The EDGE - 25 October 2023

HOME: Two top officials of GIIB acquitted of charges of furnishing fake documents p4 Penang Development Corp to fully refund Umech Land deposit p4 Construction engineering solutions group Plytec seeks ACE Market listing to raise RM37.1 mil p5 Prosecution seeks to amend Najib’s abuse of power and money laundering 1MDB charges as RM5 mil not traceable p14 WORLD: The 5% bond market means pain is heading everyone’s way p18 CEOMorningBrief WEDNESDAY, OCTOBER 25, 2023 ISSUE 658/2023 theedgemalaysia.com CHINA TO ISSUE US$137 BIL SOVEREIGN DEBT TO SUPPORT ECONOMY p17 Report on Page 2. Govt in settlement talks over Semantan Estate dispute, court told Putrajaya lifts cracking, leaching curb on Lynas, imposes strict conditions on radioactive material Report on Page 3. THE EDGE FILE PHOTO

WEDNESDAY OCTOBER 25, 2023 2 THEEDGE CEO MORNING BRIEF published by ( 2 6 6 9 8 0 - X ) tel . 603-77218000 Level 3, Menara KLK, 1 Jalan PJU 7/6, Mutiara Damansara, 47810, Petaling Jaya, Selangor, Malaysia publisher + ceo . Ho Kay Tat editor-in-chief . Kathy Fong chief commercial officer . Sharon Teh chief operating officer . Lim Shiew Yuin editors . Jenny Ng . Tan Choe Choe Lam Jian Wyn to contact editors: [email protected] to advertise: [email protected] the edge ceo morning brief Read from desktop or mobile device. You can print in A4 to read. Set print mode to fit or shrink oversize page. to get on emailing list [email protected] HOME Govt in settlement talks over Semantan Estate dispute, court told PUTRAJAYA (Oct 24): The federal government has told the Court of Appeal (COA) on Tuesday that it was in the midst of negotiating a settlement with Semantan Estate (1952) Sdn Bhd for a seven-decade dispute over 263.272 acres of land along Jalan Duta that is currently occupied by public properties. The land is located along Jalan Duta in Mukim Batu, upon which sits the Malaysian Institute of Integrity, the National Archives, the Kuala Lumpur Syariah Court, the government complex building in Jalan Duta and the Federal Territory mosque. Senior federal counsel (SFC) Shamsul Bolhassan, who is also deputy head I of the Attorney General’s Chambers’ civil division, told a three-member appellate bench led by judge Datuk Lee Swee Seng that Putrajaya is applying for an adjournment to Semantan Estate’s appeal hearing scheduled on Tuesday, following a negotiated settlement between parties. Shamsul apologised to the bench for being late in seeking the adjournment, citing a letter from Semantan Estate that it had only received on Monday. “They (Semantan Estate) wrote to us as they want to facilitate negotiations,” he said, adding that the government will decide on the quantum of damages in mesne profit. “There has been some development following a change in government and ministers. That put us in a difficult position to reach a settlement,” Shamsul added. The SFC initially mentioned that the government had agreed on a possible quantum but could not reach a deal on the mode of payment. However, Semantan counsel Datuk Dr Cyrus Das, who appeared with Ira Biswas and Janet Chai, told the appellate court that they were unsure whether an amount had been agreed upon. BY ABDUL HAFIZ YATIM theedgemalaysia.com The Semantan Estate land is located along Jalan Duta in Mukim Batu, upon which sits the Malaysian Institute of Integrity, the National Archives, the Kuala Lumpur Syariah Court, the government complex building in Jalan Duta and the Federal Territory mosque. Lee and other members of the bench were not inclined to agree to an adjournment, as there was neither anything concrete nor a plan pointing towards the settlement, and the case had gone on for too long. “This case happened before I was born — pre-Merdeka,” Lee said, indicating the bench was prepared to hear the case in the afternoon, after parties have discussed the settlement. However, Shamsul said they may need more time as the matter of settlement would not be easy, as it would have to be brought to various ministries and also the Cabinet. Cyrus concurred with the SFC about the complexity of the situation. The third member of the bench, Datuk Azizul Azmi Adnan, told Shamsul that the government should provide material progress with regards to the settlement negotiations. However, Shamsul and Ira told the bench that this would be hard to do, as they are not involved in said negotiations. Following this, Shamsul requested for a three-month adjournment. Final adjournment granted The court was informed that there were two prior adjournments made before this, but it was not the fault of both parties, as on the first occasion there was insufficient time to hear the appeal, and during the second time, there was not enough quorum to meet the three-member bench. After a short break, Lee, who sat with Datuk Che Mohd Ruzima Ghazali and Azizul, granted a final adjournment of the hearing for another three months. Read the full story

WEDNESDAY OCTOBER 25, 2023 3 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 24): The government has now lifted the ban on Lynas Malaysia Sdn Bhd’s cracking and leaching (C&L) activities. Furthermore, Lynas is allowed to import naturally occurring radioactive materials (NORM) on the condition that the company is required to extract thorium from the water leach purification (WLP) residue until the radioactive content meets the required level as set by the Atomic Energy Licensing Board (AELB). Science, Technology and Innovation Minister Chang Lih Kang said the company will be required to ensure that radioactive content in the WLP residue is below one becquerel per gramme (Bq/g). These are the new stringent conditions, according to Chang, that the government has attached to the renewal of Lynas’ licence which will expire in March 2026. “Before this, our concern was that we do not want continuous accumulation of radioactive waste in Malaysia, so we did not allow them to import and did not allow them to process it, because that will produce radioactive waste. “With the technology today, thorium extraction, they can either extract thorium from the waste, or they can extract from the feedstock, lanthanide concentrate. Once it is extracted, then it will go through C&L, and there won’t be any radioactive waste. The waste will be considered scheduled waste, because it (radioactive content) will be under 1Bq/g,” Chang told a press conference on Tuesday. Earlier this year, the government refrained Lynas from carrying out C&L activities domestically at its Lynas Advanced Materials Plant (LAMP) in Gebeng, Pahang despite receiving a three-year licence renewal last month to operate until March 2026. This meant that Lynas must stop importing and processing rare earths concentrate after July, and can only refine the materials at LAMP. The C&L of lanthanide concentrate was not allowed to be done there. Speaking to the media, Chang explained that the decision for the government to relook at Lynas’ licence was made by the AELB based on the findings of its preliminary research at the laboratory level which showed that thorium, a radioactive material, can be extracted from WLP residue. Putrajaya lifts cracking, leaching curb on Lynas, imposes strict conditions on radioactive material BY EMIR ZAINUL & SL CHNG theedgemalaysia.com With the technology today, thorium extraction, they can either extract thorium from the waste, or they can extract from the feedstock, lanthanide concentrate. Once it is extracted, then it will go through C&L [cracking and leaching], and there won’t be any radioactive waste. The waste will be considered scheduled waste, because it (radioactive content) will be under 1Bq/g.” — Science, Technology and Innovation Minister Chang Lih Kang. For this, Chang said that Lynas has allocated a ball-park figure of RM25 million for the research and development of this process. “Slowly we will not need the PDF (permanent disposal facility) anymore. Once they start scaling up and up to commercial scale, then they can also extract thorium from the waste, WLP, so after extracting thorium from WLP, those waste will be (considered) scheduled waste, and will not be radioactive waste anymore. So for the time being, PDF will still be used to store these radioactive waste,” Chang said. Building the PDF is one of the conditions set by the government in granting the previous licence renewal to Lynas. Chang was quoted in February as saying that the PDF is 32% built and is expected to be completed within three years to house the radioactive wastes, which then weighed 1.08 million tonnes, having accumulated at LAMP in Gebeng since it started operations in 2012. Chang also noted that thorium has the potential to be sold as a commodity to be used in nuclear power plants. “Mosti (Ministry of Science, Technology and Innovation) is confident that with this development, the related operations will comply with legal controls, protect the interests of the rakyat and subsequently, the country will be able to attract billions of ringgit worth of investment in the local rare earths industry to support the hightech material manufacturing industry,” Chang said. Last Friday, Australia’s Lynas Rare Earths said it planned to shut all operations in Malaysia on a temporary basis, except a mixed rare earth carbonate processing plant in the December quarter, with minimal volumes of the raw material processed during the interim shutdown. Separately, Lynas Malaysia in August was granted leave by the Malaysian High Court to challenge the government’s decision regarding the operational and licensing terms imposed on the company. In one of the judicial reviews, Lynas is looking to, among other matters, challenge the ministry’s decision that it can no longer import NORM into Malaysia from Jan 1, 2024, and that its C&L activities should be shifted outside of Malaysia from the same date. BERNAMA As such, Lynas will now be required to extract thorium from the WLP residue until the radioactive content meets the required level as set by AELB. Chang noted that it was Lynas who proposed the thorium extraction process. At this point, the minister said that Lynas has proved the capability of the extraction process at lab scale, and the company is given two years to bring the proofof-concept to commercial level.

WEDNESDAY OCTOBER 25, 2023 4 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 24): Penang Development Corp (PDC) will be required to fully refund the deposit paid by Umech Land Sdn Bhd amounting to RM64.60 million following the termination of the joint development agreement (JDA) for the development of Batu Kawan Industrial Park 2 (BKIP2). In a filing with Bursa Malaysia on Tuesday, Sunway Bhd confirmed that its 70%-owned subsidiary Umech Land received a notice of termination of the JDA from PDC last Friday. “Pursuant to the notice of termination, the JDA shall be terminated on the expiry of 90 days from the date of the notice of termination,” Sunway said, adding that PDC will fully refund the deposit within a period of 30 days from the date of termination of the JDA. Last week, the board of directors of PDC terminated its controversial collaboration agreement with Umech Land for the development of BKIP2. According to a statement posted on Penang Chief Minister Chow Kon Yeow’s Facebook page, the board of directors of PDC said the change in majority shareholdPenang Development Corp to fully refund Umech Land deposit KUALA LUMPUR (Oct 24): Two former top officials of GIIB Holdings Bhd, namely former executive director Wong Ping Kiong and former CEO Tai Boon Wee, were on Tuesday discharged and acquitted by the High Court of charges related to the furnishing of fake documents to the company’s auditor Grant Thornton Malaysia PLT over the sale of RM2.95 million worth of machinery that allegedly did not exist. Judge Datuk Azhar Abdul Hamid granted the defence’s motion to acquit the duo. The decision was confirmed by their counsel Amer Hamzah Arshad. “After reading the submissions and affidavits, the court agrees with the defence and hence grants the relief to set-aside the charges and an acquittal,” Azhar said in his decision. Wong, 60, was charged in January on four counts of giving fake documents to Grant Thornton audit manager Tam Siew Peng. The first document involved a fake GIIB debit note on the sale of machinery by the company for RM2.95 million to Top Rate Engineering, which never occurred. On the second, third and fourth charges, Wong was charged with acting in the same fashion in giving a directors’ circular from GIIB’s subsidiary — Goodway Rubber Industries Sdn Bhd — to Grant Thornton, involving the sale of the RM2.95 million worth of machinery to Top Rate Engineering Works. The prosecution claimed that the sale never took place, and that money never changed hands. Wong was charged under Section 18 of the Malaysian Anti Corruption Commission Act, where she could be jailed for up to 20 years and fined RM10,000, or five times the value of the bribe, whichever is higher. Tai, meanwhile, was charged on the same day, with colluding with Wong. He was charged under Section 28(1)(c) of the MACC Act, which relates to abetting or engaging in a criminal conspiracy to commit any offence under the Act. If he had been found guilty, he could have faced the same punishment as Wong. The duo filed a motion to strike out the charges on May 5, as they said that they had no intention to deceive Grant Thornton; that the document in question does not relate to Grant Thornton; that there is a need to show that Grant Thornton Two top officials of GIIB acquitted of charges of furnishing fake documents BY HAFIZ YATIM theedgemalaysia.com BY EMIR ZAINUL theedgemalaysia.com ers of Umech Land’s equity structure, which was done without informing PDC and without PDC’s approval, “is a serious issue and cannot be accepted by the board of PDC”. This was referring to the fact that Sunway had emerged as a majority shareholder of Umech Land only two days prior to the announcement of the agreement by injecting RM23.33 million into the company, thus diluting the shareholding of the original shareholders — Karen Cheng Pui Kwan to 21% and Nathaniel Rajakumar to 9%. Before Sunway’s cash injection, Umech Land was 70:30 owned by Cheng and Nathaniel. However, the board of PDC maintained that the selection process of Umech Land was transparent and in line with PDC policy. Sunway shares closed three sen higher at RM1.88 apiece on Tuesday, with a market capitalisation of RM9.41 billion. was actually cheated or deceived; and the three directors’ circular resolution cannot be fake in its contents. Their lawyers had argued that the duties and responsibilities of an auditor under the Companies Act 2016 do not constitute an interest under Section 18 of the MACC Act. Here, the lawyers said the auditor does not have direct financial interest in the document, which is alleged to have false particulars. “Such issue falls under the purview of the Companies Commission Malaysia and not the MACC,” they added. In a statement, Tai said: “The facts remain clear that we were subjected to false allegations and a conspiracy to tarnish our reputations. I am glad that the High Court has upheld justice. Moving forward, I wish the next generation leaders will continue to be guided by GIIB Group’s core value of integrity, trust and respect.” Last month, it was reported that Tai had passed the leadership of the company to his sons Tai Qisheng and Tai Qiyao, by electing them executive directors. (From left) Former GIIB Holdings Bhd director Wong Ping Kiong, lawyers Kee Shu Min and Amer Hamzah Arshad, and former GIIB director Tai Boon Wee. GIIB HOLDINGS BHD

WEDNESDAY OCTOBER 25, 2023 5 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 24): AmBank Research expects the share subscription agreement (SSA) in Digital Nasional Bhd (DNB) and the new equity structure to be finalised and subscribed to by the end of October 2023 to expedite 5G development rollouts across the country. It reckons that the second 5G network will be rolled out in early 2024 depending upon DNB’s network coverage of populated areas (CoPA) reaching 80% by the end of 2023. As of Sept 30, DNB’s 5G network CoPA has reached 70.2% with 5,873 sites. It said to achieve the target, all telcos must take an equity stake in Entity A and once achieved, telcos can move to Entity B and have their stakes acquired by those left in Entity A, in addition to the government relinquishing its shareholding in DNB to the private entities. “We reckon that Entity A could consist of Telekom Malaysia Bhd (TM), CelcomDigi Bhd and YTL Communication Sdn Bhd, who were the first three telcos to agree to subscribe for equity stakes in DNB previously. AmBank sees 5G share subscription agreement finalised, subscribed to by end-October KUALA LUMPUR (Oct 24): ACE Market-bound Plytec Holding Bhd, which is set to be listed on Nov 15, is seeking to raise RM37.1 million via the issuance of about 106.1 million new shares at 35 sen per share via its initial public offering (IPO) exercise. The construction engineering solutions and services provider is set to have a market capitalisation of RM212.1 million upon listing, with an enlarged share capital of 606 million shares. This values the company at 15.49 times its price-earnings ratio, based on earnings per share of 2.26 sen and net profit of RM13.69 million for the financial year ended Dec 31, 2022 (FY2022). Of the total proceeds of RM37.1 million, Plytec said that RM9 million will be allocated for the repayment of borrowings, followed by RM8 million for its capital expenditure. Meanwhile, another RM7.8 million for the construction of factories and centralised labour accommodations on Plytec’s Olak Lempit Land, which is expected to be completed by the third quarter of 2024 (3Q2024) The group will also allocate RM6.3 million for its working capital, RM4 million will be used to cover estimated listing expenses and the remaining RM2 million is set aside to purchase software systems and hardware. Applications for the IPO, which is now open, will close at 5pm on Oct 31. KAF Investment Bank Bhd is the principal adviser, sponsor, managing underwriter, joint underwriter and joint placement agent for the IPO, while Kenanga Investment Bank Bhd is the joint underwriter and joint placement agent. IPO a stepping stone to strengthen CME segment Plytec group managing director cum chief executive officer Yang Kian Lock said the group intends to strengthen its position as a construction method engineering (CME) solutions provider by increasing its capacity to provide temporary work equipment — which includes self-climbing platform, aluminium platform, shoring system and green framework that supports building structures during construction — following the IPO. “Our aim is to further strengthen our position as a construction method engineering solutions and digital design engineering solutions provider with a focus on the adoption of digital smart technology,” Yang said during the group’s prospectus launch on Tuesday. Besides CME solutions, Plytec has three Construction engineering solutions group Plytec seeks ACE Market listing to raise RM37.1 mil other business segments, namely: trading and distribution of building materials, digital design and engineering (DDE) solutions, and prefabricated construction (PC) solutions. As of Aug 31, the group’s outstanding orders stood at RM75.53 million, which are to be fulfilled by up to FY2024. The group plans to expand its presence, mainly for its CME solutions segment, in the Asean market as it recognises the immense potential that the segment offers. “We have a distributor in Myanmar and we are trying to establish (a link) to Vietnam and Indonesia because the strategy [is to expand to Southeast Asia market],” the group chief operating officer Louis Tay Chee Siong told reporters. On the impact of the weak local currency on its business, particularly concerning material costs, Yang said the group is primarily sourcing its products from China, which acts as a natural buffer against the stronger US dollar. “In terms of raw material prices, I do see it is quite stable as a lot of our products are from China. Hence, we are not much impacted by the (stronger) US dollar,” he assured. BY ANIS HAZIM & LUQMAN AMIN theedgemalaysia.com Bernama (From third left) KAF Investment Bank Bhd chief executive officer Rohaizad Ismail, with Plytec Holding Bhd independent non-executive chairman Tan Sri Dr Ahmad Tajuddin Ali, group managing director and CEO Yang Kian Lock and the company's management team, at the launch of the initial public offering prospectus. CONTINUES ON PAGE 6 ZAHID IZZANI/THE EDGE

WEDNESDAY OCTOBER 25, 2023 6 THEEDGE CEO MORNING BRIEF HOME “Meanwhile, Entity B comprises Maxis Bhd and U Mobile Sdn Bhd who previously rejected DNB shareholding participation,” it said in a note. AmBank Research said these players potentially have equal substantive stakes in DNB, assuming DNB is 100% owned by them. The equity stake would rise to 20% with a substantive value of RM300 million compared to the previously proposed 65% telcos’ shareholding, which implied an average of RM210 million for a 14%stake each. With fibre prices being lowered following the revision of mandatory standard access pricing (MSAP), which regulates wholesale pricing for high-speed broadband, AmBank Research expects broadband prices of other telcos to follow suit after TM’s revision of reference access offer (RAO) for wholesale charges and reduction in its own Unifi retail prices. “We reckon Maxis will reach an agreement with TM’s RAO and likewise revise home fibre prices by the end of this month to maintain competitiveness with the dominant fibreoptic operator’s new KUALA LUMPUR (Oct 24): AirAsia X Bhd (AAX) achieved a passenger load factor of 80% for the third quarter of 2023 (3Q2023), up 7% year-on-year (y-o-y) while seat capacity surged over nine times, hitting 1.01 million seats flown. The performance was attributed to a 10 times y-o-y increase in the number of passengers with over 807,000 passengers carried in 3Q2023 compared to nearly 80,500 passengers in the same period last year, the medium-haul low-cost carrier said in a statement on Tuesday. “Available seats per kilometre (ASK) surged close to 12 times higher y-o-y at 4,412 million, bolstered by the increase in seat capacity and the continued recovery of the company’s network,” it added. On a quarter-on-quarter (q-o-q) basis, AAX’s seat capacity grew by 24%, while ASK capacity rose by 26% as the number of serviceable aircraft increased by three aircraft q-o-q in 3Q2023. During 3Q, AAX Malaysia launched its second route to India with flights to Amritsar (four times weekly) and its fourth route in China with flights to AAX’s 3Q load factor up 7% y-o-y to 80%, capacity surges nine times Chengdu (three times weekly), reinforcing its commitment to return to core markets first which it served before the pandemic. It also noted that flight frequency soared to 114 flights per week by the end of 3Q2023 compared with 23 flights during the end of the same period last year. Meanwhile, on q-o-q basis, its flight frequency was up 19%, with Shanghai and Perth ramping up frequencies to daily flights. The group’s associate, AirAsia X Thailand carried a total of 342,078 passengers, with a healthy PLF of 82% for the quarter under review. Its ASK capacity grew by six times higher y-o-y at 1,797 million while seat capacity jumped five times higher y-o-y at 416,053 seats. In terms of network, AirAsia X Thailand’s overall flight frequency grew by 15% q-o-q with frequency on the Shanghai route increasing to six times weekly during the quarter. As at end-Sept 2023, AAX’s total fleet size remained as 17 A330s, with 14 aircraft now activated and operational, while AirAsia X Thailand’s total fleet size stood at eight A330s, with six aircraft activated and operational. AAX, which suffered a setback last Thursday when it failed to be uplifted from Practice Note 17 (PN17) status, enjoyed a share price rebound on Tuesday. Its stock closed one sen or 0.55% higher to RM1.84, which translates to a market capitalisation of RM823 million. Nonetheless, the stock has fallen 25% so far in the month of October. BY JUSTIN LIM theedgemalaysia.com FROM PAGE 5 broadband prices,” it said. It also believes the wholesale price ceiling for the second 5G network should be on par with DNB’s 5G network, which is currently set at 13 sen per gigabyte. The research house also elaborated on the good news from the Budget 2024 announcement. The government has allocated RM60 million to implement the 5G Cyber Security Testing Framework and 5G Technology Local Expertise to counter rising cyber threats, especially data theft. “We view this positively as improvement in cyber security would boost the adoption of 5G and digitalisation by enterprises and consumers. “In addition, exemption on the 8.0% service tax to telecom products as part of the government’s initiative to lower 5G access costs and overall product prices could accelerate the recruitment of new subscribers,” it said. AirAsia X said it saw an increase in the number of passengers with over 807,000 passengers carried in 3Q2023 compared to nearly 80,500 passengers in the same period last year. THE EDGE FILE PHOTO PEXELS

WEDNESDAY OCTOBER 25, 2023 7 THEEDGE CEO MORNING BRIEF

WEDNESDAY OCTOBER 25, 2023 8 THEEDGE CEO MORNING BRIEF 8 corporate MALAYSIA OCTOBER 24, 2023 He also proposed for the government to set up a child and youth climate change committee. Another group that must be included in the just transition is small and medium[-sized] enterprises (SMEs), many of which currently have insufficient awareness about sustainability. “It’s not the lack of funding. It is there. Banks have come together and we want to support the journey for the transition,” said Shahril Azuar Jimin, chief sustainability officer of Maybank Group. “Many (SMEs) are still recovering from the effects of Covid, and some are still citing the often-used phrase that ‘to go green, you cannot be in the red’,” he said. This is worrying because the SMEs will suffer when new regulations like the European Union’s Carbon Border Adjustment Mechanism are introduced, Shahril added. On the other hand, to prevent greenwashing, there needs to be comparable data and increasingly, standards to understand social and environmental impact of companies’ policies. More sophisticated methodologies are being introduced to enable the latter, said Helena Fung, head of sustainable finance and investment for Asia-Pacific at the London Stock Exchange Group. “Having clear standards will be critical to understand the impact of what companies are doing and measuring what they do, versus what they say they do.” Fund sustainability projects through carbon markets and blended finance, say panellists at JC3 conference B Y ARIS RIZA AND TAN Z HAI Y U N T HEEDGEM A L AYSI A .CO M K UALA LUMPUR (Oct 24): Carbon credits from voluntary carbon markets (VCM) should still be considered as a solution to address climate change, despite criticisms surrounding the integrity of VCM currently, said speakers during a panel session at the JC3 Journey to Zero Conference 2023 in Sasana Kijang, Kuala Lumpur on Tuesday. This is because the goal to keep global warming to below 1.5 degrees Celsius and limit the negative impacts of climate change might not be achievable by the expected timeline, said the speakers at the panel titled “Elevating VCM: Prerequisites for mobilising private finance in the climate mission”. “We are very dangerously poised when it comes to meeting any of the climate scenarios given by the Intergovernmental Panel on Climate Change and other bodies. We are heading towards a much warmer world,” said Jigar Shah, head of environmental, social and governance (ESG) research and chief executive officer (CEO) of Maybank Securities India. The conference, organised by the Joint Committee on Climate Change (JC3), brings together various stakeholders to discuss climate and nature finance. The JC3 was established in 2019 to build climate resilience within the Malaysian financial sector, and is co-chaired by Bank Negara Malaysia (BNM) and the Securities Commission Malaysia. JC3’s members comprise senior officials from Bursa Malaysia and financial industry players. VCMs allow entities to purchase carbon credits — generated by projects that reduce, avoid or remove carbon emissions — and use it to offset their own emissions. It is often pitched as a solution to channel funds towards projects that need financing, and to enable action for companies that find it difficult to reduce emissions directly due to technological or cost constraints at the moment. “VCM is one of the best tools to facilitate and implement the common but differentiated responsibility (principle) in the sense of providing funding from developed to developing economies,” said Dr Ali Izadi-Najafabadi, head of Asia-Pacific for BloombergNEF. However, the credibility of carbon credits is often questioned, as entities are accused of greenwashing. To address this, standards and methodologies that govern the supply and demand for carbon credits are critical. The Voluntary Carbon Markets Integrity Initiative (VCMI) and the Integrity Council for the Voluntary Carbon Market are currently playing this role by setting out global thresholds and frameworks for assessing carbon credits. The VCMI, for instance, released a Claims Code of Practice in January, that serves as a guide for companies that want to engage with VCMs. “It is designed to provide a tool for companies that want to do the right thing and protect their reputation [and] not be liable to criticism [by] the public, or in extreme cases, be litigated against because of potentially misleading claims,” said Mark Kenber, executive director of the VCMI. Another module of the Claims Code of Practice will be released in November and provide companies with more insights on what are the good practices when utilising carbon credits. In Malaysia, the Bursa Carbon Exchange (BCX) by Bursa Malaysia launched its first auction of carbon credits this year. Dr Wei-Nee Chen, head of carbon markets at Bursa Malaysia, said that capacity building is important to support high-quality carbon projects. “At the exchange level, we have an obligation to develop a credible carbon market offering. For BCX, we developed our standardised contracts very carefully. It is intended to send a signal that we only want to admit high-quality carbon credits into our platform,” she said. “For instance, we are not accepting any carbon credits older than 2016; we are providing pricing transparency; we publish our trading activities on our website; and we screen these carbon credits prior to admission.” Safeguards around the VCM to ensure the emissions reduction or removals are not counted by more than one entity, will be discussed at the upcoming United Nations Climate Change Conference, among other issues. This is important to prevent the same problems that plagued the Clean Development Mechanism (CDM) under the Kyoto Protocol from occurring again, said Ali. “The challenge with the CDM is [that] you had issues around a potential for unlimited supply of projects but also, double counting of emissions reductions,” he said. Blended finance important to support riskier projects More structure is needed to support the smaller and riskier sustainability projects. This is where blended finance — where public and private capital are combined — can support projects that commercial banks would not normally fund. This is especially needed in developing countries. “Developing parts of Asia is such that a lot of [projects or assets] present a level of risk [that commercial investors or commercial financers] are not ready to take,” said Marat Zapparov, CEO of Pentagreen Capital, at the panel titled “Unveiling success: Extracting insights from projects flourishing through blended finance structures”. Adam Ng, the Asia-Pacific regional and technical lead for the Greening Financial Regulation Initiative at World Wildlife Fund (WWF) Malaysia, shared how blended finance has helped with WWF’s “un-bankable” projects. Projects like turning natural resources to health products like oils and balms brought some revenue to villages in Eastern Malaysia. “We are looking at how we can scale up this kind of (village-based industry) in the East coast to [transform] them into SMEs (small and medium-sized enterprises),” said Adam. Include youths, SMEs and engage in impact reporting Youths are part of the vulnerable population due to climate change impacts, and a just transition will have to consider their needs. Mogesh Sababathy, Youth Climate Champions Consultant for UNICEF Malaysia, said youths must be included in decision-making processes on climate-related issues. Additionally, financial resources should be allocated to meet climate targets and deployed over longer time frames. “The implementation of long-term climate budget involves setting transparent, legally-binding emission reduction targets. By locking into these commitments, current decision makers will be held accountable for their actions,” said Mogesh during the panel titled “A just transition: Advancing inclusivity in finance”. ABM announces collaborations to push sustainable practice adoptions JC3 SME Focus Group launches ESG Jumpstart portal Read also From left: UK Foreign, Commonwealth and Development Office’s Southeast Asia regional lead for green finance and carbon pricing mechanisms Charis Yeap Khai Leang, Maybank Securities India CEO and head of ESG research Jigar Shah, and BloombergNEF head of Asia-Pacific Dr Ali Izadi-Najafabadi at the JC3 Journey to Zero Conference at Sasana Kijang, Kuala Lumpur on Tuesday, Oct 24, 2023. PHOTOS BY SHAHRILL BASRI/THE EDGE World Wildlife Fund (WWF) Asia-Pacific regional and technical lead for the Greening Financial Regulation Initiative, Adam Ng. Maybank Group chief sustainability officer Shahril Azuar Jimin. London Stock Exchange Group (LSEG) head of sustainable finance and investment, Asia-Pacific, Helena Fung. HOME

WEDNESDAY OCTOBER 25, 2023 9 THEEDGE CEO MORNING BRIEF HOME BATU PAHAT (Oct 24): The proposal to build Off River Storage (ORS) near the Sungai Lebah Salleh, Kota Tinggi, needs the approval of the federal government as Johor has a water supply agreement with Singapore. State Works, Transport and Infrastructure Committee chairman Mohamad Fazli Mohamad Salleh said the ORS will involve the distribution of water from Sungai Johor to Sungai Lebah Salleh, which will then enable supply to Sedenak in Johor Bahru. He said there had been a discussion with the Natural Resources, Environment and Climate Change Ministry, which had responded positively to the proposal. “But there has been no decision yet as Sungai Johor involves a two-nation contract, not just between the ministry and state government. “We are still waiting for the ORS decision,” he told reporters after visiting the Jalan Kampung Rahmat/Sri Gading Estate project here on Tuesday. Mohamad Fazli added that the Linggui Dam in Kota Tinggi is at a satisfactory level with 100% water capacity, even though it is connected to four water treatment plants. Federal govt approval needed for Off River Storage in Kota Tinggi SINGAPORE (Oct 24): City Energy Pte Ltd and Gentari Sdn Bhd have inked a joint feasibility study agreement to construct a pipeline from Malaysia to Singapore for the import of hydrogen into the republic. This follows a memorandum of understanding signed in April 2023 between City Energy, Singapore’s sole producer and provider of piped town gas, and Gentari. City Energy is a wholly owned unit of Keppel Infrastructure Trust, while Gentari is a Malaysian clean energy solutions provider wholly owned by Petroliam Nasional Bhd (Petronas). “This collaboration with City Energy is a strategic step for Gentari towards accelerating the adoption of clean hydrogen as a viable energy source for customers in Asia-Pacific and further afield,” said Gentari chief hydrogen officer Michele Azalbert at a signing ceremony here on Tuesday. “In line with our aim to produce up to 1.2 million tonnes per annum of clean hydrogen, Gentari is pleased to contribute towards accelerating the development of clean hydrogen via cross-border infrastructure, supporting Malaysia and Singapore’s target to achieve net zero emissions by 2050,” said Azalbert. According to City Energy chief executive officer Perry Ong, the year-long feasibility study will explore the design, Singapore’s City Energy, Petronas’ unit Gentari to study feasibility of constructing hydrogen pipeline from Johor Bernama Bernama Read also: Sembcorp and Indonesia’s Persero sign joint development study agreement on green hydrogen production and export “If anything happens to the main dam, it would have a big impact on the other places. But so far, the Linggui Dam has no problems,” he said. Mohamad Fazli was commenting on the statement by National Water Services Commission (SPAN) chairman Charles Santiago on Monday. Santiago was reported as saying seven dams have been identified as high risk and may cause water supply issues to water treatment plants and their surrounding areas in the event of a dam malfunction, including due to weather factors. The dams are Pedu and Muda in Kedah; Durian Tunggal, Asahan and Jus in Melaka; Mengkuang in Penang and Linggui in Johor. Santiago proposed that the state government should develop ORS as water storage ponds as a step towards mitigating the risks. Earlier, Mohamad Fazli visited the abandoned project involving the new access road between Kampung Rahmat and Sri Gading Estate, which is now expected to be completed in December 2024, and the infrastructure connected to the water supply of the Parit Sulong area here. construction, and operation of a hydrogen pipeline from Johor, Malaysia to City Energy’s Senoko Gasworks plant in northern Singapore. “Together, we are not just building a hydrogen pipeline. We are constructing a bridge to a low-carbon future. Hydrogen, as a low-carbon energy source, is expected to supply half of Singapore’s power needs by 2050,” said Ong. Upon the conclusion of the study, both parties will collectively determine the way forward in relation to the execution of a front-end engineering design agreement. The collaboration between City Energy and Gentari will continue a long-standing cooperation between the two countries. Since 1991, Singapore has been importing natural gas from Malaysia via the 2,623km-long Peninsular Gas Utilisation pipeline, owned and operated by Gentari’s sister company Petronas Gas Bhd. Also present at the signing was Malaysia’s High Commissioner to Singapore Datuk Dr Azfar Mohamad Mustafar. BLOOMBERG Singapore targets to achieve net zero emissions by 2050.

WEDNESDAY OCTOBER 25, 2023 10 THEEDGE CEO MORNING BRIEF HOME Wasco secures RM161.86 mil contract for pre-fabricated buildings project in Africa KUALA LUMPUR (Oct 24): Wasco Bhd’s (formerly known as Wah Seong Corp Bhd) wholly owned subsidiary, W S Engineering & Fabrication Pte Ltd has secured a US$33.89 million (RM161.86 million) contract for the supply of pre-fabricatedbuildings for a project in Africa. The group said it has secured the 17 months contract from Schneider Electric France. The scope of work of the contract involves engineering, procurement and construction of pre-fabricated buildings. “The contract is expected to contribute positively to the earnings of the group over the contract period. The contract is project specific and is not renewable,” it added. — by Sulhi Khalid Privasia clinches RM42 mil contract from Education Ministry KUALA LUMPUR (Oct 24): Privasia Technology Bhd has clinched a RM42.09 million contract to provide information and communications technology (ICT) equipment rental services in school computer labs in Perlis, Kedah and Penang. The group said its wholly owned unit Privasia Sdn Bhd accepted the contract from the Ministry of Education on Tuesday. The services are expected to comply with green requirements, and will be provided on a lease-to-use basis. The contract is set to last for 65 months, with a commencement date of Oct 26, and is expected to contribute positively to the group’s earnings and net assets for the financial year ending Dec 31, 2023. — by Syafiqah Salim LPI Capital 3Q net profit climbs 23% to RM97 mil KUALA LUMPUR (Oct 24): LPI Capital Bhd’s net profit in the third quarter ended Sept 30, 2023 (3QFY2023) climbed 22.96% to RM97.37 million compared to RM79.18 million in the previous corresponding quarter, partly due to the absence of the one-off Prosperity Tax that was imposed last year. As a result, earnings per share surged to 24.45 sen from 19.87 sen. Quarterly revenue increased by 14.8% to RM498.40 million against RM434.05 million, driven by performance of its general insurance segment. For the nine-month period ended Sept 30, 2023 (9MFY2023), the group’s net profit edged up by 19% to RM235.15 million from RM197.61 million while revenue expanded by 13.5% higher to RM1.42 billion from RM1.25 billion, underpinned by higher contributions from the general insurance segment. — by Sulhi Khalid Frontken’s 3Q net profit drops 23% on higher tax payments, lower forex gains KUALA LUMPUR (Oct 24): Surface engineering service provider Frontken Corp Bhd’s net profit fell 23% to RM26.75 million in the third quarter ended Sept 30, 2023 (3QFY2023), from RM34.73 million a year before, amid higher tax payments and lower foreign exchange gains. It recorded an increase in withholding tax amounting to RM5.6 million in the current quarter, as compared to RM1.9 million paid last year. The withholding tax is in relation to the dividend the group received from its Taiwan subsidiary. As a result, earnings per share dropped to 1.7 sen in 3QFY2023 from 2.21 sen in 3QFY2022, its bourse filing showed. Quarterly revenue dipped a little to RM133.52 million from RM134.57 million, due to lower contributions from its subsidiaries in Taiwan and Malaysia amid weaker demand from its semiconductor customers. No dividend was declared during the quarter under review. The weaker quarterly performance dragged its net profit for the first nine months of FY2023 to RM82.24 million, down 12% from RM93.45 million a year ago, due to lower revenue and higher tax payments. Cumulative revenue dipped 3.47% to RM368.67 million from RM381.91 million, following lower contributions from its subsidiaries in Taiwan, Singapore and Indonesia. — by Justin Lim TDM buys private maternity hospital in Klang for RM15 mil KUALA LUMPUR (Oct 24): Plantation and healthcare outfit TDM Bhd is acquiring an entire stake in Hospital Bersalin Razif Sdn Bhd for RM15 million, cash. TDM said its wholly owned Kumpulan Medic Iman Sdn Bhd (KMI) has inked a share sale agreement with the jointowners of the private maternity hospital — Datuk Dr Mohd Razif Abdul Aziz and Datin Dr Norana Yacob — for the proposed acquisition. TDM plans to fund the purchase, which is expected to be completed in the second quarter of next year, with bank financing. — by Justin Lim Duopharma gets another sixmonth contract extension to supply products to govt hospitals and clinics KUALA LUMPUR (Oct 24): Duopharma Biotech Bhd has secured another sixmonth contract extension for the new approved products list (APPL) to supply pharmaceutical and non-pharmaceutical products to government hospitals and clinics. The group’s wholly-owned Duopharma (M) Sdn Bhd received the letter of extension from Pharmaniaga Logistics Sdn Bhd (PLSB). PLSB is a whollyowned subsidiary of Pharmaniaga Bhd, which is under Practice Note 17 (PN17) status. “The contract period of the supply agreement for the supply of the products listed in the letter has been further extended until Dec 31, 2023 or such other date as may be directed by the government, which could be earlier or later,” said Duopharma. — by Syafiqah Salim NEWS IN BRIEF Globetronics expects FY2023 earnings to decline as 3Q net profit falls 25% KUALA LUMPUR (Oct 24): Globetronics Technology Bhd said it expects a decline in profitability for the financial year ending Dec 31, 2023 (FY2023), after net profit slipped 25.43% to RM9.53 million or 1.42 sen per share for the third quarter ended Sept 30, 2023 (3QFY2023), from RM12.78 million or 1.91 sen per share a year prior. Quarterly revenue also declined by 25.23% to RM34.63 million for 3QFY2023, from RM46.32 million last year, mainly due to lower volume loadings from certain groups of customers and lower foreign exhange gain of RM400,000 recognised in the quarter under review. For the cumulative nine months ended Sept 30, 2023 (9MFY2023), the integrated contract manufacturer of semiconductor-based products and services’ net profit reduced by 40.42% to RM19.91 million, against RM33.42 million for the same period last year. The group’s 9MFY2023 revenue fell 27.54% to RM99.27 million, from RM137 million last year, dragged by lower sales for its Southeast Asia and North America segments. — by Anis Hazim

WEDNESDAY OCTOBER 25, 2023 11 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 24): The Local Government Development Ministry has successfully revived a total of 256 private housing projects, comprising 28,363 housing units, with a gross development value (GDV) of RM23.37 billion, as of August this year. Deputy Minister Akmal Nasrullah Mohd Nasir said majority of these housing projects have been granted Certificates of Completion and Compliance (CCC), while the rest have had their status changed to “in progress”. “Breaking down the numbers, 225 private housing projects, involving 19,945 housing units with a GDV of RM18.09 billion, have received CCC. “The remaining 31 housing projects, which include 8,418 housing units with a GDV of RM5.28 billion, have had their status changed to ‘in progress’,” he said in response to a question from Chiew Choon Man (PH-Miri) during an oral question and answer session in Dewan Rakyat on Tuesday. Akmal also clarified that private housing projects in East Malaysia fall outside the jurisdiction of the ministry. Therefore, the ministry welcomes the Sarawak and Sabah state governments to integrate with the ministry’s housing integrated management system (HIMS). This integration is aimed at ensuring that the tracking of developers causing sick projects in Peninsular Malaysia is shared with East Malaysia and vice versa, Akmal noted. “The Sarawak government has expressed interest in integrating with the Prime Minister Datuk Seri Anwar Ibrahim, who also serves as finance minister, announced in the 2024 Budget on Oct 13 that the government has allocated RM2.47 billion for the implementation of people’s housing projects (PPR) in the coming year. This allocation includes a special RM1 billion guarantee fund to encourage responsible developers to revive abandoned projects that have been identified. Meanwhile, Akmal revealed that a total of 284 compounds were issued to housing developers for offenses under Section 7 (e) of the Housing Developers (Control and Licensing) Act 1966 in 2022 and 2023. Section 7 (e) of Act 118 stipulates that developers must send and publish, within six months after the end of the financial year, a copy of the auditor’s report, balance sheet, and profit and loss account, to the Housing Controller. “The ministry has also taken action to freeze 20 housing development accounts (HDA) for projects in the sick category. This freezing action is based on an investigation that shows that the developer is neglecting their responsibilities, which could adversely affect the interests of the buyers,” added Akmal. He further noted that developers can be fined up to a maximum of RM50,000, if they fail to fulfill their obligations as stipulated in the Housing Developers (Control and Licensing) Act 1966 and its regulations. Local Government Ministry successfully revives 256 private housing projects worth RM23.37 bil KUALA LUMPUR (Oct 24): The government’s proposal to raise the sales and service tax (SST) rate from 6% to 8% is a “less effective measure” (tindakan kurang tepat) as compared to more efficient taxation systems, according to former prime minister Datuk Seri Ismail Sabri Yaakob. While the tax increase won’t apply to food and beverages, Ismail Sabri emphasised the importance of the government understanding the ripple effect it could have on other aspects, ultimately leading to higher prices since traders are unlikely to absorb the increased tax and production costs. He urged the government to consider reimplementing the goods and services tax (GST), which had proven to be far more efficient, transparent, and fairer than the SST. “When the GST was abolished, the government lost RM20 billion to RM30 billion in revenue from the black market, which couldn’t be monitored. Many people also didn’t pay their taxes as they Ismail Sabri considers SST hike to 8% a ‘less effective measure’ BY CHOY NYEN YIAU theedgemalaysia.com BY CHOY NYEN YIAU theedgemalaysia.com should,” said Ismail Sabri, the Member of Parliament for Bera, during the Budget 2024 debate in the Dewan Rakyat on Tuesday. He said Deloitte anticipates that there will only by an additional revenue of RM900 million for next year through the SST rate increase. He questioned if the increase is worth it if the impact on the public is significant. Under Budget 2024, the government announced plans to raise the SST to 8%, with an expanded scope that includes logistics services, brokerage and underwriting, as well as karaoke. Prime Minister Datuk Seri Anwar Ibrahim, when presenting the government’s annual expenditure plan, specified that the tax increase would not be imposed on food and beverages and telecommunications services, so as not to burden the public. Read the full story ministry’s system, and we hope that the Sabah state government will also follow suit,” he added. Special Guarantee Fund will focus on affordable housing projects below RM300,000 Responding to another question from Zahir Hassan (PH-Wangsa Maju), Akmal said the ministry will submit suggestions to the Ministry of Finance on how the special guarantee fund will be used to rescue sick housing projects, with a specific focus on affordable housing projects priced below RM300,000. Akmal said that the ministry has suggested prioritising housing projects that are at least 80% “in progress” and those under government and state agencies, with affordability objectives that are at risk of becoming sick. BERNAMA

WEDNESDAY OCTOBER 25, 2023 12 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 24): Malaysia does not implement an end-of-life vehicle policy for old vehicles given its impracticality, but encourages people to move towards carbon-free electric vehicle (EV) ownership or public transportation usage. Transport Minister Anthony Loke said such a policy could not be implemented, taking into account the socio-economic needs of the country as well as the people’s living needs against a dependence on private vehicles. “We don’t have a policy for end-of-life vehicle unlike some (other) countries. If there is a policy to scrap old cars, it will burden the people. “Data shows car sales is rising, which indicate the economy is in good shape. It is an indicator that we still depend on private vehicles, there is no policy to prevent vehicle ownership,” he said. Loke told a press conference on the sideline of the High-Level 15th Regional Environmentally Sustainable Transport Forum in Asia here on Tuesday. In order to achieve the Sustainable Development Goals (SDG) towards a carbon-emission-free country by 2030, Loke said the government would continue to build and invest into the public transportation system to make it better. “In terms of the ratio of public transportation to private vehicle, the usage of public transport system is still very low at around less than 20%. “We are hoping to build up more usage of public transportation system, but definitely that will take a lot of effort and time, as well as investment by the government,” he said, saying tremendous effort is ongoing place to encourage the EV industry in Malaysia. He added that 15 out of 30 million vehicles in Malaysia are motorcycles that contribute to huge emissions, therefore MOT has started an e-motobike incentive of RM2,400 rebate as a start towards expanding the use of e-motorbike as mentioned in a Budget 2024 presentation recently. Loke: Govt has no plans to junk old cars, introduce end-oflife vehicle policy KUALA LUMPUR (Oct 24): Putrajaya is to work with Bursa Malaysia to support startups in their funding journey towards driving further innovation in Malaysia. In Dewan Rakyat on Tuesday, Minister of Science, Technology and Innovation (Mosti) Chang Lih Kang said the ministry is to provide Bursa Malaysia with market information on the local startup ecosystem towards facilitating the early identification of companies with the potential of being listed on the bourse. According to Chang, this effort forms one of Mosti’s initiatives towards driving the government’s aspiration of having Malaysia rank among the top 30 countries in the Global Innovation Index (GII) report by 2025 as stated under the 12th Malaysia Plan (12MP). Between 2022 and 2023, Malaysia’s position in GII rankings remained static at the 36th spot among 132 countries, but with a higher GII score of 40.9 versus 38.7 previously. “Among Asean countries, Malaysia remains in second place behind Singapore (which ranked 7th),” he said. According to the Tanjong Malim MP, other initiatives to further push Malaysia’s GII climb comprise: strengthening innovation commercialisation efforts; formulation of a National Planet Health Action Plan to deal with health issues linked to the environment, biodiversity, and climate change; encouraging more private sector involvement in research, developMosti to help Bursa Malaysia identify local startups with potential to be listed ment, innovation, commercialisation, and economy; and propose the establishment of a special committee for Science, Technology and Innovation Talent. Last month, state-owned venture capital fund Cradle Fund Sdn Bhd and Bursa Malaysia inked a memorandum of collaboration to build awareness among startups on funding opportunities available in Malaysia, including those offered by the equity market. Additionally, it seeks to facilitate early identification of companies with the potential for listing on Bursa Malaysia. The collaboration is a part of Mosti’s Fund Funnel programme, an initiative designed to streamline funding options and offer comprehensive support to startups throughout their funding journey, from the seed stage to the initial public offering. More Parliament stories: No more than 60 moneylending licences approved a year, says Nga Kor Ming Over 70% of active phone numbers on prepaid plans, says Fahmi Constitutional amendment, new legislation being considered for inclusion in National Anti-Corruption Strategy, says Ramkarpal BY IZZUL IKRAM theedgemalaysia.com Bernama Minister of Science, Technology and Innovation (Mosti) Chang Lih Kang said the ministry is to provide Bursa Malaysia with market information on the local startup ecosystem towards facilitating the early identification of companies with the potential of being listed on the bourse. THE EDGE FILE PHOTO BERNAMA

WEDNESDAY OCTOBER 25, 2023 13 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 24): Former Penang chief minister Lim Guan Eng’s lawyers have formally informed the Sessions Court of their intention to impeach key witness Datuk Zarul Ahmad Mohd Zulkifli over his testimony in the trial. Lim’s lawyers are seeking a court order for the prosecution to supply them with Zarul’s statements recorded in both the Shah Alam and current KL trial. The Shah Alam matter involves businessman G Gnanaraja, who was previously accused of three counts of cheating Consortium Zenith Construction Sdn Bhd (CZCSB) senior director, Zarul Ahmad. Gnanaraja pleaded guilty and was fined RM230,000 to an alternative charge under the Companies Act 2016, while the KL matter centres on Lim’s graft trial. Lim’s counsel Gobind Singh Deo told Sessions Court judge Azura Alwi that the defence was making the application under Section 145 and 155 of the Evidence Act, with the intention of securing the documents based “on a hunch” as to what Zarul Ahmad had said. In the Shah Alam trial, a former CZCSB director Ibrahim Sahari told the court that the RM2 million was to be paid to Najib. However, in Lim’s trial, two witnesses, namely a former director and a former vice president of CZCSB, told the court that the money was for Lim. On Monday, Zarul Ahmad testified under cross-examination by Gobind that on Aug 17, he retrieved RM2 million from his safe and that the money was given to Najib. He also said that a Public Bank cheque in question for RM2 million was cashed out on the same day, with the money meant for Lim. Zarul, 62, said he had rectified in his witness statement to what he testified under cross-examination. Gobind contended that the defence was entitled to get the documents under the two sections of the Evidence Act based on a hunch that Zarul Ahmad may have not been telling the truth following different testimonies at the Shah Alam and KL courts. “We (the defence) want to look at the purported rectification made by the witness as he changed something from what it was before to something else,” the counsel said, pointing to the contradictions. He also cited the court’s recording of Defence applies for documents needed to impeach star witness in Guan Eng trial BY HAFIZ YATIM theedgemalaysia.com Zarul Ahmad’s testimony on Monday to highlight the discrepancy, as initially from the testimonies of witnesses in the Shah Alam and KL trial, there was only a RM2 million payment in question. However, from Zarul Ahmad’s testimony Monday, it was revealed that the sum was not actually RM2 million but RM4 million that was passed to Gnanaraja, namely RM2 million from the CZCSB senior director’s safe to Najib, and another RM2 million from a company cheque that was cashed, and which he claimed was given to Lim. Gobind said the defence has fulfilled the requirements under Sections 145 and 155 of the Evidence Act, for the statements taken from Zarul Ahmad to be produced to the defence, for them to consider in instituting impeachment proceedings. Prosecution says defence application premature The prosecution led by DPP Datuk Wan Shaharuddin Wan Laden said that it was premature for the defence to make the application, as it did not fulfil Section 51 of the Evidence Act for the discovery of documents. He further questioned what if the documents produced entirely proved the truth in Zarul Ahmad’s statement that there was rectification. Wan Shaharuddin added there was no basis for the defence to make the application and that the defence counsel should have cross-examined Zarul Ahmad further on what rectification had been made, as well as when and how it was made. “The prosecution here says that from the cross-examination conducted yesterday, the defence had not properly cross-examined the witness to highlight the contradictions as alleged to satisfy the production of the documents,” he added. Another DPP Mahadi Abdul Jumaat said that in any discovery application of documents, the applicant must show the two tests of relevancy and material discrepancy to seek the documents and here, the prosecution said the defence have not shown they fulfilled the two tests for the documents to be provided. “Hence, the prosecution says this application by the defence should not be entertained and be dismissed.” Gobind, in reply, said the prosecution had only been submitting on the issue of Section 51 but had not addressed the application made under Sections 145 and 155 of the Evidence Act to possibly impeach this witness. “There is material contradiction and the prosecution also concedes there was rectification. Hence, the defence should be provided with the documents,” he added. Azura said that she needed time to decide on the matter and also read the written submissions which had been provided to the court on Tuesday. She fixed Nov 2 to deliver her decision on the application. Lim’s counsel Gobind Singh Deo told Sessions Court judge Azura Alwi that the defence was making the application under Section 145 and 155 of the Evidence Act, with the intention of securing the documents based “on a hunch” as to what Zarul Ahmad had said. ZAHID IZZANI/THE EDGE Read the full story Datuk Zarul Ahmad Mohd Zulkifli.

WEDNESDAY OCTOBER 25, 2023 14 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 24): The prosecution in the 1Malaysia Development Bhd-Tanore (1MDB-Tanore) trial made an application at the High Court here to amend three charges consisting of one of four predicate abuse of power charges and two money laundering charges against Datuk Seri Najib Abdul Razak, who is facing four abuse of power charges and 21 money laundering charges. The prosecution represented by deputy public prosecutor Kamal Baharin Omar informed judge Datuk Collin Lawrence Sequerah that they intended to amend the fourth abuse of power charge to reduce the amount Najib is alleged to have received from 1MDB funds by RM5 million. Kamal, during his submissions for the application to amend the charges, told Sequerah that they are seeking to amend it based on testimony by the 47th prosecution witness, Bank Negara Malaysia (BNM) analyst Adam Ariff Mohd Roslan, who had testified that RM5 million in Najib’s account came from an unknown source which is not accounted for. The specific amendment to the charge concerns the purchase of Aabar Investments PJS Ltd (BVI)’s call options by 1MDB. “These options were given to Aabar (BVI) in 2012, (which) as alleged part consideration for International Petroleum Investment Company’s (IPIC) guarantee for the notes that raised US$3.5 billion. In May and August 2014, 1MDB through its subsidiary 1MDB Energy Holdings Ltd obtained two loans totalling US$1.225 billion from Deutsche Bank AG. “From these two loans, [Najib] received a sum of RM49,930,985.70 between June 23, 2014 and Dec 19, 2014,” the prosecution said. Kamal told Sequerah that Adam had pointed out that the proceeds of RM45,837,485.70 that were credited into Najib’s account between Oct 23, 2014 and Dec 19, 2014, from Vista Equity International Partners Ltd is found to be partially traceable to the US$975 million aforementioned two loan proceeds. “According to [Adam] out of the RM45,837,485.70 which were credited into [Najib’s] account, RM5,360,065 came from an unknown source which cannot be confirmed due to limitation of documents,” BY TIMOTHY ACHARIAM & TARANI PALANI theedgemalaysia.com Prosecution seeks to amend Najib’s abuse of power and money laundering 1MDB charges as RM5 mil not traceable the prosecution said in its submission. The prosecution also added: “We are therefore amending the charge to make it absolutely clear the amount that was credited into the accused AmIslamic Bank which constitutes the offence in question”. DPP Kamal submitted that Article 145(3) of the Federal Constitution confers power to the public prosecutor (PP) to amend a charge. He adds that per case law, it is the PP’s discretion to amend a charge at any time during the trial before the judgement. Besides this, the prosecution contends that the court is also given the discretion to amend charges to meet the fact of the case. “It’s about the amount and we submit it is not prejudicial to the accused,” DPP Kamal added. In their written submission, the prosecution elaborated that the amendment was made in good faith and does not affect the nature of the offence. “In this case before Your Lordship, the amendment is made in good faith, ie to give the accused a clearer notice as to the manner he committed the offence he is being charged with as required by section 154 CPC. The amendment to the charge does not have the effect of changing the nature of the offence or having the effect of opening up a new trial,” he wrote. The new charge will read: “That you, between June 23, 2014 and Dec 19, 2014, at AmIslamic Bank Bhd, Cawangan Jalan Raja Chulan, No. 55 Jalan Raja Chulan, Kuala Lumpur, in the Federal Territory of Kuala Lumpur, as an officer of a public body, to wit, Prime Minister and Minister of Finance of Malaysia and the chairman of the Advisory Board of 1Malaysia Development Bhd (1MDB), did use your position for a gratification for yourself amounting to RM44,570,920.70,” The current charge states that Najib had allegedly received gratification amounting to RM49,930,985.70. As an effect of amending the fourth abuse of power charge, the predicate money laundering charges have to be amended as well which are the tenth and twenty-first money laundering charges. As for the 10th charge, Najib is accused of transferring monies from illegal activities to Tanore Finance Corp on Aug 2, 2013. The amount in the original charge was RM652.6 million. In the amended charge, the amount was reduced to RM515.66 million. As for the 12th charge, Najib is accused of transferring monies from illegal activity from his AmBank account (ending 694) to his other AmBank account (ending 880). The amount in the original charge was RM12.436 million. In the amended charge, the amount was reduced to RM11.411 million. After Kamal finished his submission, Najib’s lawyer Tan Sri Mohamed Shafee Abdullah said that they are objecting to the application. “This is a very serious step in the prosecution’s case and we need to look at it carefully and we would like to submit [in detail] tomorrow,” he said. He added that the prosecution seems to suggest that the amendments simply only impacted the quantum but Mohamed Shafee contends that is not the case. He said that the defence has been doing their own tracing based on the documents provided by the prosecution and the defence’s own set of documents. “We want to see whether the angle of defence we have taken and hardened up needs to be changed [...] prejudicially affects our defence. As such I ask for time until tomorrow [Oct 25] to respond.” Sequerah allowed Mohamed Shafee to submit his arguments on Wednesday, Oct 25. Datuk Seri Najib Razak is facing four abuse of power charges and 21 money laundering charges. THE EDGE

WEDNESDAY OCTOBER 25, 2023 15 THEEDGE CEO MORNING BRIEF HOME GLC CEO and another charged with conspiring and receiving RM350,000 bribe KUALA LUMPUR (Oct 24): Former Parti Pribumi Bersatu information chief Datuk Wan Saiful Wan Jan took to Facebook to claim that he will be facing criminal charges under Anti-Money Laundering Act (Amla) on Wednesday after he was questioned by the Malaysian Anti-Corruption Commission (MACC) on Tuesday. He said he received instructions to be at the court complex here at 8.30am on Wednesday. “It is said that there are new charges under the AMLA Act. The details of the charges aren’t clear at the moment. “I will attend to defend myself and I am confident the court is the best place for justice,” he said. Previously, Wan Saiful was charged under Section 16(a)(A) of the Malaysian Anti-Corruption Commission (MACC) Act 2009 with soliciting bribes to help Nepturis Sdn Bhd secure a Central Spine Road project from the federal government through pre-qualification in April 2022. This is connected to the Jana Wibawa programme by the government. He is accused of soliciting an unspecified amount for the RM232 million project from a person by the name of Lian Tan Chuan. He was also charged under Section Wan Saiful and Adam Radlan to be charged today in connection with Jana Wibawa programm BY TIMOTHY ACHARIAM theedgemalaysia.com Bernama 17(a) of the MACC Act with receiving RM6.96 million through his company’s CIMB Bank account under WSA Advisory Group Sdn Bhd from Nepturis, as an inducement to help Nepturis secure a letter of award for the same project. The offences were allegedly committed between July 8 and Sept 30 in 2022. Both charges under the MACC Act are punishable under Section 24 of the same Act, and carry a sentence of up to 20 years in jail, and a fine of not less than five times the amount of the bribe or RM10,000, whichever is higher, upon conviction. On July 21, he had failed in his application to strike out the two graft charges after Sessions Court judge Rozina Ayob denied the application. Businessman Adam Radlan Adam Muhammad will also be charged on Wednesday at the Sessions Court, a source told The Edge. Adam, who is Bersatu’s deputy division chief for Segambut, had been previously charged with five charges linked to Jana Wibawa. Read also: Penjana Kerjaya 2.0: Company Datuk Wan Saiful Wan Jan MD charged with submitting false claims SEREMBAN (Oct 24): A government-linked company (GLC) chief executive officer and another individual pleaded not guilty in the Sessions Court here on Tuesday to charges of conspiring and receiving a bribe of RM350,000 to help a company secure upgrading works at Kompleks Bangunan Getah Asli, Kuala Lumpur. The charges against CEO Mohd Zamry Sulaiman, 52, and Anuar Md Isa, 54, who is self-employed, were read out separately before judge Meor Sulaiman Ahmad Tarmizi. Mohd Zamry is accused of conspiring with Anuar by receiving two bribes of RM250,000 and RM100,000 from a man as an inducement to appoint a company to carry out mechanical and electrical upgrading works at Kompleks Bangunan Getah Asli, Jalan Ampang, Kuala Lumpur for the Malaysian Rubber Board. The offences were allegedly committed at a bank in Senawang, Seremban on June 1 and Oct 11, 2022, under Section 28(1)(c) of the Malaysian Anti-Corruption Commission (MACC) Act 2009, read together with Section 16(a)(A) of the same Act. The offences are punishable by imprisonment of up to 20 years, and a fine of not less than five times the sum or value of the gratification or RM10,000, whichever is higher, upon conviction. Anuar allegedly received the bribe of RM350,000 through a cheque from the same individual as gratification to help the company for the same purpose at the same location and date. He was charged under Section 16(a)(A) of the MACC Act, which is punishable by imprisonment of up to 20 years, and a fine of not less than five times the sum or value of the gratification or RM10,000, whichever is higher, upon conviction. MACC prosecuting officers Abd Muntaqim Abdul Aziz and Fatin Farhana Ismail appeared for the prosecution, while lawyers A Ashok and V Muniandy represented Mohd Zamry, and lawyer Azrul Zulkifli Stork represented Annuar. The judge granted bail of RM5,000 to each accused, ordered for their passports to be surrendered to the court, and for them to report to the nearest MACC office every month. The case mention was fixed for Dec 12.

WEDNESDAY OCTOBER 25, 2023 16 THEEDGE CEO MORNING BRIEF

WEDNESDAY OCTOBER 25, 2023 17 THEEDGE CEO MORNING BRIEF WORLD (Oct 24): China named Lan Fo’an as finance minister to replace Liu Kun, giving him responsibility for implementing a plan to diffuse local government debt risks. Lan’s appointment was reported by state broadcaster CCTV on Tuesday. The move was widely expected after China last month named Lan as the Communist Party chief of the finance ministry. The appointment comes at a crucial time for China’s fiscal system. China’s government finances have become more reliant on borrowing over the past decade due to massive tax cuts and a weakening property market. At the same time, Beijing is under pressure to increase spending on social welfare to meet the needs of an ageing population and more sophisticated economy. As finance minister, Lan will likely play a role in helping decide whether China should increase the official deficit, which is usually set at 3% of gross domestic product in most years, and the annual quota given to local governments to issue bonds for investment projects. The finance ministry has generally taken a conservative stance on government borrowing. The post of finance minister is less powerful in China than in other major economies. Lan is not a member of the Politburo, a group of the Communist Party’s top 24 officials. Lan, 61, is a native of the wealthy province of Guangdong in China’s south bordering Hong Kong. He spent most of his career in the Chinese province as a government official, eventually appointed vice-governor in 2016. He started his career as a clerk at the finance ministry from 1985 to 1988, and went on to serve as Party chief of the Guangdong provincial audit office before serving in other provincial posts. China’s President Xi Jinping has close family associations with Guangdong, his father having served as the top official there in the 1970s. Liu, the outgoing finance minister, also spent most of his government career in Guangdong. From March 2017 to April 2021, Lan served as a member of the top group of Communist officials overseeing the southern island province of Hainan, which has been used as a testbed for reforms to tax and housing policies. He also headed the party’s anti-graft body in the province. He was made governor of the northwestern province of Shanxi in 2021. There he oversaw the province’s difficult transition away from reliance on coal-production into new sectors like renewable energy and data storage. Read also: China removes Li Shangfu as defence minister, leaves post vacant BEIJING (Oct 24): China’s top parliament body has approved a 1 trillion yuan (US$137 billion) sovereign bond issue and passed a bill to allow local governments to frontload part of their 2024 bond quotas, state media said on Tuesday, in a move to support the economy. Funds raised from the new sovereign bonds will support the rebuilding of disaster-hit areas in the country and improve urban drainage prevention infrastructure to boost China’s ability to withstand natural disasters, state news agency Xinhua said. That will widen the country’s 2023 budget deficit to around 3.8% of gross domestic product from a previously set 3%, Xinhua said. Reuters reported on Monday that China’s parliament was set to approve just over 1 trillion yuan in additional sovereign debt issuance, citing sources. The approval of the bill by the Standing Committee of the National People’s Congress (NPC) came as it concluded a five-day meeting. “The additional fiscal support approved today is the intervention we had been expecting and that was needed to prevent an abrupt fiscal tightening in China in the closing weeks of the year,” said Mark Williams, chief Asia economist at Capital Economics. “Fiscal policy has been a prop to growth in China over the last few quarters. These new steps will keep it supportive but not deliver any additional boost.” The world’s second-largest economy grew faster than expected in the third quarter, improving the chances that Beijing can China to issue US$137 bil sovereign debt to support economy meet its growth target of around 5% for 2023. But economists say persistent drag from the property sector still weighs on the economic outlook. “It is rare for the central governments fiscal plans to be revised outside the usual budget cycle, so this move signals clear concern about near-term growth,” Williams said. China has previously let local governments issue bonds ahead of the annual session of parliament, which approves government budget plans and is usually held in March. Local governments had been told to complete the issuance of the 2023 quota of 3.8 trillion yuan in special local bonds by September to fund infrastructure projects. The government has not disclosed the size of local governments’ 2024 frontloaded bond quotas. Read also: Xi makes unprecedented central bank visit in sign of focus on economy China sovereign fund buys ETFs in new bid to boost stocks Reuters Bloomberg China names Lan Fo’an as Finance Minister to tackle debt risks REUTERS Lan Fo’an BLOOMBERG

WEDNESDAY OCTOBER 25, 2023 18 THEEDGE CEO MORNING BRIEF WORLD (Oct 24): Not so long ago, families, businesses and governments were effectively living in a world of free money. The US Federal Reserve’s benchmark interest rate was zero, while central banks in Europe and Asia even ran negative rates to stimulate economic growth after the financial crisis and through the pandemic. Those days now look to be over and everything from housing to mergers and acquisitions are being upended, especially after 30-year US Treasury bond yields this week punched through 5% for the first time since 2007. Yields got another boost on Friday after bigger-than-expected surge in US payrolls that bolster the case for more Fed rate hikes. “I struggle to see how the recent yield moves don’t increase the risk of an accident somewhere in the financial system given the relatively abrupt end over recent quarters of a near decade and a half where the authorities did everything they could to control yields,” said Jim Reid, a strategist at Deutsche Bank AG. “So, risky times.” The importance of Treasuries helps to explain why the bond-market move matters to the real world. As the basic riskfree rate, all other investments are benchmarked against them, and as the Treasury yield rises, so that ripples out to broader markets, affecting from everything from car loans to overdrafts to public borrowing and the cost of funding a corporate takeover. And there’s a lot of debt out there: According to the Institute of International Finance, a record US$307 trillion (RM1.4 quadrillion) was outstanding in the first half of 2023. There are lots of reasons for the dramatic bond-market shift, but three stand out. Economies, especially the US, have proved more robust than anticipated. That, along with the previous dollops of easy money, is keeping the fire lit under inflation, forcing central banks to jack up rates higher than once thought and, more recently, stress that they’ll leave them there for a while. As recession fears have ebbed, the idea that policy makers will have to quickly reverse course — the so-called pivot — is fast losing traction. Finally, governments issued a lot more debt — at low rates — during the pandemic to safeguard their economies. Now they have to refinance that at a much costlier BY CHRIS ANSTEY, THYAGARAJU ADINARAYAN & JACK SIDDERS Bloomberg The 5% bond market means pain is heading everyone’s way price, sowing concerns about unsustainable fiscal deficits. Political dysfunction and credit rating downgrades have added to the headwinds. Put all these together and the price of money has to go up. And this new, higher level portends major changes across the financial system and the economies it feeds. On Friday, 10-year Treasury yields surged more than 15 basis points to 4.89%. The rate in Germany, already near the highest since 2011, jumped eight basis points to move close to 3% again. The moves were driven by a report in the US showing the economy added 336,000 jobs last month, almost twice as much as forecast. Housing market pain For many consumers, mortgages are the first place that dramatic moves in interest rates really make their presence felt. The UK has been a prime example this year. Many who took advantage of pandemic-era stimulus to take out a cheap deal are now having to refinance, and are facing a shocking jump in their monthly payments. As a result, transactions are falling and house prices are under pressure. Lenders are also seeing a rise in defaults, with one measure in a Bank of England survey rising in the second quarter to the highest level since the global financial crisis. The mortgage-cost squeeze is a story playing out everywhere. In the US, the 30- year fixed rate has surpassed 7.5%, compared with about 3% in 2021. That morethan-doubling in rates means that, for a US$500,000 mortgage, monthly payments are roughly US$1,400 extra. Government pressure Higher rates mean countries have to shell out more to borrow. In some cases, a lot more. In the 11 months through August, the interest bill on US government debt totalled US$808 billion, up about $130 billion from the previous year. That bill will keep going up the longer rates stay elevated. In turn, the government may have to borrow even more, or choose to spend less money elsewhere. Treasury Secretary Janet Yellen this week said yields are something that’s been on her mind. Adding to the market tensions, the US has been in the throes of yet another political crisis over spending, threatening a government shutdown. Others are also trying to deal with bloated deficits, partly the result of pandemic stimulus. The UK is looking to limit spending, and some German politicians want to reinstate a ceiling on borrowing known as the debt brake. Read also: Treasury 10-year yield breaches 5% for first time since 2007 New age for Treasuries means 6% yield isn’t ‘out of the picture’ ‘Catastrophe’ bond market headed for major surge in issuance Read the full story Now they have to refinance that at a much costlier price, sowing concerns about unsustainable fiscal deficits. Political dysfunction and credit rating downgrades have added to the headwinds.

WEDNESDAY OCTOBER 25, 2023 19 THEEDGE CEO MORNING BRIEF WORLD (Oct 24): The UK economy lost jobs again in the quarter though August, marking the longest drop in employment since the depths of the coronavirus pandemic and a sign that inflationary pressures may be abating. Employment fell 82,000 in June to August after a 133,000 drop in the period from May through July, the Office for National Statistics (ONS) said on Tuesday. It was third consecutive three-month period in which employment has fallen compared to the previous three months, the worst stretch since early 2021. The ONS changed the way it calculates the figures released on Tuesday after delaying its unemployment and employment figures “to produce the best possible estimates”. The new calculations indicate that the labour market may be slightly tighter than the ONS’ previous data had suggested. The revised 133,000 fall in employment in May to July under the new methodology was smaller than the 207,000 drop under the old estimates. The broader picture shows the labour market is loosening, reducing the upward pressure on wages that concerned the Bank of England. Some economists are now concerned that the rise in unemployment threatens to tip an already stagnant economy into a recession. A separate report from S&P Global on Tuesday showed that UK businesses are more pessimistic than at any point this year, prompting hiring freezes and staff cuts. UK is losing jobs at the sharpest pace since the pandemic (Oct 24): Private-sector activity in the euro area kicked off the final quarter of 2023 with another dismal showing, suggesting the region’s economy may be in recession. S&P Global’s purchasing managers’ index (PMI) slowed to a three-year low in October, dropping to 46.5 — clearly below the 50 mark that separates expansion and contraction. Economists expected a slight improvement to 47.4. “In the eurozone, things are moving from bad to worse,” according to Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. “We wouldn’t be caught off guard to see a mild recession in the eurozone in the second half of this year, with two back-to-back quarters of negative growth.” The region’s economy faces several headwinds, including the European Central Bank’s (ECB) rate-hiking campaign and a slowdown in global activity. Rising energy prices as a result of the conflict in the Middle East risk exacerbating its difficulties. Banks in the eurozone tightened credit standards further in the third quarter due to rising interest rates and the worsening economic backdrop, the ECB said on Tuesday in its quarterly Bank Lending Survey. Third-quarter data — due a week from now — are likely to show euro-area output contracted 0.1% in the period, according to estimates compiled by Bloomberg. That would be the first quarterly contraction since the pandemic, though the economy did repeatedly fail to grow. That economic weakness may focus ECB officials meeting this week in Athens. After a record tightening cycle of 10 consecutive interest-rate hikes, policymakers have indicated that they’ll keep borrowing costs on hold for some time. Economists currently predict a first cut in September. Yet an economic downturn across the region may increase market speculation that this could start earlier. October’s PMI downturn was broadbased across the euro area, S&P Global said. Indicators based on business surveys in the currency blocks’ top two economies — France and Germany — remained well below the 50 mark, and the contraction affected manufacturing as well as services in both countries. The euro swung to a loss against the dollar, falling as much as 0.1% to US$1.0660. Bonds held onto earlier gains, which sent the 10-year German yield as much as eight basis points lower to 2.79%. More weakness also surfaced in the labour market — a relative bright spot until now. Eurozone may be in recession as economy goes from bad to worse BY ALEXANDER WEBER & ZOE SCHNEEWEISS Bloomberg BY TOM REES Bloomberg “Service providers’ hiring came almost to a standstill,” Hamburg Commercial Bank’s de la Rubia said. “Manufacturing companies are not just continuing to cut staff, they are ramping up job-shedding plans. This led for the first time since January 2021 to an overall decrease in employment.” The data point to another recession in Germany and confirm the widely held view that it will also suffer a full-year contraction, according to de la Rubia. “Germany is kicking off the final quarter on a sour note,” he said. “Manufacturing output continues to fall at a steep rate, and activity in the services sector, which grew last month, swung into the red again.” In France, manufacturing activity shrank at a faster pace due to weak demand, and an index of expectations in the sector fell to the lowest in three-and-a-half years, with “no relief in sight.” Services were seen “hitting roadblocks” as new orders fell. French pricing data, meanwhile, showed that it’s too soon for ECB officials to declare victory over inflation. “Price indexes are in perilous territory,” said Norman Liebke, an economist at Hamburg Commercial Bank. “The pace of increase in input prices rose for the second month in a row amid rising fuel prices and reports of sustained wage pressures.” A gauge for the UK will likely indicate a stable contraction, while US figures are predicted to reveal stagnation. An index for Japan earlier dipped below 50, while Australia’s economy had its biggest contraction since January 2022. Soaring living costs, higher interest rates and falling exports meant the economy “continued to skirt with a recession in October”, said Chris Williamson, the chief business economist of S&P Global Market Intelligence in a report on Tuesday. “Gloom about the outlook has intensified in the uncertain economic climate, boding ill for output in the coming months,” he said. “A recession, albeit only mild at present, cannot be ruled out.” Read the full story Read also: EU raised concerns with US over Biden’s China investment order Consumer sentiment turns negative in Canada as high rates bite

WEDNESDAY OCTOBER 25, 2023 20 THEEDGE CEO MORNING BRIEF WORLD (Oct 24): Nvidia dominates the market for artificial intelligence computing chips. Now it is coming after Intel’s longtime stronghold of personal computers. Nvidia has quietly begun designing central processing units (CPUs) that would run Microsoft’s Windows operating system and use technology from Arm Holdings, two people familiar with the matter told Reuters. The AI chip giant’s new pursuit is part of Microsoft’s effort to help chip companies build Arm-based processors for Windows PCs. Microsoft’s plans take aim at Apple, which has nearly doubled its market share in the three years since releasing its own Arm-based chips inhouse for its Mac computers, according to preliminary third-quarter data from research firm IDC. Advanced Micro Devices also plans to make chips for PCs with Arm technology, according to two people familiar with the matter. Nvidia and AMD could sell PC chips as soon as 2025, one of the people familiar with the matter said. Nvidia and AMD would join Qualcomm, which has been making Arm-based chips for laptops since 2016. At an event on Tuesday that will be attended by Microsoft executives, including vice president of Windows and Devices Pavan Davuluri, Qualcomm plans to reveal more details about a flagship chip that a team of ex-Apple engineers designed, acNvidia to make Arm-based PC chips in major new challenge to Intel TAIPEI (Oct 24): Taiwan Vice President Lai Ching-te on Tuesday hit out at China over its probe of major Apple supplier Foxconn, saying Beijing should “cherish” Taiwanese companies and not put pressure on them during an election. Foxconn is facing a tax probe in China, two sources close to the company said on Monday, confirming a report in China’s state-backed Global Times. The sources said they believed it was disclosed for political reasons tied to Taiwan’s January elections where the company’s founder Terry Gou is running as an independent candidate for president. The Global Times, in an English-language story late on Sunday, said by running, Gou might split the opposition vote, potentially ensuring a victory for Lai who is already leading in the polls. China claims Taiwan as its own territory and Beijing detests Lai, whom it believes is a separatist. He says only Taiwan’s people can decide their future, and Beijing has rebuffed his offers of talks. Speaking at a news conference in Taipei and asked about Beijing’s probe into Foxconn, Lai said China should “cherish and treasure” Taiwanese companies given their help in that country’s economic development. “During an election, China does not need to put pressure on Taiwanese companies, demanding they declare a position, or even that they directly support a candidate they prefer,” he said. Taiwanese companies will lose their confidence in China and if they feel scared will shift production elsewhere, which will be a big loss to China, Lai added. Foxconn has been pushing to diversify its manufacturing base outside China to places such as India, which one of the Taiwan presidential frontrunner lashes out at China over Foxconn probe BY BEN BLANCHARD & JEANNY KAO Reuters BY STEPHEN NELLIS & MAX A CHERNEY Reuters cording to a person familiar with the matter. Nvidia shares closed up 3.84%, and Intel shares ended down 3.06% after the Reuters report on Nvidia’s plans. Arm’s shares were up 4.89% at close. Nvidia spokesperson Ken Brown, AMD spokesperson Brandi Marina, Arm spokesperson Kristen Ray and Microsoft spokesperson Pete Wootton all declined to comment. Nvidia, AMD and Qualcomm’s efforts could shake up a PC industry that Intel long dominated but which is under increasing pressure from Apple. Apple’s custom chips have given Mac computers better battery life and speedy performance that rivals chips that use more energy. Executives at Microsoft have observed how efficient Apple’s Arm-based chips are, including with AI processing, and desire to attain similar performance, one of the sources said. sources said may have contributed to Beijing placing pressure on the company. Gou has not commented on the probe, with his campaign team referring questions to Foxconn and pointing out he is no longer involved in the company’s dayto-day running, though he remains a big shareholder. Gou cancelled without explanation a campaign event originally scheduled for Monday evening, and has no events planned for Tuesday, according to his media team. Foxconn said in a statement on Sunday that legal compliance was a “fundamental principle” of its operations, and it would “actively cooperate with the relevant units on the related work and operations”. Foxconn’s shares extended their declines on Tuesday, down more than 2% during mid-morning trade compared to a flat broader market. Shares closed 2.9% lower on Monday. Taiwan frequently accuses Beijing of seeking to exert pressure, whether military or economic, to sway the outcome of its elections to ensure an outcome favourable to China, whose government has not commented on the Foxconn probe. Lai said China should respect Taiwan’s democratic system, way of life and choice of president, moving away from confrontation towards an era of respectful dialogue. He reiterated it was his “mission” to maintain the status quo across the Taiwan Strait, in a reference to how he would not seek to push for Taiwan’s formal independence, a red line for China. Taiwan Vice President Lai Ching-te on Tuesday hit out at China over its probe of major Apple supplier Foxconn, said China should 'cherish and treasure' Taiwanese companies given their help in that country's economic development. BLOOMBERG Read the full story

WEDNESDAY OCTOBER 25, 2023 21 THEEDGE CEO MORNING BRIEF WORLD (Oct 24): Don’t anticipate big gains from US equity markets anytime soon, says one Wall Street prognosticator who foresaw the rally in the first half of this year. The S&P 500 Index peaked in July and is unlikely to trade beyond the mid4,000s for the next six months as higher rates weigh on corporate earnings growth, according to Stifel chief equity strategist Barry Bannister. The US stock benchmark rose slightly on Monday, hovering above the key technical 4,200 level, while the 10-year Treasury yield crossed 5% for the first time since 2007. “Our view is that the S&P 500 peaked summer 2023 and tops around 4,400 through April 2024,” Bannister wrote on Monday in a note to clients. He previously predicted stocks would be at that level by the end of December. While Bannister believes that yields will top around 5% during the current cycle, he projects a normalized 10-year yield of up to 6% during the mid-2020s. “It is not ‘Fed high for longer’ — the Fed has returned to ‘policy modulation at normalised rates,’” he said. US stocks have flailed in recent months, eroding a strong advance in the first half of the year, against a backdrop of a turbulent bond market, driven by concerns that sustained higher interest rates will derail economic growth. Worries about the buying power of US consumers and fresh geopolitical risks from war in the Middle East have further weighed on investor sentiment in recent weeks, dragging the S&P 500 below its 200-day moving average on Friday for the first time since March. Bannister was one of a handful of sellside forecasters to accurately make a contrarian call on the US stock rally in the first part of 2023 and has since said gains would stall in the second half of the year — a projection that is so far playing out. The strategist also sees little to no upside for the US equities for the rest of the decade as tighter US financial conditions thwart price-to-earnings ratios across US firms. “Our mantra has been that ‘We’re all traders now’ as the 2020s decade is likely flat/widely range-bound for the S&P 500,” said Bannister, adding that US stocks are in the “fourth secular bear market of the past century”. This year’s topsy-turvy equity market has upended conventional wisdom for Wall Street’s soothsayers. In the first half of the year, strategists were blindsided by the resilience of the US economy, recovering corporate profits and an artificial intelligence frenzy that fuelled technology stocks. Just as many were cornered into changing their pessimistic views this summer, US equities began to lose steam. With just a little more than two months left in 2023, market participants are torn. Strategists at firms including Goldman Sachs Group Inc and Deutsche Bank AG think earnings could drive the S&P 500 another leg higher at year end, while bears like Morgan Stanley’s Michael Wilson see further declines in US equities. RBC Capital Markets LLC’s Lori Calvasina said on Monday that the “outlook has become cloudier and we don’t think the pause in the S&P 500 rally is done yet”. Strategist who called first-half rally sees S&P 500 stalling out OSLO (Oct 24): Norway’s US$1.4 trillion sovereign wealth fund, the world’s largest, posted a loss of 374 billion Norwegian crowns (US$33.80 billion) in the third quarter of 2023, as all asset classes fell in value, it said on Tuesday. The fund’s return on investment was minus 2.1% for the July-September period, which was 0.17 percentage points stronger than the return on the fund’s benchmark index. “The stock market saw a weaker quarter compared to the two previous quarters. It was particularly the tech, industrials and consumer discretionary sectors which contributed negatively to the return,” deputy CEO Trond Grande said in a statement. The fund invests the Norwegian state’s revenues from oil and gas production in equities, bonds, property and renewable projects abroad. It holds stakes in more than 9,200 companies globally, owning 1.5% of all listed stocks. The fund had 70.6% of its value invested in equities by end-September, compared to 71.3% three months earlier. Fixed income stood for 27.1% of the value, against 26.4% in three months earlier, while 2.2% was in unlisted real estate, against 2.3% three months earlier, and 0.1% in unlisted renewable energy infrastructure, against 0.1% before. World’s largest sovereign wealth fund posts US$34 bil loss in Q3 BY GWLADYS FOUCHE Reuters BY ALEXANDRA SEMENOVA Bloomberg REUTERS REUTERS US stocks have flailed in recent months, eroding a strong advance in the first half of the year, against a backdrop of a turbulent bond market, driven by concerns that sustained higher interest rates will derail economic growth.

WEDNESDAY OCTOBER 25, 2023 22 THEEDGE CEO MORNING BRIEF WORLD (Oct 24): Germany’s economy is projected to dislodge Japan’s as the world’s third largest in 2023, helped by a slide in the yen against the dollar and the euro. The International Monetary Fund’s (IMF) latest projections estimate Germany’s nominal gross domestic product at US$4.43 trillion (RM20.9 trillion) this year, compared with US$4.23 trillion for Japan. That would leave Germany lagging only the US and China in terms of economic size. The projections come as the yen teeters close to the 160 mark against the euro and remains within striking distance of the 33-year low against the dollar that sparked a second round of currency intervention in October last year. The euro last reached 160 yen in August 2008. The yen weakness has largely been caused by fundamental differences in monetary policy. The Federal Reserve and the European Central Bank (ECB) have raised interest rates from pandemic lows to tackle inflation while the Bank of Japan (BOJ) has stayed in stimulus mode as it looks to nurture price growth after years of deflation. While the Fed and ECB are expected to keep rates unchanged at their upcoming meetings, expectations that borrowing costs will stay higher for longer are likely to maintain pressure on the yen. The BOJ meets next week amid speculation of possible tweak to its control of bond yields, but the ending of its negative interest rate is not widely expected to come until next year. Still, the figures also point to steadier long-term growth in Germany that will concern policymakers in Japan as they mull the details of their latest economic package. “It’s true that Japan’s growth potential has fallen behind and remains sluggish,” Japan’s economy minister Yasutoshi Nishimura said on Tuesday when asked about the IMF projections. “We’d like to regain the ground lost over the past 20 or 30 years. We want to achieve that through measures such as our upcoming package.” Germany to overtake Japan as third-largest economy, helped by weak yen Rusal takes 30% stake in China refinery to secure aluminium feedstock supply LONDON (Oct 24): World fossil fuel demand is set to peak by 2030 as more electric cars hit the road and China’s economy grows more slowly and shifts towards cleaner energy, the International Energy Agency said, undercutting the rationale for any rise in investment. The report from the IEA, which advises industrialised countries, contrasts with the view of oil producer group the Organization of the Petroleum Exporting Countries, which sees oil demand rising long after 2030 and calls for trillions in new oil sector investment. In its annual World Energy Outlook released on Tuesday, the IEA said peaks in oil, natural gas and coal demand were visible this decade in its scenario based on governments’ current policies — the first time this has happened. “The transition to clean energy is happening worldwide and it’s unstoppable. It’s not a question of ‘if’, it’s just a matter of ‘how soon’ — and the sooner the better for all of us,” said IEA executive director Fatih Birol. “Governments, companies and investors need to get behind clean energy transitions rather than hindering them.” Still, the IEA also said as things stand, deBEIJING/LONDON (Oct 24): Russia’s Rusal, the world’s largest aluminium producer outside China, said on Tuesday it will buy a 30% stake in a Chinese alumina refinery to ensure adequate supply of the raw material for its plants. The company said it would pay 1.9 billion yuan (US$262 million) for a 30% stake in Hebei Wenfeng New Materials (HWNM), pendinRg approvals from Chinese authorities. After Russia invaded Ukraine in 2022, Rusal lost two crucial sources of alumina, used to make aluminium, as a refinery in Ukraine suspended production and Australia banned supplies to Russia. Rusal replaced the loss with purchases from China and other refineries in Asia, but its costs last year to source the material soared by US$1.1 billion to US$1.8 billion. “Rusal will be able to gain access to alumand for fossil fuels is set to remain far too high to keep within reach the Paris Agreement goal of limiting the rise in average global temperatures to 1.5 degrees Celsius. “This risks not only worsening climate impacts after a year of record-breaking heat, but also undermining the security of the energy system, which was built for a cooler world with less extreme weather events,” the agency said in a statement. China’s role changes By 2030, the IEA expects there to be almost 10 times as many electric cars on the road worldwide, and it cited policies supporting clean energy in key markets as weighing on future fossil fuel demand. For example, the IEA now expects 50% of new US car registrations will be electric in 2030, up from 12% in its outlook two years ago, largely as a result of the US Inflation Reduction Act. The IEA also sees China’s role as a key source of energy demand growth changing. While China in the last decade accounted for almost two-thirds of the rise in global oil use, the momentum behind its economic growth is ebbing and the country is a “clean energy powerhouse,” the report said, adding more than half of global electric vehicle sales in 2022 were in China. The IEA said the key to an orderly transition is to scale up investment in all aspects of a clean energy system, rather than in fossil fuels. “The end of the growth era for fossil fuels does not mean an end to fossil fuel investment, but it undercuts the rationale for any increase in spending,” the IEA report said. An Opec report earlier this month said calls to stop investments in new oil projects were “misguided” and “could lead to energy and economic chaos.” World oil, gas, coal demand to peak by 2030, IEA says BY ALEX LAWLER Reuters BY YOSHIAKI NOHARA Bloomberg Reuters mina at a competitive cost and secure its key raw material supply,” Rusal said in a statement about the China deal. HWNM operates an alumina refinery in China with an annual capacity of 4.8 million metric tons, and Rusal said it will get a 30% share of the refinery’s production. Read the full story Read the full story

WEDNESDAY OCTOBER 25, 2023 23 THEEDGE CEO MORNING BRIEF WORLD TOKYO/PARIS (Oct 24): Japan’s Mitsubishi Motors said it will end production of its cars at its joint venture in China and transfer its stake in the unit to its Chinese partner, becoming the latest foreign automaker to cut back its operations in the world’s top auto market. The decision by the Japanese car maker comes amid fierce price competition in China which has led global automakers such as Hyundai Motor and Stellantis to take steps to bring down costs by restructuring their businesses. Mitsubishi Motors separately said on Tuesday it will invest up to 200 million euros (US$214 million) in the new electric vehicle unit of French counterpart Renault, as it seeks to strengthen its foothold in Europe and other markets. The Japanese automaker established its JV in China with Guangzhou Automobile Group (GAC) and trading house Mitsubishi Corp in 2012. Following a transfer of Mitsubishi Motors’ and Mitsubishi’s stake in the JV to their Chinese partner, it will become a wholly-owned subsidiary of GAC, the Japanese automaker said. The JV plant will start producing GAC’s Aion cars from June 2024, which would help the EV brand to achieve a total annual capacity of 600,000 units by then, GAC said in a separate statement on the social media WeChat platform. Mitsubishi Motors would book a special loss of 24.3 billion yen (US$162.4 million) in the current financial year for restructuring in China. It did not make any change to its full-year earnings forecast. Ampere investment Mitsubishi Motors said it is seeking to improve its EV development technology with its investment in Renault’s Ampere EV business, which the French automaker is looking to list on the stock market next year. Renault Chairman Jean-Dominique Senard, speaking on the sidelines of an event in Paris, said he welcomed Mitsubishi’s investment and had always been confident the company would take part in Ampere. “As a first step of this collaboration, Ampere will supply an EV on an OEM (original equipment manufacturer) basis in the European market,” Mitsubishi said in a statement. Senard said he intends to talk in more detail with Mitsubishi during an upcoming trip to Japan. The decision to invest in Ampere comes after Mitsubishi’s partners, Renault and Nissan Motor, finalised a restructured alliance in July. Nissan has already committed to invest up to 600 million euros in the unit, consistent with it being a strategic investor and securing a board seat on the new company Mitsubishi Motors to end production in China, invest in Renault EV unit (Oct 24): Nidec Corp slumped the most in more than 12 years after reporting quarterly earnings that missed estimates, underscoring weakness across the global electric vehicle (EV) and electronics arenas. The Japanese firm’s shares fell as much as 11% on Tuesday in Tokyo, its biggest drop since March 2011 intraday. Nidec, a key supplier to EV and electronics makers from Tesla Inc to Apple Inc, reported a less-than-projected 7.6% rise in September quarter operating income. Revenue barely grew during the period. Nidec’s underperformance reflects a soft automotive market during an economic downturn. Tesla last week tempered its growth expectations and signalled pain ahead. Chief executive Elon Musk blamed rising interest rates in the US for driving electric car buyers to the sidelines. The smartphone market, meanwhile, is grappling with its worst demand in about a decade. “The EV sector looks challenged at the moment due to price pressure and there isn’t any clear sign that this will change soon,” said Mio Kato, an analyst at LightStream Research. “Investors have been complacent about Nidec’s long-term margin prospects and I think they will struggle to generate double-digit margins in the future.” The company expects a loss of ¥15 billion (RM475.41 million) in its e-Axle business this fiscal year, but it’s looking at an operating profit margin of 15% in the future, chief executive officer Shigenobu Nagamori said at a press briefing on Tuesday. E-Axle is a traction motor system for EVs that’s mass-produced by Nidec. Nidec plunges most since 2011 after EV malaise eats into profit The e-Axle market is seeing a price war in China rather than quality improvement, Nagamori said. “We shouldn’t engage in a competition that doesn’t recognise our value,” he said, adding that the company plans to broaden its strategy from a China-focused one to include Japan, the US and Europe. Nidec posted ¥2.24 trillion in revenue for the fiscal year that ended in March. During the period, it reported losses in its automotive business, which is seeking to expand in the market for traction motors used by electric vehicles, due in part to restructuring costs. Nidec is aiming for a sharp recovery this fiscal year. The company harbours ambitions of achieving ¥10 trillion in sales by March 2031, Nagamori has said. Nagamori, 79, has built a reputation over the past 50 years as one of Japan’s most successful executives when it comes to merger and acquisitions, having bought dozens of business to fold into Nidec, which he founded in a shack. Even so, he’s struggled to find a successor who can help him reach his goal of quadrupling the manufacturer’s sales. BY AYA WAGATSUMA & EDWIN CHAN Bloomberg BY DANIEL LEUSSINK Reuters

WEDNESDAY OCTOBER 25, 2023 24 THEEDGE CEO MORNING BRIEF WORLD SHANGHAI (Oct 24): The founder of PDD Holdings saw his wealth swell by US$13.8 billion (RM66.03 billion) in a year, as a slowing global economy drove more shoppers to the Chinese company’s discount e-commerce platforms Temu and Pinduoduo, an annual rich list showed on Tuesday. Colin Huang, who founded PDD in 2015 and stepped down as its chief executive officer in 2020, was the fastest riser in this year’s Hurun Rich List, leaping seven places to be ranked China’s third richest man with a US$37.2 billion fortune. It also marked the first time he had broken into the top three rankings. The growth of his fortune reflects the changing e-commerce landscape both in China, where consumer confidence remains low after three years of Covid curbs, and abroad where shopping platforms such as Temu and Shein are gaining steam. PDD did not immediately respond to a request for comment. Jack Ma, founder of rival Alibaba which is currently going through a restructuring and working to fend off competition from the likes of PDD, fell one place from 2022 to 10th spot and the number of Alibaba shareholders on the list fell from 18 last year, to 12 this year. Richard Liu, who founded e-commerce giant JD.com, also saw his wealth, and that of his wife Zhang Zetian, fall by $6.2 billion since last year to US$8.26 billion, according to Hurun’s list. JD.com shares fell to a record low earlier this month after banks cut its price targets citing a weaker-than-expected recovery in consumer spending. “Going global has been one of the key sources of growth this year,” said Rupert Hoogewerf, Hurun Report’s chairman and chief researcher, citing PDD’s Temu, ByteDance’s short video platform TikTok and ultra-fast fashion brand Shein as examples. The founder of bottled water brand Nongfu Spring, Zhong Shanshan, retained his first place for the third year running on the list with a US$62 billion fortune while Pony Ma, founder of social media and gaming giant Tencent was second with US$38.6 billion. Hurun also said 179 individuals dropped off this year’s list, which ranks China’s wealthiest people with a minimum net worth of five billion yuan, 15% of which were in real estate, as the sector grapples with a prolonged debt crisis. Wang Jianlin, the owner of Dalian Wanda Group and once China’s richest man, saw his wealth and that of his family fall by US$7.3 billion and 57 spots to be placed in 89th position with a US$6.47 billion fortune. The founder of China Evergrande Group, the world’s most indebted property developer, remained on the list at 268 place despite his company’s woes, due to dividends paid out in previous years, Hurun said. Hui Ka Yan is currently being investigated over suspected “illegal crimes”, Evergrande said last month. Founder of discount e-shopping firm PDD races up China’s rich list Bitcoin hits US$35,000 for first time since 2022 on ETF optimism BY MUYAO SHEN & OLGA KHARIF Bloomberg BY CASEY HALL Reuters Colin Huang, who founded PDD in 2015 and stepped down as its chief executive officer in 2020, was the fastest riser in this year’s Hurun Rich List, leaping seven places to be ranked China’s third richest man with a US$37.2 billion fortune. REUTERS (Oct 24): Bitcoin extended a rally fueled by expectations of fresh demand from exchange-traded funds, reaching the highest price since May last year. The largest digital asset rose as much as 11.5% to top US$35,000 before paring some of the gain to trade at US$34,605 as of 8.11am.in New York on Tuesday, taking its year-to-date rebound from 2022’s digital-asset rout to 108%. The possible approval in coming weeks of the first US spot Bitcoin ETFs is stoking speculative ardor for the token. Asset managers BlackRock Inc and Fidelity Investments are among those in the race to offer such products. Digital-asset bulls argue the ETFs would widen adoption of the cryptocurrency. A US federal appeals court on Monday also formalized a victory for Grayscale Investments LLC in its bid to create a spot Bitcoin ETF over objections from the US Securities and Exchange Commission. The SEC has so far resisted allowing ETFs that invest directly in Bitcoin, citing risks such as fraud and manipulation in the underlying market. The court ruling and flurry of applications from investment heavyweights to start spot funds stoked speculation that the agency will relent. ETF ticker Bloomberg Intelligence ETF analyst Eric Balchunas flagged on X, the platform formerly known as Twitter, that the iShares Bitcoin Trust “has been listed on the DTCC” with the ticker IBTC. BlackRock, the world’s largest asset manager, operates the iShares business. The DTCC is the Depository Trust and Clearing Corp, which undertakes clearing and settlement in US markets. “This doesn’t mean it’s technically approved,” Balchunas said in an interview. “It’s not home free. But this is pretty much checking every box that you need to check before you launch an ETF. When we see a ticker added, those things are usually right before launch.” Bitcoin also surged 10% intraday at the start of last week on ETF hype. On that occasion, an erroneous report that BlackRock had won approval to launch a fund caused the move and the rally cooled once the mistake came to light. Read the full story Read also: Crypto delistings from exchanges already running at record pace this year Even as bitcoin stages an astonishing resurgence, a record amount of digital tokens are being delisted this year from exchanges such as Coinbase Global Inc and Binance.

WEDNESDAY OCTOBER 25, 2023 25 THEEDGE CEO MORNING BRIEF WORLD GAZA/JERUSALEM (Oct 24): Israel’s military said it was preparing for “unrelenting attacks” to dismantle Hamas while former US President Barack Obama warned that “any Israeli military strategy that ignores the human costs could ultimately backfire.” The Palestinian health ministry said the Gaza death toll in two weeks of air strikes had topped 5,000. Israel pounded hundreds of targets in Gaza from the air on Monday as its soldiers fought Hamas militants during raids into the besieged Palestinian strip where civilians are trapped in harrowing conditions. Hamas on Monday said it had freed two Israeli women among the more than 200 hostages taken during its Oct. 7 rampage in southern Israel in which the Islamist group killed 1,400 people. They were the third and fourth hostages to be released. Israeli Chief of Staff Lieutenant General Herzi Halevi issued a statement suggesting that Israel had no intention of curbing its strikes on the densely populated Gaza Strip and hinting that it was well prepared for a ground assault. “We want to bring Hamas to a state of full dismantling,” Halevi said. “The path is a path of unrelenting attacks, damaging Hamas everywhere and in every way. “We are well prepared for the ground operations in the south,” he added, referring to southern Israel, which abuts Gaza. “There are tactical, operative, strategic considerations that have provided additional time, and troops who have more time are better prepared, and that is what we are doing now.” In public, the US has stressed Israel’s right to defend itself but two sources familiar with the matter said the White House, Pentagon and State Department have stepped up private appeals for caution in conversations with the Israelis. A US priority is to gain time for negotiations to free other hostages, said the sources, who spoke before the hostage releases were announced on Monday. Asked about the possibility of a ceasefire, US President Joe Biden said: “”We should have those hostages released and then we can talk.” Obama warns Israel against civilian casualties Obama, in a rare comment by a former US president on a foreign policy crisis, issued a written statement warning Israel not to cause so many civilian casualties in retaliating against Hamas that it would alienate generations of Palestinians. “Any Israeli military strategy that ignores the human costs could ultimately backfire. Already, thousands of Palestinians have been killed in the bombing of Gaza, many of them children. Hundreds of thousands have been forced from their homes,” Obama said in a statement posted on social media. Read the full story Read also: As Israel-Hamas war rages, global finance chiefs in Saudi sound gloomy note Israel promises ‘unrelenting attacks’ on Hamas; US, Obama urge caution BY NIDAL AL-MUGHRABI & ARI RABINOVITCH Reuters NEWS IN BRIEF China’s Weibo asks top influencers to show real names (Oct 24): Chinese microblogging site Weibo Corp is planning to ask its more influential users to display their real names to the public, a move that could encroach on online privacy in the world’s biggest internet arena. The profiles of users with more than one million followers will be required to reveal their identities on the social media platform, Weibo chief executive officer Wang Gaofei said last week. Wang has implemented the change to his personal account, which previously didn’t show his name publicly. “I’m testing out the controversial function myself first,” Wang wrote last Friday in one of the Weibo posts in response to user queries about the change. Beijing has long demanded insight into users on social media, concerned about dissent but also criminal activity such as stock market manipulation and fake news. It’s unclear if Weibo is acting on the instructions of internet regulators, and Wang, while acknowledging a potentially unpopular move, didn’t explain his rationale. He said different rules may apply to people with large followings. — Reuters Read the full story OCBC to roll out generative AI chatbot for employees globally SINGAPORE (Oct 24): Starting next month, 30,000 employees across Oversea-Chinese Banking Corporation (OCBC) offices globally will be able to use an internal generative artificial intelligence (AI) chatbot to assist them in writing, research and ideation. Called OCBC GPT, the chatbot is powered by ChatGPT’s large language models. Users can type a query in natural language into OCBC GPT via Microsoft Teams, and the chatbot will produce answers based on accessible text-based information on the web. To prevent any data leakage, the chatbot is hosted in a secure and controlled environment. Information entered by OCBC employees is also kept within the bank and is not accessible to any external parties, including Microsoft. “We see this as an easy quick win because it democratises access to ChatGPT for employees but in a secure environment, where there is no risk of data leakage for the bank,” says Donald MacDonald, OCBC’s head of Group Data Office, at a media briefing earlier today. — Nurdianah Md Nur/ theedgesingapore.com Barack Obama (left) speaks to Israeli Prime Minister Benjamin Netanyahu during the burial ceremony of former Israeli President Shimon Peres at Mount Herzl Cemetery in Jerusalem September 30, 2016. REUTERS

WEDNESDAY OCTOBER 25, 2023 26 THEEDGE CEO MORNING BRIEF WORLD NEWS IN BRIEF South Korea’s Hyundai, Saudi Aramco clinch US$2.4 bil gas plant deal SEOUL (Oct 24): South Korea’s Hyundai Engineering & Construction and Hyundai Engineering have signed a US$2.4 billion contract with oil giant Saudi Aramco to build a gas processing plant, Seoul’s presidential office said on Tuesday. The deal was signed on Monday (Oct 23) in Riyadh at a ceremony to mark 50 years of construction cooperation between the two countries, with South Korean President Yoon Suk Yeol attending as part of his state visit to the kingdom. The two builders, affiliates of Hyundai Motor Group, have been working on the first phase of Aramco’s Jafurah gas processing facilities project after winning the order in 2021, Hyundai said in a statement confirming the signing of the US$2.4 billion contract on the second phase. — Reuters Sembcorp and Indonesia’s Persero sign joint development study agreement on green hydrogen production and export SINGAPORE (Oct 24): Sembcorp Industries’ wholly-owned subsidiary, Sembcorp Utilities, has signed a joint development study with Indonesianstate-owned utility company PT PLN (Persero) at the Singapore International Energy Week 2023. Witnessed by Rachmat Kaimuddin, the Indonesian deputy coordinating minister for infrastructure and transportation coordination and Ngiam Shih Chun, the CEO of Singapore’s Energy Market Authority (EMA), the agreement will explore the feasibility of green hydrogen production in Indonesia for export to Singapore. — theedgesingapore.com Chinese appliance giant Midea Group files for Hong Kong listing (Oct 24): Midea Group Co, China’s largest home appliance maker, has filed for a Hong Kong listing that could be among the city’s biggest in recent years. The Shenzhentraded firm has chosen Bank of America Corp and China International Capital Corp as joint sponsors of the offering, according to a preliminary filing posted on the stock exchange website on Tuesday. Midea is aiming for a listing in the city as soon as next year, BloombergNews has reported. Midea has a market value of about US$51 billion (RM244.04 billion), and its board approved a plan in August to explore selling as much as 10% of its total capital in a Hong Kong float. A large offering would provide a much-needed boost to Hong Kong’s initial public offering (IPO) market. The Asian financial hub hasn’t had a listing raising over US$1 billion in more than a year, data compiled by Bloomberg showed. There hasn’t been a deal raising US$3 billion or more since JD Logistics Inc’s US$3.6 billion IPO in May 2021. Founded in 1968, Midea manufactures air conditioners, refrigerators, washing machines, kitchen appliances and vacuum cleaners among others, according to its website. It sells products under brands including Midea, Comfee, Eureka, Little Swan and Vandelo. The Chinese firm in 2016 acquired Toshiba Corp’s home appliance business. It also owns German robotics firm Kuka AG. — Bloomberg Sri Lanka approves free tourist visa for seven countries including Malaysia COLOMBO (Oct 24): Sri Lanka’s Cabinet approved issuing free tourist visas to visitors from seven countries, including China, India and Russia, a statement issued by the media ministry said on Tuesday, to boost tourism and help revive its crisis-hit economy. Tourists from China, India, Russia, Japan, Thailand, Indonesia and Malaysia will be issued free visas till March 31, 2024 under a pilot programme, the statement detailing Cabinet decisions said. The scheme is part of attempts by Sri Lanka to boost tourism recovery and hit a target of five million arrivals by 2026, the statement added. The country of 22 million people, famed for its beaches, ancient temples and aromatic tea, saw its tourism industry pummelled first by the Covid-19 pandemic and then by a severe financial crisis last year, that saw mass scale protests and shortages of essentials such as fuel. But the tourism industry is seeing a turnaround in 2023, with Sri Lanka clocking a million arrivals by September, for the first time since 2019. The island is expecting to close the year at 1.5 million arrivals. India is the largest source of tourists with 200,310 arrivals, followed by Russia with 132,300, latest data from the Sri Lanka Development Authority showed. Sri Lanka earned US$1.3 billion from tourism in the first eight months of 2023, up from US$833 million dollars during the same period last year, according to the central bank. — Reuters Indonesia president says rupiah’s drop still ‘safe’, flags tax incentives JAKARTA (Oct 24): Indonesia President Joko Widodo said on Tuesday the rupiah’s recent depreciation rate against the dollar was still “safe” for Southeast Asia’s largest economy and its inflation targets and that his government was drafting tax incentives to boost growth. Speaking at a seminar attended by investors, Jokowi, as the president is popularly known, warned of a potential for oil prices to soar due to the escalating conflict in the Middle East and capital outflows linked to US monetary tightening, which could affect Indonesia’s economy. “If we see the percentage of the depreciation of our currency, it’s still safe for the real sector, safe for the financial sector, as well as for inflation,” Jokowi said.The rupiah has dropped by as much as 4.7% from its last peak in early September, coming under pressure amid investors’ risk-off sentiments. On Tuesday the currency strengthened as much as 0.66% to trade at 15,825 against the US dollar, but continued to trade near its weakest levels since 2020. “We have to be calculative and prepare for the long run,” the president said, adding that his state budget still has endurance to withstand shocks until 2024 with his finance minister still holding 616 trillion rupiah (RM184.9 billion) in cash as of Oct 13. Jokowi said the government is also preparing tax incentives for the property sector, which may include a removal of value-added tax for house purchases. — Reuters Read the full story BLOOMBERG BLOOMBERG

WEDNESDAY OCTOBER 25, 2023 27 THEEDGE CEO MORNING BRIEF MARKETS Top 20 active stocks World equity indices Top gainers (ranked by %) Top losers (ranked by %) Top gainers (ranked by RM) Top losers (ranked by RM) NAME VOLUME CHANGE CLOSE YTD MARKET (MIL) (RM) CHANGE CAP (%) (RM MIL) WIDAD GROUP BHD 129.37 -0.105 0.430 0.00 1331.5 METRONIC GLOBAL BHD 90.76 -0.005 0.015 -25.00 23.0 SARAWAK CONSOLIDATED 66.70 0.015 0.540 272.41 345.7 KANGER INTERNATIONAL BHD 55.61 0.010 0.125 212.50 81.2 KNM GROUP BHD 51.53 0.020 0.110 120.00 444.8 MERCURY SECURITIES GROUP BHD 49.52 -0.010 0.315 0.00 281.3 ZEN TECH INTERNATIONAL BHD 45.04 0.000 0.020 0.00 52.6 EKOVEST BHD 42.05 0.010 0.470 38.24 1393.7 EVERGREEN MAX CASH CAPITAL 41.70 0.035 0.415 0.00 462.7 REVENUE GROUP BHD 39.68 0.015 0.225 -66.67 124.4 YTL CORP BHD 39.17 0.050 1.310 125.86 14363.0 UEM SUNRISE BHD 37.00 0.040 0.765 200.00 3869.7 DAGANG NEXCHANGE BHD 35.27 0.000 0.415 -18.63 1309.9 LEFORM BHD 31.68 0.005 0.230 11.43 340.6 MY EG SERVICES BHD 31.01 0.005 0.790 -8.18 5893.0 ECONPILE HOLDINGS BHD 29.70 0.000 0.320 88.24 453.6 KINERGY ADVANCEMENT BHD 26.47 0.000 0.330 -16.46 641.9 ASDION BHD 24.91 0.000 0.085 -10.53 38.0 INDUSTRONICS BHD 24.84 0.000 0.050 -33.33 35.4 META BRIGHT GROUP BHD 24.53 0.000 0.260 52.94 617.1 Data as compiled on Oct 24, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) EA HOLDINGS BHD 0.010 100.00 589.8 -33.33 64.5 FINTEC GLOBAL BHD 0.010 100.00 201.1 0.00 59.2 MMAG HOLDINGS BHD 0.015 50.00 3,252.4 -40.00 36.3 TALAM TRANSFORM BHD 0.025 25.00 290.0 66.67 107.4 KNM GROUP BHD 0.110 22.22 51,526.7 120.00 444.8 PDZ HOLDINGS BHD 0.040 14.29 6,360.2 0.00 23.3 ZELAN BHD 0.040 14.29 248.5 -42.86 33.8 SKB SHUTTERS CORP BHD 0.655 12.93 6,861.2 72.37 86.5 GIIB HOLDINGS BHD 0.090 12.50 1,246.9 0.00 53.2 PUC BHD 0.050 11.11 16,988.1 42.86 118.4 MTOUCHE TECHNOLOGY BHD 0.050 11.11 59.2 0.00 46.3 MINETECH RESOURCES BHD 0.050 11.11 0.1 -9.09 76.5 LKL INTERNATIONAL BHD 0.160 10.34 4,572.2 -44.60 62.1 PARLO BHD 0.115 9.52 2,465.5 -4.17 69.1 EG INDUSTRIES BHD 1.500 9.49 4,664.8 177.78 675.3 EVERGREEN MAX CASH CAPITAL 0.415 9.21 41,660.6 0.00 462.7 SEALINK INTERNATIONAL BHD 0.240 9.09 12,845.1 140.00 120.0 PWF CORP BHD 0.730 8.96 4,868.6 96.61 217.2 S&F CAPITAL BHD 0.125 8.70 592.3 47.06 68.8 KANGER INTERNATIONAL BHD 0.125 8.70 55,613.2 212.50 81.2 Data as compiled on Oct 24, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) GREEN OCEAN CORP BHD 0.010 -33.33 10,263.6 -50.00 21.1 METRONIC GLOBAL BHD 0.015 -25.00 90,755.4 -25.00 23.0 ALDRICH RESOURCES BHD 0.035 -22.22 12,059.8 16.67 39.0 XIDELANG HOLDINGS LTD 0.020 -20.00 2,100.0 -20.00 42.3 WIDAD GROUP BHD 0.430 -19.63 129,365.4 0.00 1,331.5 NEXGRAM HOLDINGS BHD 0.025 -16.67 15,274.6 -64.29 16.2 KOMARKCORP BHD 0.170 -15.00 2,573.2 -38.18 112.9 INNITY CORP BHD 0.480 -11.11 14.9 15.66 66.9 TFP SOLUTIONS BHD 0.045 -10.00 220.0 -30.77 26.3 CITRA NUSA HOLDINGS BHD 0.045 -10.00 1.0 -30.77 32.4 HONG SENG CONSOLIDATED BHD 0.045 -10.00 4,729.6 -79.55 229.9 GREEN PACKET BHD 0.050 -9.09 9,320.1 -9.09 99.7 ENCORP BHD 0.255 -8.93 15.0 15.91 80.7 SOUTHERN STEEL BHD 0.560 -8.20 1.9 -4.27 333.9 EDUSPEC HOLDINGS BHD 0.060 -7.69 743.0 -40.00 64.0 JOE HOLDING BHD 0.120 -7.69 2,301.5 -40.00 36.7 SENTORIA GROUP BHD 0.070 -6.67 3,436.1 -22.22 42.9 JADI IMAGING HOLDINGS BHD 0.070 -6.67 165.9 -17.65 98.0 BTM RESOURCES BHD 0.070 -6.67 7.9 -17.65 88.0 OLYMPIA INDUSTRIES BHD 0.070 -6.67 253.9 -6.67 71.6 Data as compiled on Oct 24, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) NESTLE MALAYSIA BHD 126.800 -0.800 85.0 -9.43 29734.6 BLD PLANTATION BHD 10.320 -0.660 11.1 0.58 964.9 CARLSBERG BREWERY MALAYSIA 19.880 -0.240 175.6 -13.11 6078.3 PPB GROUP BHD 15.380 -0.220 717.2 -11.81 21879.6 PETRONAS DAGANGAN BHD 22.420 -0.200 417.9 -1.87 22273.2 MALAYSIAN PACIFIC INDUSTRIES 26.820 -0.140 69.4 -6.75 5334.4 WIDAD GROUP BHD 0.430 -0.105 129,365.4 0.00 1331.5 BINTULU PORT HOLDINGS BHD 5.020 -0.080 1.7 4.58 2309.2 AJINOMOTO MALAYSIA BHD 15.240 -0.080 36.4 16.51 926.6 NEGRI SEMBILAN OIL PALMS BHD 3.230 -0.070 7.2 -7.71 226.8 QUALITY CONCRETE HOLDINGS 1.280 -0.070 13.0 -3.03 74.2 HONG LEONG FINANCIAL GROUP 17.400 -0.060 996.5 -6.45 19927.2 PRESS METAL ALUMINIUM 4.800 -0.060 5,480.3 -1.64 39550.2 AEON CREDIT SERVICE M BHD 11.360 -0.060 173.6 -9.70 2900.3 BURSA MALAYSIA BHD 6.690 -0.060 112.8 0.60 5414.2 CELCOMDIGI BHD 4.140 -0.060 3,138.9 3.50 48568.4 INNITY CORP BHD 0.480 -0.060 14.9 15.66 66.9 IOI CORP BHD 3.870 -0.050 1,978.7 -4.44 24008.3 HONG LEONG CAPITAL BHD 4.870 -0.050 2,168.5 -22.45 1202.4 SOUTHERN STEEL BHD 0.560 -0.050 1.9 -4.27 333.9 Data as compiled on Oct 24, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) HEXTARTECHNOLOGIES SOLUTIONS 24.580 1.080 0.2 44.08 3162.2 FRASER & NEAVE HOLDINGS BHD 26.000 0.220 56.2 20.48 9536.2 HEINEKEN MALAYSIA BHD 24.400 0.220 60.2 -3.17 7371.2 GREATECH TECHNOLOGY BHD 4.420 0.140 934.2 -8.68 5543.6 EG INDUSTRIES BHD 1.500 0.130 4,664.8 177.78 675.3 VITROX CORP BHD 7.250 0.130 90.300 -5.23 6853.8 LPI CAPITAL BHD 12.000 0.120 90.7 -5.06 4780.6 MALAYAN CEMENT BHD 3.640 0.090 643.7 71.70 4769.1 KECK SENG MALAYSIA BHD 4.530 0.090 51.2 26.54 1627.6 INARI AMERTRON BHD 2.920 0.080 11,804.7 11.88 10931.7 SYARIKAT TAKAFUL MALAYSIA 3.640 0.080 650.1 5.81 3047.8 TEO SENG CAPITAL BHD 1.300 0.080 1,013.9 74.50 381.3 PETRONAS CHEMICALS GROUP 7.150 0.080 2,026.0 -16.86 57200.0 AURELIUS TECHNOLOGIES BHD 2.600 0.080 1,377.3 42.08 1024.4 PERTAMA DIGITAL BHD 4.070 0.080 1,762.7 131.25 1783.5 MAGNI-TECH INDUSTRIES BHD 1.990 0.080 390.6 8.15 862.6 SMRT HOLDINGS BHD 0.985 0.075 17,775.4 579.31 446.2 SKB SHUTTERS CORP BHD 0.655 0.075 6861.2 72.37 86.5 UNITED U-LI CORP BHD 1.800 0.070 1830 50.00 392.0 FORMOSA PROSONIC INDUSTRIES 2.910 0.070 242.9 -9.91 742.4 Data as compiled on Oct 24, 2023 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 32,936.41 -190.87 -0.58 S&P 500 * 4,217.04 -7.12 -0.17 NASDAQ 100 * 14,604.85 43.97 0.30 FTSE 100 * 7,374.83 -6.88 -0.09 AUSTRALIA 6,856.86 12.78 0.19 CHINA 2,962.24 22.95 0.78 HONG KONG 16,991.53 -180.60 -1.05 INDIA 64,571.88 -825.74 -1.26 INDONESIA 6,806.76 64.80 0.96 JAPAN 31,062.35 62.80 0.20 KOREA 2,383.51 26.49 1.12 PHILIPPINES 6,039.72 -48.72 -0.80 SINGAPORE 3,083.88 30.52 1.00 TAIWAN 16,309.76 58.40 0.36 THAILAND 1,391.03 -8.32 -0.59 VIETNAM 1,105.90 12.37 1.13 Data as compiled on Oct 24, 2023 * Based on previous day’s closing Source: Bloomberg CPO RM 3,667.00-86.00 OIL US$ 90.220.39 RM/USD 4.7845 RM/SGD 3.5022 RM/AUD 3.0448 RM/GBP 5.8577 RM/EUR 5.0891