Holdings Bhd (AmBank) although the group’s financial results for the first quarter ended June 30, 2023 (1QFY2024) were below expectations due to higher-than-expected loan impairment allowances. In their results review note released on Tuesday (Aug 22), analysts from RHB Investment Bank (RHB IB) and Hong Leong Investment Bank (HLIB) Research said they believe AmBank’s net interest margin (NIM) is stabilising with waning fixed deposit (FD) competition. They also expressed a liking towards AmBank for its undemanding valuation and talked of a larger dividend payout from the adoption of the foundation internal ratings-based approach (FIRB). RHB IB said AmBank’s NIM — which reduced to 1.76% in 1QFY2024, down eight basis points quarter-on-quarter and 36 basis points year-on-year (y-o-y) — will stabilise at current levels. The firm opined that further lumpy provisions are unlikely, as most of AmBank’s loans are collateralised and its loan loss coverage ratio remains sound at 116%. “The group also wrote back RM100 million of its management overlays, with a balance of RM362 million remaining (circa 17% of total provisions),” RHB IB said. However, RHB IB revised AmBank’s FY2024 loans growth target to 4% to 5% from 5% to 6%, and lowered AmBank’s FY2024 to FY2026 earnings forecasts by 12% to 13% in alignment with the updated guidance. “Our target price (TP) is lowered to RM4.20 as a result, and includes a 0% enBY HAILEY CHUNG theedgemalaysia.com Analysts favour AmBank for its undemanding valuation, stabilising NIM and possibility of special dividend vironmental, social and governance (ESG) premium or discount,” the firm said. “We continue to like AmBank for its inexpensive valuation and transparent guidance, while the likely disposal of AmMetLife is a potential catalyst given the possibility of special dividends.” In terms of AmBank’s guidance, RHB IB said AmBank’s management is expecting FY2024 profit after tax and minority interests of circa RM1.6 billion. “Against the backdrop of softer loan growth and stable-but-muted NIM, operating expense control will be crucial — guidance is for the full-year total to not exceed RM2 billion, or flat y-o-y,” it said. “The group’s capital rebuilding exercise is now largely done, and it can fully return to its dividend policy of 35% to 40%, with scope for an upside following the adoption of the FIRB, which the group aims to complete in FY2024,” RHB IB added. Similar to RHB IB, HLIB Research said AmBank’s NIM is set to stabilise from 2QFY2024 onwards, and foresaw that FD from the January to March 2023 cohort to be repriced at lower rates. “However, Casa (current account savings accounts) substitution to FD may limit the upside,” HLIB Research wrote on its note. “Separately, credit growth is expected to continue tapering due to the soft macro environment. That said, net credit cost is seen to improve in subsequent quarters given smaller forward looking provisions put in by AmBank. “Overall, we are not particularly worried about asset quality, since AmBank has already made big provisions to cushion any jump in gross impaired loans ratio,” HLIB Research said. The firm also cut AmBank’s FY2024 to FY2025 earnings projection by 5% to 8%, lowered its Gordon growth model-derived TP of RM4.20 and concurred that the potential adoption of FIRB in 2024 could create headroom for a larger dividend payout in the future. According to Bloomberg, besides RHB IB and HLIB Research, five other firms also put “buy”, “outperform” or “accumulate” calls for AmBank on Tuesday. There were another two firms that recommended “hold”. At the time of writing, AmBank was trading lower five sen or 1.33% to RM3.72, valuing the group at RM12.33 billion. AMMB Holdings Bhd 0 5 10 15 20 25 Aug 22, 2022 Aug 22, 2023 3 4 5 Vol (mil) RM RM3.75 RM3.82 *As at 11.30am, Aug 22, 2023 Source: Bloomberg Analysts’ recommendation on AmBank Firm Recommendation Target price (RM) MIDF Amanah Investment Bank Buy 3.98 RHB Research Buy 4.20 Hong Leong Investment Bank Buy 4.20 Public Investment Bank Trading buy 4.20 CLSA Accumulate 4.28 TA Securities Holdings Buy 4.30 Kenanga Investment Bank Outperform 4.45 Nomura Buy 4.70 UOB Kay Hian (Equity) Hold 4.00 Maybank Investment Banking Group Hold 4.20 Source: Bloomberg

WEDNESDAY AUGUST 23, 2023 11 THEEDGE CEO MORNING BRIEF HOME NEWS IN BRIEF BNM’s international reserves at US$112.2 bil as at Aug 15 KUALA LUMPUR (Aug 22): Bank Negara Malaysia (BNM)’s international reserves stood at US$112.2 billion as at Aug 15, 2023, a 0.62% decline from US$112.9 billion recorded as at end-July. BNM said in a statement on Tuesday (Aug 22) that the reserves position is sufficient to finance 5.2 months of imports of goods and services, and is one time the total short-term external debt. Of the five main components of the reserves, foreign currency reserves decreased to US$99.7 billion from US$100.7 billion as at July 31, while other reserve assets increased to US$3 billion from US$2.7 billion. The International Monetary Fund (IMF)’s reserve position, the Special Drawing Rights, was maintained at US$1.4 billion and US$5.7 billion, respectively. Gold was also unchanged at US$2.4 billion, according to BNM. — by Syafiqah Salim MOF raises iTEKAD micro-financing programme allocation to RM10 mil KUALA LUMPUR (Aug 22): The Ministry of Finance (MOF) has raised the allocation for the iTEKAD programme to RM10 million, from the initial amount of RM4 million under the revised Budget 2023. Prime Minister Datuk Seri Anwar Ibrahim said that this is due to the success of the programme, which aims to help micro-enterprises from low-income groups. With the additional allocation, Anwar, who is also the finance minsiter, targets nine more banks to participate in the iTEKAD programme, joining the 11 banks that are already in, he said in a keynote address at the iTEKAD Network Event with Bank Negara Malaysia on Tuesday (Aug 22). Among the banks participating in iTEKAD are AmBank Islamic, Bank Islam, Bank Muamalat, CIMB Islamic Bank, Public Islamic Bank, RHB Islamic Bank, Bank Simpanan Nasional (BSN), Bank Rakyat, Agrobank, SME Bank, and Maybank Islamic bank. Anwar said that SUHAIMI YUSUF/THE EDGE iTEKAD enables micro-entrepreneurs to gain access to funding to start and sustain their businesses. “The structured training provides participants with upskilling and mentoring, which help to improve their business acumen and generate higher income sustainably,” he added. The previous administration of Datuk Seri Ismail Sabri Yaakob announced in Budget 2023 in October 2022 that RM10 million was allocated for the iTEKAD programme. — by Anis Hazim Ramssol Group Bhd 0 5 10 15 20 25 30 35 Aug 22, 2022 Aug 22, 2023 30 40 50 60 Vol (mil) Sen 40.5 sen 43 sen Source: Bloomberg Malaysia keeps September crude palm oil export duty at 8% KUALA LUMPUR (Aug 22): Malaysia maintained its export tax for crude palm oil at 8% for September and increased its reference price, a circular on the Malaysian Palm Oil Board website showed on Tuesday. The world’s secondlargest palm exporter calculated a reference price of RM3,755.13 (US$808.08) per metric tonne for September. The August reference price was RM3,614.28 a metric tonne. The export tax structure starts at 3% for Ramssol shares actively traded after Top Glove’s Lim Wee Chai emerged as substantial shareholder KUALA LUMPUR (Aug 22): Ramssol Group Bhd saw its shares actively traded and its share price reached a seven-month high on Tuesday (Aug 22), after Top Glove Corp Bhd founder and executive chairman Tan Sri Dr Lim Wee Chai emerged as a substantial shareholder. At market close, Ramssol, which provides solutions for human capital management, saw 31.43 million shares change hands, which was more than 10-fold its 200-day average volume of 1.83 million shares. It was also higher than Monday’s volume of 1.29 million shares. Its share price rose five sen or 14.08% higher at 40.5 sen against its last closing price of 35.5 sen on Monday, giving Ramssol a market capitalisation of RM99.37 million. It reached an intraday high of 41.5 sen. Its closing price reached a seven-month high on Feb 23 at 44 sen. — by Sufi Muhamad Matrix Concepts’ 1Q net profit rises 37% to RM64.6 mil, declares 2.5 sen dividend KUALA LUMPUR (Aug 22): Matrix Concepts Holdings Bhd’s net profit for the first quarter ended June 30, 2023 (1QFY2024) rose 37.3% to RM64.6 million from RM47.04 million a year ago, as it benefitted from improved speed of construction activity with labour shortage issues resolved. Earnings per share was 5.16 sen versus 3.76 sen previously, the property developer reported in a Bursa Malaysia filing on Tuesday (Aug 22). Revenue grew 44.6% to RM331.43 million in 1QFY2024 from RM229.3 million in 1QFY2023, mainly driven by higher contributions from the group’s property development division, which rose by 46.4% to RM321.3 million in the current quarter from RM219.4 previously. “Residential and commercial properties made up the key revenue contributor, amounting to RM306.3 million for the quarter under review, an increase by 51.7% from RM201.9 million previously,” Matrix said. The company declared a first interim dividend of 2.5 sen per share in respect of FY2024, to be paid on Oct 5, 2023. Matrix said the group has extended its strong sales momentum by securing RM305.3 million worth of new property sales for the quarter, while unbilled sales amounted to RM1.4 billion as at June 30, 2023, providing secure earnings visibility over the next 15- to 18 months. — by Hailey Chung crude palm oil in a RM2,250 to RM2,400 per tonne range. The maximum tax rate is set at 8%, when prices exceed RM3,450 a tonne. — Reuters THE EDGE

WEDNESDAY AUGUST 23, 2023 12 THEEDGE CEO MORNING BRIEF HOME NEWS IN BRIEF Federal civil servants required to wear Malaysian batik on Thursdays PUTRAJAYA (Aug 22): All federal civil servants are required to don Malaysian batik on Thursdays, while wearing batik on other working days is encouraged. The directive, effective from Monday (Aug 21), is stated in the Service Circular on the Wearing of Malaysian Batik Attire During Working Hours for Federal Public Service Officers, signed by the Public Service Department’s (PSD) director general, Datuk Dr Zulkapli Mohamed. According to the circular dated Aug 21, the directive does not apply to officers who are provided with uniforms, or who are attending official ceremonies with specific dress codes. “The use of Malaysian batik by civil service officers has been implemented since 1985. “In order to continue supporting the Malaysian batik industry, and to ensure that it remains a heritage and a symbol of Malaysian identity, the government agreed that all public officials are required to wear Malaysian batik every Thursday, and are encouraged to wear it on other working days,” read the circular, which was shared on the PSD’s official Facebook page on Tuesday. The circular was also distributed to all state civil services, statutory bodies and local authorities. “With the effect of this [new] service circular, Service Circular Number 1 of 2021 on the Wearing of Malaysian Batik Attire for Federal Civil Service Officers is hereby revoked,” it said. The Service Circular Number 1 of 2021 stated that wearing Malaysian batik every Thursday is encouraged. — Bernama IRB: Use of e-Services mandatory in stages starting September PUTRAJAYA (Aug 22): The Inland Revenue Board (IRB) is mandating the use of e-Services for taxation through the MyTax portal in stages from Sept 1 this year to empower the digitalisation of the service delivery system for the people. The IRB said the mandatory use of e-Services is in line with the government’s aspiration to gradually increase the number of fully online services, with the transition expected to be fully realised by Jan 1, 2024. “It is also one of the IRB’s efforts to introduce elements of Awareness, Education and Services (AES.) at all IRB service counters,” it said in a statement on Tuesday (Aug 22). The IRB also advised taxpayers to switch to End-to-End (E2E) services for all transactions, including utilising the provided online payment methods to ensure that all recorded transactions are secure and organised. The list of mandatory e-Services along with their descriptions can be accessed at https://www.hasil. gov.my/e-perkhidmatan/. The guide for using e-Services can be accessed through the MyTax portal at https://mytax.hasil.gov.my/ > User Manual. — Bernama CCK Consolidated’s 2Q net profit up 44%, boosted by retail and prawn divisions KUALA LUMPUR (Aug 22): CCK Consolidated Holdings Bhd’s net profit climbed 44.28% to RM16.76 million for the second quarter ended June 30, 2023 (2QFY2023) from RM11.61 million a year earlier, thanks to stronger consumer demand for its retail segment and contributions from its Indonesia-based prawn processing unit. Revenue rose 17.67% to RM247.11 million from RM210 million, according to the poultry firm and supermarket operator’s bourse filing on Tuesday (Aug 22). The group said stronger consumer demand led to the retail segment’s revenue rising 11.4% to RM191.58 million from RM172.04 million previously. No additional stores were opened during the three-month period under review. On its prospects, CCK Consolidated said that while consumer sentiment has normalised post-Covid-19, the volatility of the US dollar against the ringgit remains a concern as it leads to fluctuations in prices of corn and soy. CCK Consolidated said it will take proactive steps to mitigate any risks that arise whilst optimising efficiency and productivity across all its key business segments. — by Izzul Ikram Sarawak Plantation reports 45% drop in 2Q profit amid lower CPO, PK prices KUALA LUMPUR (Aug 22): Sarawak Plantation Bhd’s net profit fell 45% to RM16.56 million or 5.93 sen per share in the second quarter ended June 30, 2023 (2QFY2023), from RM30.01 million or 10.75 sen per share a year ago, as operating profit dropped and revenue declined amid lower realised average selling prices of crude palm oil (CPO) and palm kernel (PK), despite higher sales volume. Group revenue came in at RM127.35 million, down 38.52% from RM207.13 million previously, its bourse filing showed. The decline was partly offset by a gain on fair value changes in biological assets of RM4.6 million, compared with a loss of RM10.7 million recorded in 2QFY2022. According to the group, average CPO prices dropped 41.6% in the period, while PK prices fell 44.4%, although sales volume for CPO rose 8.1% while PK improved 10%. Oil palm operations contributed RM127.2 million or 99.9% of the group’s total revenue for the quarter. “Both fresh fruit bunches and CPO production in the second half of the year will be higher than first half of the year due to peak crop periods occurring in August to October 2023. However, if the Russia-Ukraine war continues, commodity prices [will continue to be] affected, which in turn [will] impact living costs and food security,” it said. — by Isabelle Francis Perdana Petroleum back in black in 2Q on higher utilisation rates, reversal of impairment loss KUALA LUMPUR (Aug 22): Perdana Petroleum Bhd posted a net profit of RM8.65 million for the second quarter ended June 30, 2023 (2QFY2023), compared with a net loss of of RM6.54 million a year earlier, on the back of higher utilisation rates for accommodation work barges with a better margin. The return to profitability was also due to lower depreciation charges, and a reversal of impairment loss on receivables of RM1.7 million, said the offshore support vessel (OSV) operator in a filing to Bursa Malaysia. The group registered earnings per share of 0.39 sen, versus a loss per share of 0.29 sen in 2QFY2022. Quarterly revenue jumped 89% to RM81.64 million from RM43.18 million a year ago, thanks to higher vessel utilisation and improved daily charter rates (DCR) due to higher demand arising from an uptrend in offshore production operation activities. The higher revenue was also driven by an improved revenue generated from ancillary vessel chartering services. — by Anis Hazim PERDANA.MY

WEDNESDAY AUGUST 23, 2023 13 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 22): Australia’s Deputy Prime Minister and Defence Minister Richard Marles is scheduled to visit Malaysia and the Philippines this week, to strengthen bilateral ties and cooperation in the realm of defence and security. During his visit in Kuala Lumpur, Marles is scheduled to co-chair the 3rd High-Level Committee meeting with his Malaysian counterpart Datuk Seri Mohamad Hasan, and meet Australian Defence Force personnel at the Royal Malaysian Air Force Base in Butterworth, Penang. Marles will proceed to the Philippines to observe significant bilateral training as part of Indo-Pacific Endeavour 2023, besides meeting his Philippines counterpart, Gilberto Teodoro, who serves as the Philippines’ Secretary for National Defence. “I look forward to visiting Malaysia and the Philippines, and working with our partners to ensure [that] our region continues to support our collective security and prosperity. “My visit underlines the [Australian] government’s commitment to investing in our partnerships in Southeast Asia. Partnerships that support a more peaceful, stable and prosperous region,” he said in a statement on the official website of the Australian government’s department of defence. Indo-Pacific Endeavour 2023 is Australia’s flagship regional engagement activity and supports the Australian government’s focus on deepening diplomatic and defence partnerships across Southeast Asia and the Northeast Indian Ocean. The statement said that Australia and Malaysia have a deep and enduring partnership based on history, shared interests and strong personal connections. Australian deputy premier to visit Malaysia, Philippines this week KUALA LUMPUR (Aug 22): The cockpit voice recorder (CVR) of the aircraft that crashed onto the Guthrie Corridor Expressway near Bandar Elmina, Shah Alam, last Thursday (Aug 17) will be sent to its manufacturer in Florida, the US, to retrieve the last 30 minutes of its audio data before the crash for analysis. Transport Minister Anthony Loke said the CVR was initially sent for analysis at a laboratory in Singapore last Saturday, but there were technical issues and limitations that prevented the retrieval of the audio recording. “The head of the Air Accident Investigation Bureau (BSKU) will return to Kuala Lumpur this afternoon and brief me...we will try as soon as possible, either later today (Tuesday) or tomorrow morning, to send them there (Florida). “...to answer the question of what happened, we have to seek assistance from external parties, and my priority is to provide answers to the families of the victims and the public as quickly as possible,” he said. Loke said this at a press conference after the launch of the 2023 Malaysian Aviation Safety Seminar here on Tuesday. On Monday, Loke reportedly said the BSKU had faced difficulties in retrieving data from the charred CVR, whose memory puck is still intact. He said experts in Singapore would retrieve data from the final 30 minutes of voice recording captured in the memory puck before the crash happened. According to the minister, the full report on the crash involving the Beechcraft Model 390 (Premier 1) plane could take up to a year to complete, but based on international guidelines, a preliminary report would be issued within a month from the date of the incident. Responding to public inquiries regarding the role of the Ministry of Transport (MOT) in regard to the tragedy, Loke explained that when an air accident occurs, the investigation of the case no longer falls under the responsibility of the police or the Home Ministry, but comes Loke: Crashed plane’s cockpit voice recorder to be sent to manufacturer in US to retrieve audio data under the job scope of BSKU, which is under the MOT. “It’s not the case of interfering, it’s about the responsibility for human lives and safety. I want to clarify that matters involving air accidents are under the BSKU and they report directly to the Minister of Transport...that’s how it’s structured in our aviation administration,” he said. On the seminar themed ‘Promoting Unified Aviation Safety Across The Region’, Loke said he hoped that it would provide some recommendations related to aviation safety to the government. “We are hoping that they can share ideas, and hopefully they can come up with one or two resolutions that can be applied, but any adoption of safety standards must be guided by the International Civil Aviation Organisation (ICAO) standards,” he said. The Beechcraft 390 Premier 1 aircraft flying from Langkawi to Subang crashed onto the Guthrie Highway at about 2.50pm on Aug 17, killing all eight people onboard, including Pahang state executive councillor Datuk Seri Johari Harun. An e-hailing driver and a p-hailing rider on the highway were also killed. Read also: Death of 10 plane crash victims classified under ‘sudden death report’ for now, says Selangor police chief Bernama Bernama Australia's Defence Minister Richard Marles. REUTERS

WEDNESDAY AUGUST 23, 2023 14 THEEDGE CEO MORNING BRIEF HOME JOHOR BAHRU (Aug 22): Kuala Lumpur Consumer Safety Association (PKPKL) president Samsudin Mohamad Fauzi has become the first individual to offer to stand as an independent candidate in the Pulai parliamentary by-election next month. Samsudin, 47, who also contested the Putrajaya parliamentary seat in the 15th general election (GE15) as an independent candidate, said he aims to bring the voice of non-governmental organisations (NGOs) to Parliament if elected. He also said that he decided to throw his hat in the ring after seeing more focus given on positions rather than people’s issues after GE15. “I feel the need to have an NGO that brings the people’s voice to the Parliament, to convey what is happening to the people because we are directly involved in dealing with various consumer issues. We listen to people’s grievances every day. “I have been commuting to Pulai for three weeks now to collect data, and I have seen many people who are struggling, for example, with the rising prices of goods,” he said. The Kluang-born said he chose to stand as an independent candidate because he did not want to be bound by any political party. “I’m not here to divide the votes. I want the people to understand that choosing an independent candidate will not disrupt the government’s stability. I’m offering them a chance to determine whether they wish to step up as consumer advocates or not. The decision rests with them. “However, the people’s voice already exists in Parliament, and I am opening the door for other NGOs to progress further,” he said. In GE15, Bersatu vice-president Datuk Dr Radzi Jidin who contested on a Perikatan Nasional ticket, won the Putrajaya parliamentary seat with a 2,310- vote majority, defeating five challengers including Samsudin and incumbent Datuk Seri Tengku Adnan Tengku Mansor (Barisan Nasional). Samsudin to stand as independent in Pulai by-election PAC targets tabling of Covid-19 management probe report at Oct 9-Nov 30 Parliament session KUALA LUMPUR (Aug 22): Prime Minister Datuk Seri Anwar Ibrahim on Tuesday (Aug 22) said that the government has never neglected the middle 40% (M40) group. He said the allegation by certain parties that the government’s approach was more focused on the low-income or bottom 40% (B40) group to the extent of neglecting the middle-income group, is not true. “We have taken several approaches but to say that we gave more to the B40 is not true. For example, just look at all science schools or MRSM (Mara Junior Science College) including Malay College and other institutions, the poorest group that really benefitted from it is very small, not even 1(%) or 2%. “That’s why I proposed to the Minister of Education to have a new type of school specifically for children of the poorest group or allocate 1(%) to 5% of the quota (in the existing schools) to the poorest group. Or else, the disparity will continue to exist.” Anwar said this at the iTEKAD Networking event at Sasana Kijang here, which was also attended by Deputy Finance Minister Datuk Seri Ahmad Maslan and Bank Negara Malaysia governor Datuk Shaik Abdul Rasheed Abdul Ghaffour. On meritocracy in education, the prime minister said that while the system is important, it cannot be the sole criterion to ensure fair management and good governance in the country. “If we want to talk about meritocracy between the best schools in Kuala Lumpur and schools in Kapit, Sarawak, it’s like talking about a formula [that] does not give emphasis on fairness. “On one hand, there are proponents of meritocracy, and on the other hand, there are proponents of quota (for Bumiputera)... I think the two should be combined; there should also be meritocracy or else, we will not have the best among us,” he said. Anwar, who is also finance minister, therefore urged the relevant ministries, banks and the elite to reach out to the lower-level groups who have different perspectives and concerns on this matter. “Sometimes I’m worried; we have been independent for so long and we are mature now, but our discourse is divided into two and disconnected between the elite and the lower-level groups. “When they (lower-level groups) feel neglected and marginalised, they will turn to narrow issues of race and religion because the elite does not empathise with them,” he added. PM: Government never neglected M40 group Bernama Bernama Bernama KUALA LUMPUR (Aug 22): The Public Accounts Committee (PAC) is committed to tabling the report on its probe into the management of Covid-19 for debate at the third meeting, the second session of the 2023 15th Parliament scheduled for Oct 9 to Nov 30. In a statement, PAC chairman Datuk Mas Ermieyati Samsudin said five witnesses testified and provided clarifications in the second hearing related to the management of Covid-19, held on Tuesday (Aug 22). She said they were the Ministry of Health (MOH) deputy secretary-general (Finance) Datuk Seri Norazman Ayob, former MOH secretary-general Datuk Seri Chen Chaw Min, former MOH secretary-general Datuk Seri Mohd Shafiq Abdullah, former MOH director-general Tan Sri Dr Noor Hisham Abdullah and former MOH Medical Services Development division head Datin Seri Dr Asmah Samat. Prime Minister Datuk Seri Anwar Ibrahim speaks at the iTEKAD Networking event at Sasana Kijang, Kuala Lumpur on Tuesday, Aug 22, 2023. SUHAIMI YUSUF/THE EDGE “PAC wishes to thank all witnesses and highly appreciates their attendance today, especially the main witness, who has retired from the civil service. “PAC will call Pharmaniaga Logistic Sdn Bhd next to provide its testimonies and clarifications on several issues related to defective ventilators,” she said. Read the full story

WEDNESDAY AUGUST 23, 2023 15 THEEDGE CEO MORNING BRIEF WORLD (Aug 22): Some three months after an election that represented one of the biggest challenges in years to Thailand’s royal establishment, the country finally has a new prime minister — and it’s someone who has the support of forces aligned with the palace. Srettha Thavisin, a former property tycoon, became the first new leader to take charge of Thailand since 2014, when former army chief Prayuth Chan-Ocha staged a coup. Srettha, 61, won 482 votes in a joint sitting of the parliament’s two chambers with 747 lawmakers on Tuesday (Aug 22). He was backed by 152 members of the military-appointed Senate in addition to his bloc’s 314 elected lawmakers and some others. Srettha can form his cabinet once his appointment is endorsed by King Maha Vajiralongkorn in a Royal Gazette. The vote came hours after Thaksin Shinawatra, a former premier who effectively helms Srettha’s Pheu Thai party, returned to Thailand for the first time in 15 years after cutting a deal with a military establishment that has repeatedly ousted his political allies over the past two decades. Pheu Thai had finished second to the upstart Move Forward party, which had pushed for changes to a law that restricts criticism of the nation’s powerful monarchy. The agreement between former enemies effectively shut the door on Move Forward from taking power. Pita Limjaroenrat, the party’s 42-year-old Harvard-educated leader, had vowed to press ahead with — a stance that prompted senators to deny him the premiership. Thailand’s currency and stocks rallied on the news of Srettha’s election. The benchmark stock index jumped 1.3%, the biggest one-day gain since July 14, while the baht rose as much as 0.7%, the most in almost a month. After landing in Thailand on Tuesday, Thaksin bowed before a portrait of the monarch to show his loyalty before being taken to prison to serve jail sentences for various cases stemming from his time as prime minister, which ended with a coup in 2006. He’s expected to receive a royal pardon at some point. Red-clad supporters of Pheu Thai, who had thronged the airport to welcome back Thaksin, also celebrated Srettha’s win at the party headquarters in central Bangkok. In the meantime, Srettha will look to move ahead with forming a cabinet among an 11-party alliance that can revive growth in Southeast Asia’s second-largest economy, which is among the nations growing at the slowest pace in the region. Investors, who have fled Thailand’s stocks since the May election, will be watching if Srettha follows through with his coalition’s promise to fire up the economy with cash handouts and a dose of fiscal stimulus. “The new government will be positive for the economy,” said Amonthep Chawla, head of research at CIMB Thai Bank PCL in Bangkok. “It will help improve sentiment and spur economic activities” through stimulus measures, he said. BY PATPICHA TANAKASEMPIPAT, SUTTINEE YUVEJWATTANA & ANUCHIT NGUYEN Bloomberg Thaksin ally Srettha elected new Thai PM, ending three-month political impasse The vote came hours after Thaksin Shinawatra, a former premier who effectively helms Srettha’s Pheu Thai party, returned to Thailand for the first time in 15 years after cutting a deal with a military establishment that has repeatedly ousted his political allies over the past two decades. Pheu Thai had finished second to the upstart Move Forward party, which had pushed for changes to a law that restricts criticism of the nation’s powerful monarchy. Srettha is a three-decade veteran in the real estate industry with an MBA from Claremont Graduate School in the US. He joined Pheu Thai earlier this year, first taking the role of being the chief adviser to Thaksin’s daughter Paetongtarn Shinawatra before being named as one of the three premier candidates. An avid soccer player and a fan of Liverpool FC in the English Premier League, Srettha led Bangkok-based Sansiri PCL for decades before resigning as president and chief executive in April. In an interview with Bloomberg earlier this year, Srettha said he wants to stimulate the economy that’s lagging the growth of its neighbours and bridge the gap between the rich and the poor. He was the one to unveil Pheu Thai’s “digital wallet” scheme that would give every Thai who is 16 years old and above 10,000 baht (RM1,328) each. The new prime minister will also have to follow through with Pheu Thai’s campaign pledges such as a 70% hike in minimum wage, household income guarantee of 20,000 baht per month and tripling of farm profits to lift economic growth to 5%. The lion’s share of the giveaways promised by Pheu Thai may not get implemented until the fourth quarter of 2024 as there’s limited room to adjust pre-set budget parameters for fiscal starting Oct 1, said Tamara Mast Henderson of Bloomberg Economics. Still, the coalition’s plan to ramp up fiscal support will likely reinforce the Bank of Thailand’s resolve to increase the policy rate again on Sept 27. Data on Monday showed gross domestic product grew 1.8% in the second quarter, missing analysts estimate for a 3% growth and prompting authorities to slash the 2023 forecast to a range of 2.5% to 3% from 2.7-3.7% seen previously. The US$500 billion (RM2.32 trillion) trade- and tourism-reliant economy faces headwinds from a slowdown in China, which has hurt Thai exports, and also a slow return of Chinese tourists. Read also: Thailand’s fugitive ex-PM Thaksin returns to jail from years in self-exile Thaksin appeared briefly with family members at a private jet terminal at Bangkok’s Don Mueang airport, smiling and waving to hundreds of ecstatic supporters, before he was escorted by police to the Supreme Court, then to a prison to serve a term of eight years. BLOOMBERG

WEDNESDAY AUGUST 23, 2023 16 THEEDGE CEO MORNING BRIEF WORLD (Aug 22): The US lifted restrictions on 27 Chinese companies and organisations, a sign Washington is extending an apparent olive branch ahead of Commerce Secretary Gina Raimondo’s planned trip to Beijing this month. The US Department of Commerce on Monday (Aug 21) removed the Chinese entities — such as chemical firm and lithium battery material maker Guangdong Guanghua Sci-Tech Co, and sensor maker NanJing GOVA Technology Co — from its “unverified list”, which restricts a company’s ability to buy American technology. The companies were taken off the list after they successfully completed end-use checks that allowed the Commerce Department’s Bureau of Industry and Security to establish their “legitimacy and reliability”, according to a government statement. Companies on that list need to obtain additional licences to buy products from US firms and organisations. Along with the more than two dozen Chinese entities — which also included two universities and a handful of other technology firms — the US also removed parties from Indonesia, Pakistan, Singapore, Türkiye, and the United Arab Emirates. China welcomed the move, with Ministry of Foreign Affairs spokesman Wang Wenbin saying on Tuesday that it showed that “the two sides can address specific concerns through communication, based on mutual respect”. “China will continue to firmly defend the lawful rights and interests of Chinese companies and institutions,” he added. Raimondo is expected to visit China later this month, part of the Biden administration’s effort to reduce tensions between the world’s two largest economies. The Chinese side also seems to be trying to ease strains. Premier Li Qiang on Monday told a visiting US-China Business Council delegation that the two economies complement each other more than they stand in competition, according to reports from the official Xinhua News Agency. “China is willing to work with the US in undertaking their responsibilities as major countries, jointly upholding international trade rules, and ensuring the stability of global industrial and supply chains,” Li told the delegation, which was celebrating its 50th anniversary. Read the full story Read also: US Commerce Secretary Gina Raimondo to visit China next week Raimondo will travel to China next week, making her the fourth cabinet-level official to visit since June as the US seeks to sustain high-level contacts despite strains over Taiwan and US plans to limit some exports. US lifts restrictions on some Chinese firms ahead of commerce secretary’s trip to Beijing MUMBAI (Aug 22): India is not considering imposing any restrictions on exports of non-basmati parboiled rice, Food Secretary Sanjeev Chopra said on Tuesday (Aug 22). Last month, India surprised buyers by imposing a ban on the export of widely consumed non-basmati white rice, following a ban on broken rice exports last year. “There is no proposal as of now to restrict parboiled rice exports,” Chopra said in response to questions about whether India was considering imposing an export tax or introducing a floor price for parboiled rice exports. Currently, there are no restrictions on the exports of parboiled rice, which constitutes nearly a third of India’s total rice exports. India’s rice stocks were at nearly three times its target at the start of August. “The government has surplus stocks, the open market has surplus stocks, and the new crop will start arriving within two months,” said Prem Garg, president of the Indian Rice Exporters Federation. “Rice supplies are more than comfortable.” Indian farmers, who typically start planting rice in the rainy months of June and India not planning to restrict parboiled rice exports, official says al prices in a rare move to boost supplies and curb food inflation ahead of state and national elections next year. Wheat stocks at government warehouses were at 28.3 million tonnes on Aug 1, 20% below the 10-year average. Separately, Chopra said the government would also allow mills to sell an extra 200,000 tonnes of sugar in August. The government earlier allowed mills to sell 2.33 million tonnes of sugar in the open market this month. Every month, the federal government fixes the quantity each mill can sell in the open market. Read also: Soaring onion prices in India may hurt Modi more than tomatoes India has imposed a 40% export tax on onions and plans to sell them locally at subsidised rates. The vegetable stands alongside tomatoes and potatoes as part of a trio of crops so crucial to Indian diets that past price spikes due to crop losses have prevented some ruling parties from returning to power. BY MAYANK BHARDWAJ Reuters Bloomberg July, will start harvesting the new season crop from October. During the marketing year beginning Oct 1, the government plans to buy 52.1 million tonnes of new season rice from farmers against 49.5 million tonnes a year earlier, Chopra said. Chopra also said there is no proposal as of now to import wheat from Russia via diplomatic deals. Last week government sources told Reuters that India is in talks with Russia to import wheat at a discount to surging globUS Commerce Secretary Gina Raimondo has a planned trip to Beijing this month. BLOOMBERG

wednesday A UGU S T 23, 2023 17 The E dge C E O m o rning brief world (Aug 22): Chinese stocks staged a sudden rally late on Tuesday (Aug 22), with several traders attributing the rebound to technical reasons in the absence of any fresh triggers. In Hong Kong, the Hang Seng Index climbed nearly 2% within minutes, after a seven-day losing run that was the longest since late 2021. About half of the stocks in the index were oversold, according to one technical indicator as of Monday, the highest ratio since March 2022. The CSI 300 Index, the benchmark for mainland shares, finished up 0.8% after erasing a loss of as much as 0.7%. The gauge was the most oversold since early June on Monday. Speculation was rife as stocks jumped, with many market participants talking about the possibility of buying by statebacked funds. The CSI 300 gauge dropped in each of the last two weeks, and previous incidents have shown that purchases by the so-called “national team” help slow losses. Some other traders cited a Caixin report from Saturday, which said China is considering stronger action to address risks from local government financing vehicles. “Most people I spoke to were quite baffled by the move this afternoon (Tuesday). There were all kinds of speculations, but there has been no clear explanation,” said Willer Chen, a senior analyst at Forsyth Barr Asia Ltd. But “it is also reasonable to see some technical rebound” given the steep losses recently, he added. Meanwhile, foreign investors continued to sell onshore Chinese stocks on a net basis. They pulled out 6.4 billion yuan (US$875 million or RM4.11 billion) on Tuesday, extending a record selling streak to 12 days. Turnover for Chinese stocks was about 800 billion yuan on Tuesday, largely in line with the average for the month, according to data compiled by Bloomberg. Sudden rally in Chinese stocks has traders scratching their heads (Aug 22): China extended two lines of yuan defence, pushing up funding costs in the offshore market to squeeze shorts while battling with a stronger-than-expected reference rate for the managed currency. The People’s Bank of China (PBOC) set its daily yuan fixing at 7.1992 per dollar compared to an average estimate of 7.3103 in a Bloomberg survey on Tuesday (Aug 22). That’s the largest gap since the poll was initiated in 2018. That came a day after one-month forward points, a measure of the cost to borrow the yuan versus the dollar, saw its biggest jump in offshore trading since 2017. The funding costs have steadily increased over the recent days as big Chinese banks refrained from providing more of the currency in the swap market, according to traders. The yuan has been under pressure for months as the economy struggles, with the China ramps up fight with yuan bears to stop selloff from spiralling Bloomberg by Shikhar Balwani, Charlotte Yang & John Cheng Bloomberg Tuesday’s moves also suggest that continued losses in Chinese stocks are making traders jumpy. Investor sentiment has deteriorated in recent weeks owing to dismal economic data, deflation fears, and a property market slump that’s now threatening a crisis in the shadow banking sector. A gauge of Chinese stocks listed in Hong Kong has plunged more than 11% so far in August, making it the worst performer among 92 global equity indices tracked by Bloomberg. “There simply are no obvious triggers. The only potential explanation that seems to make sense is that the national team has been active,” said Brock Silvers, the Hong Kong-based chief investment officer of private equity firm Kaiyuan Capital. The Hang Seng Index finished the session 1% higher. The Hang Seng Tech Index ended up 2%. Read also: Chinese short-term local govt bonds in great demand Demand has surged for shorter-term yuan bonds from local government financing vehicles (LGFVs), led by lower-rated borrowers, in the wake of China’s efforts to stem debt risks in the sector. Read the full story PBOC’s policy rate cuts widening yield differentials with the US. While the Chinese central bank is loosening its monetary policy, it’s also trying to slow the decline of the yuan with stronger-than-expected fixings, dollar sales by state banks and other measures such as tweaking capital flow rules. “A CNH funding squeeze could be a tactical tool and a signalling device, but unlikely the go-to tool in isolation,” wrote Citigroup Inc strategists Philip Yin and Gaurav Garg in a note. “It will have to work with other FX (foreign exchange) tools. Overall, the combination of rate cut and other FX tools suggest that fundamental-driven yuan weakness is allowed but the pace is managed,” they said. The yuan was little changed in offshore trading on Tuesday, having touched a yearto-date low last week. Higher funding costs will make it more expensive for speculators to bet against the currency. The PBOC is also set to sell a total of 35 billion yuan of bills in Hong Kong on Tuesday, exceeding the 25 billion yuan (RM16.12 billion) coming due this month. That’s the first time it refrained from a flat roll-over in two years, which may also increase demand for the currency, according to Bloomberg-compiled data

wednesday A UGU S T 23, 2023 18 The E dge C E O m o rning brief world Goldman sees US shutdown over spending ‘more likely than not’ (Aug 22): The UK government transferred £14.3 billion (US$18.3 billion or RM84.84 billion) to the Bank of England (BOE) in July, the single biggest state transfer to the bank on record, in order to meet shortfalls in its monetary stimulus programme. Losses on the BOE’s quantitative easing (QE) measures have cost taxpayers almost £30 billion in the past 11 months, according to official figures released on Tuesday (Aug 22) by the Office for National Statistics. The July sum was £5.4 billion more than forecast by the Office for Budget ResponsiJAKARTA (Aug 22): Indonesia’s current account swung into deficit for the first time in two years in the second quarter due to falling commodity prices and weak global growth, the central bank said on Tuesday, with expectations that the deficit will be higher next year. Having posted a US$6.5 billion balance of payments surplus in the first quarter, Indonesia showed a US$7.4 billion deficit in the AprilJune quarter. Bank Indonesia (BI) blamed portfolio outflows related to global market uncertainties for the payments deficit, which was not unexpected for the market, as foreign exchange reserves data had given forewarning of the way flows had turned. Worsening external balances could further pressure the rupiah currency, which has weakened against the US dollar in recent weeks amid rising US Treasury yields and signs of weakness in China’s economy. The second quarter current account deficit was equivalent to 0.5% of gross domestic product (GDP), BI data showed. Read the full story bility in March, underscoring the devastating impact that high interest rates are having on the public finances. QE affects the public finances because the bank bought UK government bonds with £875 billion it created between 2009 and 2021. Those gilts pay a fixed interest rate to the bank. The new money it created, known as “central bank reserves”, is held by high street lenders and earns interest at the bank’s main rate. When interest rates were below 2%, the QE programme was profitable for the bank, which transferred the gains backs to the government. With the BOE’s key rate at 5.25%, the programme is now deeply in the red, with net payments now being made to the commercial banking sector. The losses make it more difficult for the government to boost spending on public services or deliver tax cuts. The QE programme saved the government about £120 billion between 2009 and 2022, but the situation has reversed since interest rates hit 1.75% last year. The BOE’s own projections show that taxpayers will need to transfer about £220 billion to the bank in the seven years to 2030 alone. Over its lifetime, QE is likely to cost the state a net £150 billion. Losses on BOE’s quantitative easing programme cost UK taxpayers almost £30 bil in past year Indonesia posts first quarterly current account deficit in two years by Philip Aldrick Bloomberg by Gayatri Suroyo, Stefanno Sulaiman & Fransiska Nangoy Reuters by Lewis Krauskopf Reuters NEW YORK (Aug 21): The US government looks “more likely than not” to shut down later this year due to political differences on spending that could temporarily hit economic growth, Goldman Sachs analysts said in a research note. The Goldman economics analysts said prior shutdowns — which occurred when Congress failed to pass annual spending bills — stemmed either from disagreement on the level or distribution of spending, or a dispute over other issues that one party wanted to address in spending legislation. “At the moment, both types of risks are in play,” Goldman said in the note. A broad government shutdown stands to directly reduce growth by around 0.15 percentage point for each week it lasts, while the reduction could be 0.2 percentage point a week when including a modest impact on the private sector, according to Goldman. However, the analysts said, in the quarter following the government reopening, growth would rise by the same amount. Markets have not had strong reactions to three past shutdowns, in 1995-1996, 2013, and 2018-2019, according to the note. Read the full story

wednesday A UGU S T 23, 2023 19 The E dge C E O m o rning brief world (Aug 22): Geely Automobile Holdings Ltd, one of China’s largest private carmakers, posted first-half earnings that beat estimates, weathering a price war that continues to hit the industry. Net income rose 1% to 1.57 billion yuan (RM1.01 billion) in the six months ended June 30, the company said in a statement Tuesday (Aug 22), beating analyst estimates of 1.51 billion yuan, according to data compiled by Bloomberg. Revenue climbed 26% to 73.18 billion yuan. “The decline of the price of lithium carbonate in the first half of the year resulted in the decrease of battery prices, which exerted a positive influence on the cost control of new energy vehicles,” the company said in the earnings release. “However, the group’s gross profit margin was still impacted by the new energy transformation and intensified competition in the automobile market,” it said. The price war has forced most of the industry to slash prices on some models, and Geely’s gross margin remained at 14% despite the growth in revenue and decline in battery raw material prices. Investments in developing clean cars added to that, as Geely tries to speed up its transition to EVs to take on competitors like Tesla Inc and BYD Co, although the company has reined in some spending in this area compared to last year. Total research and development costs fell 8% to three billion yuan. Deliveries of the company’s battery EVs and plug-in hybrids increased by 44% in the first half of the year, faster than the overall market which grew at 37%, according to the China Passenger Car Association. The premium Zeekr range was a star performer, with sales climbing 124% in the first six months. Despite the weak economy clouding the outlook for car sales for the rest of the year, Geely said it was still optimistic about achieving its sales target of 1.65 million units. It has delivered 694,045 vehicles as of the end of June. Geely’s board said it decided not to pay an interim dividend. Geely’s firsthalf profit beats estimates as price war rages on (Aug 22): Chinese search engine and artificial intelligence company Baidu Inc beat second-quarter revenue estimates on Tuesday (Aug 22), helped by strength in advertising. The company’s US-listed shares rose 2.4% in premarket trading. Businesses have revived spending on digital advertising after easing of Covid-19 restrictions spurred an economic recovery, benefiting the Chinese tech giant, which relies on online ads for most of its revenue. Baidu has also been promoting its generative artificial intelligence (AI) large language model (LLM) tool, Ernie, to jump on the AI bandwagon — a trend that has caught the attention of investors and consumers. “In the second quarter of 2023, Baidu Core accelerated revenue and profit growth, driven by the solid performance of online marketing business and operating leverage,” said Robin Li, Baidu’s co-founder and CEO. He added that Baidu was adopting an “AI native mindset”. “Overall, Baidu is committed to building a new engine around generative AI and LLM to drive sustainable long-term growth.” The company’s revenue for the quarter ended June 30 was 34.06 billion yuan (RM21.7 billion), compared with analysts’ average estimate of 33.28 billion yuan, according to Refinitiv data. Its online marketing revenue rose 15% in the second quarter. The company reported adjusted profit of 22.55 yuan per American Depositary Share (ADS), compared with profit of 15.79 yuan per share a year earlier. This also exceeded analysts’ average estimate of 16.86 yuan per ADS, according to Refinitiv. (Aug 22): BHP Group Ltd, the world’s biggest miner, reported its lowest annual profit in three years, and warned the outlook for China was uncertain as the nation grapples with a brewing crisis in the steel-intensive construction sector. Beijing had put “policies in place that are meant to stimulate new starts” in the property sector, “but they’re not translating as effectively into changes on the ground as certainly we were anticipating,” chief executive officer Mike Henry said in an interview on Bloomberg TV. “It is fair to characterise it as a bit uncertain,” he said. China is by far BHP’s biggest customer for iron ore. Twelve months after posting its highest-ever profit as prices soared, the deteriorating economic outlook in the world’s biggest metals consumer has brought double-digit percentage declines to BHP’s earnings from copper, coal and nickel. Inflation, particularly in labour costs, had also put pressure on profits, the Melbourne-based company said on Tuesday (Aug 22). BHP’s plunging earnings mirror those posted by iron ore rival Rio Tinto Group last month, with miners holding their breath for an upswing in China’s economy since Beijing abandoned “Covid Zero” restrictions last November. Baidu beats quarterly revenue estimates on strong advertising BHP’s profit falls 37% with less demand for metals from China Reuters by Linda Lew Bloomberg by James Fernyhough & Liz Yee Xing Ng Bloomberg reuters Bloomberg Read the full story BHP’s underlying attributable profit from continuing operations fell 37% to US$13.4 billion (RM62.27 billion) in the 12 months to June 2023, below analysts’ estimates.

wednesday A UGU S T 23, 2023 20 The E dge C E O m o rning brief world (Aug 22): Deutsche Bank AG is a creditor to a Singapore company whose two directors were arrested for their roles in an alleged money laundering and forgery ring. The bank has a charge that was registered on May 22 against Golden Eagle Assets Pte. The firm’s directors Zhang Ruijin and Lin Baoying, and eight others, were indicted in a Singapore court last week for money laundering and forgery involving assets worth over S$1 billion (RM3.4 billion). Deutsche Bank’s facility to Golden Eagle Assets is secured against “all monies” at the investment holding company, according to corporate filings reviewed by Bloomberg News, that didn’t specify the facility’s size. Golden Eagle Assets hasn’t been named in the criminal investigation. “It is Deutsche Bank’s general practice to fully cooperate with authorities,” a spokesperson for the German lender said in response to queries from Bloomberg News, declining to comment on specific cases. The bank has “zero tolerance for its global network being misused for financial crime.” Deutsche Bank is the latest lender to be embroiled in the scandal that raises questions about guardrails against illicit money flowing into the financial hub. The Chinese duo was charged for trying to cheat Malaysia’s CIMB Bank Bhd about their ownership and sale of a property in Macau. Citigroup Inc’s Singapore subsidiary allegedly received fake documents from other suspects. The police declined to comment as investigations are ongoing. The Monetary Authority of Singapore had earlier said suspicious fund flows and other inconsistencies prompted unnamed banks to file suspicious transaction reports. The information prompted a probe which led to the arrests. The financial regulator also separately said it was assessing whether financial firms had taken all reasonable steps to mitigate against money laundering and terror financing risks, according to the Straits Times. Golden Eagle Assets was incorporated in the city-state in Oct 2019, according to the business filing. Lin listed a unit in Fuzhou, the capital of China’s Fujian province as her residence, while Zhang listed a Pearl Island property on Singapore’s southern Sentosa island as his. Lin and Zhang were arrested at a luxury bungalow in Sentosa, a popular leisure area for locals and home to many ultra-rich foreigners. The couple are in remand and didn’t enter pleas during the initial court hearing. Zhang is due back in court on Wednesday (Aug 23). Deutsche Bank is creditor to alleged launderers’ Singapore firm BENGALURU (Aug 22): S&P Global followed Moody’s in cutting its credit ratings and outlook on multiple US regional banks, saying higher funding costs and troubles in the commercial real estate sector will likely test the credit strength of lenders. A relentless rate-hike campaign by the US Federal Reserve has raised deposit costs at banks, which have been forced to pay out higher interest to keep depositors from fleeing to other high-yielding alternatives. S&P on Monday cut its ratings on Associated Banc-Corp and Valley National Bancorp on funding risks and higher reliance on brokered deposits, while UMB Financial Corp, Comerica Bank and KeyCorp were downgraded, citing large deposit outflows and prevailing higher interest rates. KeyCorp shares fell 1%, while Comerica, Valley National, UMB Financial and Associate Banc-Corp dipped between 0.3% and 0.8%. S&P also lowered the outlook of S&T Bank and River City Bank to “negative” from “stable”, citing higher CRE exposure. The agency’s action will make borrowing costlier for the ailing banking sector that S&P downgrades multiple US banks on growing liquidity worries by Gokul Pisharody, Niket Nishant & Akanksha Khushi Reuters by Low De Wei & Alfred Cang Bloomberg Thailand’s KBank in talks to buy Vietnam lender in up to S$1 bil deal — sources by Low De Wei & Alfred Cang Bloomberg is looking to shake off the effects of the crisis from earlier this year, when the collapse of Silicon Valley Bank and Signature Bank sparked a loss of confidence and led to a run on deposits at several regional lenders. Borrowing costs globally have also surged, with the US Treasury yields hitting their highest in 16 years, as the bond market rout entered its sixth week on Tuesday. S&P’s action came weeks after similar downgrades by its peer Moody’s, which lowered ratings on 10 US banks and placed six, including Bank of New York Mellon, US Bancorp, State Street and Truist Financial, on review for potential downgrades. An analyst at Fitch, the last of the three chief rating agencies, told CNBC last week that several US banks, including JPMorgan Chase, could see downgrades if the sector’s “operating environment” were to deteriorate further. HANOI/SINGAPORE (Aug 22): Thailand’s second-biggest lender Kasikornbank is in talks to buy consumer finance provider Home Credit Vietnam in a deal of up to US$1 billion (RM4.6 billion) that would further its push to expand in Vietnam, two sources said. The Bangkok-based lender, also called KBank, hopes to become one of Vietnam’s top 20 banks in terms of assets by 2027. It has total assets worth US$119.7 billion, second only to Bangkok Bank in Thailand, Refinitiv data showed. The news comes at a time when Vietnamese banks are under pressure as a slowing economy and protracted turmoil in the real estate sector have stoked an uptick in bad loans and triggered broad rate cuts. A potential deal would underscore a trend of consolidations in Asia’s finance sector and make KBank’s the second-largest M&A transaction in Vietnam’s financial industry this year after the sale of a US$1.5 billion stake in Vietnam Prosperity Joint Stock Commercial Bank to Japan’s Sumitomo Mitsui in March, according to Refinitiv data. Read the full story

wednesday A UGU S T 23, 2023 21 The E dge C E O m o rning brief world BENGALURU (Aug 22): Elon Musk is pushing to change how news links appear on his social media platform X, formerly called Twitter, in a move that could potentially undermine the ability of news publishers to draw audience. X is planning to remove the headline and text while retaining just the lead image from links to news articles shared on the platform, Musk said in a post late on Monday (Aug 21). The move is likely an attempt by Musk to get users to spend more time on X and push them to opt the subscription service for more details. It is not immediately clear how the Elon Musk’s X plans to remove headlines from links to news articles (Aug 22): SoftBank-owned chip designer Arm on Monday (Aug 21) disclosed a modest 1% fall in annual revenue as it made public the paperwork for a US listing that is expected to be the year’s biggest initial public offering. Arm’s sales declined to US$2.68 billion (RM12.46 billion) in the year ended March 31, hurt by a slump in global smartphone shipments. Sales for the quarter ended June 30 fell 2.5% to US$675 million. Its listing is expected to bring back to life a lacklustre IPO market, which has over the last year seen some big startups hold back their listing plans due to market volatility and risk-off sentiment. “We see a decent pipeline of pre-IPO companies sitting on the fence between a listing in 2023 or 2024. While Arm is a unique asset, its reception will tell us a lot about market sentiment,” said Matthew Kennedy, analyst at IPO-research firm Renaissance Capital. The company, whose chip technology powers most of smartphones including iPhones, did not reveal the number of shares it was selling and the pricing of its offering. SoftBank is reportedly chasing a valuation of between US$60 billion and US$70 billion for the company in the IPO, which is expected in September. lion, but rose later in line with gains in the chipmaker’s shares. Goldman Sachs, JPMorgan, Barclays and Mizuho are the lead underwriters of the offering. Arm said it expects to list on the Nasdaq and trade under the ticker symbol ‘ARM’. SoftBank-owned Arm reveals revenue fall ahead of blockbuster US IPO by Manya Saini & Jaiveer Shekhawat Reuters by Yuvraj Malik Reuters move will impact advertisers on the platform that Musk claimed in July had 540 million monthly users. Currently, news links come up on the timeline of users as “cards”, along with an image, source address and an abridged headline. Such a packaging helps draw clicks and helps publishers gain readers. But with the shortened links, users might end up writing some text along with their posts and eventually, they could consider X’s premium service that allows a single post of up to 25,000 characters. With the changes, Musk is pitching X as a more relevant platform for content creators. Premium subscribers can now post longer videos, their posts are shown higher up, and they also receive a cut of ad sales. Read also: Arm needed 3,500 words to explain its China risks before IPO Arm runs most of its China business through an independent unit, called Arm Technology Co, which is its single largest customer and accounted for about 24% of its sales in the year ended March. But Arm and its parent, Japan’s SoftBank Group Corp, don’t control that business. SoftBank gains on first sales of Latin America stakes SoftBank Group Corp is selling some of its investments in Latin America for the first time, turning a profit on the holdings even though startups in the region have been shut out of the market for initial public offerings (IPOs). It had earlier sought to raise between US$8 billion to US$10 billion through the listing, but sources said the amount dropped last week after it took a 25% stake in Arm it did not directly own from its Saudi-backed Vision Fund. Hopes of a rebound in IPO activity has been underpinned by strong debuts from Johnson & Johnson’s spinoff Kenvue and Mediterranean restaurant chain Cava. Traditional listings have raised US$10.25 billion so far this year as of Aug 20, excluding blank-check deals, almost double the level seen in 2022, Dealogic data showed. SoftBank has also been in talks with several technology companies to make them cornerstone investors in Arm ahead of its IPO, including Amazon.com and Nvidia, Reuters has reported. It acquired Arm for US$32 billion in 2016 and struck a blockbuster deal four years later to sell it to Nvidia. The buyout was, however, later terminated due to regulatory hurdles. The value of the cash-and-stock deal with Nvidia that was announced in 2020 was originally pegged at about US$40 bilReuters

wednesday A UGU S T 23, 2023 22 The E dge C E O m o rning brief world (Aug 22): Microsoft Corp said it will give Ubisoft Entertainment SA the cloud streaming rights for all of Activision Blizzard Inc’s console games released in the next 15 years in order to placate regulators reviewing its US$69 billion (RM320.65 billion) deal for the Call of Duty maker. Under the arrangement, French gamemaker Ubisoft will get exclusive worldwide rights to stream Activision titles and non-exclusive streaming rights in the European Economic Area, after Microsoft’s deal for Activision is completed, the Redmond, Washington-based company said in a statement on Tuesday (Aug 22). Separately, the UK’s antitrust watchdog said it opened a fresh probe into the Microsoft-Activision transaction after the tech giant submitted a substantially different deal, giving the acquisition a rare second chance to appease regulators. The Competition and Markets Authority (CMA) had vetoed the deal in April on the grounds that it could harm the nascent market for cloud gaming. The US Federal Trade Commission also objected to the transaction, but failed to convince a judge to block it. “Under the restructured transaction, Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service — Xbox Cloud Gaming — or to exclusively control the licensing terms of Activision Blizzard games for rival services,” Microsoft said in the statement. As it navigated regulatory obstacles, Microsoft missed the July 18 deadline in the original agreement — signed in January 2022 — to close the acquisition. Activision agreed to extend the timeline until Oct 18 to give Microsoft more time to iron out the remaining hurdles. Microsoft asked the UK regulator in July to reconsider its April veto on the grounds that the situation had “materially changed”, given the US court decision and a subsequent deal it reached to license Activision blockbuster title Call of Duty to rival Sony Group Corp. The divestiture proposal may obviate the need for the CMA to rule on that request. The CMA has said it prefers structural remedies to address concerns about mergers that hinder competition. To satisfy that preference, Microsoft and Activision have been seeking a divestiture that wins over regulators without harming what Microsoft considers the key parts of the acquisition. The software giant has publicly ruled out selling the Call of Duty franchise, for example. While potentially promising for the future, cloud gaming — or games played via streaming to devices — is a money-loser for Microsoft, and the company and rivals in the space are still trying to find ways to make it appealing to a large number of gamers. Streaming games requires pricey cloud-computing power and the technology still subjects players to latency that impacts quality, which means the technology doesn’t work well for fast-paced, graphics-intensive titles. (Aug 22): Chinese investors are gradually returning to Dubai’s real estate market, joining Russian and other international buyers who have already pushed property prices in the emirate to record levels. At the city’s largest developer, Emaar Properties PJSC, buyers from the Asian nation doubled to 8% of the total during the first half of 2023 from 4% through 2022, according to a report by CI Capital, which cited an analyst call with the firm’s management. While those levels are still below the peak of 13% to 14%, Chinese demand could become a key factor in helping to shore up demand in the emirate’s property market. Russians were the biggest buyers of Emaar developments during the first quarter and demand remains strong, according to the report’s author Sara Boutros. CI Capital estimates that Emaar sales are likely to reach 33 billion dirhams (RM41.76 billion) to 34 billion dirhams this year, a 10% increase from 2022. “Emaar’s nationality mix is important because the company acts as a proxy for the wider real estate market in Dubai,” she said, adding that the developer has the biggest market share with around 30% of all home sales ahead of construction. Dubai’s property market has been booming, bucking the trend in many parts of the world, where home values have dropped amid surging interest rates and a darkening growth outlook. The recovery, which capped seven years of price declines, started after the pandemic and was fueled by an influx of newcomers — from crypto millionaires and bankers relocating from Asia to wealthy Russians seeking to shield assets. Read the full story Microsoft concedes Activision cloud streaming rights to Ubisoft Nvidia hits record high as AI boom lifts bets on another strong forecast Dubai’s property boom is starting to lure back buyers from China by Dina Bass & Amy Thomson Bloomberg by Medha Singh Reuters by Zainab Fattah Bloomberg According to a report by CI Capital, buyers from China doubled to 8% of the total during the first half of 2023 from 4% through 2022. bloomberg (Aug 22): Nvidia shares hit an all-time high on Tuesday (Aug 22) in a buildup in expectations over the quarterly results of the chip designer that has been the biggest beneficiary of a boom in artificial intelligence. The shares eased 1.1% from a record high of US$481.87 hit minutes after the market opened, crossing its previous peak of US$480.88 on July 14. Rising bets that Nvidia’s revenue target will once again surpass Wall Street estimates have lifted the stock about 19% from a two-month low hit last week. Analysts expect Nvidia, which dominates the market for chips used to power generative AI like ChatGPT and many such services, to forecast 110% growth in third-quarter revenue to US$12.50 billion (RM58.1 billion) when it reports results on Wednesday. “It might be the most important report of this earnings season. We want to hear that they can build on the amazing quarter they had last quarter,” said Dennis Dick, market structure analyst at Triple D Trading.

wednesday A UGU S T 23, 2023 23 The E dge C E O m o rning brief world Meta rolls out web version of Threads NEW YORK/BENGALURU (Aug 22): Meta Platforms said on Tuesday that it is launching the web version of its new text-first social media platform Threads, in a bid to retain professional users and gain an edge over rival X, formerly Twitter. Threads’ users will be able to access the microblogging platform by logging-in to its website from their computers, Meta Platforms, which owns Facebook and Instagram, said. Meta CEO Mark Zuckerberg said in a Threads post that the web version would reach users “over the next few days”. The widely anticipated roll-out could help Threads gain broader acceptance among power users like brands, company accounts, advertisers and journalists, who can now take advantage of the platform by using it on a bigger screen. Threads, which crossed 100 million sign-ups for the app within five days of its launch on July 5, saw a decline in its popularity, as users returned to the more familiar platform X after the initial rush. In just over a month, daily active users on Android version of Threads app dropped to 10.3 million, from the peak of 49.3 million, according to a report dated Aug 10 by analytics platform Similarweb. The company will be adding more functionality to the web experience in the coming weeks, Meta said. — Reuters Singapore plans to raise another US$1.3 bil via its green bond (Aug 22): Singapore plans to raise at least S$1.8 billion (US$1.3 billion or RM6.2 billion) by reopening its 50-year green bond, adding to its financial firepower to combat climate change. The Monetary Authority of Singapore has tapped Citigroup Inc, DBS Group Holdings, Oversea-Chinese Banking Corporation Ltd, Standard Chartered plc and United Overseas Bank Ltd to conduct the transaction, which is expected to be kicked off this week, according to person familiar with the matter, who asked not to be identified because they’re not authorised to speak about it. The city-state joins Hong Kong and countries such as Germany and Italy to sell green bonds this year, pushing global issuance by sovereigns and companies in that segment to nearly US$340 billion so far in 2023, up 17% on the year, Bloomberg-compiled data show. Singapore’s planned offering is part of a bid, announced last year, to raise as much as S$35 billion of environment-focused financing by 2030. Although the initial tap announcement on Tuesday didn’t spell out exactly how any money raised would be spent, the proceeds of Singapore’s offering last year were earmarked for expanding public transport. — Bloomberg Read the full story news In brie f Singapore gives nod to three candidates to run for president (Aug 22): Singapore’s elections department said that three candidates will run for president in a vote on Sept 1 after filing their nomination papers on Tuesday (Aug 22). Ng Kok Song, Tan Kin Lian and former deputy premier Tharman Shanmugaratnam will compete in the city-state’s first contested presidential election in over a decade. It’ll be just the third time since a constitutional amendment in 1991 transformed the post into a publicly elected one. The candidates agreed to campaign “in a manner that is dignified, decorous and consistent with the president’s position as the head of state and the symbol of national unity”, the Elections Department said in a statement. Ng, chairman of Avanda Investment Management, pledged to protect the national reserves if elected. The 75-year-old said he has what it takes to “uphold the integrity of public service appointments”. Tharman, 66, said Singapore will face a “more difficult and challenging future”, and promised to use his decades of experience in government to see the country through. Tan, a former CEO of insurer NTUC Income, said his candidacy for the post is “truly independent of the ruling government”. He, too, pledged to safeguard the reserves and uphold the integrity of the public service. Tan, 75, earlier defended concerns raised over his social media posts seen as objectifying women. Six years ago, incumbent Halimah Yacob got the job in an uncontested exercise. She will not seek the office — a largely ceremonial role — for a second time. — Bloomberg Coinbase takes stake in stablecoin issuer Circle (Aug 22): Coinbase Global Inc, the biggest US crypto exchange, has taken a stake in stablecoin issuer Circle citing “growing regulatory clarity for stablecoins in the US” and elsewhere. The companies were co-founders of the Centre Consortium that governs the USD Coin stablecoin. Centre will be dissolved. Terms of the agreement weren’t disclosed. Coinbase and Circle’s revenue from the USD Coin stablecoin “will continue to be shared based on the amount of USDC held on each of our platforms, and additionally we will now equally share in interest income generated from the broader distribution and usage of USDC,” Boston-based Circle said in a blog post Monday (Aug 21). Stablecoins — crypto tokens that are pegged to an asset like the dollar — are mostly used by traders to move digital assets between exchanges and have so far made limited inroads into consumer payments. Last month, a key US House of Representatives panel advanced a bill to regulate stablecoins. The proposal remains in the House. — Bloomberg Hong Kong to activate control measures on seafood from Japan HONG KONG (Aug 22): Hong Kong’s leader said on Tuesday (Aug 22) he strongly opposes Japan’s release into the sea of treated radioactive water from the crippled Fukushima nuclear plant and the city would “immediately activate” import controls on Japanese seafood. Japan will on Thursday begin releasing more than a million tons of water from the plant north of Tokyo, insisting it is safe to do so. The plant was wrecked in a 2011 tsunami and the water has mostly been used to cool damaged reactors. Though approved by the UN nuclear watchdog, the plan to dump the water has faced opposition at home and abroad, including from China, over worries about food safety. Hong Kong Chief Executive John Lee said the release was “irresponsible” and posed “impossible risks to food safety and the irreparable pollution and destruction of the marine environment”. Lee, in a post on his Facebook account, said he had told the secretary for the environment and ecology and relevant departments to immediately activate import controls to protect food safety and public health. — Reuters Read the full story Ng Kok Song Tan Kin Lian Tharman Shanmugaratnam photos by bloomberg

WEDNESDAY AUGUST 23, 2023 24 THEEDGE CEO MORNING BRIEF WORLD (Aug 22): Computer-generated children’s voices so realistic they fool their own parents. Masks created with photos from social media that can penetrate a system protected by face ID. They sound like the stuff of science fiction, but these techniques are already available to criminals preying on everyday consumers. The proliferation of scam tech has alarmed regulators, police and people at the highest levels of the financial industry. Artificial intelligence in particular is being used to “turbocharge” fraud, US Federal Trade Commission chair Lina Khan warned in June, calling for increased vigilance from law enforcement. Even before AI broke loose and became available to anyone with an internet connection, the world was struggling to contain an explosion in financial fraud. In the US alone, consumers lost almost US$8.8 billion (RM40.9 billion) last year, up 44% from 2021, despite record investment in detection and prevention. Financial crime experts at major banks, including Wells Fargo & Co and Deutsche Bank AG, say the fraud boom on the horizon is one of the biggest threats facing their industry. On top of paying the cost of fighting scams, the financial industry risks losing the faith of burned customers. “It’s an arms race,” says James Roberts, who heads up fraud management at Commonwealth Bank of Australia, the country’s biggest bank. “It would be a stretch to say that we’re winning.” The history of scams is surely as old as the history of trade and business. One of the earliest known cases, more than 2,000 years ago, involved a Greek sea merchant who tried to sink his ship to get a fraudulent payout on an insurance policy. Look back through any newspaper archive and you’ll find countless attempts to part the gullible from their money. But the dark economy of fraud—just like the broader economy—has periodic bursts of destabilising innovation. New tech lowers the cost of running a scam and lets the criminal reach a bigger pool of unprepared marks. Email introduced every computer user in the world to a cast of hard-up princes who needed help rescuing their lost fortunes. Crypto brought with it a blossoming of Ponzi schemes spread virally over social media. The AI explosion offers not only new tools but also the potential for life-changing financial loss. And the increased sophistication and novelty of the technology mean that everyone, not just the credulous, is a potential victim. Covid-19 lockdowns accelerated the adoption of online banking around the world, with phones and laptops replacing face-to-face interactions at bank branches. It’s brought advantages in lower costs and increased speed for financial firms and their customers, as well as openings for scammers. Some of the new techniques go beyond what current off-the-shelf technology can do, and it’s not always easy to tell when you’re dealing with a garden-variety fraudster or a nation-state actor. “We are starting to see much more sophistication with respect to cybercrime,” says Amy Hogan-Burney, general manager of cybersecurity policy and protection at Microsoft Corp. Globally, cybercrime costs, including scams, are set to hit US$8 trillion this year, outstripping the economic output of Japan, the world’s third-largest economy. By 2025 it will reach US$10.5 trillion, after more than tripling in a decade, according to researcher Cybersecurity Ventures. In the Sydney suburb of Redfern, some of Roberts’ team of more than 500 spend their days eavesdropping on cons to hear firsthand how AI is reshaping their battle. A fake request for money from a loved one isn’t new. But now parents get calls that clone their child’s voice with AI to sound indistinguishable from the real thing. These tricks, BY NABILA AHMED, ADAM HAIGH, AINSLEY THOMSON & ELLIE HARMSWORTH Bloomberg Deepfake imposter scams are driving a new wave of fraud known as social engineering scams, tend to have the highest hit rates and generate some of the quickest returns for fraudsters. Cloning a person’s voice is increasingly easy. Once a scammer downloads a short sample from an audio clip from someone’s social media or voicemail message—it can be as short as 30 seconds—they can use AI voice-synthesising tools readily available online to create the content they need. Public social media accounts make it easy to figure out who a person’s relatives and friends are, not to mention where they live and work and other vital information. Bank bosses stress that scammers, running their operations like businesses, are prepared to be patient, sometimes planning attacks for months. What fraud teams are seeing so far is only a taste of what AI will make possible, according to Rob Pope, director of New Zealand’s government cybersecurity agency CERT NZ. He points out that AI simultaneously helps criminals increase the volume and customization of attacks. “It’s a fair bet that over the next two or three years we’re going to see more AI-generated criminal attacks,” says Pope, a former deputy commissioner in the New Zealand Police who oversaw some of the nation’s highest-profile criminal cases. “What AI does is accelerate the levels of sophistication and the ability of these bad people to pivot very quickly. AI makes it easier for them.” Read the full story

WEDNESDAY AUGUST 23, 2023 25 THEEDGE CEO MORNING BRIEF MARKETS Top 20 active stocks World equity indices Top gainers (ranked by %) Top losers (ranked by %) Top gainers (ranked by RM) Top losers (ranked by RM) NAME VOLUME CHANGE CLOSE YTD MARKET (MIL) (RM) CHANGE CAP (%) (RM MIL) HONG SENG CONSOLIDATED BHD 272.08 -0.005 0.055 -75.00 281.0 CN ASIA CORP BHD 127.97 0.085 0.270 10.20 66.1 MY EG SERVICES BHD 78.40 0.025 0.815 -5.42 6035.4 WIDAD GROUP BHD 73.51 0.005 0.440 2.33 1362.4 UEM SUNRISE BHD 53.74 -0.005 0.630 147.06 3186.8 TALAM TRANSFORM BHD 53.65 0.005 0.020 33.33 85.9 CAPITAL A BHD 44.87 -0.020 1.010 61.60 4252.4 PARKSON HOLDINGS BHD 40.57 -0.020 0.320 137.04 367.6 ICON OFFSHORE BHD 34.81 0.015 0.085 -10.53 230.1 AWANBIRU TECHNOLOGY BHD 33.77 -0.005 0.175 -53.33 137.9 UCREST BHD 32.88 0.010 0.205 64.00 152.1 JAKS RESOURCES BHD 31.76 0.015 0.210 -10.64 480.9 SARAWAK CONSOLIDATED 31.47 0.000 0.440 203.45 281.7 RAMSSOL GROUP BHD 31.43 0.050 0.405 -7.95 99.4 EKOVEST BHD 30.49 -0.010 0.425 25.00 1145.7 LAND & GENERAL BHD 28.37 -0.005 0.130 30.00 386.5 SP SETIA BHD GROUP 26.60 -0.040 0.810 35.00 3305.0 CLASSITA HOLDINGS BHD 25.52 0.000 0.075 -79.45 92.5 SASBADI HOLDINGS BHD 23.17 0.020 0.220 83.33 95.3 MALAYSIAN RESOURCES CORP BHD 22.78 -0.005 0.405 37.29 1809.3 Data as compiled on Aug 22, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) DGB ASIA BHD 0.010 100.00 2,369.2 -33.33 18.8 GREEN OCEAN CORP BHD 0.015 50.00 1.0 -25.00 31.7 TECHNA-X BHD 0.015 50.00 1,309.1 -40.00 33.2 CN ASIA CORP BHD 0.270 45.95 127,972.3 10.20 66.1 TALAM TRANSFORM BHD 0.020 33.33 53,656.4 33.33 85.9 ICON OFFSHORE BHD 0.085 21.43 34,812.3 -10.53 230.1 TFP SOLUTIONS BHD 0.060 20.00 0.1 -7.69 35.1 ALAM MARITIM RESOURCES BHD 0.030 20.00 169.1 20.00 46.0 MQ TECHNOLOGY BHD 0.030 20.00 300.4 -40.00 41.4 PUC BHD 0.035 16.67 83.0 0.00 63.7 SAUDEE GROUP BHD 0.035 16.67 1,178.2 -22.22 52.1 JIANKUN INTERNATIONAL BHD 0.220 15.79 5,901.1 -12.00 79.3 BOUSTEAD HEAVY INDUSTRIES 0.490 15.29 794.8 18.07 121.7 SC ESTATE BUILDER BHD 0.040 14.29 6,755.0 -11.11 43.0 RAMSSOL GROUP BHD 0.405 14.08 31,430.9 -7.95 99.4 WELLSPIRE HOLDINGS BHD 0.830 13.70 7,494.8 0.00 591.1 INDUSTRONICS BHD 0.045 12.50 447.0 -40.00 31.8 SASBADI HOLDINGS BHD 0.220 10.00 23,171.4 83.33 95.3 PARLO BHD 0.120 9.09 3,656.1 0.00 71.3 EWEIN BHD 1.520 8.57 7,678.4 340.58 458.4 Data as compiled on Aug 22, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) FINTEC GLOBAL BHD 0.005 -50.00 101.2 -50.00 29.6 COMPUGATES HOLDINGS BHD 0.010 -33.33 100 0.00 55 JOE HOLDING BHD 0.010 -33.33 12672 -50.00 30.6 AT SYSTEMATIZATION BHD 0.010 -33.33 7,066.0 -33.33 67.9 XOX BHD 0.015 -25.00 2020 0.00 75.8 LAMBO GROUP BHD 0.020 -20.00 209.6 -63.64 30.8 SMTRACK BHD 0.025 -16.67 774.2 -50.00 30.1 PDZ HOLDINGS BHD 0.030 -14.29 1,221.5 -25.00 17.4 CME GROUP BHD 0.030 -14.29 800.0 0.00 31.0 FITTERS DIVERSIFIED BHD 0.035 -12.50 314.9 -50.00 81.9 ADVANCE INFORMATION 0.175 -10.26 3.3 -22.22 17.1 PERMAJU INDUSTRIES BHD 0.045 -10.00 5,660.5 0.00 87.5 CSH ALLIANCE BHD 0.045 -10.00 1,264.1 12.50 62.2 EA TECHNIQUE M BHD 0.235 -9.62 16,864.3 38.24 124.7 SAPURA ENERGY BHD 0.050 -9.09 4,779.5 42.86 799.0 VIZIONE HOLDINGS BHD 0.050 -9.09 12,802.3 -9.09 102.3 BERTAM ALLIANCE BHD 0.100 -9.09 12.0 53.85 24.8 AVILLION BHD 0.050 -9.09 482.0 -37.50 56.7 HONG SENG CONSOLIDATED BHD 0.055 -8.33 272,078.8 -75.00 281.0 TRANSOCEAN HOLDINGS BHD 1.880 -7.84 9.0 -2.08 122.4 Data as compiled on Aug 22, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) PETRONAS DAGANGAN BHD 22.060 -0.440 831.5 -3.45 21,915.6 FRASER & NEAVE HOLDINGS BHD 25.600 -0.200 105.7 18.63 9,389.5 HAP SENG CONSOLIDATED BHD 3.540 -0.190 8,799.2 -44.69 8,813.4 TRANSOCEAN HOLDINGS BHD 1.880 -0.160 9.0 -2.08 122.4 CARLSBERG BREWERY MALAYSIA 20.500 -0.140 67.9 -10.40 6,267.8 KECK SENG MALAYSIA BHD 4.450 -0.100 56.5 24.30 1,598.9 AYER HOLDINGS BHD 6.900 -0.100 5.0 4.55 516.5 TENAGA NASIONAL BHD 10.060 -0.080 5,022.8 4.47 58,220.6 PIE INDUSTRIAL BHD 2.770 -0.080 341.3 7.19 1,063.8 BINTULU PORT HOLDINGS BHD 5.080 -0.070 10.5 5.83 2,336.8 HONG LEONG CAPITAL BHD 5.380 -0.070 3,215.2 -14.33 1,328.3 BATU KAWAN BHD 21.020 -0.060 4.4 -5.74 8,268.9 APOLLO FOOD HOLDINGS BHD 4.640 -0.060 338.9 20.21 371.2 YNH PROPERTY BHD 4.980 -0.060 102.8 17.73 2,631.9 DKLS INDUSTRIES BHD 2.050 -0.060 0.1 -5.96 190.0 TEO GUAN LEE CORP BHD 1.150 -0.050 5.0 4.55 96.0 YINSON HOLDINGS BHD 2.530 -0.050 456.5 4.12 7,353.9 APB RESOURCES BHD 2.360 -0.050 884 57.33 261.7 RCE CAPITAL BHD 2.350 -0.040 334.7 39.05 1,722.2 SHANGRI-LA HOTELS MALAYSIA 2.530 -0.040 974.7 -26.67 1,113.2 Data as compiled on Aug 22, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) HEXTARTECHNOLOGIES SOLUTIONS 28.180 0.580 8.1 65.18 3,625.3 PANASONIC MANUFACTURING 21.140 0.400 29.6 -7.69 1284.2 UNITED PLANTATIONS BHD 16.000 0.280 612.3 6.59 6636.6 HONG LEONG FINANCIAL GROUP 18.720 0.220 627.8 0.65 21439 ALLIANZ MALAYSIA BHD 16.400 0.140 54.3 15.82 2,918.7 MALAYSIAN PACIFIC INDUSTRIES 26.860 0.120 41 -6.61 5342.4 EWEIN BHD 1.520 0.120 7,678.4 340.58 458.4 PRESS METAL ALUMINIUM HOLDINGS 4.900 0.110 4,191.5 0.41 40,374.1 PETRONAS CHEMICALS GROUP BHD 7.010 0.110 8164.8 -18.49 56080 SCIENTEX BHD 3.860 0.100 849.8 19.88 5987.1 NESTLE MALAYSIA BHD 131.500 0.100 63.2 -6.07 30836.8 MALAYSIA AIRPORTS HOLDINGS 6.900 0.100 2255.8 5.18 11513 WELLSPIRE HOLDINGS BHD 0.830 0.100 7,494.8 0.00 591.1 AIRASIA X BHD 2.430 0.090 10,327.7 326.32 1,086.4 CN ASIA CORP BHD 0.270 0.085 127972.3 10.20 66.1 VITROX CORP BHD 7.860 0.080 1571.7 2.75 7430.2 KLCCP STAPLED GROUP 6.870 0.080 2 2.38 12,402.6 AEON CREDIT SERVICE M BHD 11.600 0.080 32.9 -7.79 2,961.6 TELEKOM MALAYSIA BHD 5.090 0.070 3,383.6 -5.74 19,453.9 SYARIKAT TAKAFUL MALAYSIA 3.660 0.070 892.9 6.40 3,064.5 Data as compiled on Aug 22, 2023 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 34,463.69 -36.97 -0.11 S&P 500 * 4,399.77 30.06 0.69 NASDAQ 100 * 14,936.69 241.85 1.65 FTSE 100 * 7,257.82 37.75 0.52 AUSTRALIA 7,121.61 6.14 0.09 CHINA 3,120.33 27.36 0.88 HONG KONG 17,791.01 167.72 0.95 INDIA 65,220.03 3.94 0.01 INDONESIA 6,916.45 50.42 0.73 JAPAN 31,856.71 291.07 0.92 KOREA 2,515.74 6.94 0.28 PHILIPPINES 6,212.39 -77.88 -1.24 SINGAPORE 3,159.88 5.85 0.19 TAIWAN 16,437.61 56.12 0.34 THAILAND 1,545.60 19.75 1.29 VIETNAM 1,180.49 0.73 0.06 Data as compiled on Aug 22, 2023 * Based on previous day’s closing Source: Bloomberg CPO RM 3,882.0016.00 OIL US$ 84.30-0.16 RM/USD 4.6480 RM/SGD 3.4323 RM/AUD 2.9996 RM/GBP 5.9455 RM/EUR 5.0696