The Edge - 07 March 2024

CEOMorningBrief THURSDAY, MARCH 7, 2024 ISSUE 729/2024 theedgemalaysia.com APPELLATE COURT ACQUITS ISA SAMAD OF GRAFT CHARGES p2 HOME: ANZ to sell 16.5% in AMMB in upsized RM2.1 bil deal p6 Khazanah names Hisham Hamdan as investment chief with immediate effect p6 Property sales hit fresh record RM196.8 bil in 2023; Johor sees highest price jump p9 Manulife and Public Mutual the biggest winners at LSEG Lipper Fund Awards 2024 p10 WORLD: Powell reiterates Fed needs more confidence on inflation to cut p19 PNB values four highways at RM1.05 bil for trust IPO, expects 6.7% yield Report on Page 5. THE EDGE FILE PHOTO AG flags going-concern issues at Felda, PR1MA See reports on pages 3&4. PR1MA may struggle to repay a RM1.75 bil sukuk in October, while Felda’s deficit of RM1.01 bil is now the highest among federal agencies.

thursday march 7, 2024 2 The E dge C E O m o rning 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] Appellate Court acquits Isa Samad of graft charges PUTRAJAYA (March 6): A three member Court of Appeal bench on Wednesday has allowed former Federal Land Development Authority (Felda) chairman Tan Sri Mohd Isa Abdul Samad’s appeal over his conviction and sentence on nine counts of graft with regard to the acquisition of a hotel in Kuching, Sarawak, 10 years ago. The bench, led by Datuk Vazeer Alam Mydin Meera, that also comprised Datuk Ahmad Zaidi Ibrahim and Datuk SM Komathy Suppiah, unanimously allowed the former Negeri Sembilan menteri besar’s appeal. “The High Court judge had misdirected himself with regard to the decision and hence, the conviction is unsafe. Vazeer said there are two versions of the purported money being given, and the benefit of the doubt should be given to the appellant. “Hence, the conviction is unsafe and the conviction and sentence is set-aside,” Vazeer said. Mohd Isa, 73, was found guilty by the High Court on Feb 3, 2021 on nine bribery charges amounting to RM3.09 million in Felda’s acquisition of the Merdeka Palace Hotel & Suites in Kuching, Sarawak between July 21, 2014 and Dec 11, 2015, where the offence took place on the 49th floor of Menara Felda, Platinum Park, No 11, Persiaran KLCC, Kuala Lumpur. Following this, he was sentenced by then High Court judge Datuk Mohd Nazlan Mohd Ghazali (now Court of Appeal judge) to a six-year jail sentence and RM15.45 million fine, or in default, another 18 years’ jail, for being found guilty of nine counts of graft. When met after the decision, Mohd Isa thanked God for the appellate court decision after a six-year struggle with this case and said he may consider returning back to politics. Deputy Public Prosecutor Afzainizam Abdul Aziz said he would brief the Attorney General over Wednesday’s decision and decide on whether to file an appeal. Mohd Isa was represented by Datuk Salehuddin Saidin and Siti Sarah Khalil. by Hafiz Yatim theedgemalaysia.com home The prosecution has 14 days from Wednesday to file the appeal. Three elements of graft have to be proven Vazeer, in his grounds, said there are three elements to be proven under Section 16 of the MACC Act in a graft case, namely the accused or through others had received gratification from Ikhwan Zaidel, a director of Gegasan Abadi Properties Sdn Bhd (GAPSB) that owned the hotel; the acceptance by Mohd Isa of the said bribes for his assistance; and that the acceptance of bribes by Mohd Isa is corrupt. Hence, Vazeer said it was incumbent for the prosecution to prove that Mohd Isa directed his former aide Zahid Md Arip to ask for the bribe and that he received it from Ikhwan. It is to be noted that Zahid had contested against former prime minister Datuk Seri Najib Razak in Pekan in 2018 under the Parti Pribumi Bersatu Malaysia ticket but lost, although he was later appointed a senator. In this case, Vazeer said the evidence shows that the Felda Investment Corporation Sdn Bhd (FICSB) board, of which Mohd Isa is also a director, had approved the acquisition, and the management had asked to negotiate the sum, and the decision was done collectively. Vazeer said the High Court should look at Ikhwan’s evidence in his first meeting with Mohd Isa, who said that any approval to the acquisition of the hotel depends on the decision by the FICSB board and that Zahid was not present then. “(Mohd) Isa also said to Ikhwan that he (Mohd Isa) can only assist but cannot make any promises, as it depended on the board,” Vazeer said. The appellate court noted that the purported bribes were allegedly given after the approval of the FICSB board but in this case, there is no credible evidence produced that Mohd Isa instructed Zahid to seek the bribe from Ikhwan following approval of the purchase of the hotel for RM160 million, as the event (approval) was already gained. Vazeer added that in this case, Zahid testifying that Mohd Isa told him “whatever they (Ikhwan) give, you receive it” cannot be construed as a directive to demand for a bribe. “Zahid also testified that he had used the word salam (greetings) from (Mohd) Isa to Ikhwan, which had triggered the payments made to the appellant (Mohd Isa). However, there is no credible evidence [that] there was such an understanding between (Mohd) Isa and Zahid, and Zahid gave contradictory evidence in this,” Vazeer said. “Zahid, during the cross-examination, admitted that (Mohd) Isa did not give salam greetings to denote (the greetings) as a signal before any transactions (bribe). The appellate bench noted that the material contradictions regarding this crucial issue were not properly evaluated by the trial judge,” Vazeer said. Read the full story Former Felda chairman Tan Sri Mohd Isa Abdul Samad seen at the Palace of Justice on Wednesday, March 6, 2024 for his graft trial appeal. Suhaimi Yusuf/The Edge

THURSDAY MARCH 7, 2024 3 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (March 6): Malaysia’s auditor general on Wednesday flagged going-concern issues at two federal government agencies Federal Land Development Authority (Felda) and PR1MA Corp Malaysia. Both Felda and PR1MA face “going concern” issues — an accounting parlance that casts doubt on an organisation’s resources and income to stay afloat — based on levels of debt and reliance on government aid, the auditor general said in a statement following the release of the 2022 Auditor General Report. Felda tops federal agencies with highest deficit of RM1.01 bil Felda is now the federal agency reporting the highest deficit at RM1.01 billion, according to Auditor General Wan Suraya Wan Mohd Radzi in the report. Felda’s expenditures in 2022 amounted to RM1.947 billion, surpassing its income of RM942 million, which was further offset by an increased impairment of RM742 million, resulting in a current deficit of RM1.005 billion. The heightened impairment was attributed to the devaluation of investment value by RM380 million, outstanding amounts from subsidiary companies totalling RM193 million, and settler debts of RM147 million. Four other agencies with the highest deficits in 2022, highlighted in the AG’s Report, were the Electric Industry Fund (KWIE), the Railway Assets Corporation (RAC), the National Trust Fund Group (KWAN), and Kuala Lumpur City Hall (DBKL). KWIE incurred expenses totalling RM1.015 billion, surpassing its income of RM25 million, leading to a current deficit of RM990 million in 2022. The deficit was due to KWIE not receiving any revenue from excess electricity tariff rebates or charges due to increased fuel costs. Additionally, KWIE’s funds were utilised to cover rebate expenses as a mitigation plan to minimise the impact of electricity tariffs on consumers, as reported in the AG’s Report. The RAC reported expenses of RM641 million exceeding income of RM157 million, resulting in a current deficit of AG flags goingconcern issues at Felda, PR1MA RM484 million, due to a decline in revenue from the sale of second-hand goods amounting to RM162 million in 2022. For KWAN, its expenses in 2022 totalled RM922 million, surpassing income of RM569 million, resulting in a current deficit of RM353 million. This occurred due to expenses related to the acquisition of Covid-19 vaccines amounting to RM896 million. DBKL, meanwhile, experienced expenses of RM2.792 billion surpassing income of RM2.51 billion, resulting in a current deficit of RM283 million. This was attributed to an increase in service and supply expenses amounting to RM267 million for the maintenance of facilities and public housing, as well as city cleaning. The AG’s report also indicated that the Employees Provident Fund (EPF) had a surplus income of RM35.72 billion, leading the government agencies with a surplus in 2022, followed by Bank Negara Malaysia (RM6.99 billion), the Public Sector Home Financing Board (LPPSA; RM2.6 billion), Lembaga Tabung Haji (RM1.93 billion), and Bank Rakyat (RM1.8 billion). PR1MA may struggle to repay RM1.75b sukuk in October The Ministry of Housing and Local Government’s PR1MA, meanwhile, may struggle to repay the second tranche of its sukuk, amounting to some RM1.75 billion, maturing in October this year. According to the AG’s report, PR1MA has an Islamic medium term note loan repayment, with balances which amounted to RM3.792 billion (2021: RM4.542 billion). “PR1MA needs to pay the debts by the year 2027, including Sukuk Tranche 2 amounting to RM1.750 billion, which will mature in October 2024. BY CHOY NYEN YIAU, JASON NG & ISABELLE FRANCIS theedgemalaysia.com CONTINUES ON PAGE 4 KUALA LUMPUR (March 6): The Federal Land Development Authority (Felda), which posted a net loss of RM1.01 billion in 2022, almost double of the amount it bled in 2021, faces financial challenges to meet its debt obligations, according to the Auditor-General’s Report on Federal Agencies for 2022. The annual net loss of RM1.01 billion was sharply higher than the RM545 million net loss it suffered in 2021, despite strong crude palm oil prices. The AG highlighted that Felda’s loan repayment commitment amounted to RM1.561 billion compared to its cash AG flags Felda’s loan defaults, urges reducing reliance on government grants BY CHOY NYEN YIAU theedgemarkets.com ment for financial assistance. The report recommended Felda to establish a clear operational direction, ensuring robust financial performance without over-reliance on federal government assistance. Additionally, Felda is advised to closely monitor the operations and financial performance of its subsidiary companies, ensuring sustainability, viability, and providing appropriate returns without relying heavily on the parent agency. Read the full story balance of RM808 million as at end2022. “Felda is unable to fulfill commitments amounting to RM753 million,” the report said “Felda relies on the government and financial institutions for operational costs and liabilities, highlighting potential challenges in meeting these financial obligations,” said AG in the report. The Auditor-General urges Felda to reduce its reliance on the federal governTABLE SAMPLE FONT/COLOUR Federal agencies that report the highest deficits in 2022 Agency Deficit (RM bil) Percentage (%) Federal Land Development Authority (Felda) 1.01 32.3 Electric Industry Fund (KWIE) 0.99 31.8 Railway Assets Corporation (RAC) 0.48 15.5 National Trust Fund (KWAN) 0.35 11.3 Kuala Lumpur City Hall (DBKL) 0.28 9.1 Source: Auditor General’s Report 2022 AG’s Report 2022

THURSDAY MARCH 7, 2024 4 THEEDGE CEO MORNING BRIEF HOME Based on cash and cash equivalent amounting to RM428 million as at Dec 31, 2022, PR1MA “will encounter difficulties to repay the Sukuk Tranche 2,” said the report. PR1MA incurred a net loss amounting to RM257 million and recorded liabilities amounting to RM5.746 billion in In 2022. The audit recommends that PR1MA re-evaluate their development strategy of residential and commercial projects based on current needs and market conditions, to ensure marketability of completed residential and commercial units to be able to achieve PR1MA’s project development objectives. The audit also suggested for PR1MA to ensure that cash projections from the sales of residential and commercial units can be achieved to fund operational activities, besides settling the Sukuk Tranche 2 amount. 10 agencies had total borrowings of RM122.39 bil The report tabled to the Parliament on Wednesday covers 130 financial statements by government agencies for the year 2022 out of 140 submitted for audit. Four federal agencies have yet to submit their statements due to “financial system network disruption” and delay in appointment of board chairman. The AG issued unmodified opinions — which generally means that auditors saw no issues with the statements presented — for 116 of the agencies. However, 14 of the federal agencies were given modified opinions comprising 13 qualified opinions and one adverse opinion. Of the 130 audited statements, the AG said special attention should be given for financial performance of federal agencies for current surplus or deficit, asset and liabilities, federal government grants, borrowings and investments in subsidies. The AG noted that 10 agencies had the highest borrowings totalling RM122.39 billion, of which four still owed the federal government RM5.34 billion though three of the four have rescheduled their repayments. The one with the most borrowings among them is Public Sector Home Financing Board (LPPSA) with RM62.08 billion borrowings, followed by the National Higher Education Fund or PTPTN (RM41.5 billion), Felda (RM8.66 billion), PR1MA (RM3.79 billion), Port Klang Authority (RM3.47 billion), Malaysian Highway Authority (RM767 million), Social Security Organisation or Socso (RM708 million), Malaysian Timber Industry Board (RM694 million), RAC (RM420 million) and Bank Simpanan Nasional (RM300 million). KUALA LUMPUR (March 6): The Armed Forces Fund Board (LTAT) has consistently reported a deficit in its reserves since 2020, according to the Auditor General’s Report on Federal Agencies for 2022. As outlined in the AG’s Report, LTAT’s reserve stood at a negative RM376 million in 2020, RM258 million in 2021, and RM338 million in 2022. Notably, the report highlighted 41 old stock portfolios with an unrealised loss of RM662 million as of Dec 31, 2022, contributing to the deficit. The AG’s Report also disclosed that LTAT’s 2022 investment in 13 subsidiaries amounted to RM5.29 billion, including investments of RM2.55 billion in Boustead Holdings Bhd and RM106 million in Pharmaniaga Bhd. However, the report revealed impairment of investments amounting to RM768 million LTAT reserves in deficit since 2020 EC’s KWIE fund logged RM990m loss in 2022 on tariff rebate expenses BY CHOY NYEN YIAU theedgemalaysia.com BY IZZUL IKRAM theedgemalaysia.com FROM PAGE 3 in Boustead Holdings and RM44 million in Pharmaniaga. “LTAT did not provide impairment for investments in Boustead Holdings and Pharmaniaga, resulting in an overstatement of net profit and subsidiary investments by RM0.812 billion,” stated the AG’s Report. Additionally, the report found that LTAT divested its holdings in Perumahan Kinrara Bhd and Tanah Sutera Development Sdn Bhd, selling them for a total of RM43 million to Perbadanan Perwira Harta Sdn Bhd (PPHSB). In return, LTAT received PPHSB shares valued at RM232 million. From this transaction, LTAT recorded a non-cash profit of RM189 million, forming the basis for dividend payment in 2022. In light of these findings, LTAT is advised to reassess and revamp its investment strategy by diversifying its portfolio, avoiding excessive reliance on subsidiaries to mitigate risk and income dependence. The AG’s Report also recommends improving the governance of investment management, refining policies to address shares with prolonged losses. Additionally, it suggests basing dividend declarations on realised gains to ensure the ability to distribute payouts to eligible contributors in the future. KUALA LUMPUR (March 6): The Electricity Industry Fund (KWIE) found itself among the top five loss-making federal agencies in 2022, with a loss of RM990 million, on the back of hefty electricity tariff rebate expenses, according to the Auditory General’s Report on federal agencies for 2022. KWIE, a fund under the Energy Commission to support the Imbalance Cost Past-Through (ICPT) mechanism and cushion the impact of electricity tariffs on consumers, logged RM1.02 billion in expenses and RM25 million in revenue. “This occurred because KWIE did not receive any revenue on excess electricity tariff rebates/surcharges due to an increase in fuel costs,” the AG’s Report disclosed. “In addition, KWIE’s funds were used to cover rebate expenses as mitigation to reduce the impact of electricity tariffs on consumers.” Established in 2016, KWIE gathers excess tariff collections when fuel costs are low, and disburses them when costs are high to keep tariffs stable. However, due to tariff discounts in 2020, and prolonged rebates in 2021 and 2022, KWIE experienced a period of under-recovery with excess ICPT being a rarity. It is unclear how much KWIE currently has in its coffers, but as at end-December 2021, the fund had RM1.62 billion in short-term investments, RM178.77 million in cash and cash equivalents, while current liabilities stood at RM266.5 million, according to the fund’s 2021 annual report. KWIE recorded a net profit of RM996.73 million for 2021 on revenue of RM1.52 billion, mainly thanks to excess ICPT of RM1.11 billion received from Tenaga Nasional Bhd for the first half of 2021 (1H2021). While fuel prices remained largely below benchmark coal and gas prices — which are used to calculate base electricity tariffs — in 1H2021, they later exceeded benchmark prices in 2H2021 and stayed elevated in 2022 and 2023. AG’s Report 2022

THURSDAY MARCH 7, 2024 5 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (March 6): Permodalan Nasional Bhd’s (PNB) wholly owned unit Projek Lintasan Kota Holdings Sdn Bhd (Prolintas) is listing its four highway concessions via a business trust to raise RM445.3 million. The initial public offer (IPO) of Prolintas Infra Business Trust, the first of its kind being listed on Bursa Malaysia, is priced at 95 sen per unit. There is only an offer for sale of 468.7 million units to the public and institutional investors. The trust does not issue any new units for the listing exercise. The four toll highways — Ampang-Kuala Lumpur Elevated Highway (Akleh), Guthrie Corridor Expressway (GCE), Lebuhraya Kemuning-Shah Alam (LKSA), and Sistem Lingkaran Lebuhraya Kajang (Silk) — are valued at RM1.05 billion based on unit base of 1.1 billion units. Prolintas Infra, which is set to be listed on March 25, intends to distribute yearly distributions of at least 90% of the business trust’s distributable amount, according to Prolintas chief executive officer Datuk Mohammad Azlan Abdullah. For the current financial year ending Dec 31, 2024 (FY2024), Prolintas Infra is targeting to distribute RM70 million. The payout translates into a 6.4 sen distribution per unit based on 1.1 billion units in the business trust. Based on the IPO price of 95 sen per unit, the implied distribution yield is about 6.7% for FY2024. BY EMIR ZAINUL theedgemalaysia.com PNB values four highways at RM1.05 bil for trust IPO, expects 6.7% yield For comparison, AmFIRST Real Estate Investment Trust (REIT) had a distribution yield of 8.6% for FY2023 — the highest distribution yield among REITs listed on Bursa Malaysia — followed by Sentral REIT at 8.4%, Hektar REIT at 8.1% and IGB Commercial REIT at 7.1%. (see table) It is worth noting that the four highways collectively recorded a net loss of RM256.95 million on revenue of RM228.57 million for the nine-month financial period ended Sept 30, 2023 (9MFY2023). The loss was wider than in the previous year’s corresponding period of RM9.6 million on the back of RM285.32 million in revenue then. The impairment of highway development expenditures (HDE) of RM124.24 million and amortisation of HDE amounting to RM32.86 million had contributed to the trust’s losses. In addition, it incurred finance costs of RM107.45 million and income expenses of RM171.35 million for 9MFY2023. As at Sep 30, 2023, the four highways’ combined cash balances totalled RM348.47 million, while its net debts stood at RM1.83 billion. The sizable impairment on HDE of Akleh and LKSA as well as the reversal of deferred tax assets from both Projek Lintasan Shah Alam Sdn Bhd and Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd, resulted in the business trust recording a negative total equity of RM13.6 million as at Sept 30, 2023, the IPO prospectus stated. CONTINUES ON PAGE 6 (From left) AmInvestment Bank Bhd deputy CEO Christopher Ng Kok Wai, Prolintas Managers Sdn Bhd CEO Malik Parvez Ahmad Nazir Ahmad, Prolintas Group of Companies chairman Datuk Idris Kechot, Prolintas Managers chairman Datuk Ikmal Hijaz Hashim and Projek Lintasan Kota Holdings Sdn Bhd group CEO Datuk Mohammad Azlan Abdullah at the Prolintas IPO prospectus launch on Wednesday. SHAHRILL BASRI/THE EDGE Top 10 Malaysian REITs in terms of distribution yield Company Distribution Unit price Distribution per unit for as at Mar 6 yield FY2023 (sen) (RM) (%) AmFIRST Real Estate Investment Trust 2.70 0.315 8.57 Sentral REIT 6.68 0.8 8.35 Hektar Real Estate Investment Trust 5.02 0.62 8.10 IGB Commercial Real Estate Investment Trust 3.49 0.49 7.12 Pavilion Real Estate Investment Trust 9.01 1.28 7.04 UOA Real Estate Investment Trust 7.82 1.12 6.98 KIP REIT 6.20 0.89 6.97 Capitaland Malaysia Trust 4.17 0.64 6.52 Al-’Aqar Healthcare REIT 7.90 1.26 6.27 YTL Hospitality REIT 7.44 1.2 6.20 Source: Bloomberg

thursday march 7, 2024 6 The E dge C E O m o rning brief home KUALA LUMPUR (March 6): Khazanah Nasional Bhd on Wednesday named Datuk Hisham Hamdan as its new chief investment officer effective immediately, filling the vacancy left over a year ago, following the departure of Tengku Datuk Seri Azmil Zahruddin Raja Abdul Aziz. Hisham is currently Khazanah’s executive director of public markets. His appointment allows for greater focus on building the sovereign wealth fund’s capabilities as an investment institution while creating new capacity and competencies, Khazanah said in a statement. “We are confident that his vast experience and knowledge will be an asset to Khazanah’s ongoing efforts in gearing up the organisation to build the required capacity, as well as institutionalise talent development, part of our overall strategy in developing a winning team,” said managing director Datuk Amirul Feisal Wan Zahir. “This, along with our long-term strategy of Advancing Malaysia, would further allow us to strengthen our position in facing the challenging global market condition,” he added. Hisham joined Khazanah in April 2011 from Sime Darby Bhd, and held various senior positions in strategy and business development spanning healthcare, energy, and utilities sectors. He is also the current chairman of Khazanah’s 69.6%-owned UEM Sunrise Bhd and the board of trustees of the Khazanah Research Institute. He was the previous chairman of UDA Holdings Bhd, a past director of Iskandar Investment Bhd, and a former board member of ValueCap. Khazanah names Hisham Hamdan as investment chief with immediate effect KUALA LUMPUR (March 6): Australia & New Zealand Banking Group Ltd (ANZ) said on Wednesday it has agreed to sell a 16.5% stake in Malaysia’s sixth largest lender by assets AMMB Holdings Bhd, in a block trade worth over RM2.1 billion. The share sale, priced at RM3.85 per share, has been upsized from its initial plan to sell a 9% stake in the company also known as AmBank previously reported by The Edge. Once completed, the sale will reduce its shareholding in AmBank to 5.2% from 21.7%, ANZ said in a statement. The deal is “in line with ANZ’s strategy of simplifying the bank”, ANZ said. “Following the sale, ANZ will continue to have one nominated director on the AmBank board.” The Edge reported on Tuesday after reviewing a term sheet that ANZ was marketing up to 297.72 million shares in AmBank at an indicative price of RM3.80 to RM3.85 per share. The accelerated bookbuilding process was set to close on Tuesday night, followed by settlement on Friday. Currently, foreign shareholding in Malaysian commercial banks is capped at 30%, and ANZ has long made known its intention to let go of its block of shares, but there has been no buyers for its stake — the single largest in AmBank. AmBank founder Tan Sri Azman Hashim is the second largest shareholder with an 11.8% stake, followed by the Employees Provident Fund’s 9.6%. ANZ said the proceeds from the sale will increase its Common Equity Tier 1, a measure of a bank’s capital strength, by about 16 basis points but would not have a material impact on profit. “Capital management considerations will include the capital release from this sale, subject to regulatory approvals,” it added. ANZ to sell 16.5% in AMMB in upsized RM2.1 bil deal by Jason Ng theedgemalaysia.com by Chester Tay theedgemalaysia.com from Page 5 In view of the accounting losses, Mohammad Azlan explained that Prolintas has opted to undertake the IPO via a business trust structure to enable the company to pay distributions out of cash flow without being constrained by accounting profits. As such, Prolintas Infra will still be able to pay out distributions despite incurring accounting losses. “The reason why we set this up in the business trust structure is purely for the cash flow. Dividends will be paid out from the operating cash flow, which is revenue after operating cost rather than conventionally where it is paid out from the retained earnings. “The focus for the trust is to ensure capability to pay out an attractive dividend yield. “As we have already targeted a payout of RM70 million for the first year, it comes down to a yield of 6.7%. With this, we hope we can attract interest from investors,” he said at the launch of the IPO prospectus on Wednesday. Business trust is an asset class introduced in the Malaysian capital market following the release of the Securities Commission Malaysia’s Business Trusts Guidelines which came into force on Dec 28, 2012. Conventional companies are restricted to paying dividends out of accounting profits, while business trusts can pay distributions to investors out of operating cash flows. This structure is suitable for businesses which are capital-intensive with stable cash flow but may be affected by high depreciation charges, much like a highway concessionaire. One of the benefits of a business trust structure is that it allows investors to have a direct exposure to cash flow-generating assets. The structure breaks down big ticket assets into liquid and affordable units which are traded on the exchange, giving investors a new alternative to existing yield. There are eight cornerstone investors led by PNB’s investment funds, Yayasan Pelaburan Bumiputera, Lembaga Tabung Haji, AIIMAN Asset Management, AHAM Asset Management, Maybank Asset Management, and Kenanga Investors. PNB will hold a 51% stake in the business trust upon completion of the IPO. The concession periods for GCE, LKSA and Silk will all expire in 2062, and management has indicated that there will be two scheduled toll hikes during this period. Meanwhile, the concession period for Akleh will expire in 2037 and there will be no planned toll hikes during the period. Prolintas’ IPO is the largest listing, in terms of amount raised, since CTOS Digital Bhd raised RM1.21 billion in July 2021. khazanah.com.my

thursday march 7, 2024 7 The E dge C E O m o rning brief Invest in Women: Accelerate Progress FORUM2024 INTERNATIONAL WOMEN'S DAY PARTNERS #INSPIREINCLUSION #INVESTINWOMEN #OPTIONSIWD2024

thursday march 7, 2024 8 The E dge C E O m o rning brief On average, women constitute 50% of any population and yet, systemic disparities and discrimination persist. Find out what can be done to promote parity and empower individuals interested in investing in women to close the global gender gap as well as drive economic growth and social progress. MONDAY, MARCH 11, 2024 11.30AM – 5.00PM BALLROOM A, HILTON KuALA LuMPuR 2.50pm PANEL DISCUSSION I PROGRAMME 4.20pm PANEL DISCUSSION I I Barrier Breakers + The Road Ahead for Creative Women 11.30am REGISTRATION 12.00pm LUNCH 1.00pm Welcome Address YBhg Dato’ Ho Kay Tat Publisher & Group Chief Executive Officer, The Edge Media Group 1.05pm Keynote Address YB Puan Hannah Yeoh Minister of Youth and Sports 1.20pm YBhg Tan Sri Dato’ Seri Prof Emerita Dr Mazlan Othman Executive Director, Tropical Science Foundation 4.50pm Q&A SESSION AND CLOSING REMARKS 1.50pm Ms Lina Tan Founder and Chief Content Officer, Red Communications Sdn Bhd Nurturing Female Talent: The Key Role Managers Play in Creating Equal Opportunity and Fostering Growth Ms Beh Gaik Lean Co-Founder & Chef-Owner, Auntie Gaik Lean’s Old School Eatery YBhg Dato’ Ho Kay Tat Dr Anita Ratnam Founder, Narthaki.com Ms Wendy Ting Managing Director, Group International Business & Group Corporate Banking, RHB Banking Group Ms Nadirah Zakariya Founder, Layar Lucida Ms Amanda Zhang CEO & President, Mercedes-Benz Malaysia & Head of Region SEA II 3.20pm COFFEE BREAK 3.50pm Ms Mint Lim Founder, School of Concepts Ms Freda Liu Emcee & Moderator for Panel Discussion I & II #INSPIREINCLUSION #INVESTINWOMEN #OPTIONSIWD2024 2.20pm Ms Madhusmita Bora Co-Founder, Sattriya Dance Company

thursday march 7, 2024 9 The E dge C E O m o rning brief home KAJANG (March 6): The number of completed residential properties that remained unsold for nine months continued to decline in 2023, extending the improvement seen a year before. According to the National Property Information Centre’s (Napic) Property Market Report 2023, the number of overhang residential units fell 7% year-on-year (y-o-y) to 25,816 in 2023, versus 27,746 units in 2022. Value of overhang residential units also declined 4% to RM17.68 billion in 2023, from RM18.41 billion a year earlier. “The residential overhang shows encouraging momentum, as the numbers continued to decline as compared to 2022,” Napic said in a statement on Wednesday. In 2022, the number of overhang residential units declined 24.7% y-o-y, compared with 36,863 units in 2021. Last year, the residential overhang was led by units priced at RM300,000 or below at 29.4%, closely followed by RM500,001 to RM1 million (29.1%), then RM300,001 to RM500,000 (25.3%), and above RM1 million (16.2%). Perak overtakes Johor By state, Perak overtook Johor as the number of overhang residential units in the silver state spiked worryingly by 98.9% to 4,598 units in 2023, versus 2,312 units a year ago, while Johor’s fell 19.6% to 4,228 in 2023, from 5,258 previously. Other states that Napic deemed to have a high number of overhang residential units were Kuala Lumpur with 3,535 units, and Selangor with 3,405 units. The number rose 3.1% in Kuala Lumpur from 3,429 in 2022, while in Selangor, there was a decline of 7.9% from 3,698 units in 2022. Overhang residential units down 7% in 2023, affordable housing the largest category KAJANG (March 6): Malaysia’s property transaction value hit RM196.83 billion in 2023 — the highest ever recorded by the National Property Information Centre (Napic). The figure was a 9.91% year-on-year (y-o-y) rise from the previous all-time high of RM179.07 billion logged in 2022, Napic said in a statement in conjunction with the release of its Property Market Report 2023 on Wednesday (March 6). As for the number of transactions, it was largely flat at 399,008 in 2023, a 2.54% increase from 389,107 in 2022, with the bulk 62.8% or 250,586 units coming from the residential subsector. Likewise, the residential sub-sector contributed the majority or 51.3% of 2023’s transaction value at RM100.93 billion, followed by commercial (19.5%), industrial (12.2%), agricultural (9.5%) and development land and others (7.5%). “This positive growth trend is driven by a higher increase in transaction value in all subsectors, namely residential (up 7.1%), commercial (up 17.5%), industrial (up 13.1%), agriculture (up 4.6%) and development land and others (up 13.8%) compared wit 2022,” Napic said. The Malaysian House Price Index (MHPI) — a measure of Malaysian home prices — stood at 216.5 points (RM467,144 per unit) in 2023 with a moderate annual growth of 3.2%. “All major states recorded positive annual growth in [MHPI] led by Johor (up 6.2%), Penang (up 3.8%), Selangor (up 2.9%) and Kuala Lumpur (up 1.8%) respectively,” Napic said. Property sales hit fresh record RM196.8 bil in 2023; Johor sees highest price jump by Izzul Ikram theedgemalaysia.com by Izzul Ikram theedgemalaysia.com Cautiously optimistic property market in 2024 Napic said that with the national economy expected to expand by 4% to 5% in 2024, the property market’s performance is expected to remain cautiously optimistic. As for unsold incomplete residential units, comprising both those still under construction and yet to begin construction, a total of 59,058 units were recorded in 2023. There were 51,132 unsold units still under construction in 2023, with the bulk of 45.4% or 23,231 units being those priced at RM300,000 or below — or in other words, in the affordable housing range. Meanwhile, another 7,926 unsold units had yet to begin construction, likewise being led by units priced at RM300,000 or below at 38.3% or 3,039 units. In 2023, new launches in the residential subsector stood at 56,526 units, 4.4% higher than the 54,118 units logged in 2022. Of the total, 36,793 units were landed properties, while the other 19,733 were high-rise units. Second Finance Minister Datuk Seri Amir Hamzah Azizan, who officiated the report’s launch, said that the property sector in 2024 is expected to continue its recovery momentum supported by government initiatives set out in Budget 2024, although the domestic economy is facing global challenges. Outlining relevant initiatives, Amir Hamzah mentioned the RM2.47 billion allocation for affordable housing development, RM10 billion allocation to the Housing Credit Guarantee Scheme (SKJP), stamp duty exemption for first-time homebuyers who purchase a home valued up to RM500,000, and more relaxed conditions for Malaysia My Second Home (MM2H) programme. “Accommodative policies, well-executed measures outlined in Budget 2024 and proper implementation of strategies and initiatives under the 12th Malaysia Plan (12MP) are expected to catalyse further growth in the property sector,” Amir Hamzah said. (From left): Director General of Valuation and Property Services Department Sr Abdul Razak Yusak, Finance Minister II Datuk Seri Amir Hamzah Azizan and Director of Napic Sr Norhisham Shafie during the launch of the property report. Mohd Izwan Mohd Nazam/The Edge Read also: Shopping complex occupancy rises slightly y-o-y in 2023, office space remains flat

thursday march 7, 2024 10 The E dge C E O m o rning brief home KUALA LUMPUR (March 6): Manulife Investment Management (M) Bhd was the biggest group awards winner and Public Mutual Bhd was the biggest individual awards winner at the LSEG Lipper Fund Awards 2024 on Wednesday. Manulife took home three group awards, alongside eight individual awards, while Public Mutual won 21 individual awards. Other big winners included KAF Investment Funds Bhd, which won a group award and 10 individual awards, and Maybank Asset Management Sdn Bhd, which grabbed a group award and 7 individual awards. A total of 96 awards were given to 18 fund management companies at the awards ceremony held at the Mandarin Oriental Hotel here. 2023 was another challenging year for fund managers. Still, despite all the uncertainties, fund managers were able to cut through the noise and turn in a good performance, said Anna Taing, managing editor of The Edge Malaysia, in her opening speech. “They might not necessarily have made the right calls all the time, but the key was in delivering consistent and positive returns to their clients,” said Taing. The Edge Malaysia is the official presenter of the LSEG Lipper Fund Awards 2024 in Malaysia. A new award category was added to the list this year, which is the best equity sector real estate Asia Pacific fund award. Taing expressed that it is encouraging to see that a broader variety of investment products is being offered to the markets. She added that the key developments that will define 2024 would be rising geopolitical tensions, expectations of higher interest rates as inflation continues to stay elevated and technology disruption. “Additionally, sustainability and ESG will increasingly be an important factor to consider for all fund managers moving forward. Let us hope that 2024 turns out to be a better and more exciting year for all of us here today,” she said. US dollar money market received the largest net inflows in 2023 Xav Feng, LSEG Lipper Asia Pacific Head of Research, said 2023 turned out to be a better year than 2022, as global equity markets provided investors with significant returns on the back of the booming artificial intelligence (AI) trend and cooling inflation globally. He said the global fund industry had enjoyed net inflows of US$1,236 billion, which was a significant turnaround compared to 2022 with net outflows of more than US$2,500 billion. Interestingly, most investors’ money went into money market USD last year (US$1,015 billion), which was among the safest of all asset classes. That was followed by bond USD medium term (US$130 billion), money market EUR (US$113 billion), money market CNY (US$86 billion) and bond USD government (US$82 billion). According to Feng, funds that experienced the largest net outflows last year were bond USD short term, money market GBP, equity US small and mid-cap, equity US income and mixed asset BRL flexible. by Grace Yap Ern Hui theedgemalaysia.com Manulife and Public Mutual the biggest winners at LSEG Lipper Fund Awards 2024 How about the Malaysian market? Feng pointed out that real estate received the highest inflows of US$344.4 million. That was followed by equity (US$182.01 million), bonds (US$180.07 billion), money market (US$23.52 million) and others (US$17.1 million). Alternative asset classes in Malaysia experienced the highest net outflow of US$35.31 million, followed by commodity (US$7.54 million) and mixed assets (US$7.46 million). “For Malaysia, after a huge US$3 billion net outflows in 2022, there was a total of nearly US$700 million net inflow into Malaysia in 2023,” said Feng. As for the winners, Gan Kong Yik, senior director and head of equity of Manulife Investment Management (M) Bhd, is proud that the firm emerged as one of the biggest winners at the awards. “As you know, 2023 was a very challenging and volatile year. How we try to do better than the rest is that we have to be more reactive and, at the same time, always try to take the market condition and readjust our portfolio to suit the market condition.” Public Mutual Bhd won the greatest number of individual awards. Its CEO Chiang Kang Pey attributed the achievement to team effort. “We have a very strong team who has enabled us to continue to perform over the years. Of course, the direction from the board of directors is very important, as well as the support from the unit trusts, investors and unit trust consultants,” he said. A total of seven group and 89 individual awards were given out during the ceremony. From left: Chue Kwok Yan, CEO and CIO of KAF Investment Funds Berhad; Gan Kong Yik, senior director and Head of Equity of Manulife Investment Management (Malaysia) Berhad; Xav Feng, Director of Lipper Asia Pacific Research of LSEG; Lim Suet Ling, CEO of UOB Asset Management (Malaysia) Berhad; Goh Wee Peng, CEO of AmFunds Management Berhad; Shyiful Zamri, CIO of Maybank Asset Management Sdn Bhd; Riduan Hasmi, CIO of Maybank Islamic Asset Management Sdn Bhd, and Kuek Ser Kwang Zhe, Editor of Wealth, The Edge con tinues on Page 11

thursday march 7, 2024 11 The E dge C E O m o rning brief home FUND AWARD WINNERS DURATION: 3 YEARS Award fund Bond MYR (Malaysia) KAF Bond Fund Bond MYR (Islamic) AmanahRaya Syariah Fund Trust Bond MYR (Provident) RHB Bond Fund Equity Malaysia (Malaysia) Maybank Malaysia Growth Fund Equity Malaysia (Islamic) KAF Dana Adib Equity Malaysia (Provident) KAF Tactical Fund Equity Malaysia Small & Mid Cap (Malaysia) Public SmallCap Fund Equity Malaysia Small & Mid Cap (Islamic) Manulife Investment Shariah Progress Plus Fund Equity Malaysia Small & Mid Cap (Provident) KAF Vision Fund Equity Malaysia Income (Malaysia) RHB Malaysia Dividend Fund Equity Malaysia Income (Islamic) PMB Dana Bestari Equity Malaysia Income (Provident) KAF Core Income Fund Equity Malaysia Diversified (Malaysia) Maybank Malaysia Ethical Dividend Fund Equity Malaysia Diversified (Islamic) PMB Shariah Equity Fund Equity Malaysia Diversified (Provident) PMB Shariah Equity Fund Equity ASEAN (Malaysia) Public South-East Asia Select Fund Equity ASEAN (Islamic) Saturna ASEAN Equity Fund Equity Asia Pacific (Malaysia) Public Regional Sector Fund Equity Sector Real Estate Asia Pacific (Malaysia) TA Asia Pacific REITs Income Fund Equity Asia Pacific ex Japan (Malaysia) PB Asia Pacific Dividend Fund Equity Asia Pacific ex Japan (Islamic) Maybank Asiapac Ex-Japan Equity I-Fund Equity Asia Pacific ex Japan (Provident) Manulife Investment Shariah Asia-Pacific ex Japan Fund Equity Greater China (Malaysia) Public China Titans Fund Equity Global (Malaysia) Principal Global Titans Fund- Class MYR Equity Global (Islamic) Public e-Islamic Sustainable Milennial Fund Mixed Asset MYR Balanced - Malaysia (Malaysia) Maybank Malaysia Balanced Fund Mixed Asset MYR Balanced - Malaysia (Islamic) Manulife Investment Al-Umran Mixed Asset MYR Balanced - Malaysia (Provident) Principal Dynamic Enhanced Malaysia Income Fund Mixed Asset MYR Balanced - Global (Malaysia) PB Australia Dynamic Balanced Fund Mixed Asset MYR Conservative (Malaysia) PB Mixed Asset Conservative Fund Mixed Asset MYR Flexible (Malaysia) Manulife Investment- CM Flexi Fund Mixed Asset MYR Flexible (Islamic) PMB Shariah Tactical Fund Mixed Asset MYR Flexible (Provident) Manulife Investment- ML Flexi Fund from Page 10 continues on Page 12 Winners of the LSEG Lipper Fund Awards 2024 GROUP AWARD WINNERS DURATION: 3 YEARS Award COMPANY Bond Group (Malaysia) AmFunds Management Bhd Bond Group (Islamic) Maybank Asset Management Sdn Bhd Equity (Malaysia) Manulife Investment Management (M) Bhd Equity (Islamic) Manulife Investment Management (M) Bhd Equity (Provident) KAF Investment Funds Bhd Mixed Assets (Malaysia) UOB Asset Management (Malaysia) Bhd Mixed Assets (Provident) Manulife Investment Management (M) Bhd

thursday march 7, 2024 12 The E dge C E O m o rning brief home from Page 11 FUND AWARD WINNERS DURATION: 5 YEARS Award fund Bond MYR (Malaysia) AmanahRaya Unit Trust Fund Bond MYR (Islamic) AmanahRaya Syariah Fund Trust Bond MYR (Provident) RHB Bond Fund Equity Malaysia (Malaysia) Areca equityTRUST Fund Equity Malaysia (Islamic) TA Dana Fokus Equity Malaysia (Provident) KAF Tactical Fund Equity Malaysia Small & Mid Caps (Malaysia) Public Emerging Opportunities Fund Equity Malaysia Small & Mid Caps (Islamic) Manulife Investment Shariah Progress Plus Fund Equity Malaysia Small & Mid Caps (Provident) KAF Vision Fund Equity Malaysia Income (Malaysia) RHB Malaysia Dividend Fund Equity Malaysia Income (Islamic) PMB Dana Bestari Equity Malaysia Income (Provident) KAF Core Income Fund Equity Malaysia Diversified (Malaysia) Maybank Malaysia Value Fund Class A-MYR Equity Malaysia Diversified (Islamic) PMB Shariah Equity Fund Equity Malaysia Diversified (Provident) PMB Shariah Equity Fund Equity ASEAN (Malaysia) Public ASEAN Growth Fund Equity ASEAN (Islamic) Public Islamic ASEAN Growth Fund Equity Asia Pacific (Malaysia) PB Asia Equity Fund Equity Sector Real Estate Asia Pacific (Malaysia) Maybank Singapore REITs Fund SGD Class Equity Asia Pacific ex Japan (Malaysia) Pheim Asia Ex-Japan Fund Equity Asia Pacific ex Japan (Islamic) Principal Islamic Asia Pacific Dynamic Equity Fund— Class MYR Equity Asia Pacific ex Japan (Provident) Principal Islamic Asia Pacific Dynamic Equity Fund — Class MYR Equity Global (Malaysia) Principal Global Titans Fund— Class MYR Equity Global (Islamic) RHB Islamic Global Developed Markets Fund RM Class Mixed Asset MYR Balanced — Malaysia (Malaysia) Public Growth Balanced Fund Mixed Asset MYR Balanced — Malaysia (Islamic) Hong Leong Dana Maa'rof Mixed Asset MYR Balanced — Malaysia (Provident) Hong Leong Dana Maa'rof Mixed Asset MYR Balanced — Global (Malaysia) Public Strategies Balanced Fund Mixed Asset MYR Conservative (Malaysia) PB Mixed Asset Conservative Fund Mixed Asset MYR Flexible (Malaysia) Public e-Flexi Allocation Fund Mixed Asset MYR Flexible (Islamic) PMB Shariah Tactical Fund Mixed Asset MYR Flexible (Provident) AHAM Tactical Fund FUND AWARD WINNERS DURATION: 10 YEARS Award fund Bond MYR (Malaysia) AmanahRaya Unit Trust Fund Bond MYR (Islamic) AmanahRaya Syariah Fund Trust Bond MYR (Provident) AmDyanmic Bond Equity Malaysia (Malaysia) Areca equityTRUST Fund Equity Malaysia (Islamic) Hong Leong Dana Makmur Equity Malaysia (Provident) AmMalaysia Equity Equity Malaysia Small & Mid Caps (Malaysia) Manulife Investment Progress Fund Equity Malaysia Small & Mid Caps (Islamic) Public Islamic Opportunities Fund Equity Malaysia Small & Mid Caps (Provident) KAF Vision Fund Equity Malaysia Income (Malaysia) Eastspring Investments Equity Income Fund Equity Malaysia Income (Islamic) Manulife Investment Al-Fauzan Equity Malaysia Income (Provident) KAF Core Income Fund Equity Malaysia Diversified (Malaysia) Maybank Malaysia Dividend Fund Equity Malaysia Diversified (Provident) Kenanga Malaysia Inc Fund Equity Asia Pacific ex Japan (Malaysia) PB China Australia Equity Fund Equity Asia Pacific ex Japan (Islamic) Principal Islamic Asia Pacific Dynamic Equity Fund- Class MYR Equity Asia Pacific ex Japan (Provident) Principal Asia Titans Fund Mixed Asset MYR Balanced — Malaysia (Malaysia) PB Balanced Fund Mixed Asset MYR Balanced — Malaysia (Islamic) Hong Leong Dana Maa'rof Mixed Asset MYR Balanced — Malaysia (Provident) Hong Leong Dana Maa'rof Mixed Asset MYR Balanced — Global (Malaysia) Eastspring Investment Asia Select Income Fund Mixed Asset MYR Flexible (Malaysia) PB Dynamic Allocation Fund Mixed Asset MYR Flexible (Islamic) Public Islamic Asia Tactical Allocation Fund Mixed Asset MYR Flexible (Provident) Kenanga OneAnswer Investment FundsKenanga Diversified Fund

thursday march 7, 2024 13 The E dge C E O m o rning brief home Indonesia’s Gapki sees lower 2024 palm oil exports, possible B40 mandate High palm oil prices not sustainable; drop forecast in 2H2024 — Palm Oil Analytics KUALA LUMPUR (March 6): Malaysia must accelerate its replanting exercise to reverse the ageing oil palm structure or risk the market turning to other alternatives in the future, according to ISTA Mielke GmbH (Oil World) executive director Thomas Mielke. “[If the situation is not reversed], it will be reflected in comparatively higher prices because the world needs rising quantities of oil. The market will decide who is going to cover this. The market will react, if necessary, [with] increased plantings and production of rapeseed, sunflower seed, or soybeans in other parts of the world,” he cautioned. According to Mielke, there are over 1.7 million hectares of oil palms aged 19 years or older but the rate of replanting in the country remains low. “The rate of replanting improved a little bit last year at around 130,000 to 140,000 KUALA LUMPUR (March 6): Indonesia’s 2024 palm oil exports are seen at 29.50 million metric tonnes, down from 30.25 million tonnes last year, the Indonesia Palm Oil Association (Gapki) said at an industry conference here on Wednesday. Meanwhile, palm oil output in Indonesia, the world’s biggest producer of the edible oil, is expected to rise by 2.26% to 54.4 million tonnes, while domestic consumption is seen higher due to demand for biodiesel feedstock, Gapki official Fadhil Hasan said at the Palm & Lauric Oils Price Outlook Conference & Exhibition. Indonesia’s end-2024 palm oil stock is estimated at 5.25 million tonnes. KUALA LUMPUR (March 6): Fastmarkets Palm Oil Analytics managing editor Dr Sathia Varqa said the current high cost of crude palm oil (CPO) isn’t sustainable and anticipates a price drop to between RM3,500 and RM3,700 in the second half of 2024. This is because the high phase of palm oil output from March onwards coupled with high stocks in China and India will keep CPO prices under pressure, he said on Wednesday at the Palm & Lauric Oils Price Outlook Conference & Exhibition. “After witnessing RM4,000 MT (metric tons) in [the] first quarter (1Q2024), high prices will not be sustained otherwise competitiveness and demand will suffer. Prices are bullish for the first quarter, but palm oil is expected to trade lower in the second quarter,” said Sathia. Meanwhile, CIMB Investment Bank’s head of Malaysia research and regional head of agribusiness research Ivy Ng Lee Fang said that the B35 mandate implemented by the Indonesian government will lead to a decline in palm exports, subsequently tightening the global supply of palm oil and supporting the CPO price. She said that the global palm oil supply growth is projected to slow to 1.8% in 2024, compared with the historical compound annual growth rate of 3.8%, due to the impact of El Nino, replanting activities and ageing estates. Nevertheless, the impact of El Nino was minimal in the Malaysian plantation sector but higher in the Indonesian counterpart, she said, noting that this impact will be observed particularly in the third quarter of 2024. Overall, CIMB forecasts CPO to average marginally higher at RM3,900 in 2024 compared with RM3,809 in 2023. For the long term, the research house expects CPO to average RM3,500 due to increased production costs over the years. hectares but still way below requirements. This is far too less and less than half of the recommended replanting of 250,000 to 280,000 hectares per year,” he told the audience at the Palm & Lauric Oils Price Outlook Conference & Exhibition. “So there is a risk that by the year 2025, 35% or two million hectares of oil palm trees shall [be] older than 19 years. This is a problem which has to be solved,” he added. Meanwhile, he commended the proposal put forward by Minister of Plantation and Commodities Datuk Seri Johari Abdul Ghani to consolidate independent smallholders to increase palm oil yield, as part of the efforts to reverse the ageing oil palm structure in Malaysia. Mielke reiterated that palm oil production had lost its growth dynamics, as production has slowed down significantly since 2019. Looking ahead, he expected the annual palm oil production in major countries — including Malaysia and Indonesia — to slow to 1.5 million tonnes or less in the 10 years to 2030 from an average annual growth of 2.9 million tonnes in the 10 years to 2020, he added. “For the current year, we expect a stagnation or slight decline in Indonesia’s production. For Malaysia, we expect production to remain virtually unchanged at 18.6 million tonnes,” he noted. Malaysia must speed up replanting amid alarming drop in palm oil yield — Mielke by Hee En Qi & Syafiqah Salim theedgemalaysia.com by Syafiqah Salim theedgemalaysia.com by Bernadette Christina Munthe & Danial Azhar Reuters Read also: Expansion of pure biodiesel could lift palm oil prices, says analyst Mistry “There is a possibility of the new incoming government increasing B35 to B40,” Fadhil said, referring to Indonesia’s mandatory bio-content mix that currently stands at 35% of biodiesel. This could take place in the second half this year, he said. “One of the programmes by the candidate likely to be elected is intention to raise to B50, but that is maybe after 2025,” he added. Pollsters have said that Defence Minister Prabowo Subianto is the likely winner of the Feb 14 general election. The election committee has until March 20 to verify votes. Meanwhile, the impact of El Nino dry weather pattern last year has turned out to be insignificant on 2024’s production, as it hit mostly Java and southern regions of Sumatra, which are not palm oil producing centres, Fadhil said.

thursday march 7, 2024 14 The E dge C E O m o rning brief home KUALA LUMPUR (March 6): Top Glove Corp Bhd’s credit rating has been downgraded to AA- from AA by MARC Rating, which also revised the RM3 billion Perpetual Sukuk Wakalah Programme of the glove maker’s wholly owned funding vehicle TG Excellence to AIS(cg) from A+IS(cg), amid a slower-than-expected recovery in the group’s business and financial profile. But on a more positive note, MARC Rating has revised Top Glove’s outlook from negative to stable, on the back of a healthy liquidity position, with cash balances of RM1 billion that would support operational and financial obligations. In a statement on Wednesday, MARC Rating noted that “Top Glove continues to contend with the lingering headwinds in the global glove industry from overcapacity, and the suppressed selling price of gloves”, adding that competition from manufacturers in China remains stiff, and will continue to weigh on sales volumes and industry margins. Nevertheless, the rating agency anticipates that Top Glove will benefit from its cost manMARC downgrades Top Glove’s credit rating and RM3 bil sukuk, but revises outlook to stable KUALA LUMPUR (March 6): Malaysia said on Wednesday it will closely monitor how the European Union (EU) responds to a WTO ruling that supported the bloc’s stance that biofuels causing deforestation cannot be regarded as renewables, but sought changes in how it implemented that decision. A World Trade Organization (WTO) adjudicating panel, in its first ruling related to deforestation, on Tuesday rejected many of Malaysia’s claims against EU measures that led it to rule out palm oil-based biofuel as a renewable fuel. However, the panel accepted Malaysia’s complaints over how the measures had been prepared, published and administered. The EU will need to make adjustments, but need not withdraw its measures, following the WTO ruling. The European Commission said it welcomed that the WTO panel report allowed the EU to preserve its legal framework on renewable energy and biofuels broadly intact, and confirmed it had the right to take action to tackle greenhouse gas emissions. It said it was analysing the report but believed it would need to issue a report on the most recent scientific data to determine whether crops have a high risk of contributing to deforestation, and amend an act to change certain criteria for certification for crops of low risk. It would do so in the coming months. The Malaysian government will monitor any changes to the EU’s regulations to bring it into line with the WTO’s findings and pursue compliance proceedings Malaysia to monitor changes in EU curbs on palm biofuel after WTO ruling by Rozanna Latiff Reuters by Luqman Amin theedgemalaysia.com agement initiatives that include decommissioning old production lines, temporary factory shutdowns, and workforce streamlining. “There has been some improvement in profitability among Malaysian glove manufacturers, following capacity rationalisation and lower energy costs, although this remains substantially below the pre-pandemic level in FY2019 (the financial year ended Aug 31, 2019),” MARC Rating added. For the first quarter ended Nov 30, 2023 (1QFY2024), Top Glove’s earnings before interest, taxes, depreciation and amortisation (Ebitda) turned positive, reaching RM21.3 million, compared to a loss of RM61.6 million for the previous corresponding period. However, its Ebitda margin remained low at 4.3%, significantly lower than the 14% recorded in FY2019. MARC Rating said the narrow margin leaves little buffer against potential fluctuations in raw material and energy costs. On Top Glove’s healthy liquidity position, MARC said its leverage ratios remain low with an adjusted debt-to-equity (DE) ratio of 0.33 times and a net DE ratio of 0.12 times, adding that the group has an outstanding RM1.18 billion perpetual sukuk of which the first call date is on Feb 27, 2025, and is likely to be refinanced. Plantations and Commodities Minister Datuk Seri Johari Abdul Ghani said the government will monitor any changes to the EU's regulations to bring it into line with the WTO's findings and pursue compliance proceedings if necessary. if necessary, Plantations and Commodities Minister Datuk Seri Johari Abdul Ghani said in a statement on Wednesday. Malaysia, the world’s second largest producer of palm oil, has described the EU’s renewable energy directive as discriminatory, and in 2021 asked the WTO to examine the rules restricting the bloc’s use of palm oil-based biofuels. Under the regulations, palm oil-based fuels can no longer be considered as renewable transport fuel and are to be phased out by 2030, as the EU has determined that palm oil cultivation leads to excessive deforestation. Johari said the WTO report found fault with the EU’s rules on indirect land use change to ban palm oil biofuels, and with the bloc’s approach to notifying and consulting with other economies when introducing new trade measures. “This ruling from the WTO demonstrates that Malaysia’s claims of discrimination are indeed justified,” he said, adding that the government would continue to defend the interests of palm oil biofuels industry players against trade barriers. Low Yen Yeing/The Edge

thursday march 7, 2024 15 The E dge C E O m o rning brief home KUALA LUMPUR (March 6): The Federation of Malaysian Manufacturers (FMM) said it was caught by surprise on the latest changes to foreign worker policy. In a statement on Wednesday, FMM president Tan Sri Soh Thian Lai said the sudden decision to cut short the quota validity period for those still having active quota balance with just one month’s notice and to cancel all active quotas after March 31, 2024 would be most damaging as the sector has shown signs of business recovery in the second half of 2023 and is anticipated to gain momentum in the first half of 2024. Soh said the sudden policy change will leave many manufacturers in the lurch in meeting their manpower requirements, especially those who have planned their worker intake in stages according to their job order schedule. He said many of those with active quota balance had either delayed the process of bringing in the workers earlier due to the softening of the market or had staggered the worker intake over the 18-month quota validity period to coincide with their peak production period. “Industries will now find themselves being unable to cope with their job orders due to the inability to bring in workers as planned, which may lead to having to cancel job orders or be subjected to financial penalties for late delivery or failure to meet confirmed orders. “The industry finds that the timelines announced under the policy change where employers have to apply for the Calling Visa/Visa Dengan Rujukan (VDR) by March 31, 2024 and ensure entry of the workers by May 31, 2024 as very restrictive and were decided hastily without any consultation and understanding of the actual time frame it takes in reality for employers to mobilise the workers,” he said. Soh said that allowing only one month for employers to get the calling visa issued would be a near impossible timeline as there is a long process involved, starting with the job order approval at the source country, worker interview and selection, passport issuance and medical check-up before the employer can apply for the Calling Visa. “The process on average can easily take up to more than 2.5 months,” he said. Foreign worker intake deadline changes will leave manufacturers in the lurch, says FMM KUALA LUMPUR (March 6): Bank Negara Malaysia (BNM) will likely maintain the overnight policy rate (OPR) at 3%, when its Monetary Policy Committee announces its decision on Thursday, Standard Chartered (StanChart) said. Both economic growth and inflation are moderating, making it unlikely that the central bank will raise rates to support the ringgit, StanChart said in a preview note. Further, the currency weakness isn’t affecting the growth and inflation outlook, it said. “We expect the central bank to keep the OPR unchanged,” StanChart said. The ringgit also has had some reprieve since the start of March following a decline in KUALA LUMPUR (March 6): Proton Holdings Bhd extended its positive growth trajectory with sales of 13,602 units, both domestic and export, in February, marking sales of 26,484 units in the first two months of 2024, an increase of 3% from the same period last year. In a statement on Wednesday, it said Proton’s market share is forecast to be at 20.5%, placing it comfortably in the second position in the overall national automotive sales rankings. “After the first two months of 2024, total industry volume is estimated to have grown by 13.8% year-to-date to 129,353 units, as an influx of new brands launching both traditional and electric vehicle models generated a lot of buyer interest,” it said. Proton Edar chief executive officer Roslan Abdullah said the company continued its positive trajectory in February 2024, with sales underpinned by consistent domestic demand and increasing export growth. “Therefore, our export markets will be an important area of growth in 2024, and we also have high expectations for the Proton S70 to dominate its segment, as deliveries continue to ramp up in the coming months. “Having extended our footprint across many countries, we will continue to work diligently to bring Proton models to greater heights in these export markets, as we see them as having the potential to grow our sales significantly in the long term,” he said. Proton highlighted that its export business leapfrogged by 223% to 346 units in February, as compared to January this year, while year-to-date export growth stood at 50.5%, with 453 units sold to overseas markets this far. January to February, the bank noted. StanChart’s prediction dovetails with the consensus among economists. A survey of 19 economists by Bloomberg unanimously called for the central bank to stand pat in its second of six scheduled monetary policy reviews for this year. Last week, the central bank’s Financial Markets Committee highlighted “coordination with government-linked companies and investment companies to encourage them to repatriate foreign investment income, and convert that income into ringgit more consistently”. “This coordination is likely preferred over a tweak to monetary policy by BNM to address foreign exchange weakness, as it is not seen as affecting the growth and inflation outlook at present,” StanChart said. The ringgit’s persistent weakness will likely limit the central bank’s room to cut rates to support growth, StanChart flagged, citing a 2.1% quarter-on-quarter contraction in the final three months of 2023, and core inflation which eased to 1.8% year-on-year in January. StanChart expects BNM to keep policy rate at 3% on Thursday Proton continues positive growth with 13,602 units sold in February by Jason Ng theedgemalaysia.com Bernama by Surin Murugiah theedgemalaysia.com Read also: BNM says better external demand boosting exports, supporting growth continues on Page 16

thursday march 7, 2024 16 The E dge C E O m o rning brief home Zantat starts taking orders for RM18.20 mil IPO KUALA LUMPUR: Construction company Lim Seong Hai Capital Bhd (LSH) said on Wednesday it is proposing a public offering which could potentially raise RM168.08 million as part of its listing transfer to the ACE Market from the LEAP Market. The share sale involves the issuance of 132 million new shares and an offer for sale of up to 59 million existing shares, the company said in an exchange filing. The retail tranche consists of 29.3 million shares for the public and eligible persons while the institutional portion will have 102.66 million new shares and 59 million existing shares. Based on an illustrative price of 88 sen per share, LSH will raise RM116.16 million which will go towards construction projects and repayment of debt, it said. The company, which also develops properties, has three projects worth nearly RM1.7 billion in gross development value, LSH noted. Further, LSH has an outstanding order book of about RM501.26 million across nine infrastructure construction and civil engineering projects. Cash from the public offering will ease the company’s cash flow when carrying out its construction activities, it said. The offer for sale meanwhile will raise gross proceeds of up to RM51.92 million which will accrue entirely to the selling shareholders, including independent director Tan Sri Lim Keng Cheng and executive chairman Datuk Lim Keng Guan. LSH did not raise any proceeds during its listing on the LEAP Market on July 30, 2021. The company however raised over RM4.6 million from the pre-listing investors through the issuance of 35.86 million shares at 13 sen apiece. The proposed public offering is expected to be completed in the fourth quarter of 2024 alongside the transfer of listing, LSH said. AmInvestment Bank Bhd is the principal adviser and sponsor to the company for its ACE Market listing transfer. KUALA LUMPUR (March 6): Calcium carbonate producer Zantat Holdings Bhd began taking orders from investors for its initial public offering (IPO) on Wednesday, to raise up to RM18.20 million. The IPO, priced at 25 sen per share, involves a public issue of 56.0 million new shares, representing 20% of the enlarged share capital of Zantat and an offer for sale of 16.8 million existing shares by way of private placement to selected investors, according to its prospectus. The offering will close on March 13, and the listing is scheduled for March 27. Zantat produces ground calcium carbonate and calcium carbonate dispersions that are mainly used in the manufacturing of plastic masterbatch, rubber gloves, PVC pipes and cables, and in other products such as paints and coatings. The sale of new shares is expected to raise total proceeds of RM14.00 million, of which 27% will be used for upgrading its research-and-development facilities. The company has also earmarked 7.2% to upgrade its Calrock Perak plant’s infrastructure and 9.6% for investment in machine components and industrial automation. The upgrading of R&D facilities is crucial to facilitate the company’s product exLim Seong Hai Capital proposes RM168 mil share sale for listing transfer by Jason Ng theedgemalaysia.com by Jason Ng theedgemalaysia.com pansion plan, according to its managing director Ivan Chan. “With the upgraded R&D facility and enhanced testing capabilities, we will be focusing on our in-house product development and enhancement including testing of our products as well as for new and existing customers pertaining to our calcium carbonate products and bioplastic compounds. “As part of our strategy to expand our product range, we intend to develop three new bioplastic compounds and enhance our ultrafine grade ground calcium carbonate namely “Zanelite” series and produce more varieties to generate new revenue stream,” Chan said in a statement. The remainder of the IPO proceeds will be set aside for repayment of bank borrowings, working capital, and to defray listing expenses. Meanwhile, the offer-for-sale of existing shares will gross RM4.20 million, which will accrue entirely to the existing shareholders of Zantat, including deputy chairman Chan Hup Ooi and managing director Chan Bin Iuan. Out of 56.0 million issued shares, 14.0 million will be made available to the Malaysian public via balloting, 11.2 million issue shares for its eligible directors, employees and persons who have contributed to the success of the Zantat under pink form allocations, while the remaining 30.8 million issued shares are reserved for private placement to selected investors. M&A Securities will underwrite a total of 25.2 million issued shares made available to the Malaysian public and pink form allocations. M&A Securities is the adviser, sponsor, underwriter and placement agent for the IPO exercise. from Page 15 Meanwhile, Proton said the S70 model had unlocked pent-up demand and interest from buyers in both domestic and international markets, with sales increasing by 60.5% to 2,314 units in February, while the Saga recorded a sale of 6,212 units during the month. “The X50 ended February in the second place for B-segment sport utility vehicles (SUVs), but still maintained a healthy level of sales with 1,816 units, and X70 saw an uptick of 19.6% to 445 units, while Iriz added 3.8% to close at 543 units. “Although production has ended for the Exora, 39 units were sold in February, and to date, over 194,250 units of the model had been sold, making it the most successful C-segment multipurpose vehicle (MPV) in Malaysia’s automotive history,” Proton added. (L-R): M & A Securities head of corporate finance Gary Ting, M & A Equity Holdings Bhd managing director (MD) Datuk Bill Tan, Zantat Holdings Bhd deputy chairman Chan Hup Ooi, Zantat MD Ivan Chan, Zantat chairman Yap Yoon Kong and Zantat executive director Chan Jee Chet at Zantat Holdings Bhd’s prospectus launch. zantat holdings bhd

thursday march 7, 2024 17 The E dge C E O m o rning brief home KUALA LUMPUR (March 6): Amir Nashrin Johari has been appointed as an executive director of CI Holdings Bhd, and a non-independent and non-executive director of KUB Malaysia Bhd, effective from Wednesday. Amir, 30, is the son of Plantation Industries and Commodities Minister Datuk Seri Johari Abdul Ghani. Johari, through his investment vehicle JAG Capital Holdings Sdn Bhd, holds stakes of 32.96% in CI Holdings and 33.28% in KUB, according to bourse filings by the two listed companies. Amir, meanwhile, is also a director of JAG and several other companies, including Central Cables Bhd (an 86.65% stake in which JAG wants to inject into KUB), Continental Resources Sdn Bhd and Palmtop Vegeoil Products Sdn Bhd. Johari in December last year relinquished his chairman’s post at KUB and CI Holdings, following his appointment to the Cabinet. Amir, who holds a degree in accounting and finance from Oxford Brookes University, has previously worked in the financial assurance departments of EY Malaysia and KPMG Malaysia from 2014 to 2017. “He has spent the past nine years in various management and executive roles in different industries and companies, including audit and management consulting, various technology-based start-ups, private investment companies, and a public cable manufacturing company in Melaka. “His roles covered corporate finance, strategy management, asset management, credit control, business development, accounting, treasury and information systems,” said CI Holdings and KUB in their respective filings. CI Holdings shares finished down four sen or 1.43% at RM2.75 on Wednesday, valuing the group at RM445.5 million. The stock has fallen 26.67% over the past one year. Meanwhile, KUB fell half a sen or 0.83% to 59.5 sen, with a market capitalisation of RM331.1 million. The stock has gained 16.67% over the past one year. Johari Ghani’s son Amir Nashrin appointed director of CI Holdings, KUB KUALA LUMPUR (March 6): Former BSI banker Kevin Swampillai told the High Court on Wednesday that he was not aware about funds from SRC International Sdn Bhd which were transferred to a fiduciary fund. Testifying in a civil lawsuit brought by SRC against former prime minister Datuk Seri Najib Razak and several others, Swampillai said he had only dealt with the documentation of the transfer from SRC to the fiduciary fund, but had no idea what happened to the amount (US$864.5 million) after that. The banker, who was under cross-examination by Najib’s lawyer Harvinderjit Singh, explained that clients using fiduciary funds have virtually limitless flexibility to decide on the structure of transactions placed through such funds. For example, they will choose the target destinations where the money will eventually end up, he said. They will also decide on the instruments (such as equity shares or loans in the form of lending agreements like promissory notes) used to optically legalise the flow of money from the fund to target companies or assets intended to be acquired. The clients are also in control of the timing and amounts channelled through such fiduciary structures, said Sawmpillai. The witness said that while he did not know what happened, he had his suspicions about the money and told his superiors about the fraudulent transactions done by SRC International (Malaysia) Ltd totalling US$864.5 million between November 2011 and April 2012. Swampillai said that suspicious transactions did not fall on his department at the bank, and were part of the compliance department and the Client Acceptance Committee (CAC). He said that the compliance department and CAC were supposed to monitor these transactions. The banker said he raised his suspicions to his direct superior and this was tendered as evidence in the 1Malaysia Development Bhd (1MDB)-Tanore trial where Swampillai was also a witness. “I was concerned because we did not know where the money was going, and had no visibility on where they would end up. My concerns were raised because the SRC transactions would be frequent, but no action was taken by senior management of the bank,” he said. He said had the transactions been clearer or had the bank been in the know about the source of the funds and the ultimate beneficiary, which was Najib, they would not have gone through with the transactions as Najib was a “politically exposed person” at that time. Swampillai and Harvinderjit got a little tense with one another as the cross-examination wore on, after the witness said he did not understand the lawyer’s questions. “It’s hard to follow the vagueness of your questions and it’s difficult for me to follow. If you could just be more succinct with your questions,” Swampillai told the lawyer. Harvinderjit then snapped back: “Let’s not beat around the bush. I’m trying to establish how [fugitive] Jho Low worked with crooked bankers to misappropriate the funds. Without them he won’t be able to do it. Let’s not beat around the bush I’m not being vague,” Harvinderjit then asked Swampillai about the nearly US$6 million in commissions from his previous employer BSI Bank for his role in carrying out deals for SRC and 1MDB. Harvinderjit asked him if he had earned it or was entitled to it, to which the banker said “no”. SRC filed the US$1.18 billion suit against Najib and former SRC chief executive officer and managing director Nik Faisal Ariff Kamil in May 2021. It had obtained a judgement in default against Nik Faisal, who was named as Najib’s proxy. In the opening statement for the trial on Tuesday, lead co-counsel Datuk Lim Chee Wee said that out of the total KWAP loan of RM4 billion, a sum of US$120 million made its way to Najib’s bank account. The civil suit continues before judge Datuk Ahmad Fairuz Ahmad Zainol on Thursday. Ex-BSI banker says he was not aware where SRC funds went by Timothy Achariam & Tarani Palani theedgemalaysia.com by Anis Hazim theedgemalaysia.com Former BSI banker Kevin Swampillai told the High Court on Wednesday that he was not aware about funds from SRC International Sdn Bhd which were transferred to a fiduciary fund. He said that clients using fiduciary funds have virtually limitless flexibility to decide on the structure of transactions placed through such funds. Zahid Izzani/ The Edge

thursday march 7, 2024 18 The E dge C E O m o rning brief home KUALA LUMPUR (March 6): Rapid bus and rail service users in Klang Valley will soon have the option to pay fares using methods other than Touch ‘n Go (TNG), as the government aims to expand cashless payment options. Transport Minister Anthony Loke Siew Fook announced that Prasarana Malaysia Bhd has committed to implementing the open payment system for its services, starting with Rapid KL buses, as the integration for rail services, including LRT and MRT stations, requires additional time. Currently, these buses only accept Touch ‘n Go cards as a payment method, whereas rail stations offer alternatives like tokens. “We recognise that this limitation affects both tourists and locals. We aim to transition toward an open payment system, allowing the use of credit cards, debit cards and other methods,” said Loke in a news conference in Parliament on Wednesday. Loke added that Prasarana has already initiated a tender process for this, and he anticipates the tender process to conclude within the next two months. “Ideally, the open payment system will be implemented in the next three to six months. We hope to have it in place by the end of this year, at least for Rapid KL buses,” Loke said. Additionally, Loke announced that a Cabinet committee has approved the construction of 344 bus stations and over 7,000 metres of covered pedestrian walkways in seven local authorities in the Klang Valley, with an allocation of RM48.6 million. In another development, Loke announced that the ministry will publish real-time statistics on death cases due to accidents every day, to raise awareness among road users and the public. Prasarana to expand cashless payment options for Rapid KL buses and rail services PN’s Selat Klang assemblyman declares support for Selangor MB Amirudin Shari’s leadership GEORGE TOWN (March 6): The Penang government will continue discussions with Malaysia Airports Holdings Bhd (MAHB) regarding the expansion of the Penang International Airport (LTAPP), Chief Minister Chow Kon Yeow said. He said talks will revolve around comSHAH ALAM (March 6): Perikatan Nasional’s (PN) assemblyman for Selat Klang, Datuk Abdul Rashid Asari, on Wednesday declared his support for the leadership of Selangor Menteri Besar Datuk Seri Amirudin Shari. The former chairman of Selangor Parti Pribumi Bersatu Malaysia (Bersatu) said the decision was made after considering the speech of the Sultan of Selangor Sultan Sharafuddin Idris Shah, who praised the state government’s administration for being on the right track for the progress and wellbeing of the people. He said the move was also taken in view of several PN’s actions, especially Selangor PN, which he saw as remaining silent against criticisms directed at the Malay rulers, which he deemed contrary to the principles of Malay Muslims. “I also made this decision to ensure the wellbeing of the people of Selangor, especially the residents of the N44 Selat Klang constituency, who will benefit from a stable and united government,” he said in a statement here. Abdul Rashid said, however, that he remained committed as a member of Bersatu. Meanwhile, Selangor State Legislative Assembly Speaker Lau Weng San, when approached by reporters at the lobby of the Selangor State Assembly Building, stated that he had not yet received any notification regarding Abdul Rashid’s move as of 1.50pm. “As for his seating position in the Selangor State Assembly, I will discuss it further before making any decisions, and considering the statement of support from Selat Klang, the position of PN in the Selangor State Assembly is 21 seats,” he said. pliance with technical issues in the LTAPP expansion project. “With the approval from the Cabinet, MAHB will proceed with the tender for the appointment of a contractor to commence the project, expected to start this year, possibly in the third quarter. “The discussions and the LTAPP expansion project can proceed concurrently. We will manage and expedite it,” he told reporters after officiating the 45th World Congress of the International Advertising Association at the Setia Spice Convention Centre here on Wednesday. A total of 1,000 participants from 30 countries are attending the three-day congress from Wednesday, the first to be held in Southeast Asia. Chow was responding to Transport Minister Anthony Loke Siew Fook’s statement recently that the LTAPP expansion effort, costing over RM1 billion, had received Cabinet approval. Penang govt to go over airport expansion compliance, technical issues with MAHB Bernama by Choy Nyen Yiau theedgemalaysia.com Bernama Loke added that Prasarana has already initiated a tender process for this, and he anticipates the tender process to conclude within the next two months.

thursday march 7, 2024 19 The E dge C E O m o rning brief world (March 6): US Federal Reserve (Fed) chair Jerome Powell reiterated to lawmakers that the US central bank is in no rush to cut interest rates until policymakers are convinced they have won their battle over inflation. In prepared testimony to a House panel on Wednesday, the Fed chief said it will likely be appropriate to begin lower borrowing costs “at some point this year”, but made clear they are not ready yet. The remarks echoed a consistent message from nearly every Fed official in recent weeks: The economy and labour market are strong, meaning policymakers have time to wait for more evidence that inflation is headed back to their goal before cutting interest rates. “The committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2%,” Powell said in brief prepared remarks to the House Financial Services Committee, where he is set to testify at 10am on Wednesday. The Fed chief is on Capitol Hill for the first of two days of his semiannual monetary policy testimony, and is scheduled to appear before the Senate Banking Committee on Thursday. Treasury yields remained mostly lower on the day after the remarks were released, and S&P 500 index futures held gains while the dollar was lower. Fed officials are in the last rounds of an aggressive fight to contain inflation. After raising their benchmark federal funds rate more than five percentage points starting in March 2022, they have held rates steady since July amid easing price pressures. Central bankers are now grappling with how soon and how far they should lower rates. Cut too early, and officials worry they could by Craig Torres theedgemalaysia.com Powell reiterates Fed needs more confidence on inflation to cut fuel a pickup in economic activity that keeps inflation above 2% — the rate they see as appropriate for a healthy economy. Keep borrowing costs elevated for too long and they risk tipping the economy into a recession. “We believe that our policy rate is likely at its peak for this tightening cycle,” Powell said in his prepared remarks, repeating language used at his last press conference on Jan 31. “If the economy evolves broadly as expected, it will likely be appropriate to begin dialling back policy restraint at some point this year. But the economic outlook is uncertain, and ongoing progress towards our 2% inflation objective is not assured.” Inflation slowed to a 2.4% rate for the 12 months ending in January, down from a peak of 7.1% in June 2022. But price pressures accelerated from December, and an underlying measure often cited by Powell — services prices excluding shelter and energy — is still tracking higher than its pre-pandemic trend. At the same time, demand for workers has remained strong, with employers adding 353,000 jobs in January and economists forecasting another 200,000 added in February. Fed officials have said high interest rates should continue to ripple through the economy and eventually slow growth, which has been surprisingly robust over the past year. Still, some forecasters have lifted their estimates for economic output in the first quarter, due to expectations for higher consumer spending. Policymakers have responded to the economy’s surprising strength by indicating that they’ll hold rates at a high level and, once they begin cutting, will probably lower them at a slower and potentially less regular pace than in the past. Since their January meeting, officials have pushed back aggressively on expectations that they will cut rates when they meet on March 19 and 20. Investors are now betting the first rate cut will come in June. They also expect between three and four rate cuts this year, in line with Fed officials’ median forecast in December. Policymakers will release updated rate projections in the meeting this month. Meanwhile, Democratic lawmakers are growing impatient with the US central bank ahead of the November elections. Sherrod Brown, the Senate Banking Committee chair who is in a tough re-election battle in Ohio, urged the Fed to cut rates “early this year” in a Jan 30 letter to Powell, arguing that high rates are hurting small businesses and putting homeownership out of reach for many Americans. We believe that our policy rate is likely at its peak for this tightening cycle. If the economy evolves broadly as expected, it will likely be appropriate to begin dialling back policy restraint at some point this year. But the economic outlook is uncertain, and ongoing progress towards our 2% inflation objective is not assured.” bloomberg

thursday march 7, 2024 20 The E dge C E O m o rning brief world LONDON (March 5): US manufacturers are struggling to regain momentum as the sector tries to pull out of the prolonged but shallow downturn, with any help from lower interest rates delayed due to continuing inflation in the service sector. The desultory state of factory and freight activity has limited diesel consumption, postponed the anticipated depletion of fuel inventories, and caused refining margins to soften. The Institute for Supply Management (ISM)’s purchasing index slipped to 47.8 (18th percentile for all months since 1980) in February down from 49.1 (25th percentile) in January. The index has been below the 50-point threshold dividing expanding activity from a contraction for 16 months running since November 2022. The manufacturing downturn has been the most prolonged since the slowdown of 2000-2002 and before that 1981-1983. Both of those downturns were cycle-ending recessions rather than mid-cycle slowdowns, characterised by a far more severe contraction in activity. By contrast, in the current slowdown manufacturing output has declined less than 2%, according to data from the US Federal Reserve. The worst of the current downturn was over by the second and third quarters of 2023, but manufacturers have since struggled to regain momentum. US manufacturers struggle to grow again without interest rate cuts WASHINGTON (March 6): US regulators are expected to significantly reduce the extra capital banks must hold under a proposed rule that has drawn aggressive pushback from Wall Street, said eight industry executives in regular contact with the agencies and regulatory officials. Bank regulators led by the Federal Reserve in July unveiled the “Basel III” proposal to overhaul how banks with more than US$100 billion in assets calculate the cash they must set aside to absorb potential losses. The agencies said it would increase aggregate capital by around 16% for the roughly three dozen affected lenders. That figure is expected to fall sharply as regulators embark on a sweeping rewrite of the draft, the people said. The regulatory discussions are in their early stages and no decisions have been made, the people said. The agencies have said they are analyzing hundreds of public comments and data from banks on the impact of the proposal. The biggest capital savings will come from changes to how banks will have to calculate potential losses from operational risks, which is the costliest plank of the proposal, three people said. In that section, banks had been pushing regulators to reduce the risk weights for fee income associated with lending services, such as investment banking. Officials are also expected to scrap or reduce higher risk weights on mortgages to low-income borrowers and on renewable energy tax credits, the people said. (March 6): Bond investors have punished banks with heavy exposure to commercial real estate, potentially adding even more pressure to the lenders’ profits as Wall Street scrambles to assess how widely pain in property debt will spread through the financial system. Banks with high levels of commercial real estate exposure tend to have bonds that trade at relatively wider spreads, according to an analysis by Barclays plc credit strategists led by Dominique Toublan. In some cases, spreads on those bonds have been widening, even as investors have broadly piled into financial industry bonds in pursuit of higher-yielding securities. Barclays’ Toublan wrote in an email that commercial real estate-related angst explains about 80% of issuer-level spreads in the US investment-grade debt market, with lenders with lower exposure generally trading tighter. The differentiation in pricing underscores how investors are being selective as they snatch up bonds, a factor that could lift funding costs for banks already under pressure from setting aside money for potential real estate losses. “At first, everybody just sold everything and asked questions later,” Invesco’s head of North America investment grade and senior portfolio manager Matt Brill said, citing last March when the collapse of Silicon Valley Bank triggered a selloff, widening bank bond spreads. “Now, they’re finding out that there are some regionals that are better positioned than others.” Some of the regional lenders with portfolios weighted toward underperforming commercial real estate markets include Bank OZK, Valley National Bancorp and Webster Financial Corp, according to Morgan Stanley. None of the trio of banks responded to requests for comment from Bloomberg News. Read the full story US regulators expected to significantly reduce Basel capital burden, sources say Banks with heavy commercial property exposure see bonds get hit by Pete Schroeder Reuters by Allison Nicole Smith Bloomberg by John Kemp Reuters reuters

thursday march 7, 2024 21 The E dge C E O m o rning brief world (March 6): Republican presidential candidate Nikki Haley is ending her campaign after overwhelming losses in a string of primary contests, ceding the nomination to Donald Trump and setting up a rematch of the 2020 election against President Joe Biden. Haley is due to speak in her home state of South Carolina at 10am, where she will concede that Trump is her party’s choice, according to a person familiar with the matter. Both Biden and Trump prevailed in almost every Super Tuesday nominating contest, including victories in Virginia, North Carolina, Tennessee and Utah that demonstrate their respective holds over their political parties. Haley will not, however, immediately endorse Trump and will instead push him to pivot on some issues in order to court her voters, another person familiar with her plans said. Haley managed only a token victory in Vermont — a deeply liberal state Republicans haven’t carried in 36 years — despite backing from billionaires including Stan Druckenmiller and Charles Koch. And a viable alternative to Biden never emerged: Primary opponent Dean Phillips didn’t stand a chance, no matter how many times investor Bill Ackman said he did. Yet the dominant performances by both Biden and Trump disguise deep anxiety and reservations among the electorate. For Democrats, the choice of Biden is a risky gamble that voters in November will put aside their concerns about the ability of an 81-year-old man to continue to lead the country for another four years, particularly at a time when foreign wars are raging and economic angst persists despite a strong post-pandemic recovery. On the Republican side, Trump’s myriad legal woes, inflammatory statements about minorities and immigrants and what his critics say are his authoritarian plans for a second term threaten to alienate moderate voters key to recapturing the White House. by Justin Sink, Jordan Fabian & Nancy Cook Bloomberg Nikki Haley to end 2024 bid, setting up Trump-Biden rematch Trump’s political efforts must compete for his time, resources, and attention as he mounts a defence against 91 criminal charges in four separate cases. He is just four years younger than Biden, but recently has made verbal stumbles on the campaign trail that are making it somewhat harder to strike a contrast with the president on the question of whether they are too old to effectively do the job. Trump, casting himself as a de facto incumbent despite losing in 2020, consolidated GOP support following his indictments, with the party’s drift towards populism leaving little room for Haley to get traction. Florida governor Ron DeSantis, Trump’s other main challenger, stumbled before he even started. Democrats rallied around Biden, with no big-name politicians willing to challenge a sitting president even as party figures whispered fears about his age. Divergent approaches In foreign capitals, the prospect of a rematch between the two men has already sown disbelief that the US refuses to move on to a new generation of leaders, and leaves bureaucrats to gird for two wildly divergent approaches to diplomacy, economics, and governance. The vision of a second Trump term is clear: substantial new trade protections, a sharp crackdown on immigration, lower taxes, an isolationist foreign policy bent, and a campaign of retribution targeting progressives, federal bureaucracy and a news media he blames for alienating his base against the ruling class. An extension of Biden’s presidency would guarantee the implementation of his first-term legislative achievements aimed at reviving domestic manufacturing, improving infrastructure, and battling climate change. Biden would also aim to raise taxes on the wealthy and strengthen foreign alliances, though his subdued, technocratic approach has done little to inspire the electorate. “We’re going to win this election because we have to win,” Trump said on Tuesday night, casting the stakes of the Biden rematch as existential. “If we lose the election we’re not going to have a country left.” Read also: Kremlin says Russia will not meddle in the US presidential election The dominant performances by both Biden and Trump disguise deep anxiety and reservations among the electorate.

thursday march 7, 2024 22 The E dge C E O m o rning brief world (March 6): Amazon.com Inc’s cloud services division is halting fees it has long charged customers that switch to a rival provider — following in the steps of Google, which recently announced it was ending the practice. Amazon Web Services (AWS) will no longer charge customers who want to extract all of their data from the company’s servers and move them to another service, AWS vice-president Robert Kennedy said in a blog post on Tuesday. “Beginning today (Tuesday), customers globally are now entitled to free data transfers out to the internet if they want to move to another information technology provider,” Kennedy said. The move follows intensifying scrutiny of cloud services by regulators and lawmakers. UK antitrust authorities launched a probe into such penalties, and the fees emerged as a key issue when the US Federal Trade Commission asked for public comments on a variety of cloud concerns. Amazon has said the fees help cover the costs of networking and other infrastructure. AWS is the world’s largest provider of rented computing power, followed by Microsoft Corp and Alphabet Inc’s Google. Competition among the three companies heated up recently with the advent of generative artificial intelligence, which mines vast quantities of data to generate text or images. All three are looking to bake the technology into their cloud offerings. Read also: Elon Musk’s X escapes most of lawsuit over copyrighted songs Amazon cancels fees for customers moving to rival cloud services (March 6): Smaller cryptocurrencies are starting to pull ahead of record-setting bitcoin, as traders bet the tokens are next in line to test all-time peaks. An index tracking the bottom half of the largest 100 digital assets is up about 60% over the past month, beating the 56% advance in bitcoin. During the same period, the overall value of tokens jumped by more than US$800 billion (RM3.79 trillion), according to data tracker CoinGecko. Market observers contend there are growing such signs of speculators rotating away from the largest digital asset into smaller rivals that have lagged in the bitcoin-led crypto recovery that began last year. “Our desk has been seeing strong flows and more excitement on non-bitcoin assets recently,” said David Lawant, the head of research at crypto prime broker FalconX. At one point five times as much investment was flowing into bitcoin, compared to second-ranked Ether, but that has dropped to two times, he said. Bitcoin dominance Coins like Ether remain some way off hitting all-time highs, a reflection of the intense focus on bitcoin amid the launch of landmark US exchange-traded funds for the token, as well as an upcoming reduction in its supply growth. “Bitcoin’s market dominance typically tops out in the weeks following an all-time high breakout,” Vetle Lunde, a senior analyst at K33 Research, wrote in a note. He added that ramped-up bets on altcoins are a typical feature of an “all gas, no brakes stage of the market”. Frothy wagers on bitcoin have washed Crypto’s US$800 bil rally widens beyond recordsetting bitcoin by Sidhartha Shukla Bloomberg by Matt Day Bloomberg across the derivatives sector, evidenced by metrics such as elevated costs for perpetual futures and unprecedented levels of open interest — or outstanding contracts — at Chicago-based CME Group’s bitcoin futures market. Futures appetite That too is a positive backdrop for smaller digital assets, according to Jag Kooner, the head of derivatives at crypto exchange Bitfinex. “It’s anticipated that the surge in open interest will eventually redistribute towards altcoins, as the market’s focus shifts away from bitcoin, further out on the risk curve towards meme tokens, which accounted for a third of the volume on major exchanges last week,” Kooner wrote in a note. Meme coins Shiba Inu, Floki, dogwifhat, Pepe and Bonk sat atop the seven-day performance charts at CoinGecko, with gains of about 150% or more as of 9.20am on Wednesday in London. Bitcoin changed hands at US$67,250, a little shy of the record US$69,192 reached on Tuesday in US trading. While crypto veterans might rationalise the meme trend as part of the pivot beyond bitcoin, others could well see it as mindless speculation. bloomberg

thursday march 7, 2024 23 The E dge C E O m o rning brief world HONG KONG (March 6): Morgan Stanley has laid off about 9% of its staff at its asset management business unit in China, two people with direct knowledge of the matter said, as the country’s spiralling stock market dampens prospects for its US$3.8 trillion (RM17.97 trillion) fund sector. Morgan Stanley Investment Management China started reducing headcount in December and the move has impacted about 15 employees, the people said on condition of anonymity as they were not authorised to speak to the media. Morgan Stanley cuts 9% of China fund unit staff amid market rout, sources say SINGAPORE (March 6): Foreign investors returning to China’s recuperating stock markets say spending plans announced on Tuesday are not enough to turn battered sentiment around, and the main reason to keep buying shares for now is because they are cheap. Money managers hunting for bargains have been trickling back into mainland stocks since February, after China replaced its stock market regulator and tightened rules around speculation, leading to a sharp but fragile recovery in the market. Few had held out hopes the National People’s Congress (NPC) would unleash a torrent of cash big enough to buoy markets and the mood right away. But those expecting solid spending plans to reach a growth target of 5%, as authorities stuck to a familiar script about managing risks in the property sector and municipal debt. China plans to run a budget deficit of 3% of economic output, down from a revised 3.8% last year, belying the fiscal shot-in-the-arm some had hoped for to fuel a recovery. “Investors need to see policies that could improve governance and final demand, but neither seem to be on offer so far at the NPC,” Ken Peng, head of investment strategy in Asia at Citi Global Wealth, said in an email to Reuters. Mainland China stockmarkets lost about US$2 trillion (RM9.47 trillion) in market value in the year to Jan. 31, with foreign investors’ net selling of 112 billion yuan (RM73.6 billion) over the period drawing down exposures of global money managers to the lowest levels for years. They have since bought stocks worth 48.3 billion yuan and China’s blue-chip CSI300 Index has bounced nearly 15% off the five-year lows it hit last month. But where global investors were once happy to park slabs of their portfolios in China for the long term, many are running smaller and nimbler “tactical” books offering exposure to short-term bounces while holding back on larger strategic stakes. “There is a degree of anticipation as to when all of these collective measures will start making a lot of sense and moving markets and moving asset prices,” said Niraj Athavle, J.P. Morgan’s head of sales and marketing in Singapore. “I wish I could tell you what exactly would be the single point that triggers it ... but I don’t think any such trigger exists.” Finding a footing Investors, both foreign and domestic, are being selective buying stocks but only in sectors such as electric vehicles and technology, says Winnie Chiu, senior director and investment adviser at Indosuez Wealth Management. These sectors lie at the heart of China’s quest for self-sufficiency. Mainland markets are also cheap. The 12-month forward price-to-earnings ratio, a widely used valuation measure, is just around 10 for the CSI 300, half the levels for S&P 500 and Japan’s Nikkei. Enough has been done to at least stop the carnage, analysts say and Steve Lawrence, chief investment officer at Balfour Capital, who manages US$300 million across different funds, sees money flowing back into Chinese stocks. “The reality is when there’s fear, or there’s a sense of fear, the smart money, the real money, always buys. If you take a step back, China is still growing, it will continue to grow,” Lawrence said. “It’s just the beginning of a massive biblical move. When you have such a divergence — the Nasdaq at all-time highs and where the Hang Seng is — there will be a teeter-totter.” Investors in China stick to bargains as fiscal bazooka proves elusive by Ankur Banerjee & Tom Westbrook Reuters by Selena Li & Xie Yu Reuters This would be the first time Morgan Stanley has cut staff at the China fund unit since it bought out its local partner’s 36% stake in the loss-making business for about US$54 million in 2023. It rebranded the unit as a wholly owned subsidiary in June. Morgan Stanley declined to comment. The downsizing underscores the challenges that global financial firms, including JPMorgan and BlackRock, face in the world’s second-biggest economy as a protracted economic malaise batters markets there. reuters

thursday march 7, 2024 24 The E dge C E O m o rning brief world BEIJING (March 6): China’s 2024 growth target of around 5% is in line with the country’s economic potential, the head of the state economic planner said on Wednesday while announcing plans to step up policy adjustments and issue special treasury bonds. Speaking at a rare joint briefing on the sidelines of the annual parliament meeting in Beijing with China’s finance minister, commerce minister, central bank chief and head of the securities regulator, Zheng Shanjie said he expected the world’s second-largest economy to have a good first quarter. “The target is in line with the annual requirements of the Fourteenth Five-Year Plan and matches the potential for economic growth, making it a positive and achievable target,” said Zheng, chair of the National Development and Reform Commission (NDRC). On Tuesday, Premier Li Qiang in his maiden work report to the National People’s Congress announced this year’s growth target would be around 5%, which many analysts said was ambitious unless the government rolls out much more stimulus. “Comprehensive analysis shows that the economy can be expected to have a good first quarter,” Zheng said, referring to February manufacturing and services sector data. Zheng also said that China’s exports for the January-February period increased by 10%, but did not state whether that was in yuan or US dollar terms. Economists recently polled by Reuters expected outbound shipments in the first two months grew just 1.9% year-on-year, slowing from December. China’s central bank governor said the bank would keep the yuan basically stable and that it had “rich monetary policy tools at its disposal”. Pan Gongsheng, governor of the People’s Bank of China (PBOC), added there was still room for cutting bank’s reserve ratio requirement, following a 50-basis points cut in January, which was the biggest in two years. China’s disappointing post-Covid recovery has cast doubts about the foundations of its economic model, raising the stakes for government action at the week-long parliament meeting of senior policymakers. China’s 5% growth target for 2024 is achievable, says state planner BEIJING (March 5): China will try to stabilise a property sector with targeted measures while providing financing to “justified” projects, Premier Li Qiang said on Tuesday, as Beijing looks to resolve a glut of unfinished properties that have worried homebuyers. The policy message in Li’s annual report to China’s parliament reinforced the view that the world’s second-largest economy is still working through a combination of half-completed projects as well as unsold homes that will take years to remedy and remain a brake on economic growth. The property sector has lurched from one crisis to another since 2021 after a regulatory crackdown on high leverage among developers triggered a liquidity crisis. So far, authorities have not rolled out massive stimulus to support developers, instead adopting a long series of incremental steps to revive the sector. The government will “meet justified financing demands of real estate enterprises under various forms of ownership on an equal basis, so as to promote the steady and healthy development of the real estate market,” said Li. Investors remain underwhelmed by the government’s plans for the property market, with the mainland CSI 300 Real Estate Index down 42% in the past year. Some analysts are drawing comparisons with Japan’s lost decades of stagnation and deflation. “The property market has yet to stabilise. Its woes reflect insufficient easing in the past and have raised the risk of deflation,” said Chil Lo, Senior Market Strategist, Asia Pacific, at BNP Paribas Asset Management in Hong Kong. “To counter the deflation risk so that structural reforms and debt reduction can proceed, Beijing needs to pump-prime the system by aggressive easing to protect economic growth with determination.” ANZ estimates China’s unsold residential property had surpassed three billion square metres by the end of 203, a glut that would take 3.6 years to clear. New home prices could decline 0.9% in 2024, according to a Reuters poll of economists last month, versus 1.1% growth tipped in a previous poll in November. China’s Li vows more support for property market stuck in the doldrums by Liangping Gao & Ryan Woo Reuters by Kevin Yao & Albee Zhang Reuters reuters reuters

thursday march 7, 2024 25 The E dge C E O m o rning brief world (March 6): The Starbucks operator in the Middle East and North Africa has cut thousands of jobs as it faces tough economic conditions and calls to boycott the US coffee chain over its response to the Israel-Hamas war. Alshaya Group, which has been the licensed partner for the chain in the region for over a decade with 1,300 locations, eliminated 2,000 jobs, the company confirmed to Bloomberg News. That reduces its regional Starbucks workforce by around 20%. A spokesperson cited “challenging trading conditions” as the reason for the layoffs. Earlier this year, the company said it saw significant impact on traffic and sales in the Middle East, and a hit to US business due to the Israel-Hamas war. The coffee chain has faced backlash from customers accusing it of not doing enough to pressure Israel to end its offensive in Gaza. The Seattle based coffee chain has issued public statements to emphasise its political neutrality. Yet the boycott movement has has spread rapidly since the war began, with calls to avoid Starbucks still spreading. Mideast Starbucks slashes jobs amid Israel-Hamas war boycotts (March 6): DBS Group Holdings Ltd cut chief executive officer Piyush Gupta’s variable pay components in a year which saw disruptions in the bank’s digital services rub some shine off its record profit. Gupta, one of the highest-paid banking bosses in Asia, received a total compensation of S$11.2 million (RM39.54 million) for 2023, down from S$15.4 million a year ago, Singapore’s largest lender said in its annual report published Wednesday. That brought his total pay lower by 27%. The cut came despite DBS notching an 18% return-on-equity, among the highest for banks in Asia’s developed markets, according to data tracked by Bloomberg News. The higher returns came as the lender’s record profit exceeded S$10 billion. “Despite record 2023 profits and outperformance in many years, the gaps in technology resiliency resulted in a lower scorecard appraisal by the board compared to the previous year,” the bank said in the report. Gupta’s retention pay, which is not included in the total compensation, dropped to S$832,650 from S$1.21 million in the preceding year. Meanwhile, overall compensation for the bank’s senior management excluding Gupta dropped to S$63.5 million from S$73.8 million to reflect their accountability for the digital disruptions. (March 6): Unilever plc is announcing more ambitious emissions-cutting goals, targeting suppliers and even the shops that stock its brands, despite concerns from investors that non-financial objectives have become a distraction for the company. In its latest climate plan released on Wednesday, the maker of Ben & Jerry’s ice cream and Lynx deodorant said it’s aiming to cut greenhouse gas emissions associated with the retailing and consumption of its goods by the end of the decade. For example, Unilever wants emissions from indirect sources, including ice cream refrigerators in shops and the recycling of the products it sells, to decline 42% from 2021 levels. It also seeks emissions from forest, land and agriculture — which includes growing commodities such as palm oil — to drop by 30% in the same period. The new approach comes at a challenging time for Unilever. The company has been riddled by financial underperformance and falling market share, which some investors have blamed on its fixation on sustainability. At the same time, Republican-led backlash in the US against environmental, social and governance (ESG) investing threatens to make companies more timid in setting their climate priorities. Executives are under increasing pressure to reassure investors that environmental programmes won’t be detrimental to the bottom line. Thomas Lingard, the global head of sustainability — environment at Unilever, said in an interview that the company’s climate plans were built into its financial-growth model. DBS cuts CEO’s pay package in record year hit by glitches Unilever sets new climate goals despite growing ESG backlash by Chanyaporn Chanjaroen Bloomberg by Dasha Afanasieva & Akshat Rathi Bloomberg by Leen Al-Rashdan & Nicolas Parasie Bloomberg bloomberg bloomberg DBS CEO Piyush Gupta is one of the highest-paid banking bosses in Asia. Read the full story

thursday march 7, 2024 26 The E dge C E O m o rning brief world SYDNEY (March 6): Australia’s economy grew at a snail’s pace in the December quarter as a punishing squeeze on household incomes brought consumer spending to a standstill, reinforcing market bets that the next move in interest rates will be down. The slowdown confirmed high borrowing costs were working all too well to curb demand, prompting treasurer Jim Chalmers to declare that the balance of risks in the economy is shifting from inflation to growth. Data from the Australian Bureau of Statistics on Wednesday showed real gross domestic product (GDP) rose 0.2% in the fourth quarter, under forecasts of 0.3%. That compared with a upwardly revised 0.3% expansion in the prior quarter. Annual growth slowed to 1.5%, down from 2.1% the previous quarter and the lowest since early 2021, when the economy was emerging from a pandemic-driven recession. In a telling sign of the softness in domestic demand, household spending did not add to economic growth at all in the fourth quarter, as a 0.7% rise in spending on essentials was offset by a 0.9% fall in discretionary spending. ABS data showed households are spending more on electricity, rent, food and health while cutting back on hotels, cafes and restaurants as well as things like new vehicle purchases and clothing and footwear. “Australian consumers are suffering from higher interest rates and cost of living pressures, while the rate of housing investment remains in the doldrums,” said Deloitte Access Economics partner Stephen Smith. “There is simply not enough demand in the Australian economy to justify the RBA’s (Reserve Bank of Australia) claim about ‘homegrown’ inflation.... Monetary and fiscal policy need to pivot away from containing inflation to stimulating economic growth.” Australian economy slows to a crawl, underscoring case for rate cuts (March 6): Jeremy Hunt said UK growth is due to be stronger than previously forecast by the budget watchdog, a boost for the ruling Conservative Party ahead of an election expected later this year. Delivering his annual budget, the Chancellor of the Exchequer said growth is forecast at 0.8% in 2024, compared with the Office for Budget Responsibility’s previous estimate of 0.7%. The watchdog is now predicting 1.9% growth for 2025, compared to a previous reading of 1.4%, and 2% growth in 2026, equal to the prior prediction of 2%, Hunt said. “We are delivering the prime minister’s economic priorities,” Hunt said in the House of Commons on Wednesday. “We can now help families not just with temporary cost of living support but with permanent cuts in taxation.” The rosier growth forecast is a welcome lift for Hunt and the Tories as they seek to close a 20 percentage-point polling gap versus the opposition Labour Party. Hunt is set to announce personal tax cuts in his budget in a bid for a pre-election boost, including a two percentage point reduction in national insurance, a payroll tax. Hunt says UK growth betterthan-expected in boost for Tories by Joe Mayes & Alex Wickham Bloomberg by Stella Qiu Reuters The Conservatives are seeking to close a 20 percentage-point polling gap versus the opposition Labour Party. Hunt has been under pressure from Tory lawmakers to deliver eye-catching tax cuts even as he’s constrained by fragile public finances. The UK entered recession last year and the chancellor went into his budget with just £13 billion (RM77.85 billion) of breathing space against his key fiscal rule, a margin near historic lows. The budget is one of the few remaining so-called political set-pieces the Conservatives have left to try to boost their poll standing ahead of the UK vote, which Prime Minister Rishi Sunak must call by Jan 25 at the latest. Conservative strategists have said they want to fight the election on an improving economy and Britons getting past an historic squeeze on living standards. Tax cuts are a key part of the Tory messaging — even though the overall tax burden has risen to the highest level since World War II and polls show voters want repaired public services more than pre-election giveaways. Still, senior Tories say a campaign built around tax cuts would create a clear dividing line with Labour and claw back votes from typical Tory voters who are considering either staying at home on polling day or backing a different party. Bloomberg reuters

thursday march 7, 2024 27 The E dge C E O m o rning 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) Harvest Miracle Capital Bhd 111.70 -0.015 0.120 0.00 147.1 Velesto Energy Bhd 81.00 -0.020 0.270 17.39 2,218.2 Widad Group Bhd 76.40 0.000 0.095 -80.41 294.2 Hong Seng Consolidated Bhd 57.00 -0.005 0.010 -60.00 51.1 Minetech Resources Bhd 48.20 0.005 0.150 3.45 267.6 Notion VTEC Bhd 46.80 0.010 0.525 64.06 270.8 Powerwell Holdings Bhd 42.40 0.010 0.310 31.91 180.0 AMMB Holdings Bhd 40.10 -0.210 3.990 -0.50 13,199.1 YTL Corp Bhd 39.10 -0.040 2.580 36.51 28,290.7 TWL Holdings Bhd 38.60 0.000 0.035 16.67 192.3 TDM Bhd 35.70 0.010 0.260 44.44 447.9 Genting Bhd 34.50 -0.070 4.820 4.33 18,559.8 YTL Power International Bhd 31.60 -0.110 3.840 51.18 31,116.1 Malayan United Industries Bhd 27.80 0.000 0.055 -8.33 177.4 My EG Services Bhd 26.70 -0.005 0.795 -2.45 5,930.3 Dialog Group Bhd 26.00 0.010 2.140 3.38 12,075.1 Evergreen Max Cash Capital Bhd 25.90 -0.005 0.425 3.66 473.8 Malaysia Building Society Bhd 22.80 -0.005 0.775 9.15 6,372.3 MASTER TEC GROUP BHD 22.70 0.015 0.815 0.00 831.3 CIMB Group Holdings Bhd 22.30 -0.020 6.510 11.28 69,429.8 Data as compiled on Mar 6, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) Pegasus Heights Bhd 0.010 100.00 1,436.0 100.00 108.2 Focus Dynamics Group Bhd 0.015 50.00 332.5 0.00 95.6 Mlabs Systems Bhd 0.015 50.00 4,195.2 0.00 21.7 XOX BHD 0.015 50.00 1,431.0 0.00 77.9 EVD Bhd 0.145 26.09 1,809.5 26.09 61.5 Saudee Group Bhd 0.025 25.00 474.6 0.00 39.0 WMG Holdings Bhd 0.240 23.08 8,925.7 140.00 106.7 Theta Edge BHD 1.140 19.37 16,871.5 66.42 134.5 Ta Win Holdings BHD 0.035 16.67 1,176.5 -12.50 120.2 Silver Ridge Holdings Bhd 0.355 16.39 5,834.3 -69.13 79.0 HB Global Ltd 0.080 14.29 5.0 -11.11 62.6 ARB Bhd 0.045 12.50 1,670.8 -30.61 56.2 Sapura Energy Bhd 0.050 11.11 8,638.2 11.11 918.8 Transocean Holdings BHD 1.700 10.39 2.7 0.00 110.7 Eksons Corp BHD 0.540 10.20 5.0 -3.57 86.3 Tanco Holdings Bhd 0.770 10.00 8,778.4 30.51 1,597.4 Rekatech Capital Bhd 0.055 10.00 35.0 -15.38 32.6 Techbase Industries BHD 0.220 10.00 7,621.4 103.44 60.70 OCR Group Bhd 0.060 9.09 2,789.5 0.00 83.2 Innity Corp Bhd 0.450 8.43 0.1 -6.25 62.7 Data as compiled on Mar 6, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) Hong Seng Consolidated Bhd 0.010 -33.33 56,964.9 -60.00 51.1 TECHNA-X Bhd 0.010 -33.33 571.5 -33.33 22.1 SC Estate Builder Bhd 0.010 -33.33 1,194.4 -35.71 32.2 MQ Technology Bhd 0.015 -25.00 1,270.1 -40.00 22.8 Metronic Global Bhd 0.015 -25.00 3,913.5 0.00 23.0 Sapura Resources Bhd 0.250 -24.24 0.1 -33.33 34.9 G3 Global Bhd 0.020 -20.00 119.6 -20.00 75.5 Xidelang Holdings Ltd 0.025 -16.67 281.0 0.00 52.9 XOX Networks Bhd 0.025 -16.67 260.0 -28.57 28.4 Sinaran Advance Group Bhd 0.060 -14.29 5.0 -29.41 54.9 Harvest Miracle Capital Bhd 0.120 -11.11 111,687.7 0.00 147.1 Classita Holdings Bhd 0.040 -11.11 1,770.0 -11.11 49.3 Country Heights Holdings BHD 0.205 -10.87 9,233.3 -36.92 60.2 Fitters Diversified Bhd 0.045 -10.00 1,287.0 -10.00 105.4 Hiap Huat Holdings Bhd 0.135 -10.00 1,356.5 -6.90 53.3 SMTrack Bhd 0.045 -10.00 16,139.2 -10.00 55.0 ASTEEL Group Bhd 0.090 -10.00 660.0 -14.29 43.6 mTouche Technology Bhd 0.045 -10.00 495.2 -10.00 41.7 PESTECH International Bhd 0.205 -8.89 6,330.0 -36.92 201.8 Ho Hup Construction Co Bhd 0.165 -8.33 561.6 -34.00 85.5 Data as compiled on Mar 6, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) Malaysian Pacific Industries Bhd28.600 -0.300 256.5 1.42 5,689.4 ViTrox Corp Bhd 7.080 -0.260 154.3 -2.88 6,693.6 AMMB Holdings Bhd 3.990 -0.210 40,085.8 -0.50 13,199.1 Petronas Dagangan Bhd 22.060 -0.200 503.5 1.01 21,915.6 Hume Cement Industries Bhd 2.680 -0.170 1,444.3 19.11 1,681.0 AEON Credit Service M Bhd 6.170 -0.150 450.7 10.77 3,150.5 Carlsberg Brewery Malaysia Bhd18.580 -0.140 226.7 -3.63 5,680.8 Bintulu Port Holdings Bhd 5.760 -0.120 4.6 12.06 2,649.6 Petronas Gas Bhd 17.880 -0.120 604.8 2.76 35,379.7 Paragon Union BHD 3.770 -0.120 104.5 35.13 316.0 Dutch Lady Milk Industries BHD 23.880 -0.120 231.5 3.11 1,528.3 YTL Power International Bhd 3.840 -0.110 31,573.7 51.18 31,116.1 Harrisons Holdings Malaysia Bhd8.590 -0.090 2.7 -0.35 588.2 D&O Green Technologies Bhd 3.110 -0.090 3,772.4 -14.09 3,851.1 Malayan Cement Bhd 5.030 -0.090 414.4 18.91 6,595.3 AirAsia X Bhd 1.290 -0.090 7,451.1 -31.02 576.7 CELCOMDIGI BHD 4.180 -0.080 2,252.6 2.45 49,037.7 Teck Guan Perdana BHD 1.600 -0.080 1.0 -6.98 64.2 Sapura Resources Bhd 0.250 -0.080 0.1 -33.33 34.9 IHH Healthcare Bhd 5.960 -0.080 3,631.2 -1.16 52,489.7 Data as compiled on Mar 6, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) Nestle Malaysia Bhd 121.000 1.500 198.3 2.89 28,374.5 Ajinomoto Malaysia Bhd 18.660 0.400 76.7 17.36 1,134.5 Amway Malaysia Holdings Bhd 7.900 0.320 98.6 34.35 1,298.6 Fraser & Neave Holdings Bhd 28.920 0.300 223.1 3.31 10,607.2 United Plantations BHD 23.500 0.240 633.8 32.02 9,747.4 Theta Edge BHD 1.140 0.185 16,871.5 66.42 134.5 Kotra Industries Bhd 4.980 0.170 0.3 3.11 738.6 Transocean Holdings BHD 1.700 0.160 2.7 0.00 110.7 Sarawak Oil Palms Bhd 3.070 0.110 495.6 18.53 2,733.4 PPB Group Bhd 15.400 0.100 698.3 6.35 21,908.0 Petronas Chemicals Group Bhd 6.960 0.100 2,446.3 -2.79 55,680.0 Jaya Tiasa Holdings BHD 1.390 0.090 11,474.1 52.75 1,345.5 Zhulian Corp Bhd 1.370 0.080 402.9 -14.87 630.2 Deleum Bhd 1.350 0.080 1,586.8 41.36 542.1 HeiTech Padu Bhd 1.990 0.070 4,327.4 126.14 201.4 Edaran Bhd 1.180 0.070 3,646.1 35.63 68.3 Tanco Holdings Bhd 0.770 0.070 8,778.4 30.51 1,597.4 Hong Leong Industries Bhd 10.220 0.060 43.1 10.97 3,265.0 TH Plantations Bhd 0.745 0.055 10,801.0 53.61 658.5 Unisem M Bhd 3.380 0.050 356.2 2.11 5,452.2 Data as compiled on Mar 6, 2024 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 38,585.19 -404.64 -1.04 S&P 500 * 5,078.65 -52.30 -1.02 NASDAQ 100 * 17,897.87 -328.61 -1.80 FTSE 100 * 7,646.16 22.30 0.29 AUSTRALIA 7,733.54 9.34 0.12 CHINA 3,039.93 -7.86 -0.26 HONG KONG 16,438.09 275.45 1.70 INDIA 74,085.99 408.86 0.55 INDONESIA 7,329.80 82.34 1.14 JAPAN 40,090.78 -6.85 -0.02 KOREA 2,641.49 -7.91 -0.30 PHILIPPINES 6,878.54 -26.92 -0.39 SINGAPORE 3,136.14 29.04 0.93 TAIWAN 19,499.45 112.53 0.58 THAILAND 1,370.55 11.29 0.83 VIETNAM 1,262.73 -7.25 -0.57 Data as compiled on Mar 6, 2024 Source: Bloomberg CPO RM 4,081.00 95.00 OIL US$ 82.53 0.49 RM/USD 4.7323 RM/SGD 3.5290 RM/AUD 3.0873 RM/GBP 6.0249 RM/EUR 5.1470 * Based on previous day’s closing