The Edge - 20 March 2024

CEOMorningBrief WEDNESDAY, MARCH 20, 2024 ISSUE 736/2024 theedgemalaysia.com TOP JAPAN BANKS TO RAISE ORDINARY DEPOSIT RATES FOR FIRST TIME IN 17 YEARS AFTER BOJ SHIFT p15 HOME: Ringgit a top performer in region following govt coordination measures, says Amir Hamzah p3 Loke says MOT taking note of views to improve KLIA after it was named among Asia’s worst airports p4 Arbitration outcome of Felda-Rajawali dispute to be out soon, says Zahid p6 WORLD: China Evergrande’s alleged US$78 bil fraud is among biggest ever p17 Crypto exchange BitMEX investigates flash crash that sent Bitcoin to US$8,900 p19 Sultan Ibrahim: I will begin my real way of ruling after honeymoon phase ends Report on Page 2. BERNAMA

wednesday march 20, 2024 2 The E dge C E O m o rning brief published by ( 2 6 6 9 8 0 - X ) tel . 603-77218000 Level 3, Menara KLK, 1 Jalan PJU 7/6, Mutiara Damansara, 47810, Petaling Jaya, Selangor, Malaysia publisher + ceo . Ho Kay Tat editor-in-chief . Kathy Fong chief commercial officer . Sharon Teh chief operating officer . Lim Shiew Yuin editors . Jenny Ng . Tan Choe Choe Lam Jian Wyn to contact editors: [email protected] to advertise: [email protected] the edge ceo morning brief Read from desktop or mobile device. You can print in A4 to read. Set print mode to fit or shrink oversize page. to get on emailing list [email protected] Sultan Ibrahim: I will begin my real way of ruling after honeymoon phase ends Mat Sabu: Price of imported white rice to drop between RM2 and RM3 starting today KUALA LUMPUR (March 19): His Majesty Sultan Ibrahim, King of Malaysia said he will start his real way of ruling once his two-month honeymoon period is over, saying he bears the trust of the Malay rulers to look after the interests of the people and the country. “I am not a statue to be worshipped or to be used as decoration in ceremonies, or to be forced to follow every word and desire of the minister. “In less than two weeks, it will mark two months since I have taken over the reins as Head of State. When this ‘honeymoon period’ is over..., I will begin my real way of ruling,” the king decreed in a Facebook post in conjunction with the ceremony to confer the 2024 Federal Territory awards at Istana Negara on Tuesday. The king also said the awards conferred were to recognise individuals who have rendered meritorious service, dedicated service, or contributed to the Federal Territory. “I have personally reviewed each candidate prepared by the Selection Committee and this year I have decided that only 36 recipients truly deserve to be awarded,” he said. by Chester Tay theedgemalaysia.com Bernama home PUTRAJAYA (March 19): The government, through the National Action Council on Cost of Living (Naccol), has agreed that the retail price of imported white rice will be reduced by RM2 to RM3 effective Wednesday, Agriculture and Food Security Minister Datuk Seri Mohamad Sabu said. He added that the current price is around RM38 to RM45 for a 10 kilogramme (kg) pack of imported white rice, which is expected to drop to RM35 following the announced adjustment in price, which was finalised at Tuesday’s Naccol meeting. “The government is optimistic that this move will help Malaysians reduce their cost of living, especially during the Ramadan month and the upcoming festivities,” he said, adding that the government also decided that all current rice stocks, totalling 140,000 metric tonnes, and purchased by millers, will need to be processed and made available to local markets immediately to boost rice distribution. “My ministry will ramp up enforcement throughout the country, and to expand the distribution of imported white rice, the Federal Agricultural Marketing Authority (Fama) and the Farmers’ Organisation Authority (FAO) will carry out more Agro Madani sales throughout the country,” he said. Read the full story Leading the list of honorees was Kuala Lumpur Mayor Datuk Seri Kamarulzaman Mat Salleh, who was conferred Darjah Kebesaran Seri Mahkota Wilayah (SMW), which carries the title Datuk Seri. Eight individuals were conferred Darjah Kebesaran Panglima Mahkota Wilayah (PMW), which carries the title Datuk, including the Ministry of Natural Resources and Environmental Sustainability’s secretary general Datuk Dr Ching Thoo Kim; Hospital Kuala Lumpur senior consultant of vascular surgery and head of general surgery department Datuk Dr Hanif Hussein; and the Federal Territories Department deputy director general Datuk Ramlee Yatim. Agong wants strict action taken over ‘Allah’ socks issue The king also expressed anger and sadness over the sale of socks that bear the word Allah in a chain of convenience stores, and said the strictest actions should be taken against anyone found guilty in the issue, based on the authorities’ investigation. “Whether it was intentional or not, whether it was imported or produced in local factories, I want the enforcement agencies to investigate and take the strictest actions according to the existing laws so that the same mistake does not happen twice,” he said in another Facebook post. He said it is unreasonable for a company with employees who are Malaysian citizens to be insensitive to such matters. “We have lived in a multi-ethnic country for so long. Mistakes on religious and racial issues like this cannot be accepted and allowed to happen again,” he said, as he reminded all parties to maintain the country’s harmony and to not play with sensitive issues involving religion, race, and the royalty.

WEDNESDAY MARCH 20, 2024 3 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (March 19): YTL Power International has set up YTL AI Cloud, a specialised provider of massive-scale graphics processing unit (GPU)-based accelerated computing, to deploy and manage one of the world’s most advanced supercomputers on Nvidia Grace Blackwell-powered DGX Cloud, an artificial intelligence (AI) supercomputer for accelerating the development of generative AI. In a statement on Tuesday, YTL Power said it is among the first companies to adopt the Nvidia GB200 NVL72, which YTL Power set to deploy and manage Nvidia’s AI supercomputer in Johor KUALA LUMPUR (March 19): The ringgit was in the first place compared to nine other regional countries since coordination measures among the government, Bank Negara Malaysia (BNM), government-linked investment companies (GLICs) and government-linked companies (GLCs) were implemented on Feb 26. Finance Minister II Datuk Seri Amir Hamzah Azizan also said that based on BNM’s Financial Markets Committee statement on March 1, 2024, there was an immediate impact on market trends with increased market interest in the ringgit. “The government is committed to ensuring that the performance of the ringgit is at a better and stronger level,” he told the Dewan Negara on Tuesday. He said various measures had already been taken, and that BNM always ensures that the domestic foreign exchange market remains orderly, and maintains financial stability. The central bank also continues to monitor the financial market and take the necessary measures, including intervention in the foreign exchange market, to curb excessive currency movements. In addition, Amir Hamzah said, BNM also monitors the conversion of export revenue into ringgit by exporting companies, and continues to encourage the use of the local currency for export settlement, so that dependence on the US dollar can be reduced. He said that the Ministry of Finance and BNM had taken integrated and coordinated actions to bring money into the foreign exchange market. “Among them are encouraging GLICs and GLCs to bring back foreign investment income, and convert the income to ringgit more consistently.” Amir Hamzah said the government also controls overseas investment by private companies to reduce pressure on the ringgit, including encouraging them to prioritise domestic investments and delaying new overseas investments. “Overseas investments must be managed prudently, such as protecting the value [of the ringgit] through ‘hedging’ foreign currency exposure and bringing back the proceeds of overseas investments.” In addition, he said that besides the joint measures with BNM, the government is also focusing on economic reform efforts, which will indirectly strengthen the economic performance and the ringgit. “The government has introduced the Madani Economic framework, with the main pillar being to restructure the economy to emerge as a leader in Asia. The Madani economy focuses on ensuring Malaysia is a competitive investment destination,” he said. Ringgit a top performer in region following govt coordination measures, says Amir Hamzah Bernama BY SURIN MURUGIAH theedgemalaysia.com is a multi-node, liquid-cooled, rack-scale system with fifth-generation NVLink. It said the supercomputer will be interconnected by the Nvidia Quantum InfiniBand networking platform. The platform acts as a single GPU with 1.4 exaflops of AI performance and 30TB of fast memory, and is designed for the most compute-intensive workloads. The YTL AI Supercomputer will surpass more than 300 exaflops of AI compute, making it one of the fastest supercomputers in the world. Meanwhile, the self-described technocrat said in dealing with the issue of the value of the ringgit, all parties should play their respective roles, and Malaysians are expected to adopt a “Malaysia first” attitude as daily consumers. “Buy Malaysian goods and services, as well as invest in unit trusts and domestic hedge investments,” he said, adding that the campaign to travel within the country and buy local goods will continue to be strengthened, because it helps strengthen the ringgit and improve economic performance. The former chief executive officer of the Employees Provident Fund (EPF) said that to encourage the influx of foreign tourists, the government had taken steps, including exempting visas for 30 days for Chinese and Indian citizens from December 2023. Read also: No plans to peg the ringgit, says second finance minister Amir Hamzah: Govt always takes cautious approach when reforming tax system YTD change (%) Data compiled on Mar 19 Source: Bloomberg Ringgit vs US dollar performance tops Asean peers’ currencies since Feb 26 -0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0 Malaysian ringgit Cambodian riel Philippine peso Brunei dollar Singapore dollar Thai baht -0.06 -0.34 -0.35 -0.54 0.85 0.62 0.29 0.19 0.19 0.07 Myanmar kyat Laotian kip Vietnamese dong Indonesian rupiah CONTINUES ON PAGE 4

WEDNESDAY MARCH 20, 2024 4 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (March 19): Datuk Farhash Wafa Salvador, who recently emerged as a substantial shareholder in HeiTech Padu Bhd with a 15.91% stake, has clarified that he shared ownership of the shareholding in the company, held via private vehicle Rosetta Partners Sdn Bhd, with Kelantan’s Sultan Muhammad V. Farhash said Rosetta Partners is wholly-owned by Mfivesouthsea Sdn Bhd, which is in turn jointly-owned by the sultan and himself. “The ownership of these shares is also part of the investment strategy between Sultan Muhammad V and I to help Bumiputera companies. “I would also like to clarify that I have never been involved with any part of government administration and political activities. My full focus at the moment is on business and corporate,” he said in a statement on Tuesday after news of his emergence in Heitech Padu drew flak from the Opposition. Farhash was formerly a political aide to Prime Minister Datuk Seri Anwar Ibrahim and PKR’s Perak chief. He resigned as PKR’s Perak chief post in 2022. He was appointed as executive chairman of Excel Force MSC Bhd in May last year and group executive chairman of Apex Equity Holdings Bhd in December 2022. He emerged as a substantial shareholder in HeiTech Padu after Rosetta Partners bought 6.16 million shares on March 11 and 9.69 million shares on March 12, resulting in a 15.91% stake in the company. This happened shortly after it was reported that HeiTech Padu was among the frontrunners to develop the government’s National Integrated Immigration System (NIISe), worth more than RM1 billion, which seeks to incorporate biometric technology at the electronic gates of the country’s immigration checkpoints. NIISe is intended to replace MyIMMs, which Home Minister Datuk Seri Saifuddin Nasution Ismail reportedly said was outdated and no longer capable of meeting future immigration needs. Nonetheless, HeiTech announced on March 11 that it had secured a contract extension worth RM13.11 million for the provision of maintenance services to the Malaysian Immigration System (MyIMMs). Shares of Heitech Padu closed up three sen or 1.19% at RM2.56 on Tuesday, giving the group a market capitalisation of RM259.14 million. Year to date, the counter has jumped 187.64% from when it was trading at 89 sen at the start of the year. Farhash says HeiTech Padu stake co-owned with Kelantan Sultan KUALA LUMPUR (March 19): The Ministry of Transport (MOT) takes note of views or studies regarding the Kuala Lumpur International Airport (KLIA) as reference and advice in improving services at the airport, said Transport Minister Anthony Loke Siew Fook. He said the MOT knows there are some weaknesses at KLIA, but the ministry will try its best to upgrade the airport. “As I mentioned yesterday (Monday, March 18), there are two big projects going on. The first is the aerotrain, which is being overhauled; and the second is regarding the baggage management system that is being upgraded. It will take a year or two to upgrade. “There are also several projects being carried out by MAHB (Malaysia Airports Holdings Bhd) to upgrade and enhance the ambience at Terminal 1 (KLIA),” he told reporters after a mock cheque presentation ceremony to Tunku Abdul Rahman University of Management and Technology (TAR UMT), here on Tuesday. Loke was commenting on a report by a business portal (Business Financing) which said the KLIA ranked eighth in the list of the worst airports in Asia, with a total score of 3.36 given by business travellers. According to the report, one of the reasons why KLIA’s performance declined was due to the lack of comfortable facilities at the airport, and because tourists often complained about the poor design of the KLIA airport, resulting in long queues and having to walk a long way to get to the terminal. Loke said that however, not every study Loke says MOT taking note of views to improve KLIA after it was named among Asia’s worst airports Bernama BY EMIR ZAINUL theedgemalaysia.com FROM PAGE 3 Nvidia founder and chief executive officer Jensen Huang said Nvidia is working with YTL AI Cloud to bring a world-class accelerated computing platform to Southeast Asia, helping to drive scientific research, innovation and economic growth across the region. “This latest supercomputer marks one of the first deployments of the NvidiA GB200 Grace Blackwell Superchip on DGX Cloud, supporting the growth of accelerated computing in the Asia-Pacific region,” he said. YTL Power managing director Datuk Seri Yeoh Seok Hong said the company is proud to be working with Nvidia and the Malaysian government to bring powerful AI cloud computing to the country. “We are excited to bring this supercomputing power to the Asia-Pacific region, which has been home to many of the fastest-growing cloud regions, and many of the most innovative users of AI in the world,” he said. The YTL AI Supercomputer will be located in a 1,640-acre (663.68-hectare) data centre facility in the YTL Green Data Center Campus, Johor, powered by a renewable energy source from its on-site 500MW solar power facility. This supercomputer will help meet the demand for highly scalable, high-performance cloud-based solutions for AI and machine learning workloads. Johor is within 50km from some of the world’s densest network interconnection points in neighbouring Singapore. or view of a party should not be taken as a conclusion or impression, as there are currently too many studies being carried out. “What kind of methodology did (the business portal’s reporter) undertake to come up with that conclusion?... We are not taking a defensive approach but it is a negative view that will be well received and an incentive for us to do more, [taken] positively,” the minister said. Regarding the mock cheque ceremony to TAR UMT, Loke said it was a contribution of RM40 million from the Unity Government to help the university financially. The Unity Government is committed to ensuring that the annual allocation is disbursed in the first quarter of each year, in its efforts to help ease TAR UMT’s financial burden to provide the best facilities to students, lecturers and staff, he added. Read also: Loke: Revenue generated from vehicle plate sales channelled into consolidated fund

WEDNESDAY MARCH 20, 2024 5 THEEDGE CEO MORNING BRIEF

wednesday march 20, 2024 6 The E dge C E O m o rning brief home KUALA LUMPUR (March 19): Palm oil prices are anticipated to pull back to the trading range of RM3,800 to RM4,000 in April this year, according to the Malaysian Palm Oil Council (MPOC). In a statement on Tuesday, the MPOC said a bullish price movement from the current level of RM4,250 is unlikely due to the ample supply of soybeans from South America entering the global market from April onwards, as well as the gradual seasonal recovery of palm oil production domestically. “Palm oil prices were trading at a premium of US$40 to US$95 above soft oils in March. Therefore, a recovery in soft oil prices is anticipated in April to narrow MPOC: Palm oil price to trade between RM3,800 and RM4,000 in April 2024 by Isabelle Francis theedgemalaysia.com by Choy Nyen Yiau theedgemalaysia.com by Luqman Amin theedgemalaysia.com the price spread,” it added. On March 15, 2024, CPO prices had surged to their highest level in 12 months, nearly 10% above the February closing price. MPOC said the strong price trends observed in first quarter of 2024 is predominantly shaped by the deficit supply growth dynamic. “As the low season for palm oil production concludes in March, palm oil prices may begin to reflect the recovery in production and inventory levels in April and May, potentially capping palm oil prices,” it explained. Read the full story FGV gets sixth extension to comply with public shareholding spread requirement KUALA LUMPUR (March 19): FGV Holdings Bhd said it has been granted a further six-month extension until Sept 2 by Bursa Securities to comply with the public shareholding spread requirement. This marks the sixth time the plantation group has received an extension from the regulator to comply with the requirement. In an exchange filing on Tuesday, FGV said its public shareholding spread remained at 13.09% as of Feb 16, compared to the minimum requirement of 25%. FGV said it is fully aware of the potential consequences of non-compliance with the requirement, which may lead Bursa Securities to take action against the company, including suspending trading in its shares. It said it will continue to make quarterly announcements on the status of its rectification plan to Bursa Securities in an effort to comply with the public spread requirement. On June 30 last year, FGV announced a bonus issue to address the public shareholding spread. On Feb 13, the group said it had applied for a further extension of time until Aug 13 to issue its bonus issue circular. The extension application was submitted under the request of the Federal Land Development Authority (Felda), which owns an 81.9% stake in FGV. The bonus issue involves the issuance of 364.8 million new redeemable preference shares (RPS-i) on the basis of one RPS-i for every 10 existing FGV shares. Felda plans to pare down its stake in FGV after the completion of the bonus issue, to comply with the shareholding spread requirement, FGV said when announcing the corporate exercise. Shares in FGV ended down one sen or 0.70% at RM1.43 on Tuesday, valuing the group at RM3.65 billion. Arbitration outcome of FeldaRajawali dispute to be out soon, says Zahid KUALA LUMPUR (March 19): The outcome of the arbitration initiated by Federal Land Authority’s (Felda’s) unit FIC Properties Sdn Bhd (FICP) against the Rajawali Group, to exercise the put option to sell its 37% stake in PT Eagle High Plantations Tbk back to the Indonesian company for US$678.09 million is expected to be out soon. Deputy Prime Minister Datuk Seri Ahmad Zahid said the two-day arbitration hearing against Rajawali at the Singapore International Arbitration Centre (SIAC) was completed on Dec 5 and 6 last year. “The arbitration’s outcome is expected in the near future,” Zahid said in a written parliamentary reply to Radzi Jidin (PN-Putrajaya) on Tuesday. Felda purchased the 37% stake in Eagle High from Rajawali via FICP back in 2015 for US$505.4 million (around RM2.2 billion), or 580 Indonesian rupiah per share. The acquisition drew heavy criticism, as the price was at a 95.86% premium to Eagle High’s market value at the time. FICP, who had to take up a RM2.5 billion financing facility from Govco Holdings Bhd — a unit of Minister of Finance Inc — to afford the acquisition, defaulted on the loan’s repayment in 2017. Eagle High is majority-owned by Rajawali, which is controlled by tycoon Tan Sri Peter Sondakh, a known associate of Malaysia’s former prime minister Datuk Seri Najib Razak. FICP issued its first put option notice on January 11, 2019, citing Eagle High’s failure to meet the terms of the sale agreement, in particular securing the Roundtable on Sustainable Palm Oil (RSPO) certification for Eagle High within the stipulated 30-month period. However, Rajawali disputed this and initiated arbitration proceedings to block Felda from exercising the option. The outcome of that arbitration favoured Eagle High, but no details were disclosed. Felda then made a second attempt to exercise the option on May 11, 2022, which Rajawali again disputed. The outcome of the first arbitration and Felda’s second attempt to exercise the same option were only revealed when the Malaysian government made a surprise announcement in February 2023 that Felda had initiated fresh arbitration against the Rajawali group. Two weeks ago, the Auditor General’s Report on Federal Agencies for 2022 raised concerns about Felda’s loan repayment commitments, as the government agency has loans totalling RM7.97 billion obtained from financial institutions and RM686 million from the federal government. These included the RM2.5 billion financing facility FICP took up to buy the Eagle High stake. The authorities, meanwhile, are still investigating a police report filed by Felda in 2019 against the parties involved in the Eagle High investment, Zahid said.

wednesday march 20, 2024 7 The E dge C E O m o rning brief home KUALA LUMPUR (March 19): Developer YNH Property Bhd, which recently made headlines over several delayed disclosures of its business operations, has appointed Messrs Morison LC Malaysia as its new external auditor. Morison LC Malaysia has been appointed for the financial period ending June 30, 2024, and will hold office until the conclusion of the next annual general meeting, according to a YNH filing with Bursa Malaysia on Tuesday. “Over the past few months, the board of directors has been carefully evaluating several candidates for this role to recommend to the independent non-executive directors that make up the audit committee,” YNH said. The appointment came on the heels of the group’s redesignation of its senior independent, non-executive director, Khong Kam Hou, as chairman of its audit committee on March 1 to assist YNH in fulfilling its oversight and fiduciary duties. Back then, YNH stated that the most immediate and critical task of the audit committee, headed by Khong, would be to appoint an independent external auditor. Prior to this, YNH’s previous external auditor, Baker Tilly Monteiro Heng PLT, had issued a qualified opinion on YNH’s financial statements for the 18 months ended June 30, 2023, over its joint venture and turnkey contracts for property development works. Since the conclusion of the group’s annual general meeting on Dec 8, 2023, Baker Tilly had ceased to be the company’s external auditor and had notified YNH that it did not wish to seek reappointment as its auditor, prior to the company tabling a resolution to reappoint it to the role. The company said the appointment of Morison LC Malaysia aligns with the board’s commitment to embracing high levels of corporate governance within the organisation. According to YNH, Morison LC Malaysia is part of the larger Morison Global family, which is among the top accounting networks on a global scale. “The board and the management team of YNH aim to provide full cooperation and support to our new external auditor to safeguard the interests of our shareholders and stakeholders,” YNH added. YNH shares were down half a sen or 1.1% at 47 sen at the time of writing, valuing the company at RM248.6 million. YNH appoints Messrs Morison LC as external auditor KUALA LUMPUR (March 19): Integrated palm oil milling services provider Ecoscience International Bhd is partnering with Netherland renewable energy firm Maatschappij Wilhelmina NV (Wilhelmina), to build and manage Wilhelmina’s TG2 black pellet plant in Kuantan, Pahang. The investment in the plant is estimated at US$60 million (RM283.65 million), said Wilhelmina co-founder cum chief executive officer Barthold Van Doorn after the signing ceremony for the agreement on Tuesday. Under the collaboration agreement, Wilhelmina shall finance, own and operate the TG2 black pellet plant. Ecoscience, as the contractor, is to undertake the engineering, procurement and construction (EPC) work for the plant. Both parties shall execute a definitive EPC and master manufacturing agreement, which is expected by the fourth quarter of 2024. The plant is located in Phase 3 of the Gebeng Industrial Area, and the construction is expected to kick-start by the fourth quarter. The plant’s capacity is about 120,000 tonnes of black pellets per annum. The plant converts agricultural waste such as empty fruit bunches (EFB) into TG2 black pellets, which is a drop-in-coal replacement fuel. Upon commissioning of the plant, there will be operations and maintenance of the plant, which Wilhelmina shall outsource to Ecoscience to operate, maintain and manage the TG2 black pellet plant on behalf of Wilhelmina. “Besides taking on the EPC role, we are expected to also operate, maintain and manage the plant for Wilhelmina upon commissioning. All in all, the plant is expected to give our order book a significant boost, as well as provide consistent recurring income Ecoscience partners Dutch RE firm to build, manage TG2 black pellet plant in Kuantan to our group in the future,” said Ecoscience managing director Wong Choi Ong. Meanwhile, Van Doorn said the investment in Malaysia is only the first step in the group’s overall strategic expansion plan. “We have earmarked a number of locations in both Malaysia and in Southeast Asia to establish more TG2 black pellet plants that will also use other agricultural wastes, such as coconut husks and rubber tree wood as feedstock,” he said. Van Doorn sees tremendous opportunities in generating renewable and carbon-neutral energy through recycling industrial agricultural waste streams. “In fact, this TG2 black pellet, which will use EFB as feedstock, will be the first of its kind in the world. As the second largest producer of palm oil globally, we understand Malaysia generates some 20 million tons of EFB waste a year. Instead of being left to decay or filling up landfills, these can be transformed into a clean and high-energy coal replacement that could reduce as much as 12 million tons of methane, equivalent to 300 million tons of CO2. This can certainly contribute towards the Malaysian government’s target of becoming a carbon-neutral nation by 2050,” he added. Wilhelmina is a renewable energy company, with its principal business activities in converting agricultural waste streams into sustainable energy in the form of TG2 black pellets. At Tuesday’s noon market break, Ecoscience’ share price was traded unchanged at 41.5 sen, bringing the stock a market capitalisation of RM155 million. The stock has gained 43% from 29 sen on March 11. by Justin Lim theedgemalaysia.com by Luqman Amin theedgemalaysia.com Maatschappij Wilhelmina NV chief operating officer David Hiel and chief executive officer Barthold Van Doorn, with Ecoscience International Bhd managing director Wong Choi Ong and chairman Datuk Tan Yee Boon at the collaboration agreement signing ceremony on Tuesday. Patrick Goh/The Edge

wednesday march 20, 2024 8 The E dge C E O m o rning brief home KUALA LUMPUR (March 19): Shares of Ge-Shen Corp Bhd fell on Tuesday, after the contract manufacturer said it was not aware of any reason that could explain the recent jump in its stock prices. Ge-Shen dropped as much as 6.3% to an intraday low of RM3.74 on Tuesday, after hitting an all-time high on Monday (March 18). The counter pared its losses to close at RM3.79 – down 5.01% or 20 sen from its previous close – giving it a market value of RM463.23 million. In an announcement to Bursa Malaysia, the plastic injection moulding and metal stamping company said it was not aware of any rumour, report, or any other possible reason that could be fuelling the surge in its share price recently. Bursa issued an unusual market activity query to Ge-Shen on Monday, after its share price surged to an intraday high of RM4.03. The counter then closed at RM3.99 on Monday, with a market value of RM490 million. The company also announced, on the same day, its acquisition of a 60% stake in two entities, Amity Research & Development Sdn Bhd and Amity Technical Services & Consultancy (M) Sdn Bhd, for RM13.5 million in cash. The move aims to bolster its presence in the electrical-and-electronics sector, which will expand its revenue streams, Ge-Shen said. The acquisition is expected to be completed in the third quarter of 2024. This announcement follows the group’s recent agreement made two weeks ago, to purchase a 40% stake in smaller rival Local Assembly Sdn Bhd for RM48 million in cash. Ge-Shen’s net profit had declined by 16.9% to RM8.44 million in the financial year ended Dec 31, 2023 (FY2023), from RM10.16 million a year earlier, on higher effective tax rate. Its revenue for FY2023 stood at RM256.31 million, 1.1% higher than the RM253.61 million in FY2022, thanks to contribution from its 60%-owned unit Kibaru Manufacturing Sdn Bhd. Ge-Shen shares retreat, company says unaware of reason for price spike KUALA LUMPUR (March 19): Shares of Apollo Food Holdings Bhd on Tuesday soared to a new all-time high as strong earnings drew investors’ attention to the usually lightly-traded snack maker. Apollo rose as much as 22.7% to RM7.08, adding some RM104.8 million to its market capitalisation. The stock closed at RM7 after 697,100 shares changed hands, valuing the company at RM560 million on Bursa Malaysia. Bloomberg data showed the counter has rather low liquidity, with floating shares accounting for just 9.01 million or 11.3% out of 80 million outstanding shares, and the other 88.7% deemed stagnant. According to a bourse filing from the company on Feb 21, its public shareholding spread was 21.21% as of end-January. Apollo has been granted an extension of six months until July 23 to comply with the public spread requirement. No institutional analysts cover the stock. So far this year, Apollo has climbed 21.53%, outperforming its peers. Bursa Malaysia Consumer Index, which tracks 168 stocks, clocked in less than 4% yearto-date gain. The counter has also gained 77.22% over the past 12 months. The surge in Apollo’s share price comes after the company reported that its net profit nearly tripled to RM30.24 million for its third financial quarter ended Jan 31, 2024 (3QFY2024) from a year earlier as improved margins and higher domestic sales were further boosted by disposal gains. Apollo booked a gain on the disposal of investment properties of RM18.6 million. Nevertheless, the company said yearto-date earnings have already exceeded past year’s corresponding nine months’ results even without the one-off gains, thanks to product pricing strategies and the strength of its brands. The group also declared a dividend of 50 sen per share, bringing its year-to-date dividends to 70 sen per share, up from 25 sen per share for the entirety of FY2023. For its first nine months, Apollo recorded a net profit of RM47.83 million, up 92.5% from RM24.84 million recorded in the same period last year. Apollo Food charts new all-time high since listing in 1996 The majority shareholder of Apollo is Scoop Capital Sdn Bhd, the local franchisee of Baskin-Robbins. Scoop Capital is owned by Datuk Cheah See Yeong and his spouse Datin Soon Gock Lan @ Soon Geok Lin. Scoop Capital became the majority shareholder after acquiring a 51.3% stake from Apollo’s executive chairman Liang Chiang Heng and managing director Liang Kim Poh for RM238.08 million in cash in December last year, triggering a mandatory general offer for the remainder shares it did not own. Its stake rose to over 78.8% on conclusion of the MGO in January. by Hee En Qi theedgemalaysia.com by Syafiqah Salim theedgemalaysia.com Apollo Food Holdings Bhd 0 1 2 3 4 5 Feb 26, 2019 March 19, 2024 0 2 4 6 8 Vol (mil) RM RM2.79 RM7.00 *As at market close on March 19, 2024. Source: Bloomberg Ge-Shen Corp Bhd 0 2 4 6 Feb 27, 2023 March 19, 2024 0 1 2 3 4 Vol (mil) RM RM3.79 RM1.48 *As at market close on March 19, 2024. Source: Bloomberg

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wednesday march 20, 2024 10 The E dge C E O m o rning brief home Steel Hawk files draft prospectus for listing transfer to ACE Market South Malaysia Industries: SC said decision not open to review application ACE Market-bound Alpha IVF posts 2Q net profit of RM12 mil by Chester Tay theedgemalaysia.com by Surin Murugiah theedgemalaysia.com by Jason Ng theedgemalaysia.com KUALA LUMPUR (March 19): South Malaysia Industries Bhd (SMI), which has filed a judicial review application to compel the Securities Commission Malaysia (SC) to hold a hearing on its complaint and come up with an official decision, said on Tuesday that the regulator had contended that its decision is not open to a review application under industry regulations. SMI revealed that the SC, in its letter to the group in December last year, “categorically” stated that its findings “do not amount to decision of the SC that is open to a review application pursuant to Section 364 of the CMSA (Capital Markets and Services Act 2007)”. Section 364 stipulates that the commission may review its own decision under the CMSA upon an application made by any person who is aggrieved by such decision. SMI had complained to the SC in March 2023 that YB Ventures Bhd and Techbase Industries Bhd’s executive director Datuk Au Yee Boon and persons acting in concert (PACs) have allegedly amassed more than a 33% stake (in SMI) without making a mandatory general offer (MGO). SMI’s statement on Tuesday is a follow-on from the SC’s two-paragraph statement last Friday, where the regulator said it had already looked into and acted on the complaint after receiving it about a year ago from the group. The regulator also said it has yet to be served the cause papers of SMI’s judicial review application which SMI said it had filed to the SC earlier last week. In its statement, SMI clarified that the judicial review application was in fact served and extended to the SC last Thursday (March 14) by SMI solicitors “and certainly before SC’s statement”. SMI said that the regulator had communicated with the group on three instances after it filed the complaint last year. The group detailed that the first instance was pursuant to a reminder by SMI’s solicitor to SC on the complaint dated Oct 11, 2023, which led to a physical meeting on Nov 8 last year. The subsequent two instances were SC’s response letters to SMI’s solicitor in December 2023 and January this year. SC had said it also had multiple engagements and communications with SMI on the issue, the most recent being in January this year. Shares of SMI were trading unchanged at 63 sen at the time of writing, giving it market capitalisation of RM132.26 million. Read also: SMI says no to Au Yee Boonlinked units’ bid to appoint directors at AGM KUALA LUMPUR (March 19): Steel Hawk Bhd has filed for an initial public offering (IPO) that would raise more funds for the oil-and-gas services firm as part of its listing transfer from the LEAP Market to ACE Market. The IPO involves a public issue of 90 million new shares and an offer for sale of 44.7 million existing shares, according to the draft prospectus filed with Bursa Malaysia. All in all, the listing would offer investors a 27% stake in the company listed on the LEAP Market since October 2021. “Our shares are generally illiquid and have a lower trading volume” on the LEAP Market, and shareholders have committed not to sell or reduce their stakes in the company until the listing is completed, Steel Hawk said. Steel Hawk mainly services the oil-andgas industry both onshore and offshore, providing engineering, procurement, construction, and commissioning for chemical KUALA LUMPUR (March 19): ACE Market-bound Alpha IVF Group Bhd posted a net profit of RM12.21 million for the second quarter ended Nov 30, 2023 (2QFY2024), on the back of revenue of RM38.54 million. In a bourse filing on Monday, the company said the revenue was derived mainly from the provision of assisted reproductive services focusing on in-vitro fertilisation (IVF) treatments. As the company is not yet a public listed entity, there are no comparative figures for the same period in the previous year. Earnings per share stood at 0.27 sen. For the cumulative six months ended Nov 30, 2023, Alpha IVF said it posted a net profit of RM25.34 million, on the back of revenue of RM80.14 million. In a separate statement, Alpha IVF group managing director Datuk Dr Colin Lee Soon Soo said the 2QFY2024 financial performance highlights the group’s ability to ride the wave of medical tourism and growing need for IVF treatments. “Our positive financial performance, along with our imminent listing and enhanced profile in the public eye, allows us to capitalise on new market opportunities.” injection skids and facilities improvement as well as maintenance of topside facilities. The company also sells, instals and maintains oilfield equipment. For the financial year ended Dec 31, 2023, profit after tax rose 24% to RM7.22 million, on the back of revenue of RM72.54 million, while margins expanded. The also said it had exhausted the RM3.2 million raised from its LEAP Market listing. Out of the 90 million new shares, Steel Hawk is offering 24.5 million shares to the Malaysian public, 12.25 million to eligible persons, and 53.25 million shares to select investors through private placement. The offer for sale, meanwhile, will be done through private placement to select investors. Proceeds from the public issue will go towards construction of the company’s second facility in Teluk Kalung that will cost an estimated RM13.64 million, as well as funding working capital, repayment of bank borrowings, and to defray listing transfer expenses. Meanwhile, any money raised from the offer for sale will accrue entirely to selling shareholders, including chief executive officer Salimi Khairuddin and chief operating officer Khairul Nazri Kamarudin. UOB Kay Hian is the principal adviser, sponsor, underwriter and placement agent for the IPO.

wednesday march 20, 2024 11 The E dge C E O m o rning brief home KUALA LUMPUR (March 19): The recent revision of Malaysia Airport Holdings Bhd’s (MAHB) operating agreements (OA) offers a relief to its capital expenditure but doesn’t significantly impact its earnings, said analysts. Kenanga Research said while said the OAs ease the company’s capital expenditure (capex) obligations, the financial impact remains immaterial. As such, Kenanga Research maintained its forecasts, a target price (TP) of RM9.00 and a “market perform” call on MAHB. The new terms of the agreement between MAHB and the government include several notable transformative procedures. First, it facilitates flexible funding of airport developments, either through government allocations via development expenditure (DE) or by MAHB through any appropriate investment recovery model mechanism, or any other finance model mutually agreed upon by both parties. Second, it provides for the establishment of the Airport Development Fund (ADF), set up to receive contributions from airport users, the public and airlines to fund future airports’ capital expenditures. An additional benefit of the agreement is the provision allowing 50% of the passenger service charge (PSC) considered in the user fee calculation to be directed into the ADF. This user fee percentage will be reviewed every three years. “For illustration purposes, a RM1 billion airport revenue will translate into a RM24 million contribution to the ADF. This is based on PSC revenue making up 40% of total airport revenue and a user fee rate of 12%. “Only user fees on PSC revenue will be subject to contribution to the ADF and the proposal entails half of these to go into the fund (RM1 billion x 40% x 12% x 50% = RM24 million),” said Kenanga Research. The agreement also anticipates likely losses due to the slow recovery of air travel post-pandemic. It allows the airport to recover its losses in RP1 (Regulatory Period 1) via a loss capitalisation mechanism (LCM) from Regulatory Period 2 (RP2). In terms of other revenue earnings and losses, if the airport earns more than its costs, it retains 10% of the profit but is required to return 90% of the excessive gain to customers. However, if it earns less than its operating costs, the company bears 10% of the loss but has the right to recover 90% from customers. The agreements also retains all the marginal cost support sums (MARCS) mechanisms, replacing the MARCS-PSC with an enhanced passenger service charges compensation scheme. As for valuations, Kenanga Research’s TP of RM9.00 is based on the 22x FY2025F EPS (financial year 2025 forecast earnings per share), which translates into a 40% discount to its peer, the airport of Thailand, driven by market capitalisation disparities. Kenanga Research expects leisure and business air travel to continue recovering throughout FY2024, with a projected increase of 35% in tourist arrivals to Malaysia. This growth can be attributed to by Isabelle Francis theedgemalaysia.com New operating agreements lighten MAHB’s capex burden but earnings unaffected — analysts factors like the 30-day visa-free scheme implemented starting December 2023 for Chinese and Indian tourists. Offering another perspective, MIDF Research stated that under the new OAs, the undertaking of development capital expenditure can be done through several channels, such as introducing project financing from the capital market, using funds offered by the government, implementing the ADF, or by adapting any other bankable finance model. MIDF Research said that while the agreements will extend MAHB’s authorities to manage and develop the existing 39 airports in Malaysia until Feb 11, 2069, the research house is still waiting for more details, for example on the marginal cost support sum. It also noted that the latest decision paper released by the Malaysian Aviation Commission (Mavcom) specified that the implementation of the aviation services charges (ASCs) will initiate in June this year. MIDF Research maintained its existing “neutral” call on MAHB, leaving its TP at RM8.75, awaiting the briefing session on Wednesday (March 20) for more details on the new OAs and land lease agreements (LAs). MAHB shares were thinly traded as they shed one sen or 0.1% to settle at RM9.11 just before noon break on Tuesday, translating into a market capitalisation of RM15.2 billion. Analysts’ calls on MAHB Research House Recommendation Target price (RM) Kenanga IB Market perform 9.00 Macquarie Outperform 9.80 Nomura Buy 10.96 UOB Kay Hian Buy 9.86 CGS International Hold 8.31 Maybank IB Hold 8.91 RHB Research Buy 9.67 Affin Hwang Buy 9.50 CLSA Accumulate 9.10 HLIB Buy 9.80 Citi Buy 8.20 MIDF Neutral 8.75 HSBC Hold 8.50 TA Securities Hold 9.18 CIMB Securities Buy 9.50 AmInvestment Buy 8.07 JP Morgan Overweight 11.30 Source: Bloomberg

wednesday march 20, 2024 12 The E dge C E O m o rning brief home KUALA LUMPUR (March 19): The Malaysian Communications and Multimedia Commission (MCMC) is refining a proposal to require social media platforms and internet messaging services providers to register for a licence and is in the process of finalising the licensing framework. Deputy Minister of Communication Teo Nie Ching said that the move aims to enhance online safety and address content that violates national laws. “It is in line with current global approaches and developments and is not intended to restrict media freedom,” Teo said in response to Datuk Shamshulkahar Mohd Deli (BN-Jempol) during the question and answer session in the Dewan Rakyat on Tuesday. Teo added that licensing will also improve consumer protection, shielding users from online fraud and harmful content, while ensuring a safe and reliable online environment. In response to supplementary questions from Shamshulkahar, Teo denied claims that the government issues directives to social media providers for the removal of critical content from their platforms. She reiterated that social media providers would make their own judgments based on their community guidelines after receiving a complaint. “From January 1 until March 1 this year, 14% of the complaints filed by MCMC to social media platform providers to remove the content have been rejected, as the platform providers did not think that it goes against their community guidelines. “This has shown that the decision to remove content on the social media platform providers is not solely in MCMC’s hands,” Teo said. She added that out of the 86% of content that platform providers agreed to remove after MCMC filed a request, the majority were related to gambling, scamming, and fake news. MCMC finalising licensing framework for social media platforms KUALA LUMPUR (March 19): The National Action Council on Cost of Living (NACCOL) agreed on Tuesday to allow the Department of Statistics Malaysia (DOSM) to develop new indicators to measure the cost of living standards down to the district level. Prime Minister Datuk Seri Anwar Ibrahim, who chaired Tuesday’s meeting held at Parliament building, said that the new indicators would assist the government to draft a more accurate and effective programme implementation. He added that NACCOL also discussed several matters related to cost of living in detail, especially prices and the availability of rice in the country. “Several short-term mechanisms have been identified and will be implemented soon,” he posted on Facebook on Tuesday, adding that he had stressed the need for continuous enforcement to ensure no one would take advantage of the enlargement of scope and the change in service tax rates implemented on selected services. “The Domestic Trade and Cost of Living Ministry has conducted several special checks under Ops Kesan from March 1 to ensure businesses do not raise prices indiscriminately,” he added. New indicators to measure cost of living standards being developed — Anwar Bernama by Choy Nyen Yiau theedgemalaysia.com news In brie f Eita Resources bags RM48 mil job from TNB to build Perak substation KUALA LUMPUR (March 19): Eita Resources Bhd said its 60%-owned unit has won a RM47.96 million contract from Tenaga Nasional Bhd to supply a new outdoor transmission substation in Ayer Puteh, Perak. The scope of work includes the erection, testing and commissioning of the 132kV conventional substation, as well as civil, transmission lines and remote ends relay retrofits, said Eita. The two-year contract is effective from March 8, added the group in a stock exchange filing on Tuesday. — by Chester Tay Poh Kong 2Q earnings up 10% amid stronger gold demand, prices KUALA LUMPUR (March 19): Poh Kong Holdings Bhd posted a 10% growth in net profit for its second quarter ended Jan 31, 2024 (2QFY2024) amid an overall uptrend in gold prices, coupled with an increase in demand for gold jewellery and gold investment products. Net profit grew to RM28.25 million or 6.88 sen per share for 2QFY2024, from RM25.68 million or 6.26 sen per share a year ago, the group said in a stock exchange filing on Tuesday. Revenue rose 5% to RM423.82 million from RM403.84 million. For its first six months of FY2024 (1HFY2024), Poh Kong’s net profit grew 14% to RM47.25 million from RM41.35 million in 1H2023, though revenue only rose 1% to RM779.8 million from RM774.2 million. Going forward, Poh Kong said it is certain that stronger and more dynamic trade activities will translate into greater demand for gold and gold products. — by Chester Tay Urusharta Jamaah ceases to be a substantial shareholder in IJM Corp KUALA LUMPUR (March 19): IJM Corporation Bhd said Urusharta Jamaah Sdn Bhd, a special purpose vehicle established under the Ministry of Finance, has ceased to be its substantial shareholder after disposing of a 0.08% stake in the group. The stake sale, comprising 2.5 million shares, took place on March 14, IJM said in a bourse filing on Tuesday. Based on the closing price of RM2.28 on Tuesday, the stake is valued at RM5.7 million. Following the transaction, Urusharta Jamaah’s shareholding in IJM has fallen to 4.93% — below the 5% threshold required for substantial shareholding status. — by Luqman Amin Deputy Minister of Communication Teo Nie Ching said that the move requiring social media platforms and internet messaging services providers to register for a licence is to enhance online safety and address content that violates national laws. bernama

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wednesday march 20, 2024 14 The E dge C E O m o rning brief home KUALA LUMPUR (March 19): Sungai Besar Division Umno chief Datuk Seri Jamal Md Yunos failed in his bid on Tuesday to strike out the lawsuit brought against him by former health minister Khairy Jamaluddin pertaining to alleged defamation during the 2022 Umno General Assembly. Khairy’s lawyer, Shakeel Saifuzzaman, stated that the Judicial Commissioner of the High Court, Dr Suzana Muhamad Said, struck out Jamal’s application on the grounds that there were issues which need to be addressed in the lawsuit. “The defendant’s [Jamal’s] application to strike out the writ of summons and the plaintiff’s [Khairy’s] statement of claim has been dismissed by the court. “The court has also set May 27 for case management,” the lawyer said when contacted after the online proceedings on Tuesday. Jamal had filed the application on Sept 19, 2023, citing various grounds such as unclear allegations against him, accusations of defamation, and abuse of the court process. Khairy filed the lawsuit on May 24, 2023, stating that during the 2022 Umno General Assembly held on Jan 14 last year, Jamal held a press conference at the Kuala Lumpur World Trade Centre attended by media practitioners, Umno representatives, and several members and leaders of the party. He alleged that on the same day, Jamal uploaded a video on Facebook titled “Saya harap Khairy Jamaluddin dikenakan tindakan oleh Lembaga Disiplin Umno selepas mengeluarkan kenyataan yang semberono dan memalukan Umno #UmnoDuluKiniDanSelamanya” (I hope Khairy Jamaluddin is disciplined by the Umno Disciplinary Board after issuing baseless and shameful statements against Umno #UmnoThenNowForever) under the name DS Jamal Yunos (DS Jamal Yunos Official). According to the former Umno Youth Chief, the defendant also uploaded the same video on a TikTok account under the name ‘jamal_yunos’. Khairy alleges that the defamatory statements included implications that he lacks integrity, is unfit to be a leader, and is disloyal to Umno and its leaders. Jamal Yunos fails bid to strike out suit by Khairy Jamaluddin KUALA LUMPUR (March 19): The government and a group of retired senior judges have been granted another extension to reach a settlement in a lawsuit over the retirees’ pensions and benefits. When contacted by The Edge, senior federal counsel Shamsul Bolhassan confirmed that the court had now fixed April 25 for the parties to provide an update on the settlement talks, following a case management on Tuesday. The deliberations have been going on for some time now, resulting in several extensions being granted by the court. More recently, in late January, the parties were given one month to reach a proposed settlement of the suit. Another two-week extension was granted earlier this month. Some 28 judges and seven dependants of former judges have taken the government, prime minister, Cabinet and director general of the Public Service Department to court over adjustments to their pensions and benefits. They claim that the government failed to implement an appropriate higher percentage adjustment of more than 2% annually to their pensions and other benefits in accordance with Section 15B(2) of the Judges Remuneration Act 1971. The increment, they added, should have been effective since July 1, 2015. The plaintiffs are also claiming that the adjustment is a violation of Article 125(7), read together with Article 125(9) of the Federal Constitution. Article 125(7) stipulates that the remuneration and other terms of office (including pension rights) of a judge of the Federal Court shall not be altered to his disadvantage after his appointment. Among others, they are seeking a declaration that the gazette for the higher percentage of adjustment of 2% annually to their pensions and other benefits Govt, ex-judges, dependants given more time to settle pension suit had been altered to their disadvantage. Besides the increase in pensions of more than 2% annually, they are also claiming payments due from July 1, 2015, to be paid in one lump sum, a pre-judgement interest of 5% per annum and costs. Among the 28 judges are former Court of Appeal (COA) president Tan Sri Alauddin Md Sheriff, and former chief judges of Malaya Tan Sri Haidar Mohamed Nor and Tan Sri Siti Norma Yaakob. Others include Datuk Pajan Singh Gill, Tan Sri Sulong Matjeraie, Datuk Azmel Maamor, Datuk Mahadev Shankar, Datuk Seri Mohd Hishamudin Md Yunus, Datuk Shaik Daud Ismail, Datuk Clement Allan Skinner, Datuk Abdul Malik Ishak, Datuk Mah Weng Kwai, Datuk VC George, Datuk Syed Ahmad Helmy Syed Ahmad, and Tan Sri Mohamad Ariff Md Yusof, who is a former COA judge and former Dewan Rakyat speaker. The dependants include the wife of the late COA president Tan Sri Abdul Malek Ahmad, as well as dependants of former Federal Court judges Datuk Hashim Che Yusoff and Datuk Mohd Noor Ahmad, and former COA judges Datuk KC Vohrah and Datuk Vincent Ng Kim Khoay. In April last year, former Federal Court judge Tan Sri Jeffrey Tan Kok Wha and Datin Ann Chan, the widow of former COA judge Datuk NH Chan, were included in the originating summons. by Tarani Palani theedgemalaysia.com Bernama Sungai Besar Division Umno chief Datuk Seri Jamal Md Yunos bernama

wednesday march 20, 2024 15 The E dge C E O m o rning brief world (March 19): Australia’s central bank signalled it may be done tightening monetary policy after leaving interest rates at a 12-year high, sparking a selloff in the currency and a rally in bonds. The Reserve Bank of Australia (RBA) held its cash rate at 4.35% for a third straight meeting on Tuesday. Unlike previous months, the board made no reference to the possibility of further rate rises, signaling its tightening cycle may have ended. “While recent data indicate that inflation is easing, it remains high,” the board said in a statement accompanying the decision. “The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the board is not ruling anything in or out.” In response, the currency weakened to a two-week low of 65.32 US cents in Sydney and the policy-sensitive three-year government bond yield dropped to 3.67%. Australia’s equity benchmark extended its gain to a session high. All eyes now move to governor Michele Bullock’s press conference at 3.30pm in Sydney. “The market is interpreting RBA’s forward statement as dovish, as the possibility of a rate hike seems to be lower now,” said Mingze Wu, a currency trader at Stonex Financial in Singapore. Still, given the lack of further signals, it’ll “take time and a tremendous shift” in policy for the Aussie to break out of its narrow 0.63-0.68 range, Wu added. The post-meeting statement gave few clues on the potential timing of an easing cycle. Bullock has previously said the bank is RBA keeps key rate at 12-year high of 4.35% TOKYO (March 19): Japan’s top banks said on Tuesday they would raise interest rates on ordinary yen deposits for the first time in 17 years after the Bank of Japan ended eight years of its unorthodox negative interest rate policy. The planned hikes by the main banking arms of Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group mark a key inflection point as Japan’s economy overcomes years of deflation. The BOJ on Thursday ditched its negative rate policy, where the central bank applied a -0.1% interest rate on a small pool of excess reserves parked with it by financial institutions. It set the overnight call rate as its new policy rate and decided to guide it in a range of 0-0.1% partly by paying 0.1% interest to deposits at the central bank. In response to the shift, MUFG Bank and Sumitomo Mitsui Banking Corp separately said they would lift interest rates on ordinary yen deposits from 0.001% now to 0.02%, a level last seen in 2016. Both would be the first such increases since February 2007. Mizuho and No. 4 banking group Resona Holdings said they planned to raise Top Japan banks to raise ordinary deposit rates for first time in 17 years after BOJ shift interest rates on ordinary deposits. The latest policy shift would help widen the spread between deposit and lending rates, boosting Japanese banks’ net interest income after years of being squeezed by rock-bottom rates. “The end to the negative rate policy is positive for the banking group’s business as it helps improve our interest income,” Masahiro Kihara, the president and CEO of Mizuho, said in a statement. “The importance of keeping deposits as a funding source of our businesses is growing bigger,” he added. Major Japanese banks raised interest rates on long-term deposits late last year after the central bank loosened its grip on long-term interest rates in October. It was their first long-term rate hike since 2011. Read also: Bank of Japan scraps radical policy, makes first rate hike in 17 years Japanese banks will get earnings bump from deposits at BOJ by Makiko Yamazaki Reuters by Swati Pandey Bloomberg in data-dependent mode and will only begin reducing rates once it’s confident inflation is on track to head sustainably back to the 2-3% target. “The attention from markets has now turned to when the RBA will deliver its first cash rate cut,” said Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia. “The RBA will need a good deal of confidence inflation is headed back to the target range before it eases policy. We don’t expect the first rate cut until November.” Read the full story

wednesday march 20, 2024 16 The E dge C E O m o rning brief world SHANGHAI/SINGAPORE (March 19): China is widely expected to leave benchmark lending rates unchanged on Wednesday, a Reuters survey showed, as the central bank kept a key policy rate steady last week at a time when the broad economy is starting to show some signs of improvement. The loan prime rate (LPR) normally charged to banks’ best clients is calculated each month after 20 designated commercial banks submit proposed rates to the People’s Bank of China (PBOC). In a survey of 27 market watchers conducted this week, all respondents expected both the one-year and the five-year LPRs would stay unchanged. Most new and outstanding loans in the world’s second-largest economy are based on the one-year LPR, which stands at 3.45%. Meanwhile, China made its biggest-ever reduction in the five-year LPR, which serves the mortgage reference rate, to 3.95% in February to prop up the struggling property market. The strong consensus of steady LPR fixings this month comes after the PBOC left the medium-term lending facility (MLF) interest rate unchanged last week, as authorities continued to prioritise currency stability. “The renminbi has weakened against the U.S. dollar this year, and a reduction at this stage could trigger additional depreciation pressure on the currency,” Julian Evans-Pritchard, head of China economics at Capital Economics, said in a note. “Policymakers aim to prevent such depreciation, as indicated by their commitment to maintaining exchange rate stability in the National People’s Congress (NPC) Work Report.” The MLF rate serves as a guide to the LPR and markets mostly use the medium-term policy rate as a precursor to any changes to the lending benchmarks, analysts said. Activity indicators have suggested the economy might have had a better-than-exChina seen leaving benchmark lending rates unchanged in March LONDON (March 19): Money market pricing and short-term trading signals make the idea of the first Bank of England rate cut coming in late summer look like a clear bet. Economists and strategists are predicting a starkly different outcome for interest rates and the pound. Speculators have topped up their sterling holdings, with so-called net long positions having risen to the most on record, according to the latest CFTC data. Swaps markets price the first 25 basis point (bp) cut no sooner than August. Sterling is the best performing G10 currency against the dollar so far this year. The BoE is expected to hold rates at a 16-year high of 5.25% this week, but economists anticipate the first cut far sooner than traders expect. Bruna Skarica, chief UK economist at Morgan Stanley, sees softer-than-expected pay data published last week as justifying a rate cut in May. Barclays and Capital Economics are placing their bets on a cut in June. Traders are focused on the BoE’s hawkish rhetoric, according to Rabobank strategists. Economists are querying whether the central bank’s inflation forecasting is once again wrong and how quickly policymakers might turn dovish if the central bank’s expectations prove incorrect. The BoE expects price growth to drop to its 2% target in the second quarter but For sterling, the next Bank of England move is anyone’s guess by Naomi Rovnick Reuters by Steven Bian, Winni Zhou & Tom Westbrook Reuters Read also: ECB’s Centeno says cutting rates may help prevent a recession Read also: China bond frenzy roars back as yield falls toward 19-year low pected start to the year, with China’s factory output and retail sales beating expectations in the January-February period, offering some relief to policymakers even as weakness in the property sector remains a drag on the economy and confidence. Still, some traders and analysts noted that PBOC Governor Pan Gongsheng said this month the bank would keep the yuan basically stable and sent a dovish message to the market by saying China had “rich monetary policy tools at its disposal.” Investors have since ramped up bets that authorities will roll out more monetary easing measures, including a further reduction to bank reserves, to support the economy. “With limited room to manoeuvre in the short term, we expect one more MLF and LPR cut in the coming months to support a broader stimulus policy push,” said Lynn Song, chief economist for Greater China at ING. “However, after PBOC governor, Pan Gongsheng, hinted at more room for reserve requirement ratio (RRR) cuts ahead, we may see an RRR cut before the next MLF and LPR cut.” The BoE is expected to hold rates at a 16-year high of 5.25% this week, but economists anticipate the first cut far sooner than traders expect. to rebound to almost 3% later in the year. Paul Dales, chief UK economist at Capital Economics, sees headline UK inflation dropping to 1.6% in April and drifting to less than 1% by the end of the year. “The Bank might switch quite quickly to worrying about inflation being too low,” he said. Dales sees the pound drifting down to $1.20 later this year, from close to $1.27 now. The turning point for sterling could come as soon as Wednesday, when UK inflation data is released. Economists polled by Reuters expect inflation to have dropped to 3.6% in February. “A print closer to 3.2% could lead the (BoE) to soften its guidance language a bit more,” Barclays strategists said in a note to clients, which could liven up market bets for a May cut. Kit Juckes, FX strategist at Societe Generale, is also unsure if sterling can maintain its strength against the dollar after the latest U.S. inflation data was hotter than expected. “The Fed could go down to 2 cuts (from three currently priced in) and the BoE could go up to 5,” in 2024, he said. “I’m getting my holiday money now.” reuters

wednesday march 20, 2024 17 The E dge C E O m o rning brief world (March 19): China Evergrande Group’s alleged US$78 billion (RM369.1 billion) revenue overstatement escalates the legal peril of founder Hui Ka Yan, who now stands at the centre of one of the biggest financial fraud cases in history. The nation’s top securities regulator said the developer’s onshore unit inflated revenue by recognising sales in advance in the two years through 2020 that led up to its default. It imposed a 4.18 billion yuan fine against the unit. Evergrande’s alleged fraud dwarfs that of Luckin Coffee Inc and Enron Corp, dealing a blow to the reputation of its former auditor PricewaterhouseCoopers LLP and the country’s financial oversight. It fuels concern about how widespread such accounting issues are, just as the new China Securities Regulatory Commission chairman is trying to tighten oversight. The fine also means Evergrande, with about US$332 billion in liabilities, will have even less money to pay off global creditors, despite a Hong Kong court ordering the company to be liquidated in late January. “The alleged fraud is shocking in its scale,” said Brock Silvers, managing director at private equity firm Kaiyuan Capital. “Hui became an expected civil and criminal target as soon as Evergrande was ordered into liquidation.” The allegations mark the latest blow for Hui, once among Asia’s richest tycoons, who oversaw a sprawling empire that spanned real estate to electric vehicles. Evergrande was one of China’s biggest developers, taking on massive debt to expand across the country as condo sales boomed. The CSRC’s action may pave the way for more serious charges against Hui, who was detained by police last year due to “suspicion of illegal crimes.” No criminal charges against Hui have been made public and his whereabouts aren’t known. The levies are administrative penalties. Regulators allege Hui instructed other personnel to “falsely inflate” annual results. The onshore unit Hengda Real Estate Group boosted its 2019 revenue by about 214 billion yuan, and another 350 billion yuan in 2020, the regulator said. The inflated figures accounted for half of Hengda’s total revenue in 2019, and 79% in 2020. As the supervisor in charge, Hui used particularly “egregious” means, the regulator said. Hengda also used these inflated figures in marketing to issue a combined 20.8 billion yuan in bonds, the regulator said. “The CSRC fines may serve as a warning to owners of other defaulted developers that failing to collaborate with authorities over debt restructuring could result in severe consequences,” said Zerlina Zeng, senior credit analyst at Creditsights Inc. Evergrande used to recognise revenue from apartments including those that were presold but yet to be delivered. The developer said last year that it changed its approach since 2021 to book revenue after the units were completed or occupied by their owners. Hengda’s auditor in 2019 and 2020 was PricewaterhouseCoopers Zhong Tian LLP, a mainland entity affiliated with PwC’s network. PwC resigned as Evergrande’s auditor in January 2023 due to audit disagreements. PwC has also resigned as auditor for other Chinese developers including Sunac China Holdings Ltd and Shimao Group Holdings Ltd In Hong Kong, the city’s Financial Reporting Council said in 2022 that it was looking into Evergrande’s financial statements for 2020 and expanding an investigation of an audit carried out by PwC. The auditor didn’t respond to requests for comment. China Evergrande’s alleged US$78 bil fraud is among biggest ever “The more alarming question is — given than many other real estate developers have faced financial distress — who else relied on accounting gimmickry to buy them time,” said Joel A Gallo, an adjunct professor at New York University in Shanghai. “Regulators should pose tough questions to the industry and their auditors.” The CSRC’s fine against Hengda, while among the largest ever in China, trails that of the 7.1 billion yuan slapped on fintech giant Ant Group Co for policy violations. Hui was fined 47 million yuan for the falsified results and other alleged violations, and banned for life from capital markets activities. Other former executives Xia Haijun and Pan Darong were also among people punished with fines and market bans. Salvage assets Global creditors have been struggling to salvage their assets, as most of Evergrande’s project are on the mainland. They are also competing with other parties, including Chinese retail investors who bought into the company’s wealth management products, homeowners waiting for the firm to deliver presold apartments, and unpaid suppliers and construction workers. Evergrande’s onshore unit faced a total of 318 billion yuan in unpaid debts and 200 billion yuan of overdue commercial paper at the end of January, according to a filing. It was also dealing with 2,094 legal disputes amounting to 516 billion yuan in total. The regulatory action comes as China continues to grapple with a property downturn that has eroded economic growth and household wealth, as home sales and prices tumble. A Bloomberg gauge of China developer stocks dropped 2.1% on Tuesday, taking losses to 19% this year. Some investors welcomed the CSRC’s move, seeing it as a positive step for financial regulation. “This is a good thing,” said Yu Yingdong, general manager at Shenzhen Cowin Asset Management Ltd. Regulators are expected “to keep the pressure on in the future.” Once Asia’s second-richest man, worth US$42 billion at his peak in 2017, Hui has seen his wealth plummet to about US$1 billion after the developer defaulted in 2021. Evergrande’s stock has tumbled and was eventually suspended from trading. “To improve investor confidence in a sector that has weighed down the market, transparency, which has been murky so far, needs to be demonstrated,” said Gallo. Bloomberg Evergrande’s alleged fraud dwarfs that of Luckin Coffee Inc and Enron Corp, dealing a blow to the reputation of its former auditor PricewaterhouseCoopers LLP and the country’s financial oversight. Reuters

wednesday march 20, 2024 18 The E dge C E O m o rning brief world (March 19): New US home construction bounced back sharply last month, indicating builders are benefitting from slightly more favourable mortgage rates and a dearth of existing houses for sale. Residential starts increased 10.7% in February, the largest since May, to a 1.52 million annualised rate, government data showed Tuesday. The median estimate of economists surveyed by Bloomberg called for a 1.44 million pace. Building permits, a proxy for future construction, rose to a 1.52 million rate, the fastest since August. Both permits and starts (March 19): On the first anniversary of UBS Group AG’s historic takeover of its former rival Credit Suisse, it’s becoming clear just how advantageous the deal has been for the bank. It has pushed its market capitalization past US$100 billion (RM473.2 billion) to the highest level in almost 16 years and cemented its leading role in global wealth management. The most obvious effect for the Swiss lender is a growth in scale that would have required many years of painstaking work building client relationships if it were to be achieved organically. Overnight, the client funds managed by its wealth unit jumped by about one-fifth to US$3.4 trillion at the time. That has brought it closer to Morgan Stanley, which has about US$5 trillion in its wealth management division, even if UBS NEW YORK (March 19): Wall Street’s cash bonuses fell 2% to an average US$176,500 (RM835,198) last year as financial firms took a more cautious approach to compensation, according to an estimate by New York State Comptroller Thomas DiNapoli. The lower payouts came even as industry profits climbed 1.8% in 2023. “Wall Street’s average cash bonuses dipped slightly from last year, with continued market volatility and more people joining the securities workforce,” DiNapoli said in a statement. The industry’s bonus pool stood at US$33.8 billion for 2023, broadly in line with 2022. In 2021, it surged to a record US$42.7 billion as capital markets and dealmaking boomed. The state and city have already budgeted for lower tax revenue from financial workers, DiNapoli said. The securities industry accounts for about 27% of annual state tax collections and 7% for New York City. The industry employed 198,500 people in 2023, up from 191,600 the prior year, the report showed. The increase in headcount came as major U.S. banks cut more than 23,000 jobs worldwide. About one in 11 jobs in New York City is either directly or indirectly associated with the sector, the comptroller’s report showed. figures for January were revised higher. Single-family home construction increased to a two-year high, while multifamily home starts rose 8.3% after a steep drop the prior month. After a January slump in starts, which was the largest since May 2022, the rise adds to evidence the housing market is on the mend. Builders are taking advantage of a limited resale inventory, though a bigger decline in mortgage rates would help bring more prospective buyers off the sidelines and provide a bigger boost for the industry. US housing starts rise by most since May after steep decline UBS powers past US$100 bil a year after Credit Suisse falls Wall Street bonuses fell 2% for 2023, New York comptroller says by Michael Sasso Bloomberg by Jeff Black & Myriam Balezou Bloomberg by Tatiana Bautzer Reuters is bigger in most places outside the US. The share price boost to UBS wasn’t a given on the Sunday one year ago when the emergency takeover brokered by the Swiss government was announced. The Zurich-based bank’s shares initially plunged by as much as 16% the following day amid uncertainty about what the deal would mean for UBS, pushing its valuation down to below US$60 billion. The jitters didn’t last long as investors looked at the bargain price tag, the presence of a government guarantee and the immediate boost to scale from Credit Suisse’s client book. Some observers called it the deal of the century. In the 12 months since, UBS’ leadership has returned the guarantee, carved off much of the Credit Suisse assets it doesn’t want and begun the task of figuring out how the merger can turbo-charge its ambitions. With the scale added by the Credit Suisse deal has come a push for even more. The bank now seeks to grow invested assets in its wealth management unit to more than US$5 trillion by the end of 2028, equal to an expansion of about US$1.2 trillion over the current level. Read the full story

wednesday march 20, 2024 19 The E dge C E O m o rning brief world (March 19): Binance has asked prime brokers to run more stringent checks to keep US investors off the crypto exchange in the fallout from last year’s plea deal with the nation’s authorities, people with knowledge of the matter said. Since roughly the period around November’s guilty pleas, the world’s largest crypto trading venue has told prime brokers such as FalconX and Hidden Road — which cater to institutional traders — to demand more information from their clients, the people said, asking not to be identified as the matter is private. The checks include questions about office addresses, as well as where employees and founders are based, and require signed attestations from respondents confirming the accuracy of their replies, two of the people said. Binance in November pleaded guilty to violations of US anti-money-laundering and sanctions laws and was hit with a landmark US$4.3 billion penalty. The global platform targeted US customers — including valuable larger traders who deepened liquidity on the exchange — while refusing to comply with the relevant American legislation, the US Department of Justice (DOJ) said at the time. DOJ criticism Binance employees “called US VIPs to encourage them to provide information that (March 19): The fervour around artificial intelligence (AI) has sparked a gold rush into AI-themed exchange traded funds (ETFs), as investors seek fresh ways to play the burgeoning technology following breathtaking rallies in market darlings such as Nvidia. The funds run the gamut from those offering a bouquet of the biggest AI winners to more esoteric themes such as robotics and sound generation. All told, the universe of AIthemed ETFs traded in the US has soared to US$6.88 billion (RM32.56 billion) as of the end of February from US$2.55 billion a year earlier, Morningstar data showed. “It’s still so early in the evolution of this category...that investors are still sorting through the possibilities,” said Will Rhind, the founder and chief executive officer of GraniteShares. The exuberance surrounding AI funds echoes previous waves of investor excitement for other technologies viewed as transformative, from dotcom stocks to electric vehicles. Each wave introduced major new businesses to the economy and generated astonishing wealth for founders like Jeff Bezos and Elon Musk as well as ordinary investors. At the same time, many of the companies whose shares soared in previous market booms eventually saw their stock prices fizzle, a fate that may await some of the market’s current AI favourites. For now, investors are responding with enthusiasm and Nvidia — whose chips are seen as the gold standard in AI — continues to grab the spotlight. suggested the customer was not located in the United States,” the Justice Department said in its Nov 21 statement. Against that backdrop, the crypto industry is alert for compliance-related changes at the linchpin trading venue for digital assets. For instance, the exchange has tightened requirements for listing new digital tokens, people with knowledge of the matter previously told Bloomberg. “Binance is fully committed to compliance and has made public [as to] how it assesses end users who can access the Binance platform,” the company said in a statement, in response to queries about whether prime brokers have been tasked with stricter checks. “By making its standard transparent, Binance gives clarity to enterprises who want to access its market-leading liquidity.” Binance tasks prime brokers with checks to root out US investors Nvidia’s dizzying rally spurs rush into AI-themed ETFs (March 19): Crypto exchange BitMEX is investigating unusual trading activity that led to a flash crash in Bitcoin on its platform on Monday. The price of Bitcoin against Tether’s USDT stablecoin fell to as low as US$8,900 on BitMEX late on Monday, while the largest cryptocurrency was trading above US$66,000 on rival venues. The price of Bitcoin on the exchange quickly recovered and was trading at US$64,284 as of 4:10pm Singapore time. A spokesperson for BitMEX said the company investigated the incident and found evidence of “aggressive selling behaviour involving a very small number of accounts that exceeded expected market ranges”, adding that its systems had operated normally and all user funds are safe. An X account named @syq, which first posted about the sudden selloff, suggested the flash crash coincided with the sale of 977 Bitcoin, worth roughly US$66 million. BitMEX’s spokesperson declined to comment further on details of the incident. Bitcoin has fallen around 14% from record highs set earlier this month, after a period of rampant demand driven by a crop of spot ETFs (exchange-traded funds) launched in the US on Jan 11. The token is still up almost 50% in 2024. Bitcoin shed as much as 6.3% to trade at US$63,140 on Tuesday, after the US$25 billion Grayscale Bitcoin Trust, or GBTC, posted a US$643 million outflow — its highest since it converted into an ETF on Jan 11. Crypto exchange BitMEX investigates flash crash that sent Bitcoin to US$8,900 by Sidhartha Shukla Bloomberg by Suvashree Ghosh, Ryan Weeks & Muyao Shen Bloomberg by Suzanne McGee Reuters Read also: Bitcoin retreats as Grayscale ETF posts biggest daily outflow Read also: Nvidia unveils flagship AI chip, the B200, aiming to extend dominance Read the full story

wednesday march 20, 2024 20 The E dge C E O m o rning brief world Prosecutors seek death sentence for mastermind of Vietnam’s largest financial scam Singapore opposition leader Pritam Singh charged in lying scandal by Philip J Heijmans Bloomberg by Khanh Vu & Francesco Guarascio Reuters (March 19): Singapore opposition leader Pritam Singh was charged with two counts under the Parliament Act in connection with a lying scandal involving a former lawmaker. Singh was charged Tuesday in a Singapore court for “willfully making false answers to material questions” during an examination by the Committee of Privileges, according to a statement from the police and Attorney-General’s Chambers. Singh, who heads the opposition Workers’ Party, pleaded not guilty. The Workers’ Party made historic gains in the last election in 2020 when it won a record ten seats and secured two group representation constituencies. It had cast itself as a check on the ruling People’s Action Party that has been in power since independence in 1965. In 2022, a parliamentary committee stacked with ruling party officials found that Singh “told untruths” during his testimony into the investigation of former lawmaker Raeesah Khan, who lied in parliament about a sexual assault case. Parliament approved a motion to refer Singh to the prosecutor for possible criminal charges. The same year, lawmakers unanimously agreed to raise the threshold to disqualify members of parliament for five years if they are fined at least S$10,000 (RM35,264.87) in a criminal case, from S$2,000 previously. “It is quite clear, Mr Singh is not at significant risk of losing his seat or his eligibility to contest in a parliamentary election,” said Eugene Tan, a law professor at Singapore Management University. The charges come as the city-state prepares for a meticulously planned political succession this year ahead of a general election that is due to be held by November 2025. Prime Minister Lee Hsien Loong has said he will hand over power to his deputy Lawrence Wong before the vote. “Until the legal process comes to a complete close, I will continue with all my Parliamentary duties,” Singh wrote in a Facebook post. “When I first entered politics some years ago now, I was under no illusion as to the challenges that lay ahead in building a more balanced and democratic political system in Singapore.” Singh’s case adds to the number of controversies that has hit the city-state over the last year. Earlier this year, former Transport Minister S Iswaran resigned after being charged with corruption in the biggest political scandal in almost four decades. Iswaran, who’s out on bail, rejected the 27 charges against him, including allegedly obtaining tickets to musicals and soccer matches in the United Kingdom. In July, a Workers’ Party lawmaker resigned following an affair with a colleague just days after two ruling party members of parliament stepped down over a similar inappropriate relationship. HANOI (March 19): Vietnamese prosecutors called on Tuesday for the death penalty to be handed to Truong My Lan, the mastermind of the Southeast Asian nation’s largest financial fraud on record, state media said. Lan, the chairwoman of real estate developer Van Thinh Phat Holdings Group, faces a trial in the economic hub of Ho Chi Minh City on accusations of leading a scam that caused damages of US$20 billion (RM94.64 billion), or about 4.9% of Vietnam’s gross domestic product. The trial, expected to run until the end of April, is part of a campaign against graft that the leader of the ruling Communist Party, Nguyen Phu Trong, has pledged for years to stamp out, although with few tangible results. “Lan didn’t plead guilty and didn’t show remorse,” the Thanh Nien newspaper cited the prosecutors as saying while demanding the death penalty on the charge of embezzlement. “The consequences are extremely serious Singapore opposition leader Pritam Singh Prosecutors plan to ask the court to impose a fine if Singh is convicted. The offences are punishable with a fine of up to S$7,000 and a jail term of as long as three years. Another Workers’ Party lawmaker was given a police advisory and wasn’t charged. and irreparable, and therefore, there must be a strict punishment for Truong My Lan and remove her from society,” it added. A lawyer for Lan was not immediately available for comment on Tuesday. Lan and her accomplices are accused of syphoning off more than 304 trillion dong (RM58.13 billion) from Saigon Joint Stock Commercial Bank (SCB), which she effectively controlled through dozens of proxies, investigators say. Reuters bloomberg

wednesday march 20, 2024 21 The E dge C E O m o rning brief world SEOUL (March 19): South Korea will provide tax cuts for companies that raise shareholder returns and also cut taxes on dividend income for shareholders in the firms, the finance minister said on Tuesday. Finance Minister Choi Sang-mok said specific details of the tax cuts would be determined and announced after hearing different opinions at a meeting with market experts. South Korea last month unveiled a corporate reform plan, dubbed the “Corporate Value-up Programme”, aimed at South Korea to cut corporate, dividend income tax to boost shareholder returns Xiaomi posts 11% revenue rise on strong smartphone HONG KONG (March 19): Hong Kong sales lawmakers on Tuesday unanimously passed a new national security bill within a fortnight of it being tabled, fast-tracking a major piece of legislation that critics say further threatens the China-ruled city’s freedoms. The package, known as Article 23, punishes treason, sabotage, sedition, the theft of state secrets and espionage with up to life imprisonment. The Legislative Council stacked with pro-Beijing loyalists was first presented with the bill on March 8, following a month-long public consultation. Hong Kong’s leader John Lee called it a “historic moment for Hong Kong”. Authorities say the legislation — which will come into effect on March 23 — is necessary to plug loopholes in the national security regime despite the enactment of a sweeping China-imposed national security law that has been used to jail pro-democracy activists. The new law will have extraterritorial effect, giving rise to fears it could be used to intimidate and restrict the free speech of residents outside Hong Kong. Critics, including the US government, say the law will further narrow freedoms in the global financial hub, and could be used to “eliminate dissent through the fear of arrest and detention”. The US Congressional-Executive Commission on China — which advises the US Congress — published a letter to Secretary of State Antony Blinken last Thursday to oppose the new laws and urged the US government to “take additional steps to protect American citizens and businesses”. “An ever-expanding notion of national security will only make Hong Kong less safe for US businesses and citizens living in Hong Kong as well as Hong Kongers seeking to exercise their fundamental freedoms,” it wrote. China’s Foreign Ministry Commissioner’s office in Hong Kong condemned the US for its criticism. “Immediately stop the political manipulation and interference in Hong Kong affairs,” it saidin a statement. BEIJING (March 19): China’s Xiaomi reported a 10.9% rise in fourth-quarter revenue and beat adjusted net profit estimates boosted by strong smartphone sales as the sector shows signs of recovery. Revenue rose to 73.24 billion yuan (RM48.1 billion) in the October-December quarter versus the 73.17 billion expected by analysts, LSEG data showed. “As previously expected, the overall smartphone shipments in the second half of 2023 were better than the first half,” Xiaomi President Lu Weibing said on an earnings call. “The global consumer electronics market continues to show a gradual recovery trend.” The company’s adjusted net profit rose 236.1% to 4.9 billion yuan, beating the 3.89 billion expected by analysts. The smartphone industry has been showing signs of recovery after a long period of sluggishness. Xiaomi’s fourth-quarter global smartphone shipments were up 23% from a year earlier to 40.7 million handsets, ranking it third globally with a market share of 13%, data from researcher Canalys showed. In China, its largest market, its shipments were up 12% to 9.5 million handsets, ranking it fifth, also with a market share of 13%. Xiaomi received a boost from the release of its premium Mi 14 series, which saw sales surpass one million handsets within the first week of its October launch. Read the full story Hong Kong legislature unanimously passes new national security law by James Pomfret & Jessie Pang Reuters by Yelin Mo & Brenda Goh Reuters Reuters reuters lifting the value of Seoul-listed companies by encouraging firms to boost shareholder returns, such as dividends. The minister’s comments come after criticism from investors that the plan did not go far enough to changes corporate behaviour, since it lacked penalties and tax incentives. The government will finalise by early May guidelines for listed firms to refer to, Choi said. These were originally slated to be announced within the first half of the year.

wednesday march 20, 2024 22 The E dge C E O m o rning brief world JAKARTA (March 19): Indonesia’s biggest tech firm GoTo Gojek Tokopedia expects to break even in terms of adjusted core earnings this year after booking its first quarterly profit on that basis in the final three months of 2023, it said on Tuesday. GoTo, which offers ride-hailing, e-commerce, and financial services, reported adjusted earnings before interest, tax, depreciation, amortisation (Ebitda) and rent of 77 billion rupiah (RM23.2million) in the last quarter of 2023. Its adjusted Ebitda loss for the whole of 2023 also narrowed 77% to 3.7 trillion rupiah. “GoTo has established a solid operational base, achieving adjusted EBITDA profitability in Q4 ... Looking ahead, our focus is on strengthening this base to foster accelerated, profitable growth.” CEO Patrick Walujo said in a statement. The swing to profit was supported by GoTo’s efforts to reduce costs, including lower incentives and marketing spending, which fell 33% in the quarter from the same period of 2022. GoTo, backed by Japan’s SoftBank Group and Singapore’s sovereign wealth fund GIC, has implemented various cost-cutting measures including layoffs, which impacted 600 roles last year. The company said its profitability going forward would also be supported by its partnership with China’s TikTok, which bought a majority stake in GoTo’s e-commerce unit Tokopedia in December. “E-commerce ... is set to become a cash-accretive segment for the company through our agreement with TikTok,” GoTo finance chief Jacky Lo said, referring to the short-video app. The deal with TikTok contributed to a wider full-year net loss for GoTo in 2023 of 90.5 trillion rupiah, from 40.4 trillion rupiah in 2022, due to a reversal of goodwill, which amounted to 78.8 trillion rupiah. However, GoTo said the loss was non-recurring and non-cash in nature, and had no impact on adjusted Ebitda or cash flow. Indonesia’s GoTo sees breakeven in 2024 after first quarterly profit Temasek-backed ShopBack cuts 24% of jobs in ‘pay-later’ defeat JAKARTA (March 19): Indonesia’s government has proposed to top up investment in state companies by US$3.7 billion (RM17.51 billion) in 2024 and 2025, including for construction companies to finish infrastructure projects, a cabinet minister said on Tuesday. The proposals were presented by StateOwned Enterprises (SOEs) Minister Er- (March 19): ShopBack, an online shopping rewards app backed by Temasek Holdings Pte, is cutting about a quarter of its workforce as it retreats from the buy-now-pay-later space. The company is eliminating 195 roles, or 24% of its staff, to become more focused and self-sustainable, chief executive officer Henry Chan said in a note to employees on Tuesday. ShopBack had started freezing salaries for leaders and paying out lower bonuses since 2022, but sustainable growth remained a challenge, he said. The Singapore-based startup told customers in an email that it will be discontinuing its buy-now-pay-later service in March, without offering reasons. The buy-now-pay-later industry has struggled as households cut back on spending in the face of inflationary pressures, as compared with the pandemic-induced frenzy that buoyed the rise of such companies. Government regulators have also called for additional oversight of the industry to give consumers greater protections. “I made the mistake of pursuing too many directions as a company and expanding our team too rapidly,” Chan said in the note to workers. “I take full responsibility for the decisions that have led to this situation.” ShopBack, whose investors include SoftBank Ventures Asia and Rakuten Capital, offers cashback and other rewards for brands and retailers including Dyson, Lululemon and Foodpanda. It bought fintech startup Hoolah in 2021 to add buynow-pay-later services. Founded in 2014 by Chan and Joel Leong, the platform has expanded to 11 markets across Southeast Asia, Australia, South Korea and Taiwan, according to its website. It raised US$200 million (RM936.94 milliom) from investors including Westpac Banking Corp and Asia Partners in a Series F round in 2022. ick Thohir to a parliamentary commission overseeing state investments. They need to be approved by lawmakers before they are executed. The total amount of the proposals for 2024 is 13.6 trillion rupiah (RM4.1 billion) for seven companies, while the proposed capital injection in 2025 amounts to 44.25 trillion rupiah for 16 companies. The government’s original plan for a 2024 capital injection is worth 28.2 trillion rupiah. Four major construction firms are some of the intended recipients. Hutama Karya, which has been building a toll road the length of Sumatra island, is to receive the bulk of the capital injection, worth an additional 1.6 trillion rupiah in 2024 and 13.9 trillion rupiah in 2025. In 2025, Adhi Karya will get 2.1 trillion rupiah, Wijaya Karya 2 trillion rupiah and PT PP 1.6 trillion rupiah, under the proposals. State electricity company Perusahaan Listrik Negara is to receive 3 trillion rupiah for powering villages, according to the ministry’s proposals for 2025. Indonesia proposes injecting US$3.7 bil into state firms in 2024, 2025, minister says by Stefanno Sulaiman Reuters by Stefanno Sulaiman Reuters by Olivia Poh Bloomberg Bloomberg

wednesday march 20, 2024 23 The E dge C E O m o rning brief world MANILA (March 19): US Secretary of State Antony Blinken hailed on Tuesday a recent strengthening of defence ties with the Philippines as “extraordinary”, saying they would only grow further, though Washington’s expanding alliances were not aimed at China. Speaking during a visit to the Philippines, Blinken said China’s actions in the South China Sea had triggered a wider international reaction, and the United States was engaged in intense diplomacy to reaffirm international law. “We have a shared concern about (China’s) actions that threaten our common vision for a free open Indo-Pacific, including in the South China Sea and in the Philippines exclusive economic zone (EEZ),” Blinken told a press conference alongside his Philippine counterpart. Ties between the Philippines and China have soured amid repeated spats over disputed features in the former’s exclusive economic zone, during which Manila has accused China’s coastguard of a policy of aggression. Beijing, which claims sovereignty over almost the entire South China Sea, has maintained Philippine vessels are intruding in its territory and has repeatedly accused the United States of interfering and seeking to stoke regional tensions. The dispute coincides with a key improvement in military ties between the Philippines and United States in the past year, with Manila nearly doubling the number of its bases accessible to US forces, including three new sites facing Taiwan. Their annual military exercises have widened lately to include joint air and sea patrols over the South China Sea and close to Taiwan, which China has seen as provocations. Read also: EU, Philippines announce restart of free trade talks Blinken lauds ‘extraordinary’ expansion of defence ties with Philippines RAFAH, Gaza Strip/CAIRO/JERUSALEM (March 19): The United States made a fresh push on Tuesday for a ceasefire in Gaza to avert a manmade famine, while pressing its ally Israel to back away from plans for a ground assault on Rafah, last refuge for more than a million displaced people. Secretary of State Antony Blinken announced a trip to the Middle East, where he would meet senior leaders of Egypt and Saudi Arabia to “discuss the right architecture for a lasting peace”. Unusually, Blinken made no mention of a stop in Israel itself, and the Israeli foreign ministry said it had received no notification to prepare for one. In Rafah, dazed survivors walked through the ruins of a home on Tuesday morning, one of several buildings hit in overnight Israeli air strikes that killed 14 people in the city, where more than half of Gaza’s 2.3 million people have been pushed against the southern border fence with Egypt. At a nearby hospital morgue, relatives wailed beside corpses laid out on the cobbles. A woman peeled back a tiny bloodstained shroud to reveal the face of a small boy, rocking him back and forth in her arms. “There’s US support, European support and support of the whole world for Israel, they support them with weapons and planes,” said one of the mourners, Ibrahim Hasouna. “They mock us and send four or five airdrops (of aid) just to save their faces.” The war, triggered when Hamas fighters crossed into Israel on a rampage, killing 1,200 people and capturing 253 hostages according to Israeli tallies, is now in its sixth month. Washington makes new push for Gaza ceasefire to head off famine, Rafah assault Nearly 32,000 people have been confirmed killed in Israel’s retaliatory onslaught, according to Palestinian health officials, with thousands more feared lost under the rubble. The international hunger monitor relied on by the United Nations said on Monday that Gaza’s food shortages had already far surpassed famine levels, and Gazans would soon be dying of hunger at famine-scale rates without an immediate truce. Israel, which initially let in aid only through two checkpoints on Gaza’s southern edge, denies blame for Gaza’s hunger. It says it is now opening new routes by land, sea and air, and that UN and other aid agencies should do more to bring in food and distribute it. The UN says that is impossible without better access and security, both of which it says are Israel’s responsibility. “The extent of Israel’s continued restrictions on entry of aid into Gaza, together with the manner in which it continues to conduct hostilities, may amount to the use of starvation as a method of war, which is a war crime,” said UN Human Rights Office spokesperson Jeremy Laurence. by Bassam Masoud, Nidal al-Mughrabi & Dan Williams Reuters by Mikhail Flores Reuters Philippines’ Foreign Secretary Enrique Manalo (right) and US Secretary of State Antony Blinken

wednesday march 20, 2024 24 The E dge C E O m o rning brief MARKETS Top 20 active stocks World equity indices Top gainers (ranked by %) Top losers (ranked by %) Top gainers (ranked by RM) Top losers (ranked by RM) NAME VOLUME CHANGE CLOSE YTD MARKET (MIL) (RM) CHANGE CAP (%) (RM MIL) Hong Seng Consolidated Bhd 312.1 0.000 0.010 -60.00 51.1 Harvest Miracle Capital Bhd 111.2 -0.010 0.115 -4.17 141.0 Ta Win Holdings BHD 82.1 -0.005 0.030 -25.00 103.1 Fitters Diversified Bhd 70.5 0.010 0.060 20.00 140.5 Talam Transform Bhd 61.4 -0.005 0.015 0.00 64.4 YTL Power International Bhd 54.2 -0.030 3.890 53.15 31,521.3 YTL Corp Bhd 49.2 -0.030 2.720 43.92 29,828.6 Eversendai Corp Bhd 46.0 0.000 0.345 109.09 269.4 Sunway Bhd 40.8 0.220 3.320 61.17 18,300.1 GFM Services Bhd 40.3 0.045 0.370 32.14 281.0 MMAG Holdings Bhd 38.7 0.010 0.150 57.89 254.4 TWL Holdings Bhd 36.6 -0.005 0.030 0.00 165.1 Inta Bina Group Bhd 33.5 0.050 0.345 32.69 186.0 Eastern & Oriental Bhd 33.3 0.040 0.995 73.04 1,977.0 Sime Darby Property Bhd 31.7 0.010 0.820 31.20 5,576.7 Pan Malaysia Holdings Bhd 30.0 0.010 0.195 105.26 181.1 CIMB Group Holdings Bhd 28.8 -0.040 6.610 14.22 70,496.3 SMTrack Bhd 28.4 0.005 0.050 0.00 61.1 Public Bank Bhd 26.6 -0.010 4.280 -0.23 83,077.8 SP Setia Bhd Group 25.7 0.000 1.120 40.00 4,987.3 Data as compiled on March 19, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) Key Alliance Group Bhd 0.010 100.00 609.7 0.00 36.8 Mlabs Systems Bhd 0.015 50.00 3,901.5 0.00 21.7 SC Estate Builder Bhd 0.015 50.00 10.1 -3.57 48.3 TECHNA-X Bhd 0.015 50.00 78.8 0.00 33.2 XOX BHD 0.015 50.00 2,219.2 0.00 77.9 Mclean Technologies Bhd 0.180 28.57 1,590.2 9.09 35.5 Lambo Group BHD 0.025 25.00 3,546.2 25.00 38.5 Apollo Food Holdings Bhd 7.000 21.32 697.1 21.53 560.0 Fitters Diversified Bhd 0.060 20.00 70,459.0 20.00 140.5 Inta Bina Group Bhd 0.345 16.95 33,471.8 32.69 186.0 Netx Holdings Bhd 0.115 15.00 1,269.5 -8.00 107.9 Lotus KFM BHD 0.200 14.29 68.1 -11.11 204.6 GFM Services Bhd 0.370 13.85 40,319.6 32.14 281.0 Classita Holdings Bhd 0.045 12.50 303.7 0.00 55.5 mTouche Technology Bhd 0.045 12.50 1,556.3 -10.00 41.7 Vizione Holdings Bhd 0.045 12.50 285.3 -25.00 92.1 Mentiga Corp BHD 0.635 11.40 1.2 -9.29 44.5 Ho Hup Construction Co Bhd 0.150 11.11 9,045.9 -40.00 77.7 Radiant Globaltech Ltd 0.350 11.11 2,958.8 12.90 183.8 SMTrack Bhd 0.050 11.11 28,431.4 0.00 61.1 Data as compiled on March 19, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) Talam Transform Bhd 0.015 -25.00 61,362.2 0.00 64.4 Sanichi Technology Bhd 0.020 -20.00 1,847.4 -20.00 28.1 Nexgram Holdings Bhd 0.030 -14.29 595.1 -33.33 22.6 Ta Win Holdings BHD 0.030 -14.29 82,139.1 -25.00 103.1 TWL Holdings Bhd 0.030 -14.29 36,603.8 0.00 165.1 Green Packet Bhd 0.040 -11.11 697.2 0.00 79.8 PDZ Holdings Bhd 0.040 -11.11 49.0 -20.00 23.5 TFP Solutions Bhd 0.040 -11.11 35.0 -27.27 23.4 Asia Brands BHD 0.420 -10.64 4.8 -24.32 97.7 SFP Tech Holdings Bhd 0.660 -10.20 17,939.8 -31.25 1,584.0 Sapura Energy Bhd 0.045 -10.00 8,273.7 0.00 826.9 Velocity Capital Partner Bhd 0.045 -10.00 1,000.0 0.00 62.2 Johan Holdings Bhd 0.050 -9.09 135.0 -23.08 58.4 Advance Synergy Bhd 0.105 -8.70 6,647.2 -25.00 265.6 Industronics BHD 0.055 -8.33 2,618.1 10.00 38.9 Kanger International Bhd 0.055 -8.33 229.0 -15.38 40.2 Chuan Huat Resources BHD 0.400 -8.05 22.2 -5.88 67.5 Harvest Miracle Capital Bhd 0.115 -8.00 111,201.9 -4.17 141.0 Teo Guan Lee Corp BHD 1.090 -7.63 98.4 -8.40 92.5 Digistar Corp Bhd 0.065 -7.14 195.1 8.33 30.2 Data as compiled on March 19, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) Petronas Gas Bhd 17.540 -0.240 1,073.5 0.80 34,707.0 Ge-Shen Corp Bhd 3.790 -0.200 213.9 226.72 464.4 Hong Leong Industries Bhd 10.500 -0.160 83.6 14.01 3,354.5 CELCOMDIGI BHD 4.250 -0.130 3,027.2 4.17 49,858.9 Press Metal Aluminium Holdings 4.610 -0.120 7,492.3 -4.16 37,984.6 Carlsberg Brewery Malaysia 18.680 -0.100 227.6 -3.11 5,711.4 Malayan Banking Bhd 9.650 -0.100 15,662.2 8.55 116,446.1 Tenaga Nasional Bhd 11.500 -0.100 5,521.9 14.54 66,554.3 Westports Holdings Bhd 3.800 -0.100 194.7 4.11 12,958.0 DKSH Holdings Malaysia Bhd 4.700 -0.090 34.7 2.62 741.0 Teo Guan Lee Corp BHD 1.090 -0.090 98.4 -8.40 92.5 Kuala Lumpur Kepong Bhd 21.940 -0.080 1,048.2 0.55 24,055.1 Toyo Ventures Holdings Bhd 1.250 -0.080 841.5 -5.30 166.1 SFP Tech Holdings Bhd 0.660 -0.075 17,939.8 -31.25 1,584.0 ITMAX SYSTEM Bhd 2.320 -0.070 2,863.5 29.61 2,387.5 Kotra Industries Bhd 4.630 -0.070 82.2 -4.14 686.7 K Seng Seng Corp Bhd 0.920 -0.065 1,182.5 4.55 138.2 Gamuda Bhd 5.140 -0.060 3,601.3 11.98 14,226.4 Genting Bhd 4.920 -0.060 10,146.8 6.49 18,944.8 Hong Leong Financial Group 16.440 -0.060 133.4 0.00 18,827.8 Data as compiled on March 19, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) Dutch Lady Milk Industries BHD 26.920 1.320 84.9 16.23 1,722.9 Apollo Food Holdings Bhd 7.000 1.230 697.1 21.53 560.0 Allianz Malaysia Bhd 20.000 0.660 170.7 8.46 3,559.4 Petronas Dagangan Bhd 21.740 0.300 460.4 -0.46 21,597.7 United Plantations BHD 24.220 0.240 409.2 36.07 10,046.1 Sunway Bhd 3.320 0.220 40,766.4 61.17 18,300.1 New Hoong Fatt Holdings Bhd 3.880 0.210 202.8 17.93 320.8 Batu Kawan Bhd 20.000 0.200 11.2 -2.91 7,864.6 Magni-Tech Industries Bhd 2.220 0.190 2,225.1 18.72 962.3 Paragon Union BHD 3.780 0.160 76.7 35.48 316.9 Mega First Corp BHD 4.390 0.150 1,770.1 18.97 4,138.7 MISC Bhd 7.600 0.140 2,109.2 4.25 33,924.5 Sam Engineering & Equipment 4.830 0.140 653.2 21.00 3,269.8 Harrisons Holdings Malaysia 9.190 0.120 7.4 6.61 629.3 LPI Capital Bhd 12.380 0.120 79.2 3.51 4,932.0 MBM Resources BHD 4.450 0.110 327.9 4.95 1,739.5 Teo Seng Capital Bhd 2.010 0.110 2,635.3 25.63 589.6 Nationgate Holdings Bhd 1.470 0.100 5,427.5 -2.65 3,048.7 Nestle Malaysia Bhd 119.500 0.100 137.5 1.62 28,022.8 Negri Sembilan Oil Palms BHD 3.700 0.100 10.5 18.21 259.7 Data as compiled on March 19, 2024 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 38,790.43 75.66 0.20 S&P 500 * 5,149.42 32.33 0.63 NASDAQ 100 * 17,985.01 176.76 0.99 FTSE 100 * 7,722.55 -1.82 -0.02 AUSTRALIA 7,703.23 27.38 0.36 CHINA 3,062.76 -22.17 -0.72 HONG KONG 16,529.48 -207.64 -1.24 INDIA 72,009.47 -738.95 -1.02 INDONESIA 7,336.75 34.30 0.47 JAPAN 40,003.60 263.16 0.66 KOREA 2,656.17 -29.67 -1.10 PHILIPPINES 6,848.43 -4.86 -0.07 SINGAPORE 3,173.55 1.62 0.05 TAIWAN 19,857.20 -22.65 -0.11 THAILAND 1,382.46 -3.48 -0.25 VIETNAM 1,242.46 -1.10 -0.09 Data as compiled on March 19, 2024 Source: Bloomberg CPO RM 4,201.00 -35.00 OIL US$ 86.68 -0.21 RM/USD 4.7370 RM/SGD 3.5265 RM/AUD 3.0821 RM/GBP 6.0025 RM/EUR 5.1333 * Based on previous day’s closing