CEOMorningBrief w e d n e s d ay, J U n e 1 2 , 2 0 2 4 I s s u e 7 7 8 / 2 0 2 4 th e ed g emalay s ia. com Discover the perfect balance of elegance and eco-friendly living, nestled close to the city yet surrounded by lush greenery. Strategically located in Klang Valley North, Valeria offers every amenity and convenience you need to thrive in a self-sustainable township. 11 Acres of Pollinator & Private Thematic Garden Gated & Guarded Living next to 50 Acres Central Park Walking Distance to Retail Shops & Restaurants Direct Access to 3 Major Highways Modern Biophilic Design with Seamless Indoor-Outdoor Living S H O W U N I T S AVA I L A B L E F O R V I E W I N G Semi-D, Cluster & Link Homes Gamuda Gardens Experience Gallery gamudaland.com.my 03 2727 7432 Bandar Serai Development Sdn Bhd [201301020260 (1050090-W)] Gamuda Gardens Experience Gallery, Persiaran Gamuda Gardens 1, Bandar Gamuda Gardens, 48050, Kuang, Selangor. Tel: 03 6037 2888 Phase 5A (Valeria) • Developer: Bandar Serai Development Sdn Bhd [201301020260 (1050090-W)] • Developer's License: 19124/02-2028/0234(R) . Validity Date: 09/02/2023 - 08/02/2028 • Advertising Permit: 19124-12/11-2025/0309(N)-(S) . Validity Date: 08/11/2022 - 07/11/2025 • Approving Authority: Majlis Perbandaran Selayang • Building Plan Approval: Bil. (14) dlm. MPS 3/2-1371/442(PB(A))F1-5A • Land Tenure: Leasehold (99 years - Expiring on 15/08/2120) • Land Encumbrances: Nil • Types of Property: 2-Storey Terrace Homes . Total Units: 251 units . Selling Prices: RM1,216,800.00 (min) to RM2,196,800.00 (max) • Types of Property: 2.5-Storey Terrace Homes . Total Units: 19 units . Selling Prices: RM2,039,800.00 (min) to RM2,564,800.00 (max) • Phase 5B (Valeria) • Developer: Bandar Serai Development Sdn Bhd [201301020260 (1050090-W)] • Developer's License: 19124/02-2028/0234(R) . Validity Date: 09/02/2023 - 08/02/2028 • Advertising Permit: 19124-13/04-2026/0484(N)-(S) . Validity Date: 21/04/2023 - 20/04/2026 • Approving Authority: Majlis Perbandaran Selayang • Building Plan Approval: Bil. (28) dlm. MPS 3/2-1371/442(PB(A))F1-5B • Land Tenure: Leasehold (99 years - Expiring on 15/08/2120) • Land Encumbrances: Nil • Types of Property: 2-Storey Semi-D . Total Units: 20 units . Selling Prices: RM2,593,962.00 (min) to RM3,064,012.00 (max) • Types of Property: 2-Storey Cluster Homes . Total Units: 76 units . Selling Prices: RM2,453,542.00 (min) to RM3,397,212.00 (max) • Types of Property: 3-Storey Cluster Homes . Total Units: 24 units . Selling Prices: RM2,642,752.00 (min) to RM4,301,612.00 (max) • Types of Property: 2-Storey Terrace Homes . Total Units: 44 units . Selling Prices: RM2,637,992.00 (min) to RM3,895,822.00 (max) • Expected Date of Completion: July 2025 • 7% Discount for Bumiputera • Restriction of Interest: The land shall not be transferred, leased or charged without prior approval by the State Authority • THIS ADVERTISEMENT HAS BEEN APPROVED BY JABATAN PERUMAHAN NEGARA. The information contained in this advertisement may be changed or deleted or altered at any time without prior notice and/or subject to amendment as may be required by the developer, the authorities & the developer’s consultant from time to time. This advertisement shall not be construed or deemed to be representation by the developer in any way whatsoever. Purchasers are advised to refer to actual information, specifications or plans as inserted in the Stamped Sale & Purchase Agreement entered between the developer & the purchaser. All drawings are merely artist impressions only.
CEOMorningBrief WEDNESDAY, JUNE 12, 2024 ISSUE 778/2024 theedgemalaysia.com MITI TO DEVELOP SPECIAL INCENTIVES FOR AI DATA CENTRES p7 Click here to read the magazine Celebrating 50 years of Malaysia-China Relations HOME: MOT terminates 15-year port dredging concession with Integrated Marine Works due to payment defaults — source p2 Johor Plantations signs five cornerstone investors for IPO to raise over RM700 mil, sources say p6 Malaysia should get rid of New Economic Policy, says former minister Idris Jala p6 ViTrox surges to two-year high post-bonus issue, after being associated with Nvidia and Foxconn p8 WORLD: World Bank says global growth stabilising but well below pre-pandemic levels p22 See reports on Pages 3 & 4 Data centre demand fuels land rush in Johor Three public-listed companies — S P Setia, UEM Sunrise, and Crescendo Corp announced sale of lands in the state on Tuesday, two of which are related to data centres. Singtel is said to be eyeing a plot in Iskandar Puteri for the same reason. 123RF
WEDNESDAY JUNE 12, 2024 2 THEEDGE CEO MORNING BRIEF published by ( 2 6 6 9 8 0 - X ) tel . 603-77218000 Level 3, Menara KLK, 1 Jalan PJU 7/6, Mutiara Damansara, 47810, Petaling Jaya, Selangor, Malaysia publisher + ceo . Ho Kay Tat editor-in-chief . Kathy Fong chief commercial officer . Sharon Teh chief operating officer . Lim Shiew Yuin editors . Jenny Ng . Tan Choe Choe 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] MOT terminates 15-year port dredging concession with Integrated Marine Works due to payment defaults — source KUALA LUMPUR (June 11): The Ministry of Transport (MOT) is believed to have terminated a 15-year concession agreement for port dredging and reclamation works with Integrated Marine Works Sdn Bhd (IMW) as the company has failed to remedy default in certain payments, according to a source. It is understood that the termination notice has been issued to the company on Tuesday, effective immediately. IMW will not be entitled to any form of compensation following the termination, according to the source familiar with the matter. IMW was granted a 15-year extension of its concession to provide dredging and reclamation works at all federal ports owned by the government in May 2022. Federal ports owned by the government include Port Klang, which is made up of Northport and Westports in Selangor; Port of Tanjung Pelepas and Johor Port in Johor; Penang Port; Teluk Ewa Port in Langkawi; Tanjung Bruas Port HOME BY EMIR ZAINUL theedgemalaysia.com in Melaka; Kemaman Port in Terengganu; Kuantan Port in Pahang; and Labuan Port. The new concession agreement was signed after the conclusion of the previous 15-year concession granted to IMW that began in 2004. During the initial concession, it was noted that IMW had completed 247 projects in accordance with the guidelines and specifications set by the MOT, and the projects were completed timely. The company had also constructed three dredger ships, namely Inai Ixora, Inai Liatree and Inai Kenanga in its own shipyard in Pulau Indah, Selangor during the period. The Edge Weekly last month reported that IMW had fallen into financial distress, resulting in receivers and managers AdamPrimus & Co PLT being appointed by Malayan Banking Bhd (Maybank) to get back monies owed to the bank. It was noted that the government had already suspended IMW’s concession at the time. IMW is wholly owned by private company Inai Kiara Sdn Bhd. According to filings with the Companies Commission of Malaysia (CCM), IMW chalked up an after-tax profit of RM265,751 on a revenue of RM41.78 million in revenue for its financial year ended Dec 31, 2021 (FY2021). IMW had total assets of RM191.9 million and total liabilities pegged at RM138.99 million, out of which more than 93% or RM129.84 million were current liabilities. IMW had retained earnings of RM47.91 million as at end-2021. The company, according to the CCM filing, had charges of RM582.8 million with Maybank in March 2017. Integrated Marine Works Sdn Bhd's 15-year concession agreement for port dredging and reclamation works is believed to have been terminated by the Ministry of Transport with immediate effect for failing to remedy default in certain payments, according to a source.
WEDNESDAY JUNE 12, 2024 3 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (June 11): Stateowned property developer UEM Sunrise Bhd (KL:UEMS) said on Tuesday that it is selling land for RM144.9 million cash for the development of a data centre in Johor. Located in Iskandar Puteri, the two parcels of freehold land measuring about 11.7 hectares (28.9 acres) will be developed for the construction of a data centre, which is “expected to feature cutting-edge technologies”, UEM Sunrise said in a statement. The company did not disclose the buyer but identified it as “a leading global data centre industry player”. The proposed disposal came on the heels of UEM Sunrise’s memorandum of understanding with LOGOS Infrastructure Holdco Pte Ltd signed in May to develop a data centre campus in Gerbang Nusajaya. UEM Sunrise chief executive officer Sufian Abdullah said the strategic land divestment reaffirms the company’s dedication to supporting Johor’s data centre ecosystem, ultimately addressing the global demand for data solutions. “Our southern land banks, being strategically positioned next to Singapore, shall benefit from the growing investments in Iskandar Puteri, Johor, as well as spillover effects for demand on our residential and commercial spaces. “As we reevaluate our remaining land bank potential, this divestment and monetisation strategy sets the groundwork for substantial technological, economic and community advancements in Johor,” he added. UEM Sunrise is the latest in a series of property developers that are selling off their lands for the development of data centres in Johor. On Monday, Eco World Development Group Bhd (KL:ECOWLD) said it plans to sell a 123.14-acre industrial land in Iskandar Malaysia, Johor to Microsoft Payments (Malaysia) Sdn Bhd, a company providing data centre services, for RM402.3 million. Read the full story UEM Sunrise to sell Johor land for RM144.9 mil to data centre company KUALA LUMPUR (June 12): Singapore Telecommunications Ltd, commonly known as Singtel, is believed to be the latest international company to be setting up a data centre in Johor, Malaysia. Singapore-listed Singtel, via its regional data centre business Nxera, is said to be in talks with Malaysian authorities to set up a data centre in Iskandar Puteri in the southern state, sources told The Edge. According to its website, Nxera currently operates two data centres in its home country of Singapore, namely DC West and Kim Chuan 2. Another data centre, DC Tuas, is currently under construction and is expected to be operational in 2025. Besides that, Nxera is also currently constructing a data centre in Thailand, and another one in Indonesia. Interestingly, property developer UEM Sunrise Bhd (KL:UEMS) said on Tuesday that it is selling land for RM144.9 million cash for the development of a data centre in Johor. Coincidentally, the two parcels of freehold land measuring about 11.7 hectares (28.9 acres) are also located in Iskandar Puteri. UEM Sunrise did not disclose the identity of the buyer, merely referring to it as “a leading global data centre industry player”. Notably, Malaysia has taken a somewhat liberal approach in welcoming companies from around the world to set up data centres in the country to boost its ambition to become a regional data centre hub. From 2021 to 2023, Malaysia approved RM114.7 billion worth of investments in data centres and cloud services, Singtel in talks to build data centre in Johor — sources BY EMIR ZAINUL theedgemalaysia.com BY EMIR ZAINUL theedgemalaysia.com REUTERS creating 2,325 high-value jobs in specialised fields such as data scientists, data analysts, data engineers, cybersecurity analysts, and network engineers, according to Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz. The minister announced on Tuesday that his ministry is developing special incentives for AI data centres, as part of the government’s show of commitment to accelerate the nation’s digital transformation agenda across all sectors, while also facilitating the transition to a high-income economy. Last month, Google announced that it has committed to investing US$2 billion (RM9.43 billion) in Malaysia to develop its first data centre and Google Cloud region in the country, which will be located in Sime Darby Property Bhd’s (KL:SIMEPROP) Elmina Business Park in Selangor. Earlier in May, Microsoft Corp unveiled its plan to invest US$2.2 billion (RM10.38 billion) over the next four years in cloud and AI infrastructure in Malaysia. Bridge Data Centres, a firm backed by Chinese tech firm ByteDance, had also in February announced its expansion to Cyberjaya with the development of its third data centre, MY02. Meanwhile, China-based GDS Holdings had in March announced that it has already invested RM14.33 billion in Johor with the opening of two data centres in Nusajaya Tech Park and Kempas Tech Park. Back in 2023, Amazon Web Services said it planned to invest US$6 billion (RM28.16 billion) in Malaysia by 2037 to strengthen its cloud services infrastructure in the country. In the same year, YTL Power International Bhd (KL:YTLPOWR) confirmed that it is collaborating with Nvidia Corp to build an AI infrastructure that will be powered by the US-based chip giant’s technology, with the first phase of the data centre expected to commence operations by the middle of this year. See related story on Page 7
WEDNESDAY JUNE 12, 2024 4 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (June 11): S P Setia Bhd (KL:SPSETIA) says it has started pre-IPO (initial public offering) preparatory works to explore the establishment of a real estate investment trust that will have a diverse asset portfolio. The REIT may include retail complexes, office buildings, schools and a convention centre, S P Setia said in a statement. It aims to establish a new pathway for investor value and company growth via the REIT. “Our strategy to realise the values of our identified land assets has brought us one step closer to an even stronger financial state and supports our efforts to diversify our income base. We remain committed to our ethos of excellence and innovation, driving growth while delivering superior value to our stakeholders,” said the group’s president and CEO Datuk Choong Kai Wai. The group said this as it announced that it had sold its 959.72-acre land in Tebrau for RM564 million in cash to Senibong Island Sdn Bhd, a company linked to tycoon Tan Sri Syed Mokhtar Al-Bulkhary. In March, S P Setia said in its latest annual report that it was planning to continue cutting its debt as well as sell more unimportant assets to improve its investment properties for a potential REIT. At the time, it still owned over 6,300 acres of land that could command a gross development value of up to RM119.74 billion. In November last year, the company sold 18 acres of land in Setia City to KSL Bestari Sdn Bhd for RM228.8 million. Prior to that, in June, the company disposed of 500 acres of land in Semenyih to Mah Sing Group Bhd (KL:MAHSING) for RM392.04 million. S P Setia’s share price settled unchanged at RM1.48 on Tuesday, for a market capitalisation of RM7.03 billion. Year to date, the stock has jumped 85%. S P Setia says it has started pre-IPO works for REIT KUALA LUMPUR (June 11): S P Setia Bhd (KL:SPSETIA), which previously failed to sell its 959.72-acre Tebrau land to Scientex Bhd (KL:SCIENTX) due to Bumiputera requirement issues, has finally sold the plot to a company linked to tycoon Tan Sri Syed Mokhtar Albukhary for RM564 million, cash. S P Setia first tried to sell the land to Scientex in 2021 for RM518.1 million, KUALA LUMPUR (June 11): Crescendo Corp Bhd (KL:CRESNDO) announced another land sale to a data centre company. This time around, the property developer is selling a parcel of land in Pulai for RM115.88 million, cash. Crescendo’s wholly owned unit Panoramic Industrial Development Sdn Bhd (PID) has inked a conditional sale and purchase agreement with Singapore-based data centre firm Digital Halo Pte Ltd for the land transaction. The tract measures about 20.463 acres, according to a stock exchange filing. The latest transaction marks the sixth land sale in seven months. In total, Crescendo has sold over 150 acres of land for data centre-related development, bringing in sales proceeds of more than RM790 million, cash. At at end-January this year, the group had cash and bank balances of RM54.9 million, while its shortterm loan amounted to RM81.61 million and long-term loans totalled RM267.26 million. The selling spree seems to have powered the rally on Crescendo’s share price, which has climbed over 56% year-to-date. Crescendo stated in the filing that the disposal consideration of RM115.88 million, or RM130 per square foot (psf), was negotiated on a “willing-buyer, willing-seller” basis, considering PID’s recent disposals in nearby areas to other data centre operators, including Microsoft Payments (Malaysia) Sdn Bhd. The estimated net gain from the proposed disposal, which is expected to be completed in the second half of this year, is RM71.21 million. The exercise is subject to approvals from Crescendo’s shareholders, as well as the Johor State Authority. but the deal fell through in March 2023 after Scientex failed to obtain a waiver of the Bumiputera equity condition imposed by the Economic Planning Unit (EPU). Four months later, both parties revisited the deal with an increased price of RM547.65 million. That was aborted in January this year after Scientex again failed to gain the EPU’s approval. In a statement on Tuesday, S P Setia said the disposal of the land was conducted through its subsidiary Pelangi Sdn Bhd and was completed earlier in the day with Senibong Island Sdn Bhd (SISB). “By unlocking the value of this asset, the deal enhances the company’s financial standing, contributing to an expected profit after tax of RM332 million,” said S P Setia. A quick check on the Companies Commission of Malaysia showed that SISB is linked to Syed Mokhtar, based on filings dated end-June 2023. SISB is owned by two shareholders: Sigma Senibina Sdn Bhd with a 49% stake and WM Senibong Sdn Bhd with a 51% stake. Sigma Senibina is wholly owned by Kelana Ventures Sdn Bhd, a company owned by Syed Mokhtar. Sigma Senibina also holds 1.74 million shares, representing a 37.82% stake, in WM Senibong. Syed Mokhtar’s firm buys S P Setia’s Tebrau land for RM564 mil cash Crescendo seals sixth land sale in seven months, to data centre firm BY JUSTIN LIM theedgemalaysia.com BY SYAFIQAH SALIM theedgemalaysia.com BY JUSTIN LIM theedgemalaysia.com Read the full story Read the full story THE EDGE
WEDNESDAY JUNE 12, 2024 5 THEEDGE CEO MORNING BRIEF
WEDNESDAY JUNE 12, 2024 6 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (June 11): Malaysia should get rid of the New Economic Policy (NEP) and replace it with a more inclusive framework that helps the poor regardless of race and religion, said former minister Datuk Seri Idris Jala. “We have had the NEP for a very long time. We should get rid of it but we should not leave [a] vacuum. We should replace it with a new policy that is inclusive of all,” he said during a panel discussion on Tuesday. The session, titled Economic Growth in Middle-Income Countries: How Can Countries Escape the Middle-Income Trap?, was organised by the World Bank Group. “Come up with a policy that says we will help the poor in this country regardless of race and religion, whether it is Malay, Chinese, or Indian,” he said. “As long as they belong in the B40 category, we will apply equal affirmative action. That is the way to go.” The NEP was introduced by the late Tun Abdul Razak Hussein in 1971 to reduce ethnic inequalities and eradicate poverty. It promoted Bumiputera participation in higher education as well as enterprise management based on the notion that Bumiputeras were the poorest in the country. “To get out from the middle-income trap, it is going to be a lot harder than it used to be. We have to make some radical changes. We can’t keep playing the same game all the time,” he said, adding that such reforms would also encourage Malaysians living abroad to return home. Idris was previously a minister in the Prime Minister’s Department and the chief executive officer of the Performance Management and Delivery Unit (Pemandu) from 2009 until 2015. He was tasked to lead the Economic Transformation Programme (ETP), which was an initiative to transform Malaysia into a high-income country by 2020. Malaysia should get rid of New Economic Policy, says former minister Idris Jala KUALA LUMPUR (June 12): Johor Plantations Group Bhd has secured five cornerstone investors for what would be the largest initial public offering (IPO) in more than two years, according to people familiar with the matter. The five cornerstone investors are Retirement Fund Inc (KWAP), Fortress Capital Asset Management (M) Sdn Bhd, AHAM Asset Management Bhd, Areca Capital Sdn Bhd and Aberdeen Asset Management Sdn Bhd, one of the people told The Edge. Johor Plantations is seeking to raise more than RM700 million from the IPO on Bursa Malaysia’s Main Market, another person said. The IPO is expected to be Malaysia’s largest in terms of proceeds raised since Farm Fresh Bhd (KL:FFB), which raised RM1 billion in March 2022. Johor Plantations did not respond to a request for comment that was made through its external public relation firm. Johor Corp owns Johor Plantations via Kulim (M) Bhd, which was taken private in August 2016. The listing would offer investors up to 35% of Johor Plantations’ enlarged share capital. The IPO involves up to 875 million shares comprising a public issue of 464 million new shares and an offer for sale of up to 411 million existing shares, according to its draft prospectus filed to Securities Commission Malaysia. Johor Plantations’ listing exercise comes at a time when Bursa Malaysia is seeing a resurgence of listings. The company will be the second plantation listing on Bursa this year, after its smaller peer MKH Oil Palm (East Kalimantan) Bhd’s (KL:MKHOP) debut on Johor Plantations signs five cornerstone investors for IPO to raise over RM700 mil, sources say BY JASON NG & HEE EN QI theedgemalaysia.com BY HEE EN QI theedgemalaysia.com Read also: Malaysia’s brain drain to Singapore inevitable due to currency differentials, says World Bank Malaysia’s wholesale and retail sales growth accelerates to 6.6% in April, official data show April 30, which raised RM155.43 million. Before MKH Oil Palm’s IPO, the last palm oil producer to list on Bursa was Matang Bhd (KL:MATANG) seven years ago in 2017. Bursa has hosted 20 IPOs so far this year, with the largest so far being the IPO of fertility specialist Alpha IVF Group Bhd (KL:ALPHA) that raised RM446.54 million. According to the draft prospectus, net profit for the first seven-month period of financial year ended Dec 31, 2023 (7MFY2023) fell 80% to RM58.34 million from RM292.13 million in the previous corresponding period, while revenue declined 44% to RM622.36 million from RM1.11 billion. This is in contrast with its performance in FY2022, with net profit growing 44% to RM495.59 million from RM344.8 million in FY2021, while revenue increased 13% to RM1.75 billion from RM1.55 billion. RHB Investment Bank is the IPO’s principal adviser and managing underwriter and joint bookrunner with AmInvestment Bank, CIMB Investment Bank, Affin Hwang Investment Bank, and CLSA. RHB Investment Bank, AmInvestment Bank, CIMB Investment Bank and CLSA are also joint global coordinators. “If the exchange rate remained the same as it was back then, we would have definitely reached high-income status by 2015. We were outstripping it by 3%,” he said. “But the problem was the depreciation of the ringgit. In the Malaysian currency, we have already made it.” Malaysia recorded a gross national income (GNI) per capita of US$10,400 (RM49,086) in 2015, according to the World Bank. At the time, the World Bank defined high-income economies as countries with a gross national income (GNI) per capita of US$12,475. In 2022, the latest available figure, Malaysia recorded a GNI per capita of US$11,830, still lower than the World Bank’s definition for high-income economies of US$13,845.
WEDNESDAY JUNE 12, 2024 7 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (June 11): As Malaysia gears up to take over as the chair of Asean in 2025, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz stressed the importance of aligning Asean’s direction with Malaysia’s national economic policies. Tengku Zafrul said the chairmanship presents an opportunity to showcase Malaysia’s capabilities on the international stage, building on the Asean Community Vision 2025 that was launched during Malaysia’s previous chairmanship in 2015. This includes enhancing trade and investment, integrating economies, forging a sustainable future, and embracing digital transformation which collectively aims to position Asean as a resilient, innovative, dynamic, and people-centred community, he said in his keynote speech at a forum on Expectations of Malaysia’s upcoming chairmanship of Asean, organised by the Asean Business Club. According to Tengku Zafrul, as the chair of Asean in 2025, Malaysia is poised to lead the regional block amid global megatrends such as de-globalisation due to geopolitical tensions, the race to net-zero emissions, and the shift towards an artificial intelligence (AI)-driven world. The transition for countries towards net-zero presents “new investment and trading opportunities centred around a greener future, including carbon credits, certificates, currents, or charging capabilities”, he said “Digital transformation and innovation are central to Asean’s re-industrialisation efforts,” Tengku Zafrul added. Countries like Malaysia, Singapore, Thailand and Vietnam are investing in automation, AI, and Internet of Things to boost industrial capabilities, he noted. As Malaysia prepares for its chairmanship, Tengku Zafrul said it seeks the supAsean chairmanship will give Malaysia the opportunity to showcase its capabilities, says Zafrul KUALA LUMPUR (June 11): The Ministry of Investment, Trade and Industry (Miti) will develop special incentives for artificial intelligence (AI) data centres, said its minister Tengku Datuk Seri Zafrul Abdul Aziz. He said that AI data centres have a significant and positive economic spillover effect. “Investment in advanced technology infrastructure and AI data centres can support the Madani government’s commitment to accelerate the nation’s digital transformation agenda across all sectors, while also facilitating the transition to a high-income economy. “From 2021-2023, Malaysia approved RM114.7 billion worth of investMiti to develop special incentives for AI data centres Bernama BY LUQMAN AMIN theedgemalaysia.com ments in data centres and cloud services, creating 2,325 high-value jobs in specialised fields such as data scientists, data analysts, data engineers, cybersecurity analysts, and network engineers,” he said in a post on X on Tuesday. Tengku Zafrul added that as such, Miti will ensure Malaysia remains a preferred investment destination for AI data centres. “The National Investment Council has agreed for the Malaysian Investment Development Authority (Mida) to provide an incentive framework, including the use of energy- and water-efficient equipment, as well as sufficient renewable energy to facilitate AI data centre investments in Malaysia,” he said. port of the private sector to ensure that the Asean framework aligns with business needs and global standards. “Beyond inter-governmental support from Asean member states, the success of Malaysia’s chairmanship in 2025 will require robust support from the private sector, including business players and industry leaders,” he added. Need for Malaysia to be firm on its neutrality amid geopolitical tension Tengku Zafrul also said that Asean, and by extension Malaysia, must remain a “nonaligned and open trading region for all” and uphold its neutrality and independence amid the international trend of de-risking or de-globalisation caused by geopolitical tension. “Investors, exporters, countries and economic blocs must carefully position themselves in a multipolar world where the new power equilibrium or world order remains uncertain,” he said. He said Malaysia has the potential to become the epicentre of growth in the Global South as the economic bloc’s dialogue partners, including India, China, the European Union as well as the US are revising their outlook and commitment to strengthen trade and investment ties. “Countries such as Canada, the Gulf Cooperation Council and Switzerland are also seeking to fortify their economic ties with Asean,” he added. Malaysia, which previously chaired Asean in 1977, 1997, 2005, and 2015, will assume the chairmanship once again in 2025 as it takes over the leadership role from Laos. “We feel privileged to once again set the regional integration agenda for Asean with the launch of the Asean Community Vision 2045 during our upcoming chairmanship,” Tengku Zafrul said. Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said that Asean, and by extension Malaysia, must remain a ‘non-aligned and open trading region for all’ and uphold its neutrality and independence amid the international trend of de-risking or de-globalisation caused by geopolitical tension. SHAHRILL BASRI/THE EDGE See related story on Page 3
WEDNESDAY JUNE 12, 2024 8 THEEDGE CEO MORNING BRIEF HOME SunCon charts another new all-time high after data centre contract upsized KUALA LUMPUR (June 11): Shares of ViTrox Corp Bhd (KL:VITROX) climbed as much as 19% on Tuesday, extending a rally after being associated with Nvidia Corp and Foxconn Industrial Internet Co Ltd. By market close on Tuesday, ViTrox pared some gains to settle at RM4.85, up 60 sen or 14%, giving it a market capitalisation of RM9.17 billion. The latest closing price was the stock’s highest since Jan 7, 2022, after adjusting for ViTrox’s one-for-one bonus issue, which went ex on Monday (June 10). Penang-based ViTrox is a producer of machinery and equipment designed to automate the rigorous testing of semiconductor devices. Notably, in Nvidia Corp chief executive officer Jensen Huang’s keynote address at Computex Taipei, ViTrox was shown as one of the key players of edge artificial intelligence (AI) and robots in the factory ecosystem of Foxconn Industrial Internet. A subsidiary of Hon Hai Precision Industry Co Ltd, Shanghai-listed Foxconn Industrial Internet is involved in cloud and edge computing, industrial ViTrox surges to two-year high post-bonus issue, after being associated with Nvidia and Foxconn BY CHESTER TAY theedgemalaysia.com BY ANIS HAZIM theedgemalaysia.com internet, smart home solutions, 5G and network communication equipment, as well as smart mobile devices and wearables. “We are proud to be an associate of the supply chain and are fully committed to delivering the most advanced, innovative and cost-effective vision inspection, AI and robotic solutions. “ViTrox will continue to work handin-hand with all industry players toRead also: US-based MKS Instruments to build a factory in Penang PUC surges to 25-month high following acquisition plan Managepay Systems’ shares near five-month high following KTMB contract win Sunway Construction Group Bhd 0 10 20 30 June 12, 2023 June 11, 2024 1 2 3 4 Vol (mil) RM *RM3.74 RM1.63 *As at market close on June 11, 2024 Source: Bloomberg KUALA LUMPUR (June 11): Shares of Sunway Construction Group Bhd (KL:SUNCON) charted another new alltime high on Tuesday after one of its data centre contracts was upsized to RM3.2 billion, from RM1.7 billion. SunCon rose as much as 17% or 56 sen to RM3.87. The stock closed at RM3.74, still up 13% or 43 sen, valuing the company at RM4.84 billion. More than 20 million shares changed hands, over nine times the stock’s 200-day moving average. “This expansion will significantly enhance the company’s presence in the growing data centre market and boost its future earnings visibility,” said TA Securities. The addition of RM1.5 billion in contract value will add RM89 million to its net profit throughout the construction period, the house said. Shares of SunCon have risen 88% year-to-date amid a broad rally in the construction sector, fuelled by optimism about the government’s rollout of major infrastructure projects. A slew of high-margin jobs, particularly to build data centres, have also boosted shares of select companies, including SunCon. A majority of 10 of 14 analysts covering SunCon recommended investors to Vitrox Corp Bhd 0 10 20 30 June 12, 2023 June 11, 2024 3 4 5 Vol (mil) RM *RM4.85 RM3.91 *As at market close on June 11, 2024. Source: Bloomberg wards making a net-positive impact on the world,” ViTrox said in a Facebook post last Friday (June 7). Huang delivered his keynote address on June 2, and ViTrox shares climbed 2.2% on the first trading day (June 4) after that. The counter made incremental increases over the next three trading days through June 7, before gaining another 7% on Monday. “buy” the stock, while one rated SunCon as “hold” and three have “sell” calls. The stock has surpassed the consensus’ 12-month target price of RM3.69, according to Bloomberg. “We expect a significant revitalisation of the construction sector in 2024,” said Kenanga Investment Bank, citing rollout of major infrastructure projects and a vibrant private sector construction market, backed by massive investment in new semiconductor foundries and data centres. SunCon on Monday said that it had accepted a revised contract price of RM3.2 billion for a data centre construction project in Sedenak Tech Park (STeP), Johor.
WEDNESDAY JUNE 12, 2024 9 THEEDGE CEO MORNING BRIEF
wednesday june 12, 2024 10 The E dge C E O m o rning brief home Malaysia’s burgeoning palm oil stockpile threatens to weigh on prices — analysts PublicInvest starts coverage on Optimax, target price 83 sen UOB sees bumpy path for capital flows into emerging markets, including Malaysia by Surin Murugiah theedgemalaysia.com by Emir Zainul theedgemalaysia.com by Surin Murugiah theedgemalaysia.com KUALA LUMPUR (June 11): Malaysia’s robust foreign portfolio inflows in May, totalling RM7 billion, marked the largest inflows since July 2023, according to UOB Global Economics & Markets Research. In a macro note on Tuesday, the research house said going forward, it continues to expect a bumpy path for capital flows into emerging markets, including Malaysia. “This is premised on the uncertain start to the US Fed’s rate cut cycle, lingering geopolitical risks, increasing trade protectionisms and rising concerns about domestic policy reforms. “Relatedly, the ringgit (MYR) will remain subject to volatility despite the ongoing coordinated measures conducted by the authorities,” it said. UOB said Bank Negara Malaysia estimated that there is US$6 billion-US$7 billion (RM28.3 billion-RM33 billion) of potential annual income to be converted to help offset negative outflows and to be an active stabiliser for the ringgit. “A stronger correlation to the Chinese yuan (CNY) would also turn into a tailwind for the MYR as the CNY is widely expected to rebound in 2H24. “Hence, we project USD/MYR to recover at a measured pace to 4.65 in Q24 and 4.60 in 4Q24, from yesterday (10 Jun)’s closing of 4.7230,” it said. Read also: Ringgit seen strengthening to 3.43-3.45 against SGD by year-end KUALA LUMPUR (June 11): Malaysia’s stockpile of palm oil may continue to swell in the coming months on seasonal strength in production and weigh on prices, analysts cautioned. At least seven research houses maintained their neutral view on the plantation sector following the release of palm oil stocks data by the Malaysian Palm Oil Board (MPOB) that showed a 0.5% month-on-month expansion in inventory for May. Output will likely peak at the end of June or by the third quarter, supported by improving weather conditions and productivity, BIMB Securities said. Demand could be subdued as palm oil is still trading at a small discount against more expensive substitute soybean oil, the research house said. Prices of the edible oil used in everything from lipstick to diesel have climbed about 5% so far this year as poor weather conditions in key producing nations Malaysia and Indonesia stoked concerns over output and potential tightening in supply. The benchmark palm oil contract for August delivery was trading at around RM3,887 per tonne on Bursa Malaysia Derivatives on Tuesday. However, prices are down 12% from a high of RM4,407 per tonne on April 3. Further, strong shipments in May are at risk from Indonesia’s move to cut palm oil-related tariffs in June, which will reduce the export tax to US$18 (RM84.99) per tonne and the levy to US$75 per tonne. All in all, the move could lower export costs by US$49 per tonne compared to the previous month. Malaysia is losing competitiveness in palm oil exports, TA Securities warned. If production stays at its current robust pace, it would lead to burgeoning palm oil stockpiles and potentially limit the upside, the research house said. TA Securities would also review its current forecast for crude palm oil to average RM4,000 per tonne in 2024 if South America’s soybean supply turns out to be lower than expected, demand recovers more meaningfully, and production costs fall significantly. MPOB data released on Monday showed palm oil inventory totalling 1.75 million tonnes in May in the world’s largest palm oil producing nation after Indonesia, as higher exports and domestic consumption were more than offset by higher output. Production surged 13.5% from April to 1.70 million tonnes in May, the biggest in six months. Exports, meanwhile, rose to a six-month high of 1.38 million tonnes, up 11.66% from April, the MPOB said. For strategy, MIDF Amanah Investment Bank said now is the best time for investors to lock in profits for its top picks, such as Ta Ann Holdings Bhd (KL:TAANN) and IOI Corp Bhd (KL:IOICORP), “as we anticipate the increase in share price will gradually decline towards the end of the quarter”. TA Securities, BIMB, and MIDF have a ‘neutral’ outlook on the sector. KUALA LUMPUR (June 11): PublicInvest Research has initiated coverage on Optimax Holdings Bhd (KL:OPTIMAX) with an “outperform” rating at 68 sen and a target price (TP) of 83 sen, based on a 27x price earnings ratio pegged to FY2025F earnings per share of 3.1 sen. In a note on Tuesday, the research house said it believes Optimax’s growth prospect hinges on growing demand for cataract surgeries, fuelled by an increasing ageing population in Malaysia, whereby the proportion of individuals aged 65 and above has increased from 7.2% in 2022 to 7.4% in 2023, totalling approximately 2.5 million people. Furthermore, PublicInvest said a surge in diagnosed diabetes cases and the increased usage of electronic gadgets may lead to higher occurrence of eye-related diseases. Read also: HLIB stays optimistic on UMediC’s strategic advantage Cypark may trend higher, says Rakuten Trade
wednesday june 12, 2024 11 The E dge C E O m o rning brief home news In brie f Singapore PM arrives in Malaysia for two-day working visit SEPANG (June 11): Singapore Prime Minister Lawrence Wong arrived in Malaysia on Tuesday to begin his twoday working visit to strengthen ties and bilateral cooperation between the two countries. He arrived with his delegation at the Kuala Lumpur International Airport (KLIA) Terminal 1 at 8.50pm on a commercial flight and were greeted by the Foreign Ministry’s Chief of Protocol Datuk Mohd Aini Atan. Wong’s visit was at the invitation of Prime Minister Datuk Seri Anwar Ibrahim and also his first overseas trip since being sworn in as Singapore’s fourth prime minister on May 15. — Bernama Read the full story SBH Kibing to build RM7.2 bil solar glass manufacturing plant in Sabah KOTA KINABALU (June 11): Kibing Group’s subsidiary, SBH Kibing New Solar Energy (M) Sdn Bhd (SBH Kibing), is set to make a significant investment of RM7.2 billion to build a new six-production line solar glass manufacturing plant in Kimanis, Papar. The company had signed a memorandum of understanding (MOU) with the Sabah state government via the state’s Industrial Development and Entrepreneurship Ministry, marking its commitment to its latest venture. The Kibing Group has already invested more than RM3 billion in the silica sand processing plant and solar glass manufacturing plant in Kota Kinabalu Industrial Park (KKIP). In a statement on Tuesday, the state government said SBH Kibing’s RM7.2 billion investment is expected to create 5,000 job opportunities for Sabahans. — Bernama Read the full story Agricore’s IPO for public oversubscribed by over 130 times KUALA LUMPUR (June 11): Agricore CS Holdings Sdn Bhd (KL:AGRICOR) said investors have snapped up the 51.7 million shares it made available to the public for its initial public offering (IPO) at 50 sen per share. The ACE-Market-bound food ingredient supplier’s IPO involves 25.5% of its enlarged share capital. The company received a total of 15,304 applications for 1.34 billion shares with a value of RM669.2 million from the Malaysian public, which represents an overall oversubscription rate of 130.99 times. — by Luqman Amin Read the full story Bermaz Auto’s 4Q net profit drops 10% KUALA LUMPUR (June 11): Bermaz Auto Bhd (KL:BAUTO) said its net profit fell 10.3% to RM90.2 million for its fourth quarter ended April 30, 2024 (4QFY2024), from RM100.6 million a year ago, dragged down by lower revenue despite higher profit contribution from associated company Kia Malaysia Sdn Bhd. Bermaz Auto declared a fourth interim dividend of 4.75 sen per share and a special dividend of seven sen per share, totalling 11.75 sen per share, to be paid on Aug 2. This brings its total dividend for FY2024 to 26 sen per share, as against 22 sen per share in FY2023. — by Choy Nyen Yiau Read the full story Abrdn becomes Aurelius Technologies’ substantial shareholder KUALA LUMPUR (June 11): UK-based Abrdn plc has emerged as a substantial shareholder of Kedah-based electronic manufacturing services (EMS) provider Aurelius Technologies Bhd (KL:ATECH). Abrdn purchased 27.83 million shares, representing a 7.062% stake in the company, on June 6, according to a bourse filing by ATech. The transaction price was not disclosed. — by Syafiqah Salim Singapore Prime Minister Lawrence Wong arrived with his wife Loo Tze Lui at the Kuala Lumpur International Airport (KLIA) Terminal 1 on Tuesday night for his two-day visit to Malaysia. bernama Read also: Gamuda Land’s redevelopment plans for 75 London Wall building in London approved Axteria gets three-month extension to implement private placement Bintai Kinden bags RM22 mil contracts Hong Leong Bank issues RM1 bil debt notes Hektar Asset Management CEO resigns KUALA LUMPUR (June 11): Hektar Asset Management Sdn Bhd, the manager of Hektar Real Estate Investment Trust (KL:HEKTAR), has announced the resignation of its executive director and CEO Johari Shukri Jamil effective immediately. Johari, 52, has decided to step down to pursue new opportunities after holding the CEO post for two years, according to a statement. — by Syafiqah Salim Read the full story Talam Transform’s boss Chan Ah Chye passes away at age 78 KUALA LUMPUR (June 11): Tan Sri Dr Chan Ah Chye, the major shareholder and director of property developer Talam Transform Bhd (KL:TALAMT), passed away on Tuesday morning at the age of 78. In a filing with Bursa Malaysia, Talam Transform confirmed the demise of Chan, who was its non-independent and nonexecutive director — a post he was re-designated to in 2009. Prior to that, Chan, who joined the group’s board on Nov 6, 1990, was the group’s executive chairman. — by Liew Jia Teng Read the full story
wednesday june 12, 2024 12 The E dge C E O m o rning brief home PUTRAJAYA (June 11): Communications Minister Fahmi Fadzil wants the Malaysia Government Call Centre (MyGCC) to record data on the number of calls and questions received from the public regarding the newly implemented targeted diesel subsidy system. Speaking to the media after the ministry’s monthly assembly for June here Tuesday, he said the data will be compiled and presented in post-Cabinet meetings. “On the ministry’s part, we will examine if there are consistent issues raised (regarding the diesel subsidy), and we will forward them to the relevant ministries and the Cabinet,” he said. At the same time, Fahmi also wants MyGCC to be able to answer callers’ questions regarding the diesel subsidy clearly and concisely. Putrajaya to study public feedback on targeted diesel subsidy, says Fahmi PUTRAJAYA (June 11): Prime Minister Datuk Seri Anwar Ibrahim announced that savings from the targeted diesel subsidy will be redirected to the people, particularly through improved public transportation and the Rahmah Cash Contribution (STR). Acknowledging that the targeted subsidy is not a popular move, Anwar, who is also finance minister, stated that the measure would result in savings of RM4 billion annually, and had undergone research at numerous levels before being implemented. “The savings (from targeted diesel subsidies) will support public transportation needs. “Imagine the STR for nine million recipients of direct cash subsidy, which amounts to RM10 billion. The funds from the targeted subsidy are not for increasing ministerial allowances or other interests; I focus on assisting the people,” he said during a gathering of Ministry of Finance staff here on Tuesday. The price of diesel at all retail stations in the Peninsula was set at RM3.35 per litre starting Monday, which is the unsubsidised market price based on the average for May 2024, according to the Automatic Price Mechanism formula. Previously, Second Finance Minister Datuk Seri Amir Hamzah Azizan was reported to have said that from now on, diesel prices would be announced weekly following the current practice of the Ministry of Finance, with the government continuing to monitor the situation to avoid price instability. However, he stated that the targeted subsidy does not involve Sabah and Sarawak. Meanwhile, Anwar emphasised that the targeted diesel subsidy was implemented to ensure it did not benefit the very wealthy and foreigners. “I told the Cabinet we need to make wise decisions, we must assist the majority of the people. We should not provide subsidies to the very wealthy, large industries, and foreigners. “(This) is not discrimination against foreigners because foreigners do not pay taxes...the levy (they pay) is very little. Our main responsibility is to our citizens,” he said. He noted that the implementation of targeted diesel subsidy has been well received by parties within the unity government and some opposition parties as well, and it will be monitored to prevent issues. “So far, the statements from PAS leaders seem rather moderate, not opposing but merely monitoring. There are no issues because the opposition should monitor the implementation, and so should we. Read the full story Read also: Effective tax policies crucial to fostering ongoing growth, says deputy FM Fleet card limit based on volume of diesel purchase: Lim GEORGE TOWN (June 11): Asean member states must keep pushing for improved integration through the linking up of railway networks to achieve greater free flow of goods within the region, said Transport Minister Anthony Loke. He said rail connectivity, particularly the connection from Peninsular Malaysia to Thailand, Laos and China, has been a long-term vision of Asean. “If we can have this, then we can realise the Pan-Asian railway network because once you reach Kunming, you can reach Central Asia and even Europe. We have been talking about this for the past 30 years. “There has not been much progress on the Kunming-Singapore railway network even though there are already railway lines connecting these countries. However, there are missing dots and missing links,” he told a press conference after opening the 57th Asean Senior Transport Officials Meeting (STOM) here on Tuesday. Besides the physical railway track, member states must also iron out issues regarding regulations and cross-border customs clearance for the region to have a streamlined journey for goods and passengers in the future. Loke said Malaysia is conducting a preliminary feasibility study on the Trans-Borneo Railway project to explore the pros and cons in terms of the commercial, technical and other aspects of the proposed network to complement the existing transport networks in Borneo. “The feasibility study will be completed in the next nine months and once that is done, we can decide how to move forward,” he said. Read also: Targeted diesel subsidy: Express, school bus operators should not raise fares — Loke DOSM: Malaysia’s natural rubber output down 20.9% in April Anwar: Savings from targeted diesel subsidy to go back to people Transport minister urges push for integrated railway network among Asean countries Bernama Bernama Bernama
wednesday june 12, 2024 13 The E dge C E O m o rning brief home KUALA LUMPUR (June 11): Sarawak Report editor Clare Rewcastle-Brown’s leave to appeal Terengganu Sultanah Nur Zahirah’s defamation action against her and two others will now be heard on Sept 10. The Federal Court had started hearing the leave application online earlier on May 30 but it had to be cut short due to the internet issues faced by the editor’s lawyer Americk Sidhu. The senior lawyer was attending proceedings from overseas. Sarawak Report editor’s leave to appeal against sultanah’s defamation action set for September KUALA LUMPUR (June 11): 1Malaysia Development Bhd (1MDB), its subsidiaries, and SRC International Sdn Bhd have filed an application seeking a Mareva injunction (asset-freezing order) and other injunctive relief against Datin Seri Rosmah Mansor to bar her from removing or disposing of any of her assets up to the amount of nearly US$350 million (RM1.6 billion). This is in relation to the companies’ suit against Rosmah and another, over luxury goods which were allegedly obtained through the misappropriation of the plaintiffs’ funds in what is now known as the 1MDB and SRC scandal. In the application filed on Monday (June 10), Ministry of Finance Incorporated (MOF Inc) companies and nine other plaintiffs are seeking an injunction preventing Rosmah from disposing of assets amounting to US$346.01 million, whether in the form of credit, company shares, real property, or others. They are also seeking for the wife of imprisoned former prime minister Datuk Seri Najib Razak to put in writing the details of all her assets — whether inside or outside of Malaysia — within 14 days after the order is served. In the application seen by The Edge, Rosmah would be allowed to withdraw RM10,000 monthly, or any other sum ordered by the court, for her living and legal expenses. She would have to first disclose the source of these funds to the plaintiffs. A Mareva injunction is a court order which essentially freezes the defendant’s assets to prevent any transfer of said assets that a plaintiff is seeking to recover, until the disposal of or determination of the main suit. Besides the Mareva injunction, the companies are also seeking a proprietary injunction where Rosmah is barred from transferring, disposing of, or dealing with the items until the full disposal of the case. The companies are also seeking an interim preservation order for Rosmah to hand over the luxury goods to the safe custody of the Royal Malaysian Police or any other party deemed fit by the court. The companies also want Rosmah to disclose “full and accurate” details of these goods, including their locations, or disclose details of parties to whom the items or proceeds may have been transferred. Should the court grant the order as sought, and if Rosmah defies the said order, she may be guilty of contempt of court and could serve time in jail. 1MDB, SRC seek to freeze Rosmah’s assets in luxury goods lawsuit Rosmah’s lawyers claim application is ‘an abuse of process’ The inter partes (between parties) application will be heard on Friday (June 14). Lawyers Reza Rahim and Rajivan Nambiar, who are representing Rosmah, said that the application is an abuse of process and that their client would “vigorously oppose” it. “We have just been served with the injunction papers today. Our client will vigorously oppose the same, particularly when the High Court hearing the forfeiture of these items had previously ruled that the prosecution had failed to prove that the items were products gained from criminal breach of trust (CBT) using 1MDB funds,” they said in a brief statement. This is in reference to the forfeiture proceedings brought by the Malaysian authorities following a raid on two properties in a condominium at Pavilion Kuala Lumpur, after the 2018 general election in which the Najib-led Barisan Nasional government fell. The forfeiture application, however, was dismissed by the High Court, as it was not proven that the items were proceeds from unlawful activity, namely of 1MDB. The prosecution did not appeal. The items in question include handbags, jewellery, watches and RM114 million in cash of various foreign nominations. Read also: 1MDB: Rosmah bought jewellery and handbags worth US$346 mil by Tarani Palani & Hafiz Yatim theedgemalaysia.com by Tarani Palani theedgemalaysia.com Court of Appeal’s decision last December, which had decided in the sultanah’s favour on her challenge to the High Court’s ruling in 2022. A three-member COA panel unanimously ruled that a statement made in Rewcastle-Brown’s book titled The Sarawak Report: The Inside Story of the 1MDB Exposé linking the sultanah to fugitive businessman Low Taek Jho (Jho Low) was defamatory. The impugned statement reads: “Jho was also friendly with a key player in Terengganu, the wife of the sultan, whose acquiescence was needed to set up the fund, and he later cited her support as having been crucial to his obtaining the advisory position.” The COA awarded damages of RM300,000 which were to be paid jointly by all the defendants, which also include Gerakbudaya Enterprise publisher Chong Ton Sin and printer Vinlin Press Sdn Bhd. Read the full story The new date was set during case management on Tuesday, as confirmed by Haikaldin Mahyidin who appeared for the investigative journalist and Datuk Mohd Haziq Pillay who appeared for the sultanah. In this civil action, Rewcastle-Brown is seeking leave (permission) to appeal the File photo by Shahrin Yahya/The Edge
wednesday june 12, 2024 14 The E dge C E O m o rning brief home PETALING JAYA (June 11): Human rights NGO Lawyers for Liberty (LFL) has condemned the actions of the Malaysian Anti-Corruption Commission (MACC) in detaining a lawyer and questioning another for representing a client in court. Lawyer Lai Chee Hoe, who was speaking at a press conference on Tuesday afternoon, said the MACC had raided his office on June 4 to investigate his firm, which acted as lawyers in a strata management dispute for one of the parties in court. Lai said he was questioned at the MACC headquarters in Putrajaya, and was later detained there. He was made to wear the infamous MACC orange uniform for detainees. According to Lai, the MACC was investigating the party he is representing in court. Meanwhile, another lawyer Irwin Lo claimed that he was also questioned by the commission because he represented the same client. However, he was not detained and was told to bring in documents pertinent to the case. LFL director Zaid Malek said this was a clear threat against Lai and was tantamount to harassment against the lawyers. “MACC has no power to ask lawyers to come in and investigate lawyers and demand documents for cases they are conducting,” he told the media. Zaid stressed that all legal recourse would be considered, and he is hoping that MACC chief commissioner Tan Sri Azam Baki would come up with a statement to clear the air. When contacted after the press conference, MACC’s chieftain Tan Sri Azam Baki, however, disclosed that Lai is being investigated for embezzlement and abuse of power for his role as the former chairman of the joint management committee, while Irwin was sought to help with investigations. “Lai acted as legal adviser and is the former chairman of the joint management body (of the property in question); he, together with several committee members, were suspected of abusing their power to embezzle funds in the management and maintenance account,” Azam told The Edge. “There is no issue of interference with the right of public legal representation,” Azam commented. He said that Lai is the main suspect in the case, and he was remanded to be investigated for his role in the case. “The focus of the investigation team was on the issue of abuse of power and embezzlement carried out by Lai, and not to get information on his client,” Azam said. MACC, in a separate statement later, also said Section 31 of the MACC Act, which stipulates the commission’s power of search and seizure, gives it the right to enter any premises to search, confiscate and retrieve any books, documents, account records, or data, and to search or detain any person encountered in such premises to facilitate its investigations. It also said it will not bow to pressure or accusations in the course of their investigations. Lai, meanwhile, did not deny that he is the former chair of the joint management body. At the press conference, Lai claimed that the MACC had gone to a magistrate to seek a remand extension until June 8, but his lawyer Amer Hamzah intervened and wrote a letter to the magistrate, who then allowed Lai to be released on June 6, subject to RM20,000 in bail, with the condition that he has to report to the MACC’s headquarters periodically. He also claimed that the MACC released him on three conditions. “The MACC officers told me: do not give a press conference, do not join the management body meetings, and withdraw yourself from the case as a lawyer,” he said at the press conference. Azam, however, refuted that his officers had given the aforementioned three terms. Read also: Bar reminds enforcement agencies to respect legal professional privilege Lawyers lambast MACC for harassment while anti-graft body alleges wrongdoing KUALA LUMPUR (June 11): Former finance minister Tun Daim Zainuddin and his family have initiated another legal action to challenge the seizure of their assets and freezing of various accounts in relation to the Malaysian Anti-Corruption Commission’s (MACC) investigation into their finances. Besides the graft busters and the government — who were named as respondents in his last challenge back in January — Daim has also included Prime Minister Datuk Seri Anwar Ibrahim, MACC chief Tan Seri Azam Baki and two other MACC officers as respondents in this latest suit. Daim and his family are seeking court orders to nullify the seizure of assets and Daim takes aim at Anwar, MACC chief in new lawsuit to unfreeze their accounts, in a leave application for judicial review filed on June 6. They are also seeking general and exemplary damages. The matter is set to be heard at the High Court on Wednesday. Per her supporting affidavit seen by The Edge, Daim’s wife Toh Puan Na’imah Abdul Khalid Na’imah has claimed that since no charges pertaining to money laundering have been preferred to date, the seizure order under Section 44 (5) of the Anti-Money Laundering (AMLA Act) lapses after 90 days from the date of the order. Read the full story by Tarani Palani theedgemalaysia.com by Timothy Achariam theedgemalaysia.com (From left) Lawyers Irwin Lo, Zaid Malek and Lai Chee Hoe at a press conference on Lai's arrest. Suhaimi Yusuf/The Edge
WEDNESDAY JUNE 12, 2024 15 THEEDGE CEO MORNING BRIEF A NEW ERA BEGINS The SD Guthrie story started over 200 years ago in a tiny backwater in the Far East called Singapura. Over the ensuing 200 years, we became a leader in our industry, with extensive upstream operations and a thriving downstream business, serving customers in more than 90 countries. And all of it sustainably and responsibly managed. We have now set our sights beyond the palm oil industry because there is much more we can do. Two new business verticals – renewable energy and, green industrial parks – make plenty of sense because we have the capacity, the ability and the ambition to achieve even greater success. Unlocking Nature's Superpower Formerly known as Sime Darby Plantation Berhad SDGuthrie.com SD Guthrie Berhad. 200401009263 (647766-V)
wednesday june 12, 2024 16 The E dge C E O m o rning brief world (June 11): Global markets are on tenterhooks ahead of a US Federal Reserve interest-rate decision and key US inflation figures. Bitcoin investors have reason to be particularly alert for potential volatility. A 30-day correlation between Bitcoin and the US 10-year Treasury yield is at minus 53, one of the most negative readings in data compiled by Bloomberg since 2010. The metric suggests that the largest digital asset at present is moving in the opposite direction to the benchmark bond yield to an unusual degree. Bonds may be buffeted by the inflation data and Fed policy outlook, which are both due in the space of a few hours on Wednesday. The correlation study hints at the risk of Bitcoin being tossed around in the Treasury market’s wake. Bitcoin wobbled on Tuesday, sliding as much as 2.8% to a one-week low and hovering at US$67,840 as of 2:18 p.m. in Singapore. Smaller tokens, such as Ether and meme-crowd favourite Dogecoin, also nursed losses. Bitcoin hit a record of US$73,798 in mid-March, lifted by inflows into dedicated US exchange-traded funds. But it struggled for new highs in the past three months. For Tony Sycamore, a market analyst at IG Australia Pty, Bitcoin’s recent failed attempts to crack all-time peaks rings “alarm bells”. ‘Lack’ of Progress “The lack of upside progress in recent weeks is concerning, given the significant inflows into Bitcoin ETFs recently, which have thus far failed to turn the dial,” Sycamore said. “The next 36 hours is going to be crucial.” A net US$15.6 billion has poured into the ETFs since their January launch. On Monday, US$65 million was pulled from the products, snapping a run of 19 straight days of subscriptions, according to data compiled by Bloomberg. The inflation data are expected to show price pressures running well ahead of the US central bank’s comfort zone. At the turn of the year, investors were wagering on a slew of Fed rate reductions, but now, the debate is whether future easing will amount to only a smallish tweak of policy. An outlook of higher-for-longer borrowing costs could be a challenging backdrop for a speculative asset like Bitcoin, which has already more than quadrupled since the start of 2023, in a comeback from a deep bear market. Fairlead Strategies LLC technical analyst Katie Stockton, in a research note, flagged “neutral” short-term momentum for the digital token based on chart patterns, while adding that long-term prospects are more positive. Bitcoin slides to one-week low as traders await CPI, Fed decision (June 11): US small-business optimism edged up in May to the highest level this year as firms grew less downbeat about the economy’s prospects. The National Federation of Independent Business (NFIB) sentiment index rose 0.8 point to 90.5. The reading was slightly better than the median projection in a Bloomberg survey of economists, yet below the long-term average of 98. Five of the 10 components that make up the sentiment gauge increased in May, led by a seven-point improvement in the share of owners who expect the economy to improve. Firms’ plans to increase employment also picked up. The gain in small-business optimism is only the second this year, and the index remains well below pre-pandemic levels as firms contend with high prices, interest rates and labor costs, as well as lingering hiring challenges. The NFIB survey showed the share of firms planning to increase prices rose two percentage points to 28% after a big drop in the prior month to a one-year low. The proportion of owners indicating inflation was their top concern held at 22%. Some 6% said financing was their top business problem, the highest share in nearly 14 years. The share of firms reporting job openings they couldn’t fill climbed two points in May to 42%, while 15% of firms said they plan to create new jobs in the next three months, up three percentage points. Still, those labour metrics had been largely falling this year. US smallbusiness optimism improves to highest level this year by Jarrell Dillard Bloomberg by Sunil Jagtiani Bloomberg bloomberg
wednesday june 12, 2024 17 The E dge C E O m o rning brief world (June 11): The UK broke its record for bond demand by drumming up over £109 billion (RM655.55 billion) in orders for a gilt sale on Tuesday. That came as analysts said pricing for the 10-year offer was attractively set at 4 basis points over a comparable gilt. The government is aiming to raise £11 billion, with the orderbook beating a previous record of over £100 billion for the UK’s debut green bond in 2021. The premium was a “bit higher compared to expectations,” said Emmanouil Karimalis, a strategist at UBS Group AG. He said the market was expecting 2-3 basis points. The huge demand has emerged after yields on gilts have climbed this year as markets have pared expectations for global monetary tightening. While the Bank of England is expected to continue to hold interest rates at a meeting this month ahead of an election in July, this could be one of the last gilt syndications before it starts to cut borrowing costs. Money markets currently favour a quarter-point cut by September. Data earlier Tuesday backed the case for a cut by showing UK unemployment unexpectedly rose to the highest in more than 2 1/2 years while pay pressures eased. That led to gains in UK gilts, with the 10-year yield down 3 basis points at 4.29%. The bookrunners on the gilt sale are Barclays Plc, Citigroup Inc, Deutsche Bank AG, Lloyds Banking Group Plc, NatWest Markets Plc and Royal Bank of Canada. UK smashes bond demand record with £109 bil orderbook LONDON (June 11): The Organization of the Petroleum Exporting Countries (Opec) on Tuesday stuck to its forecast for relatively strong growth in global oil demand in 2024, despite lower-than-expected use in the first quarter, saying travel and tourism would support consumption in the second half of the year. Opec, in a monthly report, said world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month. Opec’s report is the latest to flag robust oil market conditions heading into the second half of the year. Oil rose 3% on Monday after Goldman Sachs said transport demand would push the market into a third-quarter deficit. Opec said steady global economic growth has continued in the first half of 2024 and forecast that world oil demand would rise by 2.3 million bpd in the second half. “Globally, the services sector maintains a stable momentum,” Opec said. “It is projected to be the main contributor to the economic growth dynamic in the second half of 2024, particularly supported by travel and tourism, with a consequent positive impact on oil demand.” Opec sticks to 2024 oil demand growth forecast but trims 1Q view Opec+, which groups Opec and allies such as Russia, has implemented a series of output cuts since late 2022 to support the market. The group agreed on June 2 to extend the latest cut of 2.2 million bpd until the end of September and gradually phase it out from October. Oil was steady after the Opec report was released with Brent crude edging down towards US$81 a barrel. Demand view split There is a wider than usual split between forecasters on the strength of oil demand growth in 2024, partly due to differences over the pace of the world’s transition to cleaner fuels. The report showed that Opec, at the high end of forecasts, is sticking to its guns. Although Opec lowered its estimate of total demand in the first quarter of this year by 50,000 bpd to 103.51 million bpd, it increased its second-quarter forecast by the same increment and made no change to its full-year figure. The International Energy Agency, which represents industrialised countries, expects much lower demand growth than Opec of 1.1 million bpd and is scheduled to provide an update on its view on Wednesday. by Alex Lawler Reuters by Greg Ritchie, James Hirai & Paul Cohen Bloomberg reuters bloomberg
wednesday june 12, 2024 18 The E dge C E O m o rning brief world Apple brings ChatGPT and more AI to devices, Wall Street unimpressed by Aditya Soni & Max A Cherney Reuters Read the full story Read also: Musk warns that he will ban Apple devices if OpenAI is integrated at operating system level Long known for a focus on user safety, the iPhone maker signalled it plans to differentiate itself from rivals Microsoft and Google by placing privacy “at the core” of its features. (June 11): Apple unveiled a long-awaited AI strategy on Monday, integrating its new “Apple Intelligence” technology across its suite of apps including Siri and bringing OpenAI’s chatbot ChatGPT to its devices. In the nearly two-hour long presentation at Apple’s annual developer conference, executives including CEO Tim Cook touted how voice assistant Siri would be able to interact with messages, emails, calendar, as well as third party apps. Siri will be able to write emails and change the tone of voice to suit the occasion. Long known for a focus on user safety, the iPhone maker also signalled it plans to differentiate itself from rivals Microsoft and Google by placing privacy “at the core” of its features. But Wall Street — looking for more dazzling AI features and reassurance that would put Apple in good standing to compete on AI with market-leader Microsoft — was lukewarm on the event. Apple shares closed down nearly 2%. Apple’s stock, which trails those of other Big Tech firms this year, had rallied 13% last month in the run-up to the event. “There isn’t anything here that propels the brand ahead of its as-expected trajectory of incrementalism,” said Dipanjan Chatterjee, analyst at Forrester. “Apple Intelligence will indeed delight its users in small but meaningful ways, it brings Apple level with, but not head and shoulders above, where its peers are at.” Apple’s approach contrasts with the enterprise-first focus of its rivals. The company hopes these moves will convince its more than one billion users — most of whom are not tech aficionados — on the need for the nascent technology. Apple executive Craig Federighi called Apple Intelligence “AI for the rest of us.” Apple still remains overly reliant on sales of the iPhone and some analysts said any boost from the new AI features was unlikely to materialise in the short term. “In this early race, it feels that Alphabet, and even more so Microsoft, are in better shape following their initial moves and with thanks to their cloud assets,” said Paolo Pescatore, analyst and founder of PP Foresight. The AI features announced at Apple’s Worldwide Developers Conference will come with the latest operating system for its devices, which were also demonstrated at the event. Apple uses the event at its Cupertino, California, headquarters each year to showcase updates to its own apps and operating systems as well as to show developers new tools they will be able to use in their apps. Siri revamp The revamped Siri will have more control, helping it do what has proven tricky in the past because the assistant needed to understand the user’s exact intentions as well as how the app works. Siri will also tap ChatGPT’s expertise and seek permission from users before querying the OpenAI service as part of Apple’s tie-up with the Microsoft-backed startup, a privacy feature that Apple emphasised. But the tie-up immediately sparked questions over privacy. Tesla CEO Elon Musk said on X that he would immediately ban Apple devices at his companies if the iPhone maker integrates the startup’s tech at the OS level. The ChatGPT integration will be available later this year and other AI features will follow, Apple said, adding that the chatbot could be accessed for free and that users’ information will not be logged. Later on Monday, Apple released a paper detailing how its features, including those powered by OpenAI would ensure safety of customer data. This includes handling more complex tasks by Apple’s servers under a new offering called Private Cloud Compute. Apple also said it plans to add technology from other AI companies on its devices amid reports that it was discussing a potential tie-up with long-time search partner Google. To power the AI features, Apple plans to use a combination of on-device processing and cloud computing. That means the AI features will only be available on the latest iPhones starting with iPhone 15 Pro, as well as upcoming models. Apple CEO Tim Cook attends a panel discussion during the annual developer conference event at the company’s headquarters in Cupertino, California June 10, 2024. Reuters
wednesday june 12, 2024 19 The E dge C E O m o rning brief world (June 11): The list of Chinese developers facing court-ordered liquidation in Hong Kong is getting longer, after a builder of homes in an affluent eastern coastal region was ordered to wind up. Dexin China Holdings Co Ltd received the order on Tuesday, three months after a petition was filed by China Construction Bank (Asia), and a year and half after it defaulted. A new restructuring plan was approved last year, though the developer, which builds residential, as well as commercial buildings, wasn’t able to keep up with that either. Hong Kong has served as a gateway for investors to access mainland issuers’ high-yield offshore bonds. But that has also made it an epicentre of the yearslong downturn in China’s property sector, which continues to dog the country’s economy. The liquidation order shows lingering distress, despite fresh attempts from the Chinese government to help the industry recover. Dexin joins a group, including Jiayuan International Group Ltd and China Evergrande Group, that have received such orders from courts in Hong Kong in the past couple of years. This isn’t the last one, either — a number of major developers, including Country Garden Holdings Co, Ltd are set for hearings in coming months to persuade judges that they are moving forward with their own debt-overhaul plans. The State Council, the country’s Cabinet, asked officials to keep formulating new policies that will absorb existing housing stock and stabilise markets, according to a statement posted on the government’s website late last Friday. Still, an index of Chinese developers’ shares dropped as much as 2.7% on Tuesday, falling for a second day and set for its lowest level in a month. Dexin shares dropped 6.6% on Tuesday, before trading was suspended. Dexin, a Zhejiang-based developer, concentrated on developing homes and commercial buildings in China’s relatively wealthy Yangtze River Delta region. It had total liabilities of 64.4 billion yuan (US$8.88 billion) as of the end of 2023, according to its latest annual report. Chinese developer troubles deepen as Dexin gets liquidated (June 11): The share-price gap between Taiwan Semiconductor Manufacturing Co and China’s biggest chipmaker is near its widest in almost two decades, highlighting the difficulty Beijing faces in building up its domestic chip industry. Bolstered in part by state-of-the-art chipmaking capabilities, TSMC has soared 48% this year in Taipei while Semiconductor Manufacturing International Corp lost 7.5%, leaving the gap between the two stocks’ annual performance poised to be the biggest since 2005. The chasm comes even as China’s largest semiconductor investment fund, known as Big Fund III, aims to develop the local sector amid US efforts to limit growth. Boosting SMIC’s technology “is not something that can be achieved overnight, even with abundant funding,” said Shen Meng, a director at Beijing-based investment bank Chanson & Co. China is currently capable of making seven-nanometre chips, two generations behind the most sophisticated semiconductors now in commercial production, but seeks to progress to 5nm amid US curbs. TSMC uses extreme ultravioTSMC’s premium over SMIC shows challenges for China’s chip fund let lithography equipment to produce more-advanced 3nm chips, but such tools can’t be sold into China due to export controls. “Even if SMIC can produce chips using 5nm technology, the cost would be at least 10 times higher than those produced at TSMC without EUV machines,” Bloomberg Intelligence analyst Charles Shum said. “The technology gap isn’t just about reaching a certain level, it’s also about how effectively you can achieve it. ” Although the government has unveiled few details on the third vehicle of the National Integrated Circuit Industry Investment Fund, Big Fund III’s formal name, investors are betting it will help solve some sector issues. “The new fund is expected to focus on advanced technology, including wafer manufacturing, packaging, process control and equipment materials,” said Xiang Xiaotian, a director at Shanghai Chengzhou Investment Management Co. The fund may also target investments in AI chips, according to Li Xun, an investment adviser at Guotai Junan Securities Co. Bloomberg by Pearl Liu & Dorothy Ma Bloomberg reuters
wednesday june 12, 2024 20 The E dge C E O m o rning brief world (June 11): Singapore authorities are demanding more information from family offices and hedge funds while stepping up closures of dormant firms after a string of scandals highlighted cracks in the financial hub’s oversight. The government’s push to tighten various investment regimes has accelerated since March, with agencies setting out additional requirements that must be met in the coming months and ramping up the removal of inactive corporate entities, according to people familiar with the matter. Family offices that have been granted tax exemptions were given new forms asking for greater detail in May and told to submit the information by the end of June. In March, the Monetary Authority of Singapore confirmed it would repeal a licencing regime used by hedge funds with assets of up to US$250 million (RM1.2 billion) by Aug 1 and migrate them to one with stricter reporting requirements. Singapore is stepping up scrutiny of financial institutions after a series of criminal cases highlighted the challenges of policing the influx of foreign wealth into the city-state. At least one of the accused in a recent S$3 billion money laundering case was linked to family offices that were granted tax exemptions. “Having more (and ideally more varied) data helps with potentially detecting undesirable activity earlier, which can help to minimise any loss of economic impact or reputation that illegal activity may cause,” said Richard Crowley, assistant professor of accounting at Singapore Management University. According to annual forms that must be submitted to MAS by family offices with tax exemptions, firms must now confirm that their beneficial owners, directors, representatives and shareholders have never committed, been convicted or even been charged with money laundering or terrorist financing offenses. They must also confirm that the assets under management adhere to domestic capital control regulations and the fund management company isn’t facing regulatory actions by any authority in the world. Family offices must maintain an account with a private bank based in Singapore and provide both the citizenship and the country of birth for its ultimate beneficiaries and relevant staff members, according to the forms due for many firms by June 30. A spokesperson for the MAS said it flagged in December that its processes would be enhanced to broaden the scope of due diligence checks and it would take “swift action” to remove incentives from firms if adverse activities were detected. “The updated annual declaration forms form part of the enhancements,” the spokesperson said, adding that more implementation details and the regulator’s response to industry feedback would be published later this year. The monetary authority has also tightened the tax incentive process, including by broadening due diligence checks to a wider group of individuals and entities and appointing a panel to screen applicants for money laundering and terrorism financing risks. Single family offices linked to people charged “no longer enjoy tax incentives,” it said. Read the full story Singapore ramps up scrutiny of family offices, hedge funds (June 11): Singapore Airlines has sent offers of compensation to passengers on board a flight last month that encountered severe turbulence that led to dozens of injuries and one death, the carrier said on Tuesday. Passengers with minor injuries have been offered US$10,000 (RM47,200) and those with serious injuries can discuss an offer to meet their specific needs, the airline said. “Passengers medically assessed as having sustained serious injuries, requiring long-term medical care, and requesting financial assistance are offered an advance payment of US$25,000 to address their immediate needs,” that will form part of any final settlement, it added. A 73-year-old passenger died of a suspected heart attack and dozens were injured after flight SQ321 from London to Singapore encountered what the airline described as sudden, extreme turbulence while flying over Myanmar. It diverted and landed in Bangkok, Thailand. Passengers said crew and those not strapped in left the floor or their seats and slammed into the cabin ceiling, cracking it in places. A Bangkok hospital treating passengers said there were spinal cord, brain and skull injuries. Singapore Airlines offers compensation to passengers on severely turbulent flight As of June 4, more than two weeks after the May 20 flight, 20 passengers were still receiving medical care in hospitals in Bangkok, according to the airline. It did not respond immediately to a request for an updated figure. Singapore Airlines said it would refund airfares for all passengers on board the flight and they would receive delay compensation in accordance with regulations in the European Union or Britain. A preliminary report by Singapore’s Transport Ministry said a rapid change in gravitational force and a 54-metre (177- foot) altitude drop likely caused passengers and crew to become airborne. It said the plane was likely flying over an area of “developing convective activity”, a term referring to developing bad weather. There were 211 passengers, including many Australians, British and Singaporeans, and 18 crew members on the flight. The incident has put seatbelt practices in the spotlight, with airlines typically allowing passengers to undo belts during normal cruise conditions, while recommending they keep them on. Read also: Branson plans one-stop travel shop as Virgin Atlantic turns 40 by Lisa Barrington Reuters by David Ramli & Chanyaporn Chanjaroen Bloomberg reuters
wednesday june 12, 2024 21 The E dge C E O m o rning brief world MANILA (June 11): President Ferdinand Marcos Jr said the Philippines should be prepared for any eventuality due to heightened tension in the Indo-Pacific region regarding sovereignty claims in the South China Sea, as well as security issues around neighbouring Taiwan. The Philippines has long clashed with China over the South China Sea. But the country’s proximity to Taiwan also puts it in China’s area of interest, Marcos told troops at a military camp in Isabela province in northern Cagayan region facing Taiwan. China claims democratically governed Taiwan as its own territory and has never renounced the use of force to bring the island under its control. Taiwan strongly objects to China’s sovereignty claims and says that only the island’s people can decide their future. Taiwan is home to more than 150,000 Filipinos. “The external threat now has become more pronounced, has become more worrisome, and that is why we have to prepare,” Marcos told the troops on Monday (June 10), in a speech shared Philippines must prepare as external threats grow, president says (June 11): Indonesian President Joko Widodo has shrugged off concerns about the rupiah’s recent bout of weakness, signalling there may be little political pressure for the central bank to raise interest rates next week. The rupiah at 16,200-16,300 against the US dollar — its trading range for much of June — is “still in a good position,” Jokowi, as the president is known, told reporters late Monday. The rupiah’s depreciation is in line with other currencies, as “all countries are experiencing the same thing, pressured by the dollar,” he said. The president’s comments are in sharp contrast to Indonesia’s stance in April, when all of government was put on alert to help stem a currency rout. State firms were instructed to hold off from making large dollar purchases, while exporters were urged to repatriate their foreign-currency earnings. Bank Indonesia also delivered a shock rate hike in Jokowi strikes sanguine tone as rupiah hits new four-year low by Chandra Asmara Bloomberg by Neil Jerome Morales Reuters by the presidential palace on Tuesday. Last year, Marcos gave US forces access to almost double the number of military bases, at a time of concern over increased Chinese activity in the South China Sea and tension over Taiwan. China said the expanded US access was “stoking the fire”. China’s military conducted two days of war games around Taiwan last month, including drills testing its ability to “seize power” and control key areas. “Now you have two missions, whereas before it was only internal security,” Marcos told the troops, stressing the need to strengthen external defence capabilities. Marcos said the Philippines was not trying to redraw lines of sovereign territory in the South China Sea, including its exclusive economic zone (EEZ), and that it was committed to defend itself while engaging in diplomacy. Tension with China has escalated in the past year over frequent maritime run-ins within the Philippines’ EEZ in the South China Sea, a conduit for more than US$3 trillion in annual shipping commerce. Read also: Morgan Stanley downgrades Indonesian stocks to ‘underweight’ April, taking the benchmark to 6.25%. This time, Bank Indonesia signalled more confidence. The rupiah should remain manageable and stay stronger than 16,300 per dollar, said Edi Susianto, the central bank’s executive director for monetary management, on Tuesday. The central bank reiterated that it will continue its efforts, including market intervention, to stem capital outflows and steady the rupiah. Ample dollar supply from exporters and foreign fund inflows should also support the currency, Susianto added. With authorities appearing less rattled by the rupiah, the central bank may less likely consider raising the BI-rate when it meets on June 20, and instead opt for other measures to ride out the volatility. The rupiah has slumped 2.6% this quarter to a four-year low. It’s facing renewed pressure amid seasonal dividend payments and Hajj pilgrimage outflows, coupled with a selloff in emerging markets amid uncertainty over the Federal Reserve’s policy path. Governor Perry Warjiyo has reiterated that the central bank will continue its efforts to stem capital outflows and steady the rupiah, repeatedly intervening in the spot and domestic non-deliverable forward markets. Bloomberg Bloomberg filepix Philippine President Ferdinand Marcos Jr
wednesday june 12, 2024 22 The E dge C E O m o rning brief world WASHINGTON (June 11): The World Bank on Tuesday said the US economy’s stronger-than-expected performance has prompted it to lift its 2024 global growth outlook slightly but warned that overall output would remain well below pre-pandemic levels through 2026. The World Bank said in its latest Global Economic Prospects report that the global economy would avoid a third consecutive drop in real gross domestic product (GDP) growth since a major post-pandemic jump in 2021, with 2024 growth stabilising at 2.6%, unchanged from 2023. That’s up 0.2 percentage point from the World Bank’s January forecast, largely on the strength of US demand. “In a sense, we see the runway for a soft landing,” World Bank deputy chief economist Ayhan Kose told Reuters in an interview, noting that sharply higher interest rates have brought down inflation without major job losses and other disruptions in the US or other major economies. “That’s the good news. What is not good news is that we may be stuck in the slow lane,” Kose added. The World Bank forecast global growth of 2.7% in both 2025 and 2026, a level well below the 3.1% global average in the decade prior to Covid-19. It also is forecasting that interest rates in the next three years will remain double their 2000-2019 average, keeping a brake on growth and adding debt pressure to emerging market countries that have borrowed in dollars. Countries representing 80% of the world’s population and GDP output will see weaker growth through 2026 than they had prior to the pandemic, the report said. “Prospects for the world’s poorest economies are even more worrisome. They face punishing levels of debt service, constricting trade possibilities and costly climate events,” said World Bank chief economist Indermit Gill, adding that those countries will continue to require international assistance to fund their needs. The report contains an alternative “higher-for-longer” interest rate scenario, in which persistent inflation in advanced economies keeps interest rates about 40 basis points above the lender’s baseline forecast, cutting 2025 global growth to 2.4%. US buoyant Strong demand and higher inflation readings in the US have delayed expectations for Federal Reserve rate cuts, and the US economy is defying predictions of a downturn for the second year in a row, according to the report. The World Bank is now forecasting 2.5% US growth for 2024 — matching the 2023 pace — and up sharply from the January forecast of 1.6%. Kose said the US upgrade accounts for about 80% of the added global growth since the January forecast. The World Bank also upgraded China’s 2024 growth forecast to 4.8% from 4.5% in January, largely on the back of increased exports that have offset soft domestic demand. But it forecast China’s growth will fall to 4.1% in 2025 amid weak investment and consumer confidence and an ongoing property-sector downturn. India also saw a forecast upgrade for 2024 to 6.6% from 6.4% in January amid strong domestic demand. by David Lawder Reuters World Bank says global growth stabilising but well below pre-pandemic levels Countries representing 80% of the world's population and GDP output will see weaker growth through 2026 than they had prior to the pandemic, says the World Bank. The World Bank cut Japan’s 2024 growth forecast to 0.7% from 0.9% due to weak consumption growth and slowing exports and stabilising demand for tourism. It left its 2024 eurozone forecast unchanged at 0.7% amid the bloc’s continued difficulties with high energy costs and weaker industrial output. Conflict risks In addition to the higher-for-longer rate scenario, the World Bank said the biggest downside risks to the global outlook included greater spillovers from armed conflicts in Gaza and Ukraine. A wider war in the Middle East could cause further disruptions to shipping and push up oil prices and inflation. Likewise, more uncertainty about the path of Russia’s invasion in Ukraine could also disrupt markets for oil and grains, while choking investment into neighbouring countries, the bank said. Increasing trade restrictions driven by geopolitical rivalries also could hamper the recovery of global trade volume growth, which was barely perceptible last year at about 0.1%. The World Bank forecast a rebound to 2.5% in 2024, up from 2.3% in the January forecast. But it said rising protectionism and industrial policies in many countries could lead to more inefficiencies in global supply chains and reduce investment into emerging market and developing countries. The World Bank also said a deeper downturn in China, the world’s second-largest economy, would hamper growth, especially in commodity exporters and trade-intensive economies. On the upside, the World Bank said that the US could continue to surpass expectations, boosting global growth with lower inflation if elevated productivity and labour supply due to immigration prove persistent. Lower inflation globally, supported by productivity gains, improved supply chains and easing commodity prices, could prompt central banks to cut interest rates more quickly than now expected, boosting credit growth, the bank added. reuters
wednesday june 12, 2024 23 The E dge C E O m o rning brief world French parties rush to seek alliances ahead of snap election UK’s Sunak offers more tax cuts as election polls refuse to budge by Elizabeth Piper & Alistair Smout Reuters by Elizabeth Pineau & Tassilo Hummel Reuters SILVERSTONE, England (June 11): Prime Minister Rishi Sunak pledged to cut £17 billion (RM102.03 billion) of taxes for working people if re-elected, in a final throw of the dice to overturn polls that put him on course for a heavy defeat in Britain’s July 4 election. With his Conservative Party consistently about 20 points behind Keir Starmer’s opposition Labour in the polls, Sunak made a new appeal on Tuesday to what one Conservative lawmaker described as Britain’s carpenters, bricklayers and electricians, by promising further tax cuts if they give him their vote. The party manifesto aims to put tax cuts at the heart of the campaign, with Sunak’s team believing that the move will put pressure on Labour, traditionally seen as the party of tax and spend. Starmer has said his party will not lift the main taxes. Sunak, a 44-year-old former investment banker, acknowledged that people were frustrated with him and his party after 14 years of power, dominated at times by political turmoil and scandal, during which many have struggled to make ends meet. The twin shocks of the Covid pandemic and energy price spikes have sent consumer prices up 21% in three years, the tax burden has risen to its highest as a share of the economy since just after World War Two, and failing public services have created a sense of malaise. But Sunak argued that the economy was finally recovering and if re-elected he would cut payroll taxes for workers to reignite economic growth further. Read the full story Read the full story PARIS (June 11): French political parties were rushing on Tuesday to find alliances — and trying not to fall apart — in a race against the clock to prepare for a snap election which opinion polls show Marine Le Pen’s far-right party is likely to win. The euro dropped as did French stocks and bonds after President Emmanuel Macron announced the lower house of parliament election for June 30 and July 7 following a massive loss for his camp in a European Parliament ballot on Sunday. Rating agency Moody’s warned of the risk that political instability triggered by the snap election meant for France’s already challenging fiscal picture. Le Pen’s National Rally (RN) topped the first poll issued on Monday, although the survey said the party would fall short of an absolute majority of votes. This means the RN was looking for allies to secure control of parliament, and some in mainstream parties tried to unite Dutch parties agree on final formation of rightwing government, says Wilders by Bart Meijer Reuters AMSTERDAM (June 11): Political parties in the Netherlands have reached a final agreement on the formation of their incoming rightwing government, election winner Geert Wilders said on Tuesday. After almost six months of negotiations, Wilders’ nationalist PVV party reached an agreement last month to form a coalition with three other conservative parties but they had not agreed on cabinet posts. “We have reached an agreement,” Wilders told reporters after almost four weeks of talks on the distribution of jobs over the four parties. The coalition last month already said political outsider Dick Schoof, who is not affiliated to any party, would become prime minister of the new government. Schoof, 67, was the senior official at the Dutch justice ministry until last month after having led the Dutch intelligence agency AIVD and anti-terrorism agency NCTV for years. He was the head of the Dutch immigration service in the early 2000s. He will head a cabinet that the four parties have said would have looser ties to parliament. No details on who would fill the other posts in cabinet have been announced yet. to keep the far-right out of power in the eurozone’s second-largest economy. A key target for both camps are the conservative Les Republicains (LR), in power for decades but now a shadow of its former self. It has already lost key members to Macron’s centrist party and the far right. Some now fear it could implode. Reuters Reuters
wednesday june 12, 2024 24 The E dge C E O m o rning brief world WILMINGTON, Delaware (June 12): President Joe Biden’s son Hunter Biden was convicted by a jury on Tuesday of lying about his drug use to illegally buy a gun, a verdict Democrats may seize upon to counter Donald Trump’s claim of a justice system weaponised against him. A 12-member jury in Wilmington, Delaware, federal court found him guilty on all three counts against him, making Hunter Biden the first child of a sitting US president to be convicted of a crime. Hunter Biden, 54, lightly nodded his head after the verdict was read but otherwise showed little reaction. He then patted his lawyer Abbe Lowell on the back and hugged another member of his legal team. The judge set no date for sentencing, but added the timeline is usually within 120 days. That would place it no later than a month before the Nov 5 US presidential election. Sentencing guidelines for the gun charges are 15 to 21 months, but legal experts say defendants in similar cases often get shorter sentences and are less likely to be incarcerated if they abide by the terms of their pretrial release. The trial followed the May 30 criminal conviction of Trump, the first former US president to be found guilty of a felony and the Republican challenger to Joe Biden, a Democrat, in the Nov 5 election. Trump, convicted on 34 felony counts of falsifying business records to cover up a sex scandal, accuses Democrats of pursuing that case and three other criminal prosecutions to prevent him from regaining power in his rematch with Joe Biden. Congressional Democrats have pointed to cases including the Hunter Biden prosecution as evidence that Joe Biden is not using the justice system for political or personal ends, having said last week he would not pardon his son if convicted. Hunter Biden found guilty of lying about drug use to buy gun CAIRO (June 11): Hamas accepts a UN Security Council ceasefire resolution and is ready to negotiate over the details, senior Hamas official Sami Abu Zuhri told Reuters on Tuesday, adding that it was up to Washington to ensure that Israel abides by it. Hamas accepts the UN Security Council resolution in regard to the ceasefire, withdrawal of Israeli troops and swap of hostages for detainees held by Israel, he said. “The US administration is facing a real test to carry out its commitments in compelling the occupation to immediately end the war in an implementation of the UN Security Council resolution,” Abu Zuhri said. (June 11): Some of Wall Street’s biggest banks aren’t fully accounting for the risks of doing business with oil and gas companies operating in the Amazon rainforest, according to a study by conservationists. The report, published by Stand.earth Research Group, identifies six banks it says are responsible for almost half of all direct financing for oil and gas operations in Amazonia over the past 20 years. JPMorgan Chase & Co, Citigroup Inc, Itau Unibanco Holding SA, Banco Santander SA and Bank of America Corp have failed to “fully address the adverse impacts of their financing,” the researchers said. The sixth bank — HSBC Holdings Plc — was singled out for a turnaround in its policies. “Most of these banks claim to uphold human rights and environmental protection, but, with the exception of HSBC, they continue to finance the operations of state-owned and private oil and gas companies in Brazil, Peru, Colombia and Ecuador,” the report’s authors wrote. A spokesperson for JPMorgan said the bank supports human rights and screens for “sensitive business activities”. Spokespeople for Citigroup and Bank of America referred to their latest risk-management policies, which spell out due diligence requirements and explain expectations that clients are to meet. Itau Unibanco said by email that it’s “working to tackle deforestation”. A spokesperson for Santander said the bank understands “fully the importance of protecting the Amazon” and is working with clients. A spokesperson for HSBC, which ceased financing oil and gas projects in Amazonia in 2022, said the bank’s “approach is to focus on real-world emission reductions as we support our clients in delivering the energy transition”. Read the full story Hamas accepts UN ceasefire resolution, ready to negotiate over details, official says Wall Street ties to Amazon forest depletion mapped out in new report by Nidal Al Mughrabi Reuters by Frances Schwartzkopff & Saijel Kishan Bloomberg by Tom Hals & Jack Queen Reuters Members of the UN Security Council vote on a US-drafted resolution backing a proposal outlined by US President Joe Biden for a ceasefire between Israel and Palestinian militants Hamas in the Gaza Strip, at the UN headquarters in New York City on June 10. reuters
WEDNESDAY JUNE 12, 2024 25 THEEDGE CEO MORNING BRIEF MARKETS Top 20 active stocks World equity indices Top gainers (ranked by %) Top losers (ranked by %) Top gainers (ranked by RM) Top losers (ranked by RM) NAME VOLUME CHANGE CLOSE YTD MARKET (MIL) (RM) CHANGE CAP (%) (RM MIL) HARVEST MIRACLE CAPITAL BHD 235.490 0.01 0.11 -12.50 129.2 JCY INTERNATIONAL BHD 179.470 0.13 0.80 261.36 1,688.7 SNS NETWORK TECHNOLOGY BHD 150.950 0.11 0.76 221.28 1,217.7 YNH PROPERTY BHD 146.900 0.13 0.80 -81.29 420.2 EKOVEST BHD 126.130 0.02 0.49 -1.02 1,438.2 TALAM TRANSFORM BHD 123.500 0.01 0.02 33.33 85.9 SMART ASIA CHEMICAL BHD 88.116 0.080 0.54 - 199.7 SIN-KUNG LOGISTICS BHD 85.250 -0.02 0.17 - 198.0 JATI TINGGI GROUP BHD 82.670 0.11 0.64 135.19 248.8 JAKS RESOURCES BHD 80.730 0.02 0.19 2.70 484.6 PUC BHD 64.720 0.00 0.06 50.00 148.1 SMTRACK BHD 64.670 0.00 0.04 -20.00 51.95 WIDAD GROUP BHD 61.510 -0.01 0.08 -83.51 247.72 ISKANDAR WATERFRONT CITY BHD 61.470 0.06 0.825 13.01 759.93 WCT HOLDINGS BHD 56.550 -0.02 0.895 80.81 1268.43 MALAYSIAN RESOURCES CORP BHD 55.020 0.03 0.685 53.93 3060.24 LBS BINA GROUP BHD 53.590 0.14 0.92 60.00 1425.99 HUBLINE BHD 52.61 -0.01 0.06 50 257.36 PEGASUS HEIGHTS BHD 49.21 0.01 0.01 100 108.21 SARAWAK CONSOLIDATED 48.33 0.00 0.315 -66.31 207.5 Data as compiled on June 11, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) PEGASUS HEIGHTS BHD 0.010 100.00 49210.30 100.00 108.2 MQ TECHNOLOGY BHD 0.015 50.00 1465.60 -40.00 24.5 XOX BHD 0.015 50.00 7222.10 0.00 77.9 PARKWOOD HOLDINGS BHD 0.185 37.04 602.90 27.59 50.9 BCM ALLIANCE BHD 0.020 33.33 7262.10 0.00 40.7 TALAM TRANSFORM BHD 0.020 33.33 123497.60 33.33 85.9 QUALITY CONCRETE HOLDINGS 1.320 29.410 138.40 20.00 76.5 KAMDAR GROUP M BHD 0.370 23.33 1518.00 94.74 73.3 GRAND CENTRAL ENTERPRISES 0.440 22.22 0.10 25.71 86.7 HUP SENG INDUSTRIES BHD 1.220 20.79 21766.70 56.33 976.0 G3 GLOBAL BHD 0.030 20.00 977.30 20.00 113.2 KEY ASIC BHD 0.060 20.00 43781.9 0.00 83.88 TWL HOLDINGS BHD 0.030 20.00 14730.6 0.00 172.49 JATI TINGGI GROUP BHD 0.635 19.81 82668.2 135.19 248.79 JCY INTERNATIONAL BHD 0.795 19.55 179473.5 261.36 1688.66 YNH PROPERTY BHD 0.795 18.66 146897.1 -81.29 420.15 LBS BINA GROUP BHD 0.920 17.95 53589.8 60.00 1425.99 UCREST BHD 0.14 16.67 36973.7 -12.5 103.86 SNS NETWORK TECHNOLOGY BHD 0.755 16.15 150945.1 221.28 1217.65 CENSOF HOLDINGS BHD 0.37 15.63 31608.2 60.87 204.34 Data as compiled on June 11, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) BORNEO OIL BHD 0.005 -50.00 5,409.8 -66.67 60.0 KEY ALLIANCE GROUP BHD 0.005 -50.00 281.7 -50.00 18.4 HONG SENG CONSOLIDATED BHD 0.010 -33.33 2,930.5 -60.00 51.1 ALAM MARITIM RESOURCES BHD 0.030 -14.29 4,930.6 0.00 46.0 HUBLINE BHD 0.060 -14.29 52,610.7 50.00 257.4 REACH ENERGY BHD 0.030 -14.29 14,907.8 -25.00 63.9 TA WIN HOLDINGS BHD 0.035 -12.50 1,742.9 -12.50 120.2 PERAK CORP BHD 0.345 -11.54 416.1 -28.13 34.5 PINEAPPLE RESOURCES BHD 0.800 -10.11 110.0 0.63 38.8 ICONIC WORLDWIDE BHD 0.095 -9.52 5,717.8 -10.31 160.3 MTOUCHE TECHNOLOGY BHD 0.050 -9.09 154.1 0.00 46.3 YB VENTURES BHD 0.210 -8.70 505.0 -17.65 61.1 SIN-KUNG LOGISTICS BHD 0.165 -8.33 85,246.1 - 198.0 FINTEC GLOBAL BHD 0.230 -8.00 4,545.0 -23.33 45.5 NPC RESOURCES BHD 1.800 -7.69 3.0 0.00 204.1 BERTAM ALLIANCE BHD 0.125 -7.41 47.9 -16.67 40.3 AVILLION BHD 0.065 -7.14 4,744.1 30.00 73.7 D’NONCE TECHNOLOGY BHD 0.065 -7.14 1,564.5 -53.57 28.2 JASA KITA BHD 0.135 -6.90 31.2 7.14 60.7 HARBOUR-LINK GROUP BHD 1.700 -6.59 3,158.3 50.44 677.6 Data as compiled on June 11, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) NESTLE MALAYSIA BHD 124.000 -2.300 54.5 5.44 29,078.0 PETRONAS DAGANGAN BHD 17.680 -0.420 1532.0 -19.05 17,564.3 UNITED PLANTATIONS BHD 24.300 -0.320 397.0 38.68 10,079.3 KUALA LUMPUR KEPONG BHD 20.580 -0.280 1362.3 -5.68 22,564.0 FRASER & NEAVE HOLDINGS BHD 31.880 -0.220 217.4 13.89 11,692.9 HEINEKEN MALAYSIA BHD 23.720 -0.180 179.1 -1.74 7,165.8 PPB GROUP BHD 14.520 -0.160 935.9 0.28 20,656.2 HARBOUR-LINK GROUP BHD 1.700 -0.120 3158.3 50.44 677.6 PETRONAS CHEMICALS GROUP 6.590 -0.120 4157.8 -7.96 52720.0 KLCCP STAPLED GROUP 7.450 -0.110 2337.1 5.08 13,449.7 CARLSBERG BREWERY MALAYSIA 18.940 -0.100 739.1 -1.76 5,790.9 GE-SHEN CORP BHD 3.420 -0.100 112.4 194.83 429.8 PETRONAS GAS BHD 18.280 -0.100 363.6 5.06 36,171.2 RANHILL UTILITIES BHD 1.600 -0.100 16091.3 78.67 2073.53 SIME DARBY BHD 2.650 -0.100 31298.7 12.77 18061.33 MALAYSIA AIRPORTS HOLDINGS 9.95 -0.090 1,437.8 35.19 16,602.1 MALAYSIA SMELTING CORP BHD 2.73 -0.090 1,244.7 34.48 1,146.6 MSM MALAYSIA HOLDINGS BHD 2.39 -0.090 1,972.7 48.45 1,680.1 PINEAPPLE RESOURCES BHD 0.80 -0.090 110.0 0.63 38.8 UMS HOLDINGS BHD 2.21 -0.090 4.7 9.84 89.9 Data as compiled on June 11, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) VITROX CORP BHD 4.850 0.600 2874.20 33.06 9,175.4 DUTCH LADY MILK INDUSTRIES 38.000 0.470 35.10 64.08 2,432.0 SUNWAY CONSTRUCTION GROUP 3.740 0.430 - 92.78 4,822.2 SAM ENGINEERING & EQUIPMENT 6.740 0.310 1510.10 68.85 4,562.9 TELEKOM MALAYSIA BHD 6.590 0.300 32180.40 18.74 25,290.5 GAMUDA BHD 6.400 0.280 21311.40 39.43 17,729.3 VSTECS BHD 4.290 0.220 3633.30 225.00 1529.6 HUP SENG INDUSTRIES BHD 1.220 0.210 21766.70 56.33 976.0 IDEAL CAPITAL BHD 3.700 0.200 5.50 23.33 1,850.0 ALLIANZ MALAYSIA BHD 21.880 0.180 1.6 18.66 3,894.0 PRESS METAL ALUMINIUM 5.910 0.160 18442.9 22.87 48,696.1 LBS BINA GROUP BHD 0.920 0.140 53589.80 60.00 1,426.0 FRONTKEN CORP BHD 4.440 0.130 3049.4 37.04 6,983.7 JCY INTERNATIONAL BHD 0.795 0.130 179,473.5 261.36 1,688.7 YNH PROPERTY BHD 0.795 0.125 146,897.1 -81.29 420.2 DIALOG GROUP BHD 2.620 0.120 14,876.4 26.57 14,783.65 GENTING PLANTATIONS BHD 6.050 0.120 416.7 8.10 5,427.8 IJM CORP BHD 2.910 0.120 19,276.5 54.79 10,202.94 SUNWAY BHD 3.670 0.120 25,862.3 78.16 20,678.0 PARAGON UNION BHD 3.69 0.11 135.9 32.26 309.33 Data as compiled on June 11, 2024 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 38,868.04 69.05 0.18 S&P 500 * 5,360.79 13.80 0.26 NASDAQ 100 * 19,074.67 73.72 0.39 FTSE 100 * 8,228.48 -38.02 -0.46 AUSTRALIA 7,755.38 -104.65 -1.33 CHINA 3,028.05 -23.23 -0.76 HONG KONG 18,176.34 -190.61 -1.04 INDIA 76,647.92 157.84 0.21 INDONESIA 6,855.69 -65.86 -0.95 JAPAN 39,134.79 96.63 0.25 KOREA 2,705.32 4.15 0.15 PHILIPPINES 6,410.07 -48.57 -0.75 SINGAPORE 3,309.21 -12.87 -0.39 TAIWAN 21,792.12 -66.26 -0.30 THAILAND 1,318.27 -0.30 -0.02 VIETNAM 1,284.41 -6.26 -0.49 Data as compiled on June 11, 2024 * Based on previous day’s closing Source: Bloomberg CPO RM 3,9223.00 OIL US$ 81.55-0.08 RM/USD 4.7185 RM/SGD 3.4871 RM/AUD 3.1116 RM/GBP 6.0069 RM/EUR 5.0708