The Edge - 23 February 2024

ceoMorningBrief friday, february 23, 2024 Issue 722/2024 theedgemalaysia.com Stock bulls reload AI bets as Nvidia powers rally p19 HOME: Muhyiddin’s son-in-law to be charged with criminal breach of trust — MACC p2 Malaysia’s approved investments in 2023 rises 23% to record high of RM329.5 bil — Anwar p5 Foreign outflows signal a triple threat awaits Malaysian bonds p6 WORLD: Fed worried about cutting rates too soon, minutes of January meeting show p21 Nestle, Danone see price hikes slowing after years of sharp increases p24 Report on Page 3. SAM FONG/ TheEdge After exiting Nepal, Axiata seeks buyers for Myanmar ops

friday february 23, 2024 2 The E dge C E O m o rning brief published by ( 2 6 6 9 8 0 - X ) tel . 603-77218000 Level 3, Menara KLK, 1 Jalan PJU 7/6, Mutiara Damansara, 47810, Petaling Jaya, Selangor, Malaysia publisher + ceo . Ho Kay Tat editor-in-chief . Kathy Fong chief commercial officer . Sharon Teh chief operating officer . Lim Shiew Yuin editors . Jenny Ng . Tan Choe Choe Lam Jian Wyn to contact editors: [email protected] to advertise: [email protected] the edge ceo morning brief Read from desktop or mobile device. You can print in A4 to read. Set print mode to fit or shrink oversize page. to get on emailing list [email protected] Muhyiddin’s son-in-law to be charged with criminal breach of trust — MACC home Bernama KUALA LUMPUR (Feb 22): Former prime minister Tan Sri Muhyiddin Yassin’s son-in-law Datuk Seri Muhammad Adlan Berhan, who was alleged to have left the country since May last year, is required to return to Malaysia to face several criminal breach of trust (CBT) charges. Malaysian Anti-Corruption Commission (MACC) chief commissioner Tan Sri Azam Baki said that the investigation had been fully completed and the agency is ready to charge Muhammad Adlan in court, but it cannot be done as the man had not been located and had not returned to the country. “The MACC has submitted the investigation papers for prosecution in court,” he told a press conference on Thursday after attending the 10th Convocation of the Certified Integrity Officer Programme at the World Trade Centre here, which was officiated by Chief Secretary to the Government Tan Sri Mohd Zuki Ali. In October last year, Bukit Aman CID chief Datuk Seri Mohd Shuhaily Mohd Zain confirmed that the police had officially submitted the documents required for the issuance of the Interpol Red Notice against Muhammad Adlan and his lawyer, Mansoor Saat. A Red Notice is a request to law enforcement agencies worldwide to locate and provisionally arrest a person pending an extradition, surrender or similar legal action. Muhammad Adlan, 48 and Mansor, 69, are being investigated by the MACC concerning misappropriation in the registration, recruitment and biometric storage of foreign workers at a ministry. The MACC said records showed that Muhammad Adlan left the country on May 17 last year, while Mansoor left on May 21. MACC records former finance minister’s statement in RM4.5 bil Spanco graft probe Bernama KUALA LUMPUR (Feb 22): Malaysian Anti-Corruption Commission (MACC) chief commissioner Tan Sri Azam Baki announced that the statement of a former finance minister had been recorded to aid in an investigation into corruption allegations related to a government fleet project worth RM4.5 billion. He said the former finance minister was summoned to explain the awarding of contracts for the supply and management of government vehicles to Spanco Sdn Bhd, the sole concessionaire for supplying and maintaining government vehicles. “We will call anyone, including former prime ministers and former ministers involved in authorising the project,” he told reporters after the 10th Certified Integrity Officers convocation ceremony at the World Trade Centre, officiated by the Chief Secretary to the Government Tan Sri Mohd Zuki Ali, on Thursday. The former finance minister summoned by the MACC, according to Azam, served in the government administration from 2020 to 2021. “Many witnesses have already been called, except for the former prime minister. I leave it to the investigators to decide when (if necessary) to call him,” Azam said. Most recently, the MACC summoned over 20 witnesses to assist in the investigation of the case on Feb 6. When asked whether there is a political agenda for the Spanco issue, Azam stated that as the MACC chief commissioner, he is responsible for carrying out his duties based on legal obligations, complaints, and allegations received by his office. “For now, it is my responsibility that anything given [as a complaint] to us will be investigated,” said Azam. In January, the media reported that the MACC would investigate the involvement of certain individuals in the government concerning allegations of corruption in the procurement and management of the government’s vehicle fleet. Azam: Many witnesses have already been called, except for the former prime minister. bernama bernama

friday february 23, 2024 3 The E dge C E O m o rning brief home After exiting Nepal, Axiata seeks buyers for Myanmar ops by Anis Hazim theedgemalaysia.com Read also: Myanmar exit by Axiata’s edotco may increase appeal to new investors — Kenanga Research KUALA LUMPUR (Feb 22): Having successfully disposed of its business in Nepal in December last year, Axiata Group Bhd is now working towards its Myanmar exit, citing what it described as worsening macroeconomic parameters and business conditions in the market. edotco Group Sdn Bhd, a 63%-owned subsidiary of Axiata, is seeking a buyer for its telecommunication tower business in Myanmar, according to a Axiata’s filing following its fourth quarter results release. An active program to seek buyers of the business has commenced, Axiata said, adding that discussions are ongoing on the sale of edotco Myanmar. However, the group did not reveal details of the divestment plan, whether the telco is selling its effective stake in edotco’s Myanmar operation, or that edotco is disposing of its operation there. “Tough, decisive actions were taken to exit the deteriorating operating environments of Nepal and Myanmar in the financial year ended Dec 31, 2023 (FY2023). These decisions allow management to focus on assets that can create future value for shareholders,” Axiata chairman Tan Sri Shahril Ridza Ridzuan said in a statement accompanying its latest financial results. Axiata had decided back in 2023 to exit the two markets, amid “uncertain and deteriorating operating environment, and risk of further value erosion,” the company said in the statement. The progress of its Myanmar exit plan further affirmed the telco operator’s direction to scale back its footprint in the challenging emerging markets, which have yet to yield expected returns after more than a decade. While some markets have been profitable, the regional expansion added pressure on Axiata’s working capital and cash flow, partly due to high capital investments to improve efficiency. It still has a footprint in a number of other emerging markets, including Indonesia, India, Sri Lanka, Bangladesh, Cambodia, Pakistan, Laos and the Philippines. In the case of Nepal, Axiata entered the market in 2016 through an US$1.37 billion acquisition of Reynolds Holdings Ltd, who in turn holds 80% in Ncell Pte Ltd. A year prior, Axiata’s edotco bought a 75% stake in Digicel Asian Holdings for US$125 million for its Myanmar telco tower exposure. Axiata had in December last year exited Nepal via a US$50 million disposal of Reynolds at a loss after seven years, due to the prolonged regulatory challenges and uncertainties related to the outstanding capital gains tax (CGT) to Ncell Axiata. As of last year, edotco owns and manages a portfolio of 54,000 towers across nine markets: Malaysia, Indonesia, Bangladesh, Pakistan, Sri Lanka, Myanmar, Laos, Cambodia and the Philippines, its 2022 annual report showed. According to a report by Kenanga Research dated Feb 19, edotco owns around 2,000 towers and manages around 1,000 sites in Myanmar, which it said translates to around 3% to 4% of Axiata group’s assets. While edotco continues to record strong topline growth from its inorganic ventures in Philippines and Indonesia, profitability “was impacted by assets and goodwill impairments of Myanmar and Pakistan”, said Axiata. At home, Axiata last year completed an exercise to merge its local mobile operator Celcom Bhd with Digi dotCom Bhd last year, leaving it with a 33.1% stake in the listed merged entity CelcomDigi Bhd. FY2023 losses at RM2 billion, declares five sen dividend for 4Q In FY2023, Axiata posted a net loss of RM2 billion versus a net profit of RM9.75 billion in FY2022 – the latter mainly boosted by the RM13 billion net gain on Celcom disposal as part of the merger exercise. Full-year revenue rose 9.9% to RM22 billion, from RM20.02 billion in FY2022. Despite the losses, Axiata declared a second interim dividend of five sen per share, bringing total dividends for FY2023 to 10 sen per share, compared with 14 sen in FY2022 which included a special dividend of 9.5 sen. Axiata Group Bhd profit/loss from continuing operations Source: Bursa Malaysia Net profit/loss (RM mil) 73.9 27.1 48.5 -1500 -1200 -900 -600 -300 0 300 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2022 FY2023 -301.6 -394.5 -412.1 -1421.62 -978.2 Nonetheless, Axiata has narrowed its quarterly net loss quarter-on-quarter (q-o-q) to RM695.02 million in 4QFY2023, against RM797.41 million in 3QFY2023. Revenue rose slightly by 1.72% to RM5.79 billion, as compared to RM5.70 billion in 3QFY2023. The group attributed its improved q-o-q earnings to higher revenue from its continuing operations, save for its mobile operations in Sri Lanka and Bangladesh. Profit after tax and minority interest for its continuing operations also doubled to RM48.5 million year-on-year (y-o-y) versus a loss of RM142.16 million last year, mainly driven by higher toplines and share of profits from associates namely CelcomDigi Bhd, partially offset by impairment of goodwill of infrastructure segment. The group is expecting to maintain its “single-digit” revenue growth in the financial year ending Dec 31, 2024 (FY2024), said its chief executive officer and managing director Vivek Sood at a virtual press conference post-4Q results announcement. However, Sood pointed out that Axiata has managed to exceed its growth target for earnings before interest and taxes (Ebit). The telco achieved a mid-teen Ebit growth in 2023. “The improved performance on all our continuing businesses except Link Net. So I think we should be able to improve the performance going into 2024,” Sood explained. Shares of Axiata settled three sen or 1.08% lower on Thursday, valuing the group at RM25.33 billion. The counter has fallen 12% in the past year.

friday february 23, 2024 4 The E dge C E O m o rning brief home PUTRAJAYA (Feb 22): Datuk Seri Amir Hamzah Azizan, who helmed the Employees Provident Fund (EPF) before being appointed Finance Minister II in December 2023 following a Cabinet reshuffle, sees himself more of a technocrat than a politician. The former corporate man stressed that after efforts made by Prime Minister Datuk Seri Anwar Ibrahim, such as the introduction of the Madani Economy Framework and the rolling out of a series of policies to lure more foreign and domestic direct investments, his main role now is to help the prime minister put Malaysia in a better position going forward. “I am here to help him [Anwar] work on a lot of things that a government has to do, [such as] aking the load off his day-to-day duties and following through on everything so that he can spend more time on policy matters and provide leadership to other ministries,” he said recently in his maiden media interview since taking office last year. Two months into his role in one of the most important ministries in the country, Amir Hamzah observed that it has been an interesting transition to a government role after spending more than two decades in the corporate world. Amir Hamzah, 57, is the son of the late Tun Azizan Zainul Abidin, the president and chief executive officer (CEO) of stateowned energy giant Petroliam Nasional Bhd (Petronas) between 1988 and 1995. Asked about his appointment, he revealed that he was approached to take on the role several months ago before the announcement was made. “I had not said yes for a while because this was a big decision. This is a very public role, and in the end, I am not a politician; I am a technocrat, and I know what I am good at and I know what I can contribute. “But I do not compromise about reminding people that I am not a politician. I am not fighting for any seat because it is not in the family DNA... most people know that my father was in the civil service,” he said. Amir Hamzah’s father, Azizan, has an illustrious career in the public service. He joined the Education Ministry in 1960 before becoming senior private secretary to the second, third, and fourth prime minister of Malaysia. He retired as the secretary-general of the Home Affairs Ministry in 1988 and joined Petronas as its president and CEO thereafter. No honeymoon period Asked about his adaptation to his new role, the Finance Minister II shared that there was no honeymoon period for the position. “It has been an interesting transition. As you know, I have been a busy corporate man for a very long time before transitioning into a government role. It has been two months [but] this is not a honeymoon period,” he said. He reiterated that he will do his best to help the prime minister steer Malaysia towards a better future and does not discount the possibility of making unpopular decisions for the sake of the country. “I think the value of a technocrat is the ability to say and do what is right for the country ... sometimes it could involve some difficult decisions, but if the decision is unpopular but necessary, then kita kena buat lah [we have to do it], whether you like it or not, because you must think of what is important for the long-term benefits of the country. “If nobody wants to make those decisions, then our children and grandchildren have to pay the price for it, and I don’t think we should compromise their future for our needs today,” he added. No political ambition? Asked if he would run for a parliamentary seat in the future, Amir Hamzah jested: “No lah, I am old already, I am 57 now, but let’s see how long I am here dan kalau ada rezeki, adalah, kalau tak ada rezeki, tak apa lah {if there is income, OK, if no income, then it’s alright].” On his social media engagement, he admitted that he is not an active person on the internet platforms at the moment but does not mind updating on ministerial developments in the future. “I don’t mind using social media platforms to update the government’s announcements or what we are doing in the MOF [Ministry of Finance]. “However, I still like to maintain some privacy [for myself] as I was brought in to help the government based on my experiences working in the corporates,” he said. Amir Hamzah was appointed as Finance Minister II following a Cabinet reshuffle on Dec 12, 2023. He is the second technocrat in the MOF to have a corporate background, following in the footsteps of former finance minister Tengku Datuk Seri Zafrul Abdul Aziz, who had served as the group CEO and executive director of CIMB Group Holdings Bhd from Feb 27, 2015 to March 9, 2020. Amir Hamzah joined the EPF — the country’s largest pension fund in terms of asset management — as CEO in March 2021. Before that, he was the president and CEO of Tenaga Nasional Bhd (TNB) from April 2019 to February 2021 and held several senior management portfolios throughout his career in the corporate world. He holds a bachelor of science degree in management (majoring in finance and economics) from Syracuse University, New York, and also attended the Stanford Executive Programme at Stanford University and the Corporate Finance Evening Programme at the London Business School. by Siti Radziah Hamzah & Niam Seet Wei Bernama I am a technocrat, not a politician — Amir Hamzah Datuk Seri Amir Hamzah Azizan was CEO of the Employees Provident Fund before being appointed Finance Minister II on Dec 12, 2023 by Prime Minister Datuk Seri Anwar Ibrahim. Shahrin Yahya/The Edge

friday february 23, 2024 5 The E dge C E O m o rning brief home S&P predicts 9% rebound in ringgit by end of 2024 Malaysia’s approved investments in 2023 rises 23% to record high of RM329.5 bil — Anwar Bernama Bloomberg KUALA LUMPUR (Feb 22): Malaysia recorded total approved investments of RM329.5 billion in 2023 which is 23% higher than in 2022, and is the highest amount of approved investments in the country’s history. Prime Minister Datuk Seri Anwar Ibrahim said out of the total investments, foreign investments were the main contributor at 57.2% compared to domestic investments of 42.8%. “This excellent performance is supported by an increase of 35.1% for domestic investments and 15.3% for foreign investments,” he said in a media statement on Thursday. This matter was tabled during the National Investment Council Meeting (MPN) No 2/2024 on Thursday. Anwar stressed that the country’s investment landscape which showed a very encouraging performance also reflects the recovery and revival of the economy throughout the Madani government’s administration of over one year. “Indirectly, this is a sign that the pro-investment and pro-business friendly policies implemented through the whole-of-government approach have been fruitful in increasing investors’ confidence,” he said. The total approved investments involved 5,101 projects and would potenRead also: Ringgit to strengthen to 4.20 against US dollar by end-2024 — MIDF (Feb 22): S&P Global Ratings forecast a 9% rebound in the Malaysian ringgit by the end of the year, and said the weak currency doesn’t pose a risk to the sovereign rating. “We do not see the depreciating ringgit as a risk to the sovereign rating,” said YeeFarn Phua, sovereign analyst at S&P in Singapore. “Malaysia’s external position remains strong, augmented by adequate foreign reserves and consistent current-account surpluses.” The ringgit slid to the lowest level in 26 years this week as China’s sluggish economy hurts Malaysian exports, and some analysts have said there is a risk the currency will reach a new record low. The currency, which traded at 4.79 per dollar on Thursday, is expected to climb to 4.40 by the end of the year and 4.30 by end2025, Phua said in an email on Thursday. S&P joins Moody’s Investors Service in highlighting the safety of the nation’s credit rating despite the ringgit’s weakness, as almost all the nation’s debt is denominated in the local currency. The government’s foreign debt was about RM30 billion (US$6.26 billion) at the end of 2023, just under 3% of the total, S&P estimated. Malaysia is rated A- at S&P since 2003, signifying its strong ability to pay debt. The credit score, the highest among peers in developing Southeast Asia, has withstood the fallout from the 2008 global financial crisis as well as the turmoil caused by the pandemic. tially create over 127,000 new job opportunities to the people and country. The services sector recorded the highest investments, contributing over half or 51.1% of total approved investments at RM168.4 billion, followed by the manufacturing sector at RM152 billion (46.1%) and primary industries at RM9.1 billion (2.8%). The MPN Meeting No 2/2024 also discussed the direction of the national digital investment, in line with the development of the digital economy which is expanding rapidly and is among the key economic sectors in strengthening the country’s investment agenda. The digital economy in Malaysia, which contributed 23.2% to the gross domestic product in 2021, is projected to rise to 25.5% by 2025. For the 2021-2023 period, a total of 396 digital-related projects were approved with investment value of RM128.9 billion, which included projects approved through the National Committee on Investments (NCI). Investments in the digital projects are expected to create jobs for 36,553 local citizens. Among the digital investments approved were for data centres, cloud computing, data hosting, big data analytics and artificial intelligence. The presence of renowned global digital companies and global market leaders in Malaysia also gave an important signal that the country has the attraction and conducive investment ecosystem for digital investments. Hence, the government needs to facilitate as best as possible the potential digital investments without any compromise on aspects related to data security and national sovereignty.

friday february 23, 2024 6 The E dge C E O m o rning brief home (Feb 22): The near-term prospects appear bleak for Malaysian sovereign bonds, as a weakening currency and dwindling hedged returns damp demand. Hedged returns on Malaysian government bonds have declined, as rising currency forward points make it less attractive for investors to swap dollars for ringgit. For unhedged investors, the ringgit’s tumble to a 26-year low against the dollar adds to the case to avoid ploughing money into sovereign securities. To make matters worse, traders see minimal downside for bond yields, after Bank Negara Malaysia (BNM) signalled last month that it’s unlikely to ease policy as economic growth will probably improve in 2024. “We expect the central bank to hold the policy rate at 3% throughout 2024,” said Winson Phoon, the head of fixed-income research at Maybank Securities Pte Foreign outflows signal a triple threat awaits Malaysian bonds by Marcus Wong Bloomberg Global funds sold RM2.5 billion of Malaysian bills in January, the largest outflow since September. Rising odds for a US Federal Reserve rate cut this year have led to increasing ringgit hedging costs for dollar-based investors. This comes as asset swaps have become less appealing due to rising dollar-ringgit basis, hurting foreign demand for short-term local paper, according to a note from OCBC Bank Singapore last week. The substantial foreign outflows from shorter-term securities tend to weigh more on the ringgit than on the Malaysian bond curve, according to a note from Maybank Securities on Feb 9. Dollar-ringgit forward points have risen, averaging around 184 basis points in February, the highest on a monthly basis since March last year, according to calculations by Bloomberg. Climbing forward levels make it less attractive for a dollar-based investor to borrow ringgit in exchange for the US currency. Traders remain hawkish over rate expectations from BNM, with ringgit swaps pricing very little change in rate moves over the next 12 months, as investors await the release of January inflation data on Friday. In comparison, traders see over 50 basis points of cuts in Thailand, while in South Korea, just over a quarter-point rate cut has been factored in. Ltd in Singapore. Benchmark 10-year Malaysian yields are likely to track a decline in their Treasury counterparts in the first half, but headwinds are growing due to the US economy’s unexpected resilience, he added. Below are three charts that illustrate the challenges confronting Malaysian bonds. 1. Bills' foreign flow 2. Hedged pickup 3. Less dovish

friday february 23, 2024 7 The E dge C E O m o rning brief

friday february 23, 2024 8 The E dge C E O m o rning brief home KUALA LUMPUR (Feb 22): Wireless carrier Maxis Bhd’s net profit plunged by 76% for the fourth quarter ended Dec 31, 2023 (4QFY2023) from a year earlier, dragged by tax settlement and penalties imposed by the Inland Revenue Board. Quarterly net profit was RM56 million, or 0.7 sen per share, compared with RM233 million for the same period a year earlier, Maxis said in an exchange filing. During the quarter, the company paid RM73 million to fully settle the additional tax assessments. Revenue for the quarter however rose 7.4% to RM2.74 billion from RM2.55 billion a year ago, thanks to growth across consumer and enterprise businesses. For FY2024, Maxis is guiding for a “low single-digit” increase in service revenue, and for earnings before interest, taxes, deMaxis 4Q profit tumbles 76%, pays RM73 mill to settle tax assessments, penalties KUALA LUMPUR (Feb 22): YTL Corp Bhd net profit in the second quarter ended Dec 31, 2023 (2QFY2024) rose six-fold to RM589.21 million from RM96.91 million a year ago, lifted by stellar results from listed units YTL Power International Bhd and Malayan Cement Bhd. Quarterly earnings per share rose to 5.37 sen from 0.88 sen, according to its filing. Revenue for the quarter rose by 14.2% to RM7.53 billion, up from RM6.59 billion. The conglomerate’s two biggest contributors were utilities through YTL Power, in which it has a 49.08% direct and a 6.49% indirect stake, and cement and building materials through its 78.58% indirect-owned MCement. Its cement segment experienced higher volumes and stabilization in selling prices, moderating the impact of higher energy costs recorded by all divisions, according to YTL Corp. Meanwhile, for the utilities segment, YTL Corp stated that the power generation division recorded better margins and the strengthening of the Singapore dollar against the ringgit. For the six-month period (1HFY2024), YTL Corp’s net profit jumped eight-fold to RM1.1 billion from RM133.53 million in 1HFY2023, while revenue rose by 15% to RM15.1 billion from RM13.1 billion in the same period. Regarding its biggest contributor, YTL Power, net profit rose over four-fold to RM845.12 million or 10.43 sen per share, from RM198.82 million or 2.45 sen per share, while revenue rose by 14.3% to RM5.37 billion from RM4.7 billion. For the cumulative six-month period, its net profit expanded over four-fold to RM1.69 billion from RM372.1 million in 1HFY2023, as revenue rose by 14.5% to RM1.08 billion from RM944.7 million in the same period. Malayan Cement separately posted a strong net profit of RM121.2 million or 9.25 sen per share – its best quarterly performance since 2013 – from RM15.26 million or 1.16 sen per share a year ago, on revenue increase of 29% to RM1.16 billion, from RM896.97 million. Year to date, its net profit jumped over 13-fold to RM217.28 million from RM16.21 million in 1HFY2023, as revenue jumped 31.4% to RM2.31 billion from RM1.76 billion in the same period. Aside from YTL Power and MCement, YTL Corp has exposure to the hotels segment through YTL Hospitality REIT, where it holds a 55% direct and a 3.63% indirect stake. It also undertakes property investment and development, and management services. Overall, all operating segments saw improvements in 1HFY2024, except for construction. On its prospects, YTL Corp said it remains optimistic about the growth in cement demand, primarily driven by civil and non-residential ventures, including infrastructure, logistics facilities, data centers, and factories. Strong MCement, YTL Power performance lift YTL Corp 2Q profit six-fold to RM589 mil “Cement demand is expected to be further bolstered by Malaysia’s long-term need for housing and infrastructure due to its young population and high urbanization rate,” it added. The power segment is also working towards the development of its 500MW solar park in Kulai, Johor. The Yeoh family owns 50.2% of YTL Corp through Yeoh Tiong Lay & Sons Holdings Sdn Bhd. Shares of YTL Corp slipped by seven sen or 3.15% to RM2.15, resulting in a market capitalization of RM23.7 billion. Meanwhile, YTL Power shares closed 12 sen or 3.08% lower at RM3.78, with a market capitalization of RM30.83 billion. For Malayan Cement, the counter closed down seven sen or 1.43% at RM4.83, giving it a market capitalization of RM6.33 billion. Read also: YTL Power’s 2Q net profit up four fold lifted by Singapore power biz by Choy Nyen Yiau theedgemalaysia.com by Choy Nyen Yiau theedgemalaysia.com preciation and amortisation (Ebitda) to remain “relatively unchanged”. The company said it is also aiming to keep capital expenditure under RM1 billion for the year. Maxis declared an interim dividend of four sen per share for the latest quarter, bringing its full-year dividend payout to 16 sen per share. For the full year, net profit declined 13.8% to RM993 million, from RM1.15 billion for FY2022. Revenue increased 4% to RM10.18 billion from RM9.79 billion. Service revenue for the year edged 2.8% higher to RM8.57 billion, while Ebitda was up 0.8% to RM3.93 billion for FY2023. Capital expenditure totalled RM813 million, down 27% from FY2022. Shares in Maxis closed two sen or 0.53% higher at RM3.81 on Thursday, valuing the company at RM29.84 billion. Source: Bloomberg YTL Corp Bhd quarterly earnings 0 200 400 600 0 2 4 6 8 10 Net profit (RM mil) 1Q 2Q 3Q 4Q 1Q 2Q FY2023 FY2024 6.5 6.6 7.3 9.1 7.5 7.5 36.62 521.73 589.22 96.91 414.14 480.99 Revenue (RM bil)

friday february 23, 2024 9 The E dge C E O m o rning brief home (Feb 22): German food delivery group Delivery Hero SE said negotiations to sell part of its foodpanda business in some markets in Southeast Asia have failed after it couldn’t reach a final agreement on deal terms. The company had confirmed on Feb 2 that talks to sell the business in Singapore, Malaysia, the Philippines, Thailand and other countries were continuing. Those discussions have ended, Delivery Hero SUBANG (Feb 22): Affordable housing company, Syarikat Perumahan Negara Bhd (SPNB), is currently studying a proposal to install solar panels in its residential units. SPNB chairman Datuk Husam Musa said that although the proposal is still in its early stages of discussion, it is seen as suitable and aligned with the government’s intention to enhance green technology development in the country. KUALA LUMPUR (Feb 22): AirAsia is planning to transform into a network carrier that operates under the hub-and-spoke model while maintaining its low-cost feature, from its current direct network or point-topoint model that only deals with direct flights between two cities. AirAsia will leverage on its multi-hub strategy through its presence in Malaysia, Thailand, Indonesia, the Philippines and soon Cambodia, to carry out its low-cost network carrier plan, said the airline’s holding company Capital A Bhd in a statement on Thursday. In contrast to the direct point-to-point system that budget airlines typically focus on to reduce costs as it involves no stopovers, the hub-and-spoke model is usually adopted by full-service carriers like Emirates, with the main characteristic being centralising flight operations around a major airport hub, with flights scheduled to multiple destinations that act as spokes. The hub-and-spoke model typically provides increased connectivity as it links smaller cities to a wider choice of destinations through a major hub airport. AirAsia, meanwhile, plans to resume its Airbus A321neo deliveries this year in line with strong forecast demand. The first post-pandemic delivery is expected in June. Capital A CEO Tan Sri Tony Fernandes said the airline currently has an orderbook of 647 aircraft with Airbus, comprising 612 aircraft from the A320 family and 35 aircraft from the A330 family. “With our wide-body Airbus A330 fleet including the introduction of A330neo, we are also looking to expand our medium to long-haul network to the European continent, to cities like London, Paris, Amsterdam, Bratislava, Barcelona, Copenhagen, Africa (Cairo, Nairobi, Cape Town), East Coast North America (New York, Miami, Toronto) via Europe and West Coast North America (San Francisco, Los Angeles, Vancouver) via Japan,” said Fernandes. Capital A’s share price closed unchanged at 71 sen on Thursday, giving it a market capitalisation of RM3.02 billion. Read also: A321LR joins AirAsia’s Airbus order book Delivery Hero says talks to sell foodpanda have failed Affordable housing co SPNB mulls installing solar panels on its houses AirAsia to shift focus from pointto-point to huband-spoke model by Andrew Pollack & Agatha Cantrill Bloomberg Bernama by Chester Tay theedgemalaysia.com said Wednesday in a statement. Business in Asia, Delivery Hero’s largest market, has stagnated since pandemic-era lockdowns eased. In September, the company said it was in talks to sell the Foodpanda brand in some countries in Asia without naming potential buyers. The shares fell 5% to €21.52 at 9:13am in Frankfurt trading after earlier dropping as much as 10% on Thursday. The stock has declined 14% this year. Southeast Asia’s biggest ride hailing companies, Grab Holdings Ltd and GoTo Group, restarted talks about potential combinations of their businesses, people familiar with the matter said earlier this month. Around the same time, a report from Malaysian newspaper New Straits Times said that Delivery Hero’s talks to sell part of the foodpanda business to Grab had collapsed, citing people familiar with the matter. Delivery Hero at the time denied that talks to offload the operations had failed. “We are open to collaborating with any solar panel manufacturers to install solar panels in residential homes under the Rumah Mesra Rakyat (RMR) programme,” he told reporters after launching the E-RMR system here on Thursday. Meanwhile, he said that from 2002 to 2017, SPNB successfully took over 56 sick projects involving 24,454 housing units. “We are open to continuing projects like this in the future, considering our success in resolving many sick projects in the past,” he said. On the E-RMR system, Husam said it was one of the company’s efforts to enhance its services in providing RMR houses. “The company is targeting to build 10,000 RMR units next year. This comprehensive E-RMR system is capable of reducing operational costs, saving employee time, and expediting payments to contractors,” he added. To date, SPNB has successfully built a total of 65,758 RMR units nationwide. bloomberg

friday february 23, 2024 10 The E dge C E O m o rning brief home Sime Darby Plantation expects palm oil prices to stay elevated this year E&O in talks with banks to raise RM1.5 bil for Andaman Island project by Hee En Qi theedgemalaysia.com by Syafiqah Salim theedgemalaysia.com KUALA LUMPUR (Feb 22): Property developer Eastern & Oriental Bhd (E&O) is in talks with banks to finalise the mechanism to raise between RM1 billion to RM1.5 billion for the development of its 760-acre Andaman Island project in Penang. According to its managing director Kok Tuck Cheong, the second phase of the project would require funds totalling RM2 billion. “We need RM2 billion to complete the second half of the island, but we don’t need a RM2 billion financing in place because it [the project] is for a longer period [around five years], [so] we will be able to monetise some of our existing assets [for it]. [While] launches of property projects will generate cash flows, we have a hospitality division to support,” he said. “So, we are talking to banks for about RM1 billion to RM1.5 billion. Other banks have expressed their interest in doing a direct Eastern & Oriental Bhd’s quarterly earnings 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY22 FY23 FY24 *Financial year ends on March 31 Source: Bursa Malaysia -10 10 30 50 70 90 30 60 90 120 150 Net profit (RM mil) Revenue (RM mil) 79.33 -1.65 16.00 30.09 16.09 32.95 29.73 34.44 76.55 95.02 81.20 65.30 85.40 123.86 92.23 56.71 able convertible loan stocks at 23.5 sen apiece. According to the developer, it has used RM71.87 million of the proceeds and RM183.89 million remains to be used by March 2026. For the financial period ended Dec 31, 2023 (3QFY2024), E&O saw its net gearing ratio increased to 0.51 from 0.47 recorded as at end-March, 2023. Going forward, the group expects its gearing to increase further, albeit gradually. On path for record sales for FY2024 E&O also said the group is on the path to achieve its highest annual sales in FY2024, with RM1.18 billion unbilled sales recorded in the first nine months of the year (9MFY2024), which is almost surpassing its previous record high of RM1.2 billion achieved in 2016. Of the 9MFY2024 sales, 66% were generated from its projects in Penang. KUALA LUMPUR (Feb 22): Sime Darby Plantation Bhd, the world’s largest palm oil producer by acreage, said on Thursday palm oil prices may stay elevated at around current levels this year. Crude palm oil may range between RM3,700 and RM3,900 per tonne this year, said its managing director Datuk Mohamad Helmy Othman Basha at a virtual earnings briefing. “CPO prices could go above RM4,000 per tonne, but the average will be around that level,” he noted. Output at its Indonesian operations may be dragged by the El Nino weather phenomenon, Mohamad Helmy said. Production in Malaysia, meanwhile, is expected to return to pre-Covid levels this year, he noted. The benchmark palm oil futures for May delivery was trading at RM3,847 per tonne at 5.00pm on Bursa Malaysia Derivatives. Prices of palm oil, used in everything from lipstick to cooking oil, have gained about 4% so far this year amid concerns over supply. The El Nino weather conditions raise heat and reduce rainfall, stressing oil palm trees. During the Oct-Dec quarter, Sime Darby Plantation sold crude palm oil at an average of RM3,688 per metric tonne, down 8% year-on-year (y-o-y) from RM4,005 per metric tonne, according to an exchange filing. Fresh fruit bunches’ production meanwhile, rose 15% to 2.39 million tonnes from 2.07 million tonnes over the same three-month period in 2022. Net profit for the quarter fell more than 64% from a year earlier to RM200 million, weighed by lower average realised prices. Revenue decreased 6.88% y-o-y to RM5.28 billion, from RM5.67 billion recorded for 4QFY2022. Shares of Sime Darby Plantation closed 0.4% lower at RM4.50 on Thursday, with 3.25 million shares changing hands. Read also: Sime Darby Plantation’s 4Q net profit tumbles 64% on lower prices, flags high stockpile E&O managing director Kok Tuck Cheong. Zahid Izzani/The Edge conti neus on page 11 lending to support us. We have a RM1.3 billion sukuk that we are also paying now,” he told analysts and reporters at E&O’s quarterly results briefing on Thursday. Earlier this year, the group raised RM255.76 million from the rights issuance of 1.09 billion five-year irredeemReuters

friday february 23, 2024 11 The E dge C E O m o rning brief home Kossan says challenging environment to continue in FY2024 after lowest annual earnings in 17 years by Syafiqah Salim theedgemalaysia.com KUALA LUMPUR (Feb 22): Kossan Rubber Industries Bhd expects the challenging operational landscape to continue throughout the financial year (FY2024) amid persistent supply-demand imbalance in the market, after reporting the lowest annual earnings in 17 years. As the market experiences realignments due to industry consolidation and capacity rationalisation, pressure on average selling prices from international competitors is likely to persist, the glove maker told Bursa Malaysia on Thursday. Kossan’s remarks came after the group’s net profit tumbled 98.03% to RM14.22 million or 0.56 sen per share for the financial year ended Dec 31, 2023 (FY2023) — the lowest since FY2006 — against RM157.1 million or 6.14 sen per share recorded for FY2022. The lower annual earnings was due to one-off impairment loss and write off of plant and machinery amounting to RM35.38 million and RM4.41 million respectively. This was compounded by lower sales volume as well as average selling prices and higher natural gas. Meanwhile, its revenue for FY2023 shrank 32.34% to RM1.59 billion from Source: Bursa Malaysia Kossan Rubber Industries’ annual earnings (RM mil) 0 1000 2000 3000 0 2000 4000 6000 8000 Net profit Revenue FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 14.2 224.8 1,087 2,853 156.6 1,586 2,222 3,653 6,657 2,316 The group, in a statement, said the first phase of the Andaman Island project had been well-received by the domestic market, as it had managed to sell RM1.1 billion worth of products within 15 months. According to the company, the first phase for the landed units on Andaman Island, with a gross development value (GDV) of RM140 million, had been fully taken up after its initial launch in January this year. The second phase of the project, with an estimated GDV of RM135 million, was launched this month. Meanwhile, its 380-unit serviced apartment Arica, with a GDV of RM410 million, saw a take-up rate of 95% within 10 months after its initial launch last year. “In the coming months, we have plans to design and launch a range of curated product offerings catering to market expectations. Our upcoming project, a low-density luxury condominium comprising 261 units, is targeted for launch in the second quarter of 2024 (1QFY2025) [in Penang],” it said. For 3QFY2024, E&O reported a 14.47% growth in net profit to RM34.44 million from RM30.09 million in the corresponding quarter of the previous year, while its quarterly revenue rose 13.58% to RM92.23 million from RM81.2 million. Its property segment posted a 20.7% jump in revenue to RM220.2 million in 3QFY2024, from RM182.41 million a year earlier. The group’s substantial shareholders include Amazing Parade Sdn Bhd (30.48%), Kerjaya Prospek Development (M) Sdn Bhd (12.88%), Paramount Spring Sdn Bhd (6.49%) and the Retirement Fund (Inc) or KWAP (6.01%). E&O shares closed 2.5 sen or 2.96% higher at 87 sen per share, giving the group a market capitalisation of RM1.75 billion. Read also: Eastern & Oriental’s 3Q earnings rise to RM34 mil lifted by its property and hospitality segment from page 10 ating profit, although revenue declined 16.89% to RM400.15 million from RM481.45 million. On a quarter-on-quarter basis, the group’s net profit tumbled 98.03% from RM40.97 million registered for 3QFY2023 while revenue slipped 0.83% from RM403.48 million previously. “Despite these immediate market challenges, the long-term outlook for glove demand remains optimistic, driven by increasingly stringent standards and heightened hygiene awareness in both the medical and industrial sectors,” the glove maker told Bursa Malaysia on Thursday. “The group is dedicated to sustaining effective cost management while concurrently accelerating the digitisation and automation of operations to overcome manpower challenges. This strategic approach is aimed at enhancing overall productivity, efficiency, and mitigating production costs,” it added. Shares of Kossan closed up three sen or 1.51% to RM2.02 at Thursday’s closing bell, valuing the group at RM5.17 billion. In the past year, its share price has risen by over 87%. Kossan Rubber Industries Bhd RM2.34 billion a year earlier. It nonetheless declared a two sen dividend per share for FY2023 to be paid on April 8 this year, down from 2.5 sen per share last year. For the fourth quarter ended Dec 31 (4QFY2023), Kossan posted RM806,000 net profit versus RM2.49 million net loss recorded for 4QFY2022 on higher oper-

friday february 23, 2024 12 The E dge C E O m o rning brief home KUALA LUMPUR (Feb 22): Pharmaceutical company Duopharma Biotech Bhd said on Thursday its quarterly net profit more than halved to its lowest in seven years, hurt by lower margins and higher finance costs. Net profit for the final quarter of 2023 was RM8.5 million, its lowest since the April-June 2017 period, compared to RM17.16 million over the same period in 2022, Duopharma said in an exchange filing. Revenue for the quarter, however, rose 10.23% to RM167.5 million from RM151.96 million thanks to higher sales in the private prescription market, private ethical specialty sector and export segment. Looking ahead, Duopharma said it is finalising a new supply agreement with state-owned distributor and manufacturer Duopharma Biotech logs worst quarter in seven years as 4Q net profit halves KUALA LUMPUR (Feb 22): ViTrox Corp Bhd’s profit for its fourth quarter of FY2023 halved year-on-year due to an unfavourable product mix and softer demand from its customers amid a slower global economy, but the automated test equipment maker remains optimistic on its outlook based on sustained demand growth from artificial intelligence, telecommunications and automotive sectors. Its quarterly profit for the three months ended Dec 31, 2023 (4QFY2023) dropped to RM24.4 million from RM48.6 million in in 4QFY2022, with earnings per share dropping to 2.58 sen from 5.14 sen, as revenue fell 25.1% to RM142.23 million from RM190 million. For the full FY2023, the group’s net profit dropped 36.1% to RM128.3 million from RM200.82 million in FY2022, as revenue retreated 23.4% to RM574.92 million from RM750.25 million, which it blamed on the market slowdown that affected demand for both its automated board inspection services and machine vision system business. Earnings per share for FY2023 fell to 13.58 sen from 21.26 sen in FY2022. Nevertheless, the group anticipates a gradual recovery in the first half of 2024, and said it has continued to solidify its foundation by strengthening its operation, introducing new products and expanding its market. One-for-one bonus issue The group also plans to reward shareholders by issuing one bonus share for every Vitrox optimistic on prospects even as 4Q profit halves amid softer demand; proposes bonus issue existing share of the group held. The plan, which it expects to complete by the second quarter of 2024 — subject to all approvals being obtained — would entail the issuance of up to 946.9 million bonus shares. At Thursday’s market close, Vitrox shares closed 43 sen or 5.96% higher at RM7.64, giving the group a market capitalisation of RM7.22 billion. by Hee En Qi theedgemalaysia.com by Syafiqah Salim theedgemalaysia.com ViTrox Corporation Bhd’s annual earnings (RM mil) 0 100 200 300 0 200 400 600 800 Net profit Revenue Financial year ends on Dec 31 Source: Bursa Malaysia FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 79.7 105.6 169.7 200.8 128.3 574.9 339.6 470.4 680.1 750.2 Duopharma Biotech’s quarterly earnings Source: Bursa Malaysia 0 10 20 30 0 100 200 300 Net profit (RM mil) Revenue (RM mil) FY2022 FY2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 20.3 16.3 16.3 17.2 22.6 12.5 98.50 167.5 185.9 181.7 177.1 152200.5 167.5 169.2 Pharmaniaga Bhd, and “this will be captured in 2024”. In 2017, Pharmaniaga had awarded an approved product purchase list (APPL) contract to Duopharma to supply pharmaceutical or non-pharmaceutical products to government hospitals and clinics. The contract initially covered a threeyear period from Dec 1, 2017 to Nov 30, 2019, before it was extended four times to Dec 31, 2023, and contributes about 20% of Duopharma’s annual revenue. Duopharma declared a 1.8 sen dividend per share for the quarter, to be paid on March 21. For the full FY2023, the group’s net profit declined 24.91% to RM52.65 million from RM70.11 million while revenue increased 1.1% to RM704.73 million versus RM696.72 million in FY2022. Shares of Duopharma slipped one sen or 0.82% to RM1.21 on Thursday, giving the group a market capitalisation of RM1.16 billion. Other corporate earnings: Frontken’s FY2023 net profit down 9% to RM111.9 mil, declares 2.20 sen dividend Genting Singapore posts 80% y-o-y increase in FY2023 net profit to S$611.6 mil

friday february 23, 2024 13 The E dge C E O m o rning brief home Govt incentive of RM48 mil helps MSM return to profit Dayang books best annual profit since FY2019 as revenue hits record high by Adam Aziz theedgemalaysia.com by Izzul Ikram theedgemalaysia.com KUALA LUMPUR (Feb 22): Dayang Enterprise Holdings Bhd’s net profit rose sixfold in the fourth quarter ended Dec 31, 2023 (4QFY2023) to RM93.79 million from RM12.52 million a year ago, continuing its rebound for the third consecutive quarter on improved margins. According to the upstream oil and gas services outfit, it also saw a huge lift from reversal of impairment of RM41.7 million, revision of useful life of its vessel and forex gains of RM7.6 million. Quarterly earnings per share rose to 8.1 sen, from 1.08 sen in 4QFY2022. The group posted a dividend of 1.5 sen per share, bringing its full-year dividend to three sen per share, unchanged from last year. Revenue rose 57.93% to RM351.08 million, from RM222.3 million, as it continued to see job orders despite the monsoon season, adding to the improved daily charter rates. The group has chartered more third-party vessels this year. Quarter-on-quarter, Dayang’s net profit rose 22.8% from RM76.38 million or 6.6 sen per share, as revenue rose a marginal 2.13% from RM343.76 million. For the full year ended Dec 31, 2023 (FY2023), Dayang’s net profit rose 80.6% to RM218.92 million or 18.9 sen per share, from RM121.2 million or 10.47 sen per share. (AIF) projects. Our offshore service vessels (OSV) fleet also underwent routine maintenance and renewal of approvals in preparation for a busy 2024,” it said. Dayang shares closed unchanged at RM2.23, valuing the group at RM2.58 billion. The group, which is 24.22%-owned by Sarawak-based Naim Holdings Bhd, has seen its shares climb by 39% this year. At its last close, the group traded at price-earnings ratio of 11.8 times, with a dividend yield of 1.31%. Financial year ends on Dec 31 Source: Bursa Malaysia Dayang Enterprise Holdings Bhd’s annual earnings -350 -230 -110 10 130 250 0.6 0.8 1.0 1.2 Net profit/(loss) (RM mil) 1.11 1.05 0.73 236.3 57.6 124.2 218.9 -318.9 0.98 0.67 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Revenue (RM bil) KUALA LUMPUR (Feb 22): MSM Malaysia Holdings Bhd returned to the black with a net profit of RM42.87 million for the fourth quarter ended Dec 31, 2023 (4QFY2023), after the sugar refiner had been loss-making for eight consecutive quarters. MSM posted a net loss of RM44.16 million in the previous corresponding quarter (4QFY2022). The sugar refiner attributed the improved earnings performance to RM48 million in special incentive from the government. Its quarterly profit was further boosted by improved margins, underpinned by higher average selling price for industrial usage and exports, in addition to better capacity utilisation, according to the group’s bourse filing. Quarterly revenue climbed to an all-time high of RM949.88 million, up 40.15% compared to RM677.74 million a year earlier, on higher sales volume and average selling prices, as well as the special incentive. It is understood that for November and December 2023, MSM received RM1,000 per tonne in a special incentive for coarse grain sugar and fine grain sugar. No dividend was declared for the quarter under review. Nonetheless, the bumper final quarter was insufficient in offsetting the losses the group recorded in its three prior quarters. For the financial year ended Dec 31, 2023 (FY2023), MSM posted a net loss of RM49.88 million, albeit a 72% improvement to the RM178.71 million net loss logged in FY2022, as margins remained unsustainable. This was despite a 20.47% rise in revenue to RM3.09 billion versus RM2.57 billion previously, on higher average selling price and sales volume, topped up by the special incentive. Burdening high costs remain, still in talks with government over sustainable pricing mechanism As the sugar refinery industry continues to face prolonged high input costs owing to rising raw sugar costs, high freight and natural gas costs and the weakening ringgit, MSM said the group continues to “reinforce its domestic and export market” amid stronger demand and explore other regional market opportunities due to the rising global sugar deficit. “The growth in the export segment is in line with the initiative to optimise the utilisation rate of MSM Johor refinery and improve overall group production volume,” the group said. “However, the group remains cautious on the risks of heightened geopolitical tension, which may affect the prices of our key input cost and impede financial performance,” it added. On the domestic front, MSM said the Joint Sugar Industry is engaging with the government to finalise a sustainable pricing mechanism for the domestic retail segment, to ensure food security and long-term sustainability of the industry. Full-year revenue rose 13.09% to a record high of RM1.11 billion, from RM984.18 million. It was also the best bottom line for the group since FY2019, when it recorded net profit of RM236.28 million on revenue of RM1.05 billion. Dayang said it had outstanding estimated call-out contracts of RM1.9 billion as at December 2023. “During this period, we focused on the planning and strategies for upcoming 2024 executions, namely our ‘maintenance, construction and modification’ (MCM), ‘hookup and commissioning’ (HUC) and the newly secured Asset Integrity Findings Other corporate earnings: LTKM declares 10 sen special dividend as subsidies lift 3Q profit CSC Steel logs threefold rise in FY2023 profit, plans 9.4 sen dividend Read the full story

friday february 23, 2024 14 The E dge C E O m o rning brief home KUALA LUMPUR (Feb 22:) Shares in Hong Leong Industries Bhd (HLI) surged to its all-time high on Thursday, as Kenanga Research raised its target price (TP) and earnings forecasts following HLI’s better-than-expected results. The counter opened at RM9.96 and touched a high of RM10.50 at 9.13am. At this price, the counter is valued at RM3.92 billion. Since the beginning of the year, the stock has risen by 11%. Kenanga Research, which is the only research house covering the stock, said that HLI’s net profit of RM190.14 million in the first half of 2024 (1HFY2024) beat its expectation at 60% of its full-year forecast. As HLI’s earnings exceeded the research house’s previous forecasts, Kenanga has now raised HLI’s net profit forecasts for FY2024 to FY2025 by 6% each to reflect better margins. The research house maintained its “outperform” rating on HLI but raised its TP by 11% to RM11.70 (from RM10.50) — given HLI’s strong market position in the local motorcycle segment whose prospects are buoyed by the booming gig economy. Apart from that, Kenanga also favours Hong Leong Industries hits record high as 1H earnings exceed forecast, target price lifted KUALA LUMPUR (Feb 22): Shares in Berjaya Food Bhd (BFood) fell as much as 7.55% on Thursday to temporarily erase this month’s gain, as analysts warned of earnings pressure that may persist for months following weaker-than-expected second quarter results. The counter declined to 53 sen, its lowest since Feb 2, before closing unchanged at 57 sen with 18.17 million shares exchanging hands more than four times its 65-day average of 4.22 million shares. Prior to February, the last time the counter touched its low of 53 sen was in March 2022. Analysts said BFood’s earnings prospects remain difficult amid the ongoing consumer boycott of its key Starbucks franchise that contributes about 90% of its revenue. At least two analysts downgraded their recommendations for the stock to ‘sell’. BFood is expected to face “earnings pressure in the sequential quarters”, said Maybank Investment Bank, which has a ‘sell’ rating on the stock. “While the severity of boycotts may ease over time, consumer preferences may also shift permanently to competitors due to brand erosion.” Starbucks, along with a few other global brands such as fast food chain McDonald’s, has been facing intense boycotts due to their support or perceived link to Israel amid the ongoing conflict in Gaza. BFood Berjaya Food faces downgrades as analysts warn of persistent earnings pressure Out of six analysts covering BFood, four have ‘sell’ ratings and two still recommended ‘buy’, with a median 12-month target price (TP) of 52 sen, implying a potential 3.7% decline from the current share price. “Sales will take time to go back to normal considering the still intense Israel-Gaza conflict that is unfortunately seeing no signs of abating,” said Hong Leong Investment Bank, which downgraded the stock to ‘sell’ from ‘hold’, and slashed its TP by 40% to 38 sen. The research house also flagged that BFood will face tough times despite cost control efforts due to a foreign exchange drag, as 55% of the cost of beverages purchased from the principal Starbucks International is dominated in US dollars. The ringgit has depreciated more than 4% against the greenback so far this year. BFood reported on Wednesday a net loss of RM42.58 million for the second quarter ended Dec 31, 2023 (2QFY2024), bringing total loss for the cumulative six months to RM23.55 million, against a net profit of RM70.19 million for the same period a year earlier. On its part, BFood said it expects improvement ahead. “The board believes that the operating performance will rebound and regain momentum, viewing the current situation as short-term and anticipating positive progress going forward,” the company said in an earlier exchange filing. by Jason Ng theedgemalaysia.com by Anis Hazim theedgemalaysia.com the stock for its association with the Yamaha motorcycle brand in Malaysia and the brand’s market leader position in the local motorcycle segment, its strong war chest — with a net cash of RM1.6 billion, HLI could be deployed for earnings-accretive acquisitions — and its attractive dividend yield at 6%. However, it highlighted several risks to the stock including consumers cutting back on discretionary spending (big-ticket items Hong Leong Industries Bhd 0 50 100 150 200 250 Feb 21, 2023 Feb 22, 2024 7 9 11 Vol (’000) RM RM10.28 RM8.43 *As at market close on Feb 22, 2024 Source: Bloomberg like new motorcycles) amidst high inflation, supply chain disruptions, escalating input costs, and global recession hurting demand for the export of its motorcycles and tiles. More from brokers: MPI rises 9.9% on 2Q results jump, analysts upbeat on recovery has lost some 25% of its market value on Bursa Malaysia, as Israel ramped up its deadly strikes in Palestine following the Hamas attack on Oct 7. berjaya.com

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friday february 23, 2024 16 The E dge C E O m o rning brief home Malaysia’s 5G adoption rate at 29.9%, almost 10.07 mil subscribers as of Jan 31 KUALA LUMPUR (Feb 22): Malaysia has recorded almost 10.07 million 5G service subscriptions, representing an adoption rate of 29.9%, as of Jan 31, said Communications Minister Fahmi Fadzil. However, he said all mobile network operators must be more sensitive and responsible towards the needs of their users in the future. “We have to provide fast, reliable and cheaper Internet as well as better technology, but this must also come with better service,” he said in his speech at the Maxis 5G-Advanced Trial Showcase here on Thursday. — Bernama Malaysia’s international reserves up 0.5% to US$115.4 bil as of Feb 15 — BNM KUALA LUMPUR (Feb 22): Malaysia’s international reserves rose 0.5% as of Feb 15 from a fortnight earlier, the central bank said on Thursday. Latest foreign exchange reserves totalled US$115.4 billion (RM552.5 billion) compared with US$114.8 billion as of Jan 31, Bank Negara Malaysia (BNM) said in a statement. The position is sufficient to finance five-and-a-half months of imports of goods and services, and is one time the total short-term external debt, it added. Bank Negara Malaysia releases data on foreign exchange reserves every two weeks. — by Jason Ng Ekovest sells land in KL for RM67 mil in related party transaction KUALA LUMPUR (Feb 22): Infrastructure and construction company Ekovest Bhd is disposing of 13 parcels of land measuring a total of 12,400.139 sq m in Section 85 along Jalan Pahang here to Airman Sdn Bhd, a wholly-owned subsidiary of Lim Seong Hai Holdings Sdn Bhd (LSHHSB), for RM66.8 million. The proposed disposal is deemed a related party transaction as Ekovest managing director Tan Sri Lim Keng Cheng is a major shareholder and director of LSHHSB, with a 25% stake. Ekovest plans to use the proceeds arising from the disposal to reduce its debts and for working capital purposes. The expected gain from the proposed disposal is approximately RM11 million. According to Ekovest, the 13 parcels of adjoining land are sited on the left (western) side of Jalan Pahang, travelling from Kuala Lumpur city center and Bulatan Pahang towards Gombak and Setapak localities. Kuala Lumpur city centre and Bulatan Pahang are located about 5km and 1.5km due south of the land. The land also has the benefit of a development order issued for mixed development, it said. — by Kang Siew Li news In brie f Pernas and unit MyFranchise to invest RM62 mil in adding Gloria Jean’s Coffees, 1901 Frankfurters branches KUALA LUMPUR (Feb 22): The Ministry of Entrepreneur and Cooperatives Development, through Perbadanan Nasional Bhd (Pernas) and Pernas’ wholly owned company Malaysia International Franchise Sdn Bhd (MyFranchise), will invest RM62 million to add 50 branches of Gloria Jean’s Coffees and 100 branches of 1901 Frankfurters from this year until 2029. Its minister Datuk Ewon Benedick said the move is to ensure the franchise entrepreneurship ecosystem in this country continues to grow in a more orderly and structured manner, in line with the National Franchise Entrepreneur Development Policy 2030 (D-PUF 2030), which is being finalised. He said that with a projected total sales return of RM1.8 million per year for Gloria Jean’s Coffees and RM600,000 per year for 1901 Frankfurters, it will create up to 900 job opportunities within five years. “It opens up more opportunities and increases the entrepreneurial potential in Malaysia, with a target value of franchise sales of RM100 billion by 2030.” — Bernama Pintaras Jaya bags piling contracts worth RM170 mil in Singapore KUALA LUMPUR (Feb 22): Pintaras Jaya Bhd has been awarded eight piling contracts in Singapore worth a total of RM170 million since August 2023. Pintaras Jaya said some of the projects have already commenced work or will commence in March 2024 with contract periods ranging from three to 15 months. As of end-December 2023, the group’s estimated outstanding construction order book is worth about RM300 million. Separately, Pintaras Jaya reported a net loss of RM5.36 million for the second financial quarter ended Dec 31, 2023 (2QFY2024), compared to a net profit of RM1.76 million in the previous corresponding quarter. Quarterly revenue fell 20.3% to RM61.57 million from RM77.24 million in the preceding financial year corresponding quarter. For the six-month period between July to December 2023 (6MFY2024), Pintaras Jaya’s net loss widened to RM4.17 million, from a net loss of RM1.6 million in the previous year’s corresponding period. Cumulative revenue contracted 26.4% to RM131.87 million from RM179.14 million previously. — by Emir Zainul DNeX secures RM11.17 mil two-year software maintenance contract from IRB KUALA LUMPUR (Feb 22): Dagang NeXchange Bhd (DNeX) has secured a software maintenance and support contract from the Inland Revenue Board of Malaysia (IRB) for a period of two years, worth RM11.17 million. In a filing with Bursa Malaysia on Thursday, DNeX said its subsidiary Innovation Associates Consulting Sdn Bhd had accepted the letter of acceptance from IRB in relation to software maintenance and support as well as application improvements of IRB’s Hasil Integrated Taxation Systems (HITS). The contract commenced on Feb 15, 2024 and will last until Feb 14, 2026. Prior to this, DNex inked a oneyear maintenance contract for the HITS project in Feb last year worth RM4.05 million. — by Emir Zainul Gloria Jean’s Coffees dnex.com.my

FRIDAY FEBRUARY 23, 2024 17 THEEDGE CEO MORNING BRIEF HOME The brain drain problem Over two-thirds of Malaysians working in Singapore are skilled and semi-skilled workers — study Male 62% Purpose Demographics of Malaysians in Singapore Race (%) Education (%) Top states of origin (%) Monthly gross salary (%) Job categories (%) Main job types (%) Female 38% Employment 38% 62% Other purposes Married to a Singaporean Education Research & training Business Chinese Indian 46.2 Johor: 38.3 Kedah: 12.3 Perak: 9.0 36 22.8 15.6 12.2 40.2 11.3 Malay SPM and equivalent Diploma STPM and equivalent Bachelor’s Degree Clerical Support Workers Plant and Machine Operators & Assemblers Professionals Technician and Associates Professionals Service and Sales Workers SG$1,499 and below SG$3,600 - SG$9,999 SG$1,500 - SG$3,599 SG$10,000 - SG$17,999 SG$18,000 and above A2022 study by the Department of Statistics Malaysia (DOSM) has found that a significant portion of Malaysians working in Singapore were engaged in skilled or semi-skilled occupations, heightening the concerns over the “brain drain” phenomenon. More precisely, 39% of the employed Malaysian diaspora in Singapore were categorised as skilled workers, while 35% were engaged in semi-skilled positions. The remaining 26% were low skilled workers. Top jobs for Malaysians working in Singapore include clerical support workers (24%), professionals (20%), and plant and machine operators and assemblers (15%). In fact, the majority of Malaysians working in Singapore, or 48.4% of them, intend to continue working there at least for another six years or more, citing incentives such as enhanced job prospects, favourable working conditions, attractive salaries, and advantageous exchange rates for Singapore dollars. Another perspective While this scenario may cause an adverse effect to the country, wherein Malaysia experiences a loss of skilled talents, chief statistician Datuk Seri Dr Mohd Uzir Mahidin suggested a reframing of the narrative around brain drain, transforming it into a positive concept known as “Brain Circulation”. “This shift in perspective means that the Malaysian diaspora will eventually return to Malaysia after a predetermined period, thereby contributing their acquired expertise and experiences back to the country,” he said. This idea is supported by the fact that only 3% of Malaysians working in Singapore intend to migrate to the neighbouring country permanently. For that, DOSM calls for the government to adopt a holistic approach to diaspora management, not just around repatriation but also how to harness their expertise while ensuring their well-being upon their return to Malaysia. On top of that, DOSM urged the government to revamp the labour market, so it can compete effectively with foreign investors and foster retention and attraction of employment within Malaysia. Below are some of the findings of the “Social Security Protection of Malaysians Working Abroad: Singapore in 2022” conducted by DOSM in collaboration with the Social Security Organisation (Socso). Skilled 39 Semiskilled 35 Low skilled 26 24 20 15 15 12 13.3 18.5 66.7 1.2 0.2 BY EMIR ZAINUL INFOGRAPHICS BY AARON BOUDVILLE SOURCE: DOSM

friday february 23, 2024 18 The E dge C E O m o rning brief home KUALA LUMPUR (Feb 22): EVD Bhd executive director of operations and major shareholder Mah Seong Huak, who is currently serving a suspension, has been prohibited from requisitioning an extraordinary general meeting (EGM) to remove and appoint directors in the company, pending the disposal of an injunction application by executive director of corporate Gan Wee Peng. This follows a court hearing held on Thursday, which granted a preliminary injunction against Mah. On Jan 24 this year, Mah had requisitioned for an EGM to remove four directors, namely Datuk Dr Syed Muhammad Syed Abdul Kadir, Gan, Hon Hin See and Lee Chi Hoe, and appoint three others — Kvin Lim Chun Keat, Ibrahim Maidin and Tee Chun Yeh — as directors. In a filing with Bursa Malaysia on Thursday, the information and communications technology system solutions provider said the EGM requisitioned by Mah to be held on Feb 26 has been withdrawn. “The company will update on the developments on the matter accordingly,” said EVD. Mah holds a 27.058% stake in EVD. Since Jan 11, Mah has been temporarily suspended from his executive functions of overseeing the day-to-day operations of the group in project management and engineering, project tender and budget, project system engineering and business development. In a separate filing, EVD said its wholly-owned subsidiary EVD Engineering Sdn Bhd has been slapped with a lawsuit from Zakiah Zahib and Mohd Nabawi Zahid, who own and operate SAZ Diversified, as they seek RM203,550 in outstanding payment with costs. EVD Engineering had on Feb 21 received a writ of summons and statement of claim from the duo. Case management has been fixed on March 5 via e-review. SAZ Diversified was appointed as a subcontractor by EVD Engineering to carry out the work of providing and installing scaffolding at the Conlay MRT Station project on Jalan Conlay here. EVD said it will obtain the necessary legal advice from its solicitor regarding the suit filed by Zakiah and Mohd Nabawi. “In the event that the suit is in favour of the plaintiff, the financial impact to the company will be limited to the amount awarded by the court and the legal cost incurred to defend the company. There is no impact on the operations of the group,” it added. EVD assumed the listing status of iDimension Consolidated Bhd in July 2022. EVD shares closed unchanged at 11.5 sen on Thursday, giving it a market capitalisation of RM46.74 million. A total of 254,400 shares were traded. EVD’s share price has fallen 11.5% so far this year and 39.5% over the last one year. EVD’s suspended director prohibited from calling EGM KUCHING (Feb 22): Former Sarawak governor Tun Abdul Taib Mahmud was laid to rest with full state honours at his family cemetery in Demak Jaya here after Zohor prayers on Thursday. Brunei’s Sultan Hassanal Bolkiah and his son, Pengiran Muda Abdul Mateen Bolkiah, Sarawak Governor Tun Dr Wan Junaidi Tuanku Jaafar and Sarawak Premier Tan Sri Abang Johari Tun Openg were among the dignitaries who attended the state funeral. The recitation of the talkin was done by Sarawak grand imam Datuk Mustapha Kamal Ahmad Fauzi before the Sarawak flag, as the highest honour of the state government, was presented to Abdul Taib’s second wife, Toh Puan Ragad Kurdi Taib. Abdul Taib was buried next to the grave of his first wife Datuk Patinggi Puan Sri Laila Taib, who died of cancer on April 29, 2009. Earlier, Abdul Taib’s remains were brought for a lying-in-state at the State Legislative Assembly to allow members of the public, dignitaries and Cabinet members to pay their last respects. The funeral prayer was held at the Demak Mosque near his residence. Abdul Taib, also known as the father of modern Sarawak, breathed his last at a hospital in Kuala Lumpur at 4.40am Wednesday. The state government has declared a two-day mourning period, with flags to be flown at half-mast throughout Sarawak, with all entertainment events postponed. Taib Mahmud laid to rest at family cemetery in Kuching Bernama by Kang Siew Li theedgemalaysia.com bernama

friday february 23, 2024 19 The E dge C E O m o rning brief world (Feb 22): Stocks extended their bull run as Nvidia Corp’s solid outlook rekindled the artificial-intelligence frenzy and manufacturing data bolstered confidence in the US economy. The world’s most-valuable chipmaker soared 14%, putting it on course to add more than US$230 billion (RM1 trillion) to its market capitalisation. That would be the biggest single-session increase in value ever — eclipsing a US$197 billion gain made by Meta Platforms Inc at the start of the month. With the numbers now in, bulls are swiftly calculating its new price-to-earnings ratio, by Rita Nazareth Bloomberg Stock bulls reload AI bets as Nvidia powers rally The US$15 billion VanEck Semiconductor ETF jumped 6%. Tech also led gains in European shares, while Japan’s Nikkei 225 extended its stellar rally to a record. Equities extended gains after data showed US manufacturing expanded at the fastest since September 2022. And traders took more hawkish Fedspeak in stride, with vice chair Philip Jefferson warning of easing too much. “Few things are more certain than death, taxes, and Nvidia beats on earnings,” said Ryan Detrick at Carson Group. “The bar was set quite high, and incredibly they’ve once again stepped up and hit a home run.” Demmert says that for investors who already own Nvidia, the recommendation would be to hold the stock and avoid selling in order to capture future expected growth “as we are still early in this transformative AI technology.” “For investors who don’t own the stock, we would be buying on any weakness,” he noted. “With Nvidia’s stock, there will be corrections and bumps along the way, but the stock will continue to climb the wall of worry.” Nvidia’s results come as a relief for AI bulls, as expectations have improved significantly, according to Solita Marcelli at UBS Global Wealth Management. Despite the industry surge, she sees potential for further gains in technology shares — especially those that would benefit from the AI revolution. reuters continues on Page 20 or how much investors are paying for future growth. Put another way, Nvidia’s earnings have been growing faster than the shares. “Nvidia got to where it is because of extremely strong earnings and revenue,” said James Demmert at Main Street Research. “When a company posts 265% year-overyear revenue growth, it deserves a premium valuation.” The Nasdaq 100 jumped 2.5%, while the S&P 500 reclaimed the 5,000 mark.

friday february 23, 2024 20 The E dge C E O m o rning brief world “We think the near-term momentum in AI-related stocks is likely to continue,” Marcelli noted. “To position, we maintain our preference for semiconductors and software, and see opportunities in beneficiaries of AI edge computing, big tech, and their partners.” Nvidia’s blockbuster results also underscored the tech dominance over the rest of the stock market, with the “Magnificent Seven” group of megacaps leading gains. To Chris Senyek at Wolfe Research, US equities are poised to power ahead over the next two to three weeks — with the AI-leveraged names, most of the “Mag 7,” and momentum themes driving the gains. Indeed, other stock-market industries are not rallying as strongly as the tech sector. “We still believe it is going to be important for the stock market to broaden out a lot more than it has this year if it’s going move a lot more than it already has so far this year,” said Matt Maley at Miller Tabak + Co. “What we’re trying to say is that although the tech sector is the most important one for the stock market right now, there are still plenty of opportunities in other sectors in the marketplace.” (Feb 22): A rally in Chinese stocks extended into the eighth session as a growing list of support measures helped ease bearish sentiment. After a choppy start, the benchmark CSI 300 Index ended Thursday 0.9% higher, capping its longest run of gains since July 2020. In Hong Kong, the Hang Seng China Enterprises Index jumped about 2%, close to wiping out its losses for the year. Beijing has deployed a wider range of policy levers including restrictions on equity net sales, underscoring authorities’ desperation to revive the US$8.7 trillion (RM41.5 trillion) stock market. While this month’s rebound suggests the steps — which also include stock purchases by state funds and a clampdown on quant trading — have put a floor under the rout, many still see it as a technical upswing that may wind down if supports taper. “We don’t rule out the possibility that the latest restrictions could contribute somewhat to a technical rebound in the Greater China market in the near-term,” said Homin Lee, senior macro strategist at Lombard Odier. “But the market’s long-term trajectory will be driven by fundamentals, not technical tweaks of this nature.” Efforts to boost market confidence have ratcheted up since a new chief took control of the China Securities Regulatory Commission earlier this month. The regulator has banned major institutional investors from reducing equity holdings at the open and close of each trading day, Bloomberg reported Wednesday. Foreign funds added 3.7 billion yuan of onshore shares through the trading links with Hong Kong on Thursday, boosting holdings again after scooping up more than 13 billion yuan in the previous session. The CSI 300 has now turned positive for the year, but remains down about 40% from a 2021 peak. “In the short-term, these moves should at least stop the downward spiral of the market,” said Kerry Goh, chief investment officer at Kamet Capital Partners Pte. “Machine-led, large and rapid transactions should be curtailed so we don’t cause an unexpected crash.” In another positive development, Beijing has also started drafting a law to promote the development of the private sector economy. The law will focus on the “core concerns” of China stocks cap best winning run since 2020 as rally extends private companies, including protecting their property rights and guaranteeing the interests of entrepreneurs, state media reported. The equity rout a few weeks ago was exacerbated by quant funds stampeding to exit position, according to an analysis by Man Group fund manager Ziang Fang, who said in a note this week that the unwinding of these positions was so massive that it spurred small-cap stocks to underperform by a historic margin. Beijing’s tightened grip on trading activity, however, risks upending popular strategies used by hedge funds and other institutional investors, and may further alienate foreign funds who have already left the market in droves. Rising short interest in China and Hong Kong equities amid this month’s market uptrend implies that investors’ sentiment on average is still cautious, Morgan Stanley strategists including Gilbert Wong and Laura Wang wrote in a note, citing IHS Markit data. “People have had this hazy sense of anticipation and optimism ever since the authorities demonstrated their resolve to change the state of the market with the CSRC head change,” said Liu Xiaodong, fund manager at Shanghai Power Asset Management Co. The new chief “has so far proven true to his word with a heavy hand to rectify some of the long standing, fundamental issues that have plagued the market.” Bloomberg from Page 19 What bubble? Nvidia profits are rising even more than its stock Nvidia Corp.’s blowout earnings report lifted shares and assured the market that artificial intelligence mania is still going strong. It might also make the stock look cheaper. Nikkei scores first record high since 1989 as Nvidia fuels frenzy Tech-loving Tokyo had raced up over 2.2% to top its previous all-time closing and intraday highs set at the peak of the country’s so-called bubble economy more than three decades ago. Read also:

friday february 23, 2024 21 The E dge C E O m o rning brief world (Feb 22): Intel said on Wednesday that Microsoft plans to use its services to manufacture a custom computing chip and that the company expects to beat an internal deadline of 2025 to overtake its biggest rival, Taiwan Semiconductor Manufacturing Co, in advanced chip manufacturing. The American chipmaker also gave new details on how it plans to maintain a lead over TSMC into 2026 and beyond. Intel made the disclosures at an event in San Jose, California, at the first technology conference for Intel Foundry, the contract manufacturing operation it established to compete with TSMC. Intel says it plans to retake the mantle of making the world’s fastest chips from TSMC later this year with what it calls Intel 18A manufacturing technology and extend that lead into 2026 with new technology called Intel 14A. It said Microsoft will use its 18A technology to make an undisclosed chip and that it now expects US$15 billion (RM71.5 billion) of foundry orders, up from the US$10 billion that the company had earlier told investors to expect. TSMC said it had “no comment on the competitiveness of our advanced technologies” beyond what its CEO CC Wei said at the company’s last investor conference in January. TSMC’s Taipei-listed stock has jumped almost 17% so far this year due to its dominance in producing the kinds of advanced chips used in AI applications by companies like Nvidia. The news of 14A technology is the first time the Silicon Valley company has given details of its plans beyond 2025. That is the deadline Intel’s CEO, Pat Gelsinger, had set to regain the chipmaking crown when he took the reins three years ago. For decades, Intel made chips only for itself and used its lead in manufacturing to create a cycle in which it made chips with industry-leading performance and charged a premium for them. Those margins, in turn, helped fund manufacturing advances. But when Intel lost its manufacturing lead, its chips became less competitive and margins slipped, sapping the source funding for a manufacturing rebound. Now, Intel is counting on potentially billions of dollars in US government subsidies and business from outside customers to help it get back on track. It is hoping some customers will be enticed by its long history of operating cutting-edge factories on multiple continents, especially those with concerns about TSMC’s practice of keeping its most advanced factories clustered in Taiwan. “It’s a sales pitch that’s resonating right now. People want that,” Stu Pann, the executive overseeing Intel Foundry, said of the company’s geographic diversity. Intel says it has four “large” customers signed up for its 18A manufacturing technology but has yet to name them. It is not clear if Microsoft is among those financially important customers. Intel signs Microsoft as foundry customer, says on track to overtake TSMC WASHINGTON (Feb 22): The bulk of policymakers at the Federal Reserve’s (Fed) last meeting were concerned about the risks of cutting interest rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level, according to the minutes of the Jan 30-31 session. “Participants highlighted the uncertainty associated with how long a restrictive monetary policy stance would need to be maintained” to return inflation to the US central bank’s 2% target, said the minutes, which were released on Wednesday. Whereas “most participants noted the risks of moving too quickly to ease the stance of policy”, only “a couple...pointed to downside risks to the economy associated with maintaining an overly restrictive stance for too long”. US stocks were trading lower following the release of the minutes before recovering ground later in the session, while the US dollar was little changed against a basket of currencies. US Treasury yields rose. The minutes seemed to reinforce the recent message of Fed policymakers that they would be in no hurry to deliver on rate cuts that officials still expect to begin sometime this year. In comments aired earlier on Wednesday on SiriusXM, Richmond Fed president Thomas Barkin cited concerns about Fed worried about cutting rates too soon, minutes of January meeting show persistent inflation for service industries and housing, and said data released since the central bank’s last meeting, showing strong job growth and stronger inflation than anticipated, made any rate-cut call “harder”. “It definitely did not make things easier. It made things harder,” Barkin said. Top US central bank officials, including Fed vice-chair Philip Jefferson and Fed governors Lisa Cook and Christopher Waller, may help further sketch out how the recent data may influence the discussion about possible rate cuts when they speak on Thursday. “It is clear that the message from the minutes, coupled with Fed speakers out in force, is that they are concerned about moving too quickly, before they declare a final victory in quelling inflation. Given the uptick in prices, the Fed’s concerns appear valid,” said Quincy Krosby, the chief global strategist of LPL Financial. Data released last week showed underlying, or “core”, consumer inflation remained unchanged at 3.9% annually, led by rising prices for housing. Read the full story Read also: Fed’s Bowman says that time for rate cut is ‘certainly not now’ by Howard Schneider & Lindsay Dunsmuir Reuters by Stephen Nellis & Max A Cherney Reuters In presentations to policymakers, Federal Reserve staff took note of a variety of risks, from 'notable' vulnerabilities in the US financial system, including falling commercial real estate prices, to the possibility that 'reducing inflation could take longer than expected', the minutes said. reuters

friday february 23, 2024 22 The E dge C E O m o rning brief world HONG KONG (Feb 22): China’s Lenovo Group, the world’s largest maker of personal computers (PCs), reported stronger-than-expected earnings on Thursday, with revenue returning to growth after five quarters of decline amid a post-Covid-19 slowdown. It said October-December revenue rose 3% from the same period a year prior to US$15.72 billion. Analysts polled by LSEG estimated revenue to be flat at US$15.25 billion. Revenue started contracting in 2022 at the end of a boom in demand for PCs and other electronic products that had been brought about by movement restrictions during the pandemic. But after almost two years of decline, the market is showing signs of recovery, in part due to vendors clearing excess inventory. Researcher Gartner in January reported Lenovo’s third-quarter PC shipments grew 3.2% versus the same period a year earlier. Industry-wide PC shipments likewise grew, by 0.3%. Lenovo controlled 25.6% of the global PC market during the period, Gartner data showed, with HP, Dell and Apple in second, third and fourth place. However, while Lenovo enjoyed an upturn in third-quarter revenue, profit dropped 23% to US$337 million. Still, even that exceeded market expectations. Lenovo’s share price rose after the earnings announcement and was up 3.27% in afternoon trade, versus a 1.45% increase in the benchmark Hang Seng Index. The firm saw revenue grow in most markets. However, it plunged 10% at home in China. The drop “definitely reflects” challenges posed by slowdown in the world’s second-largest economy, said CEO Yang Yuanqing at an earnings briefing. Still, investors have been buying Lenovo shares over the past 12 months, in part due to expected demand for “AI PCs”, or personal computers optimised to run artificial intelligence (AI) software. In that time, Lenovo stock has gained more than 25%. On Thursday, Lenovo said AI PCs — including those capable of running AI applications without being connected to the internet — will be a strategy focus for the foreseeable future. Last year, it unveiled more than 10 AI-capable PCs at the International Consumer Electronics Show. AI PC shipments will likely reach 50 million units this year and are set to more than triple to 167 million units by 2027, accounting for close to 60% of total shipments, showed data from researcher IDC. Lenovo is also set to benefit from being one of the technology industry’s big manufacturers of “AI servers”, or dedicated AI computers equipped with multiple processing chips developed by leading AI chipmakers, such as Nvidia. “The AI server (market) is expected to grow twice as fast as the (traditional) server market,” Yang said. Lenovo has been a major partner of US chipmaker Nvidia, but as the United States bans exports of high-end AI chips to China to slow that country’s technological development, that partnership has come under investor spotlight. Asked about the ability to source Nvidia’s AI chips, Yang said supply has been stable for Lenovo’s non-China business. China’s Lenovo posts revenue growth after five quarters of decline (Feb 22): Grab Holdings Ltd’s shares slid 5% after the ride-hailing leader forecast 2024 revenue below analysts’ estimates, suggesting a deeper-than-anticipated slowdown in its core online business. The Singapore-based company, which competes with GoTo in mobility and services such as meal delivery, expects a 14% to 17% rise in sales to US$2.7 billion (RM12.8 billion) to US$2.75 billion, lagging the US$2.8 billion average projection. The disappointing forecast overshadowed plans to buy back as much as US$500 million of stock and its second straight quarterly profit — albeit on an adjusted basis. After years of spending to gain market share and fend off competition, Grab is taking steps to become a more financially mature company. It’s focusing on the bottom line after years of swift expansion into markets from Malaysia to Thailand. Like backer Uber Technologies Inc, it’s slashed jobs and reined in spending to pivot toward profitability. Uber also announced its first buyback this month. But the effort on the bottom line coincides with a dramatic slowdown in growth from the triple-digit pace of past years, underscoring the impact of economic uncertainty and competition. Revenue rose just 30% in the December quarter, its slowest pace of growth since at least 2022. The challenging market has forced Grab and its rivals to consider aggressive options. Grab and GoTo have this year revived discussions about a merger of their core businesses, Bloomberg News reported, an alliance that could help stem spending to chase consumers across the region. Grab had also been linked to talks to take over the foodpanda brand in several markets, but negotiations fell through because parties couldn’t agree on deal terms. Shares of Grab are down sharply since it went public through a US blank-check company in late 2021. Still, they’ve stabilized this year as losses narrowed, outperforming its main regional rivals. On Thursday, it reported US$35 million in adjusted earnings before interest, taxes, depreciation and amortisation, lagging estimates for US$38.9 million. Grab also reportGrab slides after poor sales outlook clouds maiden buyback plan ed positive free cash flow for the December quarter, though again on an adjusted basis. The company posted its first-ever profit on that basis for the September quarter. “Free cash flow should remain strong after it turned positive in 3Q. This is driven by sequential expansion in the deliveries and mobility segments’ bottom lines, with the former potentially contributing to most of 4Q’s incremental adjusted Ebitda amid rising contribution of GrabUnlimited subscribers, users who spent 4.2x more than non-subscribers in 3Q. In the longer term, additional boost should come from economical mobility offerings, where opportunities to push advertising are high. Financial services could be another growth catalyst as digital banks in Indonesia, Singapore and Malaysia ramp up, meaning loan and deposit metrics will be key to watch,” said Bloomberg analyst Nathan Naidu. Read also: Uber CEO aims to get into cheap rides in ‘toughest market’ India Uber Technologies Inc wants to quicken an expansion into the cheaper but potentially larger market for two- and three-wheeled rides in India, extending a long-running rivalry with local provider Ola. by Olivia Poh Bloomberg by Josh Ye Reuters

friday february 23, 2024 23 The E dge C E O m o rning brief world (Feb 22): Houthi militants and their Iranian backers are preparing for a lengthy confrontation with the US and allies around the Red Sea regardless of how the Israel-Hamas war plays out. The Yemen-based group is shoring up military and defense capabilities to continue attacking ships around the vital waterway, according to several people with knowledge of the situation, who asked not to be identified discussing sensitive matters. Steps include fortifying mountain hideouts for more secure and effective missile launches and testing unmanned vessels above and below water, they said. Saudi Arabia, which borders Yemen and has fought the Houthis for most of the past decade, is specifically concerned the group may attempt to sabotage major internet cables running along the seabed, according to an adviser to the Saudi leadership, who didn’t want to be named. There are no suggestions yet of a plan of that nature or that the Houthis have the means to carry one out. The Houthis started attacking Red Sea shipping in November, ostensibly as a means of pressuring Israel to end its war in Gaza against Hamas, which is also backed by Iran. At first, they said only vessels with ties to Israel would be targeted, though it wasn’t long before ships with only tenuous connections to the Jewish state were also hit. The assaults have helped push oil prices up more than 8% this year, with Brent nearing US$85 a barrel, and upended trade through the southern Red Sea. The waterway normally handles about 30% of global container traffic and sees more than US$1 trillion (RM4.8 trillion) worth of goods pass through each year. The US and UK have responded since mid-January with airstrikes against the Houthis’ military assets — including missile launchers, air-defence systems and radars. The Pentagon says the group’s capabilities have weakened as a result. A US-led maritime operation to patrol and secure the Red Sea started in December and was bolstered this week by a Greek-led European Union mission. Evacuation first A foiled attempt to attack a US warship in the Red Sea on Saturday was followed by a strike on a UK-owned cargo vessel the next day, causing damage and forcing the crew to be taken ashore. It was the first such evacuation since the Houthis started their attacks. The Houthis also fired on a US-owned carrier of bulk commodities. While Israel is stoking fears in the international community over plans to attack the Palestinian refugee haven of Rafah, the Houthis and Iran are seeking to extract Western concessions that have nothing to do with the Israeli-Hamas conflict, said Rashad Al-Alimi, who heads Yemen’s internationally recognised government opposed by the Houthis. Sanctions relief for Iran and political recognition for the militant group may be among these demands, he suggested. “This is a strategic dream for Iran,” Alimi said during a panel discussion at the Munich Security Conference last weekend. The Houthis took control of Sanaa, the Yemeni capital, in 2014 at the start of the country’s devastating civil war. They hold much of the north-west of Yemen, including the key port of Hodeida, and withstood a massive bombing campaign from a Saudi-led coalition that began a year later. There’s been a tentative truce since 2022, but UN-mediated talks involving the Saudis are yet to result in a formal peace deal. Most Arab and Western countries don’t formally recognize the Houthis as a governing power. The Houthis and Iranians have “exercised a certain leverage over international trade” and “have realised the power of this tool,” Maha Yahya, director of the Carnegie Middle East Center think tank in Beirut, said in an interview. That means they won’t give up easily, she added. US humiliation In a speech last week, Houthi leader Abdul Malik al-Houthi suggested humiliating the US and driving its military forces out of the Middle East is a key motive. That’s also one of Tehran’s main longterm objectives. “We are witnessing strategic failure when it comes to American influence and control in the region,” he said. The Houthis are people who “don’t submit to America.” To this end the Houthis have over the past few weeks buttressed their positions in three mountainous areas, said the people, who shared this information with Bloomberg based on intelligence gathered mainly from individuals on the ground. by Sam Dagher & Mohammed Hatem Bloomberg Iran-backed Houthis prepare for long battle with US in Red Sea They’ve dug more trenches and tunnels in the mountains of the Hajjah governorate northwest of Sanaa, located at the Saudi border and overlooking the Red Sea, as well as around peaks inland, they said. These remote and rugged locations are being used to hide stockpiles of missiles, while mountainous heights of over 6,500 feet (2,000 metres) allow for the targeting of ships further out to sea — including in the Gulf of Aden and even the Arabian Sea, according to four people informed about the Houthis’ latest moves. Yemen’s Alimi believes the only way to restore security to the Red Sea is for the West to get tougher with Iran and support anti-Houthi factions to oust them from Sanaa — a goal that Saudi Arabia and the United Arab Emirates failed to achieve with their direct military involvement. “Diplomacy and soft approaches do not work with Iran,” Alimi said in Munich. Iranian help The US has repeatedly said the Houthis — who were added to Washington’s list of terrorist organisations last month — would not have been able to carry out and sustain their attacks in the Red Sea without technical, military and intelligence support from Iran’s Islamic Revolutionary Guard Corps, whose operatives are present in Yemen. Hundreds of operatives and experts from the IRGC and allied militias are working with the Houthis on their Red Sea attacks, according to Saudi and Yemeni security sources, and some have been killed in the recent US and UK strikes. Iran has denied any involvement in the shipping assaults but has praised the Houthis for acting in solidarity with Hamas. President Joe Biden has signalled the US will keep striking the Houthis for as long as it takes to end their grip on Red Sea shipping. It won’t be easy to achieve that without provoking the group into even more aggressive action — including attacking Saudi Arabia and the UAE, as it did before the truce — or risking a direct confrontation with Iran. The US has a duty to defend the freedom of navigation in the Red Sea but shouldn’t get into a wider conflict with the Houthis and Iran, Senator Chris Murphy, a Democrat, said at the Munich Security Conference. “The US obviously has important interests in the Middle East but that does not mean every problem in the Middle East is a US problem,” he said.

friday february 23, 2024 24 The E dge C E O m o rning brief world (Feb 22): Japan’s government called on its automotive industry to come clean after a series of investigations uncovered decades of fraudulent conduct at a pair of Toyota Motor Corp affiliates. Transport Minister Tatsuo Saito directed domestic carmakers to conduct internal probes for any misconduct, including attempts to skirt certification tests, and to report their findings by the end of April. “These scandals have damaged trust in Japan’s safety regulations,” Sato said on Thursday, adding that a committee will be established to re-examine Japan’s vehicle regulations. “It’s regrettable, given it could lead to a crisis of faith in the country’s manufacturing industry.” The ministry also issued a corrective order to Toyota Industries Ltd for manipulating power output figures for a few of its diesel engines types. Certification was revoked for three of its engine types after ministry officials conducted on-site inspections of the company’s offices, as well as those of Toyota and Hino Motors Ltd. Daihatsu Motor Co, another Toyota unit, was given the same order last month following revelations that its vehicles had not been properly tested for collision safety. On Tuesday, Daihatsu announced plans to resume production of three vehicle models in early March, while four models were slated to resume on Feb 26. Daihatsu began compensating its suppliers and partners in mid-February, a Daihatsu spokesperson told reporters on Thursday evening. “Bit by bit, we are slowly regaining our ability to revive operations and meet customers needs,” the spokesperson said. Toyota tapped Masahiro Inoue on Feb 13 to replace Daihatsu chief executive officer Soichiro Okudaira, as the carmaker looks to rebuild trust in its truck-making affiliate and the rest of its group operations. Daihatsu, which became a wholly-owned subsidiary of Toyota in 2016, was dragged into the limelight in December when an internal investigation revealed it had manipulated collision safety test results dating as far back as 1989. The scandal forced the company, which produces light “kei” trucks popular among Japanese drivers, to compensate partners after suspending domestic production. Barely a month later, a similar fate befell Toyota Industries after a probe found irregularities in its power output tests. The Toyota group “needs to return to basics” to bounce back from a string of recent scandals, Toyota chairman Akio Toyoda told reporters on Jan 30. In 2022, another Toyota affiliate, Hino, was caught falsifying emissions data. Read also: EV maker VinFast’s losses widen even as EV deliveries jump Japan demands auto industry probe as scandals rile Toyota units LONDON/PARIS (Feb 22): Two of the world’s top consumer goods companies, Danone and Nestle, said on Thursday that they will slow price increases in 2024 after two years of hikes that have prompted shoppers to seek cheaper alternatives for basic goods like yoghurt and coffee. But Danone, which owns brands including Evian and Badoit water and Activia yoghurt, warned prices would still rise, citing a need to offset labour costs and shipping prices. Their comments follow British rival Unilever, the maker of Ben & Jerry’s ice cream and Dove soap, which also said this month that price increases would start to ease. The packaged goods industry has hit shoppers with higher prices for more than two years, citing rises in input costs that started with the Covid-19 pandemic and were exacerbated by Russia’s invasion of Ukraine. Everything from sunflower oil to freight has become more expensive, taking a toll on global supply chains and fuelling a protracted cost of living crisis. “We hadn’t seen that sort of inflation spiking since 1973, 1974,” Nestle CEO Mark Schneider told a call with journalists on Thursday. The Swiss firm, maker of Maggi stock cubes, KitKat chocolate wafers and Nescafe coffee, is the world’s biggest packaged food company. Investors and analysts have raised concerns that companies are pushing price rises too far and recommended that they focus more on marketing and innovation, as cost of living worries help retailers’ cheaper private label brands steal market share. Nestle, Danone see price hikes slowing after years of sharp increases Higher prices have taken their toll on big brands’ ability to compete, and Unilever’s CEO Hein Schumacher said earlier this month that the company’s “competitiveness remains disappointing”. This quarter, however, companies have said 2024 prices will rise at a much slower rate, as they recoup higher costs. “Pricing will be a lot lower this year than last year,” Nestle’s Schneider said. “Growth going forward this year is going to be a lot more volume and mix-based,” he added, saying this would likely be “pretty universal”. As a result, the company expects slower organic sales growth of around 4% in 2024, and a “moderate increase” of its underlying trading operating profit (UTOP) margin. The 2023 UTOP margin was 17.3%, up by 40 basis points in constant currency. Danone CEO Antoine de Saint-Affrique was more measured, saying during an earnings call that “we are in a world of slowing-down inflation” but that there would still be “volatility”. “We expect to have a price component in our growth; it will differ by regions,” Saint-Affrique said. Unilever’s Schumacher said earlier this month: “We will continue to see inflation in 2024. I would say it will return to normal levels — when I say normal, I mean somewhere between 2.5%-3%”. by Richa Naidu & Dominique Vidalon Reuters by Nicholas Takahashi Bloomberg reuters bloomberg

friday february 23, 2024 25 The E dge C E O m o rning brief world (Feb 22): A huge trove of documents on GitHub appeared to outline in extraordinary detail the scope of China’s state-sponsored cyberattacks on foreign governments, transfixing the global security community. Hundreds of internal files attributed to the Shanghai-based cyber security vendor I-Soon, which works with Chinese government clients, were posted to the developers’ community owned by Microsoft Corp this week. The documents, which industry experts believe to be authentic, appeared to reveal successful attacks on a series of high-value government targets in 2021 and 2022 from the UK foreign office to the Royal Thai Army and even Nato Secretary General Jens Stoltenberg, according to a review by Bloomberg News. Offices for the alleged targets didn’t immediately respond to requests for comment. Washington and Beijing have accused each other for years of cyber-espionage, including the use of state-sponsored actors to infiltrate sensitive databases. If genuine, the documents underscore the incredible diversity of targets as well as the commercial transactions that help fuel such cyber-activity behind the scenes. “We have every reason to believe this is the authentic data of a contractor supporting global and domestic cyber-espionage operations out of China,” said John Hultquist, chief analyst at Mandiant Intelligence, a unit of Google Cloud. “We rarely get such unfettered access to the inner workings of any intelligence operation.” The origins of the files are unclear, and Bloomberg News couldn’t independently verify their authenticity. Experts who have studied the documents highlight communications from the vendor — officially known as Shanghai Anxun Information Technology Co — about selling stolen data to clients including the Ministry of Public Security and the Chinese military. This included data apparently obtained from Western governments such as the UK and Australia, as well as China-friendly countries like Pakistan. Also notable were documents claiming the company could breach accounts and devices from US tech companies from Microsoft Corp to Apple Inc and Alphabet Inc’s Google. I-Soon, Apple and Microsoft representatives didn’t respond to requests for comment. Google spokespeople didn’t have immediate comment when contacted. The Ministry of Public Security didn’t respond to a faxed request for comment. Security researchers say the documents offer a rare glimpse into the ecosystem of contractors that perform cyberattacks for the Chinese government. I-Soon, founded in 2010, has touted its contributions to national cybersecurity defenses, including posting an appreciation letter from the Communist Party’s branch in Chengdu, Sichuan, on social media. “It is a very curated leak, which looks like a reprisal type job from someone out to get the victim in trouble with authorities around the world,” said David Robinson, co-founder of the Australian cyber security company Internet 2.0. “It makes a difficult situation for China’s central government on what to do about it.” To be sure, there was little hyper-sensitive or potentially dangerous information contained in the documents, experts said. But it seemed to be the first major one from this type of Chinese cyber vendor, which in itself is significant and potentially embarrassing for Beijing, said Dakota Cary, a China-focused consultant at the US cybersecurity company SentinelOne. “The Chinese government is quite concerned about global public opinion regarding attacking and they very clearly have a media strategy to promote narratives that China is the victim of Western hacking,” he said. “It’s not a Snowden moment, but it’s really going to be an issue internally — there is now leaked public data that other countries, including the US, can reference.” Purported leaks show global reach of Chinesesponsored hacking (Feb 22): The significant stake in United Overseas Bank Ltd (UOB) held by the late patriarch Wee Cho Yaw is something that his eldest son, who is also the lender’s chief executive officer, hopes may eventually be distributed among his descendants. Cho Yaw held about 18.5% through both direct holdings and other investment vehicles, according to Bloomberg’s analysis of company filings. The Singapore-based bank has a market capitalisation of more than US$35 billion (RM167.04 billion). Wee Ee Cheong told a briefing of the firm’s earnings on Thursday that he hopes his father’s personal stake will be distributed Billionaire UOB CEO hopes to keep father’s stake in family to the children and grandchildren. “Hopefully, they can remember it’s a legacy asset given by the grandfather or great-grandfather.” Most of Cho Yaw’s stake is already in the family companies, Ee Cheong said, referring to holding companies for the family’s various business interests, which also span real estate and the maker of Tiger Balm. The elder Wee, who shaped Singapore’s financial landscape by amalgamating several old family-controlled banks, died earlier this month at the age of 95, raising questions about what will happen to his UOB stake. He amassed a net worth of US$10.4 billion as of February 2024, according to the Bloomberg Billionaires Index. Asked about succession planning, Ee Cheong, 71, said he is growing a team of younger professionals within the bank. If the family members are interested, they are more than welcome, he said. “But I think they need passion, they need love, and they need the desire to be part of the team,” he said. Read also: Singapore’s UOB revises down 2024 loan growth projections, 4Q profit beats forecasts by Chanyaporn Chanjaroen, Sheryl Tian Tong Lee & Pui Gwen Yeung Bloomberg by Sarah Zheng & Gao Yuan Bloomberg (From second left) Wee Ee Cheong, Wee Ee Chao and Wee Ee Lim attending a memorial session for their father Wee Cho Yaw in Singapore on Feb 7. bloomberg

friday february 23, 2024 26 The E dge C E O m o rning brief world news In brie f Meta believes it is not required to pay for Indonesian news content posted voluntarily JAKARTA (Feb 22): Facebook parent Meta Platforms on Thursday said it believes that a new Indonesian law does not require it to pay news publishers for content they voluntarily post to its platforms. Indonesia’s president this week signed into law a requirement that digital platforms pay media outlets that provide them with content. It is due to take effect in six months. “Following multiple rounds of consultations with the government, we understand Meta will not be required to pay for news content that publishers voluntarily post to our platforms,” said Rafael Frankel, Meta’s director of public policy for Southeast Asia. The law stipulates that digital platforms and news publishers should strike partnerships that could take the form of paid licences, revenue sharing or data sharing but much remains unclear about how these new agreements will work in practice. Governments around the world have long been concerned about what they see as a power imbalance between digital platforms and publishers of news and other content. Australia has led the way with its News Media Bargaining Code that took effect in March 2021. Meta and Google have since signed deals with media outlets that compensate them for content that generates clicks and advertising dollars. — Reuters Five killed after barge hits bridge near China’s Guangzhou BEIJING (Feb 23): Five people were killed after a barge collided with a bridge over a waterway in China’s Pearl River Delta near Guangzhou city, causing part of the bridge to break off, plunging vehicles into the water, Chinese state media reported on Thursday. The barge was travelling from Foshan city to a southern district of Guangzhou when it crashed into the bridge at 5:30am (2130 GMT) on the Hongqili Waterway, the Guangzhou Maritime Safety Administration said in a statement. Images on state-owned China Central Television (CCTV) showed an empty container barge lodged between two columns of the Lixinsha Bridge with part of the bridge’s two-lane road deck missing. All road traffic on the bridge was halted. Four vehicles and an electric motorbike fell off the bridge. Two vehicles, which included a bus, plunged into the water and three other vehicles ended up on the barge, CCTV said. The bus was carrying only its driver. “The accident resulted in five deaths (one bus driver, one motorcycle driver and three people in a van),” CCTV reported. Authorities were still investigating the cause of the accident, the Guangzhou maritime administration said on their WeChat social media account. — Reuters Google to pause Gemini AI model’s image generation of people due to inaccuracies (Feb 22): Google is pausing its AI tool that creates images of people following inaccuracies in some historical depictions generated by the model, the latest hiccup in the Alphabet-owned company’s efforts to catch up with rivals OpenAI and Microsoft. Google started offering image generation through its Gemini AI models earlier this month, but over the past few days some users on social media had flagged that the model returns historical images which are sometimes inaccurate. “We’re aware that Gemini is offering inaccuracies in some historical image generation depictions,” Google had said on Wednesday. Since the launch of OpenAI’s ChatGPT in November 2022, Google has been racing to produce AI software rivaling what the Microsoft-backed company had introduced. When Google released its generative AI chatbot Bard a year ago, the company had shared inaccurate information about pictures of a planet outside the Earth’s solar system in a promotional video, causing shares to slide as much as 9%. Bard was rechristened as Gemini earlier this month and Google rolled out paid subscription plans, which users could choose for better reasoning capabilities from the AI model. — Reuters BlackRock, Temasek-led group invests US$150 mil in thermal battery maker Antora (Feb 22): Thermal battery maker Antora Energy on Thursday said it has raised US$150 million in a funding round led by a tie-up between the world’s biggest asset manager BlackRock and Singapore state investment firm Temasek. The BlackRockTemasek partnership, called, Decarbonization Partners, led an investor group including Emerson Collective, GS Futures, The Nature Conservancy, Lowercarbon Capital, Breakthrough Energy Ventures and top global miner BHP’s venture capital unit. The fresh financing for the startup will underpin an increase in production of its batteries, blocks of solid carbon heated with renewable energy. Energy from those batteries could be used in industrial processes that use heat to melt and change raw ingredients, in sectors from chemicals to concrete. Antora or its customer would buy renewable energy at times of the day when prices are lowest to heat up the batteries to as high as 2,400 degrees Celsius (4,352 degrees Fahrenheit). Customers could draw on that heat throughout the day, potentially decarbonizing areas of the economy seen as particularly wedded to fossil fuel use. — Reuters China’s property foreclosures surge as growth slows (Feb 22): The number of foreclosed properties for sale in China rose at a faster pace in January, in a sign of the country’s continued economic slowdown. New listings of foreclosed properties nationwide rose 48% in January from a year earlier, compared with 37% in 2023, according to a report by real estate agency China Index Holdings published Thursday. The 100,400 properties listed for sale last month include residential, commercial and industrial real estate. Transactions in January also rose about 18% on-year. China’s economic downturn has resulted in a growing number of debt-saddled property owners who are forced to sell, especially as real estate loans account for a large majority of the country’s non-performing debt. For the past two years, distressed pricing has allowed homebuyers and companies to snag cheap residences, warehouses and land. Foreclosed residential properties were sold at an average discount of 23% in January, China Index Holdings data showed. “We forecast the enthusiasm for distressed properties to heat up after Lunar New Year as the overall real estate market is forecast to be on a downward trend and discounts are expected to widen.” the agency said in the report. — Bloomberg bloomberg reuters

friday february 23, 2024 27 The E dge C E O m o rning brief MARKETS Top 20 active stocks World equity indices Top gainers (ranked by %) Top losers (ranked by %) Top gainers (ranked by RM) Top losers (ranked by RM) NAME VOLUME CHANGE CLOSE YTD MARKET (MIL) (RM) CHANGE CAP (%) (RM MIL) Hong Seng Consolidated Bhd 194.70 0.000 0.020 -20.00 102.2 Reneuco BHD 116.40 -0.005 0.090 -59.09 101.0 Notion VTEC Bhd 86.70 0.140 0.455 42.19 234.7 Minetech Resources Bhd 82.50 0.000 0.175 20.69 312.2 Dagang NeXchange Bhd 60.10 -0.020 0.355 -11.25 1,120.5 Dialog Group Bhd 59.60 0.100 2.300 11.11 12,977.9 TWL Holdings Bhd 47.00 0.005 0.040 33.33 216.0 MASTER TEC GROUP BHD 38.40 0.065 0.545 0.00 555.9 WENTEL ENGINEERING HOLDINGS BHD 36.60 0.015 0.335 0.00 385.3 Widad Group Bhd 36.40 -0.005 0.125 -74.23 387.1 Avaland Bhd 35.40 0.030 0.295 20.41 429.8 Sarawak Cable Bhd 35.10 0.035 0.240 -36.00 95.8 YTL Corp Bhd 34.90 -0.070 2.150 13.76 23,573.4 YTL Power International Bhd 34.60 -0.120 3.780 48.82 30,626.1 RGB International Bhd 34.50 0.010 0.320 18.52 493.1 My EG Services Bhd 34.10 0.005 0.785 -3.68 5,855.7 Ekovest BHD 33.50 -0.005 0.495 1.02 1,467.9 Perdana Petroleum Bhd 32.20 -0.015 0.270 35.00 599.5 Sime Darby Property Bhd 26.30 -0.010 0.765 22.40 5,202.6 Velesto Energy Bhd 24.40 0.000 0.275 19.57 2,259.3 Data as compiled on Feb 22, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) Key Alliance Group Bhd 0.010 100.00 214.0 0.00 36.8 EA Holdings Bhd 0.010 100.00 111.1 0.00 64.5 XOX BHD 0.015 50.00 1,393.6 0.00 77.9 Notion VTEC Bhd 0.455 44.44 86,719.6 42.19 234.7 BCM Alliance Bhd 0.020 33.33 101.1 0.00 40.7 Metronic Global Bhd 0.020 33.33 3,087.9 33.33 30.6 Kia Lim Bhd 0.780 28.93 5,441.0 67.74 48.3 Coraza Integrated Technology Bhd0.515 22.62 13,807.6 18.39 254.2 G3 Global Bhd 0.030 20.00 657.2 20.00 113.2 Sarawak Cable Bhd 0.240 17.07 35,086.4 -36.00 95.8 Dolphin International Bhd 0.175 16.67 3,960.6 6.06 23.4 TWL Holdings Bhd 0.040 14.29 47,024.3 33.33 216.0 MASTER TEC GROUP BHD 0.545 13.54 38,440.4 0.00 555.9 Classita Holdings Bhd 0.045 12.50 2,556.1 0.00 55.5 PDZ Holdings Bhd 0.045 12.50 1,108.1 -10.00 26.5 Avaland Bhd 0.295 11.32 35,418.3 20.41 429.8 Fitters Diversified Bhd 0.050 11.11 7,772.3 0.00 117.1 Aemulus Holdings Bhd 0.360 10.77 8,149.1 14.29 241.2 Thriven Global Bhd 0.105 10.53 2,867.0 0.00 57.4 Destini Bhd 0.055 10.00 2,234.4 -8.33 108.1 Data as compiled on Feb 22, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) SC Estate Builder Bhd 0.010 -33.33 2,919.8 -35.71 32.2 ZEN Tech International Bhd 0.015 -25.00 707.5 -25.00 40.0 Talam Transform Bhd 0.015 -25.00 311.0 0.00 64.4 Xidelang Holdings Ltd 0.025 -16.67 750.0 0.00 52.9 BSL Corp Bhd 0.030 -14.29 1,014.7 -33.33 57.9 Reach Energy Bhd 0.030 -14.29 10.0 -25.00 63.9 Ta Win Holdings BHD 0.030 -14.29 6,660.7 -25.00 103.1 Innity Corp Bhd 0.405 -10.00 21.0 -15.63 56.5 Velocity Capital Partner Bhd 0.045 -10.00 560.1 0.00 62.2 Silver Ridge Holdings Bhd 0.380 -9.52 8,034.0 -66.96 84.6 RCE Capital Bhd 2.830 -8.71 4,349.9 -7.52 2,074.0 Kanger International Bhd 0.060 -7.69 370.6 -7.69 43.9 TechnoDex Bhd 0.065 -7.14 10.0 -18.75 54.8 Ho Hup Construction Co Bhd 0.200 -6.98 1,796.6 -20.00 103.7 ENRA Group Bhd 0.605 -6.92 3.0 -1.63 81.6 Ivory Properties Group Bhd 0.070 -6.67 176.8 -12.50 34.3 Industronics BHD 0.070 -6.67 7,804.1 40.00 49.5 Globaltec Formation Bhd 0.520 -6.31 229.0 -13.33 139.9 White Horse Bhd 0.610 -6.15 15.0 -3.17 134.5 Meridian Bhd 0.080 -5.88 795.9 -15.79 18.1 Data as compiled on Feb 22, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) Allianz Malaysia Bhd 18.640 -0.420 181.5 1.08 3,317.3 Nestle Malaysia Bhd 121.700 -0.300 91.8 3.49 28,538.7 PPB Group Bhd 15.200 -0.300 782.3 4.97 21,623.5 United Plantations BHD 20.720 -0.280 121.3 16.40 8,594.3 RCE Capital Bhd 2.830 -0.270 4,349.9 -7.52 2,074.0 Tenaga Nasional Bhd 11.220 -0.160 4,034.8 11.75 64,933.9 Petronas Dagangan Bhd 22.720 -0.140 366.2 4.03 22,571.3 YTL Power International Bhd 3.780 -0.120 34,585.7 48.82 30,626.1 Kotra Industries Bhd 4.800 -0.120 119.1 -0.62 711.9 Amway Malaysia Holdings Bhd 6.740 -0.110 3.7 14.63 1,108.0 KLCCP Stapled Group 7.320 -0.090 640.0 3.24 13,215.0 MNRB Holdings Bhd 1.840 -0.080 2,306.4 50.82 1,440.9 Spritzer BHD 2.170 -0.080 878.0 18.58 692.9 Atlan Holdings Bhd 2.710 -0.070 8.9 -2.87 687.4 YTL Corp Bhd 2.150 -0.070 34,867.8 13.76 23,573.4 Apex Healthcare Bhd 2.940 -0.070 1,485.4 18.07 2,112.6 Malayan Cement Bhd 4.830 -0.070 1,989.6 14.18 6,333.1 Gamuda Bhd 5.060 -0.060 4,849.6 10.24 13,852.6 HAP Seng Consolidated Bhd 4.760 -0.060 602.4 4.62 11,850.8 Lysaght Galvanized Steel Bhd 2.390 -0.060 3.4 7.66 99.4 Data as compiled on Feb 22, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) Malaysian Pacific Industries 28.780 2.600 744.3 2.06 5,725.2 Hong Leong Industries Bhd 10.280 0.700 195.8 11.62 3,284.2 ViTrox Corp Bhd 7.640 0.430 1,348.9 4.80 7,223.0 Kuala Lumpur Kepong Bhd 22.860 0.260 819.3 4.77 24,653.0 Fraser & Neave Holdings Bhd 29.420 0.220 68.0 5.10 10,790.6 Pentamaster Corp Bhd 4.540 0.190 1,502.2 -1.30 3,229.4 Frontken Corp Bhd 3.740 0.180 14,194.3 15.43 5,882.7 Kia Lim Bhd 0.780 0.175 5,441.0 67.74 48.3 Kesm Industries Bhd 6.780 0.160 17.3 -4.10 291.6 Carlsberg Brewery Malaysia 19.300 0.160 348.6 0.10 5,900.9 Sam Engineering & Equipment 4.340 0.160 1,150.9 8.72 2,351.2 Panasonic Manufacturing M BHD 17.940 0.140 6.2 -0.33 1,089.8 Notion VTEC Bhd 0.455 0.140 86,719.6 42.19 234.7 Dutch Lady Milk Industries BHD 24.000 0.140 297.5 3.63 1,536.0 Dufu Technology Corp Bhd 1.870 0.130 4,028.0 -1.58 992.1 Mi Technovation Bhd 2.070 0.130 3,222.9 11.89 1,849.7 Genetec Technology Bhd 2.050 0.110 4,856.8 -13.14 1,589.0 Ge-Shen Corp Bhd 1.880 0.110 1,097.7 62.07 229.3 Dialog Group Bhd 2.300 0.100 59,572.4 11.11 12,977.9 Coraza Integrated Technology 0.515 0.095 13,807.6 18.39 254.2 Data as compiled on Feb 22, 2024 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 38,612.24 -59.45 -0.15 S&P 500 * 4,981.80 -44.81 -0.89 NASDAQ 100 * 17,478.91 -483.49 -2.69 FTSE 100 * 7,671.25 98.67 1.30 AUSTRALIA 7,611.20 -33.64 -0.44 CHINA 2,988.36 122.46 4.27 HONG KONG 16,742.95 996.37 6.33 INDIA 73,158.24 1,562.75 2.18 INDONESIA 7,339.64 104.48 1.44 JAPAN 39,098.68 2,201.26 5.97 KOREA 2,664.27 43.95 1.68 PHILIPPINES 6,903.15 52.99 0.77 SINGAPORE 3,222.94 84.64 2.70 TAIWAN 18,852.78 756.71 4.18 THAILAND 1,402.47 14.10 1.02 VIETNAM 1,227.31 28.78 2.40 Data as compiled on Feb 22, 2024 Source: Bloomberg CPO RM 3,836.00 3.09 OIL US$ 82.72 6.97 RM/USD 4.7755 RM/SGD 3.5614 RM/AUD 3.1435 RM/GBP 6.0532 RM/EUR 5.1826 * Based on previous day's closing