ceoMorningBrief wednesday, september 6, 2023 Issue 631/2023 theedgemalaysia.com MAS bans ex-Goldman Sachs (Singapore) MD Roger Ng for life p2 HOME: Bintai Kinden internal probe: Ex-ED committed insider trading, unauthorised share transactions p6 Mat Sabu sees local production of white rice recovering within a month p11 WORLD: Tesla urges Australia to give tax credits for battery industry p15 Brent oil hits US$90 a barrel after Opec+ extends supply curbs p15 Thailand’s new PM Srettha, cabinet sworn in as economic risks mount p16 Report on Page 5. Ex-Protasco director Tey, associate ordered to pay company RM84 mil over aborted Indonesia O&G deal Report on Page 3. Shahrin Yahya/the edge MAG willing to bear short-term pain as it vows to take on legacy contract In-flight hot meals will resume from the third week of September, CEO Datuk Captain Izham Ismail said.
ceoMorningBrief wednesday, september 6, 2023 Issue 631/2023 theedgemalaysia.com
WEDNESDAY SEPTEMBER 6, 2023 2 THEEDGE CEO MORNING BRIEF published by ( 2 6 6 9 8 0 - X ) tel . 603-77218000 Level 3, Menara KLK, 1 Jalan PJU 7/6, Mutiara Damansara, 47810, Petaling Jaya, Selangor, Malaysia publisher + ceo . Ho Kay Tat editor-in-chief . Kathy Fong chief commercial officer . Sharon Teh chief operating officer . Lim Shiew Yuin editors . Jenny Ng . Tan Choe Choe Lam Jian Wyn to contact editors: [email protected] to advertise: [email protected] the edge ceo morning brief Read from desktop or mobile device. You can print in A4 to read. Set print mode to fit or shrink oversize page. to get on emailing list [email protected] MAS bans ex-Goldman Sachs (Singapore) MD Roger Ng for life Arguments for Zahid’s DNAA deemed ‘cogent’ by High Court — AGC SINGAPORE (Sept 5): The Monetary Authority of Singapore (MAS) has issued a lifetime prohibition order (PO) against Ng Chong Hwa, the former managing director of Goldman Sachs (Singapore). The POs, which took effect from Sept 5, were issued following Ng’s conviction in the US for conspiring to launder monies embezzled from 1Malaysia Development Bhd (1MDB). Ng was also convicted for violating the US’ Foreign Corrupt Practices Act (FCPA). Under the POs, Ng is permanently banned from performing any regulated activity under the Securities and Futures Act (SFA). He is also prohibited from providing any financial advisory services under the Financial Advisers Act (FAA). In addition, Ng is also not allowed KUALA LUMPUR (Sept 5): The arguments behind the request for Datuk Seri Ahmad Zahid Hamidi’s discharge in the Yayasan Akalbudi trial were deemed “cogent” by the High Court, said the Attorney General’s Chambers. In a statement, the AGC emphasised that the application for a discharge not amounting to acquittal (DNAA) had “already been accepted by the court”. “When making the ruling, the honorable judge stated that the arguments presented by the prosecution are cogent,” the statement said. It was addressing criticism regarding its decision to discontinue 12 criminal breach of trust (CBT) charges, followed by eight for graft, and 27 for money laundering in relation with Yayasan Akalbudi. The criticism touched on the prosecution’s move to accept Zahid’s letters of representations earlier this year, and to discontinue the charges despite the court having established a prima facie case, with Zahid having entered his defence. At the trial on Monday, High Court judge Datuk Collin Lawrence Sequerah upheld the application by deputy public prosecutor (DPP) Datuk Mohd Dusuki Mokhtar, who pointed to instructions from the AG to discontinue the charges. The DPP also pointed to a Royal Commission of Inquiry (RCI) into former AG Tan Sri Tommy Thomas’ controversial memoir. According to the prosecution, there was a need to investigate Thomas’ memoir, HOME BY FELICIA TAN theedgesingapore.com BY ADAM AZIZ & ANIS HAZIM theedgemalaysia.com which is relevant to Zahid’s charges. Mohd Dusuki, however, requested for a DNAA instead of a full acquittal, as the Malaysian Anti-Corruption Commission (MACC) is still investigating the charges. A DNAA means an accused person can face trial for the same charges in the future, if the prosecution decides to reinstate them. AG not bound to accept Zahid’s letter of representation, says Hanipa Separately, former deputy law minister Hanipa Maidin said it was “absolutely weird” for the prosecution to consider, let alone accept Zahid’s letter of representation to the AG, when it has proven a prima facie case in the trial. This is because the standard of proof in establishing a prima facie case is “beyond reasonable doubt”, he said in a statement. “It is indeed a very high threshold which the prosecution needs to pass, so much so that if any accused elects to remain silent when a prima facie case has been established against him or her, the court will have no choice but to convict,” Hanipa said. “Was the AG bound to accept such a representation by Zahid’s lawyers? “The answer is a resounding no,” Hanipa said. Hanipa also pointed to the early retirement by ex-senior DPP Datuk Raja Rozela Raja Toran — who was the lead prosecutor in Zahid Hamidi’s corruption trial — which spurred rumours that it had something to do with the case. “The representation was surprisingly accepted and the DPP in that case then informed the court that the prosecution had agreed to accept it and in turn asked the court to enter nolle prosequi (termination of legal proceedings) and grant Zahid a verdict of DNAA,” he added. The government’s narrative that it is the court’s decision in granting Zahid DNAA verdict “only represented half truth”, he said. “In Zahid’s case, the court, stricto sensu (in a strict sense) merely reaffirmed the ‘decision’ by the AG’s Chambers. Ergo, it would be incorrect to say that it was purely the court’s decision. “No, it is not entirely the court’s decision. The AG’s Chambers had a role in such a verdict. Period,” he added. Earlier, the Democratic Action Party (DAP) also called for outgoing AG Tan Sri Idrus Harun to explain his decision. An explanation is “crucial to ensure public confidence” towards Malaysia’s legal system, said DAP secretary general Anthony Loke Siew Fook in his Facebook post on Tuesday. to take part in the management of any capital market and financial advisory services firm under the SFA and FAA. He will also not be allowed to act as a director or become a substantial shareholder of any of such firms. Ng, who is also known as Roger Ng, was the only Goldman Sachs banker that was tried and convicted in connection to the 1MDB scandal. He was convicted in the US on April 8, 2022, and was sentenced to 10 years’ imprisonment on March 9. Ng had worked with others, including former Goldman Sachs (Singapore) director Tim Leissner, to launder billions of dollars that were misappropriated from 1MDB. Leissner was issued a permanent ban from MAS on Dec 19, 2018.
WEDNESDAY SEPTEMBER 6, 2023 3 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Sept 5): Malaysia Aviation Group Bhd (MAG), the parent company of Malaysia Airlines Bhd (MAB), has promised to bring back its hot food and beverage offerings on all its flights from the third week of September, after meals for certain domestic and international routes were disrupted during its transition to new catering service providers since Sept 1. This follows the termination of its long-standing contract with Brahim’s Food Services (BFS), which expired on Aug 31. MAG group managing director Datuk Captain Izham Ismail said its negotiation with BFS for an extension of the contract started in November last year, “but it was going nowhere”. “We couldn’t come (to an agreement), knowing the fact that BFS has a monopoly in the local in-flight catering market,” Izham said, adding that the contract terms with BFS were “lopsided”. According to him, MAG had in its negotiation with BFS requested for a new clause where MAG will have a contractual right to terminate the agreement for any reason. “However, that negotiation is off the table now. To a certain extent, we had succumbed to a partner who is operationally inefficient and who tried to make margins by raising meals and handling charges to cover their inefficiency. So is it fair? “We are aware of what would happen [when we terminated the catering contract with BFS] and of the feedback from consumers and stakeholders, but if we don’t have the courage to take on legacy contracts, then why do you need me as a CEO?” he told reporters from selected media on Tuesday. “So my team needs guts to implement change and change is never pretty. We hope consumers understand this phase that we are going through. It will not be forever, [but] a short duration of time. The timeline is the third week of September, we will start serving more hot meals again because we will have the equipment to upload the meals onboard the aircraft. “We remain steadfast that MAG runs a fair and profitable business, and we want our partners to be profitable as well.” Did MAG’s management and board of directors understand the magnitude of the journey that the airline was going to go through by addressing this legacy contract? “Yes. [We went in with BY KANG SIEW LI theedgemalaysia.com MAG willing to bear short-term pain as it vows to take on legacy contract our] eyes wide open. Will customers see degradation of food services? Definitely, but we are looking at the bigger picture. If I were nervous about this and not worry about consumers and stakeholders, then I will continue to inherit this lopsided contract,” said Izham. Izham conceded that about 30 flights or 20% of flights suffered delays on the first day of operations, which he largely blamed on coordination issues. “We have been improving since then. Catering-induced flight delays now range from seven to 10 flights or 2% to 3% of about 250 flights per day, reflecting minimal delay,” he said. Following the end of its contract extension with BFS, MAG had on Sept 1 activated its business continuity plan for in-flight meal services, which, Izham said, was only for a week. “We have now implemented the MAG Catering (MCAT) operation, where a temporary distribution centre has been set up on the airside of the Kuala Lumpur International Airport (KLIA). This operation is a short-term one to address MAB’s transition to new catering service providers while waiting for 20 new catering high lifts to be delivered,” he added. “We don’t cook at all. There is no kitchen. And we don’t have the expertise to cook meals in bulk. What our eight F&B suppliers do is cook the meals at their own facility, transport them to us, and all we do at the distribution centre is stack and distribute the food items [according to the flights] and then uplift them onboard the aircraft. Our suppliers don’t have the licence and vehicles to load the meals into the aircraft.” How long will this go on for? “This is in the interim. It will not last forever,” said Izham. Still, critics have argued that MAB should have proactively prepared for the transition to its new catering service providers from BFS sooner. To this, Izham said: “In June, when we knew that this negotiation with BFS for a contract extension on catering services was going south, we had our ground handling subsidiary AeroDarat Services Sdn Bhd procure 20 catering high lifts. We currently have four high lifts [which is insufficient].” We are aware of what would happen [when we terminated the catering contract with BFS] and of the feedback from consumers and stakeholders, but if we don’t have the courage to take on legacy contracts, then why do you need me as a CEO?” — Datuk Captain Izham Ismail. Datuk Captain SHAHRIN YAHYA/THE EDGE Izham Ismail CONTINUES ON PAGE 4
WEDNESDAY SEPTEMBER 6, 2023 4 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Sept 5): Malaysia Aviation Group Bhd (MAG), the parent company of Malaysia Airlines Bhd (MAB), is considering taking full control of Brahim’s Food Services Sdn Bhd (BFS). MAB currently holds a 30% stake in BFS, while Brahim’s Holdings Bhd (BHB) controls the other 70%. MAG group managing director Datuk Captain Izham Ismail said the airline group is contemplating buying the 70% stake it doesn’t already own from BHB. This follows the discontinuation of its long-standing partnership on catering services previously provided by BFS on selected domestic and international routes within the MAB network on Aug 31. He said this is one of three options MAG has to continue its catering operations going forward. JAKARTA (Sept 5): Prime Minister Datuk Seri Anwar Ibrahim on Tuesday urged Asean leaders to push for greater economic integration within the group and strive towards a regional economic architecture that is vibrant, inclusive, sustainable and resilient. He said intra-Asean trade, which currently stands at only 22.3% of Asean’s total trade, must be increased and greater strategic arrangements should be undertaken to enhance market integration. Asean should also facilitate the movement of goods, capital, skilled workforce, and technology-sharing among the member countries and its external partners. “Partnership with external partners to contribute towards this aim should also be heightened,” he stressed in his intervention at the 43rd Asean Summit Plenary Session here. “Malaysia stands ready to contribute through our Madani Economic Framework, which includes steps towards enhancing economic growth, promoting investment, and strengthening industries to become more innovative, competitive and capable of expanding into the regional and global markets.” Anwar, who is also Malaysia’s Finance Minister, said Asean has achieved unprecedented socio-economic advancements, from reducing poverty levels, to increasing inter-regional trade and advancing technological innovations. He pointed out that the group has a combined gross domestic product of nearly US$3 trillion despite the global economic uncertainties, making the bloc the fifth-largest economy globally, which is projected to become the fourth largest economy by 2030. MAG mulls buyout of Brahim’s catering arm Anwar urges Asean leaders to push for greater economic integration BY KANG SIEW LI theedgemalaysia.com BY MOHD ISWANDI KASAN ANUAR Bernama A joint valuer Deloitte has been appointed by both BHB and MAB to undertake valuations on BFS, which is expected to be completed in two weeks. Pursuant to this, MAG will then decide whether or not to proceed to negotiate with BHB on the stake acquisition in BFS. MAG’s current cash balance stands at RM5 billion. “Another (option) is to have more varied service providers for our in-flight meals. MAG is open to all suppliers including Malindo Catering and AirAsia’s Santan that meet our standards and are able to provide choices to our customers. We can have as many as 20 or 30 suppliers,” he told selected media on Tuesday. MAG is currently working with eight service providers for its in-flight meals, including its 60%-owned unit MAS Awana Services Sdn Bhd, and Pos Aviation Sdn Bhd. “The longer term option is to build our own catering facility. There are professionals out there whom MAG will employ to set [this] up. “We are also open to form joint ventures (JVs) with international caterers, either as technical partners that know how to run the catering business or financial partners who invest. And MAG must have a controlling stake (in the JVs) because customers are our centre of gravity,” said Izham. “The first 10 catering high lifts will be delivered in the third week of September and the remaining 10 will come next month. With the delivery of the catering high lifts, we will improve our hot food offerings,” he said. The catering high lift is designed to carry and load containers with airline food for passengers. ‘At no time MAG is going into this phase stupidly’ Asked when MAG can be on a par with BFS’ catering capability, Izham said this would take time. He said the airline group still has to decide if it wants to buy out Brahim’s Holdings Bhd’s (BHB) 70% stake in BFS or build its own flight kitchen. MAB holds a 30% stake in BFS. “No doubt we have other catering players like Pos Aviation Sdn Bhd, which has a smaller capacity. Knowing that fact, how do we move forward? Do we build our own catering outfit? Do we get other people from overseas to open catering centres here? Or do we buy over BHB’s stake in BFS? These are the options availFROM PAGE 3 able to us, but before we get there, we have to go through this pain (of transition from BFS to new catering service providers). “But we are also aware that the current small players like Pos Aviation are ramping up their production capacity. So is our 60-owned catering unit MAS Awana Services Sdn Bhd. So what consumers face today is in the interim. At no time MAG is going into this phase stupidly,” he added. Pos Aviation currently serves about 20% of MAB’s meals, while the rest are provided by MAS Awana and other service providers. Previously, Pos Aviation served 14% of MAB’s meals, with the remaining 86% from BFS. Izham also dismissed a recent local report that MAB was allowing passengers affected by disruptions to bring their own meals on board flights during its transition, stating that the media had misinterpreted its Frequently Asked Questions on its website. “Passengers have always been allowed to bring food anyway before this, except for certain food items (such as self-heating meals and foods that exude a strong smell). It is not because of the transition.” Read also: Anwar tells Asean leaders to guard group against major powers’ divisive actions
WEDNESDAY SEPTEMBER 6, 2023 5 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Sept 5): A group of shareholders of KNM Group Bhd, led by new substantial shareholder German billionaire Andreas Heeschen, has initiated a hostile takeover in the loss-making and cash-strapped engineering group. Heeschen, who emerged as the second largest shareholder of the Practice Note 17 (PN17) outfit with a 7.91% stake or 320 million shares last week, together with seven other shareholders have sought the removal of all nine directors in the company. KNM chairman Tunku Datuk Yaacob Khyra is the single largest shareholder in the company, with a 9.44% indirect stake or 347.2 million shares held via Melewar Industrial Group Bhd. Heeschen is the majority shareholder of German-based firearms manufacturer Heckler & Koch. Heeschen, who together with the parties acting in concert hold a 10.69% stake, sought to appoint Johor princess Tunku Kamariah Aminah Maimunah lskandariah Binti Sultan Iskandar as a director to replace Yaacob. Besides Yaacob, the group has proposed to remove the rest of KNM’s board — namely directors Tan Sri Zulhasnan Rafique, Ravindrasingham Balasingham, Yee Hong Ho, Steve Ho Soo Woon, Thulasy Suppiah, Datuk Uwe Ahrens, James Beltran and Datuk Naresh Mohan. Six new directors have been proposed to take over their posts, including Heeschen himself and Flavio Porro, a former executive director of KNM who exited the company back in December last year. Also proposed to be appointed directors are: former chairman of Magna Prima Bhd and Komakcorp Bhd Datuk Abd Ghani Yusof; Edwin Silvester Das, who currently serves as Jiankun International Bhd CEO; Datuk Zaidi bin Mat Isa @ Hashim, who is also SMTrack Bhd executive director; and William H Van Vliet II, who is also CN Asia Corp Bhd executive director. The shareholders want to hold an extraordinary general meeting (EGM) to be held to replace the directors. Aside from Heeschen, the shareholders include Azmi Osman, Tai Tean Seng, Kok Seng Ping, Jacqueline Lee Fei Fei, Chang Hui Kee, Sazini Abdullah, AZM Trading Venture Sdn Bhd and Gan SMT Sdn Bhd. At 5pm, shares in KNM closed unchanged at 10 sen, giving the group a market capitalisation of RM384.36 million. The counter has risen 100% this year from five sen per share, following a gradual increase first seen in June. In a statement announcing the requisition, the shareholders pointed to KNM’s German billionaireled group of shareholders seeks to remove KNM directors KUALA LUMPUR (Sept 5): The Kuala Lumpur High Court has ordered Protasco Bhd’s former director Datuk Tey Por Yee and his associate Datuk Ooi Kock Aun to pay the company RM84.64 million over breach of fiduciary and statutory duties related to a sale and purchase agreement (SPA) signed in 2014. Protasco Bhd said the judgment sum, awarded on Sept 1, will include an interest of 5% per annum to be calculated from Sept 22, 2014 — the date of the writ of summons — until full and final settlement. Protasco sued Tey and Ooi for US$27 million (RM88.41 million then) on Sept 22, 2014, for breach of fiduciary and statutory duties after the company failed to acquire a 63% stake in PT Anglo Slavic Indonesia (PT ASI) for US$22 million. Protasco also claimed that Tey and Ooi had failed to disclose their interest in the transaction and conspired to defraud the company and undertake secret profit-making, according to its past filings. Protasco first entered into an SPA with PT Anglo Slavic Utama (PT ASU) in December 2012 to acquire a 76% equity interest in PT ASI for US$55 million. At that time, PT ASI controlled PT Hase Bumou Aceh (PT Haseba), which had a production management partnership agreement (PMPA) with Indonesia’s national oil company Pertamina to develop and produce oil and Ex-Protasco director Tey, associate ordered to pay company RM84 mil over aborted Indonesia O&G deal BY ANIS HAZIM theedgemalaysia.com BY IZZUL IKRAM theedgemalaysia.com gas at the Kuala Simpang Timur field in Aceh. The deal was downsized after a due diligence to acquire a 63% stake in PT ASI for US$22 million. PT ASU provided collateral in the form of 297.14 million shares in PT Inovisi Infracom Tbk, where Ooi was then chief financial officer. The new SPA also required PT ASU to secure a 10-year PMPA extension from Pertamina. However, PT ASU was only granted a three-year extension. Unable to fulfil the conditions set in the SPA, the agreement lapsed, but Protasco had already paid the total US$22 million consideration plus an additional advance of US$5 million to PT ASU — the amount sought by the company from Tey and Ooi in the initial suit. It is worth noting that the lengthy lawsuit also saw Tey and Ooi being granted a discharge not amounting to an acquittal (DNAA) by the Sessions Court in Kajang in September 2017. Shares of Protasco finished one sen or 5.13% lower to 18.5 sen on Tuesday, with a market capitalisation of RM91.65 million. net tangible assets per share of 21 sen as at end-June. Prospective lifeline fell short KNM owns renowned German-based machinery and equipment manufacturer Borsig GmbH, but is facing liquidity issues as it was unable to sell the asset to pare its debt. Burdened by its debt obligations and tight cash flow, KNM had previously embarked to part with Borsig for €220.8 million. The deal failed to materialise, which led to KNM defaulting on three credit facilities totalling about RM416.8 million and subsequently triggering the Practice Note 17 (PN17) status. It is worth noting that the Borsig deal fell through despite the longstop date for the share sale and purchase agreement for the disposal being extended various times. Three weeks after the RM416.8 million default, the outfit announced it defaulted on the principal payment of US$3.4 million, with an outstanding interest of US$16,104, due to Bank of China (Malaysia) Bhd. The group noted that the repayments would be dealt with or restructured under its proposed scheme of arrangement. Since then, KNM has continued its dialogue with creditors and stressed its plan to accelerate the monetisation of non-core assets as well as Borsig. As of end-June this year, KNM’s borrowings stood at RM1.18 billion, down from RM1.26 billion a year earlier. The group had been lossmaking for eight consecutive quarters. Negative reserves stood at RM1.21 billion, up from RM1.16 billion the year before.
WEDNESDAY SEPTEMBER 6, 2023 6 THEEDGE CEO MORNING BRIEF HOME (Sept 5): Malaysia’s biggest wireless carrier Axiata Group Bhd and Indonesian conglomerate PT Sinar Mas Group have revived talks that could lead to a merger of their telecommunications operations in Indonesia, according to people familiar with the matter. The owners of PT XL Axiata and PT Smartfren Telecom are working with advisers to help weigh a potential transaction, the people said, asking not to be identified because the matter is private. Other options under consideration could include network sharing agreements and partnerships, the people said. XL Axiata shares have climbed about 18% this year, valuing the firm at US$2.2 billion (RM10.26 billion). Smartfren’s stock has dropped about 18%, valuing the company at about US$1.2 billion. Deliberations are preliminary and there is no certainty that any deal will take place, the people said. Smartfren President Director Merza Fachys said he would wait and see on the progress of talks, while a representative for Sinar Mas referred the request to Smartfren. A representative for XL Axiata said they couldn’t comment on speculation. Axiata is always on the lookout for colAxiata, Sinar Mas revive talks for Indonesian unit deal, sources say KUALA LUMPUR (Sept 5): Following a three-month internal probe into the conduct of three unnamed directors, Bintai Kinden Corp Bhd alleges that one of its former executive directors committed insider trading. Touching on the delay in announcing the disposal of the Bintai Kinden shares and insider trading activities, the mechanical and electrical engineering firm said a former ED disposed of the shares preceding as well as on the date the company declared its Practice Note 17 (PN17) status. It said this raised potential insider trading concerns, given the price-sensitive information available leading up to the PN17 bourse announcement on March 29. While the former executive director in question is unnamed, a bourse filing dated April 24 listed that Bintai Kinden former executive director Noor Azri Noor Azerai dumped his entire shareholding of 12.6 million shares or 1.34% stake in Bintai Kinden on March 28 and 29. He disposed of a block of 280,600 shares on March 28 at seven sen apiece. This was followed by the disposal of 12.32 million shares on March 29 at six sen per share. Based on back-of-the-envelope calculations, Noor Azri sold his 1.34% stake for RM758,806. It is worth noting that the filing dated April 24 listed the sale as “disposal in the open market due to margin call (forced selling)”, but this was later amended in a follow-up announcement half a month later on May 10 which labelled it just as a “disposal”. Back in July 28, 2021, days after he first joined Bintai Kinden’s board as an executive director at the age of 22, Noor Azri acquired three million shares, then a 0.79% stake, for RM1.08 million. The alleged insider trading claim is just one of the summary findings Bintai Kinden provided in its filing on Tuesday (Sept 5) after an independent law firm presented the findings of the internal probe into the three unnamed directors. Note that just prior to the PN17 company announcing the commencement of the internal probe, four of its directors resigned from the board. The directors who resigned weeks before the investigation were Noor Azri, former non-executive chairman Datuk Ibrahim Othman, non-executive vice and deputy chairman Ong Choon Lui and former independent non-executive director Mohd Shakir Suhaimi. Both Ibrahim and Mohd Shakir joined the company’s board in March 2021. Ong has sat on the board since August 2000, then as a non-executive director. Market manipulation, unauthorised transactions and withdrawal Besides claims of insider trading, Bintai Kinden also flagged a series of unauthorised shares and cryptocurrency trading transactions, which it noted was mainly Bintai Kinden internal probe: Ex-ED committed insider trading, unauthorised share transactions BY IZZUL IKRAM theedgemalaysia.com BY MANUEL BAIGORRI & ELFFIE CHEW Bloomberg committed by the company’s former executive director, in his capacity as executive director of its wholly-owned unit Bintai Trading Sdn Bhd (BTSB). From these, it noted that there were irregularities in BTSB’s trading in Malaysian Genomics Resources Centre Bhd (MGRC) and Emico Holdings Bhd shares, where a total of 98 of such transactions failed to comply with necessary bourse announcement requirements, despite BTSB at the time having already crossed the substantial shareholder threshold. It is worth noting that at the time, Noor Azri joined MGRC’s board end-December 2021 as an independent and non-executive director and was later redesignated as executive chairman May this year. The company also underlined there were observable recurring patterns in MGRC share trading by BTSB, where intervals between announced transactions allegedly “seem timed to evade market detection, indicating possible market manipulation through wash-trading techniques”. These unauthorised transactions continued despite Bintai Kinden’s board issuing a stock halt directive on May 5. “This included transactions on the shares of SNS Network Technology Bhd, EG Industries Bhd, and MGRC. A concerning ‘Buy High & Sell Low’ trading pattern was identified, resulting in estimated losses of RM204,608.75,” the company said. “In light of these findings, the board has decided to lodge an official report with both the local police and Bursa Securities, as well as the Securities Commission Malaysia,” it added. Shares in Bintai Kinden ended unchanged at 7.5 sen, giving the group a market capitalisation of RM70.38 million. laborations and strategic partnerships, and hopes to grow sustainably throughout its geographic footprint, a spokesperson said. The renewed talks between Axiata and Sinar Mas would follow other unsuccessful attempts in previous years, Bloomberg News has reported. XL Axiata had 58 million subscribers as of June 30, according to its latest financial presentation. Axiata owns about 66% of the firm. Smartfren, a unit of Sinar Mas, had 36 million customers as of the end of 2022, according to its annual report. The Indonesian telecommunications market has recently been consolidating. Last year, CK Hutchison Holdings Ltd and Qatar’s Ooredoo merged their Indonesian telecom businesses in a US$6 billion transaction as they sought to fend off competition in Southeast Asia’s biggest market by subscribers.
wednesday september 6, 2023 7 The E dge C E O m o rning brief is your company one of them? honouring Malaysia’s outstanding corporate performers TM Main Sponsor Official Car Supporting Sponsor
WEDNESDAY SEPTEMBER 6, 2023 8 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Sept 5): The government’s subsidy for the vast amount of repackaged cooking oil in the market have affected sales, said FFM Bhd chief executive officer Jeremy Goon. “One of the products that has been contributing to that (lower sales) was the cooking oil segment. It is challenging to manage because there is a cooking oil subsidy scheme which affects not just our brands but also cooking oil brands across the board,” he said at the group’s press and analysts briefing session for the first half of 2023 (1HFY2023) on Tuesday (Sept 5). The government’s cooking oil subsidy which began in June 2007, was provided only for 1kg cooking oil packed in polybags priced at RM2.50 each, compared to the market price of RM9 each meant for consumption of Malaysian families from the B40 (bottom 40% income) group. The Domestic Trade and Cost of Living Ministry said it will introduce a subsidy programme targeting packet cooking oil in stages next year, to benefit the B40 group, M40 (middle 40% income group) and the micro-entrepreneurs. “We along with all the other cooking oil brands will be affected by large volumes of subsidised oil, especially in the pouch bags in the market. It will continue to be challenging for all the cooking oil brands out there if the subsidy continues,” he added. He added that despite the competition, the company had not experienced a large Govt’s subsidised cooking oil affects sales, says FFM KUALA LUMPUR (Sept 5): PPB Group Bhd is cautious of potential renewal of geopolitical tension between Ukraine and Russia, along with unpredictable weather conditions that could choke grain and exert impact on the performance of the group’s grains and agribusiness segment for the rest of the year. PBB’s managing director Lim Soon Huat emphasised that potential supply risks on the downside could increase cost pressures in procuring raw materials for the group. “Downside supply risks could affect the performance of the group’s grains and agribusiness segment for the rest of the year,” he said at the group’s press & analyst briefing session for the first half of 2023 (1HFY2023) on Tuesday. Meanwhile, FFM Bhd chief executive officer Jeremy Goon said the group is monitoring the collapse of the grain deal between Russia-Ukraine, aimed at easing global food price rises by enabling Ukraine to export grain from its Black Sea ports. FFM is a 80% subsidiary of PPB and is the largest flour miller in Malaysia. “We have bought from Russia and Ukraine in the past. We have monitored the grain corridor quite closely in the last volume decline in cooking oil in the first half of the year, as it lowered the prices to not more than 10% in order to compete with the subsidised cooking oil in the market. It is understood that the government is maintaining the distribution quota of 60,000 tonnes of the repackaged cooking oil monthly — a subsidy that has been in place since 2016 after the Domestic Trade and Cost of Living Ministry took over the supply of the daily necessity from the Malaysian Palm Oil Board. Separately, Goon said the group will not respond with a price increase in its consumer products ranging from bakery and other fast-moving consumer goods under its own brands, as well as other international and local brands. FFM is 80%-owned by PPB Group. The company is the largest flour miller in Malaysia and has interests in flour milling operations in Vietnam, Indonesia, Thailand and China. PPB’s shares were unchanged at RM15.70 at market close on Tuesday, valuing the diversified group at RM22.3 billion. year. Fortunately for us, since the grain war, other origins of grain have shown good production,” said Goon. He said it is vital for the group to seek alternative grain producing countries due to difficulties of getting global insurers to cover grain ships travelling through Black Sea ports. It was reported that Russia has blockaded Ukrainian ports since its invasion last One of the products that has been contributing to the lower sales was the cooking oil segment, said FFM Bhd chief executive officer Jeremy Goon. BY PRIYATHARISINY VASU theedgemalaysia.com PPB cautious of geopolitical tension resurgence that could choke grain supply BY PRIYATHARISINY VASU theedgemalaysia.com Read the full story year, and threatened to treat all vessels as potential military targets. As of now, FFM has stopped buying grain from Russia and Ukraine, he said, adding that PPB used to source less than 20% of its grain from these two grain staple countries. PBB’s managing director Lim Soon Huat emphasised that potential supply risks on the downside could increase cost pressures in procuring raw materials for the group. MOHD IZWAN/ THE EDGE FILEPIX THE EDGE
WEDNESDAY SEPTEMBER 6, 2023 9 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Sept 5): Axis Real Estate Investment Trust (Axis REIT) is suing a former tenant at Axis Steel Centre @ SiLC in Nusajaya, Johor to recover outstanding rental payments amounting to RM105.4 million. The REIT said the suit against Yongnam Engineering Sdn Bhd (YESB) was filed by its trustee, RHB Trustees Bhd, at the High Court in Johor Bahru on Tuesday. In a filing with Bursa Malaysia, Axis REIT said it had on May 8 terminated the lease agreement entered with YESB in November 2014 after YESB defaulted on rental payments. In December last year, RHB Trustees commenced civil action against YESB and its corporate guarantor, Yongnam Holdings Ltd, over RM8.46 million in unpaid rental and other charges YESB owed as of Dec 21, 2022. It also commenced distress action against YESB over unpaid rental in January and February 2023 amounting to RM2.35 million. The distress action was then carried out by the court on July 24, with the seized items in the property sold for RM1.2 million. “This amount of RM1.2 million will be utilised to offset part of the total outstanding sums due and owing by the defendants to the trustee under the lease agreement in respect of outstanding rental due and owing for January and February 2023. “Further to the termination notice and the completed distress action, the trustee intends to recover the outstanding rental payments from YESB including rentals for the unexpired period of the lease agreement of RM105.4 million,” said Axis REIT. It added that its manager, Axis REIT Managers Bhd, is currently unable to estimate and assess the financial and operational impact of the lawsuit on the REIT as this depends on the outcome of the suit. Shares in Axis REIT ended one sen or 0.55% lower at RM1.82 on Tuesday, giving the REIT a market capitalisation of RM3.17 billion. Axis REIT sues ex-tenant to recover RM105 mil in outstanding rental payments KUALA LUMPUR (Sept 5): Global demand for rubber gloves may only recover in the second half of next year at the earliest, said Hartalega Holdings Bhd, which is still bracing for industry-wide headwinds caused by an acute oversupply. According to its chief executive officer Kuan Mun Leong, the utilisation rate of its production lines is currently hovering between the 40% and 50% level, given market demand for gloves remains “depressed”. With margin compression due to low average selling prices (ASP) and utilisation rate, the group, which suffered a net loss for three consecutive quarters, does not expect a turnaround in its financial year ending March 31, 2024 (FY2024). “For this year, the year 2023, we do not see an uptick in demand because of this ongoing phenomenon... For guidance, I think the following quarters will still be challenging as we have mentioned the demand is still very depressed at the moment. “We expect demand to recover towards the second half of 2024. So from here to then, it will still be changing,” Mun Leong told reporters during a press conference following its annual general meeting. However, he believed that the glove demand is at the bottom. The recovery will be driven by the resumption of re-stocking activities as stockpiles caused by panic buying during the Covid-19 pandemic expire, he said. Similarly, the group cautioned that ASP for gloves will only recover after the demand for gloves picks up, albeit at a gradual pace. Until then, the group’s glove ASP will remain low due to purchase volume also being at a low level, said Hartalega’s chief business officer Kuan Mun Keng. “For the ASP to revive, the volume needs to come in first. Meaning the excess stocks Hartalega sees glove demand recovery in 2H2024 has to be depleted first,” Mun Keong noted. The group’s glove ASP was at around US$20 per 1,000 pieces at the end of June this year, compared to China players’ US$14. Malaysian glove players’ glove ASP are currently around US$16. Nonetheless, owing to the geopolitical tensions, Mun Leong said Malaysian glove manufacturers, being the world’s leading glove suppliers, will remain a buying destination for buyers. Not discounting diversification In view of the challenging operating environment in the glove industry, Hartalega is looking to diversify its business. “We are in healthcare, for sure we are interested in businesses within the healthcare industry. At this point in time we don’t have anything serious in sight yet, but we are looking. We are extremely prudent and careful when we look at investment. It has to be very accretive to the core business. “We have a cash pile of RM1.6 billion and we are again very, very careful, very, very selective in how we use the cash,” said Mun Leong. For the first quarter ended June 30, 2023 (1QFY2024), Hartalega posted a net loss of RM52.47 million versus a net profit of RM88.28 million a year earlier as revenue for the period halved to RM440.04 million from RM845.67 million previously. Loss per share was 1.54 sen compared to earnings per share of 2.58 sen previously. On a quarter-on-quarter basis, net loss narrowed from RM302.76 million on the back of revenue of RM515.74 million in 4QFY2023. Prior to that, it recorded a net loss of RM31.91 million in 3QFY2023. Shares of Hartalega settled up one sen or 0.51% at RM1.98, giving it a market capitalisation of RM6.78 billion. BY JUSTIN LIM theedgemalaysia.com BY ANIS HAZIM theedgemalaysia.com (From left) Hartalega chief business officer Kuan Mun Keng, executive chairman Kuan Kam Hon and CEO Kuan Mun Leong. SAM FONG/THE EDGE
WEDNESDAY SEPTEMBER 6, 2023 10 THEEDGE CEO MORNING BRIEF HOME BENGALURU (Sept 5): Bank Negara Malaysia (BNM) will hold its key policy rate at 3% on Thursday (Sept 7), adopting the same no-change stance as most of its Asian peers amid signs of moderating economic growth and cooling inflation, a Reuters poll of economists showed. Inflation in the Southeast Asian nation dropped to a two-year low of 2% in July and the central bank, which does not particularly target inflation in setting monetary policy, said it would cool further. That suggests BNM, having raised rates by a modest 125 basis points in the current cycle, has concluded its tightening but will keep rates higher for longer as the weak ringgit, down over 5% this year, may prevent inflation from falling quickly. All 27 economists in the Aug 29-Sept 4 Reuters poll forecast the central bank would keep its benchmark overnight policy rate unchanged at 3% at its Sept 7 meeting while medians showed it there through 2024. “BNM has limited reasons to change its policy stance for its upcoming meeting ... inflationary pressures are easing, keeping the hawkish bias in check. BNM’s focus will remain on financial stability and external risks,” said Lavanya Venkateswaran, senior Asean economist at OCBC Bank. “BNM’s ‘slightly accommodative’ policy stance remains supportive of slowing growth, hence there is no imminent need to ease policy. Moreover, BNM’s rate hiking cycle was less aggressive than regional peers implying that the room to par back rate hikes is lower.” A strong majority, 24 of 25, forecast the central bank to hold rates at 3.00% until the end of this year. Only one expected a 25 basis point hike to 3.25% in November. Some economists cautioned inflation could rise again once pandemic-era subsidies were lifted, suggesting the fight against price rises is not yet over. However, slowing domestic economic growth, coupled with a sluggish global economy and a weaker China — Malaysia’s largest trade partner — would compel the central bank to remain on hold for an extended period. Among those who had a view on rates until the end of 2024, over 80% of economists, 15 of 18, forecast the central bank would hold rates. Of the remaining three, one said rates would peak at 3.25%, while two expected them to fall to 2.75%. That was despite its regional peers, who have also completed their monetary policy tightening cycles, being forecast to start easing in the first half of next year. “Leading indicators still point towards subdued third quarter growth ... the MPC (Monetary Policy Committee) will likely keep policy slightly accommodative with the rate maintained at 3%. Our base case remains for an extended pause through 2024,” said Kit Wei Zheng, director, head of Asean Economics at Citigroup. “The MPC may choose to wait until there is greater clarity over the timing and magnitude of subsidy reform before deciding whether or not to hike.” Bank Negara to hold rates at 3% through end-2024 — poll KUALA LUMPUR (Sept 5): Bank Negara Malaysia (BNM) is working closely with Payments Network Malaysia Sdn Bhd (PayNet) and the financial industry to set up the national fraud portal, which is expected to be ready by the middle of next year. BNM deputy governor Datuk Marzunisham Omar said the portal aims to automate and enhance the ability to trace fund movements as well as identify money mules. “BNM is working with the financial industry and PayNet to improve the National Scam Response Centre by automating the process of detecting and tracing the movement of funds stolen from financial scam victims. “We hope that by doing this, we will increase the likelihood of tracing and freezing the fund, and protect the victims from losses,” he said after the media workshop and panel discussion on financial scams at Lanai Kijang on Tuesday. Marzunisham noted that the rapid evolution of technology offers many benefits to the financial industry and consumers alike, but it has also led to the rise of artificial intelligence (AI)-powered scams. “This is something that we have to guard against, we don’t want to underestimate the scammers as they use various modus operandi to scam the people,” he said. Meanwhile, during the panel discussion session, BNM’s technology risk specialist Ng Lee See warned that globally, AI technology has been used to digitally manipulate or generate fake visual and audio content featuring well-known personalities. BNM: National fraud portal to be ready by mid-2024 In some instances, it has led victims to believe that an investment scheme is genuine, therefore it is important that the public be made aware of scammer’s tactics, and to always check on investment scheme licences prior to making investments, she said. She said members of the public could refer to the Securities Commission’s website to see the list of companies or individuals licensed to carry out financial planning or investment services, as well as BNM’s website to see the list of individuals or entities regulated by the central bank. At the same time, to combat AI-driven digital crimes, Ng said financial institutions must keep abreast with current events in terms of investment laws and cybersecurity operations. “The banking industry must also support the government’s efforts to strengthen the telecommunication infrastructure’s security,” she added. She noted that the banking industry has done pretty well in terms of detecting scams using the Android Package Kit (APK), which has led to a decline in such cases. “However, scammers are always changing their tactics, and scams are becoming more sophisticated and complex,” said Ng. Bernama BY ANANT CHANDAK Reuters
WEDNESDAY SEPTEMBER 6, 2023 11 THEEDGE CEO MORNING BRIEF HOME JOHOR BAHRU (Sept 5): The Ministry of Agriculture and Food Security (KPKM) is confident that white rice production in the country will recover within a month through the Special Local White Rice Programme. Minister Datuk Seri Mohamad Sabu said several intervention steps have been taken through the programme, including directing rice millers to increase production by 20% as a short-term measure. He said a number of engagement sessions with paddy industry stakeholders will be held on Thursday to discuss methods and mechanisms for the recovery of rice production. “Through these engagement sessions, KPKM will clarify the methods and mechanisms with regard to the supply of local rice in the country, covering medium- to long-term solutions,” he said when asked to comment on the ministry’s strategy to boost national production of local white rice. He was speaking at a press conference after surveying the supply of local white rice at Giant supermarket in Tampoi here on Tuesday. Mohamad said the ministry’s earlier initiatives, such as the Mini Sekinchan Smart Big Scale Padi Field project, are expected to help in the recovery of local rice production. He said this is because the project can produce a massive harvest of 11 tonnes of paddy per hectare. Mat Sabu sees local production of white rice recovering within a month KUALA LUMPUR (Sept 5): Deputy Finance Minister I Datuk Seri Ahmad Maslan said that the government is still studying the issue of a “rising” pension bill even though many quarters have urged urgent reform to the pension scheme for civil servants, given that the operating expenditure (opex) continues to rise at an unsustainable rate. The burden to the opex notwithstanding, Ahmad Maslan said that the government remains committed to providing a pension for retirees. “At the moment, the government is still studying this issue (rising pension bill), including the salaries of civil servants. The high amount [from pensions] is inevitable. Also, the number of pensioners is increasing every year,” he told media after officiating at a KWAP’s Contributors Forum on Tuesday. According to the minister, the government records an estimated 32,000 new retirees every year and spends RM31 billion on the pensions of more than 900,000 retirees, including statutory bodies and Armed Forces Fund (LTAT). As at end-December, a total of 768,947 retirees are pension recipients who come under Retirement Fund (Incorporated) (KWAP). In 2010, RM58.2 billion or 38.4% of the government’s total opex of RM151.6 billion went towards the salaries and benefits of public sector workers. That number grew to a whopping 52.3% or RM114.9 billion by 2021, and is expected to rise to RM115.2 billion in 2022 (40.5%) and RM119.8 billion in 2023 (44%), according to the Fiscal Outlook and Federal Government Revenue Estimates 2023. The federal government’s opex is funded entirely from government revenue. Talks of reforming the pension system were raised after the Pakatan Harapan (PH) administration came into power in 2018, but the coalition government collapsed soon after in February 2020. In September 2019, former prime minister Tun Dr Mahathir Mohamad said the government was looking at various mechanisms that it hoped would reduce the government’s burden, while not shortchanging civil servants and retirees. Also at that time, former JPA director general Borhan Dolah had said that newGovt still studying ‘growing’ pension bill issue, but committed to continuing pension for retirees — Ahmad Maslan BY SYAFIQAH SALIM theedgemalaysia.com Bernama He said so far the supply of local white rice is sufficient and has been maintained at the controlled price of RM2.60 per kilogramme since 2008, which shows that the ministry’s efforts to restore rice production are in line with increased demand, following the hike in the price of imported rice. Queried if it was true that 95% of the national rice production was controlled by middlemen, Mohamad dismissed this as mere hearsay. Mohamad repeated that KPKM and the Ministry of Domestic Trade and Cost of Living are working together to combat the issue of switching labels on rice packaging to manipulate market prices, which had been reported previously. “This issue is being dealt with. The national rice regulatory body is constantly monitoring the situation and taking action. Insya-Allah, it is under control now and enforcement is according to the existing law,” he said. ly appointed civil servants may no longer be pensionable, possibly from 2020, but be given an improved contract scheme to reduce the financial burden on the government by up to RM5 billion a year. KWAP’s gross fund size stood at RM184.5b as at July KWAP, which is said to be on track to achieve its RM200 billion gross fund size by 2025, has achieved a total gross fund size of RM184.5 billion as at July 2023. According to Ahmad Maslan, about 40% of the funds are invested in fixed income, followed by public equity (40%), private equity (10%) and real estate (10%). Approximately 80% of the funds are invested in the country and 20% are international investments, said the minister. Since KWAP’s incorporation in March 2007 up to July this year, its cumulative contribution fund stood at about RM57.4 billion out of the total gross fund size of approximately RM184.5 billion. The contribution collection comprises RM15.3 billion from federal government contribution, RM25.8 billion from government shares and RM16.3 billion from employers contribution, which consist of statutory bodies, local authorities and secondment agencies. Currently, there are 482 contributing agencies in Malaysia, with 192 employers from statutory bodies, 151 from local authorities and 139 from secondment agencies, contributing for approximately 177,000 employees nationwide who are under the public sector pension scheme.
WEDNESDAY SEPTEMBER 6, 2023 12 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Sept 5): The Kota Bharu Election Court has struck out an election petition for the Gua Musang parliamentary seat after the petitioner, Mohd Azmi Mahmood, fired his team of lawyers, which included senior counsels Datuk Mohd Hafarizam Harun and Tan Sri Muhammad Shafee Abdullah. Lawyer Yusfarizal Yusoff, who appeared for the respondent Datuk Mohd Azizi Abu Naim, confirmed the matter when contacted by The Edge. “The Gua Musang petition was struck out as Ku Li’s (Tengku Razaleigh Hamzah) representative fired his team of lawyers including Shafee and Hafarizam,” he said in his message to the media. He added that the court was shown a letter dated Sept 4 from Mohd Azmi to Hafarizam’s firm confirming the termination of the counsel’s services. Yusfarizal also confirmed that the respondents had received a copy of the letter on Tuesday morning. In the copy of the letter seen by the media, Mohd Azmi said the group of counsels had no right to act on his behalf in the petition but thanked them for their services thus far. Mohd Azmi had filed the petition on behalf of Barisan Nasional candidate Tengku Razaleigh to nullify the Gua Musang election results, among others, based on allegations of bribery. Tengku Razaleigh previously held the constituency for 11 terms and lost to Bersatu’s Mohd Azizi by 163 votes in the 15th general election (GE15) in November last year. In GE15, Mohd Azizi had contested under the PAS banner. In February this year, the election court had accepted the three issues in the preliminary objection raised by Mohd Azizi and had thrown out the petition. However, the apex court on June 19 allowed Mohd Azmi’s appeal and ordered for the matter to be sent back to the High Court, so its full merits could be heard. The Edge has reached out to both Hafarizam and Shafee for comments. Read also: Ahmad Amzad sworn-in as Kuala Terengganu MP Gua Musang election petition struck out as petitioner fires legal team KUALA LUMPUR (Sept 5): The Ministry of Transport (MOT) has proposed that the loan fund provided to domestic shipping company operators be continued in Budget 2024, which will be tabled next month. Minister Anthony Loke Siew Fook said the maritime sector development was emphasised, particularly on the environmental-friendly agenda, during the ministry’s Budget 2024 consultation session with the Ministry of Finance. “The maritime sector was given attention in the consultation and we wanted the government to establish a loan fund under Bank Pembangunan Malaysia Bhd for companies and domestic shipping operators to move towards the ownership of environmental-friendly vessels. “Local vessels must reduce greenhouse gas emissions to achieve carbon neutrality and to move in that direction, they need funds to carry out modifications of existing ship engines, requiring large capital investment,” he told reporters after launching the Global Shippers Roundtable on Tuesday. The roundtable was organised by the Malaysian National Shippers’ Council and Malaysia Productivity Council with the theme “Navigating the Waves of Unpredictability: Building Shippers’ Resilience for the Next Normal”. Loke also said that modifications of existing ship engines are very important and in line with the demand of the world market which requires ships and cargo to be environmentally friendly and not polluting the environment. The Federation of Malaysian Manufacturers president Tan Sri Soh Thian Lai said the requirement to compete in the international markets has changed significantly over the past few years and buyers no longer base their decisions solely on price. He said policymakers, numerous stakeholders and consumers now have different expectations and are more concerned about the significance of adopting sustainability measures. “Worldwide, shippers must invest in developing sustainable export strategies that MOT proposes maritime development fund to continue in Budget 2024 — Loke promote and adopt environmental, social and governance principles in their production process and global supply chains. He said shippers would need relevant certifications, standards, labelling and global endorsement in order to compete on a global scale, especially in high-value markets. “To do this, we must work concertedly to make sure that trade policies are adaptable to meet these developments. “We must also develop capacity-building programmes to fully realise our potential in the rapidly evolving global trade environment,” he said in his speech at the same event. In Budget 2023, the government provided the Maritime and Logistics Financing Scheme Incentive worth RM1 billion to bolster the growth of the country’s maritime industry which needed a lot of support. Minister of Finance Tengku Datuk Seri Zafrul Abdul Aziz announced that the fund, which aimed to revitalise and restore the shipping industry, would also be extended to the oil and gas supporting industries as well as the shipbuilding and repair sector. In November 2020, Budget 2021 extended the Maritime and Logistics Development Scheme, the Sustainable Development Financing Scheme, the Tourism Infrastructure Scheme and the Public Transport Fund until Dec 31, 2023 with a fund size of RM3.7 billion. Prior to that, the government relaunched the Maritime Fund (MF 2.0) worth RM1.5 billion via Bank Pembangunan Malaysia Bhd to inject modernisation into the country’s maritime sector in 2019. Bernama BY TARANI PALANI theedgemalaysia.com SHAHRILL BASRI/ THE EDGE
WEDNESDAY SEPTEMBER 6, 2023 13 THEEDGE CEO MORNING BRIEF HOME NEWS IN BRIEF Maybulk to offload vessel to Tokyo Century for RM140 mil KUALA LUMPUR (Sept 5): Malaysian Bulk Carriers Bhd (Maybulk) is to sell its Alam Kekal bulk carrier to Japan-based specialty financing services provider and equipment leasing group Tokyo Century Corp, for ¥4.43 billion (RM140.06 million). In a bourse filing on Tuesday, the dry bulk carrier operator said the price tag was derived based on the vessels’ RM140.02 million market value as appraised by an independent valuer, as well as RM112.22 million net book value as at end-December 2022. Maybulk expects a pro-forma net gain of RM23.6 million from the disposal — RM140.6 million disposal consideration against the RM112.22 million net book value and RM4.24 million in disposal expenses. The group expects the deal to be completed by Nov 15. — by Izzul Ikram KIP REIT’s RM80 mil acquisition of KIPMall Kota Warisan deemed fair and reasonable by independent adviser KUALA LUMPUR (Sept 5): KIP Real Estate Investment Trust’s (KIP REIT) proposed related-party RM80 million acquisition of KIPMall Kota Warisan in Sepang is “fair, reasonable and not detrimental” to noninterested unitholders, said independent adviser Asia Equity Research Sdn Bhd (AER). KIP REIT is purchasing the land piece together with the one-and-a-half storey commercial centre from Cahaya Serijaya Sdn Bhd. The all-cash deal is deemed a related party transaction as KIP REIT’s major unitholder Datuk Ong Kook Liong is also a director and major shareholder of Cahaya Serijaya. KIP REIT’s manager KIP REIT Management Sdn Bhd, where Ong is also managing director, has proposed an RM10 million private placement of up to 12.269 million units to part-fund the acquisition. Another RM47.93 million will be paid using bank borrowings, KIP REIT said. It said KIPMall Kota Warisan is expected to yield a rate of return of 7.91% per annum, which is higher than the average yield of KIP REIT’s other retail properties for the financial year ended June 30, 2023 of 6.54%. — by Adam Aziz CLMT to sell 3 Damansara office tower to Lagenda Properties for RM52 mil KUALA LUMPUR (Sept 5): CapitaLand M Trust (CLMT) will see the disposal of 3 Damansara Office Tower, which it acquired in 2015, to Lagenda Properties Bhd for RM52 million. The sale consideration is at a 4% premium to its valuation of RM50 million at end-July, said CapitaLand M REIT Management Sdn Bhd (CMRM) in a statement. Net proceeds of RM50.5 million from the sale will be used to repay borrowings, which will reduce CLMT’s gearing to 43.5%, from 44.1%, it added. This will help the entity in pursuing “higher yielding opportunities in the new economy sectors”, said CMRM CEO Tan Choon Siang. The proposed divestment, which it said is dividend-accretive, is expected to complete by 1Q2024. — by Adam Aziz Dayang Enterprise secures O&G maintenance contract extension from Shell in Sarawak and Sabah KUALA LUMPUR (Sept 5): Integrated oil and gas (O&G) service provider Dayang Enterprise Holdings Bhd’s wholly-owned unit Dayang Enterprise Sdn Bhd (DESB) has received a one-year and four-month extension to the company’s topside major maintenance services contract from Sarawak Shell Bhd and Sabah Shell Petroleum Co Ltd. In a bourse filing on Tuesday (Sept 5), the company said the contract’s new extended period runs from Aug 20, 2023, until Dec 31, 2024. Dayang Enterprise did not place a value on the extension as it noted that it will be based on work orders issued by Sarawak Shell and Sabah Shell throughout the extended period. The initial contract DESB was awarded from Sarawak Shell and Sabah Shell spanned a period of two years and three months from April 29, 2021, to Aug 19, 2023. — by Izzul Ikram Human Resources Minister V Sivakumar BERNAMA FILEPIX Foreign workers recruitment figures for three sectors to be decided on Sept 8 — minister KUALA LUMPUR (Sept 5): The number of foreign workers to be recruited for barbershops, textile shops and goldsmiths will be decided at a Cabinet meeting this Friday (Sept 8), said Human Resources Minister V Sivakumar. He said other details on the matter will be discussed in the meeting as well. “If there are any other details, I may announce it after Friday’s Cabinet meeting,” he said at a press conference after launching the National Training Index (NTI) here on Tuesday. On Monday (Sept 4), Prime Minister Datuk Seri Anwar Ibrahim announced that the government had approved a portion of the foreign worker intakes for the three sectors, which had previously been halted. However, Anwar set the condition that local youths should be trained to fulfil the demand in these sectors. — Bernama Pavilion REIT signs deals to power Pavilion KL, Intermark and Pavilion Bukit Jalil with RE KUALA LUMPUR (Sept 5): Pavilion Real Estate Investment Trust (Pavilion REIT) plans to purchase renewable energy (RE) under the Corporate Green Power Programme (CGPP) to power its malls. According to a bourse filing, Pavilion REIT’s trustee, MTrustee Bhd, entered into memoranda of understanding (MOUs) with two different consortiums consisting of RE players to facilitate its plan. For the Pavilion KL and Intermark malls, MTrustee inked an MOU with a consortium consisting of reNIKOLA Holdings Sdn Bhd, Sun Energy Ventures Sdn Bhd and Syarikat Osmania Logistics Sdn Bhd. Meanwhile, another MOU was inked with a consortium made up of 12 Solarpark One Sdn Bhd and Solarcap Sdn Bhd to facilitate a CGPP to power Pavilion Bukit Jalil. For both MOUs, Pavilion REIT noted that a corporate green power agreement (CGPA) is to be executed within 60 days of approval from the Energy Commission to participate in the CGPP. Touching on the salient terms of a prospective CGPA, Pavilion REIT said it is to span a 21-year term, with the solar power plant to be located in Pasir Mas, Kelantan. The plant is scheduled to be commercially operable in the third quarter of 2025. — by Izzul Ikram
wednesday september 6, 2023 14 The E dge C E O m o rning brief Partner Retirement planning is no longer what it used to be. Changing demographics and the new normal in the postpandemic economy are forcing a rethink and a shake-up. This is exacerbated by continued market volatility, black swans and rising cost of living. The way forward FOruM2023 FOruM2023 Saturday, 7th october 2023 8.30aM — 1.00PM Mandarin Oriental, Kuala luMpur REGISTRaTIon STaRTS 11th sept 2023, 9.00am watch this space for more details
WEDNESDAY SEPTEMBER 6, 2023 15 THEEDGE CEO MORNING BRIEF WORLD (Sept 5): Brent oil rallied to US$90 (RM419.50) a barrel for the first time since November as key Opec+ producers extended supply cuts that have tightened the crude market. Saudi Arabia extended its unilateral production cut by another three months as the kingdom seeks to support a fragile global market. The move will hold output at about nine million barrels a day, the lowest level in several years. Russia said it would curb 300,000 barrels a day of exports through year end, aligning with Riyadh. Crude’s latest upswing has been driven primarily by output cuts from Saudi Arabia and Russia that have helped to drain global inventories. The recovery in one of the world’s most important commodities may complicate the task facing leading central bankers as it could add a fresh jolt to inflationary pressures just as they try to determine if they’ve done enough to rein in the pace of price gains. Read also: Pump prices in US hit highest seasonal level in over a decade Brent oil hits US$90 a barrel after Opec+ extends supply curbs (Sept 5): Electric vehicle (EV) giant Tesla Inc says Australia should offer tax incentives to transform the mining nation into a hub for processing the minerals used to manufacture batteries. “Australia can be more than a ‘dig and ship’ nation,” Tesla chair Robyn Denholm told a conference in Canberra on Tuesday. The Biden administration’s Inflation Reduction Act, a climate bill signed into US law last year that offers tax credits to producers, is a “proven mechanism” for delivering the necessary investment, she said. Australia is among those nations with ambitions to disrupt China’s dominance of the supply chain for the batteries that power EVs. The government in Canberra released a Critical Minerals Strategy in June, which includes a target of luring A$500 million (RM1.49 billion) in foreign funding for projects vital to the energy transition. “The longer we wait, the greater risk we have of this opportunity passing us by as other countries — without necessarily as much underlying minerals — leapfrog us into capturing the most valuable parts of the battery supply chain,” said Denholm, who’s Australian. She said Tesla has spent over A$4.3 billion in Australian minerals in 2023, more than triple the A$1.3 billion it spent in 2021. Tesla urges Australia to give tax credits for battery industry Although Australia produces more than half the world’s lithium, the vast majority is shipped to China, which has a stranglehold on downstream processing into battery-grade chemicals. While there are three lithium refining projects being developed in Australia now, the country needs 30 more to “compete on the world stage,” Denholm said. China is a key production base for Tesla’s cars. Elon Musk’s company operates a factory in Shanghai that accounts for more than half the US company’s global output. Tesla’s vision is for every major region to host its own supply chain, co-located with manufacturing operations, Denholm said. Read also: Rise of China’s EV makers threatens Western firms, UBS says UBS predicts Western automakers’ global market share will slump to 58% from 81% by 2030. China’s Leapmotor looks to sell EV tech as it targets export growth The eight-year-old EV maker will target exports starting with Europe, Australia and New Zealand and five new models it is developing on a new platform. BY ANNIE LEE Bloomberg BY JAKE LLOYD-SMITH & JULIA FANZERES Bloomberg Tesla chair Robyn Denholm said the company has spent over A$4.3 billion in Australian minerals in 2023, more than triple the A$1.3 billion it spent in 2021. BLOOMBERG BLOOMBERG
WEDNESDAY SEPTEMBER 6, 2023 16 THEEDGE CEO MORNING BRIEF (Sept 5): A record selloff in Chinese stocks by global funds has pushed their positioning to the lowest since October, with money managers unswayed by the stimulus measures that have been coming through over the past few weeks. The average underweight position by global long-only managers is back to where it was before the reopening rally took off in late 2022, according to a Morgan Stanley quant analysis. Foreign funds sold about 90 billion yuan (RM58.2 billion) of mainland shares in August via the trading links with Hong Kong, the most in data compiled by Bloomberg going back to 2016. Global funds were again in retreat on Tuesday as a private survey showed China’s services sector cooling. That cut short a pickup in buying seen on Monday, when the latest easing of mortgage rules aided sentiment. The Hang Seng China Enterprises Index slid as much as 2.2%, giving back some of its 3.2% gain in the previous session. “Our latest positioning data shows that underweight China is a consensus among regional funds,” Morgan Stanley strategists led by Gilbert Wong wrote in a Sept 4 note. “Net outflows from active long-only managers on China/HK equities doubled in August versus that in July.” The recent volatility in Chinese equities underscores fragile sentiment. While Beijing’s stimulus drive has helped contain a rout, fundamental worries over the slowing economy and debt problems at developers are casting a pall over the longer-term outlook. Yet for some money managers such as Luca Castoldi, the slump is an opportunity to build positions. With the government following through its pledges to shore up the economy, “we are feeling confident in starting to add exposure to China,” particularly in technology and consumer discretionary shares, said Castoldi, a fund manager at Reyl Group in Singapore. Beijing’s efforts to boost housing sales by lowering down payments and loosening mortgage restrictions “is even better than our expectations,” and shows “the government is there to support the economy and will be ready to do even more if needed,” he said on Friday. Castoldi’s view is shared by Damian Bird, a manager of Polen Capital’s emerging-markets growth portfolio in London. “People aren’t giving credit for things that ultimately we think matter,” he said. “That’s why I think right now, there is an amazing opportunity to go into the market” for stocks that are less sensitive to newsflow but can deliver steady capital returns for the next five years, Bird said last week. Some bright spots are also emerging. Earnings estimates for tech stocks have been trending upwards since a March low, even as those for the broader benchmarks have remained largely unchanged. For Fredrik Bjelland, who manages the emerging-market equity fund at Skagen AS, the strategy of investing in Chinese stocks remains unchanged — focusing on corporate fundamentals and finding companies that can withstand macro challenges. Global funds slash China stock positions to lowest since October (Sept 5): Thailand’s Prime Minister Srettha Thavisin and his cabinet were sworn into office on Tuesday, nearly four months after a general election, with the new government set to unveil measures to tackle the high cost of living and near-record household debt. The prime minister and 33 ministers took the oath of allegiance before King Maha Vajiralongkorn at a traditional ceremony at the royal palace in Bangkok. Srettha will now present a policy-priority statement at a joint session of parliament likely to be held on Sept 11 to be followed by the first official cabinet meeting a day later that may decide on slashing diesel and electricity prices. The swearing-in draws curtains on Thailand’s new PM Srettha, cabinet sworn in as economic risks mount years and above. The so-called digital wallet plan is meant to stimulate consumption and investment, according to the prime minister. Srettha was elected prime minister last month after Pheu Thai reached an agreement with with military-backed and pro-royalist parties that swung the support of the influential Senate for the former property tycoon. The deal also saw Thaksin Shinawatra, the de facto leader of Pheu Thai, return from a 15-year self-exile and receive a partial royal pardon. While the upstart Move Forward Party won the most seats and popular votes in the May election, its leader Pita Limjaroenrat’s bid to take power as the head of a coalition of pro-democracy parties was thwarted by the Senate. The senate and pro-establishment parties opposed Move Forward’s plan to amend the controversial royal insults law. BY THOMAS KUTTY ABRAHAM & SUTTINEE YUVEJWATTANA Bloomberg BY HENRY REN Bloomberg Thailand’s Prime Minister Srettha Thavisin and his cabinet a post-election political stalemate that stemmed from a fractured result, causing a partial policy paralysis and exodus of foreign funds. Srettha’s coalition government faces the task of jump-starting Southeast Asia’s second-largest economy amid rising interest rates and a slowdown in exports. The immediate tasks awaiting Srettha, who also oversees the finance ministry, include the finalisation of the state budget for the fiscal year starting Oct 1. The government has already announced plans to cut energy prices and city-train fares and temporarily suspend debt repayment by farmers as part of a raft of measures to ease the cost of living and boost investment in the US$500 billion (RM2.33 billion) economy. Srettha’s Pheu Thai Party, which leads the 11-party coalition, has pledged to press ahead with a US$16 billion cash handout plan for about 55 million Thais aged 16 REUTERS WORLD
WEDNESDAY SEPTEMBER 6, 2023 17 THEEDGE CEO MORNING BRIEF WORLD SYDNEY (Sept 5): Workers at Chevron’s Gorgon and Wheatstone liquefied natural gas (LNG) projects in Australia plan a total strike for two weeks from Sept 14, a union alliance said on Tuesday, in a significant escalation of disputes over pay and conditions. Australia is the world’s biggest LNG exporter and the ongoing dispute has stoked volatility in natural gas markets, as traders worry about the risk of long-term disruption. The strike decision comes amid mediation talks hosted by the Fair Work Commission, Australia’s industrial arbitrator, which began on Monday and are scheduled to run every day this week, ahead of brief stoppages called by the union from Thursday. “The Offshore Alliance is escalating protected industrial action to demonstrate that our bargaining negotiations are far from ‘intractable’,” the union alliance said in a Facebook post. Chevron did not respond to a request for comment. Prolonged industrial action could disrupt LNG exports and likely increase competition for the super-chilled fuel, forcing Asian buyers to outbid European buyers to attract LNG cargo. The latest move by the union could be a sign that the mediation talks were not “progressing well”, ING said. “This is likely to provide some support to gas prices today and comes at a time when there is ongoing maintenance work at the Norwegian gas field, Troll, which has seen flows from Norway falling,” ING said in a research note. Wheatstone and Gorgon have the capacity to provide up to half Western Australia’s total gas consumption and on Tuesday the union alliance said some staff had offered to work through strikes to help repair the domestic gas plant at Wheatstone. Read the full story Chevron Australia labour row escalates with two-week walkout plan (Sept 5): Alan Joyce is stepping down early as head of Qantas Airways Ltd, an ignominious exit for one of aviation’s highest-profile leaders after claims the airline sold tickets for thousands of flights it had already cancelled. Joyce, who was due to hand over to chief financial officer Vanessa Hudson in November, will leave Sept 6, Qantas said in a statement Tuesday. She’ll now have the task of repairing the carrier’s tattered reputation with customers as regulators tighten their focus on Qantas’s dominance of Australia’s aviation market. Hudson’s premature succession shows an airline bowing to public anger over the alleged sale last year of seats on flights that were never going to take off. The scandal, the latest in a series of blows to Qantas’ reputation in recent months, has been amplified by the airline’s record-breaking profits. “In the last few weeks, the focus on Qantas and events of the past make it clear to me that the company needs to move ahead with its renewal as a priority,” Joyce, 57, said in the statement. Joyce’s unexpected departure after 15 years at the helm is an extraordinary concession, just weeks before a planned formal farewell at the airline’s annual general meeting. The Australian Competition & ConQantas CEO Alan Joyce steps down early after horror final weeks sumer Commission on Aug 31 sued Qantas for allegedly continuing to take money from ticket sales on more than 8,000 cancelled flights between May and July 2022. According to the regulator, Qantas kept selling tickets for an average of more than two weeks, and sometimes longer than a month. Qantas also allegedly took weeks to tell ticketholders on more than 10,000 flights that their services had been pulled. The watchdog is pursuing a record penalty of more than A$250 million (RM755 million) if the case is proven in court. The allegations that Qantas sold bogus seats to passengers was ultimately too much for the airline to weather without some attempt to limit the damage. Joyce, for years the public face of Qantas, was already under scrutiny for the airline’s levels of reliability and its retention of customers’ Covid flight credits. Pressure built on Joyce after he was grilled by a parliamentary committee last week over Qantas’s record profits during a cost-of-living crisis. For almost his entire tenure, Joyce forged a reputation as a ruthless, hardedged executive who seldom bowed to criticism. Read the full story BY ANGUS WHITLEY Bloomberg BY RENJU JOSE & LEWIS JACKSON Reuters BLOOMBERG REUTERS
WEDNESDAY SEPTEMBER 6, 2023 18 THEEDGE CEO MORNING BRIEF WORLD (Sept 5): Bytedance Ltd’s TikTok hired a UK firm to audit its data controls and protections in Europe, as the Chinese-backed app seeks to allay concerns over practices that have led to bans across the continent. TikTok engaged NCC Group Plc to assess security, audit flows of data in and out of the continent, and report incidents, vice president of public policy Theo Bertram said in an emailed statement on Tuesday. The company will validate that “only approved employees can access limited TikTok hires UK security firm to audit European data protection (Sept 5): SoftBank Group’s Arm is seeking a valuation of more than US$52 billion (RM242.3 billion) in its initial public offering, the chip designer said on Tuesday as it begins marketing for the biggest US stock market flotation of the year. SoftBank is offering 95.5 million American depository shares of the United Kingdom-based company for US$47 to US$51 apiece and is looking to raise up to US$4.87 billion at the top of the range, Arm said in a regulatory filing. The valuation that Arm is chasing now represents a climb-down from the US$64 billion valuation at which SoftBank last month acquired the 25% stake it did not already own in the company from its US$100 billion Vision Fund. Yet even with this more modest valuation ask, SoftBank would fare better than its US$40 billion deal to sell Arm to Nvidia Corp, which it abandoned last year amid opposition from antitrust regulators. The Japanese conglomerate will own 90.6% of Arm’s ordinary shares after the offering closes, the company said, adding that it will not receive any proceeds from the IPO. Arm has signed up many of its major clients as investors in its IPO, including Apple, Nvidia, Alphabet, Advanced Micro Devices, Intel and Samsung Electronics. The company said the ‘cornerstone investors’ have separately indicated an interest in buying a combined US$735 million of the ADS being sold. Arm’s listing, the biggest in New York since Rivian in late 2021, is expected to buoy the IPO market globally and fuel other startups toward going public as its success would signal the return of investor appetite for technology companies. It will also be a milestone for SoftBank, as it taps several marquee technology names as investors to drum up support for the company whose designs power more than 99% of the world’s smartphones. Arm, whose client list includes the world’s biggest tech giants, generates a big share of its revenue through royalty fees based on either the average selling price of the customer’s Arm-based chip or a fixed fee per chip. For the year ended March 31, Arm’s sales fell to US$2.68 billion, hurt mainly by a slump in global smartphone shipments. Unlike most loss-making but highgrowth tech companies that debut with lofty valuations but later plummet below list price, Arm is profitable. This is expected to significantly reduce investor anxieties, analysts have said. The company was founded in 1990, as a joint venture between Acorn Computers, Apple Computer, and VLSI Technology. Its shares traded on the London Stock Exchange and the Nasdaq from 1998 until 2016, when it was taken private by SoftBank in a deal that valued it at US$32 billion. Barclays, Goldman Sachs, JPMorgan Chase, and Mizuho Financial Group are the lead underwriters for the offering. If the underwriters exercise their right to buy shares in Arm in full as part of ‘greenshoe option’, it would take the IPO amount to be raised to US$5.2 billion. TOKYO (Sept 5): Sumitomo Mitsui Financial Group Inc injected ¥250 billion (US$1.7 billion) into SMBC Nikko Securities Inc, its brokerage arm that is seeking to recover from a market rigging scandal. The cash will help SMBC Nikko use its balance sheet to enhance its solutions business and improve customer service, the unit said in a statement on Tuesday. The investment by Japan’s second-largest banking group will bolster SMBC Nikko’s capital by nearly 30%, the Nikkei newspaper reported earlier. SMBC Nikko has been trying to restore profitability after a stock market manipulation scandal caused clients to take some of their business elsewhere. The company narrowed its losses in its fiscal first quarter, and saw the return of some customers, as well as other early signs of green shoots in dealmaking, calling this a “big step forward”. SoftBank’s Arm aims for over US$52 bil valuation in biggest US IPO of the year Sumitomo Mitsui injects US$1.7 bil into scandal-hit Nikko unit BY MANYA SAINI Reuters BY TAKASHI NAKAMICHI Bloomberg BY THOMAS SEAL Bloomberg data types,” according to Bertram. As a part of its so-called Project Clover in Europe, including the UK and Switzerland, TikTok has set up a data centre in Dublin to store data locally and is building two more in Ireland and Norway. European user data is now being migrated to the Dublin server farm, Bertram said. TikTok’s Project Clover, like its Project Texas in the US, is intended to reassure Europeans that the Chinese government can’t access their data. REUTERS REUTERS
WEDNESDAY SEPTEMBER 6, 2023 19 THEEDGE CEO MORNING BRIEF WORLD HONG KONG/BEIJING (Sept 5): China is set to launch a new state-backed investment fund that aims to raise about US$40 billion (RM186.52 billion) for its semiconductor sector, two people familiar with the matter said, as the country ramps up efforts to catch up with the US and other rivals. It is likely to be the biggest of three funds launched by the China Integrated Circuit Industry Investment Fund, also known as the Big Fund. Its target of 300 billion yuan (RM191.71 billion) outdoes similar funds in 2014 and 2019, which according to government reports, raised 138.7 billion yuan and 200 billion yuan respectively. One main area of investment will be equipment for chip manufacturing, said one of the two people and a third person familiar with the matter. President Xi Jinping has long stressed the need for China to achieve self-sufficiency in semiconductors. That need has become all the more pressing after Washington imposed a series of export control measures over the last couple of years, citing fears that Beijing could use advanced chips to boost its military capabilities. In October, the US rolled out a sweeping sanctions package that cut China’s access to advanced chipmaking equipment and US allies Japan and the Netherlands have taken similar steps. The new fund was approved by Chinese authorities in recent months, two of the people said. China’s finance ministry is planning to contribute 60 billion yuan, said one person. Other contributors could not be immediately learned. All the sources declined to be identified as the discussions were confidential. The State Council Information Office, which handles media queries on behalf of the government, the finance ministry and the Ministry of Industry and Information Technology did not immediately respond to Reuters requests for comment. The Big Fund also did not immediately respond to requests for comment. Investments to date The fundraising process will likely take months and it was not immediately clear when the third fund will be launched or if further changes will be made to the plan, said the first two sources. Backers of the Big Fund’s previous two funds include the finance ministry and deep-pocketed state-owned entities such as China Development Bank CapiChina to launch new US$40 bil state fund to boost chip industry, sources say (Sept 5): Huawei Technologies and China’s top chipmaker Semiconductor Manufacturing International Corp (SMIC) have built an advanced seven-nanometre processor to power its latest smartphone, according to a teardown report by analysis firm TechInsights. Huawei’s Mate 60 Pro is powered by a new Kirin 9000s chip that was made in China by SMIC, TechInsights said in the report shared with Reuters on Monday. Huawei started selling its Mate 60 Pro phone last week. The specifications provided advertised its ability to make satellite calls, but offered no information on the power of the chipset inside. The processor is the first to utilise SMIC’s most advanced 7nm technology and suggests the Chinese government is making some headway in attempts to build a domestic chip ecosystem, the research firm said. The firm’s findings were first reported by Bloomberg News. Huawei and SMIC did not immediately reply to Reuters’ request for comment. Buyers of the phone in China have been Teardown of Huawei’s new phone shows China’s chip breakthrough BY SHIVANI TANNA & MAX A Reuters BY JULIE ZHU, KEVIN HUANG, YELIN MO & ROXANNE LIU Reuters posting teardown videos and sharing speed tests on social media that suggest the Mate 60 Pro is capable of download speeds exceeding those of top line 5G phones. The phone’s launch sent Chinese social media users and state media into a frenzy, with some noting it coincided with a visit by US Commerce Secretary Gina Raimondo. From 2019, the US has restricted Huawei’s access to chipmaking tools essential for producing the most advanced handset models, with the company only able to launch limited batches of 5G models using stockpiled chips. But research firms told Reuters in July that they believed Huawei was planning a return to the 5G smartphone industry by the end of this year, using its own advances in semiconductor design tools along with chipmaking from SMIC. Dan Hutcheson, an analyst with TechInsights, told Reuters the development comes as a “slap in the face” to the US. “Raimondo comes seeking to cool things down, and this chip is [saying] ‘look what we can do, we don’t need you’,” he said. tal, China National Tobacco Corporation and China Telecom. Over the years, the Big Fund has provided financing to China’s two biggest chip foundries, Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor, as well as to Yangtze Memory Technologies, a maker of flash memory and a number of smaller companies and funds. Despite those investments, China’s chip industry has struggled to play a leading role in the global supply chain, especially for advanced chips. Investment managers The Big Fund is considering hiring at least two institutions to invest the new fund’s capital, said the three people. Several senior officials and former officials at SINO-IC Capital, the sole manager for the Big Fund’s first two funds, have been under investigation by China’s anti-graft authority since 2021. Even so, SINO-IC Capital is expected to remain one of the managers for the third fund, said two of the people. SINO-IC Capital did not immediately respond to a request for comment. Chinese officials have also reached out to China Aerospace Investment, the investment arm of state-owned China Aerospace Science and Technology Corporation, to discuss being one of the managers, said two of the people. China Aerospace Investment did not immediately respond to a request for comment. “Raimondo comes seeking to cool things down, and this chip is [saying] ‘look what we can do, we don’t need you’,” said Dan Hutcheson, an analyst with TechInsights. REUTERS
wednesday september 6, 2023 20 The E dge C E O m o rning brief world (Sept 5): The growth in euro zone’s gross domestic product (GDP) may come under pressure as corporates ease the pace of investments due to higher borrowing costs, HSBC economists said on Tuesday. The global bank expects rising interest rates to shave off more than 1% of euro zone’s GDP by 2025. HSBC, however, forecast a “smaller impact” to the British economy as a large chunk of corporate debt is now accounted for by ‘bounce back’ loans — government-guaranteed programs to help struggling small businesses hit by COVID-19 era lockdowns — fixed at the rate of 2.5%. A recession in Europe is “certainly possible,” HSBC said. However, the corporate sector will not tip the euro zone economy into one, as “fairly healthy” balance sheets limit the risk of businesses going bust, it added. “The impact has been delayed because, while debt costs are rising, firms are also earning more interest on their deposits which ballooned as a result of subsidies during the Covid-19 pandemic,” said Chris Hare, the lead senior economist at HSBC. HSBC points out that fast-growing lending rates matter more to European businesses than their US counterparts, as bank loans make up the vast majority of European corporate debt compared to US companies. “But ‘excess’ deposits are waning and we see the bulk of the interest rate headwinds emerging over the rest of this year and next,” Hare added. The euro zone returned to growth in the second quarter of this year, with a greater than expected expansion after narrowly avoiding a technical recession around the turn of the year. Rising debt cost to weigh on euro zone GDP — HSBC Meta to end Facebook news service in Europe’s biggest markets FRANKFURT (Sept 5): Consumer expectations for euro-area inflation inched up in July, remaining above the European Central Bank’s 2% target as officials ponder whether to hike or hold interest rates next week. Expectations for the next 12 months failed to slow, staying at 3.4%, the ECB said on Tuesday in its monthly survey. For three years ahead, they rose to 2.4% from 2.3%. The results are the last major piece of price data before a Sept 14 announcement that President Christine Lagarde has said will either extend or pause the ECB’s unprecedented campaign of monetary tightening. Numbers last week showed underlying inflation — a metric officials have been watching keenly — slowed in August, though the headline number held steady. (Sept 5): Meta Platforms Inc plans to stop promoting news content for people in three major European countries, the latest sign that the social network giant is trying to leave the industry behind. The company will “deprecate” the news tab — a Facebook feature to prominently display news material — for users in the UK, Germany and France. “We know that people don’t come to Facebook for news and political content — they come to connect with people and discover new opportunities, passions and interests,” the company wrote in an unsigned blog post on Tuesday. In recent years, Facebook has turned from news media as it dramatically shifted its business to focus on virtual reality and competing with the rising popularity of TikTok. Meta has also clashed with publishers about how they’re compensated and is blocking news material in Canada after the government passed a law requiring tech companies to pay news providers. In the Tuesday blog post, Meta said its existing agreements with publishers in the UK, Germany and France would be honoured “until they expire”. At 5.3%, both are significantly above the ECB’s 2% goal. Money markets maintained tightening wagers, placing one-in-four odds on a rate increase to 4% next week, while 15 basis points of hikes are priced by the year-end peak. ECB chief economist Philip Lane offered a cautiously optimistic take on prices earlier on Tuesday, saying slowing in goods and services gauges are welcome and that underlying pressures will keep weakening. “We do expect to see this famous core inflation come down throughout the autumn,” he told Irish website the Currency. “I would underline the fact that there has been some easing in goods inflation and services inflation, which is a welcome development.” Even so, ECB Governing Council member Pierre Wunsch signalled at the weekend that another increase in the deposit rate — currently 3.75% — may be warranted. “I’m inclined to say we maybe need to do a little bit more,” the hawkish Belgian central bank governor said, adding that the “idea that we’ll have to come to a pause at a certain point can’t be excluded.” With some policymakers fretting about the prospects for the euro zone’s 20-nation economy as rates rise, the ECB’s poll revealed that consumers have become a touch more negative, too. They see gross domestic product shrinking by 0.7% over the next 12 months, compared with 0.6% in June. ECB says consumer inflation expectations edged up in July by Zoe Schneeweiss Bloomberg by Mark Bergen Bloomberg Reuters Meta said on Tuesday its existing agreements with publishers in the UK, Germany and France would be honoured 'until they expire'. reuters
wednesday september 6, 2023 21 The E dge C E O m o rning brief world TAIPEI (Sept 5): Taiwan’s Foxconn, the world’s largest contract electronics maker and a major supplier for Apple, said on Tuesday revenue in August fell 8% year-on-year but forecast a better business outlook ahead of new product releases by major customer Apple. Foxconn, formally called Hon Hai Precision Industry Co Ltd, said revenue last month reached T$412.83 billion (RM60.2 billion), down 12% from July. Revenue in its smart consumer electronics products, including smartphones, declined in August on the year due to “customers’ conservative pull-in”, the company said in a statement without elaborating. Summer is traditionally a busy time for Foxconn as major vendors such as Apple gear up for new product launches ahead of the end-of-year holiday shopping season. “With the second half of the year peak season currently underway, operations will gradually ramp up,” Foxconn said. “The outlook for the third quarter, which will be better than the second quarter, is expected to increase at an on-quarter pace higher than the average level of the previous two years.” Apple will host its fall event on Sept 12, setting the stage for what analysts believe will be the unveiling of a new line of iPhones and smartwatches. Other businesses, including computing products such as PCs and cloud and networking products, declined from a year ago, Foxconn said, without elaborating. Foxconn beat estimates for second-quarter earnings unveiled last month thanks to a booming artificial intelligence sector but it retained a cautious outlook for this year due to global economic uncertainties. The company downgraded its outlook for full-year revenue to a slight decline from a previous guidance of flat as it joined other companies grappling with a weak global economy and a sluggish recovery in China. Foxconn’s Taipei-listed shares closed up 0.5% on Tuesday ahead of the release of its August sales, compared with flat in the broader market. Foxconn’s August sales drop 8% y-o-y, 3Q outlook better (Sept 5): Chinese developer Country Garden Holdings Co has paid interest on two dollar bonds within grace periods, avoiding its first default and bringing some respite amid a liquidity crisis that’s shaken the nation’s financial markets. Among the most indebted property firms in the world, Country Garden told some holders of the notes about the payment, the creditors said, asking not to be identified discussing a private matter. The builder — helmed by one of China’s richest women Yang Huiyan — had to pay a combined US$22.5 million (RM104.87 million) in interest on the two bonds within a grace period ending Sept 5-6, after missing an initial effective due date of Aug 7. The payments buy Country Garden time as it tries to sort through 1.36 trillion yuan (RM878.8 billion) of liabilities, but the debt crisis facing the company and the wider property sector is far from over. (Sept 5): OpenAI chief executive officer Sam Altman is the first person to get an Indonesian golden visa as Southeast Asia’s largest economy seeks to draw foreign investors. The country’s immigration authority issued a 10-year visa for Altman as he “has an international reputation and may bring benefits to Indonesia”, said Immigration Director General Silmy Karim in a statement. The co-founder of the ChatGPT creator would enjoy priority security screening at airports, longer stay periods and easier entry and exit processes, among other perks. Introduced last week to boost economic development, the new visa allows foreigners who make substantial investments in the country to remain for between five and 10 years. For example, an individual who invests US$350,000 (RM1.63 million) into shares of local public companies, savings accounts or government bonds is eligible for a five-year stay. It was not immediately known whether Altman, who visited Jakarta in June to speak on artificial intelligence, applied for the visa or has plans to invest in Indonesia. Since their debut last year, OpenAI’s tools have spurred a rush of investment into AI-supporting infrastructure by showcasing the potential of human-like intelligence using vast data centres. Country Garden bonds still trade at deeply distressed levels around 9-14 cents on the dollar despite recent gains, suggesting investors anticipate an eventual restructuring or liquidation rather than a state rescue. While China’s property market has shown tentative signs of recovery after government efforts to make homes more affordable, including relaxing mortgage rules in some of the biggest cities, a sharp rebound is unlikely given policymakers’ reluctance to back major stimulus. Investors are set to remain on edge as Country Garden and other top private peers not yet in default face more than US$8 billion of bond payments over the next six months. Country Garden didn’t offer a comment when reached on Tuesday. The company, which has developments in almost every province in China, is the latest developer to be jolted by the crisis in the nation’s real estate industry. Its annual report shows that about 60% of its projects are located in so-called Tier 3 and Tier 4 cities, which usually have a smaller population and weaker housing demand. “Country Garden can only turn around if home sales can turn around in Tier 3 and 4 cities,” said Eddie Chia, a portfolio manager at China Life Franklin Asset Management Co. “As of now it still trades like it has defaulted.” Country Garden avoids default with last-minute interest payments OpenAI CEO Sam Altman first person to get Indonesian golden visa Bloomberg Reuters Read the full story by Norman Harsono Bloomberg OpenAI chief executive officer Sam Altman Bloomberg
wednesday september 6, 2023 22 The E dge C E O m o rning brief world (Sept 5): Russia warned Tuesday it will treat any US move to station nuclear weapons in the UK for the first time in 15 years as an “escalation” after media reports indicated plans to deploy the bombs on British soil. “If this happens, it will be treated by us as an escalation, which will lead to the exact opposite of achieving the pressing task of removing all US nuclear weapons from Europe,” Russian Foreign Ministry spokeswoman Maria Zakharova said Tuesday, according to state news service Tass. The US Air Force has earmarked US$50 million (RM233 million) in funding for military housing at a UK air base. The language used to describe the purpose for the increased personnel usually refers to the handling of nuclear weapons, The Guardian reported last week. UK anti-nuclear group the Campaign for Nuclear Disarmament, or CND, said the move threatened a return of nuclear weapons to RAF Lakenheath, located 100 kilometres (62 miles) north of London, where 110 US atomic bombs were stored until their removal Russia warns of ‘escalation’ if US stations nuclear bombs in UK Bloomberg NEW YORK/SAN FRANCISCO (Sept 5): US lenders are holding onto large piles of cash as insurance against a slowing economy, continuing deposit outflows and looming tougher liquidity rules that could particularly impact mid-sized banks. The buildup is another example of a risk-averse approach from a sector still trying to regain its footing after a string of springtime bank failures, one which could result in restrained lending. “This is a logical response to a slowing economy and particularly to a scenario, where you’re seeing deposit outflows and you need to conserve cash,” said David Fanger, senior vice president at Moody’s rating agency. “What happened in March was a big wake-up call.” The collapse of Silicon Valley Bank and Signature Bank in March triggered massive deposit withdrawals and placed renewed focus on lenders’ financial health. More recently, the sector was hit by ratings downgrades when S&P last month cut credit ratings and revised its outlook for multiple US banks, following a similar move by Moody’s. Overall US banks’ cash assets were US$3.26 trillion (RM15.1 trillion) as of Aug 23, up 5.4% from the end of 2022. That was well above typical pre-pandemic levels, though down from the weeks immediately following the bank failures in March, Federal Reserve data shows. Cash assets at small and mid-sized lenders are up 12% compared with the start of the year; at the nation’s top 25 banks, cash holdings are up about 2.9%. Large banks including JPMorgan and Bank of America declined to comment beyond the disclosures, but pointed to their executives’ comments about reasons such as the Fed shrinking its balance sheet, falling deposits and higher short-term rates. The SVB failure triggered a sudden dash for cash at banks, which within two weeks had bulked up cash assets to US$3.49 trillion, the highest level since April 2022. That has pulled back since then, but is still almost twice as high as pre-pandemic. Banks need higher cash levels to meet liabilities as customers withdraw deposits, and to offset risks such as loan losses as the Federal Reserve keeps interest rates high to cool economic growth and inflation. “A lot of banks are taking steps to reduce risk and strengthen their balance sheets,” said Brendan Browne, S&P’s senior credit analyst for financial institutions. Regional banks are shifting more “earning assets,” such as those from lending activities, into cash or short-term securities, said Manan Gosalia, an analyst at Morgan Stanley, who covers regional banks. “As banks see further pressure on deposit costs, and as they hold higher levels of liquidity, we expect loan growth will continue to slow as we get to the end of this year,” he said. S&P forecasts 2% loan growth this year, after an almost 9% gain last year. Mid-sized banks are also worried about upcoming regulations, analysts said. US regulators have said they will likely impose stricter capital and liquidity requirements on banks with US$100 billion or more in assets. Since March, regulatory focus has heightened, prompting banks to focus on key capabilities in liquidity and asset liability management, bankers and analysts said. US banks hold US$3.3 tril cash amid banking crisis, slowdown worries by Saeed Azhar & Ann Saphir Reuters Read the full story in 2008 after persistent protests. Around 150 US B-61 nuclear gravity bombs are currently stationed in four European countries — Belgium, Germany, the Netherlands, Italy — as well as Turkey, the group said. The RAF Lakenheath base is operated by the US Air Force, according to its website. Reuters
wednesday september 6, 2023 23 The E dge C E O m o rning brief world Nvidia’s rally is going to show traders what a market bubble looks like, says Rob Arnott by Vildana Hajric Bloomberg Nvidia is today’s exemplar of that genre: a great company priced beyond perfection.” (Sept 5): For years now, stock traders have been getting so rich betting big companies will get even bigger that they’ve forgotten what a bubble looks like. They’re going to find out thanks to Nvidia Corp. So says Rob Arnott, renowned for his warnings on the dangers of bloated megacaps — and the designer of passive products for muting their supposed threat. Up 228% in 2023, Nvidia may be riding a revolution in computer science, but the stock is “a textbook story of a Big Market Delusion,” wrote the founder of Research Affiliates LLC. “Overconfident markets paradoxically transform brilliant future business prospects into even more brilliant current stock price levels,” Arnott wrote in a new research note, citing shares trading at around 110 times earnings. “Nvidia is today’s exemplar of that genre: a great company priced beyond perfection.” Would Nvidia’s popping bring down the whole market? “It’s very possible,” Arnott said in an interview. Shares of Nvidia fell 1.1% on Tuesday. Strong opinions about alleged bubbles are nothing new for Arnott, an architect of the so-called smart-beta system of rewiring traditional indices in ways that limit the influence of giant companies. He predicted in December 2020 that Tesla Inc would be a drag on the S&P 500 after it became the biggest company ever added to the benchmark. The stock and the index are both up about 20% since he made that case. Warnings about valuations have rained down on the Nasdaq 100 since long before Apple Inc became the first trillion-dollar US company five years ago. The index has returned nearly 15% annually since 2008. And virtually every effort to beat the main exchange-traded fund tracking the index has failed. Only one actively managed stock mutual fund in the US has managed to outperform the Nasdaq Invesco QQQ Trust Series 1 (ticker QQQ) over the past five, 10 and 15 years, a Bloomberg Intelligence analysis by David Cohne found. It did so thanks largely to a heavy concentration in Tesla. “You don’t want to be in a situation at this point where you’re betting against continued US innovation and the impacts that can have on the economy,” said Steve Chiavarone, senior portfolio manager and head of multi-asset solutions at Federated Hermes. “These companies, they’ve got more cash than God. So there’s a resiliency there, there’s balance sheets there that are altogether different than what you had a couple of generations ago.” Arnott says he’s not opposed to capitalisation-weighted indexing, in which a company’s representation in an index is based on its market value. “If you just want to own the market, sure, cap-weighting is fine. But there are issues — and the most flagrant issue is that anything that is today overpriced relative to its future prospects is overweight in your portfolio,” he said. Following the peak of the tech bubble in March 2000, the average stock in the S&P 500 rose by 25% over the next two years, while a cap-weighted index dominated by tech stocks fell by 21%. Arnott points to the list of tech firms that were the top 10 most-valuable at the peak of the dot-com bubble. None were able to beat the market by the time the next bull run peaked in 2007, and only Microsoft Corp and Oracle Corp are ahead today, two decades later. The tech behemoths that have powered the Nasdaq 100 rally have been standouts for years as they became beneficiaries of scalable business models that allowed them to generate strong earnings and cash-heavy balance sheets. They look “fantastic” when viewed over specific time periods, including since 2014, when they really started to take off. “If you cherry pick right now, you can’t beat the Qs.” But bullish sentiment towards Nvidia — which leads the market in artificial intelligence (AI) processors — reflects too much certainty that its products won’t be displaced by competitors, he says. Many investors are buying it with the assumption that its size — at roughly US$1.2 trillion (RM5.59 trillion) — makes it a “safe play”. But it’s not “too big to fail,” it’s “too big to succeed,” according to Arnott. “The risk that we’re wrong, that Nvidia’s off to incredible things and will go up another 10-fold in the coming 10 years is possible,” he said. “I would say it’s not plausible, and therefore I’m comfortable calling it a bubble.” Palantir Technologies Inc fell 25% in August, its biggest monthly drop in a year, as analysts continued to turn bearish on the stock. Morgan Stanley downgraded its recommendation on the data-analysis software company’s shares, saying its valuation reflects “AI euphoria,” but that any tailwind from this trend will take time to materialise. bloomberg
wednesday september 6, 2023 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) Classita Holdings Bhd 496.10 0.010 0.085 -76.71 104.8 Ekovest BHD 125.60 -0.025 0.535 57.35 1442.3 Malaysian Resources Corp Bhd 78.00 -0.025 0.460 55.93 2055.1 Sapura Energy Bhd 66.10 0.000 0.055 57.14 878.8 UEM Sunrise Bhd 63.90 -0.055 0.685 168.63 3465.1 Top Glove Corp Bhd 58.60 0.020 0.755 -16.57 6046.2 Kanger International Bhd 56.40 0.010 0.050 25.00 32.5 YTL Corp Bhd 48.50 -0.040 1.460 151.72 16007.6 Widad Group Bhd 47.20 0.005 0.460 6.98 1424.4 ATA IMS Bhd 45.90 0.040 0.345 53.33 415.0 Iskandar Waterfront City Bhd 44.50 -0.055 0.755 179.63 695.5 RGB International Bhd 42.90 0.010 0.290 61.11 446.8 Bumi Armada Bhd 38.10 -0.015 0.525 9.38 3109.4 Awanbiru Technology Bhd 37.80 0.040 0.265 -29.33 208.9 Mah Sing Group Bhd 34.50 -0.015 0.810 43.36 1966.4 PUC BHD 33.60 0.000 0.035 0.00 63.7 Sarawak Consolidated Industries 31.30 -0.005 0.455 213.79 291.3 CAPITAL A BHD 30.70 0.005 0.925 48.00 3895.7 Dagang NeXchange Bhd 27.90 -0.010 0.450 -11.76 1420.3 JAKS Resources Bhd 27.00 -0.015 0.220 -6.38 503.8 Data as compiled on Sept 5, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) Fintec Global Bhd 0.010 100.00 207.6 0.00 59.2 Kanger International Bhd 0.050 25.00 56,442.6 25.00 32.5 Lambo Group BHD 0.025 25.00 826.0 -54.55 38.5 Eduspec Holdings Bhd 0.065 18.18 17,638.4 -35.00 69.3 Awanbiru Technology Bhd 0.265 17.78 37,804.0 -29.33 208.9 BSL Corp Bhd 0.040 14.29 615.8 -40.83 77.3 Zelan Bhd 0.040 14.29 1,237.6 -42.86 33.8 Classita Holdings Bhd 0.085 13.33 496,123.4 -76.71 104.8 ATA IMS Bhd 0.345 13.11 45,861.0 53.33 415.0 Handal Energy Bhd 0.130 13.04 23,630.2 -16.13 34.6 Industronics BHD 0.045 12.50 9,280.7 -40.00 31.8 Mclean Technologies Bhd 0.135 12.50 249.1 -20.59 26.6 Minetech Resources Bhd 0.045 12.50 651.3 -18.18 68.8 Reach Energy Bhd 0.050 11.11 8,320.6 11.11 106.4 Vizione Holdings Bhd 0.050 11.11 1,707.2 -9.09 102.3 Comintel Corp Bhd 1.290 10.26 7,193.7 59.26 493.4 China Ouhua Winery Holdings 0.055 10.00 150.0 -15.38 36.7 DS Sigma Holdings Bhd 0.440 10.00 9,237.1 0.00 211.2 HPP Holdings Bhd 0.410 9.33 2,952.6 -3.53 159.3 Solution Group Bhd 0.235 9.30 2,453.1 -22.95 103.3 Data as compiled on Sept 5, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) Pegasus Heights Bhd 0.005 -50.00 620.0 -50.00 54.1 Metronic Global Bhd 0.010 -33.33 1503.8 -50.00 15.3 TECHNA-X Bhd 0.010 -33.33 1654.7 -60.00 22.1 Waja Konsortium Bhd 0.060 -33.33 3,612.2 -33.33 65.1 Nexgram Holdings Bhd 0.015 -25.00 184 -78.57 9.7 Sanichi Technology Bhd 0.015 -25.00 17740.8 -40.00 21 XOX BHD 0.015 -25.00 4,812.7 0.00 75.8 MQ Technology Bhd 0.025 -16.67 4,324.1 -50.00 34.5 Aldrich Resources Bhd 0.030 -14.29 2,050.0 0.00 33.4 Iqzan Holding Bhd 0.030 -14.29 194.4 -14.29 6.7 TWL Holdings Bhd 0.030 -14.29 6,859.4 -14.29 138.4 Naim Holdings Bhd 0.865 -11.28 16,449.0 64.76 433.1 Green Packet Bhd 0.040 -11.11 1,338.8 -27.27 79.8 Key Asic Bhd 0.080 -11.11 17,740.1 23.08 111.5 SC Estate Builder Bhd 0.040 -11.11 5,851.3 -11.11 43.0 Permaju Industries Bhd 0.045 -10.00 808.2 0.00 87.5 Gabungan AQRS Bhd 0.350 -9.09 16,694.6 34.62 190.0 Landmarks BHD 0.150 -9.09 567.0 -23.08 100.7 Parkwood Holdings BHD 0.150 -9.09 18.3 3.45 41.3 Pan Malaysia Holdings Bhd 0.050 -9.09 2,195.4 -28.57 46.4 Data as compiled on Sept 5, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) Allianz Malaysia Bhd 16.000 -0.240 36.3 12.99 2,847.5 Heineken Malaysia Bhd 23.560 -0.240 215.6 -6.51 7,117.4 HextarTechnologies Solutions 25.000 -0.200 56.9 46.54 3,216.2 Malaysian Pacific Industries 28.400 -0.180 50.8 -1.25 5,648.7 Malayan Cement Bhd 3.670 -0.130 784.6 73.11 4,808.4 MISC Bhd 7.090 -0.130 1,028.0 -5.47 31,648.0 AEON Credit Service M Bhd 11.460 -0.120 62.4 -8.90 2,925.8 Keck Seng Malaysia Bhd 4.380 -0.120 28.0 22.35 1,573.7 Rapid Synergy Bhd 23.520 -0.120 84.4 47.37 2,514.2 Naim Holdings Bhd 0.865 -0.110 16,449.0 64.76 433.1 Kesm Industries Bhd 7.110 -0.100 2.8 1.28 305.8 Perusahaan Sadur Timah M Bhd 3.420 -0.100 2.1 -22.10 441.5 Sime Darby Plantation Bhd 4.340 -0.100 1,491.2 -6.67 30,014.2 TIME dotCom Bhd 5.400 -0.090 2,078.2 26.17 9,972.9 TT Vision Holdings Bhd 1.210 -0.090 1,862.6 -5.47 566.3 Ajinomoto Malaysia Bhd 15.800 -0.080 28.5 20.80 960.6 DKSH Holdings Malaysia Bhd 4.800 -0.080 25.3 11.58 756.8 Kuala Lumpur Kepong Bhd 21.300 -0.080 1203.8 -4.74 22970.7 KSL Holdings Bhd 1.140 -0.080 8,395.5 47.10 1,159.6 Petronas Dagangan Bhd 22.700 -0.080 462.6 -0.65 22,551.4 Data as compiled on Sept 5, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) Nestle Malaysia Bhd 129.900 0.700 105.900 -7.2 30461.60 Dutch Lady Milk Industries BHD 22.500 0.200 19.3 -25.60 1,440.0 AirAsia X Bhd 2.41 0.160 10812.700 322.8 1077.40 AFFIN Bank Bhd 2.11 0.140 11850.8 3.94 4951.1 Hong Leong Financial Group Bhd 18.240 0.140 65.8 -1.94 20,889.3 Comintel Corp Bhd 1.290 0.120 7193.7 59.26 493.4 Kotra Industries Bhd 5.360 0.120 4.3 -18.79 795.0 Panasonic Manufacturing M 21.080 0.100 16.4 -7.95 1280.5 Teck Guan Perdana BHD 1.680 0.100 6.0 -5.08 67.4 British American Tobacco M 10.040 0.090 384.1 -10.52 2866.7 D&O Green Technologies Bhd 3.620 0.080 273.6 -15.42 4482.2 Oppstar Bhd 1.610 0.080 1834.0 0.00 1024.3 HCK Capital Group Bhd 2.190 0.060 0.7 2.34 1118.9 Boilermech Holding Bhd 0.975 0.050 1019.2 23.42 503.1 Cape Ems Manufacturing M 1.230 0.050 1571.4 0.00 1135.3 Greatech Technology Bhd 4.430 0.050 979.2 -8.47 5553.3 Master-Pack Group BHD 2.620 0.050 7.6 11.49 143.1 MNRB Holdings Bhd 1.170 0.050 788.8 32.95 916.2 OM Holdings Ltd 1.670 0.050 20.0 -19.32 11622.53 UEM Edgenta Bhd 1.030 0.045 3629.900 -9.7 856.60 Data as compiled on Sept 5, 2023 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 34,837.71 -115.80 0.33 S&P 500 * 4,515.77 8.11 0.18 NASDAQ 100 * 15,490.86 -10.21 -0.07 FTSE 100 * 7,452.76 16.39 0.22 AUSTRALIA 7,314.28 -4.54 -0.06 CHINA 3,154.37 -22.69 -0.71 HONG KONG 18,456.91 -387.25 -2.06 INDIA 65,780.26 152.12 0.23 INDONESIA 6,991.71 -5.04 -0.07 JAPAN 33,036.76 97.58 0.30 KOREA 2,582.18 -2.37 -0.09 PHILIPPINES 6,225.00 10.32 0.17 SINGAPORE 3,226.83 -12.14 -0.37 TAIWAN 16,791.61 1.92 0.01 THAILAND 1,547.86 -0.82 -0.05 VIETNAM 1,234.98 10.93 0.89 Data as compiled on Sept 5, 2023 Source: Bloomberg CPO RM 3,935.00 34.00 OIL US$ 90.27 1.27 RM/USD 4.6635 RM/SGD 3.4271 RM/AUD 2.9752 RM/GBP 5.8561 RM/EUR 5.0126 * Based on previous day’s closing