CEOMorningBrief FRIDAY, M AY 1 2 , 2 0 2 3 ISSUE 569/2023 www. theedgemarke ts. com BIDEN PRESSES FOR CHINA CONTACT DESPITE RISK OF LOSING CLOUT p17 HOME: Genting Malaysia to offload Miami unit, instead of land, for US$1.23 bil p4 Lawsuits mount at ACE Holdings as another investor sues for RM8.3 mil p5 Malaysia’s labour demand rises 2.7% y-o-y in 1Q to 8.81 mil jobs p8 WORLD: Yellen says G7 members looking at how to counter China’s ‘economic coercion’ p18 China’s slow consumer inflation, deepening factory gate deflation to test policy p19 HTTPS://PG-MDC.COM/ Report on Page 3. Penang to scale down PSI reclamation project by 49% on PM’s request, says CM
FRIDAY MAY 12, 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] DPM Fadillah: Malaysia to meet EU leaders on EUDR implementation Loke: Local private companies have indicated interest in KL-Singapore HSR project KUALA LUMPUR (May 11): Malaysia will meet leaders of European Union (EU) member states in Brussels, Belgium at the end of this month to ensure that palm oil products exported to the EU are not banned with the implementation of the European Union Deforestation-free Regulation (EUDR). Assuring that palm oil will not be affected by the implementation of the regulation, Deputy Prime Minister Datuk Seri Fadillah Yusof, who is also the Plantation and Commodities minister, said the engagement mission between Malaysia and EU leaders demonstrates the government’s commitment to resolving any issues arising from palm oil. “We hope to receive a good explanation from them and obtain their commitment so that Malaysia will not be rated (seen) as a high-risk country. This should not happen, especially to smallholders,” he said during his Aidilfitri Open House in Sri Satria here on Thursday (May 11). Fadillah said this when asked to comment on the recent statement from the EU Bernama Bernama HOME ambassador to Malaysia Michalis Rokas who said palm oil produced by smallholders under the Federal Land Development Board (Felda) would not be affected by the implementation of the EUDR. He said industry players will also participate in the important mission to find a solution to the palm oil issue so that no irresponsible actions are taken when palm oil products are exported to EU countries. “Therefore, we want to establish a fine relationship to understand each other as we are also committed to complying with environmental regulations and implementing all international standards including for the workers in Malaysia. “This includes establishing the Malaysian Sustainable Palm Oil (MSPO) certification scheme to ensure compliance with all global standards, especially environmental sustainability, and to prevent any further encroachment of permanent forest reserves and so on,” he said. Fadillah said Indonesia will also participate in the mission following the meeting and discussion between its President Joko Widodo (Jokowi) and Prime Minister Datuk Seri Anwar Ibrahim recently. Last Monday, Jokowi was reported to have said that Indonesia and Malaysia should become partners to work together in the production of palm oil for the future of the commodity industry and to confront the current anti-palm oil lobby in the EU. JOHOR BAHRU (May 11): Several private Malaysian companies have expressed interest to the government to implement the Kuala Lumpur-Singapore High-Speed Rail (HSR) project, Minister of Transport Anthony Loke Siew Fook said. The minister said the government, however, is still reviewing the implementation module for the project. He said the matter was also discussed with his Singaporean counterpart S Iswaran, who wanted to know the latest status of the HSR project, during the bilateral meeting between Malaysia and Singapore held here on Thursday (May 11). “There was a discussion about the development of HSR (at the bilateral meeting) and he (Iswaran) asked about its (HSR) status on our side. “I have given feedback that the government’s position at this point is that we welcome the involvement of the private sector to implement this project,” he said at a joint press conference with Iswaran after visiting the Johor Bahru-Singapore Rapid Transit System (RTS) Link project at the Marine Viaduct here on Thursday. He said the government is currently at the stage of gathering feedback and there are several private companies from Malaysia who are interested in implementing the project. “Nevertheless, we need to review the implementation module, funding and so on,” he said. Loke said Malaysia’s stance is to resume the HSR project with Singapore, which was terminated in 2021. “The principle that has been clearly stated by the Malaysian government is that we welcome this project to be resumed but with private funding. That is our stance,” he said. Meanwhile, Iswaran said he had a good discussion with Loke, taking the opportunity to underscore Singapore’s readiness for HSR. “We are ready to study any proposal to restart the HSR project. We are ready to work with the Malaysian government,” he said. On Jan 1, 2021, Malaysia and Singapore announced the termination of the 350-kilometre HSR project as the two countries failed to reach an agreement on changes proposed by Malaysia before the project agreement expired on Dec 31, 2020. On March 8 this year, Loke was reported to have said that Malaysia is open to any proposal to restore the implementation of the HSR project as long as it does not involve funding by the government. He was quoted as saying that, as stated by Prime Minister Datuk Seri Anwar Ibrahim earlier, the government welcomed any proposal from the private sector that wished to continue the mega project. On RTS Link, Loke said the project is on track with a progress level of 36%, including various components such as depots, stations, land lines and marine lines. RTS Link is a four-kilometre-long shuttle service between Singapore at Woodlands North station and Malaysia at Bukit Chagar station here. On the bilateral meeting, Loke said the meeting also discussed the addition of a new ferry service between Johor Bahru and Singapore, as well as Singapore’s request to increase the existing KTM Tebrau shuttle service.
FRIDAY MAY 12, 2023 3 THEEDGE CEO MORNING BRIEF HOME GEORGE TOWN (May 11): Phase 1 of the Gurney Wharf project is expected to be opened to the public in July. State Housing, Local Government, Town and Country Planning Committee chairman Jagdeep Singh Deo said the phase is 85.72% developed, and is expected to be completed by June. “Phase 1 of the project, which involves 27.53 acres (11.14 hectares) of land, will have a playground, skatepark, south vantage point, kiosks, expressway reserve, open car parks and toilets,” he told reporters during his inspection of the project site on Thursday (May 11). Also present in the site visit was newly appointed Penang Island City Council mayor Datuk A Rajendran. Jagdeep said that as of Wednesday, Phase 2 involving 87.82 acres of land was 14.5% developed, and is expected to be completed by the fourth quarter of 2024. He said that Phase 2 will have a hawker centre, north vantage point, water taxi jetty, water garden, beach, broadwalk and more. “Let me give you that commitment. To all Penangites, our green agenda is extremely important. We shall give the utmost priority and the Gurney Wharf is going to be a green lung, and a new icon of Penang in July,” he added. The entire RM200 million Gurney Wharf project is expected to be fully completed by 2025. Phase 1 of Gurney Wharf project expected to open in July GEORGE TOWN (May 11): The Penang government has agreed to scale down the Penang South Island (PSI) reclamation project by 49% by not proceeding with the construction of ‘Island B’ and ‘Island C’. Chief Minister Chow Kon Yeow said this was despite the Environmental Impact Assessment Report (EIA) for the PSI project being approved by the Department of the Environment (DOE), through a letter dated April 11, 2023, covering three islands and involving a total area of 4,500 acres. He said the decision was made in response to Prime Minister Datuk Seri Anwar Ibrahim’s request for the state government to scale down the project. “Silicon Island (Island A), covering 2,300 acres, will be implemented in two phases within 10 to 15 years for reclamation work, while reclamation work for Island B, covering 1,400 acres and Island C (800 acres) will not proceed,” he told a press conference here on Thursday (May 11). PSI involves the development of three artificial islands, with an area of 1,800ha, in the waters off Permatang Damar Laut, near Bayan Lepas. However, the project received objections from the fishing community and environmental non-governmental organisations in the state because it was alleged that the project would damage the marine ecosystem in the area. Chow said it has also been decided that Silicon Island will remain as a light rail transit (LRT) depot site, involving 60 acres, while the Green Tech Park (GTP) will be maintained as an economic catalyst and the Heart of the Island (HOTI) as a new tourism product for the state. Chow said reclamation for the first phase of Silicon Island involving 1,300 acres, including the LRT depot site, which is expected to take seven to 10 years to complete, would not have any impact on the lives of fishermen. The second phase will cover an area of 1,000 acres, he said, adding that reclamation for Silicon Island, including the ‘topside’ part, would take 20 years. He said the scaling down of the project would directly affect only 115 fishermen from Permatang Tepi Laut, compared to 496 people who would be affected by the reclamation for all three islands. “With this latest development, the Social Impact Management Plan (SIMP) scheme for the affected fishermen will be discussed in detail in the fishermen task force committee meeting to be chaired by Deputy Chief Minister I Datuk Ahmad Zakiyuddin Abdul Rahman,” he said. Chow said changes to the project will not result in any loss to the state government or the Project Delivery Partner (PDP) SRS Consortium because both parties had only signed an agreement for Island A. According to SRS Consortium project director Szeto Wai Loong, the cost of reclamation and basic facilities of Silicon Island is expected to be about RM8.5 billion, whereby the company will create land parcels and auction them to the highest bidder. The successful bidder will develop the land, he said. Meanhwhile, Chow said the state government and SRS Consortium will not be involved in the development of the land site. On May 6, Anwar announced that the federal government would allocate additional allocation to help the Penang government expedite the proposed George Town-Bayan Lepas light rail transit (LRT) project. The prime minister also asked the Penang government to scale down the project. Penang to scale down PSI reclamation project by 49% on PM’s request, says CM Bernama Bernama State Housing, Local Government, Town and Country Planning Committee chairman Jagdeep Singh Deo says Phase 1 of the Gurney Wharf project is 85.72% developed, and is expected to be completed by June.
FRIDAY MAY 12, 2023 4 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 11): Economists expect year-on-year (y-o-y) gross domestic product (GDP) growth to have moderated to between 5.2% and 5.7% in the first quarter of 2023 (1Q2023), against 7% in 4Q2022, on the absence of the base effect. Hong Leong Investment Bank (HLIB) expects 1Q2023 GDP growth at 5.2%, following the slower industrial production index (IPI) recorded during the quarter under review. In a note on Thursday (May 11), HLIB expects growth to be weighed down by moderation across all sectors. Analyst Felicia Ling and Nurul Athira Salith said private consumption is expected to remain as the key driver of growth. They maintained their 2023 GDP growth forecast at 4% y-o-y. “Malaysia’s pace of economic expansion is expected to continue moderating going forward, taking into account the absence of the base effect and pent-up demand. “Tighter global credit conditions, weaker global growth and inflationary pressures also continue to pose significant headwinds to trade activity and growth,” the analysts said. The bank also expects a moderation in the manufacturing sector, reflected by a slowdown in the manufacturing IPI in 1Q2023, largely due to slower export-oriented manufacturing activity during the quarter, amid weakening global growth and tepid international demand. Maybank Investment Bank Bhd also expects y-o-y GDP growth to have eased to 5.7% in 1Q2023, projecting a 4% Economists see 1Q GDP growth moderating to 5.2%-5.7% on absence of base effect KUALA LUMPUR (May 11): Genting Malaysia Bhd (GenM) announced that it will dispose of its wholly-owned subsidiary Resorts World Miami LLC (RW Miami) for US$1.23 billion (RM5.47 billion), instead of four parcels of land owned by the subsidiary in Miami. The casino operator revised its divestment plan because purchaser Smart Miami City LLC on May 10 opted to exercise its right to convert the transaction to a 100% purchase of the ownership interests in RW Miami, instead of the land within 10 business days after the effective date. In the latest bourse filing, GenM said that purchaser Smart Miami City LLC may elect to convert the transaction to a purchase of 100% of the ownership interests in RW Miami instead of the Miami Herald Land within ten business days after the conversation date (May 10). “Accordingly, the purchaser (Smart Miami) and RW Miami shall work in good faith to negotiate an amendment to the sale and purchase agreement (SPA) to effect the change in the transaction structure Genting Malaysia to offload Miami unit, instead of land, for US$1.23 bil BY ANIS HAZIM theedgemarkets.com BY PRIYATHARISINY VASU theedgemarkets.com of the proposed disposal to a disposal of 100% of the ownership interests in RW Miami,” it said. GenM said that further details shall be announced once the agreement regarding the amendments to the SPA has been entered into. On April 27, GenM said it wanted to sell four tracts of land, measuring 15.47 acres and held by RW Miami, for US$1.225 billion (RM5.433 billion) to Smart Miami. The deal would have enabled GenM to realise an estimated gain of US$967 million. GenM said in the earlier filing that the cash proceeds generated from the proposed disposal are intended to be utilised for general corporate and investment purposes, including funding future investments as and when they arise. GenM’s share price gained three sen at RM2.71 on Thursday, giving it a market capitalisation of RM16.09 billion. Read also: Ageson’s RM279 mil industrial land disposal called off growth in 2023 against 8.7% last year. Its chief economist Suhaimi Ilias in a note on Thursday said that the downward trend in GDP growth is likely to persist into 2Q2023, taking its cue from the manufacturing purchasing managers index, which stood at 48.8 in April 2023, signalling further softening in manufacturing output. The continued slump in crude palm oil output, which fell 18.2% y-o-y last month, would also contribute to the weaker GDP growth, the bank said. Meanwhile, CGS-CIMB economist Nazmi Idrus expects the economy to have expanded by 5.7% in 1Q2023. “The likely solid 1Q2023 GDP performance, as well as expectations of further labour market recovery, could have been the triggers behind an earlier-than expected rate hike by Bank Negara Malaysia (BNM), which resumed its monetary tightening cycle last week,” the economist said. According to BNM, consumption and investment activities have remained resilient, while improvements in tourist arrivals will further boost tourism-related activities. “Given the likely strength in the economy in 1Q2023, and the fact that BNM’s monetary policy stance remained ‘slightly accommodative’, we maintain our assumption of a 25-basis-point rate hike in the second half of 2023, lifting the overnight policy rate further to 3.25% by end-2023,” he added. The central bank will announce 1Q2023 GDP growth data on Friday. LOW YEN YEING/THE EDGE
FRIDAY MAY 12, 2023 5 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 11): The list of investors who are taking beleaguered ACE Holdings Bhd to court for failing to deliver the investment returns they were promised is growing as another investor has filed a suit against them, seeking almost RM8.3 million from the company. The plaintiff, who wishes to remain unnamed, filed the suit in April against ACE Credit Sdn Bhd — a subsidiary of ACE Holdings — and two of its directors, claiming that she entered into four agreements with the company to invest a total of RM7 million, in the statement of claim sighted by The Edge. The agreements were signed in 2019, and the plaintiff was promised annual returns of 12% on her investment. However, ACE had failed to pay all the returns to the plaintiff, leading her to exercise her rights to early cancellation. According to the statement of claim, ACE does not currently possess a valid moneylending licence as required under the Moneylenders Act 1951. The plaintiff contends that the substance of all four agreements requires ACE to maintain a valid licence during the tenure of the agreements and/or investments given that this formed the basis upon which the investments were sought. She further contends that ACE had committed a material breach of the agreements by allowing the licence to lapse and surrendering it to the Ministry of Local Government Development on the grounds of cessation of business. On March 8, through the plaintiff’s solicitors, Messrs Haris Ibrahim Kandiah Partnership, a notice was sent to ACE, specifying the default and breaches and giving them 14 days to rectify it. The statement claims that ACE did not reply to the notice, which led the plaintiff’s solicitors to send a notice terminating all four agreements on March 24 of this year. Finally on April 24, ACE wrote to Messrs Haris Ibrahim Kandiah Partnership through its directors to say that they were allegedly in the midst of finalising their turn-around and restructuring plans, expecting fresh advances from new partners and at the tail end of negotiations with relevant parties, requesting additional time to sort things out. However, the plaintiff also found out that ACE has been sued by various investors for a return of the investment sum and for failure to pay the investment tarBY TIMOTHY ACHARIAM theedgemarkets.com Lawsuits mount at ACE Holdings as another investor sues for RM8.3 mil get returns where the agreements which form the basis of such suits are identical or almost identical to the four agreements she is pleading. The plaintiff is claiming that the two directors of the company are the controlling mind of the company and are involved in fraudulent activities to cheat investors. She is also seeking for the corporate veil of ACE to be lifted in order to attach liability on the two directors. The plaintiff is also claiming reliefs such as general damages, punitive damages and exemplary damages. Lawyer Eugene Jayaraj, who is acting for the plaintiff told The Edge that ACE and its two directors have yet to enter an appearance. He said that ACE has been served the writ on May 3 and they have until May 16 to respond and enter an appearance. As for the two directors, the lawyers have tried to serve them the writs by personal service three times and were not successful. “We will be applying for substitutes service,” he said. The next case management will be on May 24 before the court to update on service on the two directors. Earlier, ACE Holdings had filed a judicial management petition which is fixed for hearing before High Court judge Ahmad Murad Abdul Aziz on May 17. Judicial management is a corporate rescue mechanism, where companies apply with the High Court to appoint a judicial manager for them when they are unable to pay their debts, creditors or directors. ACE Holdings is facing action from the Securities Commission Malaysia for its recent attempt to take over Apex Equity Holdings Bhd, as well as suits from several investors over its failure to deliver investment returns. The company is seeking for Datuk Robert Teo Keng Tuan from RSM Corporate Restructuring (Malaysia) Sdn Bhd to be appointed as its judicial manager, and to be placed under judicial management for six months. It is also seeking to stay any winding-up proceedings or enforcement, detention or distress levied against the company or its properties, and for no order of winding up of the company to be made during the period. The Edge had previously reported that ACE Group is facing a slew of suits by its investors. ACE Holdings is facing action from the Securities Commission Malaysia for its recent attempt to take over Apex Equity Holdings Bhd, as well as suits from several investors over its failure to deliver investment returns.
FRIDAY MAY 12, 2023 6 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 11): Heineken Malaysia Bhd’s net profit dipped 3.04% to RM109.93 million for the first quarter ended March 31, 2023 (1QFY2023) compared to RM113.38 million posted a year ago, due to higher expenses incurred for promotional and marketing activities. The group’s marketing spend in 1QFY2022 was comparatively lower as it was still recovering from the pandemic’s impact, it said in a bourse filing Thursday (May 11). The brewers’ revenue for 1QFY2023 grew 6% to RM740.22 million from RM698.33 million in 1QFY2022, driven by better sales mix as the group’s premium portfolio grew, as well as cost-driven price increases. The group also attributed its revenue growth to its promotional and marketing spend. Earnings per share fell slightly to 36.39 sen in 1QFY2023, from 37.53 sen in 1QFY2022. No dividend was declared for the current quarter. Heineken managing director Roland Bala said the brewer’s business will remain adaptive to a volatile environment and new market realities. “We take a long-term view to build a sustainable business and will continue to focus on delivering our EverGreen strategy to future proof our business,” he added, referring to the group’s multi-year strategy to strengthen its resilience and ability to adapt to a fast-changing world. Heineken will also remain committed to supporting and working closely with the authorities to address the issue of illicit alcohol holistically, said Roland. Illegal trade and smuggling have caused the government to incur tax revenue losses and pose health hazards to consumers with unregulated illicit alcohol, the group said. In FY2022, its full-year results came in at a record RM412.82 million, 68.03% higher than FY2021’s RM245.68 million, as annual revenue jumped 44.24% to a fresh high of RM2.86 billion from RM1.98 billion. Heineken Malaysia’s share price settled 20 sen or 0.71% higher at RM28.40, giving the group a market capitalisation of RM8.58 billion. Read also: Sentral REIT’s 1Q net property income falls 4% Heineken Malaysia’s 1Q profit slips on higher promotional spend KUALA LUMPUR (May 11): Greatech Technology Bhd’s net profit slipped 3.71% to RM27.86 million or 2.22 sen per share, in the first quarter ended March 31, 2023 (1QFY2023) from RM28.93 million or 2.31 sen per share a year earlier although revenue rose 11.28%. The lower net profit was mainly due to the higher net foreign exchange (forex) loss of RM5.39 million; net loss on impairment of contract assets and trade receivables of RM2.02 million and the increase in employees’ compensation and long-term incentive plan expense of RM3.03 million. The automation solution provider registered RM113.68 million revenue for the quarter, up from RM102.16 million in 1QFY2022 driven by the execution of projects related to the electromobility industry. Compared with 4QFY2022, Greatech’s net profit fell 24.35% from RM36.82 million as revenue dropped 32.76% from RM169.11 million amid lower revenue contribution from production line systems. The projects have yet to achieve the contracted billing milestone for revenue recognition in 1QFY2023, according to the group. Despite uncertainty of the global economy due to financial sector turmoil, high inflation and rising geopolitical tensions, Greatech said it saw clear signs of increased activity in the markets in which the group operates, driven by ambitious climate targets and decarbonisation efforts from the US and other governments worldwide. Demand for renewable and clean energy, fleet vehicle decarbonization and sustainability-related solutions is expected to continue to remain positive supported by the recently signed US Inflation Reduction Act and this has provided niche opportunities for the group, it said. “The group is mindful of macroeconomic developments but remains confident that the group is making good progress in our financial targets for 2023,” the group told Bursa Malaysia. According to Greatech, it has allocated about RM227 million for its targeted capital expenditure investment in 2023 to support operating and growth requirements, which includes a new fourth factory in Batu Kawan Industrial Park in Penang Greatech’s 1Q profit down 4% despite higher revenue; appoints new director with a built-up of approximately 600,000 square feet, to capture the growth potential in its markets around the world. Its total order book stood at approximately RM650 million as of May 2, which is expected to last until the first half of 2024. Group names Ooi Boon Chye as new director In a separate filing, Greatech announced the appointment of Datuk Ooi Boon Chye, the former senior vice president of global operations at Broadcom Limited (previously known as Avago Technologies) as its new independent and non-executive director. The appointment will take effect next Monday (May 15). From November 2003 to January 2009, Ooi served as senior vice president of worldwide operations and business process reengineering at Xilinx Inc. He also has more than 25 years of experience at Intel Corp. “He worked in Intel Penang from 1976 to 1980 and from 1984 to 1986. He was also the general Manager for Intel Barbados from 1980 to 1983. He served a number of operational management positions such as assembly operations manager, plant manager and general manager,” Greatech explained. Shares of Greatech closed six sen or 3.64% lower at RM4.23 on Thursday, giving it a market value of RM5.3 billion. BY SYAFIQAH SALIM theedgemarkets.com BY PRIYATHARISINY VASU theedgemarkets.com REUTERS
FRIDAY MAY 12, 2023 7 THEEDGE CEO MORNING BRIEF
FRIDAY MAY 12, 2023 8 THEEDGE CEO MORNING BRIEF HOME In Malaysia, migrants say they are in limbo after promised jobs fall through PUTRAJAYA (May 11): Malaysia’s labour demand continued its upward trend in the first quarter of 2023 (1Q2023) with total jobs rising 2.7% to 8.81 million, from 8.57 million in the same quarter last year, the Department of Statistics Malaysia reported. Total jobs increased 233,700 year-onyear (y-o-y), the highest quarterly increase since 2018, said chief statistician Datuk Sri Dr Mohd Uzir Mahidin in a statement on Thursday (May 11). According to him, all economic sectors grew this quarter, with the manufacturing sector recording the highest growth at 3.8%, followed by mining and quarrying at 3.4% and agriculture at 2.9%. “This positive trend was an indication of the country’s gradual economic recovery, bolstered by various government initiatives such as job placement programmes, wage subsidies and tax incentives,” he said. The positive trend is mirrored in filled jobs, which edged up by 2.7%, recording 8.61 million jobs this quarter (1Q2022: 8.39 million). Mohd Uzir surmised that “this was likely underpinned by the government’s initiative on easing the foreign workers hiring rules through Foreign Worker Recruitment Relaxation Plan and Illegal Immigrant Recalibration Plan 2.0”. In terms of composition, filled jobs were concentrated in the services sector, while trailing behind were the manufacturing and construction sectors. “From the viewpoint of skill category, filled jobs were largely in the semi-skilled category, recording 5.39 million jobs or equivalent to 62.6%, followed by the skilled category with 2.15 million jobs (24.9%) and low-skilled [with] 1.08 million jobs (12.5%),” he added. Although the number of filled jobs have increased, job vacancies have also risen by 4.5% to 192,600, predominantly in the manufacturing sector accounting for 55.9% of vacancies, followed by agriculture (16.5%) and service (15.3%). Malaysia’s labour demand rises 2.7% y-o-y in 1Q to 8.81 mil jobs BY REYANNA NG theedgemarkets.com BY A ANANTHALAKSHMI & ROZANNA LATIFF Reuters The rate of filled jobs stood at 97.8% and job vacancies at 2.2%. Reflecting Malaysia’s economic recovery, more jobs were recorded to meet the needs of the industry, said Mohd Uzir. “Across the economic activity, the majority of the jobs created were in the services sector with a share of 50.8% (16,100) mainly in the wholesale and retail trade sub-sector with 8,700 (27.3%). In the meantime, the manufacturing sector created 10,500 new jobs, with a share of 33.2% mostly in the sub-sector of electrical, electronic, and optical products (11.0%; 3,500),” he added. “Despite the expectation that the economic growth momentum would lose steam this year amid global recessionary risks, business activities in Malaysia have continued to grow, contributing to more job opportunities, hence strengthening Malaysia’s labour market. “Labour market position is also anticipated to remain stable and expanding in the upcoming months led by the current development of economic activity in Malaysia.” The statistics were published in the report of Employment Statistics, First Quarter 2023 based on the Employment Survey conducted on registered businesses in the private sector. CONTINUES ON PAGE 9 meant to be upgraded to a work permit, but never was. Because their legal status is unclear, they are afraid to leave the premises, the workers told Reuters at the facility where they are staying. Many say recruitment agents took their passports and continue to promise them jobs. “We are all depressed and helpless. We already paid a huge amount for the job. How can I pay that back if I do not have a job?” a Nepali migrant at the dormitory told Reuters. The 23-year-old, who declined to be KUALA LUMPUR (May 11): Stranded without work for months, hundreds of South Asian migrants in Malaysia say they are losing hope after failing to find jobs promised to them by recruitment agents in exchange for thousands of dollars in fees. At a students’ dormitory about 40 km (25 miles) from the capital, Kuala Lumpur, about 500 migrants — mostly young men from Nepal and Bangladesh who had arrived in Malaysia since December — spend their days in crowded rooms or at an open-air cafeteria. They say they arrived in the country on a three-month work visa that was identified for fear of backlash from recruitment agents, signed a two-year contract with a Malaysian cleaning company but has not started work. He said he, like others there, had borrowed 300,000 Nepali rupees (RM10,259) to pay an agent for the job. He was promised a monthly salary of RM2,062 per month. The workers at the facility all tell similar stories: upon arriving in Malaysia, recruiting agencies told them no jobs were immediately available and took them to accommodation facilities to wait. They were then told they would eventually be employed; in the meantime, they must pay for their own food without a salary. It is unclear how the workers ended up without jobs despite arriving in Malaysia with employment contracts and promises that their temporary work visas would become permanent on arrival. Malaysia last month launched an investigation. Puncak Jupiter Management Services and Star Domain Resources, listed as employers on some of the workers’ travel documents, did not respond to requests for comment. Amial International, one of the recruitment agencies the workers used, did not respond to requests for comment. REUTERS South Asian migrant workers stand on a bridge in Sepang May 2, 2023.
FRIDAY MAY 12, 2023 9 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 11): Bahvest Resources Bhd chief executive officer Datuk Lo Fui Ming has ceased to become a substantial shareholder of the company after offloading some 9.3% or 115.19 million shares in the open market. According to bourse filings, Lo disposed of the shares on Tuesday (May 9), when the stock plunged 29% to 13.5 sen, before falling by a further 15% a day after. The Sabah-based gold mining company was traded 1.5 sen or 13% higher at 13 sen as at Thursday’s noon market break, valuing it at RM161.17 million. The stock was also the third most actively traded counter as at the time of writing, with 88.51 million shares traded. After the latest disposal, Lo’s ownership dropped to 3.89%, from 13.18% last week, according to a filing with Bursa Malaysia on Thursday. Lo has been cutting down his shareholding since the company received an extraordinary general meeting (EGM) requisition from a group of shareholders to remove him — and his son Lo Teck Yong and non-executive chairman Datuk Seri Dr Md Kamal Bilal — from the board. The group of five shareholders, consisting of Datuk Freddy Lim, Yong Fen Yoo, Chong Tzu Khen, Marlex Trading Ltd and Innosabah Capital Holdings Sdn Bhd, collectively owns more than 10% of Bahvest, and has requested for an EGM on May 25. Bahvest CEO ceases to be substantial shareholder after selling 9.3% stake KUALA LUMPUR (May 11): Yinson Production (YP), the offshore production business unit of Yinson Holdings Bhd, together with its project partner Sumitomo Corp announced that floating production, storage and offloading (FPSO) Anna Nery achieved first oil on Sunday (May 7), following a successful 72-hour testing. FPSO Anna Nery is YP’s first operational asset in Brazil. This marks the commencement of the firm charter for a period of 25 years, until 2048, according to Yinson’s statement on Thursday. FPSO Anna Nery is operating on the Marlim field in the eastern part of the Campos Basin, about 150km offshore Rio de Janeiro. “The delivery of the asset is a laudable achievement, amid challenges brought about by the Covid-19 pandemic and disruptions to the global supply chain,” said Yinson. Letters of intent for the FPSO Anna Nery project were awarded by Petróleo Brasileiro SA (Petrobras) to YP in October 2019, with Sumitomo holding a 25% stake in the project. Sumitomo’s participation follows the signing of a long-term and binding memorandum of understanding between the two parties in April 2018 to jointly pursue and collaborate in the leasing and operation of FPSO and FSO projects worldwide. CGS-CIMB Research in a note in December wrote that the FPSO Anna Nery project is expected to help Yinson to deliver strong profit growth in the financial year ending Jan 31, 2024 (FY2024). Yinson posted a 46% rise in FY2023 net profit to RM586 million, from RM401 million a year earlier, mainly due to higher contributions from the group’s FPSO operations and engineering, procurement, construction, installation and commissioning (EPCIC) business activities. Revenue grew 75% to RM6.32 billion from RM3.61 billion. Its total dividend payout stood at two sen for FY2023, lower than six sen for FY2022. At Thursday’s noon break, Yinson’s share price finished up one sen or 0.39% at RM2.56, giving it a market capitalisation of RM7.84 billion. Yinson’s FPSO Anna Nery project in Brazil achieves first oil BY SYAFIQAH SALIM theedgemarkets.com BY CHESTER TAY theedgemarkets.com Read also: Utarasama Marine ceases to be substantial shareholder in Destini Malaysia’s Human Resources Ministry and the labour department did not immediately respond to requests for comment. The ministry has promised to find jobs for a separate group of 226 stranded workers from Bangladesh and Nepal. Migrants form the backbone of Malaysia’s export-reliant economy, making up about 15% of the country’s 15 million workforce. Malaysian companies have faced US bans in recent years over use of forced labour. Rights activists say migrant workers have been at greater risk after Malaysia eased recruitment processes this year in a bid to fill a 1.2 million job shortage across its plantation, manufacturing and construction industries. “It’s a bigger problem now,” said Adrian Pereira, the executive director of migrant rights’ group North South Initiative, adding that his team had received reports of about 1,200 other workers across Malaysia caught in a similar plight. The Bangladesh embassy in Kuala Lumpur last month called for more transparency by Malaysia to prevent its citizens from being cheated of jobs. A Bangladeshi official, speaking on condition of anonymity because of the sensitivity of the situation, told Reuters a “few hundred” of its citizens were stuck in Malaysia without jobs. The Nepal embassy has also said it received such complaints. At the facility visited by Reuters, the migrants lived four to six in small rooms with bunk beds and one shared bathroom. Two workers — Nepali citizens aged 43 and 46 — died by suicide between February and April at the facility, the Nepalese embassy in Kuala Lumpur said, citing reports from the Malaysian police and hospitals. Reuters could not determine why the two men killed themselves. Without income, the migrants find it difficult to buy food and pay back loans back home. “We still don’t know whether we will get a job or not. The agent keeps asking us to wait... it’s been three months,” one Bangladeshi worker said. FROM PAGE 8
FRIDAY MAY 12, 2023 10 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 11): Home improvement retailer Mr DIY Group (M) Bhd’s net profit rose 27.13% to RM127.77 million for the first quarter ended March 31, 2023 (1QFY2023) from RM100.5 million a year earlier (1QFY2022), thanks to higher revenue and lower freight costs, which boosted its gross profit. Quarterly revenue climbed 15.6% to RM1.05 billion from RM905.16 million, driven by growth in same-store sales as well as contribution from new stores, its bourse filing showed. The number of stores grew 18.8% year-on-year (y-o-y) to 1,125, which led to a corresponding increase in total transactions, which grew 18.1% to 32.8 million in 1QFY2023, its bourse filing showed. The group’s gross profit rose 30.6% y-o-y to RM463.3 million, with a profit margin of 44.3% or 5.1 percentage points higher y-o-y lifted also by the impact of a price adjustment exercise it undertook in 3QFY2022, the group’s bourse filing showed. Earnings per share improved to 1.35 sen from 1.07 sen. A first interim dividend of 0.6 sen per share or about RM56.6 million — to be paid on June 23 — equivalent to 44.3% of its net earnings, was announced. The group operates in both Malaysia and Brunei and both locations reported higher revenues and net profits. Its Malaysian business contributed the bulk of its revenue at RM1.04 billion in 1QFY2023, up from RM899.26 million a year earlier. Net profit from the Malaysian segment stood at RM125.43 million from RM99.2 million. Its Bruneian segment’s revenue about doubled to RM11.08 million from RM5.9 million previously, raising net profit to RM2.52 million from RM1.3 million. Chief executive officer Adrian Ong said the latest set of results highlight the group’s ability to deliver sustainable growth, underpinned by its value for money offerings, despite a challenging environment and inflationary pressures. “Despite operating cost pressures, we continue to record improvements in our operating margins driven by earlier price increases put through during 3QFY2022 Mr DIY’s 1Q earnings jump 27% on higher revenue and lower freight costs; pays 0.6 sen dividend KUALA LUMPUR (May 11): Bertam Alliance Bhd said its external auditor has expressed its unqualified opinion with material uncertainty related to the group’s ability to continue as a going concern, with regards to its audited financial statements for the financial year ended Dec 31, 2022 (FY2022). Messrs PKF highlighted that Bertam Alliance incurred negative operating cash flows of RM1.47 million during FY2022 and its current liabilities has exceeded its current assets by RM17.09 million, the property developer said in a bourse filing on Thursday (May 11). Bertam Alliance said it is taking measures to mitigate the material uncertainty on going concern within the next 12 months. It said that Mercury Securities Sdn Bhd, on behalf of the Bertam Alliance board, had submitted an application in regards to its regularisation plan on March 30 last year and submitted a revised application on Feb 21 this year. As of now, Bertam Alliance said the application is pending approval from Bursa Securities. Messrs PKF had also previously expressed its unqualified opinion with material uncertainty related to going concern in Bertam Alliance’s audited financial statements for FY2021. Then, PKF said Bertam Alliance incurred a net loss of RM4.83 million and negative operating cash flows of RM3.18 million during FY2021, and its current liabilities exceeded its current assets by RM32.25 million. At that time, Bertam Alliance said it had announced a proposed regularisation Auditor flags material uncertainty over Bertam Alliance’s ability to continue as going concern BY HAILEY CHUNG theedgemarkets.com BY SUFI MUHAMAD theedgemarkets.com plan which entails proposed shares issuance, whereby the company entered into conditional subscription agreements with subscribers Richard Ling Do Nyean and Law Ngia Meng for the proposed issuance of 74.43 million new ordinary shares in Bertam Alliance. The group said the proposed regularisation plan also included proposed renounceable rights issue of up to 161.27 million new Bertam Alliance shares on the basis of one rights share for every two existing shares held, together with up to 161.27 million free detachable warrants in Bertam Alliance on the basis of one warrant for every one rights share. Bertam Alliance was classified as a Practice Note 17 (PN17) company on April 4, 2018 after Bursa rejected its application for a waiver after taking into consideration the winding-up order against its wholly-owned unit Bertam Development Sdn Bhd, which accounts for at least half of the company’s total assets. Shares of Bertam Alliance have closed unchanged at seven sen a piece since Monday (May 8), valuing the group at RM17.37 million. Read also: Pentamaster posts mildly stronger 1Q profit as factory automation business lifts as well as lower freight costs which have normalised mainly due to the improvement in the global supply/demand situation for containers and vessels. Should these conditions prevail, we expect to see the full benefit of it in FY2023,” Ong said. The group also sees the prevailing inflationary environment as one that puts it in “a good position to benefit from the strong demand for our affordable, everyday items”, he said. “The more favourable freight environment also favours a better performance going forward.” The group plans to keep investing in sustainable growth through a measured store expansion strategy, innovations in store formats that suit market needs, while continuing to provide its customers with value, convenience and a wide range of products, he added. The home improvement retailer targets to open 180 new stores across all its brands this year, to raise its total stores to over 1,200, and further cement its position as the country’s largest home improvement retailer. Mr DIY’s share price closed unchanged at RM1.59 on Thursday (May 11), giving the group a market capitalisation of RM15 billion.
FRIDAY MAY 12, 2023 11 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 11): DXN Holdings Bhd announced that its initial price offering (IPO) was oversubscribed by 3.20 times by the Malaysian public, ahead of its listing on the Main Market of Bursa Malaysia on May 19. In a statement, the group said a total of 12,146 applications for 420.12 million new shares were received for the 100 million made available to the Malaysian public. Meanwhile, a total of 4,765 applications for 92.93 million new shares were received, representing an oversubscription rate of 0.86 times. On the other hand, for the non-Bumiputera portion, a total of 7,381 applications for 327.19 million new shares were received, representing an oversubscription rate of 5.54 times. Additionally, “the 60 million issue shares made available for application by the directors of DXN, eligible employees of the group and persons who have contributed Main Market returnee DXN’s IPO oversubscribed by 3.2 times MACC insists every action taken in accordance with the law, not politically motivated KUALA LUMPUR (May 11): Analysts remain positive on Swift Haulage Bhd’s prospects for the financial year ending Dec 31, 2023 (FY2023), with target prices (TPs) ranging from 90 sen to 97 sen, despite a decline in the company’s first-quarter (1QFY2023) earnings. In a note on Thursday (May 11), MIDF Research maintained its “buy” call, with an unchanged TP of 90 sen for Swift Haulage, as it expects revenue growth to be supported by full-year contributions of new warehouses, an increase in the number of land transportation trips, and higher transportation rates. The research house also expects an improvement in margins, as Swift’s management previously stated their intention to sell two pieces of unutilised land in 2QFY2023, of which the net proceeds will be used to pare down borrowings. MIDF’s unchanged TP of 90 sen owes to the stock trading at a 51% discount to the sector’s five-year historical mean. Meanwhile, Kenanga Research maintained its “outperform” call on the stock, but trimmed its TP by 3% to 97 sen (from RM1), in a note released on Thursday, considering that Swift Haulage’s warehouses are still in expansion mode across Malaysia, coupled with a green logistics hub that is expected to be completed in 2028, with its first phase in 2025. Kenanga cut its TP to 97 sen after rolling forward the valuation base year to FY2024, along with an unchanged price-earnings ratio of 14 times. The decisions of both research houses took into account the decline in Swift Haulage’s net profit to RM10.13 million for 1QFY2023, compared with RM14.31 million for the same period last year, accredited to higher finance costs and overhead expenses. However, quarterly revenue grew 5.66% to RM169.4 million, from RM160.3 million a year earlier, primarily driven by land transportation through fleet expansion and the warehousing segment. At the time of writing on Thursday, Swift Haulage was unchanged at 47 sen a share, with a market capitalisation of RM413.85 million. Lower 1Q earnings didn’t dent analysts’ positivity on Swift Haulage’s prospects BY REYANNA NG theedgemarkets.com BY REYANNA NG theedgemarkets.com Bernama to the success of the group have been fully subscribed”, the group added. As for the institutional offering, the joint bookrunners have confirmed that the 772.68 million shares offered to Malaysian and foreign institutional and selected investors, including Bumiputera investors approved by the Ministry of Investment, Trade and Industry, have all been taken up. Under the listing exercise, DXN aims to raise RM121.6 million from its IPO of 160 million new shares at an issue price of 70 sen per share. Of the RM121.6 million raised, RM80 million or 65.8% has been earmarked for repayment of bank borrowings, followed by RM17.51 million (14.4%) for working capital, and RM24.09 million (19.8%) for listing expenses. DXN is involved in sales of health-oriented and wellness consumer products. Previously listed on the Main Market in 2003, it was delisted in December 2011 after being privatised by founder Datuk Lim Siow Jin. Principal adviser Maybank Investment Bank Bhd, together with CIMB Investment Bank Bhd, are the joint global coordinators, joint bookrunners, joint managing underwriters and joint underwriters for the IPO. Another joint underwriter is RHB Investment Bank Bhd, who is also a joint bookrunner for the IPO with CLSA Ltd and CLSA Securities Malaysia Sdn Bhd. The latter two are also joint global coordinators for the IPO. The notices of allotment will be mailed to all successful applicants by May 19, the group added. PUTRAJAYA (May 11): The Malaysian Anti-Corruption Commission (MACC) on Thursday (May 11) affirmed that every action it takes — whether during the investigation process or after charges are filed — is in accordance with the provisions of the law based on the principles of independence, transparency and professionalism, and is never aimed at pressuring any individual for political reasons. Responding to a former minister’s claim that the MACC deliberately held an investigation to defame him, the MACC said the statement was untrue and had tarnished its image. Yesterday, former home minister Datuk Seri Hamzah Zainudin alleged that the case involving businessman Sim Choo Thiam, which he was also dragged into, was clearly aimed at damaging the good name of Bersatu and Perikatan Nasional (PN). Hamzah also confirmed that he was called by the MACC on Wednesday to record his statement in connection with a case involving a businessman at the Kuala Lumpur Sessions Court on the same day. “MACC would like to emphasise that all investigations are based on information and authentic evidence obtained by the commission. “The investigation papers that have been completed with elements of offences found under the MACC Act 2009 and other related acts are then referred to the Attorney General’s Chambers for proper study and consideration,” said the commission. Read also: MACC chief commissioner ready to meet Loke over ‘ignored’ misconduct reports
FRIDAY MAY 12, 2023 12 THEEDGE CEO MORNING BRIEF HOME NEWS IN BRIEF BDB bags RM204 mil state road maintenance contract in Kedah KUALA LUMPUR (May 11): Bina Darulaman Bhd’s (BDB) unit has secured a state road maintenance contract worth RM204 million from the Kedah state government. BDB’s wholly-owned subsidiary BDB Infra Sdn Bhd (BDB Infra) will undertake the project that will run for a period of 36 months from May 2023 to May 2026, the company said in a filing to Bursa Malaysia on Thursday (May 11). The maintenance work will cover zone one, which includes the districts of Kota Setar, Padang Terap/Pokok Sena, Kubang Pasu, Pendang, Yan and Sik. BDB group executive director Raja Shahreen Raja Othman said this project is expected to have a positive impact on the company’s earnings per share for the financial period of 2023 to 2026. — by Priyatharisiny Vasu Uzma bags RM45 mil O&G support job in Thailand KUALA LUMPUR (May 11): Uzma Bhd has been awarded a RM45 million contract to supply coil tubing equipment and services in the Gulf of Thailand. In a bourse filing on Thursday (May 11), the oil and gas (O&G) services company said the job was accepted by its wholly-owned subsidiary MMSVS Group Holding Co Ltd from Canada-based upstream O&G company Valeura Energy Inc. The contract spans a duration of three years — with a two-year extension option — effective from May 5, 2023, according to Uzma. The company added that the contract is expected to contribute positively towards its earnings and net assets per share for the financial year ending June 30, 2023 (FY2023), and onwards until the contract’s expiry. — by Izzul Ikram Favelle Favco clinches three tower crane contracts worth RM84.9 mil KUALA LUMPUR (May 11): Favelle Favco Bhd (FFB) has secured three contracts for the supply of tower cranes worth a total of RM84.9 million. The contracts, to be delivered by the second quarter of next year, were awarded to its whollyowned subsidiaries Kroll Cranes A/S and Favelle Favco Cranes Pty Limited. The names of the clients are G A Caelli Holdings Trust, Aarsleff BIZ Sp. z o.o. and Afcons Infrastructure Ltd, the crane manufacturer told Bursa Malaysia on Thursday (May 11). “The above contracts are expected to contribute positively to the earnings and net assets of FFB for the financial year ending Dec 31, 2023 and beyond,” it added. — by Syafiqah Salim LRT service at six stations to resume on Friday KUALA LUMPUR (May 11): Operations at six Light Rail Transit (LRT) stations on the Ampang-Sri Petaling Line, involving the Bandaraya, Sultan Ismail, PWTC, Titiwangsa, Sentul and Sentul Timur Stations, will be reactivated at 6am on Friday (May 12). Rapid Rail Sdn Bhd, in a statement on Thursday, said that the temporary repair work (first phase) of the structural and runway damage near the Bandaraya LRT Station had been completed. “The trains that need to undergo maintenance have been brought to the LRT depot in Ampang, and replacement trains will be used for this service. “With the reopening of these stations, the LRT 11, 13 and 14 bus services will be terminated,” it said. Operations at the six LRT stations have been suspended since April 2, because the trains used no longer meet the operational criteria, and have to be taken out of service for safety reasons. This was following the structural and runway damage near the Bandaraya LRT Station, which resulted in trains not being able to return to the Ampang LRT depot to undergo maintenance works since Jan 27. According to Rapid Rail, the comprehensive repair work (second phase) of the track structure is expected to be fully completed by mid-October, depending on the evaluation and approval from the authorities involved. — Bernama Reneuco inks MOA to explore green energy biz in Perak KUALA LUMPUR (May 11): Reneuco Bhd (formerly known as KPower Bhd) announced it has entered into a memorandum of agreement (MOA) with Pengurusan Murni Sdn Bhd (PMSB), a wholly-owned subsidiary of Perak Industrial Resources Sdn Bhd (PIRSB), and Aero Line Facilities & Engineering Services Sdn Bhd (ALFES) on Wednesday (May 10), to explore a collaboration into a green energy business in Perak, according to a filing to Bursa Malaysia on Thursday. The venture includes, but is not limited to, awarding Reneuco and ALFES with a contract to supply smart solar LED lighting to PMSB and PIRSB for a smart solar project. PIRSB is a wholly-owned subsidiary of Perbadan Kemajuan Negeri Perak, a state economic development corporation primarily based in Perak and engages principally in energy related businesses, including green energy. Meanwhile, ALFES is primarily engaged in the construction of engineering projects. “Through the MOA, Reneuco would be in good stead to assist the Malaysia government and state agencies to further their green energy agenda be it through project management consultancy or supply of green energy technology and products. The MOA also paves the way for Reneuco to further explore the application of smart street lighting throughout the Asean region.” it described. — by Reyanna Ng ZAHID IZZANI/THE EDGE
FRIDAY MAY 12, 2023 13 THEEDGE CEO MORNING BRIEF With a rapidly ageing population and longer life expectancy, access to basic medical services and support is the foundation for building a vibrant and well-balanced society. This has inspired “Sunsuria Care”, a collaborative platform for Sunsuria Berhad’s community driven initiatives. Sunsuria Care Hub is one of the first initiatives with the aim to provide access to basic healthcare, starting with residents of Sunsuria City. The common concerns among Malaysians boiled down to three things: housing, geriatric care, and the rising cost of healthcare. To help mitigate some of these concerns, Sunsuria Berhad provides accessibility to basic healthcare needs that is people centric. Hence, making basic medical support and services an integral part of the community service framework. This holistic and proactive approach strengthens the community resident’s health, making the community care service system the first line of defence in protecting public health. Sunsuria Berhad’s commitment to create a sustainable multigenerational living environment is based on the philosophy of “Building Today, Creating Tomorrow”. This means building a well-balanced, integrated township where the residents and businesses thrive in an active, vibrant, and healthy environment. Healthcare services within reach Sunsuria Berhad is proud to launch the Care Hub where the underlying foundation is to create a living environment that aims at integrating healthcare access for Sunsuria’s multigenerational residents. This is the first-of-its-kind comprehensive platform rolled out by Sunsuria Berhad. The platform bridges the gap between the suburban community’s need for healthcare support that are integrated with rapid urban development. Sunsuria Berhad rolled out the maiden project in the company’s flagship development Sunsuria City, a township that spans across 525 acres of land, servicing its community. Opened daily, including weekends and public holidays, the Sunsuria Care Hub will be managed by a doctor, assisted by two trained nurses. The trained nurses are stationed to provide complimentary first-aid assistance, vital sign check-ups and general health advice. When needed, Sunsuria City’s community could engage the nurses for home care nursing services at a minimal fee. The care hub’s nurses will facilitate the township’s residents in obtaining basic health advice services either face-to-face or via phone call and WhatsApp. Medical equipment such as vital sign detector, wheelchairs, crutches, walkers, glucometers, breast pump, etc. are also available for short or long-term rent. The nursing staff will also guide and educate the users on the correct usage of the equipment and monitor the progress of their health at an affordable rate. The aim is to help families reduce their basic healthcare expenses and support the needs of the different generations within Sunsuria City. The Sunsuria Care Hub will also host health talks and workshops facilitated by doctors and certified professionals on common health topics, as well as cardiopulmonary resuscitation (CPR) and first aid demonstrations. The service is expected to expand into medical clinics by the end of 2023 to provide Sunsuria City’s residents access to primary healthcare support. A solid assurance in caring for the people’s health Tan Sri Ter Leong Yap, Executive Chairman of Sunsuria Berhad, Audrey Ooi, Chief Executive Officer of Sunsuria Healthcare, and Dr. Diana Tan, the Director of Sunsuria Care Hub jointly presided over the launch ceremony of the nursing station earlier, marking a new milestone where the Company leads a new era in the healthcare industry. Sunsuria Berhad will be adding senior-friendly amenities such as designated nursing rooms in common areas, nursing care suites, and wheelchair-friendly features, i.e., mini-ramps, stretcher lifts, wider doorways, and bathroom grab bars in future developments. The group hopes that the products and services provided will be inclusive, accessible, and convenient while catering to the needs of the community. For more details about Sunsuria Care, please visit their Facebook page at Sunsuria Care and website: www.sunsuria.com/concierge/ sunsuria-care Sunsuria Berhad pioneers the Sunsuria Care Hub to provide basic healthcare support for its residents Sunsuria Bhd executive chairman Tan Sri Ter Leong Yap (centre) launching the first community nursing station in Sunsuria City. On the left is Sunsuria Care director Dr Diana Tan and on the right is Sunsuria Healthcare CEO Audrey Ooi. The nurses at the community nursing station are ever ready to provide health assessments and relevant advice to the community.
FRIDAY MAY 12, 2023 14 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 11): The 1Malaysia Development Bhd-Tanore (1MDB-Tanore) trial of Datuk Seri Najib Razak at the High Court here was vacated again on Thursday (May 11), as the former prime minister was still down with diarrhoea and dehydration. The trial is scheduled to resume on June 21. The prosecution in the trial called Hospital Kuala Lumpur’s clinical specialist Dr Mohd Fadhli Zil Ikram Karim, who was attending to Najib, to testify on his condition. Najib has been admitted to the hospital since Tuesday. Fadhli said when he made his rounds at 7.20am on Thursday, Najib was still complaining of diarrhoea. “At this stage we surmised that it was active diarrhoea. When you have this, we have to check for dehydration, and tests show that he has dehydration. We think he has high risk of low blood pressure. We need to keep him on saline drips and monitor his vitals every two hours,” he said in his testimony before judge Datuk Collin Lawrence Sequerah, adding that Najib was issued a medical certificate as he was unfit to attend court proceedings. He then produced the medical certificate in court and submitted it to the judge. Najib’s lawyer Tan Sri Muhammad Shafee Abdullah then took over the questioning. Shafee asked the doctor if Najib was fit to attend court proceedings on Wednesday, to which Fadhli replied in the affirmative. Fadhli also said that if Najib is dehydrated, he could suffer from fainting spells. Shafee: Yesterday (Wednesday) it was thought that he was ok to be sent to court today (Thursday)? Fadli:Yes, that was yesterday’s evaluation. Najib’s 1MDBTanore trial vacated again, as ex-PM still stricken with diarrhoea KUALA LUMPUR (May 11): The trial for Datin Seri Rosmah Mansor’s RM7.1 million money laundering and tax evasion case is set to begin on Friday (May 12). The wife of incarcerated former prime minister Datuk Seri Najib Razak will be in the dock for her second criminal trial following her conviction in the graft trial pertaining to a solar hybrid project for rural schools in Sarawak in September last year. It was reported that Rosmah had sent a letter of representation earlier this month regarding this trial. However, her counsels have said that there has yet to be a reply from the Attorney General’s Chambers — the public prosecutor on this. A letter of representation is usually sent by lawyers seeking to reduce or withdraw the charges against the accused. About 15 trial dates between May and September have been set, and the prosecution has indicated that it intends to call 13 witnesses. High Court judge K Muniandy will preside over the trial. He replaces judge Mohamed Zaini Mazlan, who was elevated to the Court of Appeal in January. Trial delayed several times Rosmah’s second criminal trial has been delayed several times as she had filed applications to recuse Zaini and disqualify the lead prosecutor, the late Datuk Seri Gopal Sri Ram, in this matter. She has since withdrawn her related appeal to recuse Zaini, given his elevation. The defence has also withdrawn the application to disqualify Sri Ram, who died in late January due to a lung infection. Zaini was the judge who presided over Rosmah’s first criminal trial on graft charges over a solar hybrid project involving 369 rural schools in Sarawak. In September last year, Rosmah was found guilty of all three graft charges, sentenced to 10 years in jail, and fined a whopping RM970 million. Rosmah’s second criminal trial to begin on Friday BY TARANI PALANI & HAFIZ YATIM theedgemarkets.com BY TIMOTHY ACHARIAM theedgemarkets.com A stay was granted, pending the disposal of her appeal, which is slated to be heard in July this year. In this trial, Rosmah is represented by Datuk Geethan Ram Vincent, Datuk Firoz Hussein Ahmad Jamaluddin and Mohd Reza Rahim. Deputy public prosecutors Kamal Bahrin Omar, Ahmad Akram Gharib, Mohd Mustafa P Kunyalam, Poh Yih Tinn and Deepa Nair Thevaharan are prosecuting. The charges In this trial, Rosmah faces 17 charges involving RM7.1 million transferred into her personal bank account between 2013 and 2017. The charges were framed under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001. On the first eight counts, she is charged with money laundering by directly engaging in a transaction involving proceeds of unlawful activities amounting to RM1.1 million that were deposited into her account. On the ninth to 12th counts, she is charged with directly engaging in 227 transactions involving proceeds of unlawful activities totalling RM6 million, which were also deposited into her account. On the 13th to 17th counts, she is charged with engaging in money laundering by failing to file a return on the sum that was deposited into her account as required under the Income Tax Act 1967. Shafee: Now this dehydration which you have put saline solution, [the saline solution] is for? Fadli: To prevent dehydration from chemical losses and electrolytes in the body. Shafee: This can cause fainting spells if a person is dehydrated? Fadli: Yes. On Tuesday, the trial was postponed after Dr Mohd Hafiz Mohd Hoshni from Kajang Prison, where Najib is serving his sentence, testified that the former prime minister was complaining of stomach pain and diarrhoea. The doctor, who was called to court to explain Najib’s condition, also said the former Pekan lawmaker had a slight fever and was sent to Hospital Kuala Lumpur. In March this year, the 1MDB-Tanore trial was postponed after Najib was hospitalised for several days because of a lung infection. The trial was also postponed around September last year after his blood pressure was reportedly affected by a change in medication. Najib reportedly also has a history of stomach ulcers. When the trial resumes on June 21, two new witnesses will take the stand. ZAHID IZZANI/THE EDGE
FRIDAY MAY 12, 2023 15 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 11): The proposed increase in public health spending will be discussed during the tabling of the White Paper on Health in Parliament next month, said Health Minister Dr Zaliha Mustafa. She said the ministry will continue discussion with the Ministry of Finance (MOF) for allocation to the Health Ministry be increased to up to 5% of the gross domestic product (GDP). “Now, it is 2.9% (of the GDP), and if we compare our country with equivalent countries, which are middle-income countries, they are already at a rate of up to 5% (of their GDP),” she told a press conference here on Thursday (May 11). Earlier, Dr Zaliha opened the CRM (Clinical Research Malaysia) Trial Connect 2023 programme, which was held in conjunction with the Clinical Research Day 2023. Meanwhile, Dr Zaliha said Malaysia was ready to carry out its first-in-human clinical research at two certified locations, namely Sarawak General Hospital and Ampang Hospital. “We have the facilities and we also have discipline when we carry out the research and this actually attracts the interest of many companies to do first-inhuman (clinical trial) in Malaysia,” she added. The event was also attended by Health Director General Datuk Dr Muhammad Radzi, Sarawak Deputy Premier Datuk Seri Dr Sim Kui Hian and CRM chief executive officer Dr Akhmal Yusof. Regarding Thursday’s programme, Dr Zaliha said it was to showcase the country’s achievement and capabilities in sponsored research. “In the last decade, sponsored research has brought in more than RM1 billion of clinical research contract value, created 2,700 skilled jobs in clinical research and delivered over 2,000 sponsored research,” she said. Proposed increase in public health spending to be discussed in Parliament next month, says Dr Zaliha SERDANG (May 11): The Ministry of Agriculture and Food Security will continue with the existing formula of subsidy distribution to broiler chicken breeders and supplier companies at a division ratio of 10 sen and 70 sen, while poultry farmers in Selangor are crying foul with demand for equal subsidies. Agriculture and Food Security Minister Datuk Seri Mohamad Sabu, who is also known as Mat Sabu, said chicken breeders and supplier companies need to discuss between themselves the distribution of the 80 sen subsidy to overcome the increase in the cost of chicken and egg production, because the government will not intervene in negotiations over the distribution agreement. “We are still sticking to what has been implemented for more than a year. We are sticking to 10 sen (for breeders) and 70 sen (for supplier companies). “From the ministry’s point of view, the arrangement is business-to-business, meaning it’s between integrators and contract farmers. When they made the deal, the government was not involved, so it should be an agreement between them,” he told the media in a cordial meeting between the minister and ministry members here on Thursday (May 11). “There needs to be negotiations between integrators and farmers to get the right profit-sharing, or even the right subsidy sharing, but so far the ministry is of the opinion that we will maintain the existing rate,” added Mohamad. A report published by local media stated that the Selangor Poultry Breeders Association wants the government to consider the distribution of subsidies to broiler chicken breeders and supplier companies at a ratio of 50:50, because there are chicken breeders going out of business as they cannot afford the hike in operating costs. Association chairman Muzamri Shoib reportedly reiterated that in broiler chicken farming, breeders are at the highest risk, because they only make a profit through the sale of live chicken, while supplier companies profit earlier in the value chain from the sale of chicken feed, chicks, medicines and, ultimately, chicken sales. On Feb 27, the government decided to continue providing subsidies at a rate of 80 sen per kg for chicken and eight sen per egg until June 2023, involving a cost of RM1.28 billion. In other developments, Mohamad said the appointments of new chairmen for five statutory bodies under his ministry were made after taking into account their involvement with the communities, and the names had been discussed with the government’s top leadership. “We can’t choose people who are elitist, while [those chosen] need to know about other matters like fishing, rice-growing and so on. Their record with the communities is the most important,” he said. On Wednesday, Mohamad in a media statement announced the appointments of the five new chairmen, which come into effect on May 15. They are Muhammad Faiz Fadzil as the chairman of the Malaysian Fisheries Development Board, Datuk Mahfuz Omar for the Board of Farmers Organisations, Aminuddin Zulkipli for the Federal Agricultural Marketing Authority, Dr Azman Ismail for the Malaysian Agricultural Research and Development Institute, and Sheikh Umar Bagharid Ali for the Malaysian Pineapple Industry Board. As breeders cry foul, Mat Sabu says govt sticking to current subsidy ratio Bernama Bernama LOW YEN YEING/THE EDGE
FRIDAY MAY 12, 2023 16 THEEDGE CEO MORNING BRIEF HOME PUTRAJAYA (May 11): Barisan Nasional (BN) has not decided whether to allow its allies in the unity government to contest under the BN symbol in the six state elections due this year, said BN chairman Datuk Seri Dr Ahmad Zahid Hamidi. “… we will not object if other parties in the unity government wish to use the BN symbol but a final decision has yet to be made. The intention (of others to use BN logo) is there but it has not been finalised,” said Ahmad Zahid, who is Umno president. However, he said the BN supreme council had decided that BN candidates would contest the six state polls using its own symbol. The deputy prime minister told reporters this after chairing a meeting of the Supreme Committee on Violence Control (JPTKK) here on Thursday (May 11). On Wednesday, BN elections director Datuk Seri Mohamad Hassan said BN was considering a proposal by some allies in the unity government to use BN’s dacing (scale) symbol in the state elections. Negeri Sembilan, Penang, Selangor, Terengganu, Kelantan and Kedah must hold their state elections this year because they did not conduct their polls during the general election last year. No decision yet on allies using Barisan logo in state polls, says Zahid KUALA LUMPUR (May 11): The High Court has dismissed single mother Loh Siew Hong’s judicial review to challenge the unilateral conversion of her three children to Islam. In delivering his decision on Thursday (May 11), High Court judge Datuk Wan Ahmad Farid Wan Salleh said there was no evidence that the three children had stopped professing the religion of Islam even under her care. “[Loh] did not deny the affirmative assertion that the three children continued professing the religion of Islam in performing the daily Subuh prayers when they are in her custody,” he said. Loh, the judge said, had denied this in her court filings but he found this to be a “bare denial”. The High Court judge noted the Perlis Islamic Religious and Malay Customs Council (MAIPs), who is the second respondent in this matter, had filed an affidavit where its chief executive officer (CEO) Mohd Nazim Haji Mohd Noor affirmed that the children had expressed their faith and determination to remain in the religion. Mohd Nazim had said that the children expressed this through their actions and behaviour a day after they were in Loh’s custody in Feb 2022, where they were still performing Subuh prayers; one child even expressed an ambition to be a shariah lawyer in the future. The judge also said that there was no evidence before him to indicate that the children — twin girls who are now 14-years-old and a boy who is now 11 — have reverted to the Hindu religion. ‘Welfare of children should take precedence’ Loh was previously locked in a protracted custody battle with her ex-husband, claiming she had been separated from her children since March 2019. She was finally reunited with her children in February last year, when the court allowed her habeas corpus application. Subsequently, she filed the judicial review in March last year seeking declarations that her children are Hindu — her ex-husband M Nagashwaran’s religion prior to his conversion — and to reverse the registration of her children’s conversion to Islam in July 2020. On Thursday, the High Court judge also noted that welfare of the children should take precedence. “Having regard to all the circumstances of the case, there is no evidence before me that the three children are not happy staying with the applicant (Loh). Although this is another issue, it is quite related to the instant case. There is no evidence that the three children have stopped professing the religion of Islam when they are under her care either. “Therefore, the welfare of the children, within the meaning of Indira Ghandi, dictates that the status quo should remain,” he said referring to the 2018 landmark judgement which states that unilateral conversion of children is unlawful. High Court dismisses single mother’s bid to reverse unilateral conversion of children to Islam No dispute on certificates of conversion Wan Ahmad Farid also noted that he was not departing from the landmark Indira Gandhi judgement, but also took note of a recent majority decision in a Court of Appeal (COA) case, also concerning the issue of conversion. The case revolves around the conversion status of a 37-year-old woman. Among others, the High Court had ruled that she was never Muslim to begin with. However, the appellate court had overturned the ruling. “Despite the vigorous dissenting judgment [in the case], I am bound by the doctrine of stare decisis. “This court, being a High Court, is bound by the majority decision of the COA,” he said on Thursday. On the issue of conversion, the High Court judge found that there was no dispute that the certificates of conversion were issued for the children. The certificates were issued after the first respondent, Perlis Registrar of Mualaf, was satisfied that the legal requirements under Section 107(1) of the Perlis 2006 Enactment were adhered to when the children had professed the Syahadah proclamation (Islamic recitation to convert to Islam) willingly. As the case was a matter of public interest, he made no order as to cost. Loh to appeal decision Loh’s counsel J Gunamalar when contacted, confirmed that they will be appealing Thursday’s decision. In this matter, Loh is also represented by A Srimurugan and Dr Shamsher Singh Thind. Senior counsel Mohamed Haniff Khatri Abdulla and Datuk Zainul Rijal Abu Bakar appeared for MAIPS. Perlis state legal adviser Mohd Radhi Abas appeared for the other respondents — Perlis Registrar of Mualaf, state mufti Datuk Dr Mohd Asri Zainul Abidin and the state government. BY TARANI PALANI theedgemarkets.com Bernama
FRIDAY MAY 12, 2023 17 THEEDGE CEO MORNING BRIEF WORLD (May 11): The Biden administration is trying to make it hard for China to say no to engagement by seeking a flurry of meetings and phone calls, a strategy aimed at easing tensions and painting President Xi Jinping as recalcitrant if he refuses. The approach, described by people familiar with the matter who asked not to be identified, has involved proposals of meetings and calls from the lowest level all the way up to a possible conversation between Xi and President Joe Biden, something that has been stalled for months now. It’s also meant to appease allied nations in Asia and Europe that are anxious the US isn’t doing enough to ease tension that some fear could lead to open conflict. The people acknowledge the strategy could paint the US as a supplicant seeking the favour of a powerful adversary. It has already garnered scepticism from critics of the Biden administration who warn it makes the US look weak. A White House spokeswoman didn’t immediately reply to a request for comment. “This is a smart but risky play,” said Evan Medeiros, former senior director for Asia on the Obama National Security Council. “It looks credible to Europe and Asia. But it also risks reinforcing China’s view that we need them more and they can drive the US-China agenda.” Chinese Foreign Ministry spokesman Wang Wenbin said at a press briefing in Beijing on Thursday that China and the US do maintain lines of communication. “The key is that the US cannot stress the importance of communication while keeping up suppression and containment against China,” he added. The push started in earnest in recent weeks as a furore died down over an alleged Chinese spy balloon that traversed the US in February and was then shot down by US fighter jets. A visit by Taiwan President Tsai Ing-wen to the US, which included an unprecedented meeting on US soil with House Speaker Kevin McCarthy, further complicated any effort to ease tensions. In the time since, the administration has floated the idea of calls and meetings with senior leadership in China, including between Defense Secretary Lloyd Austin and his counterpart and Trade Representative Katherine Tai and China’s commerce minister. Treasury Secretary Janet Yellen, Commerce Secretary Gina Raimondo, and climate envoy John Kerry are all planning trips to China. That planning has also been accompanied by a broader messaging campaign from Yellen and National Security Adviser Jake Sullivan saying the US doesn’t want to sever economic ties — just address the possible national security concerns. Biden’s team is also looking to establish what it calls guardrails around a relationship facing deeper, more systemic strains around economic competition and China’s continued partnership with another US adversary, Russia. Beijing has rejected US attempts to frame the relationship around “competition” and “guardrails”, with Foreign Minister Qin Gang saying in March the intention is to “contain and suppress China in all respects.” So far, China has responded tepidly to the US requests. It has ignored Austin’s outreach for calls and hasn’t publicly responded to his request for a meeting on the sidelines of the Shangri-La Dialogue in Singapore set for June. China hasn’t even said if Commerce Minister Wang Wentao will travel to Detroit for an Asia-Pacific Economic Cooperation meeting, where Tai has floated the idea of bilateral talks. It’s also unclear when Biden will speak with Xi, something the US president first mentioned in February amid the balloon furore. On Wednesday, Biden said the call with Xi was still in the works, without providing a timeframe. “China’s leaders probably assess that their strategy of freezing the relationship since the spy balloon shootdown has worked,” said Dennis Wilder, the Central Intelligence Agency’s former deputy assistant director for East Asia and the Pacific. “They may feel they have achieved a tactical upper hand in US-China bilateral diplomacy.” The Chinese Embassy in Washington declined to comment. But Beijing has reBY PETER MARTIN & JENNY LEONARD Bloomberg Biden presses for China contact despite risk of losing clout peatedly stressed that the US must change its policies for ties to improve. Even so, there are tentative indications the strains that have marked the relationship in recent months may be easing. Qin met US Ambassador Nicholas Burns in Beijing on Monday for the first time since becoming China’s foreign minister, a symbolic move that may indicate Beijing’s willingness to allow more senior-level discussions. On Thursday, Burns sat down with Chinese Commerce Minister Wang Wentao, exchanging views on trade issues between the world’s largest economies, the Commerce Ministry said in a statement. “Due to the extreme anti-China hostility by the US government, China is giving the US the cold shoulder, refusing to let a number of senior US officials to come to China,” said Gao Zhikai, a former Chinese diplomat who served as translator to the late leader Deng Xiaoping. “China’s position is clear — stop violating the One China policy and stop promoting Taiwan separatism and sedition.” Read the full story Read also: China audits littered with deficiencies, US accounting watchdog finds “A US accounting watchdog found unacceptable deficiencies in audits of US-listed Chinese companies performed by KPMG in China and PricewaterhouseCoopers in Hong Kong, the government agency said on Wednesday.” China warns brokerages not to spread sensitive information “Beijing has launched a crackdown on perceived threats to national security, as tensions grow between the West and China. Authorities have raided foreign consulting firms, and limited foreign access to financial data.” Germany warns EU on hitting China with Russia sanctions “Germany led calls urging caution against targeting China under new European Union sanctions over Russia’s invasion of Ukraine during a first discussion among the bloc’s 27 countries on proposed new restrictions, diplomatic sources said.” BLOOMBERG
FRIDAY MAY 12, 2023 18 THEEDGE CEO MORNING BRIEF WORLD NIIGATA (May 11): US Treasury Secretary Janet Yellen on Thursday (May 11) urged Congress to raise the US$31.4 trillion (RM140 trillion) federal debt limit and avert an unprecedented default that would trigger a global economic downturn and risk undermining US global economic leadership. Yellen issued the latest in a series of increasingly stark warnings in remarks prepared for a press conference ahead of a meeting in Japan with her counterparts from the Group of Seven (G7) rich nations, as well as India, Indonesia and Brazil. “A default would threaten the gains that we’ve worked so hard to make over the past few years in our pandemic recovery. And it would spark a global downturn that would set us back much further,” she said. “It would also risk undermining US global economic leadership and raise questions about our ability to defend our national security interests.” US President Joe Biden on Wednesday said failure by Congress to act before Treasury runs out of money to pay the government’s bills — something that could happen as early as June 1 — risked throwing the US economy into a recession. Yellen said Republican brinkmanship on the issue amounted to a “crisis of our own making” and that just the threat of a default could lead to a downgrade of the US government’s credit rating, as occurred during a debt ceiling fight in 2011. It could drive interest rates higher on mortgages, auto payments and credit cards, Yellen said, noting that rates were already spiking on debt due around June 1. The US economy would suffer a “substantial” hit if Treasury was no longer able to issue debt, not to mention the impact on financial markets and institutions and consumer confidence, she said, calling the prospect “unthinkable.” “All of these analyses show that we would fall into — if this lasted for any meaningful period of time — a very substantial downturn,” she said. Yellen warns US default would threaten global economy, undermine its leadership NIIGATA (May 11): US Treasury Secretary Janet Yellen on Thursday (May 11) said many members of the Group of Seven advanced economies shared US concerns about China’s use of “economic coercion” against other countries, and were considering how to counter such behaviour. Yellen told a press conference that Washington had also long considered the possibility of imposing further, narrowly targeted restrictions on outbound investment to China, and had been discussing that prospect with G7 allies. She said the US government had been discussing the possibility internally for some time, but had not finalised its approach. The Biden administration was committed to discussing the issue with partners and allies, and viewed coordinated action by like-minded countries as most effective and useful. China is much on the minds of G7 finance leaders as they meet in Niigata, Japan this week, with current G7 president Japan leading fresh efforts to diversify supply chains and reduce their heavy reliance on China, the world’s second-largest economy and the second biggest external holder of US debt. US lawmakers have been pushing the administration to boost oversight of investments by US companies and individuals in other countries, particularly China, citing concerns over national security and supply chain issues, and have urged President Joe Biden to issue an executive order. “We have been engaging in discussions with our G7 colleagues, and I would expect that that would continue these meetings, at least in some informal way,” Yellen said, when asked about the long-awaited executive order. Yellen says G7 members looking at how to counter China’s ‘economic coercion’ BY ANDREA SHALAL Reuters BY ANDREA SHALAL Reuters Read also: Abu Dhabi royal’s firm shorts US stocks on global recession fears “An investment firm controlled by a top Abu Dhabi royal has built a short position worth billions of dollars in US stocks, people familiar with the matter said, in a bet that growing fears over a recession will pressure markets.” US weekly jobless claims jump to highest level since late 2021 “The number of Americans filing new claims for jobless benefits jumped last week to the highest level since late 2021, suggesting that higher interest rates were starting to weigh on the labour market.” OPEC holds global oil demand view steady, cites US debt ceiling risks “OPEC’s global oil demand forecast for 2023 was held steady for a third month on Thursday, with the producer group citing the potential Chinese growth to be offset by downside economic risks elsewhere such as the US debt ceiling.” She said any US action would be “narrowly scoped and targeted at technologies where there are clear national security implications,” without giving a timetable for action. The United States already has a strong commitment to protect its national security, in part through reviewing inbound investment and through export controls. Some restrictions on outbound investment would be a complement to that, she said. “My own view is that this should be national security focused. It’s not focused at undermining, say, China’s economic competitiveness or ability to advance economically,” she added. Yellen said the G7 — which groups the US, Japan, Germany, Britain, France, Italy and Canada, as well as the European Union — would also keep working to mitigate geostrategic risks and counter economic coercion, Yellen said, citing a speech last month in which she said Washington would push back against Chinese actions to dominate foreign competitors. She told reporters that China had clearly used economic coercion with Australia and Lithuania, adding, “that’s a matter that should be of concern to all of us.” Read the full story BLOOMBERG
FRIDAY MAY 12, 2023 19 THEEDGE CEO MORNING BRIEF WORLD BEIJING (May 11): New Chinese bank loans tumbled far more sharply than expected in April, adding to worries that the economy’s post-pandemic recovery is losing steam and putting pressure on the central bank to ease policy. Chinese banks extended 718.8 billion yuan (RM463.4 billion) in new yuan loans in April, less than a fifth of March’s tally and just over half of the amount expected by analysts, data from the People’s Bank of China (PBOC) showed on Thursday (May 11). Analysts polled by Reuters had forecast new yuan loans would fall to 1.4 trillion yuan in April, versus 3.89 trillion yuan in March. But the total was higher than 645.4 billion yuan a year earlier. While some moderation in credit demand had been expected last month after record lending in the first quarter, the report came hours after price data showed deflationary pressures were deepening in China, and days after news that the country’s imports had contracted sharply, suggesting domestic demand is still frail and more stimulus may be needed. “China’s credit data came in well below estimates, reinforcing the concerns over the sustainability of post-Covid recovery,” said Zhou Hao, economist at Guotai Junan International. “Both aggregate financing and new loans were only half of the market expectations, suggesting that the first wave of post-Covid recovery has more or less faded.” Read the full story (May 11): China has asked its commercial banks to cap rates offered on some deposits from next week, in its latest move to lower lenders’ funding costs to support the world’s second-largest economy. The four biggest state-owned banks including Industrial & Commercial Bank of China Ltd can offer up to 10 basis points above the benchmark rates on so-called agreement and call deposits, while other lenders are told to cap the ceiling at 20 basis points, according to a notice seen by Bloomberg News. The change would imply a drop of 40 to 55 basis points from previous ceilings on such deposits, according to Guotai Junan Securities Co. The move, following recent rounds of deposit rate cuts in early May and last year, would further alleviate pressure on banks, as they strive to balance shrinking margins and government directives to beef up lending support to the economy. The notice, taking effect from next Monday (May 15), was communicated through the nation’s interest rate self-disciplinary mechanism overseen by the central bank. Reuters reported on the move earlier. Read the full story Read also: Xi urges financial institutions to move to new flagship city China asks state banks to cut deposit rate ceilings from May 15 BEIJING (May 11): China’s consumer prices rose at the slowest pace in more than two years in April, while factory gate deflation deepened, data showed on Thursday, suggesting more stimulus may be needed to boost a patchy post-Covid economic recovery. The weak consumer price rise reinforces the signals from this week’s trade data suggesting domestic demand remains lacklustre, while the deflationary impulse in producer prices underlines the strains on factories — a double-whammy for the world’s second-biggest economy as it tries to shake off the Covid-induced damage. The consumer price index (CPI) in April rose 0.1% year-on-year, the lowest rate since February 2021, and cooling from the 0.7% annual gain seen in March, the National Bureau of Statistics (NBS) said. The result missed the median estimate of a 0.4% rise in a Reuters poll. Producer deflation also deepened last month, which taken together with the CPI data, highlights the broader economy’s struggles to rev-up after the lifting of Covid curbs in December. The producer price index (PPI) fell at the fastest clip since May 2020 and was down for a seventh consecutive month, declining 3.6% year-on-year after a 2.5% drop the previous month. That compared with a forecast for a 3.2% fall. China’s economy grew faster than expected in the first quarter thanks to the lifting of Covid curbs but the recovery has been uneven. Recent data showed factory activity contracted, while persistent weakness in the property market remains a concern. The reopening probably put some upward momentum on services inflation, but it was in large part offset by slowing growth in food and energy prices, analysts say. The latest data could raise pressure on the People’s Bank of China (PBOC) to cut rates or release more liquidity into the financial system. It cut lenders’ reserve requirements ratio (RRR) for the first time this year in March. “Headline (CPI) rate will remain well below the government’s ceiling of ‘around 3.0%’; that gives breathing room for PBOC officials concerned about the durability of the economic rebound to keep policy rates on hold,” said Zichun Huang, China Economist at Capital Economics. Read the full story China’s slow consumer inflation, deepening factory gate deflation to test policy China’s April bank loans tumble more than expected, raise pressure on central bank BY LIANGPING GAO & RYAN WOO Reuters Reuters Bloomberg BLOOMBERG
friday may 12, 2023 20 The E dge C E O m o rning brief world LONDON (May 11): The Bank of England raised its key interest rate by a quarter of a percentage point to 4.5% on Thursday (May 11) and Governor Andrew Bailey said the British central bank would “stay the course” as it seeks to curb the fastest inflation of any major economy. The central bank is no longer predicting a recession after it revised up growth forecasts from the gloomy projections it released in February, the biggest such improvement since it first published forecasts in 1997. But it also now expects inflation — which remained above 10% in March — to be slower to fall than it had hoped, mostly due to unexpectedly big and persistent rises in food prices. It also saw stronger wage growth than it previously thought. “We have to stay the course to make sure inflation falls all the way back to the 2% target,” Bailey said in a statement at the start of a press conference. A Reuters poll last week showed most economists expected a quarter-point rise in May — taking borrowing costs to their highest since 2008 with its 12th consecutive rate rise — and for the BOE to keep rates on hold after that. But investors have been betting on further increases in Bank Rate and shortly after Thursday’s decision, interest rate futures were pricing in a 5% peak for rates this autumn. “If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required,” the BoE said, retaining the same guidance on future actions that it had in February and March. The pound rose almost half a cent against the US dollar, topping US$1.26, while British government bond yields jumped in response to the BOE’s move. “Inflation data will be watched extremely closely over the next few months and may be a source of market volatility especially around currency, with sterling now pricing in more aggressive action from the BoE from here compared to other central banks,” abrdn senior economist Luke Bartholomew said. Read the full story Read also: ECB says consumer inflation expectations rose significantly Bank of England raises rates as Bailey promises to ‘stay the course’ (May 11): An illiquid corner of swaps insuring Credit Suisse Group AG debt surged back to life this week as some hedge funds make the case they should be triggered. Funds including FourSixThree Capital and Diameter Capital Partners have been buying swaps insuring Credit Suisse’s subordinated bonds with the idea that the controversial writedown of the firm’s AT1 securities could prompt a potential payout of the derivative contracts, according to people familiar with the matter. While the five-year credit default swaps dipped on Thursday, they’re up more than 80 basis points this week to about 360, according to CMAI prices. That’s the biggest increase since UBS Group AG agreed to buy Credit Suisse in an emergency weekend deal in March. As part of that acquisition, Swiss regulators Hedge funds drive Credit Suisse CDS higher on bets of a payout forced the wipeout of about US$17 billion of so-called Additional Tier 1 notes. Law firm Kramer Levin is helping with efforts to make a case for a triggering event, said the people, asking not to be identified describing private talks. Earlier this week, at least one question was sent to the Credit Derivatives Determinations Committee — a panel of 13 banks and asset managers that regulate the credit derivative swap market — in an attempt to trigger an insurance payout, according to separate people familiar with the matter. But the CDDC’s website showed no such submissions as of 9.20am in London. The CDDC didn’t immediately respond to an emailed request for comment. Representatives for FourSixThree, Diameter, and JPMorgan declined to comment. A spokesperson for Kramer Levin didn’t respond to requests for comment. Traders at JPMorgan Chase & Co have held discussions with buyside clients over the possibility of a trigger, fueling some trading in the swaps this week, separate people briefed on the matter said. The JPMorgan traders were presenting the argument as one that some hedge funds are making rather than the bank’s view, the people said. Many investors in the AT1 bonds have separately brought legal challenges against the writedown decision, which regulators have argued was justified because the rescue deal involved state support. by Laura Benitez, Erin Hudson & Luca Casiraghi Bloomberg by David Milliken & Andy Bruce Reuters
friday may 12, 2023 21 The E dge C E O m o rning brief world (May 11): Three companies controlled by billionaire Gautam Adani are considering a fundraising that may draw as much as US$5 billion (RM22.3 billion), according to people familiar with the matter, in a pivotal test of investor confidence in the tycoon’s empire less than four months after a scathing short seller report plunged it into crisis. Adani Enterprises Ltd, the flagship, as well as Adani Green Energy Ltd and Adani Transmission Ltd, may raise between US$3 billion and US$5 billion for a war chest to bolster the businesses, the people said, asking not to be identified as the information is private. The boards of the three firms are meeting on Saturday (May 13) to consider raising funds via the sale of shares or other securities, according to exchange filings late Wednesday. They didn’t disclose how much they intend to raise or who they’re working with for potential deals. The companies’ boards usually approve fundraising plans to enable the management to quickly tap markets when opportunities arise. The plans are still being discussed and there is no certainty that the companies will announce a sum they are looking to raise after the Saturday board meetings, the people said. A representative for the Adani Group didn’t to comment on the fundraising details. Any move by the Adani Group companies to tap a broader group of investors for funds could backfire, if the market isn’t convinced that the cloud hanging over the stocks has lifted — or find the prices still too high. Despite the coal-to-cement conglomerate denying fraud allegations made by Hindenburg Research in January, the broadside triggered a weeks-long stock rout that wiped out more than US$100 billion of market value, forcing the billionaire to scrap a US$2.4 billion share sale by his flagship firm priced at pre-attack levels. Damage repair The Adani family in early March raised about US$1.9 billion selling shares in four firms to US investment firm GQG Partners, held investor roadshows and prepaid debt as they raced to bolster confidence and repair the damage from short seller’s accusations. Adani company board meetings every year include proposing enabling resolutions to raise capital, which is part of their annual financial planning, the people said. An analysis by Bloomberg of exchange filings shows Adani Enterprises and Adani Transmission have sought board approval for fundraising every year in April or May since at least 2019. Adani Green Energy secured such permission every year except in 2021, the data shows. The three firms raised almost US$2 billion from Abu Dhabi-based International Holding Company PJSC in April last year. But the current round of fundraising, once finalised, will be the first for Adani companies after the Hindenburg attack and the ensuing market rout. A successful share sale would go a long way toward cementing Adani’s recovery from the crisis, though much would also depend on the terms of the deal and the profile of investors. The stock meltdown earlier this year also cooled Adani companies’ heated valuations. Added to the rout, a further discount could make them more attractive to investors. Adani Enterprises posted a 138% jump in its latest quarterly profit while revenue rose 26%, boosted partly by the mining and airport businesses, and gross debt shrank by 6.5%. Adani Green’s profit more than quadrupled for the March quarter and its operational capacity surged by almost half to more than 8 gigawatts. It is targeting a capacity of 45 gigawatts by 2030. Adani Transmission hasn’t announced the March quarter earnings yet. Billionaire Adani’s firms weigh raising up to US$5 bil, sources say (May 11): The largest banks face billions of dollars in extra fees to replenish the US government’s bedrock deposit insurance fund after it was tapped to backstop uninsured depositors at Silicon Valley Bank and Signature Bank. The so-called special assessment that the Federal Deposit Insurance Corp laid out on Thursday stems from the regulator’s extraordinary decision in March to insure all deposits at the two failed lenders. The FDIC estimates that move cost its Deposit Insurance Fund, which is typically used to cover only as much as US$250,000 in an account, about US$15.8 billion. Although the plan will still require votes by its board members and could be tweaked in the coming months before being finalized, the FDIC made clear that big banks will be on the hook. The agency said Thursday that institutions with more than US$50 billion in assets would pay 95% of the fees, and those with less than US$5 billion wouldn’t have to pay. “In general, large banks with large amounts of uninsured deposits benefited the most,” FDIC Chairman Martin Gruenberg said in a statement. The payments can be paid in eight installments quarterly starting in 2024, and the agency projects that 113 banks out of thousands in the US would have to pay them. The extra fees would be collected at an annual rate of about 12.5 basis points over the eight periods. Gruenberg said that if lenders took the effects on capital and income from the fees in one quarter only, it would result in an estimated average reduction in income of 17.5% for those three months. The proposal will immediately add fuel to a political battle raging in Washington over who will pay to refill the fund, which is known as the DIF. Smaller banks have lobbied hard to avoid paying the so-called Big banks face billions in extra FDIC fees to cover SVB failure special assessment fees, in addition to the contributions that all lenders make to fund quarterly. Separately, the agency is poised to announce changes to the regular quarterly fees that banks have to pay into the DIF. That plan will help blunt any impact from the First Republic to the DIF, Bloomberg News has reported. The FDIC’s move to use the DIF to cover uninsured depositors jump-started a long-simmering debate over whether the US$250,000 cap needs to be raised. Earlier this month, the FDIC said it supported expanding coverage to business and laid out three options for overhauling the fund. Beyond Thursday’s special assessment proposal, and the broader overhaul considerations, the agency is also poised to announce changes to the regular quarterly fees that banks have to pay into the DIF. That plan will help blunt any impact from the First Republic to the DIF, Bloomberg reported last week. Read also: Jamie Dimon says US needs to ‘finish’ the bank crisis by Katanga Johnson Bloomberg by PR Sanjai & Baiju Kalesh Bloomberg
friday may 12, 2023 22 The E dge C E O m o rning brief world LONDON (May 11): Three of Britain’s largest power providers have expressed interest in acquiring Shell’s UK retail business which was put under review due to poor returns earlier this year, sources close to the process said. Octopus Energy and Ovo have placed bids for Shell Energy and progressed into the second round of bidding, according to the three sources. British Gas, the retail arm of Centrica, also bid but it was unclear if it had progressed to the second round. Shell and Centrica declined to comment. Octopus Energy and Ovo did not respond to requests for comment. Shell Energy, created with the acquisition of First Utility in 2019, has almost 1.5 million customers after it absorbed several failed rivals in recent years. Putting a price on the business is tricky due to large uncertainty over future power prices following last year’s price volatility in the wake of Russia’s invasion of Ukraine Shell’s British power retailer draws bids from three rivals — sources (May 11): Saudi Aramco is pushing back a planned Riyadh initial public offering of its energy-trading business, a deal that would have ranked as one of the world’s largest share sales this year, people with knowledge of the matter said. The state-controlled oil company has significantly slowed down preparatory work on the deal in recent months, according to the people, who asked not to be identified because the information is private. It hasn’t set a new timeline for the listing, which may be postponed until next year unless the market improves, one of the people said. Aramco had been planning to list the business in late 2022 or early this year and was considering seeking a valuation of more than US$30 billion (RM133.8 billion), Bloomberg News reported previously. It now feels it could be difficult to list such a large business on the Riyadh bourse at the moment, the people said. The Saudi firm also wants to take more time to complete the integration of its main trading unit with the trading arm of its US refining business Motiva Enterprises LLC beSaudi Aramco to postpone mega IPO of energy trading unit Head of new lithium giant building supply chain for Americas by Dinesh Nair, Julia Fioretti & Matthew Martin Bloomberg by James Fernyhough Bloomberg by Ron Bousso Reuters fore proceeding with the IPO, the people said. Saudi Arabia, typically one of the Gulf’s biggest and busiest listing markets, has been very quiet this year amid concerns over global economic growth, while other exchanges like Abu Dhabi have stepped into the limelight. Just US$72 million has been raised from listings in Riyadh, the least since 2014, data compiled by Bloomberg show. This time last year the IPO haul stood at almost US$4 billion. Aramco has been working with banks including Goldman Sachs Group Inc, JPMorgan Chase & Co and Morgan Stanley as it studies the potential IPO, people with knowledge of the matter have said. Deliberations are ongoing, and details of the offering could change, the people said. A representative for Aramco declined to comment. Profits from trading oil, gas and refined fuel have soared recently. BP Plc, Shell Plc and TotalEnergies SE together made US$37 billion of trading income last year, according to Sanford C Bernstein & Co, as energy prices and volatility jumped following Russia’s invasion of Ukraine and as economies recovered from the Covid-19 pandemic. Still, very few energy traders are listed, and the Big Oil firms don’t disclose much information about their dealing units. Aramco’s own traders had little enthusiasm for an IPO when the listing plans were revealed, people with knowledge of the matter said. Traders can often have deals that don’t go their way while recouping those losses with even bigger gains later in the year, making the close scrutiny faced by listed companies a challenge. and the value bidders assign to new customers, two sources said. As a result, Shell Energy could be valued in a range US$50 million to US$100 million (RM223 million to RM446 million), according to the sources. Read the full story (May 11): The soon-to-be chief executive of what will become the world’s third-biggest lithium producer says the new company will focus on building a supply chain in the Americas, as US automakers look for non-Chinese sources of the battery metal. “America-centric is a big differentiator for us with customers, with investors,” Paul Graves said in an interview on Thursday (May 11), a day after it was announced Livent Corp will combine with Allkem Ltd to create a US$10.6 billion (RM47.25 billion) company. China, where USbased Livent has refineries, “will not be a focus of growth for us in the future”, he said. The as-yet unnamed company will bring together lithium assets from Argentina, Canada and Australia, allowing it to meet growing Western demand, Livent CEO Graves and his counterpart at Allkem, Martin Perez de Solay, emphasized in the joint interview. President Joe Biden’s Inflation Reduction Act, which supports domestic production of electric vehicle components, had “turbocharged” the move away from China, Graves said. The law, enacted last August, offers tax credits on EVs that use materials made in the US or its freetrade partners, such as Canada and Australia. The Livent-Allkem deal shows how the IRA is reshaping supply chains for metals like lithium, and how it’s helping Washington challenge Beijing’s leading role in many sectors that are critical to the energy transition. China is the dominant downstream producer of battery materials, and the only part of the lithium supply chain it doesn’t control is extraction, where Australia and Chile are important. Read the full story
friday may 12, 2023 23 The E dge C E O m o rning brief world (May 11): Microsoft Corp said on Wednesday it will not raise salaries for full-time employees this year, citing tough economic conditions, but will continue with its bonuses, stock awards and promotions. The company, which is now squarely focused on the lucrative generative AI, had in January decided to let go 10,000 employees, joining other technology companies in preparing for a turbulent year ahead. “We recognize that navigating both a dynamic economic environment and a major platform shift requires us to make critical decisions in how we invest in our people, our business and our future,” a spokesperson for the tech giant said. Along with ChatGPT maker OpenAI, which has received billions of dollars in funding from Microsoft, the tech giant has been infusing the AI tech into its Office products and search engine Bing. Earlier in the day, Insider cited an internal email by CEO Satya Nadella that (May 11): European lawmakers came a step closer to passing new rules regulating artificial intelligence tools such as ChatGPT, following a crunch vote on Thursday (May 11). The European Union’s highly anticipated AI Act is set to be the first comprehensive legislation governing the technology, with new rules around the use of facial recognition, biometric surveillance, and other AI applications. After two years of negotiations, the Act is now expected to move to the next stage of the process, in which lawmakers finalise details of the law with the European Commission and individual member states. Speaking ahead of the vote by two lawmakers’ committees, Dragos Tudorache, one of the EU parliamentarians (MEPs) Microsoft skips pay hikes this year amid sharp focus on AI TOKYO (May 11): Japan’s SoftBank Group Corp on Thursday (May 11) posted a sharply narrower annual loss, after a capital raise using its stake in Alibaba Group Holding Ltd helped cushion investment loss at its Vision Fund investing arm. SoftBank reported a net loss of ¥970 billion (US$7.18 billion or RM32.15 billion) for the year ended March 31, compared with a ¥1.7 trillion loss a year earlier. Chief executive officer Masayoshi Son’s attempt to bestride the tech investing industry has suffered a series of high-profile reversals, after outsized bets through SoftBank’s first Vision Fund turned sour, and investments made at bubbly valuations via a smaller second fund slumped. With key architects of that strategy having left, Son has focused on shoring up the balance sheet, cutting his stake in e-commerce giant Alibaba, and stepping back from trademark presentations to focus on the listing of chip designer Arm. The Vision Fund unit booked an investment loss for the full year of ¥5.28 trillion. The investing arm booked its fifth consecutive quarter of investment loss in January-March, albeit a smaller loss than in previous quarters. Assets gaining during the quarter included e-commerce retailer Coupang Inc and robotics company AutoStore Holdings Ltd, with office-share company WeWork Inc among the fallers. SoftBank wrote down the value of private portfolio companies in both the first and second funds. At the end of March, the second fund’s portfolio was worth US$31 billion, compared to an acquisition cost of US$49.9 billion. Investment opportunities SoftBank has said it is in defence mode, putting investing activity on the backburner, with the Vision Fund unit striking just 25 new deals over the past year. Looking to bolster its capital buffers, SoftBank raised US$35.46 billion through prepaid forward contracts using Alibaba SoftBank books narrower loss after Alibaba stake selldown by Sam Nussey & Kiyoshi Takenaka Reuters by Foo Yun Chee, Martin Coulter & Supantha Mukherjee Reuters Reuters shares during the fiscal year. A further US$4.1 billion was raised through forward contracts for the period after April 1, 2023. With the uptick in some tech stock prices, investor attention has turned to how long SoftBank will maintain its holding pattern. Referring to the rise of new technology such as generative artificial intelligence (AI), “we need to look at whether we should stick to our defensive strategy, or whether we should also be on the offensive”, SoftBank chief financial officer Yoshimitsu Goto told a news briefing. “We don’t want to miss investment opportunities,” Goto, a long-time Son lieutenant, said. The Vision Fund unit emphasises that it holds stakes in companies including Arm and short video app TikTok parent ByteDance worth some US$37 billion ready to go public in the future. Investors are focused on the potential for further buy-backs. SoftBank shares closed down 0.85% ahead of earnings on Thursday, and had fallen almost 9% this year. As the emergence of AI generates global excitement and debate, Goto said Son had also been excited by the new technology. “It makes me worried if he has time to sleep,” Goto said. said Microsoft was helping drive a major platform shift in the new era of Al against the backdrop of rising competition and global macroeconomic uncertainties. “We will maintain our bonus and stock award budget again this year, however, we will not overfund to the extent we did last year, bringing it closer to our historical averages,” Insider said, quoting from Nadella’s email. EU lawmakers’ committees agree tougher draft AI rules charged with drafting the laws, said: “It is a delicate deal. But it is a package that I think gives something to everyone that participated in these negotiations.” “Our societies expect us to do something determined about artificial intelligence, and the impact it has on their lives. It’s enough to turn on the TV ... in the last two or three months, and every day you see how important this is becoming for citizens.” Under the proposals, AI tools will be classified according to their perceived level of risk, from low to unacceptable. Governments and companies using these tools will have different obligations, depending on the risk level. In Thursday morning’s vote, MEPs agreed to ban the use of facial recognition in public spaces, predictive policing tools, and to impose new transparency measures on generative AI applications like OpenAI’s ChatGPT.
friday may 12, 2023 24 The E dge C E O m o rning brief world (May 11): Tokyo Electron Ltd, one of the world’s largest suppliers of chipmaking equipment, projected earnings well below analysts’ estimates in another negative signal for the global semiconductor sector. The Japanese company forecast operating income of ¥393 billion (US$2.9 billion or RM13.04 billion) for the year ending March 2024, lagging the ¥446.7 billion average estimate. That disappointing outlook came after it reported a smaller-than-expected 9.4% profit slide for the March quarter of 2023. Chip suppliers are grappling with myriad uncertainties, as the US imposes sanctions on China, the world’s largest semiconductor market, to try and contain the Asian country’s technological and geopolitical ambitions. Tokyo Electron has been closely watched for indications of demand after Japan and the Netherlands agreed to join the US in imposing strict export restrictions on advanced semiconductor technology and products to China. More broadly, chipmakers are struggling with volatile demand, as recessionary fears weigh on global spending for smartTokyo Electron’s outlook disappoints in bad sign for chips (May 11): The value of US semiconductor imports grew 13% over the first three months of this year, showing there’s a long way to go before the country can satisfy its chip needs at home. Asia continues to be the key source, though supply lines have shifted since last year. Malaysia, home to many chip testing and packaging facilities, shed close to a third of the value of its direct exports to the US, while Thailand nearly doubled its output. China shrunk further, as trade tensions and sanctions between the world’s two biggest economies escalate, while India saw a 39-fold jump in its exports. Overall, the US imported US$15.4 billion in chips through March this year, underscoring the scale of the challenge for its chipmaking domestication project. Washington’s CHIPS and Science Act provides subsidies for international chip fabrication specialists to set up facilities on US soil, but those projects take years to get off the ground. Taiwan, whose Taiwan Semiconductor Manufacturing Co is building an Arizona facility with two chipmaking fabs, retained its ranking as second on the list of exports by value. The island’s role in the chip supply chain is in reality far larger, as many of the parts exported from other Asian nations are first fabricated in Taiwan or nearby South Korea, home to memory-making leaders Samsung Electronics Co and SK Hynix Inc. Vietnam and Thailand together now account for a fifth of US imports. The two nations are benefiting from US firms looking for greater geographic diversity of supply to help offset the risk of China-US relations deteriorating further. Upstarts like Cambodia and India have expanded their share at an astronomical rate, even cutting into the share of traditional strong players like Japan. India grew its shipments to US$497.1 million, more than 38 times last year’s number, while Cambodia’s rose nearly fivefold to US$499 million. Semiconductors, essential to everything from computers and smartphones to electric vehicle batteries and large-scale data centres, are now a point of focus for US lawmakers. Last year’s legislation to encourage TSMC and Samsung to increase their investment on American soil is just one part of its broader contest with economic rival China — whose semiconductor shipments to the US dropped nearly 11%. US chip imports jump 13% as supply lines shift by Kevin Varley Bloomberg by Takashi Mochizuki & Yuki Furukawa Bloomberg phones, computers and other electronics. Taiwan Semiconductor Manufacturing Co, one of Tokyo Electron’s largest customers, warned in April that demand from the mobile and PC industries remains “soft” for now, though the market is stabilising and likely to improve in the second half. It’s sticking with earlier plans to spend as much as US$36 billion upgrading and expanding capacity in 2023. Tokyo Electron, one of a handful of indispensable suppliers to the chipmaking industry, got about 23% of its revenue from China in the December quarter. The company is predicting ¥1.7 trillion of net sales this fiscal year, also falling short of estimates. Read also: Apple partner Hon Hai’s profit misses despite iPhone rebound Italy’s antitrust watchdog probes Apple over alleged app market abuse bloomberg
friday may 12, 2023 25 The E dge C E O m o rning brief world LONDON (May 11): It was the best year for sales of super-prime, or luxury properties above £10 million (US$12.6 million) in London since before 2016’s Brexit vote, which ushered in years of political uncertainty and sent the pound tumbling. This is according to a new report by real estate agency Knight Frank. Between March 2022 and March 2023, 161 super-prime properties were sold, at a total of £3.1 billion. The last time there were more sales was 2015-16, with 164 properties. The highest number of super-prime deals took place in the borough of Kensington with 26 properties sold, followed by 25 in Belgravia and 22 in Mayfair. The biggest month for deals was in December 2022, with 29 deals priced at £10 million and over. Recent sales include a penthouse in Knightsbridge overlooking Hyde Park with a large roof terrace and a guide price of £19.95 million in March, and a house on Eaton Place in Belgravia at £17.5 million in February. “After everything that has happened in recent years, London is still highly regarded by global buyers,” says Paddy Dring, global head of prime sales at Knight Frank. “However, I expect sales volumes will decline by at least 10% over the next 12 months as political and economic uncertainty picks up.” Dring tells Bloomberg that he expects just a 3% decline in prime central London prices, less than in London as a whole. “We don’t expect a dramatic decline,” he says. “There will always be a market for houses in areas like Mayfair and Belgravia, and we are still behind our five-year average on supply terms.” “Ultimately, property in London is seen as an effective long-term hedge against inflation,” says Dring. The next issue moving onto the radar for buyers since the mini-budget chaos last September, and the bailout of Credit Suisse and the health of the banking sector, may be the coming general election in the UK, which is expected to take place in 2024. The Conservative Party, currently led by Prime Minister Rishi Sunak, has been in control of Parliament since 2010. Last week, Sunak’s Conservatives lost hundreds of local council seats in a bruising election, a result that suggests the ruling party is in danger of losing power to the opposition Labour Party. Matters such as foreign investors owning homes and taxation could become hot-button issues during the election. “Discussions around the general election have started to creep into conversations,” says Christian Lock-Necrews, head of the Knightsbridge office. But Dring says he anticipates a busy end to the spring, as well as a lively buying spree during the summer. “London still remains at the top of people’s list of global destinations,” he says. London has its best year for super-prime property since Brexit vote (May 11): Property buyers of certain nationalities including the US are exempt from Singapore’s recent tax hike for foreigners. Nationals from the US, Iceland and Norway, among others, are accorded the same stamp duty treatment as Singapore Citizens. This policy — based on respective free trade agreements — came into operation in 2013. Foreigners eligible for ABSD remission under free trade agreements: • Nationals and permanent residents of Iceland, Liechtenstein, Norway, Switzerland • US nationals The groups have been less avid buyers of property in the city-state compared with Chinese and Malaysians. Americans play a smaller role among foreign buyers because they typically gravitate toward property within the US or in the UK, according to Nicholas Mak, Chief Research Officer at real estate platform MOGUL.sg. In new measures that took effect April 27, foreigners will pay 60% tax on any residential purchase, while the rate for using an entity or a trust was raised to 65%, preventing any circumvention of the rules. The timing of the announcement comes ahead of a general election due by 2025. With housing a hot issue, authorities raised taxes for buyers of higher-value properties in the latest budget. The tax changes were made “to dampen both local and foreign investment demand, so as to prioritise local owner-occupation demand”, the Ministry of National Development said in an emailed statement. “Foreigners purchasing residential property in Singapore come from a wide range of countries.” At the recent launch of condominium Blossoms by the Park, four units were sold to US buyers and four to Chinese, according to Lim Yew Soon, managing director of the developer EL Development Pte. The launch came two days after the new stamp duties took effect. Read also: Singapore says it will take more property measures if needed Singapore’s property tax won’t hurt these foreign buyers by Krystal Chia Bloomberg by Sarah Rappaport Bloomberg
friday may 12, 2023 26 The E dge C E O m o rning brief world Bank of Thailand to relax rules on use of yuan for trade this year BANGKOK (May 11): Thailand’s central bank expects to relax rules on the use of China’s yuan for trade this year to help reduce the impact of currency volatility, a deputy central bank governor said on Thursday (May 11). The Bank of Thailand is in talks with the Chinese central bank on how to promote the use of the currency, Mathee Supapongse told reporters. China is Thailand’s major trade partner but payments in local currencies are still few, he said. There will be no problem with the amount of yuan to be used for trade settlements due to both country’s swap line, Mathee added. The use of yuan should not be a problem for the US as the Chinese currency will not be able to play the same role as the US dollar in the short term, he said. Thailand is encouraging the use of local currencies for trade to help exporters reduce any impact of dollar fluctuations against the baht. — Reuters Hong Kong overnight funding costs surge to highest since 2007 (May 11): The cost to borrow overnight in Hong Kong jumped to a sixteen-year high as liquidity continued to tighten in the city after repeated currency intervention from authorities. The overnight Hong Kong interbank offered rate, known as Hibor, climbed 37 basis points to 4.81%, the highest since 2007, on Thursday. The Hong Kong Monetary Authority has been draining liquidity from the banking system to boost the local dollar, reduce a gauge of interbank liquidity to its lowest since 2008. The currency had come under pressure when the gap between Hibor and its US counterpart widened to attractive levels for hedge funds to borrow the city’s dollar cheaply and buy the higher-yielding greenback. The HKMA has spent US$6.5 billion since February to defend the local dollar’s 7.75-7.85 peg with its US counterpart. Rising demand for the local currency as some firms prepare for dividend payouts during summer is also playing a role in boosting Hibor. — Bloomberg Read the full story UOB keeps most Citi staff after Southeast Asia retail buyout (May 11): United Overseas Bank Ltd will keep most of Citigroup Inc’s employees after buying the US bank’s consumer assets in Indonesia, Malaysia, Thailand and Vietnam. About 90% of Citi’s 5,000 employees in the four countries will transfer to UOB when the last leg of the acquisition completes at the end of this year, according to Jacquelyn Tan, head of the Singapore-based lender’s group personal financial services. First announced in January last year, the S$4.9 billion (US$3.7 billion) deal will nearly double UOB’s regional retail clients to about 5.3 million. The confirmation of the personnel retention is a boost for the region’s banking sector, which is bracing for redundancies from the Credit Suisse Group AG takeover and from the return of some finance sector job cuts globally — which were all but absent during the pandemic — as firms focus on reducing expenses amid an uncertain economic environment. Tan said UOB was “very, very happy” with the 90% retention level, which she described as high during a press briefing. UOB is already seeing uplift in the three markets of Thailand, Vietnam and Malaysia where it integrated the Citi units, the lender said in its latest earnings report. — Bloomberg Read the full story India tax dept searches Mankind Pharma’s office — sources NEW DELHI (May 11): India’s income tax department is conducting searches at Mankind Pharma Ltd’s office in New Delhi, two government sources told Reuters on Thursday (May 11), days after the condom maker’s successful public listing on domestic stock exchanges. The company’s shares fell as much as 5.5% on the news. The searches may last for two to three days, said the second source. Neither source elaborated on the reason for the search. They declined to be named as they were not authorised to speak to the media. Mankind Pharma and the IT department did not respond to Reuters’ requests for comment. Mankind Pharma shares debuted on the Indian stock exchange on Tuesday and surged about 32%, valuing the maker of Manforce condoms at 569.76 billion rupees (nearly RM31.2 billion), in a rare instance of a successful domestic public listing this year. The stock was last trading down nearly 2% at 1,360 rupees on Thursday but was still well above its initial public offering offer (IPO) price of 1,080 rupees. Mankind Pharma says its Manforce is the top-selling male condom brand in India, where it competes with Reckitt Benckiser Group’s Durex and TTK Group’s Skore. — Reuters news In brie f German rail union’s planned strike likely to impact freight, rail traffic BERLIN (May 11): Germany’s railway union EVG on Thursday announced a new 50-hour strike to take place from Sunday to Tuesday as wage talks with state train operator Deutsche Bahn and around 50 other rail companies dragged on without a resolution. The walkout — set to start at 2000 GMT on Sunday and end at 2200 GMT on Tuesday — will be the latest in a wave of industrial action in several European countries as a cost of living crisis eats into incomes. “There is little movement at the negotiating table, so we will now go on strike once again,” said Cosima Ingenschay, head of collective bargaining at EVG, adding that “the offer on the table must be significantly improved”. Deutsche Bahn called the planned strike “completely unjustified and completely excessive”, with executive board member Martin Seiler saying that “the EVG wants to paralyse the country for an unbelievable 50 hours instead of seeking compromise”. Deutsche Bahn said the strike would have “a massive impact on all German rail operations” and a “considerable impact on freight traffic throughout Europe”. — Reuters Read the full story reuters reuters
FRIDAY MAY 12, 2023 27 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) VINVEST CAPITAL HOLDINGS BHD 198.10 -0.005 0.195 2.63 189.0 BAHVEST RESOURCES BHD 135.00 0.015 0.130 -57.38 161.2 FITTERS DIVERSIFIED BHD 85.40 0.000 0.050 -28.57 117.1 EDUSPEC HOLDINGS BHD 50.90 -0.005 0.025 -75.00 26.7 SEAL INC BHD 50.00 0.020 0.430 82.98 133.9 DAGANG NEXCHANGE BHD 39.90 -0.025 0.460 -9.80 1,451.9 TANCO HOLDINGS BHD 39.30 0.020 0.500 49.25 938.4 SAND NISKO CAPITAL BHD 38.90 -0.045 0.185 -51.32 46.2 MY EG SERVICES BHD 35.70 0.000 0.785 -8.90 5,813.3 WIDAD GROUP BHD 28.10 -0.010 0.425 -1.16 1,225.0 TOP GLOVE CORP BHD 25.50 -0.040 1.060 17.13 8,488.2 YONG TAI BHD 24.00 0.015 0.380 90.00 143.7 AIMFLEX BHD 22.90 0.005 0.175 16.67 257.1 MINDA GLOBAL BHD 21.60 0.010 0.120 71.43 201.5 AWANBIRU TECHNOLOGY BHD 20.60 0.040 0.480 28.00 378.2 ARTRONIQ BHD 20.60 -0.005 0.805 13.38 264.3 CIMB GROUP HOLDINGS BHD 20.20 -0.070 4.950 -14.66 52,792.3 SILVER RIDGE HOLDINGS BHD 16.90 0.025 0.425 214.81 86.4 STAR MEDIA GROUP BHD 16.60 -0.010 0.485 61.67 351.5 MR DIY GROUP M BHD 16.60 0.000 1.590 -20.50 14,998.9 Data as compiled on May 11, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) VSOLAR GROUP BHD 0.010 100.00 6,938.2 0.00 48.3 PEGASUS HEIGHTS BHD 0.010 100.00 798.0 0.00 108.2 TECHNA-X BHD 0.020 33.33 2,807.1 -20.00 44.3 SANICHI TECHNOLOGY BHD 0.020 33.33 238.0 -20.00 28.1 BARAKAH OFFSHORE PETROLEUM 0.055 22.22 1,606.6 120.00 55.2 ASIA BRANDS BHD 0.550 17.02 0.1 0.00 128.0 IVORY PROPERTIES GROUP BHD 0.110 15.79 6,170.6 37.50 53.9 SINMAH CAPITAL BHD 0.115 15.00 2,842.4 4.55 45.1 BAHVEST RESOURCES BHD 0.130 13.04 134,977.8 -57.38 161.2 BSL CORP BHD 0.050 11.11 352.0 -26.04 96.6 VIZIONE HOLDINGS BHD 0.055 10.00 584.3 0.00 112.5 JOHAN HOLDINGS BHD 0.055 10.00 77.5 0.00 64.2 FARLIM GROUP BHD 0.225 9.76 135.0 -4.26 34.4 PARAGON GLOBE BHD 0.170 9.68 5.0 -5.56 126.9 AWANBIRU TECHNOLOGY BHD 0.480 9.09 20,642.1 28.00 378.2 FLEXIDYNAMIC HOLDINGS BHD 0.180 9.09 9.8 -20.00 51.2 ASTRAL ASIA BHD 0.120 9.09 54.6 0.00 79.2 MINDA GLOBAL BHD 0.120 9.09 21,577.9 71.43 201.5 EVERSENDAI CORP BHD 0.065 8.33 512.0 -58.06 50.8 DFCITY GROUP BHD 0.395 8.22 13.9 2.60 41.7 Data as compiled on May 11, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) EQUITIESTRACKER HOLDINGS BHD 0.150 -34.78 100.0 0.00 40.6 EA HOLDINGS BHD 0.010 -33.33 10,392.9 -33.33 64.5 MMAG HOLDINGS BHD 0.010 -33.33 3,685.4 -60.00 24.2 GREEN OCEAN CORP BHD 0.015 -25.00 185.9 -25.00 31.7 METRONIC GLOBAL BHD 0.015 -25.00 9,520.4 -25.00 23.0 IQZAN HOLDING BHD 0.035 -22.22 60.0 0.00 7.8 SAND NISKO CAPITAL BHD 0.185 -19.57 38,891.1 -51.32 46.2 ALDRICH RESOURCES BHD 0.025 -16.67 395.0 -16.67 27.8 EDUSPEC HOLDINGS BHD 0.025 -16.67 50,940.8 -75.00 26.7 ZELAN BHD 0.030 -14.29 1,027.9 -57.14 25.3 SMTRACK BHD 0.030 -14.29 3,373.7 -40.00 35.3 KANGER INTERNATIONAL BHD 0.035 -12.50 575.5 -12.50 22.7 COUNTRY VIEW BHD 0.950 -11.21 2.0 -1.04 95.0 TWL HOLDINGS BHD 0.040 -11.11 6,895.4 14.29 163.5 DS SIGMA HOLDINGS BHD 0.335 -10.67 6,935.5 0.00 160.8 SC ESTATE BUILDER BHD 0.045 -10.00 20.0 0.00 48.3 HO WAH GENTING BHD 0.105 -8.70 816.2 -8.70 69.6 KNUSFORD BHD 0.550 -8.33 2.5 -8.33 54.8 KEY ASIC BHD 0.055 -8.33 489.0 -15.38 76.6 GRAND CENTRAL ENTERPRISES 0.340 -8.11 15.0 -2.86 67.0 Data as compiled on May 11, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) PETRONAS DAGANGAN BHD 22.320 -0.480 94.2 -2.31 22,173.9 DUTCH LADY MILK INDUSTRIES BHD 25.800 -0.200 6.7 -14.68 1,651.2 GREATECH TECHNOLOGY BHD 4.230 -0.160 475.9 -12.60 5,299.5 PETRONAS CHEMICALS GROUP BHD 7.160 -0.150 3,949.5 -16.74 57,280.0 HONG LEONG FINANCIAL GROUP 18.080 -0.140 88.3 -2.80 20,706.0 BATU KAWAN BHD 21.620 -0.140 10.1 -3.05 8,504.9 HEXTARTECHNOLOGIES SOLUTIONS 23.240 -0.140 2.3 36.23 2,989.8 COUNTRY VIEW BHD 0.950 -0.120 2.0 -1.04 95.0 HARTALEGA HOLDINGS BHD 2.180 -0.110 16,111.7 28.24 7,450.1 DKSH HOLDINGS MALAYSIA BHD 4.900 -0.100 0.3 13.91 772.5 NESTLE MALAYSIA BHD 134.900 -0.100 27.7 -3.64 31,634.1 KESM INDUSTRIES BHD 7.250 -0.100 0.9 3.28 311.9 INARI AMERTRON BHD 2.260 -0.080 3,583.2 -13.41 8,436.4 PERTAMA DIGITAL BHD 2.690 -0.080 4,257.4 52.84 1,165.7 FRONTKEN CORP BHD 2.850 -0.080 1,563.7 -7.47 4,481.4 KUCHAI DEVELOPMENT BHD 1.220 -0.080 12.0 -7.58 151.0 EQUITIESTRACKER HOLDINGS BHD 0.150 -0.080 100.0 0.00 40.6 VITROX CORP BHD 7.840 -0.080 80.3 2.48 7,411.0 HAP SENG CONSOLIDATED BHD 4.750 -0.070 560.6 -25.78 11,825.9 PADINI HOLDINGS BHD 3.940 -0.070 290.1 17.61 2,592.2 Data as compiled on May 11, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) KUALA LUMPUR KEPONG BHD 22.020 0.300 732.4 -1.52 23,747.2 HEINEKEN MALAYSIA BHD 28.400 0.200 20.2 12.70 8,579.6 CARLSBERG BREWERY MALAYSIA 21.760 0.160 81.8 -4.90 6,653.1 AURELIUS TECHNOLOGIES BHD 2.440 0.140 1,583.3 33.33 961.4 PANASONIC MANUFACTURING 22.440 0.140 12.3 -2.01 1,363.1 ALLIANZ MALAYSIA BHD 14.040 0.120 27.2 -0.85 2,498.7 CHIN HIN GROUP BHD 4.390 0.120 1,900.3 35.91 7,767.7 PETRONAS GAS BHD 16.980 0.100 271.9 -0.82 33,598.9 ASIA BRANDS BHD 0.550 0.080 0.1 0.00 128.0 SIME DARBY PLANTATION BHD 4.450 0.080 873.5 -4.30 30,774.9 INFOMINA BHD 1.460 0.070 2,155.6 1.39 877.8 PIE INDUSTRIAL BHD 3.410 0.070 580.8 31.15 1,309.6 IOI CORP BHD 3.880 0.070 2,222.1 -4.20 24,080.6 AEON CREDIT SERVICE M BHD 11.840 0.060 23.6 -5.88 3,022.8 FRASER & NEAVE HOLDINGS BHD 27.200 0.060 1,213.3 26.04 9,976.4 TENAGA NASIONAL BHD 9.090 0.060 4,052.1 -5.61 52,295.5 YINSON HOLDINGS BHD 2.610 0.060 1,902.1 7.41 7,586.0 EITA RESOURCES BHD 0.745 0.055 411.4 -3.87 193.8 EUROSPAN HOLDINGS BHD 1.200 0.050 20.0 6.19 53.3 GENTING PLANTATIONS BHD 6.050 0.050 82.1 -3.09 5,428.0 Data as compiled on May 11, 2023 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DOW JONES 33,531.33 -30.48 -0.09 S&P 500 4,137.64 18.47 0.45 NASDAQ 100 13,347.83 146.72 1.11 FTSE 100 7,743.62 2.29 0.03 AUSTRALIA 7,251.92 -3.82 -0.05 CHINA 3,309.55 -9.60 -0.29 HONG KONG 19,743.79 -18.41 -0.09 INDIA 61,904.52 -35.68 -0.06 INDONESIA 6,755.94 -55.97 -0.82 JAPAN 29,126.72 4.54 0.02 KOREA 2,491.00 -5.51 -0.22 PHILIPPINES 6,675.46 16.87 0.25 SINGAPORE 3,229.55 -12.74 -0.39 TAIWAN 15,514.64 -127.12 -0.81 THAILAND 1,567.40 -2.16 -0.14 VIETNAM 1,057.12 -1.14 -0.11 Data as compiled on May 11, 2023 Source: Bloomberg CPO RM 3,604.00-105.00 OIL US$ 76.810.40 RM/USD 4.4640 RM/SGD 3.3611 RM/AUD 3.0083 RM/GBP 5.6195 RM/EUR 4.8781