The Edge - 06 March 2024

CEOMorningBrief WEDNESDAY, MARCH 6, 2024 ISSUE 728/2024 theedgemalaysia.com CHINA VOWS TO ‘TRANSFORM’ ECONOMY, SETS AMBITIOUS GROWTH TARGET p16 HOME: Cypark says it has enough funds for its projects despite deferring sukuk coupon payment p2 Govt urged to reassess decision to bring forward foreign workers intake deadline p2 IWH, PLS Plantations in talks with China state-owned firm to develop industrial park, innovation hub in Johor p3 SRC claims US$120 mil out of RM4 bil KWAP loan went to Najib p10 WORLD: Singapore’s exclusive deal with Taylor Swift not a hostile act towards neighbours, PM says p18 WTO backs EU in deforestation case against Malaysia Report on Page 5. Report on Page 3. ANZ puts up 9% AMMB stake for sale via accelerated bookbuilding REUTERS/ THE EDGE FILE PHOTO

WEDNESDAY MARCH 6, 2024 2 THEEDGE CEO MORNING BRIEF published by ( 2 6 6 9 8 0 - X ) tel . 603-77218000 Level 3, Menara KLK, 1 Jalan PJU 7/6, Mutiara Damansara, 47810, Petaling Jaya, Selangor, Malaysia publisher + ceo . Ho Kay Tat editor-in-chief . Kathy Fong chief commercial officer . Sharon Teh chief operating officer . Lim Shiew Yuin editors . Jenny Ng . Tan Choe Choe Lam Jian Wyn to contact editors: [email protected] to advertise: [email protected] the edge ceo morning brief Read from desktop or mobile device. You can print in A4 to read. Set print mode to fit or shrink oversize page. to get on emailing list [email protected] HOME KUALA LUMPUR (March 5): The National Chamber of Commerce and Industry of Malaysia (NCCIM) has urged the government to reassess the decision to bring forward deadlines for bringing in foreign workers into the country, to avoid disruption to recruitment plans by businesses. The NCCIM’s appeal came after the Immigration Department’s recent announcement of changes in the regulations on the management and intake of foreign workers. Among others, emGovt urged to reassess decision to bring forward foreign workers intake deadline BY CHESTER TAY theedgemarkets.com particularly in sectors that rely heavily on foreign labour, such as the manufacturing, construction, agriculture and plantation industries. “There is a palpable concern among employers who have fulfilled their financial obligations by paying the levy, but are not able to receive the visa with reference by March 31, 2024. The lack of clarity on whether there will be a refund for these levies only adds to the growing uncertainty,” he said. ployers with an active quota for foreign workers are now required to bring these workers into the country by May 31, a shift from the previously set deadline of Sept 30. The department will also cancel unused foreign worker quotas by March 31. NCCIM president Tan Sri Soh Thian Lai said in a statement on Tuesday the abrupt cancellation poses a risk of causing substantial disruption to businesses, KUALA LUMPUR (March 6): Cypark Resources Bhd confirmed that it has deferred a coupon payment due on Monday (March 4) for its subsidiary Cypark Renewable Energy Sdn Bhd, under a RM500 million Musharakah-based perpetual sukuk programme that it set up to finance four solar photovoltaic (solar PV) power plant projects. The group said the move is to conserve cash flow, and to prioritise funds towards the completion and delivery of its 270MW solar projects in Kelantan and Terengganu in the second quarter of this year. “The deferment, allowable by terms of the perpetual sukuk, is a strategic decision as part of CRB’s debt optimisation in aligning facilities against long-term concession assets,” a Cypark spokesperson told The Edge when contacted about the matter. News of it deferring the coupon payment was reported on Bondsupermart, a bond information platform, after midnight on Tuesday. The spokesperson also assured that the group has “sufficient cash flow to achieve the COD (commercial operation date) of its ongoing projects”, with the support of its major shareholder Jakel Capital Sdn Bhd, who subscribed for the lion’s share of the sukuk — RM265 million — in the fourth quarter of 2023, together with available banking facilities from its principal bankers. RHB Investment Bank is the principal adviser/lead arranger for all three tranches of the unrated perpetual that was issued in 2020 and 2023. Cypark Resources also said the sukuk remains secured as it takes 95% cash sweeps from revenue generated, amounting to RM86.5 million currently. All three tranches of the sukuk carry a distribution rate of 6.5% per annum, with “stepped-up distribution rates” that include Cypark says it has enough funds for its projects despite deferring sukuk coupon payment an additional 2% above the distribution rate starting from the first call date, and a yearly increase of 1% on each anniversary thereafter, capped at a maximum rate of 15% per annum. The first call date for tranche 1 (Series 1 to 4) of the perpetual sukuk is Sept 3, 2027. Cypark is currently racing to complete its LSS2 floating solar project in Danau Tok Uban, Kelantan, and its LSS3 solar project in Merchang, Terengganu, which have seen several delays. The LSS2 project’s completion date was previously postponed by nine months to September 2022 from end-2021, while the LSS3’s completion had been pushed to end-2022 from March 2022. In an interview with The Edge last year, Cypark’s management said the group would see improvement in its financials once the projects are completed. “This time next year, when we deliver both the LSS projects, we will be a very different entity. There’s nothing like recurring revenue streams, right? Being actualised. And for both the LSS2 and LSS3, they are 21-year concession assets,” said its chairperson Ami Moris. Cypark posted a net profit of RM1.3 million on a revenue of RM91.8 million in its six months ended Oct 31, 2023. BY INTAN FARHANA ZAINUL theedgemalaysia.com CONTINUES ON PAGE 3

WEDNESDAY MARCH 6, 2024 3 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (March 5): Iskandar Waterfront Holdings Sdn Bhd (IWH) and PLS Plantations Bhd, two entities linked to tycoon Tan Sri Lim Kang Ho, are in talks with a China state-owned company to develop an industrial park and innovation hub in Johor. The two companies inked a memorandum of understanding (MOU) with Shenzhen provincial government-owned Shenzhen Shenyue Joint Investment Co Ltd (SSJI) on Tuesday, for the proposed development of a 1,000-acre Johor-Shenzhen Industrial Park in Ulu Sedili, together with a 50-acre Johor-Shenzhen Innovation Development Hub in Johor Bahru, according to a statement from IWH. “The proposed industrial park, about the size of 1,000 football fields, will be one of the largest purpose-built fully integrated new industrial estates in Johor. It will be designed to provide companies with offices and production facilities, as well as related support services to promote industrial development and collaboration,” the property developer said. “This will be supplemented by the Johor-Shenzhen Innovation Development Hub to be set up within the Johor Bahru central business district, which will provide resources and support for innovative activities and research and development initiatives in Johor,” the group said. PLS Plantations is the landowner of one of the identified locations for the developments, said IWH, adding that SSJI’s parent, Shenzhen Investment Holding Co Ltd, has developed 50 industrial parks covering 8,000 acres in Shenzhen. Lim, who represented both IWH and PLS Plantations at the signing of the MOU, said the two projects would ride on Johor’s industrial wave spurred by the Johor-Singapore Special Economic Zone (JSSEZ) and the Johor Bahru-Singapore Rapid Transit System (RTS). “These two projects are a positive value proposition for Johor and will attract interest from businesses, both domestic and foreign,” he added. IWH, in which the Johor state sovernment owns 37% through Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ), is one of the biggest land developers in Iskandar Malaysia. The IWH group owns more than 4,200 acres of land bank, including prime waterfront land in Johor Bahru. Shares in PLS Plantations closed half a sen or 0.65% lower at 76 sen, valuing the company at RM331.94 million. Read also: Ekovest, Iskandar Waterfront climb in active trade on 10-year development plan in Johor worth RM4.33 bil GDV IWH, PLS Plantations in talks with China state-owned firm to develop industrial park, innovation hub in Johor KUALA LUMPUR (March 5): Australia and New Zealand Banking Group Ltd (ANZ) is putting up 297.72 million shares in AMMB Holdings Bhd for sale, at an indicative price of RM3.80 to RM3.85 per share, according to a term sheet sighted by The Edge. CIMB Investment Bank and BofA Securities are the joint bookrunners for the block of shares being put up via ANZ Funds Pty Ltd. The offer size ranges between RM1.13 billion and RM1.15 billion. The offered price range represents an 8.3% to 9.5% discount to AMMB’s closing price of RM4.20 on Tuesday, down four sen or 0.9% from a day earlier, giving it a market capitalisation of RM13.92 billion. The sale would reduce ANZ’s shareholding in AMMB to 12.7% from 21.7%. Currently, foreign shareholding in Malaysian commercial banks are capped at 30%. The accelerated bookbuilding process is set to close on Tuesday night, followed by settlement on Friday. ANZ has long made known its intention to let go of its block of shares, but ANZ puts up 9% AMMB stake for sale via accelerated bookbuilding BY CHESTER TAY theedgemalaysia.com BY IZZUL IKRAM theedgemalaysia.com there has been no buyers for its stake — the single largest in the sixth largest bank in Malaysia by asset size. AMMB 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 had, in the financial year ended Sept 30, 2021 (FY2021), written down the value of its investment in AMMB, following the latter’s RM2.6 billion settlement with the Malaysian government over its role in the 1Malaysia Development Bhd (1MDB) scandal. The write-down reduced the carrying amount of ANZ’s investment in AMMB to A$719 million (RM2.21 billion) in FY2021, from A$1.06 billion in FY2020. By FY2023, the carrying amount had risen to A$881 million, from A$790 million in FY2022. Soh said the decision places a “considerable strain” on businesses, leading to potential delays and disruptions in ongoing and upcoming projects due to the unavailability of foreign workers. “The industry is also faced with the dilemma of what happens to workers scheduled to arrive after May 2024, leaving them in a precarious position without employment,” he said. Soh said the rescheduling of the deadline to bring in foreign workers into the country by May 31 had created a sense of urgency, compelling employers to navigate through immigration processes that remain unclear. “This sudden shift disrupts meticulously planned business operations, necessitating a rapid and often unfeasible adjustment,” he said. Soh said the repercussions of these announcements extend beyond individual businesses, potentially impacting the broader economy and the country’s ability to attract and retain foreign investment. Therefore, he said the NCCIM proposes that the original deadline of Sept 30 be maintained to provide businesses with adequate time to comply with the regulations. “Furthermore, we advocate for a consultative approach involving key industry stakeholders before the implementation of significant policy changes. This would ensure that any future quotas are aligned with the actual needs of various sectors, thereby mitigating potential disruptions. FROM PAGE 2

wednesday march 6, 2024 4 The E dge C E O m o rning brief home Development on Malay reserve land in Selangor only for public infrastructure projects — MB Govt to mitigate impact of new tax measures on vulnerable groups, Amir Hamzah assures Parliament by Chester Tay theedgemalaysia.com Bernama KUALA LUMPUR (March 5): Second Finance Minister Datuk Seri Amir Hamzah Azizan has assured his legislature counterparts that the rakyat, especially those with low income, would not be negatively affected by the government’s new tax measures. The newly appointed self-described technocrat told his Dewan Rakyat colleagues that exemptions under the expanded and hiked service tax ensure that the government’s tax base is broadened to cover only those with additional financial means, while continuing to protect the lower income group’s accessibility to basic needs, such as food, power and water. “As usual, whenever there is a tax hike, it raises a lot of questions from all walks of life, but when the government drafted its tax measures, we took into consideration the approach where we try to reduce the burden on all rakyat, especially those in vulnerable groups,” he told the Dewan Rakyat on Tuesday. Amir Hamzah faced queries from both the government and opposition benches after the recent implementation of a wider service tax. The rate was raised from 6% to 8% starting last Friday (March 1). Rodziah Ismail (PKR-Ampang) asked the government to state its commitment and willingness to introduce more progressive taxation alternatives, such as the inheritance tax and capital gains tax, before re-implementing the goods and services tax (GST), in its efforts to diversify and increase national revenue while addressing the fiscal deficit. Datuk Syed Abu Hussin Hafiz Syed Abdul Fasal (Bersatu-Bukit Gantang) also asked whether there is any preparation at present to reintroduce the GST, which he deemed to be more sustainable and transparent. Datuk Dr Mohd Radzi Md Jidin (Bersatu-Putrajaya) asked whether the sales and service tax (SST) system had generated lower revenue for the government, even though it had a similar negative impact on the rakyat when compared to the GST. ‘Inappropriate to reintroduce GST when rakyat facing high cost of living’ Amir Hamzah, however, said the government is taking a gradual approach to widening the tax base, and that it is not the right time at present to reintroduce the GST when the rakyat, especially the vulnerable groups, have to deal with a higher cost of living. “As explained by Tambun (Prime Minister Datuk Seri Anwar Ibrahim) here before, in terms of fiscal reform, the government takes a progressive approach, in target subsidies and the tax regime. The government has not proposed to implement the GST yet, because it is a broadbased consumption tax. “It is not the right time to reintroduce the GST, as our people, especially those with low income, are facing a high cost of living. Although the inflation rate in 2023 was 2.5%, but for the food and beverage [segment], inflation was nearly 5%, and this is a category that is more pertinent to the people,” he said. Amir Hamzah reiterated that the government will continue to prioritise improving the existing tax system, introducing new tax measures that do not impact the vulnerable groups, before evaluating the need to introduce a new consumption tax, such as the GST. “In terms of differences between the GST and SST, there are differences, but what is important is we look at the government’s capability in utilising the existing tools we have. We also find ways where we can reduce leakages in the existing system. Hence, targeted subsidies are one aspect that is important for the government, because we need to reduce leakages in our expenditure now,” he said. Amir Hamzah also updated the house that the government is still in the midst of enacting new legislation to implement the high-value goods tax at a rate of 5% to 10%, which will be progressive and based on a certain threshold to avoid burdening the low-income group. “This tax will be charged based on a certain threshold value set for each item involved. This tax is also progressive, because it is imposed on those who can afford to buy high-value goods, and does not burden the low-income group,” he said. SHAH ALAM (March 5): The Selangor government does not permit any development on Malay reserve land unless it involves the construction of public infrastructure, said Menteri Besar Datuk Seri Amirudin Shari. He said among the public infrastructure development projects carried out on such land are the construction of the East Coast Rail Link (ECRL) project and Kuala Lumpur International Airport (KLIA), with replacements made according to the same type of Malay reserve land and not exceeding the cancelled reserve land area. He also expressed the state government’s confidence in ensuring the preservation of Malay reserve land in Selangor. “In this regard, we are also considering how the TRM [Malay reserve land] area can be given added value, in line with the announcement of the Madani Housing Scheme on Malay reserve land made by Prime Minister Datuk Seri Anwar Ibrahim during the recent Bumiputera Economic Congress 2024 (KEB 2024),” he told the state assembly meeting here on Tuesday. He was responding to Mohd Razali Saari’s (PN-Sungai Panjang) question regarding the National Audit Report (LKAN), which found that the management of Malay reserve land at the Selangor Land and Mines Office (PTG) was overall inefficient and ineffective. During KEB 2024 over the weekend, Anwar, who is also finance minister, announced the establishment of the Madani Housing Scheme to develop 2,500 affordable housing units on Malay reserve land immediately to ensure the well-being of the community in the cities. Read also: Guan Eng wants govt to reconsider 8% service tax, Bung Moktar prefers GST

wednesday march 6, 2024 5 The E dge C E O m o rning brief home World’s biggest palm oil exchange Bursa Malaysia to launch soy oil futures WTO backs EU in deforestation case against Malaysia Palm oil supply woes to bolster prices this year, Mistry says by Rachel More & Philip Blenkinsop Reuters by Anuradha Raghu Bloomberg by Danial Azhar, Bernadette Christina Munthe & Rajendra Jadhav Reuters GENEVA (March 6): The European Union (EU) scored a victory at the World Trade Organization (WTO) on Tuesday as an adjudicating panel rejected a Malaysian complaint against an EU decision that biodiesel made from palm oil should cease to count as a renewable biofuel. In the WTO’s first ruling related to deforestation, a three-person panel voted by two-to-one to reject Malaysia’s substantive claims, while accepting its complaints over how the measures had been prepared, published and administered. The EU will need to make adjustments, but need not withdraw its measures after the WTO’s first ruling related to different treatment of products according to their risks of greenhouse gas emissions. The dispute centres on EU rules setting a target of 10% of transport fuels from renewable sources. Crop-based biofuels are considered renewable if they meet sustainability criteria. The EU excludes crops grown on deforested land or where there is a high risk they displaced food crops, which were then grown on cleared land. The EU determined that palm oil-based biofuel should be phased out as a renewable by 2030, while crops grown in the bloc, such as sunflower or rapeseed, did not need to be. Malaysia and Indonesia, the world’s two largest palm oil producers accounting for 85% of global exports, then challenged the European Union at the WTO. The WTO panel was the same for both cases and was expected to have also issued a joint ruling on Tuesday. However, Indonesia requested the suspension of the panel’s work on Monday. Parties to WTO disputes normally know panel results before publication. Read also: Malaysia sees Asia, Africa taking palm oil that Europe doesn’t want KUALA LUMPUR (March 5): Bursa Malaysia Derivatives Exchange (BMD), the world’s leading exchange for crude palm oil futures, will launch a soyoil futures contract on March 18 this year, to facilitate arbitrage between soyoil and palm oil contracts, its chairperson said at an industry conference on Tuesday. This would be the first non-palm based edible oil futures to be listed on Malaysia Bursa Derivatives, said Bursa Malaysia Bhd chairman Tan Sri Abdul Wahid Omar, after an agreement with Dalian Commodity Exchange (DCE). (March 5): Stagnating production and dwindling stockpiles will underpin palm oil prices relative to other edible oils in the near term, according to veteran trader Dorab Mistry. Production in top grower Indonesia may fall by at least a million tons in 2024, while Malaysian output could remain flat, said Mistry, a director at Godrej International Ltd. The trend is likely to last at least five years, as the industry contends with ageing trees, erratic weather and little improvement in farming practices, he said in an interview. “I think you have to be reasonably bullish on all oils, but particularly palm,” due to output constraints, he said on the sidelines of the Palm & Lauric Oils Price Outlook Conference in Kuala Lumpur. While production of other oilseeds is set to climb this year, “palm is unfortunately the laggard”, he said. These supply problems are upsetting the hefty discount palm typically has to alternative oils. The tropical oil is trading at a premium to soybean oil and sunflower oil in some markets, an unusual phenomenon that’s set to continue until around October when palm production seasonally peaks, said Mistry, who has traded vegetable oils for decades. Benchmark palm oil futures have risen about 6% this year and traded at RM3,942 a ton on Tuesday in Kuala Lumpur. Unpredictable weather is also a major wildcard for crop markets. Benign conditions have generally favoured recent harvests and helped send a gauge of grain and oilseed prices to the lowest level in more than three years. But that may not last. “We dodged bullets in several parts of the world” last year, Mistry said. “We have got to be on our guard.” More from the interview: • US is emerging as an important importer of palm oil, driven by demand for renewable fuels • Palm will eventually regain its market share in India, with total annual imports remaining close to 10 million tons • Shipping disruptions in the Red Sea caused temporary shortages of vegetable oil in India, but the market is continues on page 6 now adapting. Bursa Malaysia Bhd chairman Tan Sri Abdul Wahid Omar speaks at the official opening ceremony of the of 35th Annual Palm & Lauric Oils Price Outlook Conference & Exhibition (POC2024) on Tuesday, March 5, 2024. The Edge file photo

wednesday march 6, 2024 6 The E dge C E O m o rning brief home KUALA LUMPUR (March 5): The Ministry of Plantation and Commodities is searching for a feasible model that can consolidate independent smallholders to increase palm oil yield, according to its minister Datuk Seri Johari Abdul Ghani. Johari, in his speech at the 35th Annual Palm & Lauric Oils Price Outlook Conference & Exhibition (POC2024) on Tuesday, mooted the consolidation of 214,680 independent smallholders into clusters spanning 8,000 to 10,000 hectares of oil palm estates, to be managed by medium or large estates. “As we all know, out of the 5.7 million hectares of oil palm planted area, 27% (1.5 million hectares) are managed on a small scale via smallholders. On average, these smallholders manage plots of land of around four hectares. Indeed, many smallholders are facing difficulties in increasing their yield. “If we are able to consolidate even 30% of independent smallholders, we would have an additional 250,000 hectares of land to be managed efficiently,” Johari said. “These clusters would then be managed just like a medium or large estate by a dedicated team. We are looking at how big companies can help consolidate this. I know this is not going to be easy because it involves land,” the minister explained. Additionally, Johari suggested a more pragmatic way to guarantee timely replanting by smallholders for consistent maximum yields, would be to utilise the technical expertise of major industry players and the Malaysian Palm Oil Board. This would encompass guidance on seeds, clones, fertilisers, as well as pest and disease management. “Surely, achieving a larger scale is crucial to reduce costs per unit and increase productivity. If all smallholders can adopt good management practices of large scale plantations, fresh fruit bunches’ yield can easily increase by two metric tonnes per hectare,” he said. This in turn will increase the country’s crude palm oil production by an additional 600,000 tonnes a year, which is valued at around RM2.4 billion at the current market price, without any additional land use change, he added. Read also: UOB Kay Hian sees CPO prices at RM3,800-RM4,200/tonne for 2024 United Plantations sees palm oil prices ranging between RM3,850 and RM4,250 in 2024 Oleochemicals industry to grow in the near term with Asia-Pacific leading Plantation Ministry mulls smallholders’ consolidation to increase palm oil yield KUALA LUMPUR (March 5): Malaysia’s Sime Darby Plantation Bhd, the world’s largest palm oil producer, expects 2024 production growth to rise at least 5% from last year, as the country’s labour situation improves, a top executive said on Tuesday. Sime Darby Plantation group managing director Mohamad Helmy Othman Basha said the firm’s higher production this year will be driven by reducing its reliance on foreign labour through a shift to automation and local worker recruitment. “We believe there will be a growth in our production (for 2024)... We think it’s above 5%,” Helmy said in an interview on the sidelines of the Palm and Laurics Oil Price Outlook Conference 2024. Sime Darby Plantation’s fresh fruit bunches (FFB) production was 8.71 million tonnes in 2023, a 6% increase from 2022, the company said last month. The firm’s oil extraction rate last year was at 21.18%, slighlty up from 2022. Helmy said the company had sufficient workers and would not need to bring in Sime Darby Plantation sees higher 2024 output as labour situation eases new harvesters until 2026. Malaysia’s palm oil industry, which relies on foreign workers for 70% of its plantation workforce, has suffered a labour crunch in recent years, in part because of the Covid-19 pandemic. The labour shortage eased last year with the return of foreign workers to the country. In a speech at the conference on Tuesday, Malaysian Plantation and Commodity Minister Johari Abdul Ghani said improved labour market conditions in the world’s second-biggest producer of palm oil would increase its 2024 crude palm oil production marginally by about 1% compared to last year. The Malaysian Palm Oil Board expects production at 18.75 million tonnes in 2024, compared to the 18.55 million tonnes in 2023, driven by the improving labour situation. by Danial Azhar & Bernadette Christina Reuters by Syafiqah Salim theedgemalaysia.com “Soyoil contract will enable market participants to seamlessly arbitrage between soybean oil and palm oil prices on the same platform,” he said at the 35th Annual Palm & Lauric Oils Price Outlook Conference & Exhibition (POC2024), here. The BMD will use the settlement price of the soyoil futures contract on the DCE as the basis for calculating the settlement price for its new US dollar-denominated soyoil futures, he added. Price movements in palm oil, soyoil, sunflower oil and rapeseed oil depend on the price trends of other competing edible oils. Currently, traders and refiners hedge their risk in various edible oils on different exchange platforms. Currently, Chicago Mercantile Exchange (CME Group), which merged with the Chicago Board of Trade (CBOT), offers one of the most liquid soyoil futures contract that is used by the industry as a benchmark. The BMD’s new soyoil contract appears attractive, but it may not be easy for BMD to garner large participation due to the already very active existing soyoil contracts offered by CBOT and DCE, said a Mumbai-based dealer with a global trade house. “The new contract needs to bring [in] a lot of participation and liquidity, which will eventually attract more people to trade the contract,” the dealer said. Meanwhile, Abdul Wahid also said that Malaysian palm oil prices are expected to improve in 2024, helped by heightened demand from key markets, but warned that market participants should remain vigilant of possible challenges. from page 5

wednesday march 6, 2024 7 The E dge C E O m o rning brief home KUALA LUMPUR (March 5): PPB Group Bhd, which operates Golden Screen Cinemas (GSC), said on Tuesday it expects a tough year ahead for its film exhibition and distribution business, as the Hollywood writers’ guild strike has affected supply of content in the medium term. To offset the impact, GSC is shifting its focus to local and regional movies, including participating in local film production, to gain better control over the content at its cinemas, Koh Mei Lee, who leads PPB’s entertainment business unit, said at the group’s earnings briefing. GSC is working on co-producing local movies on profit-sharing, with costs ranging between RM8 million and RM20 million for each production, she noted. “After the [Covid-19] pandemic, both Malaysia and Vietnam have witnessed steady recovery [in terms of admission]. However, if you compare it with pre-pandemic levels, the recovery in 2023 was slower than expected, because of the unprecedented strike,” said Koh. Box office revenue in Vietnam recovered to 92% of pre-pandemic levels, thanks to local movies there. However, the recovery was slower in Malaysia at only 75%, she noted. The shift comes at a time when the cinema industry is still reeling from the twin strikes by Hollywood actors and writers, which have disrupted major film and television productions. For PPB, the company’s film-and-distribution segment suffered a larger net loss of RM120 million for the financial year ended Dec 31, 2023 (FY2023), compared with RM17 million for FY2022, mainly due to the impairment of cinema operations and assets. The segment would still be in loss by RM8 million due to higher operating costs if the impairments were excluded. “For Malaysia, what we have is local titles and regional titles. We have seen titles coming from China, Singapore, India and Indonesia helping to supplement the period when Hollywood titles were lacking,” Koh said. For 2024, GSC has three co-productions in the pipeline, including Legasi: Bomba the Movie, Takluk and Reversi. GSC expects contributions from events and sales of food and beverages to partially cushion the impact of the strike, Koh said. Further, she stressed that strong titles would still draw moviegoers, even as consumers are increasingly cautious about their spending. “We notice that when there are strong titles, people still come to the cinema, and it does not affect our premium cinemas, which is a different category. That is one of the reasons why we started the ultra-luxurious Aurum Theatre at the Tun Razak Exchange,” she said. She said the group saw an occupancy rate of over 50% in some of its Imax cinemas over the opening weekend of Dune: Part 2, which indicated that consumers are still willing to pay for a premium experience at cinemas. “We will be looking at some of the pricing adjustments, but it will only be minimal,” she said. “We want to keep it very affordable, so that cinema-going is still one of the most affordable [forms of] entertainment we can get.” GSC expects tough year ahead, to focus on local, regional movies KUALA LUMPUR (March 5): PPB Group Bhd, which owns flour miller FFM Bhd, said there was an increase in local flour consumption following the boycott of Western consumer brands amid the war in Gaza, as more people visited local eateries. “The boycott has affected many Western brands, such as McDonald’s, Starbucks and KFC, even though many franchise holders are locals. However, many local eateries have become beneficiaries of the boycott, because people are going to local eateries to eat more roti canai, [resulting in] local coffee shops experiencing more businesses,” said FFM chief executive officer Jeremy Goon. “We have certainly seen an increase in flour consumption because of that,” Goon told the media and analysts at the group’s earnings briefing on Tuesday. Meanwhile, Goon said PBB had no plans to increase the prices of its consumer products, despite higher operating cost, in order to remain competitive in the market. For the financial year ended Dec 31, 2023 (FY2023), PPB’s consumer product segment saw its profit fall by 23.5% to RM26 million from RM34 million for the previous year, due to higher trade promotion and operating costs. “There will be no price adjustments. Over the last couple of years, there were very minimal price adjustments even when the price of wheat went much higher. We are going to make sure that if there are any price increases, PPB sees increased flour consumption amid boycott of Western brands it will also be minimal, because the competition is going to be intense,” he said. “We will also be mindful of the cost of living, especially when it comes to staple food like bread. It is important that they are as affordable as possible,” he added. Looking ahead, Goon said the group will focus on cost efficiency, as well as new consumer product launches, as it anticipates the consumer market to be challenging with consumers becoming more cautious about their spending. On the grains and agribusiness segment, Goon noted that the group had divested its flour mill in Indonesia to allow better allocation of resources, as the Indonesian market had become increasingly competitive over the years. PPB’s grains and agribusiness segment saw its profit more than double to RM230 million from RM74 million a year ago, due to an improved performance of the flour, feed and livestock divisions. Overall, the group’s full-year net profit stood at RM1.39 billion, falling by 36.5% year-on-year from RM2.2 billion, while revenue dropped 7% to RM5.72 billion from RM6.15 billion, attributable to lower contributions from the divested Indonesian flour operations. At Tuesday’s market close, PPB shares went up two sen or 0.13% to RM15.30, valuing the group at RM21.77 billion. by Hee En Qi theedgemalaysia.com by Hee En Qi theedgemalaysia.com ‘We will also be mindful of the cost of living, especially when it comes to staple food like bread. It is important that they are as affordable as possible,’ says FFM Bhd chief executive officer Jeremy Goon. Shahrill Basri/The Edge

wednesday march 6, 2024 8 The E dge C E O m o rning brief home KUALA LUMPUR (March 5): Investment promotion agency InvestKL reported a record high of RM8.7 billion in foreign direct investment (FDI) in 2023, more than tripling from RM2.79 billion in 2022. This surge in investment, according to its chief executive officer Datuk Muhammad Azmi Zulkifli, underscores the solid confidence of foreign investors in Malaysia’s economic potential, specifically in the city of Kuala Lumpur. “The unprecedented FDI into Greater KL showcases the city’s attractiveness across diverse sectors, such as technology, healthcare, finance, and engineering, signifying a major achievement in our efforts to attract high-value activities. The success demonstrates Greater KL’s maturing business ecosystem, capable of securing and supporting substantial, intricate investments,” he told reporters at a press conference on Tuesday following the announcement. According to Azmi, 12 leading global corporations from the Americas, Europe and Asia spearheaded the investments, and made their entry into Malaysia in 2023. They included digital and technology firm CogniMalaysia records 68 SRI funds worth RM7.7 bil as at Dec 31, 2023 — SC InvestKL drew RM8.7 bil FDI in 2023, tripling 2022’s tally MELBOURNE (March 5): Major Australian companies have shown interest to invest a total of RM24.5 billion in Malaysia, including expansion of existing investments, said Prime Minister Datuk Seri Anwar Ibrahim. Anwar, who is also the finance minister, said the intention was expressed to him during his meeting with more than 20 Australian companies in Melbourne on Tuesday, the second day of his official visit to Australia. Among the potential investments are from data centre operators AirTrunk and NextDC which plan to spend about RM11 billion and RM3 billion, respectively, he said. Mining firm Lynas is also keen to invest a further RM1 billion while other companies that are potential investors include Fortescue, Macquarie Group and Arnott’s Group, Anwar said. “This is an achievement to be proud of, [as it] shows Australia’s interest and their confidence in the policies that we have announced,” he told the Malaysian media here, adding that these potential investments would create jobs for about 1,200 skilled workers in Malaysia. The amount of potential investments exceeds an earlier estimate made by the Ministry of Investment, Trade and Industry and Malaysian Investment Development Authority, he said. In terms of trade, Anwar said, Malaysia has recorded potential export sales of over RM900 million to Australia, consisting of products such as urea, timber, food and electrical components, in conjunction with his visit. He added that the government has made efforts to clarify any concerns or doubts in order to give Australian investors and businesses confidence in Malaysia’s prospects. Australian companies keen to invest RM24.5 bil in Malaysia — Anwar by Leslean Arshad Bernama by Emir Zainul theedgemalaysia.com by Emir Zainul theedgemalaysia.com zant from the US, healthcare company Demant from Denmark, water and environment services provider Beijing Enterprises Water Group Ltd from China, and the London Stock Exchange Group from the UK. The report by InvestKL showed that the investments in 2023 generated 8,329 highskilled jobs, a substantial rise from the 2,805 positions created in 2022. Notably, a significant 81% of these positions were in the digital and technology sectors. Since its inception in 2011, InvestKL has managed to secure a total of RM29.79 billion in cumulative FDI. To date, 66% of the investment, or RM19.74 billion, has materialised, leading to the creation of over 27,000 executive jobs. Currently, 74% of these positions are filled, providing Malaysians with an average monthly income exceeding RM14,000. “I must commend the multinational corporations, because it’s not just about them coming in and parachuting 100 expats — they are coming in to hire locals, work with [Malaysian] graduates, and looking at adding [locals] to their mid-management and senior management levels, and that progress has been significant. Eighty per cent of the 27,000 jobs today are occupied by Malaysians,” Azmi added. While he did not disclose the agency’s target for 2024, Azmi said he is optimistic that FDI will continue to pour into Malaysia this year, specifically Greater KL, as InvestKL focuses on more investment in the aerospace sector, semiconductor, as well as energy. “I’m optimistic about the outlook for 2024, very encouraged by the momentum that we see, [and I am] confident in the ecosystem that is being developed across the country, especially in KL,” he said. KUALA LUMPUR (March 5): Securities Commission Malaysia (SC) on Tuesday announced that there were 68 sustainable and responsible investment (SRI) funds with a total size of RM7.7 billion in Malaysia as of Dec 31, 2023. Chairman Datuk Seri Dr Awang Adek Hussin said companies and investors are becoming more comfortable with sustainability as an investment approach and they are seeing demand for it. “Globally, trillions of dollars have flowed into funds that tout their environmental, social and governance [ESG] credits. “With the amounts rising, there is also growing concern about greenwashing, greenhushing and green bleaching,” he said at the Institutional Investors Council Malaysia-Securities Industry Development Corp (IICSIDC) Corporate Governance Conference 2024 here on Tuesday. In his opening address at the conference, Awang Adek said the International Organisation of Securities Commissions highlighted that greenwashing remains a fundamental market conduct concern that poses risks to both investor protection and market integrity. He said greenwashing could undermine the fundamental trust in sustainable finance. “If investors lose trust, the financing required for a just transition can be dissipated,” he said. Awang Adek also emphasised the importance of good governance and that governance failure can have a wide-reaching impact beyond financial losses. He said the industry expects institutional investors to play a greater role in driving responsible and sustainable value creation in companies.

wednesday march 6, 2024 9 The E dge C E O m o rning brief

wednesday march 6, 2024 10 The E dge C E O m o rning brief home KUALA LUMPUR (March 5): In the SRC International Sdn Bhd’s US$1.18 billion civil suit against former prime minister Datuk Seri Najib Razak, lawyers for the company have alleged that out of the RM4 billion loan given by Retirement Fund Inc (KWAP) to SRC International over two disbursements in 2011 and 2012, US$120 million made its way to Najib’s AmBank account. Datuk Lim Chee Wee, the lead counsel for SRC International, described the SRC International case as a “multi-jurisdictional fraud” in his opening statement at the trial before High Court (Commercial division) judge Datuk Ahmad Fairuz Zainol Abidin. Lim contended that the company became a victim orchestrated by Najib’s multiple wrongdoings in his various roles as a public officer — namely as Prime Minister and Minister of Finance, Advisor Emeritus of SRC, and in truth a shadow director. “SRC International was set up as a special purpose vehicle on Jan 7, 2011, to invest in conventional and renewable energy, natural resources and minerals sector. “These investments were ultimately meant for the rakyat, with the expectation that those in power would act in good faith for the benefit of the public. Those in power having all the avenues open to them, were duty bound to act solely in a manner that would be of public good. In short, as custodian of the country’s coffers,” he added. Lim said the unthinkable happened in this case, that an abuse of power took place and they would attempt to prove it, and that Najib wielded supreme authority to ultimately cause harm and injury to the company which was set up with the public’s interest in mind. Najib is presently serving a 12-year jail sentence and RM210 million fine, which was recently reduced to six years jail and a RM50 million fine, following a partial pardon by the former King. Lim said a portion of the RM4 billion loan from KWAP made its way to a Swiss BSI account, followed by elaborate transactions with Enterprise Emerging Market Fund in Curacao, and then to Blackstone Asia Real Estate Partners Ltd in British Virgin Island, and then to Singapore, where a sum of US$120 million made its way back to Najib’s bank account. Action against Najib The senior lawyer said the action against Najib is for fraud, breach of fiduciary duties and breach of trust, conspiracy, tort of misfeasance in public office, conversion, dishonest assistance and knowing receipt of assets belonging to SRC International. Najib has pulled in several former directors of SRC International, namely Datuk Suboh Md Yassin, Datuk Shahrol Azral Ibrahim Halmi, Tan Sri Ismee Ismail, Datuk Mohammed Azhar Osman Khairuddin and Nik Faisal Ariff Kamil, as third party respondents. Nik Faisal, who was Najib’s proxy in managing his AmBank accounts, is still at large having fled the country much earlier. Lim claimed that Najib was the ultimate controller of SRC and its board of directors by virtue of being the chairman of the board of advisors, and in wearing different hats, influenced and directed decisions of the board. He said that Nik Faisal was Najib’s proxy and accessory (to the crime) and that both were beneficiaries of the decisions taken. The actions by Najib and Nik Faisal had resulted in losses of US$1.18 billion, by Hafiz Yatim & Timothy Achariam theedgemalaysia.com SRC claims US$120 mil out of RM4 bil KWAP loan went to Najib which are accountable for pursuant to the purported investment schemes. Following this, SRC International is seeking several declarations in this case namely that Najib is liable for the breaches of duties and trust, that Najib and Nik Faisal are liable for and to pay the US$1.18 billion losses from the investment funds, an order for Najib to compensate the US$120 million and Nik Faisal to pay US$2 million to SRC, and that the company is entitled to trace the amount, as well as general, exemplary and aggravated damages. SRC International co-counsel P Gananathan said the plaintiff would show how the KWAP loans were to be utilised within Najib’s purview and influence. He added that SRC invites the court to observe the role of Nik Faisal who is the company’s former CEO and was the link between Najib and the board of directors of SRC, who were accustomed to act in accordance with the former premier’s instructions. “The directors were updated by Nik Faisal and were essentially adopting shareholder resolutions of SRC by Najib which were brought to the attention of the directors of SRC at board meetings. “The court will also hear evidence of circumstances where the board of SRC International were accustomed to act on the directions or instructions from Najib where there was an absence of shareholders resolutions or minutes,” he added. The action by SRC International is one of 16 suits filed by the company since 2021 to recover the losses. Of the 16 suits, two have been settled and this case against Najib is the first to go to trial. In addition, there is a separate suit filed by SRC International and its subsidiary Gandingan Mentari Sdn Bhd against Najib for RM42 million, where the court granted a Mareva injunction against the disposal of assets by Najib. The first witness to be called in this civil suit is former BSI banker Kevin Swampillai. Read also: Najib and SRC International alleged to have disregarded BNM conditions on RM4 bil KWAP loan Ex-BSI banker says he’s under impression SRC fund transactions undertaken at Najib’s instructions Najib’s lawyer Harvinderjit Singh at the Kuala Lumpur High Court on Tuesday. Datuk Lim Chee Wee, the lead counsel for SRC International Sdn Bhd, described the SRC case as a ‘multi-jurisdictional fraud’ in his opening statement at the trial before High Court (Commercial Division) judge Datuk Ahmad Fairuz Zainol Abidin. PHOTOS by Zahid Izzani/The Edge

wednesday march 6, 2024 11 The E dge C E O m o rning brief home CIMB Islamic, Petronas sign master agreement for shariahcompliant commodity derivatives Paramount aims for RM1.4 bil sales in FY2024, flags potential property price increase Selangor partners TNB to explore RE projects, including a solar park by Anis Hazim theedgemalaysia.com by Izzul Ikram theedgemalaysia.com by Luqman Amin theedgemalaysia.com KUALA LUMPUR (March 5): Paramount Corp Bhd said on Tuesday it aims to sell RM1.4 billion worth of properties in the financial year ending Dec 31, 2024 (FY2024), as the company ramps up launches. The real estate developer plans to launch projects worth RM2.4 billion in gross development value this year, including some delayed projects, group chief executive officer Jeffrey Chew Sun Teong said at an earnings briefing. Some of the projects were stalled in 2023, due to delays in obtaining the necessary approvals, Chew noted. “We are launching a lot more than last year. The reason is not because we are crazy, but RM700 million [worth of properties] was delayed [last year],” he said. Last year, Paramount sold properties worth RM1.12 billion, a record high, with products launched worth RM886 million, compared with RM1.21 billion in 2022. Paramount booked a 37.6% jump in net profit to RM82.84 million for FY2023, from RM60.2 million for FY2022, as revenue rose 19.44% to RM1.01 billion from RM847.46 million, mainly fuelled by improvements in all its business segments, namely property, co-working, investment and others. “We will become more efficient in terms of margins, which will also increase our ROE (return on equity),” he said. “We have been working hard to improve this.” Paramount’s ROE rose to 5.7% in FY2023, from 4.2% in FY2022 and 2% in FY2021. Chew flagged rising costs following an increase in the sales and service tax to 8% effective last Friday, and the company may consider raising prices to protect its margins. The higher rate is ‘neutral from the property developer perspective’, though it may affect ‘other areas’, and the cost increases may trickle into later projects, Chew said. “For any industry, if you find that your cost has gone up, you tend to pass this cost to someone else as a business, and generally, you could create an inflation issue overall.” At the time of writing on Tuesday, shares in Paramount were two sen or 1.83% lower at RM1.07, giving the group a market capitalisation of RM666.32 million. KUALA LUMPUR (March 5): Petroliam Nasional Bhd (Petronas) and CIMB Islamic Bank Bhd have signed an inaugural Tahawwut Master Agreement (TMA) for shariah-compliant commodity derivatives. The TMA is a multi-product framework agreement drafted by the International Swaps and Derivatives Association in collaboration with the International Islamic Financial Market Association, the Petronas group said in a statement on Tuesday. According to the group, the TMA provides the market with globally accepted and standardised terms for Islamic hedging products, which is expected to spur the growth of Islamic hedging products in the international market. KUALA LUMPUR (March 5): The Selangor state government is set to explore potential collaborations with Tenaga Nasional Bhd (TNB) for various renewable energy projects, including the development of a centralised solar park (CSP). The state government, Selangor State Development Corporation (PKNS)-owned Worldwide Holdings Bhd and TNB inked a memorandum of understanding (MOU) for the collaboration on Tuesday. During a press conference after the MOU’s signing ceremony, Selangor Menteri Besar and Worldwide chairman Datuk Seri Amirudin Shari said the MOU is aligned with the National Energy Transition Roadmap (NETR) toward developing a CSP in collaboration with TNB. Amirudin noted that the MOU is also to explore potential collaborations in floating solar, battery energy storage, electric vehicle infrastructure, energy efficiency and other renewable energy projects. According to the NETR, the CSP initiative is to comprise five 100MW largescale solar parks — an aggregate 500MW — to be co-developed by TNB in partnership with small and midsize enterprises (SMEs), cooperatives and state economic development corporations. For the CSP in Selangor, Amirudin said the state government is eyeing land in Hulu Bernam, noting that PKNS already owns land in the area. While Amirudin said parties are merely at the stage of discussing a potential collaboration with details yet to be cemented, he noted that based on TNB’s plans, the CSP project could be completed by 2025 or 2026. The MOU was inked by Selangor state secretary Datuk Haris Kasim, TNB president and chief executive officer (CEO) Datuk Megat Jalaluddin Megat Hassan, and Worldwide CEO Datin Norazlina Zakaria. ‘We are launching a lot more than last year. The reason is not because we are crazy, but RM700 million [worth of properties] was delayed [last year],’ says Paramount Corp Bhd group chief executive officer Jeffrey Chew Sun Teong at the earnings briefing on Tuesday. Suhaimi Yusuf/The Edge

wednesday march 6, 2024 12 The E dge C E O m o rning brief home KUALA LUMPUR (March 5): 7-Eleven Malaysia Holdings Bhd will continue to grapple with soft consumer spending in the near term, Maybank Investment Bank (Maybank IB) said on Tuesday amid broader caution among analysts over the convenience store chain operator’s outlook. Operating costs are also rising, Maybank IB said in a note to clients, and slashed earnings forecasts for FY2024- FY2026 by 8% to 10%. That lowered its target price to RM2.00 from RM2.10, and the research house maintained its “hold” call for the stock. The company’s “pivot towards higher margin fresh food products could partially buffer potential sales downside” if store expansion plans and new fresh food items are rolled out smoothly, Maybank IB said. “Execution is key.” Shares of 7-Eleven have remained largely flat year-to-date amid broader concern over consumption spending outlook on the back of rising costs of living. Maybank IB: 7-Eleven Malaysia grapples with sluggish spending, rising costs KUALA LUMPUR (March 5): Tan Chong Motor Holdings Bhd, which mainly assembles Nissan-branded vehicles, will remain in the red this year amid an onslaught of headwinds, AmInvestment Bank flagged on Tuesday and told investors to “underweight” the stock. AmInvestment is forecasting a net loss of RM57.6 million for Tan Chong in financial year 2024 (FY2024) and cautioned that its share price will remain under pressure if the ringgit stays weak against the US dollar. The research house also noted escalating competition in the industry with the entry of various Chinese car models. Tan Chong “will still be loss making”, AmInvestment said in a note. Industry data showed that the company lost market share in January and “we have yet to see the recovery momentum picking up”, it said. Shares of Tan Chong have plunged 17% in 2023 and are barely higher year-to-date as the company racked up net losses for the fourth consecutive year. The stock was down two sen or 2% at 98 sen at 4.40pm, valuing the car company at RM658 million on Bursa Malaysia. A majority of five out of seven analysts covering Tan Chong rated the stock “sell” with the remaining two recommending a “hold” call. The median 12-month target price stood at 78 sen, a potential of over 20% from current share price. Tan Chong to stay in the red in 2024 amid headwinds — AmInvest Phillip Capital starts coverage on Frontken with target price of RM5.20 by Husnina Ahmad Dahlan theedgemalaysia.com by Surin Murugiah theedgemalaysia.com by Jason Ng theedgemalaysia.com KUALA LUMPUR (March 5): Phillip Capital has initiated coverage on Frontken Corp Bhd with a “buy” rating at RM3.67 and target price of RM5.20 based on a target 43 times price-earnings (PE) multiple on 2025 estimated earnings per share (EPS). In a note on Tuesday, the research house said it likes Frontken for its frontend semiconductor exposure and strong earnings growth (three-year compound annual growth rate: 26%). Key downside risks include customer concentration risk, ringgit strength, and weaker-than-expected customer orders. The house said was positive on Frontken’s long-term prospects on the back of an expectation of a global semiconductor sector recovery and foundries expansion to increase capacity. It said Frontken is poised to leverage the technological advancement of its key wafer fab customers, like 2nm transitions and the ramp-up of mature 3/5nm nodes, and seize growth opportunities alongside investments from partners such as Infineon, Micron, UMC, Global Foundries, and LAM Research in Malaysia and Singapore. Tan Chong’s inventory has swelled to a four-year high of RM822 million at the end of 2023, largely due to built-up stock of Nissan Navara. “This is a popular model, and we think TCM (Tan Chong) should be able to pare down on its inventories quickly,” AmInvestment said. AmInvestment stressed that new car model launches are key to drive sales and for Tan Chong to turn around. “Forward visibility, however, is low” as Tan Chong’s management was reluctant to share more details on upcoming model launches, it noted. Nevertheless, the problems faced by Tan Chong are “structural and require a deep restructuring of the underperforming business segments”, AmInvestment added. Tan Chong reported a net loss of RM54.85 million for the three months ended Dec 31, 2023, while total net loss for the year ballooned to RM128.74 million from RM51.11 million. Out of five analysts covering the stock, three have 7-Eleven Malaysia on “hold” call, including Maybank IB, while one has a “buy” call while one rated the stock “sell”. The median 12-month target price is RM2.00, according to Bloomberg. Maybank IB flagged narrower profit margin from higher advertising-and-promotion activities, fresh food wastage rate and costs related to its new distribution centre in latest FY2023 results. Plans to move up the value chain are “well underway and we believe group margin accretion will gradually flow through” as the number of fresh food products are raised, Maybank IB noted. “That said, subdued consumer spending could delay consumer reception of its new products as consumption habits turn cautious.” 7-Eleven Malaysia registered a record-high net profit of RM221.08 million for the fourth quarter ended Dec 31, 2023 (4QFY2023), thanks largely to divestment gain derived from the stake sale in 75%-owned subsidiary Caring Pharmacy Group Bhd. However, the company posted an operating loss of RM28.11 million in 4QFY2023 amid a sharp 58% rise in administrative expenses to RM98.5 million from longer operating hours, new store expansions and workforce expansion. “Execution is also paramount to ensure cost overruns do not occur, particularly with high food wastages and labour costs,” Maybank IB added.

wednesday march 6, 2024 13 The E dge C E O m o rning brief home news In brie f Keyfield inks underwriting deal with M&A Securities for Main Market listing KUALA LUMPUR (March 5): Keyfield International Bhd has signed an underwriting agreement with M&A Securities Sdn Bhd in conjunction with its initial public offering (IPO) and listing on the Main Market of Bursa Malaysia Securities Bhd. In a statement on Tuesday, Keyfield said the IPO entails the public issue of 209 million new Keyfield shares, representing 26.1% of its enlarged share capital upon listing. Out of this, 40 million shares will be offered to the Malaysian public via balloting, while 24 million shares will be made available to eligible directors, employees and persons. Meanwhile, 73 million shares will be offered to selected Bumiputera investors approved by the Ministry of Investment, Trade and Industry, and the remaining 72 million will be set aside for private placement. M&A Securities will underwrite the 64 million shares made available to the Malaysian public, Keyfield’s eligible directors, and employees and persons who have contributed to the success of the group. Keyfield aims to launch its prospectus by March and list on the Main Market in endApril 2024. M&A Securities is the adviser and underwriter for Keyfield’s IPO. It is also the joint placement agent, together with Maybank Investment Bank Bhd. — by Surin Murugiah Fajarbaru bags RM121 mil contract for JB clubhouse, range complex KUALA LUMPUR (March 5): Fajarbaru Builder Group Bhd has won a RM120.82 million contract to build a clubhouse and a driving range complex in Johor Bahru. The Johor Golf and Country Club (JGCC) project was awarded by Tanjung Nakhoda (M) Sdn Bhd, said Fajarbaru in a stock exchange filing on Tuesday. The contract period is 90 weeks from March 11, 2024 to Nov 30, 2025. Fajarbaru executive chairman Tan Sri Chan Kong Choy said the contract is a testament to the group’s expertise and credibility in the construction industry. “The JGCC project marks our inaugural venture in Johor, and we take great pride in extending our project portfolio across diverse regions, spanning from Penang to the East Coast [of Peninsular Malaysia], encompassing the Klang Valley, and now venturing into the southern reaches of the peninsula. “We are proud to be involved in the project for one of Malaysia’s most iconic golf and country clubs. We will work closely with Tanjung Nakhoda and other players involved in this project to give JGCC a more modern, sophisticated look that meets international standards,” Chan added. — by Chester Tay Actiforce to establish RM50 mil Penang furniture plant KUALA LUMPUR (March 5): Actiforce, which is part of Germany’s Hettich Group — one of the world’s largest manufacturers of furniture fittings — is investing RM50 million to set up a new manufacturing plant in Penang. Actiforce, which originates from the Netherlands, plans to have the plant serve as a hub for research and design, manufacturing and distribution of furniture fittings for the Europe and the US markets, according to a joint statement from Actiforce, InvestPenang and the Malaysian Investment Development Authority or Mida. “It will be instrumental in Actiforce’s global expansion. The move to consolidate manufacturing capabilities in one area, creating a comprehensive one-stop centre, exemplifies Actiforce’s commitment to lean manufacturing and delivering better value to customers. “The company aims to enhance the local economy, generate employment opportunities for the local community, and solidify its position as a key contributor to regional prosperity,” the statement read. — by Luqman Amin Solarvest to equip over 300 Petronas stations with solar power systems KUALA LUMPUR (March 5): Solarvest Energy Sdn Bhd, a subsidiary of clean energy expert Solarvest Holdings Bhd, has been appointed by Gentari Renewables Sdn Bhd to install solar power systems at over 300 Petronas stations across Malaysia. In a statement on Tuesday, Solarvest said the project represents a major milestone in Malaysia’s energy transition journey, contributing to the nation’s clean energy goals. The company said this demonstrates a growing environmental, social and governance (ESG) commitment in the oil and gas industry and solidifies Solarvest’s position as a key player in Malaysia’s energy transition. Solarvest said the project aimed to commence in April 2024 will see the installation of more than 5.4 megawatt peak (MWp) of solar capacity across more than 300 Petronas stations. It said these solar power systems are expected to be operational by 2027. Once energised, it is estimated to offset around 5,035 tonnes of carbon dioxide emissions per year, it said. Solarvest executive director and group chief executive officer Davis Chong Chun Shiong said oil and gas operations account for around 15% of total energyrelated emissions globally, equivalent to 5.1 billion tonnes of greenhouse gas emissions. — by Surin Murugiah Crest Builder’s order book hits RM1.8 bil with RM448 mil new contract KUALA LUMPUR (March 5): Crest Builder Holdings Bhd’s order book has reached a record high of RM1.8 billion after the group bagged a commercial development from Sunway Velocity Three Sdn Bhd for a total contract value of RM448.5 million. In a statement on Tuesday, the company said its unit Crest Builder Sdn Bhd has accepted a letter of award for the construction of the Sunway Velocity 3 commercial development in Kuala Lumpur. Sunway Velocity Three was formerly known as Tanda Warisan Sdn Bhd, a member of the Sunway Group. It said the construction will consist of 1,604 units of serviced apartments in two 60-storey blocks, which also comprise a level of basement car park, 8 levels of elevated car parks, two levels of mezzanine as well as recreation facilities. Crest Builder said the construction works will take approximately 43 months to complete from its scheduled site possession date of March 15 and targeted to be completed by Oct 14, 2027. Crest Builder Holdings Berhad group managing director Eric Yong Shang Ming said with the first contract for the year bagged, he was confident the company we will achieve its RM500 million order book replenishment target. — by Surin Murugiah Penang Chief Minister Chow Kon Yeow said the state is proud to host Actiforce to showcase its capacities and capabilities in Penang, as it further supports the needs of industrial players in next generation technologies and growth strategies.

wednesday march 6, 2024 14 The E dge C E O m o rning brief home KUALA LUMPUR (March 5): Datuk Wan Saiful Wan Jan, the Member of Parliament for Tasek Gelugor from Perikatan Nasional, apologised on Tuesday for his action in issuing a malicious statement against Prime Minister Datuk Seri Anwar Ibrahim in the Dewan Rakyat. The apology was made after Dewan Rakyat Speaker Tan Sri Johari Abdul gave the MP an opportunity to explain his action, before a motion by Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi was presented to suspend Wan Saiful for six months for accusing Anwar of abusing his power. Wan Saiful in his apology admitted that the statement made when debating on the motion of thanks for the royal address in the Dewan Rakyat on Feb 28 was indeed directed at Anwar. “I did address that sentence to Tambun [MP Anwar]...I retract that sentence, I retract my statement, and I also apologise for the statement. “I also humbly apologise, because in the motion, there was a mention of the Yang di-Pertuan Agong, and therefore I apologise and withdraw the statement, and I hope it is given due consideration,” Wan Saiful said. Following the apology, Johari considered the issue closed, and proposed that Zahid, who is also the rural and regional development minister, to withdraw the motion. “This means the honourable member for Tasek Gelugor has apologised to Tambun and withdrawn his statement. The honourable member has also sought the forgiveness of His Majesty the King. “For that, I accept the [apology] and the minister’s withdrawal of motion. Thus, I consider the matter settled, as an apology has been made, and hopefully, it is aceptable to the minister (Zahid),” Johari said. Zahid later stood up to withdraw the relevant motion listed in the order of business of the Dewan Rakyat meeting on Tuesday. Meanwhile, Opposition Leader and MP for Larut Datuk Seri Hamzah Zainudin stood up to express his appreciation, and praised the decision of the speaker in resolving the issue. Wan Saiful apologises for accusing PM of abuse of power, six-month suspension motion withdrawn KUALA LUMPUR (March 5): Former finance minister Tun Daim Zainuddin’s wife, Toh Puan Na’imah Abdul Khalid, wants to stay her trial at the Sessions Court on her alleged failure to declare her assets to the Malaysian Anti-Corruption Commission (MACC). This was part of Na’imah’s prayer in her application to refer questions of law to the High Court on whether two sections of the MACC Act 2009 contravene articles in the Federal Constitution guaranteeing personal liberty and equality before the law. In the application filed last week, the 66-year-old wants the High Court to make an order that Section 30(5) and Section 36(2) of the MACC Act pertain to disclosure of information per notices served and compliance with the said notices to assist in the anti-graft agency’s investigations. Na’imah, who filed the application through her solicitors at Messrs Raj & Sach, wants the court to make a determination, among others, on whether the two sections encroach on a person’s right against self-incrimination. Na’imah wants High Court to determine question of law regarding asset disclosure, seeks stay of trial Na’imah was charged in January under Section 36(2) of the MACC Act for failure to declare her assets. The single charge carries a punishment of a maximum five-year imprisonment and a fine not exceeding RM100,000. Among the 12 assets that she did not declare were a Mercedes Benz EQC400 and 500 SL AUTO series, seven properties in Kuala Lumpur and one in Penang and Ilham Tower Sdn Bhd and Ilham Baru Sdn Bhd. She has claimed trial to the offence and the court has set bail at RM250,000. A few days later, her husband was charged under the same section over a similar offence. Daim, 85 was charged with not declaring one Amanah Saham bank account, seven vehicles including a Rolls-Royce, an Austin Morris Austin and a Jaguar XJS HE, 38 companies, and 25 properties, some of which are linked to the companies he owns. Among the companies mentioned were Ibu Kota Developments Sdn Bhd, Maya Seni Holdings Sdn Bhd, Menara Ampang Sdn Bhd, Dream Cruiser Sdn Bhd, Landbelt Corporation Sdn Bhd, Avillion Bhd, Avillion Hotel Group, Admiral Cove Development Sdn Bhd and Avillion Hotels International Sdn Bhd, to name a few. The former Cabinet minister has also claimed trial and the court set bail at RM280,000. Daim and Na’imah have claimed that the charges and ongoing investigations against their family are politically motivated. by Tarani Palani theedgemalaysia.com Bernama Toh Puan Na'imah Abdul Khalid, the wife of former finance minister Tun Daim Zainuddin, was charged in January under Section 36(2) of the Malaysian Anti-Corruption Commission Act for failure to declare her assets. Zahid Izzani/The Edge Tasek Gelugor MP, Datuk Wan Saiful Wan Jan, apologises for his statement against Prime Minister Datuk Seri Anwar Ibrahim during a Dewan Rakyat debate on Feb 28 bernama

wednesday march 6, 2024 15 The E dge C E O m o rning brief home KUALA LUMPUR (March 5): Claims of a low number of registrations and information updates in the Central Database Hub (Padu) system due to data integrity issues are inaccurate, said Economy Minister Mohd Rafizi Ramli. He said this is because Padu contains data integrated from various sources, including federal and state governments, agencies and statutory bodies, with all the information profiles of individuals and households. “All the data is already there. What we want is for it to be updated when it is implemented, so that it does not arise why I did not get [help], why I am like that, and so on. “If the data in Padu is considered inaccurate, all the data in the government system from the federal, state, Zakat Board and so on is also inaccurate, because the information comes from these data,” he said in a question-and-answer session in the Dewan Rakyat on Tuesday. He was replying a supplementary question by R Yuneswaran (Pakatan Harapan-Segamat), who wanted to know the government’s measures to ensure more Malaysians register and update information in the Padu system HULU LANGAT (March 5): The Road Transport Department (JPJ) will introduce the electronic driving test and training system (e-Testing) in April. Transport Minister Anthony Loke said the implementation of this system will allow candidates to undergo the test without JPJ officers present in the vehicle while the candidate’s performance evaluation will be conducted electronically (automation) using detectors and cameras. “The results will be generated in real time while improving the integrity of the evaluation process,” he said after a working visit to a driving institute here in conjunction with the implementation of the e-Testing initiative. The development of the e-Testing system was announced in 2020, and the JPJ had already started testing the system in a pilot phase project at several driving institutes. Loke said for now driving test candidates are given the option of either taking the normal test or e-Testing before it is fully implemented in 2030. According to Loke, although driving schools can charge a maximum of RM100, candidates who choose to use e-Testing will receive several benefits, including being able to make a second attempt for each failed test on the same day at no additional cost. Rafizi refutes claims of Padu data integrity issues Loke: JPJ to introduce e-Testing in April Bernama Bernama following concerns about data security. Rafizi said the number of those who had registered and updated their information in the Padu system cannot be compared with the number of Malaysians as a whole, but rather the number of households should be taken into account. “The concern is that current registrations (as of Feb 25) are 3.79 million. We always look at several perspectives — that is, we see how many have been updated compared to the total number of citizens of 30 million people. “When we compare the number of updates, it cannot be compared with 30 million. It should be compared with the number of households. The current He said candidates only need to repeat the test involving the failed elements without having to resit the entire Part II test element (such as manual test execution) and will be given priority in the test reservation list and a RM10 rebate for the issuance of a learner’s driving licence. The implementation of the e-Testing system will enable more candidates to be tested compared to the existing or manual test system in addition to improving the integrity of the driving test system, issuing driving licences, simplifying the audit process as well as monitoring test activities electronically, he said. Currently, there are three driving institutes that are ready to implement the e-Testing system. They comprise Institut Memandu Surfine Hitech, Hulu Langat in Selangor; Pusat Latihan Memandu Berjaya Bhd, Ulu Tiram in Johor; and Institut Lima Bintang Abadi Sdn Bhd in Penang. household is 7.9 million, and since singles and people without families are counted as one household, the number of households is expected to rise to nine million,” he said. Accordingly, he said his ministry will ensure that as many families and individuals will make full use of the final month (before the end of March 31) to register and update information in the system. “Some groups feel that they are not eligible for targeted subsidies, and they don’t want to update [their information]. Some groups will wait until the last minute until March 31 to register, and some may be in a rush to update after the government announces targeted subsidies. “But [all this] does not interfere with planning that all household information data must be available by March 31 to enable the government’s socio-economic programme to move to the net household disposable income method,” he said. Padu was launched on Jan 2, and is open to the public for updates until March 31, with Phase 2 expected to start from April to June 2024, which will involve the development of algorithms according to use case requirements based on data in Padu. “The Transport Ministry encourages all driving institutes to offer the e-Testing system. A grace period of six years will be given to driving institutes to make the transition from manual testing to the e-Testing method,” he said. In the meantime, Loke said the government will start allowing driving institutes to have test centres in order to conduct computerised legal tests at their respective premises to reduce the waiting time for driving test candidates. He also said this enable candidates to take the computerised test and circuit test at the same place, thus making it easier for them. “However, driving institutes which intend to open test centres to conduct computerised tests at their premises are required to also offer e-Testing for circuit tests. “Driving institutes can start applying to open KPP (Driver Education Curriculum) Test Centres on their premises starting from April 2024. Approved driving institutes will be required to also provide an e-Testing system within one year,” he added. Read also: MDEC offers incentives of up to RM200,000 per project to drive digital innovation

WEDNESDAY MARCH 6, 2024 16 THEEDGE CEO MORNING BRIEF WORLD China vows to ‘transform’ economy, sets ambitious growth target BY ANTONI SLODKOWSKI, ANDREW HAYLEY & EDUARDO BAPTISTA Reuters BEIJING (March 5): Chinese Premier Li Qiang announced an ambitious 2024 economic growth target of around 5% on Tuesday, promising steps to transform the country’s development model and defuse risks fuelled by bankrupt property developers and indebted cities. Delivering his maiden work report at the annual meeting of the National People’s Congress (NPC), China’s rubber-stamp parliament, Li also flagged higher defence spending, while hardening the rhetoric on Taiwan. In setting a growth target similar to last year, which will be harder to reach as a post-Covid recovery is losing steam, Beijing signals it is prioritising growth over any reforms even as Li pledged bold new policies, analysts said. “It’s more difficult to achieve 5% this year than last year because the base number has become higher, indicating that the top leaders are committed to supporting economic growth,” said Tao Chuan, chief macro analyst at Soochow Securities. Last year’s uneven growth laid bare China’s deep structural imbalances, from weak household consumption to increasingly lower returns on investment, prompting calls for a new growth model. China started the year with a stock market rout and deflation at levels unseen since the global financial crisis of 2008-09. The property crisis and local government debt woes persisted, increasing pressure on China’s leaders to come up with new economic policies. With awe at China’s economic miracle fading rapidly, some economists have drawn comparisons with Japan’s lost decades since the 1990s, calling for pro-market reforms and measures to boost consumer incomes. “We should not lose sight of worst-case scenarios,” Li said in the Great Hall of the People in Tiananmen Square. “We must push ahead with transforming the growth model, making structural adjustments, improving quality, and enhancing performance.” There was no timeline or concrete details for the structural changes China intended to implement, however, with Li also emphasising stability as “the basis for everything we do”. Li acknowledged reaching the target “will not be easy”, adding a “proactive” fiscal stance and “prudent” monetary policy was needed. The target considers “the need to boost employment and incomes and prevent and defuse risks”, Li said. The International Monetary Fund projects China’s 2024 growth at 4.6%, declining towards 3.5% in 2028. Chinese stocks and the yuan were largely unchanged. “Policymakers seem happy with the current trajectory,” said Ben Bennett, Asia-Pacific investment strategist at Legal And General Investment Management. “That’s disappointing for those that hoped for a bigger push.... There’s rhetorical support for local government debt and the property sector, but the key is how this is applied in practice.” Moderate stimulus China plans to run a budget deficit of 3% of economic output, down from a revised 3.8% last year. Crucially, it plans to issue one trillion yuan (RM660 billion) in special ultra-long term treasury bonds, which are not included in the budget. The special bond issuance quota for local governments was set at 3.9 trillion yuan, versus 3.8 trillion yuan in 2023. China also set the consumer inflation target at 3% and aims to create over 12 million urban jobs this year, keeping the jobless rate at around 5.5%. “China is unlikely to do bazooka-style stimulus,” said Tommy Xie, head of Greater China research at OCBC Bank. “There are still a lot of constraints at the moment in terms of how China can support the economy via fiscal expenditure.” Budgetary plans included an increase in defence spending by 7.2% this year, similar to 2023 — a figure closely watched by the US and China’s neighbours, who are wary about its strategic intentions as tensions rise over Taiwan. China’s defence budget has doubled since President Xi Jinping came to power more than a decade ago. This year marks the 30th in a row of increasing defence expenditure, based on research by the International Institute for Strategic Studies. Premier Li Qiang acknowledged reaching the target “will not be easy”, adding that a “proactive” fiscal stance and “prudent” monetary policy was needed. Read also: China plans US$139 bil special ultra-long debt for economy China vows to mobilize nation as it fights US for tech supremacy REUTERS Read the full story

WEDNESDAY MARCH 6, 2024 17 THEEDGE CEO MORNING BRIEF WORLD SYDNEY/HONG KONG (March 5): A group of lenders to China’s Country Garden has hired Allen & Overy and Deloitte as advisers, three sources with knowledge of the matter said, as creditors to the embattled developer gear up for possible debt restructuring talks. The hiring by the lenders’ group comes as the Foshan-based developer, China’s top private property company by sales, prepares to face a Hong Kong court on May 17 after a creditor filed a liquidation petition against it. The lenders’ group has about US$4 billion worth of credit exposure to Country Garden, two of the people said. The group includes Bank of China and China Construction Bank, one of them added. Country Garden’s debt revamp process started in recent weeks with the hiring of advisers by the developer and a so-called ad-hoc offshore bondholders’ group, after it missed a US$15 million bond coupon repayment last October. Country Garden has total liabilities of US$200 billion. That includes US$11 billion offshore debt now deemed to be in default. Country Garden lenders’ group hires advisers for debt revamp talks, sources say (March 5): China’s property debt crisis is showing new signs of trouble after entering its fourth year, with one of the country’s major state-backed developers placed under unprecedented scrutiny by investors. Some of China’s largest insurers are sounding an alarm over the debt risks of China Vanke Co, according to people familiar with the matter, as shares and bonds of the major developer hit record lows on repayment concerns. At least two Beijing-based insurers that farm out annuity investments told their external portfolio managers late last week to closely monitor Vanke’s credit risks, said the people, asking not to be identified discussing a private matter. One life insurer also told its pension managers to curb exposure, the people added. Meanwhile, Vanke, China’s second-biggest developer by sales, has begun a new round of negotiations with several state insurers in recent days to extend maturities of some private borrowings, the people said. No agreement has been reached so far. In response to queries from Bloomberg, Vanke said Tuesday it has prepared funds to repay its 5.35% dollar bond due on March 11 and that the payment is being arranged orderly. Vanke’s shares were down as much as 4.1% in Hong Kong, after dropping to a record low Monday. Its 3.975% dollar note slumped 1.7 cents to 46 cents on the dollar, set for the lowest since October, Bloomberg-compiled prices show. The warnings about Vanke’s risks are particularly worrisome and threaten to elevate the sector’s debt woes to the next level because the company is seen as a bellwether for Beijing’s support for major developers with strong ties to the state. The company is also one of China’s few remaining and surviving investment-grade builders, following a record wave of defaults that engulfed mostly private-sector builders including former industry giants Country Garden Holdings Co and China Evergrande Group. The growing concerns about Vanke also come at an inconvenient time for authorities as the nation kicked off its seven-daylong annual parliamentary sessions on Tuesday, with key policy topics from the housing crisis to local government debt in focus. Authorities pledged Tuesday to refine real estate policies to provide stronger support for the ailing sector, including treating developers equally regardless of their ownership. “It is no surprise that Vanke is in trouble today,” said Li Kai, chief investment officer of Beijing Shengao Fund Management Co. “Domestic real estate sales have been so poor that it is difficult for companies to hang on, and the market has not seen strong visible support from local governments.” The builder, whose biggest shareholder is Shenzhen Metro Group Co, has faced concerns about its debt obligations since last year. China’s home sales slump accelerated this year, even after regulators stepped up efforts to rescue the beleaguered sector. Vanke had about 1.7 trillion yuan (RM1.12 trillion) of assets and 1.3 trillion yuan of total liabilities as of mid-2023, according to its interim report. The builder said Friday it plans to raise about 1.16 billion yuan in an infrastructure REIT that will list in Shenzhen. It’s not the first time state-linked Chinese developers are in trouble. China South City Holdings Ltd and Sino-Ocean Group Holding Ltd, two such firms, are also on the list of defaulters. However, their sizes and impact are nowhere near Vanke’s. “If Vanke does have a redemption risk, I think it will be comparable to the impact on the market of Country Garden’s default, and will directly hit other private real estate developers that are still struggling to support themselves,” said Beijing Shengao’s Li. Vanke’s Hong Kong-listed shares may remain weak until there is a sales recovery or stronger support from the Shenzhen government, according to JPMorgan Chase & Co analysts, who forecast a 20%-30% yearly drop in the developer’s full-year earnings. Read also: Developer China Vanke assures it can repay US$630 mil dollar bond amid liquidity worries China’s property debt woes deepen as Vanke under closer scrutiny Bloomberg BY SCOTT MURDOCH & CLARE JIM Reuters The warnings about Vanke’s risks are particularly worrisome and threaten to elevate the sector’s debt woes to the next level because the company is seen as a bellwether for Beijing’s support for major developers with strong ties to the state.

WEDNESDAY MARCH 6, 2024 18 THEEDGE CEO MORNING BRIEF WORLD (March 5): Singapore’s Temasek Holdings is in discussions to invest in Microsoft-backed artificial intelligence company OpenAI, the Financial Times reported on Tuesday, citing two people familiar with the matter. Senior executives at Singapore’s state investment firm have met ChatGPT maker’s CEO, Sam Altman, multiple times in recent months, the report added. OpenAI did not immediately respond to Reuters requests for comment, while Temasek declined to comment on the report. Temasek in talks to invest in OpenAI, FT reports Meta’s Facebook, Instagram down for hundreds of thousands of users across globe SYDNEY (March 5): Singapore Prime Minister Lee Hsien Loong said on Tuesday an incentive provided to Taylor Swift to make Singapore the only stop in Southeast Asia on her world tour was not a hostile act towards its neighbours. “(Our) agencies negotiated an arrangement with her to come to Singapore and perform and to make Singapore her only stop in Southeast Asia,” Lee told a press conference in Melbourne, where he is attending a regional summit. “It has turned out to be a very successful arrangement. I don’t see that as being unfriendly.” Swift is currently part way though six sold-out shows in Singapore, her only stop in Southeast Asia. Singapore’s government previously said it had given Swift a grant to play in the city-state, without mentioning the terms of the deal. The announcement annoyed other countries in the region, with the Thai prime minister saying the grant was made on condition that it would be Swift’s only show in Southeast Asia, while a Filipino lawmaker said it “isn’t what good neighbours do”. Last month, Singapore’s tourism board and culture ministry referred to the economic benefits brought by Swift’s concerts around the world due to her popularity, and said the ministry had worked with concert promoter AEG Presents to get Swift to perform in Singapore. Read also: Singapore Air’s budget unit Scoot adds services as tourism picks up Singapore’s exclusive deal with Taylor Swift not a hostile act towards neighbours, PM says BY ALASDAIR PAL Reuters BY ADITYA SONI, JASPREET SINGH & KATIE PAUL Reuters Reuters REUTERS Altman has reportedly been in talks to raise about US$5 trillion to US$7 trillion for a network of AI chip factories. AI startups attracted one out of every three dollars invested last year in the United States, reflecting a surge in investor interest after OpenAI’s ChatGPT grabbed the spotlight and startups raced to develop AI technology. Temasek is an active investor in the tech sector with a portfolio valued at S$382 billion (US$284.21 billion), as of March 31. Some of the companies in the portfolio include Roblox, Tencent and Alibaba. The launch of OpenAI’s ChatGPT in late 2022 brought attention to generative AI technologies, spurring billions in investments on chips and servers required to support the adoption of such applications. Read also: Singapore’s Temasek shortlists Saudi Aramco, Shell in sale of Pavilion Energy assets, sources say BENGALURU/NEW YORK (March 6): Meta-owned social media platforms Facebook and Instagram were down for hundreds of thousands of users on Tuesday in a global outage that has been going on for more than an hour. The disruptions started around 10.00am ET (1500 GMT), with many users saying on rival social media platform X they had been booted out of Facebook and Instagram and were unable to log in. There were more than 300,000 reports of outages for Facebook and 40,000 reports for Instagram on tracking website Downdetector.com. “We’re aware people are having trouble accessing our services. We are working on this now,” Meta spokesperson Andy Stone said in a post on X. The social media giant, shares of which were down 1.5% in late morning trade, has about 3.19 billion daily active users across its family of apps, which also include WhatsApp and Threads. Meta’s status dashboard showed the application programming interface for WhatsApp Business was also facing issues. Though the outage for WhatsApp and Threads was much smaller, with under 200 incident reports each on Downdetector, which tracks outages by collating status reports from several sources including users. Several employees of Meta said on anonymous messaging app Blind that they were unable to log in to their internal work systems, which left them wondering if they were laid off, according to posts seen by Reuters. The outage was among the top trending topics on X, formerly Twitter, with the platform’s owner Elon Musk taking a shot at Meta with a post that said: “If you’re reading this post, it’s because our servers are working”. X itself has faced several disruptions to its service after Musk’s US$44 billion (RM207.84 billion) purchase of the social media platform in October 2022, with an outage in December causing issues for more than 77,000 users in countries from the US to France. REUTERS

WEDNESDAY MARCH 6, 2024 19 THEEDGE CEO MORNING BRIEF WORLD Australia to create US$1.3 bil fund to invest in Southeast Asian projects Prabowo vows smooth transition, pushes privatisation BY GAYATRI SUROYO & STEFANNO SULAIMAN Reuters BY LEWIS JACKSON & RENJU JOSE Reuters JAKARTA (March 5): Indonesia’s presumed president Prabowo Subianto on Tuesday promised a “very smooth” transfer of power later this year and opened the door to privatising state-run firms while maintaining government control of key economic sectors. Speaking at an investment forum, Prabowo, who unofficial vote counts show won the Feb 14 presidential election by a huge margin, also said he believed economic growth could reach 8% annually within the next four or five years. Prabowo said that while the state could continue to regulate and maintain decision-making in strategic areas in Southeast Asia’s biggest economy, the private sector should be allowed to thrive and take the leading role. “Maybe we have to really have a programme of rationalising and privatising many of the state owned enterprises. The state can regulate, the state can (provide) oversight, the state must also have strategic decision-making in the strategic sectors,” he said. “I don’t see for instance why we need to be present in every sector of the economy ... now we must allow private sectors to be more and more dominant.” State companies in sectors such as banking, telecommunication, construction and mining currently play a dominant role in Indonesia’s economy. Prabowo, 72, pledged to continue the policies of incumbent Joko Widodo, who has overseen a big push to modernise infrastructure, and said he aimed to significantly improve tax ratios by widening the tax base, not necessarily by raising taxes. He said his government could widen the fiscal gap to up to 2.8% of gross domestic product (GDP), from under 2% in 2023, and would still comply with the mandatory deficit ceiling of 3% of GDP. Investors have been closely watching Prabowo’s fiscal plans, after previous comments on potentially upping Indonesia’s debt-to-GDP ratio raised alarms. Rating agencies warn his signature promise of free school lunches could be costly. Prabowo pledged to maintain Indonesia’s track record of fiscal prudence, but repeated that he thought there was space to increase public spending and debt, with their ratios relative to GDP being lower than other countries. SYDNEY (March 5): Australia said on Tuesday that it would set up a A$2 billion (US$1.3 billion) finance facility to boost trade and investment in Southeast Asia, as it looks to deepen ties in a region where many are also searching for ways to live with a more assertive China. The fund will focus on clean energy and infrastructure and provide loans, guarantees, equity and insurance. Australia will also tip in an extra A$140 million to extend an existing programme which advises the region on infrastructure projects. Prime Minister Anthony Albanese announced the fund, which was recommended last year by Australia’s envoy to the region, in a speech on Tuesday to business leaders at the Association of Southeast Asian Countries (Asean) summit in Melbourne. is not unlimited time. We must act together, and we must act now.” Two-way trade between Australia and Asean states passed US$178 billion in 2022, greater than Japan or the United States, Albanese said. Australia is hosting the Asean summit, which marks the 50th anniversary of its ties to the bloc, amid growing recognition in Canberra that the region needs to be cultivated at a time when China’s increasing assertiveness is reshaping the Indo-Pacific. Stances on China across the 10-member bloc, range from wary to warm. Philippine Prime Minister Ferdinand Marco Jr told an audience in Melbourne on Monday that his country would grow its security ties with the US and resist when China ignores its maritime rights in the South China Sea. However, at a joint press conference with Albanese hours earlier, Malaysian Prime Minister Anwar Ibrahim criticised growing “China-phobia” in the West. Asked by reporters about China’s push to join regional trade group, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Albanese and Singaporean Prime Minister Lee Hsien Loong said any decision would be by consensus. Beijing has long sought to join the 12-member CPTPP, which includes Singapore, the UK and Japan, but faces opposition from some members including Australia over its coercive trade policies. “Australia and Southeast Asia must together face this moment with a sense of optimism and urgency,” he said. “Because while there is so much untapped potential, there Indonesia’s presumed president Prabowo Subianto pledged to continue the policies of incumbent Joko Widodo, who has overseen a big push to modernise infrastructure, and said he aimed to significantly improve tax ratios by widening the tax base, not necessarily by raising taxes. REUTERS BLOOMBERG

WEDNESDAY MARCH 6, 2024 20 THEEDGE CEO MORNING BRIEF WORLD Alibaba backs US$2.5 bil AI startup in second major 2024 deal Ericsson CEO: Don’t repeat Europe’s mistakes, speed up 5G adoption to prevent economic setback BY LIEW JIA TENG theedgemalaysia.com BY JANE ZHANG Bloomberg (March 5): Alibaba Group Holding Ltd is leading a financing round of at least US$600 million (RM2.84 billion) for Chinese artificial intelligence (AI) startup MiniMax, spearheading its second major deal in the space this year as it deploys capital in pursuit of growth. The two-year-old firm has secured funds from Alibaba and other investors at a valuation of more than US$2.5 billion, according to people familiar with the matter. The fundraise remains in progress but Alibaba and HongShan, formerly Sequoia China, have committed to the financing, one of the people said, asking not to be identified talking about a private deal. Deal terms could still change because negotiations with more investors are ongoing, the people added. Alibaba joins Silicon Valley peers like Microsoft Corp in placing big bets on generative AI, the technology that powers ChatGPT. It led a US$1 billion funding round in recent months RIYADH, Saudi Arabia (March 5): Telefonaktiebolaget LM Ericsson president and chief executive officer Börje Ekholm has warned other countries not to make the same mistake Europe did with the fifth generation (5G) network. The Swedish executive said Europe is moving too slowly with 5G, and other countries should avoid falling behind. He is of the view that 5G will have a big impact on the economy and that it’s important for everyone to embrace it soon. “The US has outgrown Europe over the past 15-20 years. If you look at Facebook, Google, Netflix and Amazon, all these big tech companies are providing services to the consumers by leveraging the 4G network. “Europe pretty much has nothing on that. Europe, by not investing into 4G, actually fell behind. And now, the same thing is actually happening with 5G,” Ekholm said during a fireside chat at the LEAP 2024, a global technology event held at the Riyadh Exhibition and Convention Centre on Monday. He went on to say that the problem for Europe is that it has put itself on a path to becoming a region that has good foods and great arts, but it has “no industry”. “Nowadays, if you visit a European country, most likely you will be landed on a 3G network. It’s a huge issue. Europe had tried to lead with regulation, it didn’t work out. Europe should have led with innovation, but unfortunately, it went the wrong way,” said Ekholm. Telefonaktiebolaget LM Ericsson president and CEO Börje Ekholm is of the view that 5G will have a big impact on the economy and that it’s important for everyone to embrace it soon. According to him, about two decades ago, Europe believed it would not make any money by investing into 4G. That’s because Europe thought its 3G network was good enough, and that that was actually true then. “But what followed later was that Europe failed to see the prospects of what the new technology could bring. And as we have seen, 4G has fully digitalised the consumers, and Europe is now lagging behind,” he observed. Ekholm said the Western Europe had been considered as the leader in mobile connectivity about 20 years ago. However, during the 4G era, most of the applications were created in China and the US. “Why was that the case? That’s because those were the first two countries that rolled out a strong data network for mobile, which is 5G, nationwide,” he said. Stockholm-headquartered Ericsson is a multinational networking and telecommunications giant that currently has 158 live 5G networks across the globe, spanning 67 countries. Closer at home, Digital Nasional Bhd (DNB) had in July 2021 announced that it has appointed Ericsson (Malaysia) Sdn Bhd as its network equipment provider to design and build the National 5G Network at a total cost of RM11 billion. in Moonshot AI, boosting the yearold startup’s valuation also to about US$2.5 billion, Bloomberg News reported. The successive deals show how Alibaba’s keen to place bets on potential future leaders in artificial intelligence, even if they don’t necessarily dovetail: MiniMax, founded by veterans of computer-vision specialist SenseTime Group Inc, competes with Moonshot in developing ChatGPT-like services. Alibaba — once among China’s most prolific tech investors until a government clampdown began in 2020 — is once again on the hunt for growth. New chiefs Joseph Tsai and Eddie Wu are exploring options to turn around a flagging company hammered by two years of regulatory scrutiny and an economic downturn. Read also: Apple China iPhone sales plunge 24% as Huawei’s popularity surges REUTERS BLOOMBERG Read the full story

WEDNESDAY MARCH 6, 2024 21 THEEDGE CEO MORNING BRIEF WORLD Don’t invest in China, Goldman Sachs wealth management CIO warns AMD hits US roadblock in selling AI chip tailored for China BY JANE LANHEE LEE & MACKENZIE HAWKINS Bloomberg BY JACOB GU Bloomberg (March 5): China’s big stock-market declines aren’t enough to warrant putting money in the country, according to the chief investment officer of Goldman Sachs Group Inc’s wealth-management business. “All our clients are asking us that question — given how cheap China appears, people inevitably say, well, has it discounted the worst news?” Sharmin Mossavar-Rahmani said in a Bloomberg Television interview. “Our view is that one should not invest in China.” She cited a host of reasons for her take, including expectations for a steady slowdown in the economy over the next decade. China will struggle with a weakening in the three pillars of growth up to now — the property market, infrastructure and exports, she said. A lack of clarity on China’s policymaking, along with patchy economic data, add to concerns about investing there, Mossavar-Rahmani said. China’s Communist leadership has over the past year emphasised the importance of information security and put curbs on Mossavar-Rahmani said. “Policy uncertainties generally put a little bit of a cap on the equity market.” The benchmark CSI 300 Index last month sank to a five-year low amid worries over the state of domestic demand at a time of escalating geopolitical tensions. It has since rebounded after regulators took steps to curb selling and boost institutional purchases. There may be some short-term stimulus measures coming, but China’s real estate sector hasn’t found the bottom yet, according to Mossavar-Rahmani. “Data is unclear — we really don’t have a good grasp of what growth was last year or what growth will be this year,” she also said, echoing concerns among a number of economists who doubt China’s official economic expansion figures. While China formally published a growth rate above 5% for 2023, “most people think that is not the real growth number — it was actually a lot weaker,” she said. “We don’t recommend clients move into China at this point,” she concluded. what data can be removed from the nation. The statistics bureau also suspended for a time some unemployment figures. On Monday, Beijing announced that the country’s premier — second only to President Xi Jinping — will discontinue a decades-long tradition of annual press briefings at a key gathering. “It is not clear what the overall general direction of policy will be long term,” (March 5): US officials have told Advanced Micro Devices Inc (AMD) that the artificial intelligence (AI) chip it tailored for the Chinese market is too powerful to sell without a licence from the Commerce Department, throwing up a roadblock for the company, as it tries to navigate Washington’s crackdown on exports of advanced technologies. AMD had hoped to gain a green light from the Commerce Department to sell the AI processor to Chinese customers, as it performs at a lower level than what AMD sells outside of China, according to people familiar with the situation, asking not to be identified, because the matter is private. But US officials told AMD it must still obtain a licence from the Commerce Department’s Bureau of Industry and Security in order to sell it, the people said. AMD didn’t immediately have comment. The Bureau of Industry and Security declined to comment. It’s unclear whether AMD will seek the licence. AMD shares were down 1.8% in pre-market trading on Tuesday. The US has been working to limit Chinese access to cutting-edge semiconductors that can develop AI models — and the tools used to manufacture those chips — out of fear that Beijing will gain a military edge. US President Joe Biden’s administration unveiled an initial set of export controls in 2022, and strengthened them in October last year to include more technology, and curb sales to intermediary nations that might undermine the ban. The tighter controls restricted the sale of a processor that leading AI chipmaker Nvidia Corp had designed specifically for China — in compliance with the initial 2022 version of the export rules. The company has since developed new customised, less-powerful products for the Chinese market to align with the 2023 restrictions, and Commerce Secretary Gina Raimondo has said that she is looking into the specifics of those components. The 2022 US ban prevented both Nvidia and AMD from selling their most powerful AI chips to China, forcing them to find workarounds. Nvidia immediately responded with a reduced-performance modified model, whereas AMD hasn’t publicly discussed its efforts to develop a new AI processor for the country. AMD had less of a foothold in the Chinese AI chip industry than Nvidia, which had a large share of that market prior to the ban. When the restrictions took effect in 2022, AMD said it didn’t expect to be materially affected by the rules. But AMD is now going after the AI chip market more aggressively. In December, it launched a new MI300 lineup that will challenge processors from Nvidia. The China-tailored product has been referred to as MI309, according to the people. It’s not clear which Chinese customer was trying to buy the AMD AI chips. That factor could influence whether the company is able to secure a licence, should the chipmaker choose to move forward. Leading Chinese tech firms, including Tencent Holdings Ltd and Baidu Inc, have said they have stockpiled enough powerful chips from Nvidia — the types that are now subject to US controls — to advance their chatbots’ capabilities for another year or two. Meanwhile, Shenzhen-based Huawei Technologies Co is developing its own AI semiconductors and chipmaking capability that could eventually help Chinese companies fill the gap created by the US ban. BLOOMBERG

WEDNESDAY MARCH 6, 2024 22 THEEDGE CEO MORNING BRIEF WORLD (March 5): The US$12 billion (RM56.73 billion) fraud trial of Vietnamese real estate tycoon Truong My Lan began Tuesday as the government presses its anti-corruption campaign across all sectors of society. Lan, chairwoman of Van Thinh Phat Group, or VPT, that held some of the most prestigious properties in the nation’s commercial hub of Ho Chi Minh City, faces charges of allegedly embezzling more than US$12 billion from Saigon Commercial Bank, or SCB, between February 2018 and October 2022 — a sum that surpasses the market capitalisation of most Vietnamese banks. The trial, which could last two months, is being held under tight security at the Ho Chi Minh City People’s Court. Some six tons of documents are part of the proceedings, according to local media. Eighty-six defendants in a dozen or so vans under heavy police escort blaring sirens arrived at the courthouse in the city’s District One around 7am. Lan’s husband, Hong Kong businessman Eric Chu, and niece, VTP chief executive officer Truong Hue Van, also face charges in the case. The trial started about 8.20am with Lan and her husband saying they were in good health after being asked about their condition by Judge Pham Luong Toan. The hearing overseen by two judges and three jury members then proceeded with the reading of charges for each defendant. The country’s largest-ever fraud case is part of a years-long anti-corruption campaign spearheaded by Communist Party Secretary Nguyen Phu Trong. The push has touched all sectors of society and the highest levels of government and comes as the Southeast Asian nation emerges as a global supply chain hub for companies such as Apple Inc and Samsung Electronics Co. The Lan case and others have roiled the nation’s bond, banking and property sectors. Vietnam US$12 bil fraud trial begins amid anti-graft push (March 5): For the first time in more than nine months, Elon Musk is no longer the world’s richest person. Musk lost his position atop the Bloomberg Billionaires Index to Jeff Bezos after shares in Tesla Inc tumbled 7.2% on Monday. Musk now has a net worth of US$197.7 billion (RM934.63 billion); Bezos’ fortune is US$200.3 billion. It’s the first time that Bezos, 60, the founder of Amazon.com Inc., has topped Bloomberg’s ranking of the richest people since 2021. The wealth gap between Musk, 52, and Bezos, which at one point was as wide as US$142 billion, has been shrinking as Amazon and Tesla shares move in opposite directions. While both are among the so-called Magnificent Seven stocks that have propelled US equity markets, Amazon shares have more than doubled since late 2022 and are within striking distance of a record high. Tesla is down about 50% from its 2021 peak. Tesla shares fell on Monday after preliminary data showed shipments from its factory in Shanghai slumped to the lowest in more than a year. Amazon, meanwhile, is coming off its best online sales growth since early in the pandemic. Pay package Musk’s wealth could take a further hit after a Delaware judge struck down his US$55 billion pay package at Tesla, where he’s chief executive. The decision took the side of an investor who’d chalElon Musk loses world’s richest person title to Jeff Bezos lenged Musk’s compensation plan, which had been the largest in history. Options that were included in the voided plan are one of Musk’s largest assets, alongside his stakes in Tesla and SpaceX. The Bloomberg index continues to include them in its calculations of his wealth. The vast majority of Bezos’s fortune comes from his 9% stake in Amazon. He’s the online retailer’s largest shareholder, even after unloading 50 million shares worth about US$8.5 billion last month. For Bezos, being atop the wealth rankings is a familiar perch. He first overtook Microsoft Inc co-founder Bill Gates as the world’s richest person in 2017. But a massive rally in Tesla shares left Bezos jockeying with Musk for much of 2021 for the top spot. Late that year he fell way behind, and didn’t regain the No 1 position until now. Bernard Arnault, 74, the chairman of LVMH Moet Hennessy Louis Vuitton, the world’s largest luxury-goods maker, also ranks among the world’s wealthiest with a net worth of US$197.5 billion. Read also: Former Twitter execs sue Elon Musk for over US$128 mil in severance Tesla’s German plant stops output after suspected arson nearby BY TOM MALONEY & ANNIE MASSA Bloomberg BY JOHN BOUDREAU Bloomberg The wealth gap between Musk and Bezos, which at one point was as wide as US$142 billion, has been shrinking as Amazon and Tesla shares move in opposite directions. Truong My Lan, chairwoman of Van Thinh Phat Holdings (second left) arrives at the Ho Chi Minh City People’s Court in Ho Chi Minh City, Vietnam, on Tuesday, March 5, 2024. The US$12 billion fraud trial of Vietnamese real estate tycoon begun Tuesday as the government presses its anticorruption campaign across all sectors of society. BLOOMBERG BLOOMBERG

WEDNESDAY MARCH 6, 2024 23 THEEDGE CEO MORNING BRIEF WORLD (March 5): The Biden administration on Tuesday unveiled its latest measures to combat rising consumer costs and charges known as junk fees, including an interagency effort to crack down on inflated prices and limiting what banks can charge for late credit card payments. The Justice Department and the Federal Trade Commission will lead a joint “strike force” aimed at stopping illegal corporate behavior that hikes prices on Americans through anticompetitive or fraudulent business practices, said administration officials. The administration will also finalize a rule that slashes credit card fees from an average of $31 down to $8, and another that gives ranchers and farmers more leverage when negotiating contracts with meat packers, officials said. “Late credit card fees have gotten out of control,” Consumer Financial Protection Bureau Director Rohit Chopra said during a press call previewing the moves. The moves to address rising costs come as Democratic President Joe Biden and his allies try to change views among the many American voters unhappy with his economic stewardship. Biden is set to highlight the steps during the sixth meeting of the Competition Council, which he created by executive order to stop anticompetitive practices in sectors from agriculture to drugs and labor. Biden has successfully pressured companies such as Airbnb and Live Nation to limit junk fees — or extra charges — that customers pay when booking concert tickets, hotels and airfares. The White House Council of Economic advisers estimates that the administration’s actions will eliminate more than $20 billion in junk fees annually. The moves to counter junk fees is expected to feature in Biden’s State of Union Speech on Thursday, White House aides say. Chopra said the limit on credit card late fees will save American families $10 billion annually, or an average of $220 per year for the 45 million cardholders who are charged late fees annually. Credit card issuers have been exploiting a loophole created in 2010 that allowed them to escape a federal ban on unreasonable fees by increasing them each year with automatic inflation adjustments, Chopra said. The Department of Agriculture rule, first proposed last September, prohibits among other things retaliation against producers for activities like asserting rights under the Packers and Stockyards Act, which aims to ensure competition in the livestock, meat and poultry markets. “This final rule will provide for clearer, more effective standards by which to govern all of this in the modern marketplace,” Agriculture Secretary Tom Vilsack said on a Monday press call. Biden administration to limit credit card late fees in move against junk fees LONDON (March 5): Major European banks have been cutting their lending to commercial property and have half the exposure of their U.S. peers, making U.S. lenders more vulnerable as office prices plunge further, Morgan Stanley said on Tuesday. Commercial real estate (CRE) markets are in the grip of the biggest downturn since the 2008-9 financial crisis as higher borrowing costs and a spike in vacancy rates driven by more people working from home hit demand for office space. Morgan Stanley analysts said in a research note that regional U.S. banks looked most exposed, alongside German regional lenders - which unlike bigger European banks had been increasing their exposure. “Overall, we think CRE-related issues will not translate into a systemic event, but rather a manageable earnings impact localized to a small set of banks,” the analysts wrote. In a ‘stress scenario’, in which property price falls force banks to recognise losses and borrowers’ credit quality worsens, European banks would face a 3% hit to earnings over three years, which the analysts called “manageable”. That is especially the case as 70% of large-cap European banks reduced their exposure since 2022 to around 5% of their loan book, and nearly all lenders have sub-1% exposure to the United States, where office vacancy rates are 21% versus 8% in Europe, the analysts said. By contrast, German regional banks have more than 20% CRE exposure, US banks far more exposed than Europeans to property crunch, says Morgan Stanley with such loans accounting for most of the loan books of specialist lenders Deutsche Pfandbriefbank and Aareal, Morgan Stanley said. Among large European lenders, Deutsche Bank has the biggest CRE exposure to the U.S. market, but the analysts said it was just 1.5% of its loans and that the bank had already set some money aside to cover potential losses. U.S. large cap banks have about 11% exposure, while mid-cap lenders - some of which have seen their shares plunge in recent weeks - have around 30%, they added. Refinancing risks and vacancy rates have been “key concerns” for the market globally, the analysts said, but they saw “notable differences” between U.S. and European banks. About $660 billion of CRE debt is set to mature in the United States in 2024, against $150-$200 billion in Europe, they estimate. City office vacancy rates range from 32% and 27% in San Francisco and Los Angeles respectively, to 9% in London and 5% in Zurich, according to Morgan Stanley. BY TOMMY WILKES Reuters BY JARRETT RENSHAW Reuters “Late credit card fees have gotten out of control,” Consumer Financial Protection Bureau Director Rohit Chopra said during a press call previewing the moves. REUTERS

WEDNESDAY MARCH 6, 2024 24 THEEDGE CEO MORNING BRIEF WORLD BEIJING (March 5): China will boost its defence spending by 7.2% this year, fuelling a military budget that has more than doubled under President Xi Jinping’s 11 years in office as Beijing hardens its stance on Taiwan, according to official reports on Tuesday. The increase mirrors the rate presented in last year’s budget and again comes in well above the government’s economic growth forecast for this year. China also officially adopted tougher language against Taiwan as it released the budget figures, dropping the mention of “peaceful reunification” in a government report delivered by Premier Li Qiang at the opening of the National People’s Congress (NPC), China’s rubber-stamp parliament, on Tuesday. Tensions have risen sharply in recent years over Taiwan, the democratically ruled island that China claims as its own, and elsewhere across East Asia as regional military deployments rise. Li Mingjiang, a defence scholar at the Rajaratnam School of International Studies (RSIS) in Singapore, said that despite China’s struggling economy, Taiwan is a major consideration in Beijing’s defence spending. “China is showing that in the coming decade it wants to grow its military to the point where it is prepared to win a war if it has no choice but to fight one,” Li said. Since Xi became president and commander-in-chief more than a decade ago, the defence budget has ballooned to 1.67 trillion yuan (RM1.1 trillion) this year from 720 billion yuan in 2013. The percentage rise in military spending has consistently outpaced the annual domestic economic growth target during his time in office. This year the growth target for 2024 is about 5%, similar to last year’s goal, according to the government report. The defence budget is closely watched by China’s neighbours and the US, who are wary of Beijing’s strategic intentions and the development of its armed forces. Based on data from the London-based International Institute for Strategic Studies (IISS), this year’s budget marks the 30th consecutive year of Chinese defence spending increases. Japanese government spokesperson Yoshimasa Hayashi on Tuesday urged greater openness from Beijing, warning of serious international concerns. China’s continuous military spending increases without sufficient transparency were “the greatest strategic challenge ever to ensure the peace and stability of Japan and the international community and strengthen international order”, Hayashi said in Tokyo. South Korea’s defence ministry declined to comment. Australia’s defence ministry did not immediately respond to a request for comment. James Char, a security scholar at the RSIS, said that despite the defence budget’s outpacing gross domestic product (GDP) growth, it had remained at about 1.3% of overall GDP in the last decade and had put no stress on the national coffers. “Of course, the country’s longer-term economic fortunes will determine whether this can be sustained going forward,” Char said. The purchase of new equipment is likely to take up the largest single chunk of the budget as the military works to meet Xi’s goal of full modernisation by 2035, the IISS said in research published last month. That push continues across several fronts, with China producing weapons ranging from warships and submarines to drones and advanced missiles that can be equipped with both nuclear and conventional warheads. Char said tighter management would also be a priority for military leadership after high-profile personnel purges related to weapons procurement. BY YEW LUN TIAN & LAURIE CHEN Reuters China drops ‘peaceful reunification’ reference to Taiwan, raises defence spending by 7.2% The Central Military Commission, China’s top military body, last July ordered a “clean up” of the procurement process and invited the public to report irregularities. The commission has not announced the results of its investigation, but at least nine generals, including four directly in charge of procurement, have been stripped of their title as parliamentarians, a necessary procedure before they can be charged in court. Two former defence ministers, Li Shangfu and Wei Fenghe, have also gone missing without explanation, which in China often means they are under investigation. Li had been in charge of military procurement from 2017 to 2022. When asked whether Li would attend the parliament sessions, parliament spokesman Lou Qinjian told Singapore paper Lianhe Zaobao on Monday that Li “cannot attend because he is no longer a delegate”. In the government work report, China reiterated a call for “reunification” with Taiwan, but added emphasis that it wants to “be firm” in doing so and dropped the descriptor “peaceful”, which had been used in previous reports. Although it is not the first time that China had omitted the word “peaceful”, the change in language is closely watched as a possible sign of more assertive stance towards Taiwan. Taiwan’s Mainland Affairs Council on Tuesday urged China to accept the fact that the two sides are not subordinate to each other, and urged China to create health crossstrait exchanges. Read the full story Read also: Philippines summons China diplomat over ‘aggressive’ actions in South China Sea Since Xi became president and commander-in-chief more than a decade ago, the defence budget has ballooned to 1.67 trillion yuan (RM1.1 trillion) this year from 720 billion yuan in 2013. (From top left) Chinese President Xi Jinping, Premier Li Qiang, National People's Congress (NPC) Standing Committee Chairman Zhao Leji and NPC Standing Committee Vice Chairman Li Hongzhong sing the national anthem at the opening session of the National People's Congress (NPC) at the Great Hall of the People in Beijing, China on March 5. REUTERS

WEDNESDAY MARCH 6, 2024 25 THEEDGE CEO MORNING BRIEF MARKETS Top 20 active stocks World equity indices Top gainers (ranked by %) Top losers (ranked by %) Top gainers (ranked by RM) Top losers (ranked by RM) NAME VOLUME CHANGE CLOSE YTD MARKET (MIL) (RM) CHANGE CAP (%) (RM MIL) TWL HOLDINGS BHD 140.00 0.000 0.035 16.67 192.3 HARVEST MIRACLE CAPITAL BHD 126.20 -0.005 0.135 12.50 165.5 SAPURA ENERGY BHD 88.60 -0.005 0.045 0.00 826.9 WIDAD GROUP BHD 85.30 -0.015 0.095 -80.41 294.2 FITTERS DIVERSIFIED BHD 54.40 0.000 0.050 0.00 117.1 EKOVEST BHD 50.60 0.000 0.450 -8.16 1,334.4 HONG SENG CONSOLIDATED BHD 48.90 0.000 0.015 -40.00 76.6 MAG HOLDINGS BHD 48.70 -0.015 0.185 -2.63 303.6 YTL CORP BHD 47.30 -0.050 2.620 38.62 28,729.3 MINETECH RESOURCES BHD 42.70 -0.010 0.145 0.00 258.7 VELESTO ENERGY BHD 39.40 0.000 0.290 26.09 2,382.5 CIMB GROUP HOLDINGS BHD 39.40 0.080 6.530 11.62 69,643.1 PUBLIC BANK BHD 38.80 0.020 4.320 0.70 83,854.2 YTL POWER INTERNATIONAL BHD 33.30 0.010 3.950 55.51 32,007.5 MASTER TEC GROUP BHD 31.40 0.110 0.800 0.00 816.0 JAKS RESOURCES BHD 28.90 -0.005 0.150 -18.92 355.5 MALAYSIAN RESOURCES CORP BHD 27.90 0.000 0.575 29.21 2,568.8 S P SETIA BHD GROUP 26.40 0.015 0.910 13.75 4,050.6 ISKANDAR WATERFRONT CITY BHD 25.30 0.025 0.760 4.11 700.1 MY EG SERVICES BHD 23.90 0.005 0.800 -1.84 5,967.6 Data as compiled on Mar 5, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) KEY ALLIANCE GROUP BHD 0.010 100.00 290.3 0.00 36.8 TALAM TRANSFORM BHD 0.020 33.33 39.8 33.33 85.9 METRONIC GLOBAL BHD 0.020 33.33 802.6 33.33 30.6 G3 GLOBAL BHD 0.025 25.00 3,746.6 0.00 94.3 MASTER TEC GROUP BHD 0.800 15.94 31,433.0 0.00 816.0 WMG HOLDINGS BHD 0.195 14.71 8,761.7 95.00 86.7 NOTION VTEC BHD 0.515 14.44 17,010.6 60.94 265.7 GOLDEN PHAROS BHD 0.520 14.29 6,555.2 57.58 73.2 CLASSITA HOLDINGS BHD 0.045 12.50 1,447.3 0.00 55.5 MYETF DOW JONES ISLAMIC 1.000 11.11 10.0 0.91 279.1 AVILLION BHD 0.055 10.00 723.2 10.00 62.3 HEITECH PADU BHD 1.920 9.71 4,821.3 118.18 194.4 PIMPINAN EHSAN BHD 1.180 9.26 10.2 -7.81 81.6 ZELAN BHD 0.060 9.09 540.6 -25.00 50.7 ANEKA JARINGAN HOLDINGS BHD 0.195 8.33 3,407.2 2.63 127.3 ORNAPAPER BHD 1.010 8.02 191.5 10.38 74.9 AXTERIA GROUP BHD 0.140 7.69 1,158.6 -6.67 100.4 PERAK CORP BHD 0.430 7.50 0.2 -10.42 43.0 PARKWOOD HOLDINGS BHD 0.145 7.41 19.9 0.00 39.9 WCE HOLDINGS BHD 1.050 7.14 3,828.7 2.94 3,137.1 Data as compiled on Mar 5, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) PEGASUS HEIGHTS BHD 0.005 -50.00 1,413.8 0.00 54.1 FOCUS DYNAMICS GROUP BHD 0.010 -33.33 473.2 -33.33 63.7 XOX BHD 0.010 -33.33 1,432.6 -33.33 51.9 SAUDEE GROUP BHD 0.020 -20.00 300.8 -20.00 31.2 REKATECH CAPITAL BHD 0.050 -16.67 135.2 -23.08 29.6 REACH ENERGY BHD 0.025 -16.67 106.1 -37.50 53.2 TA WIN HOLDINGS BHD 0.030 -14.29 13,055.4 -25.00 103.1 WIDAD GROUP BHD 0.095 -13.64 85,265.7 -80.41 294.2 ENG KAH CORP BHD 0.385 -13.48 100.0 1.32 45.5 ECOBUILT HOLDINGS BHD 0.070 -12.50 29.0 -22.22 29.5 PDZ HOLDINGS BHD 0.040 -11.11 1,580.2 -20.00 23.5 ARB BHD 0.040 -11.11 973.1 -38.32 50.0 TFP SOLUTIONS BHD 0.040 -11.11 257.4 -27.27 23.4 CHINA OUHUA WINERY HOLDINGS 0.045 -10.00 1,502.8 -18.18 30.1 PERMAJU INDUSTRIES BHD 0.045 -10.00 432.1 -10.00 87.6 SAPURA ENERGY BHD 0.045 -10.00 88,584.3 0.00 826.9 INNITY CORP BHD 0.415 -9.78 19.2 -13.54 57.9 PINEHILL PACIFIC BHD 0.330 -9.59 21.1 -8.33 49.4 DESTINI BHD 0.050 -9.09 22,799.6 -16.67 99.8 RAPID SYNERGY BHD 0.780 -8.77 3,340.7 -97.26 83.4 Data as compiled on Mar 5, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) NESTLE MALAYSIA BHD 119.500 -1.500 100.4 1.62 28,022.8 UNITED PLANTATIONS BHD 23.260 -0.740 883.4 30.67 9,647.9 FRASER & NEAVE HOLDINGS BHD 28.620 -0.580 84.3 2.24 10,497.2 KUALA LUMPUR KEPONG BHD 21.900 -0.420 1,631.6 0.37 24,011.3 HEINEKEN MALAYSIA BHD 22.900 -0.400 303.4 -5.14 6,918.0 KLUANG RUBBER CO MALAYA BHD 4.400 -0.240 3.1 21.55 273.5 ALLIANZ MALAYSIA BHD 18.900 -0.180 99.1 2.49 3,363.6 CARLSBERG BREWERY MALAYSIA 18.720 -0.180 215.4 -2.90 5,723.6 HONG LEONG BANK BHD 19.420 -0.160 834.2 2.75 42,097.1 MALAYSIA AIRPORTS HOLDINGS 8.280 -0.140 1,504.8 12.50 13,815.6 PETRONAS DAGANGAN BHD 22.260 -0.140 244.5 1.92 22,114.3 NPC RESOURCES BHD 1.700 -0.140 6.0 -5.56 193.3 VITROX CORP BHD 7.340 -0.120 164.0 0.69 6,939.4 PRESS METAL ALUMINIUM 4.540 -0.120 8,074.7 -5.61 37,407.9 IOI CORP BHD 3.960 -0.110 5,519.6 0.76 24,566.6 GE-SHEN CORP BHD 2.730 -0.100 894.1 135.34 333.2 SIME DARBY PLANTATION BHD 4.260 -0.100 3,213.8 -4.48 29,460.9 AIRASIA X BHD 1.380 -0.100 5,785.7 -26.20 617.0 APOLLO FOOD HOLDINGS BHD 5.420 -0.080 24.0 -5.90 433.6 HUME CEMENT INDUSTRIES BHD 2.850 -0.080 1,813.9 26.67 1,787.4 Data as compiled on Mar 5, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) AJINOMOTO MALAYSIA BHD 18.260 0.780 146.7 14.84 1,110.2 BINTULU PORT HOLDINGS BHD 5.880 0.230 0.1 14.40 2,704.8 GENTING BHD 4.890 0.200 17,787.4 5.84 18,829.3 HEITECH PADU BHD 1.920 0.170 4,821.3 118.18 194.4 HONG LEONG INDUSTRIES BHD 10.160 0.160 49.2 10.31 3,245.8 FRONTKEN CORP BHD 3.800 0.130 7,868.3 17.28 5,977.0 MASTER TEC GROUP BHD 0.800 0.110 31,433.0 0.00 816.0 PIMPINAN EHSAN BHD 1.180 0.100 10.2 -7.81 81.6 MYETF DOW JONES ISLAMIC 1.000 0.100 10.0 0.91 279.1 AME ELITE CONSORTIUM BHD 1.780 0.080 1,988.5 6.59 1,137.6 PETRONAS GAS BHD 18.000 0.080 4,277.5 3.45 35,617.2 CIMB GROUP HOLDINGS BHD 6.530 0.080 39,363.7 11.62 69,643.1 MALAYSIAN PACIFIC INDUSTRIES 28.900 0.080 139.6 2.48 5,749.1 ORNAPAPER BHD 1.010 0.075 191.5 10.38 74.9 WCE HOLDINGS BHD 1.050 0.070 3,828.7 2.94 3,137.1 PARAGON UNION BHD 3.890 0.070 178.6 39.43 326.1 NOTION VTEC BHD 0.515 0.065 17,010.6 60.94 265.7 GOLDEN PHAROS BHD 0.520 0.065 6,555.2 57.58 73.2 MCE HOLDINGS BHD 1.680 0.060 206.3 16.67 207.6 INARI AMERTRON BHD 3.120 0.060 10,843.8 3.65 11,713.4 Data as compiled on Mar 5, 2024 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 38,989.83 -97.55 -0.25 S&P 500 * 5,130.95 -6.13 -0.12 NASDAQ 100 * 18,226.48 -76.43 -0.42 FTSE 100 * 7,640.33 0.76 0.01 AUSTRALIA 7,724.20 -11.59 -0.15 CHINA 3,047.79 8.49 0.28 HONG KONG 16,162.64 -433.33 -2.61 INDIA 73,677.13 -195.16 -0.26 INDONESIA 7,247.46 -29.29 -0.40 JAPAN 40,097.63 -11.60 -0.03 KOREA 2,649.40 -24.87 -0.93 PHILIPPINES 6,905.46 -46.21 -0.66 SINGAPORE 3,107.10 -15.11 -0.48 TAIWAN 19,386.92 81.61 0.42 THAILAND 1,359.26 -3.33 -0.24 VIETNAM 1,269.98 8.57 0.68 Data as compiled on Mar 5, 2024 * Based on previous day’s closing Source: Bloomberg CPO RM 3,986.0048.00 OIL US$ 82.58-0.22 RM/USD 4.7352 RM/SGD 3.5231 RM/AUD 3.0715 RM/GBP 6.0069 RM/EUR 5.1385