The EDGE - 03 Oktober 2023

CEOMorningBrief TUESDAY, OCTOBER 3, 2023 ISSUE 645/2023 theedgemalaysia.com SEVERE CRASH COMING FOR US OFFICE PROPERTIES, INVESTORS SAY p16 HOME: Putrajaya announces additional measures to tame rice prices p2 Star Media climbs as MCA ups stake to near 46% p4 Home shopping Astro Go Shop to cease operations after eight years p6 WORLD: Big Tech profits are humming while stocks slide p20 Airbnb is fundamentally broken, says its CEO, and he plans to fix it p25 Report on Page 5. World Bank cuts Malaysian GDP growth forecast to 3.9% for 2023 THE EDGE FILE PHOTOS Report on Page 3. RM1.15 bil BousteadKLK deal falls through, say sources; govt seeks RM2 bil to ‘save’ LTAT

TUESDAY OCTOBER 3, 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] Putrajaya announces additional measures to tame rice prices Applications for foreign workers in three sub-sectors to open on Oct 10 KUALA LUMPUR (Oct 2): Malaysia on Monday announced a subsidy and other measures to try to cool rice prices amid concern over rising costs and supply shortages. Countries across Asia have seen lower supplies and climbing prices for rice in recent weeks, as rising temperatures threaten harvests and top exporters like India restrict shipments to offset inflation and ensure food security. Malaysia caps the price of local white rice at RM2.60 per kilogramme (kg). According to state-run rice importer Bernas, the retail price of imported white rice is estimated to have risen by as much as 31% from RM2.90 to RM3.80 per kg, it said, prompting an increase in demand for local grains. Malaysia, a country of more than 32 million people, imports about 38% of its rice needs and held talks with India last week on lifting export restrictions. Its Agricultural and Food Security Ministry said it would provide a subsidy of RM950 per tonne for imported white BY DANIAL AZHAR Reuters Bernama Its Agricultural and Food Security Ministry said it would provide a subsidy of RM950 per tonne for imported white rice in the states of Sabah and Sarawak from Oct 5. rice in the states of Sabah and Sarawak from Oct 5. That would allow imported white rice to be purchased at a retail price of RM31 for a 10kg bag in the two states, which are among Malaysia’s most populous. The ministry also asked the Federal Agricultural Marketing Authority to increase distribution of local white rice to rural areas. Malaysia’s Agriculture Minister Mohamad Sabu said the government also agreed that all government contracts for rice procurement would now involve purchasing of imported white rice instead of local white rice. He said government suppliers could buy imported white rice at a wholesale price of RM3,200 per 50kg bag. Mohamad also said a task force had been formed to inspect local rice supply chains. Read also: Anwar announces RM400 mil subsidy for govt premises to buy imported rice PUTRAJAYA (Oct 2): Applications for the recruitment of foreign workers for barbershops, as well as for the textile and goldsmith sub-sectors will open on Oct 10, said Human Resource Minister V Sivakumar. He said it was in line with the government’s announcement last month to reopen the intake of foreign workers for the three sub-sectors, which had been frozen since 2009. Sivakumar said the Cabinet meeting on Sept 8 had approved the quota of 7,500 foreign workers for the three sub-sectors, including the existing 5,000 foreign workers in the sub-sectors, based on the records of the Immigration Department. “One of the conditions is that the application must be made by employers registered with the Indian commerce association and no extension of the application is allowed after the quota of 7,500 foreign workers is met,” he told a press conference here on Monday. For existing foreign workers, the application for renewal of the Temporary Employment Visit Pass (PLKS) can be made by employers from Oct 10. Sivakumar said the approval of recruitment of foreign workers for the three sub-sectors is also subject to the existing business operations and not new business. “Prior approval from the Department of Labour Peninsular Malaysia (JTKSM) director-general is also needed under Section 60K of the Employment Act 1955. “Employers are also reminded to comply with all provisions of the labour law, including providing accommodation certified by JTKSM, minimum wage payment of RM1,500, and Social Security Organisation contributions,” he said. For goldsmith and textile stores, the number of foreign workers should be no more than 15% of the number of local workers for business premises, with floor area ranging from 1,000 square metres (sq m) to 5,000 sq m, and three- to four workers (200 sq m to 999 sq m). For barbershops, the owner must possess a Malaysian Skill Certificate recognised by the government and for every three barber chairs in the premises, one local worker and two foreign workers are allowed. The application requirements and employment process of foreign workers for the three sub-sectors will be uploaded to the websites of the Ministry of Human Resources, JTKSM, as well as the ministry’s social media platforms. HOME

TUESDAY OCTOBER 3, 2023 3 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 3): The proposed disposal of a 33% stake in Boustead Plantations Bhd (BPlant) by the Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd to Kuala Lumpur Kepong Bhd (KLK) has fallen through, sources told The Edge. The deal would have seen LTAT and Boustead receive RM1.15 billion from KLK for the 33% stake, as Boustead races to address its short-term debt obligations which totalled RM3.99 billion at end-March. KLK, LTAT and Boustead had already extended twice the deadline for the cut-off date of the strategic collaboration agreement (SCA) inked between the three parties, first from Sept 11 to Sept 22, and later to Oct 6 (Friday). Shares of BPlant fell as much as 27 sen or 18.49% to RM1.19 in the morning session on Monday, before settling at RM1.27, still down 19 sen or 13.01%. It was the ninth most active counter on Bursa Malaysia, with 46.67 million shares traded. KLK shares closed eight sen or 0.37% higher at RM21.48. Both LTAT and KLK declined to comment when contacted. The stake sale, excluding two parcels of land in Penang and Selangor which could be carved out by LTAT for future property developments, was first proposed on Aug 24 and valued BPlant at RM1.55 per share or RM3.47 billion. Reports that Boustead was preparing to dispose of the plantation arm had sent BPlant shares on a steady climb from a low of 64 sen apiece since June. The announcement of KLK’s offer lifted the counter to a high of RM1.52 on Aug 28. Under the offer, KLK had planned to extend a mandatory general offer at RM1.55 a share in order to raise its shareholding to 65%, and to subsequently delist the company. The company currently holds a direct 3.09% stake in BPlant, following its last acquisition of 6.11 million shares on Sept 29. LTAT and Boustead, meanwhile, would hold the remaining 35% in BPlant, compared with the 68.01% they have now — 10.59% under LTAT and 57.42% under Boustead. The proposal was seen as a good deal for LTAT, considering BPlant’s below average fresh fruit bunch (FFB) yield and how KLK planned to fund the replanting costs required for half of BPlant’s plantations, which some estimated would be around RM150 million annually for several years. In the first six months ended June 30 of its financial year 2023 (1HFY2023), BPlant booked a net loss of RM304,000 compared with the net profit of RM508.38 million it made in 1HFY2022, as revenue fell 40.43% to RM400.98 million from RM673.11 million with the normalisation of crude palm oil prices. Govt to inject RM300 mil into LTAT this week The government, meanwhile, has allocated RM300 million this week to help LTAT address its liquidity issues, and is looking for a total of RM2 billion by year end to “save” the armed forces fund board. The money would help LTAT avoid losses, Prime Minister Datuk Seri Anwar IbraBY ADAM AZIZ theedgemalaysia.com him was quoted as saying in news reports on Monday, as he revealed the financial support at the launch of the Felda Segalanya event at Felda Chemomoi, Teriang, Pahang. It remains to be seen if there will be another buyer with a similar offer for BPlant. When explaining the proposal to the Dewan Rakyat, Defence Minister Datuk Seri Mohamad Hasan said 15 parties — including Sime Darby Plantations Bhd, Tabung Haji, Tradewinds Corp and FGV Holdings Bhd — were invited to submit their offers under a three-month bidding period, but many declined to participate while those who did mostly made too low of an offer. Boustead, Mohamad Hasan told Dewan Rakyat on Sept 18, needs “RM800 million by year-end, and another RM1.7 billion to redeem their Islamic Medium-Term Notes (IMTN)”. The BPlant-KLK proposal came just months after LTAT took Boustead Holdings private to accelerate the latter’s debt restructuring. LTAT paid RM702.3 million or 85.5 sen per share for the remaining 40.58% stake in Boustead in a deal that valued the conglomerate at RM1.73 billion. Aside from BPlant, LTAT and Boustead own 54.96% of Practice Note 17 outfit Pharmaniaga Bhd and 48.7% in Affin Bank Bhd. It also holds a 73.16% stake in Boustead Heavy Industries Corp Bhd, which just recently disposed of its troubled littoral combat ship (LCS) contractor Boustead Naval Shipyard Sdn Bhd (BNS) to the Ministry of Finance for RM1. There are talks that LTAT and Boustead are in discussion for a new substantial shareholder to buy into Pharmaniaga, which supplies medicine to government hospitals but is facing balance sheet issues after its huge RM552.3 million impairment earlier this year on its Covid-19 vaccines stockpile. Boustead has a slew of other assets, including The Curve shopping mall (RM573 million) and Menara UAC (RM92 million) in Mutiara Damansara, as well as Menara Affin (RM124 million)) in Kuala Lumpur. It also owns the University of Nottingham building in Semenyih, valued at RM236.5 million, and a 66% stake in the education group’s Malaysian arm. At end-March, Boustead had shortterm borrowings of RM3.99 billion and long-term borrowings of RM2.78 billion. Its long-term debt includes the IMTN, of which RM1.65 billion are maturing in 3Q2024. The group has also issued RM626.4 million in perpetual sukuk. For LTAT, improvements in Boustead will be positive to its own position, considering that over one-third of its assets are located in the conglomerate. In March this year, the armed forces fund paid RM476.45 million in dividends or a rate of 5% for 2022, up from 2021’s RM379.4 million or 4.1%. TUESDAY MAY 18, 2021 4 THEEDGE CEO MORNING BRIEF TABLE SAMPLE FONT/COLOUR LTAT and Boustead’s shareholdings in key listed entities Company Share price Shareholding Market value (RM) (%) (RM mil) Affin Bank 2.07 48.70 2,365.26 Boustead Plantations 1.27 68.01 1,934.64 Pharmaniaga 0.43 54.96 340.58 Boustead Heavy Industries Corp 0.54 73.16 98.15 Total 4,738.63 As at Oct 2, 2023 Source: Bursa Malaysia Boustead Plantations’ share price since June 2022 0 40 80 120 June 1, 2022 Oct 2, 2023 0.5 0.9 1.3 1.7 Vol (mil) RM/sen RM1.27 89.8 sen Source: Bloomberg Boustead Plantations’ shareprice since June 2022 0 40 80 120 June 1, 2022 Oct 2, 2023 Vol (mil) RMRM1.27 89.8 sen Source: Bloomberg RM1.15 bil Boustead-KLK deal falls through, say sources; govt seeks RM2 bil to ‘save’ LTAT

TUESDAY OCTOBER 3, 2023 4 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 2): Malaysia Building Society Bhd (MBSB) has completed its acquisition of Malaysian Industrial Development Finance Bhd (MIDF) from Permodalan Nasional Bhd (PNB) for RM1.01 billion worth of new share issuance at 96.52 sen per share. MBSB told Bursa Malaysia on Monday that 1.05 billion new shares were allotted to PNB, resulting in PNB emerging as a substantial shareholder with a 12.78% stake. Meanwhile, the Employees Provident Fund’s (EPF) shareholding in MBSB was reduced from 65.78% to 57.45%. “The completion of this merger is strategically compelling, as the enlarged group would emerge more financially resilient and as a major player in Islamic banking, with a strengthened capacity through a bigger balance sheet, a wider reach, and a whole range of new offerings from consumer banking, commercial and SME (small and medium enterprise) banking to corporate and investment banking businesses,” said MBSB group chief executive officer Rafe Haneef. MBSB completes RM1.01 bil acquisition of MIDF Star Media climbs as MCA ups stake to near 46% KUALA LUMPUR (Oct 2): AMMB Holdings Bhd and MetLife International Holdings LLC are proposing to divest their jointly owned insurance and Takaful businesses to Great Eastern for approximately RM1.12 billion. AMMB’s wholly owned AMAB Holdings Sdn Bhd owns 50% minus one share in AmMetLife Insurance Bhd and 50% plus one share in AmMetLife Takaful Bhd, with the remaining stake in both units owned by MetLife. Upon securing the necessary regulatory approvals, AMMB said the involved parties will proceed with a sale and purchase agreement. The plan is for Great Eastern Life Assurance (M) Bhd and Great Eastern Takaful Bhd to buy a 100% share capital in AmMetLife Insurance and AmMetLife Takaful. Post-acquisition, both AmMetLife Insurance and AmMetLife Takaful will be merged and integrated with Great Eastern Life Assurance and Great Eastern Takaful respectively. According to AMMB’s stock exchange filing, the proposal will also see these four KUALA LUMPUR (Oct 2): Star Media Group Bhd, which has seen a series of acquisitions by its largest shareholder Malaysian Chinese Association (MCA) over the last month that raised its stake to nearly 46%, jumped 11.11% or 4.5 sen on Monday to close at its highest since June 19. The stock, which closed at 45 sen for a market capitalisation of RM332 million after 16.92 million shares were traded, has climbed 20% or 7.5 sen from Aug 21, when the stock closed at a low of 37.5 sen. The stock had been trending down since it hit a high of 61.5 sen on April 26, following the emergence of The Edge Communications Sdn Bhd and its owner chairman Tan Sri Tong Kooi Ong as the group’s substantial shareholder on April 25, with a 5.424% stake, which was trimmed to 5.374% at end August. Nevertheless, the stock is still up by 50% year to date. According to Star Media’s latest filings, insurance units entering into exclusive 20- year bancassurance and bancatakaful agreements for the distribution of life insurance and family takaful products, through the distribution network of AMMB’s banking subsidiaries across Malaysia. The proposal is subject to, among others, the prior written approval of Bank Negara Malaysia and/or the Minister of Finance, and the Monetary Authority of Singapore. In a statement on Monday, AMMB group chief executive officer Datuk Sulaiman Mohd Tahir said the “synergistic integration will provide us with the advantage of securing economies of scale that will translate into superior customer value, enhanced by our combined and complementary capabilities in product design, digital innovation and distribution expertise”. “We are genuinely excited about the potential this alliance holds. It is not just about business growth; it is about transforming the customer experience. We are committed to utilising this strategic collaboration as a springboard for innovation, developing tailored solutions to meet the needs of our diverse customers at different life stages in the Malaysian market,” he added. According to MetLife and AmMetLife’s websites, their strategic partnership dates back to April 2014, when MetLife took up half of the shareholdings in AmLife Insurance and AmFamily Takaful Bhd (which later had its name changed to AmMetLife Takaful) at a price tag of RM812 million or US$249 million. Shares of AMMB closed two sen or 0.5% higher at RM3.72 on Monday, giving it a market capitalisation of RM12.33 billion. AMMB, MetLife to sell AmMetLife JV insurance units to Great Eastern for RM1.12 bil BY CHESTER TAY theedgemalaysia.com BY CHESTER TAY theedgemalaysia.com BY SULHI KHALID theedgemalaysia.com MCA, which had a 45.347% stake in the group at end-March — 43.23% directly held and 2.117% via the political party’s investment arm Huaren Holdings Sdn Bhd — acquired 3.196 million shares in September via Huaren Holdings, raising its total shareholding by 0.48% to 45.827%, as its indirect stake rose to 2.597%. The group reported a net profit of RM1.93 million for the January-June period of its financial year 2023 (1HFY2023), down 55.48% from RM4.33 million in the Star Media Group Bhd 0 40 80 120 Sept 9, 2022 Oct 2, 2023 20 40 60 80 Vol (mil) Sen 45 sen 28.8 sen Source: Bloomberg corresponding first half of FY2022, though revenue rose marginally to RM110.01 million from RM106.55 million, as it recorded higher operating expenses. Read the full story

TUESDAY OCTOBER 3, 2023 5 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 2): Malaysian manufacturers reported demand weakness at the end of the third quarter of 2023, and this was evident across a range of indicators in the latest purchasing managers index (PMI) data. In a statement on Monday, S&P Global Market Intelligence said output and new orders both moderated to a greater extent than in August, while new export orders fell at the third-strongest pace in the series history. Moreover, it said employment levels fell for the fifth month running, while purchasing activity softened to the greatest degree since September 2021. This weakness in demand for inputs also fed through into stocks of purchases. A degree of spare capacity in the sector was signalled, as the level of outstanding business was depleted at one of the strongest rates in the series history since July 2012. The seasonally adjusted S&P Global Malaysia PMI posted 46.8 in September, down from 47.8 in August. M’sian business conditions deteriorate to greatest extent since January, manufacturing PMI shows KUALA LUMPUR (Oct 2): The World Bank reduced its forecast for Malaysian economic growth, as measured by gross domestic product (GDP), to 3.9% this year from 4.3% projected previously, amid substantial deceleration in external demand. However, the bank raised its 2024 projection for Malaysian GDP to grow 4.3%, up from 4.2% previously, according to its East Asia and Pacific October 2023 Economic Update published on Monday. World Bank lead economist for Malaysia Dr Apurva Sanghi said the country’s economy is expected to be driven by recovery in global growth, the tourism sector and anticipated higher oil prices. “The economy is expected to face significant external risks. Deeper global growth shocks could potentially result in a more significant slowdown than anticipated,” he told reporters at a briefing here. Sanghi said the base effect also plays a role in the World Bank’s GDP growth forecasts, World Bank cuts Malaysian GDP growth forecast to 3.9% for 2023 BY CHESTER TAY theedgemalaysia.com BY SURIN MURUGIAH theedgemalaysia.com given that the country’s economy rebounded 8.7% last year, so expansion is projected to moderate in 2023, before accelerating in 2024. “On the domestic front, key sources of downside risk are linked to uncertainties surrounding domestic inflation. Higher domestic inflation could weigh on the strength of consumption spending. An upside shock to inflation may also prompt further monetary tightening,” he said. As the economy continues to grow, Sanghi said it is expected that poverty and income inequality will further decrease, provided that it is accompanied by policies that enhance inclusiveness. “Meanwhile, around 490,000 Malaysian households remain vulnerable and are grappling with the aftermath of Covid-19. This underscores the importance of having effective and well-targeted social protection programmes. “The government’s initiative to establish PADU (Pangkalan Data Utiliti Kebangsaan), the national household socio-economic database, as a basis for identifying eligible beneficiaries plays a critical role in ensuring broader coverage and enhanced protection,” he said. Read also: Malaysia requires further liberalisation of services sector to attract investments, says World Bank The latest reading signalled further challenges for firms in the manufacturing sector, with business conditions moderating to the greatest extent since January. S&P Global said that looking at the relationship between the PMI data and official gross domestic product (GDP) statistics, the figures for the third quarter suggest that yearon-year GDP growth eased further from that seen in the second quarter. It said the data are also consistent with official manufacturing production remaining broadly stable on an annual basis. Manufacturing new orders moderated for the 13th month running in September, with the latest slowdown the sharpest in eight months amid widespread reports of demand weakness. The subdued demand environment was not limited to the domestic market, as new export orders softened to the greatest extent since May 2020. A lack of demand was also a key factor behind a further slowdown in production, which eased for the 14th month running and to the greatest extent since January. S&P Global said employment moderated for the fifth month in a row in September. It said lower workloads and staff resignations were cited as the main reasons for reduced staffing levels. Spare capacity was also evident, with backlogs of work reducing for the 16th consecutive month, and at the steepest rate since July 2017. Read the full story sa, >50 = improvement since previous month Gross domestic product Sources: S&P Global PMI, Department of Statistics Malaysia via S&P Global Market Intelligence. Data were collected on Sept 12-25, 2023. Malaysia Manufacturing PMI 60 55 50 45 40 35 30 20 15 10 5 0 -5 -20 -15 -10 % y-o-y 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 See also story on Page 17

TUESDAY OCTOBER 3, 2023 6 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 2): Keck Seng (Malaysia) Bhd, which engages in palm oil cultivation and manufacturing, property development and investment, and hotels and resort ownership businesses, said it will wind down operations and voluntarily liquidate its 99.97%-owned subsidiary, Tanjong Puteri Golf Resort Bhd (TPGR). TPGR, formerly known as Victavest Holdings Sdn Bhd, operates a 54-hole golf course in Pasir Gudang, Johor. It does not have any subsidiary or associated company. “TPGR has been operating under very difficult and challenging market conditions characterised by declining number of golfers, ageing assets, increased maintenance expenses and the severe repercussions of Covid-19. As a consequence, TPGR has incurred consistent financial losses over several years and has accrued substantial debts,” Keck Seng (Malaysia) said in a regulatory filing on Monday. As of Sept 22, 2023, TPGR’s total outstanding liabilities to short-term unsecured creditors amounted to RM57.66 million. Keck Seng (Malaysia), as TPGR’s holding company, stands as its largest creditor. “In light of TPGR’s ongoing inability to settle its outstanding debts to creditors, including its largest creditor, Keck Seng (Malaysia), it has been determined that continued financial support from Keck Seng (Malaysia) would not be commercially prudent. Although Keck Seng (Malaysia) has provided financial backing for a considerable number of years, given the circumstances, it is no longer feasible for TPGR to sustain its operations in the face of mounting liabilities,” it added. Keck Seng (Malaysia) said it had made a statutory declaration pursuant to Section 440(1) of the Companies Act 2016 that TPGR cannot, by reason of its liabilities, continue its business, and appointed Leong May Lee of Perun Consultants as the interim liquidator to commence the creditors’ voluntary winding up (CVWU). “The meetings of the TPGR shareholders and the creditors of TPGR are scheduled to be held within 30 days from the date of this announcement,” said Keck Seng (Malaysia). It added that the winding up is not expected to have any adverse impact on the group’s earnings per share and net asset per share for the financial year ending Dec 31, 2023 (FY2023), as well as any operational impact. As at end-December 2022, Keck Seng (Malaysia)’s total amount of investment in TPGR was RM49.19 million and based on the management accounts made up to Sept 22, 2023, the advances to TPGR stood at RM57.23 million. Keck Seng (Malaysia) said the group had made full impairment amounting to RM106.42 million in relation to its investment in TPGR and advances made to TPGR. “Therefore, Keck Seng (Malaysia) is not expected to provide further material impairment in respect of the CVWU of TPGR for FY2023,” it added. The CVWU does not require the approval of Keck Seng (Malaysia)’s shareholders or any other relevant authority. Keck Seng (Malaysia) shares closed one sen or 0.24% lower at RM4.19 on Monday, giving it a market capitalisation of RM1.51 billion. The stock’s share price has risen 16.4% year to date. Keck Seng (Malaysia) to wind down and liquidate Tanjong Puteri Golf Resort KUALA LUMPUR (Oct 2): Pay-TV provider Astro Malaysia Holdings Bhd announced that it will close down its home shopping business under “Go Shop” from Oct 11, citing “challenging overall economic landscape and the changes in consumer shopping behaviour”. “There has been a significant downturn in this mode of shopping since the Covid-19 pandemic and closure will ensure that Astro Malaysia’s resources are focused on business lines that contribute the biggest difference to the overall operations,” Astro Malaysia said in a statement on Monday. The group and its Korean joint venture partner GS Retail Co Ltd (GSR) have decided that Astro GS Shop Sdn Bhd (AGSS), which operates the home shopping business under the brand name “Go Shop”, will cease operations beginning Oct 11. AGSS is a 60:40 joint venture between Astro Malaysia’s wholly-owned subsidiary of Astro Retail Ventures Sdn Bhd (ARV) and GSR. “As part of the ongoing strategic realignment underway within Astro Malaysia, including the execution of significant cost-saving measures, both parties have taken the decision to exit the business,” said Astro Malaysia. Home shopping Astro Go Shop to cease operations after eight years It noted that Go Shop is not considered a material subsidiary of the group and is not expected to have a material effect on the group’s consolidated earnings per share and net assets per share or gearing for the financial year ending Jan 31, 2024 (FY2024). Go Shop started in 2015 as Astro Malaysia’s first foray into the e-commerce domain, enabling Malaysians to shop anytime and anywhere 24/7. The home shopping platform was also present in Singapore and Brunei. According to Astro Malaysia’s 2023 annual report, the group had fully impaired its cost of investment in Go Shop, which is held by ARV, amounting to RM48.1 million, following the subdued consumer sentiment, changes in consumer behaviour as customers return to physical stores, and continuing losses during FY2023. Astro Malaysia’s net profit declined 75.98% in the second quarter ended July 31, 2023 (2QFY2024) to RM23.65 million, from RM98.47 million a year earlier, dragged by higher operating costs and unfavourable foreign exchange loss. Shares in Astro Malaysia, which have fallen 30.77% year-to-date, settled down one sen or 2.17% at 45 sen on Monday, giving the group a market capitalisation of RM2.35 billion. BY ANIS HAZIM theedgemalaysia.com BY KANG SIEW LI theedgemalaysia.com

TUESDAY OCTOBER 3, 2023 7 THEEDGE CEO MORNING BRIEF

TUESDAY OCTOBER 3, 2023 8 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 2): Budget 2024, which is slated to be tabled in Parliament next week, will be a prime opportunity for the government to undertake fiscal consolidation reforms to avoid running off a fiscal cliff. With the growing burden on Putrajaya’s coffers, Socio-Economic Research Centre (SERC) executive director Lee Heng Guie said Budget 2024 serves as a window of opportunity for the government to unveil a measured pace of fiscal reform, so that the following years running up towards the 16th general election, which is expected to take place at the end of 2027, can be utilised to quell discontent from voters over unpopular policy moves. “Prime Minister Datuk Seri Anwar Ibrahim mentioned yesterday (Sunday) that we have RM1.5 trillion in debt. If the government continues to have a deficit, debt keeps growing, and one day you can’t service your debt, eventually the rating agency will downgrade your credit rating and all your costs will increase,” he said. Lee said it is crucial for the government to come to “political sense and economic sanity” to avoid a fiscal cliff, namely conflict over constant increases in the debt ceiling due to an unsustainable budget deficit, as seen in the US currently. In view of this, Lee foresees that Budget 2024 will focus more on operating expenditure, and will be characterised by the introduction of “necessary but unpopular” measures, including targeted petrol subsidies, as well as scheduled implementations of the previously announced capital gains tax (CGT) on non-listed shares and luxury goods tax. Touching on targeted petrol subsidies, he said this should be undertaken in stages sequenced at a measured pace based on the principles of needs and income, accompanied by cash aid for affected households. He urges the government to ensure transparent and extensive communication over the policy, and suggests for its mechanism to be pre-announced three to six months prior to implementation. Meanwhile, Lee said that the CGT on non-listed shares as well as the luxury goods tax are to be finalised in Budget 2024 towards broadening the government’s revenue base. However, he shared his concern that the introduction of the CGT may open the door for it to be carried over to cover public listed shares as well in the future, while the luxury goods tax may adversely affect the domestic luxury goods market. Lee also noted that a reform of the civil service must be done to improve the quality and value of public services-based performance and productivity-linked salary systems. Towards this, he shared his disagreement with the government’s previously announced plan to detail a civil servant salary raise in Budget 2024, as he said things of this nature should only be done until the ongoing comprehensive study of salary and retirement schemes is completed in 2024. ‘GST should be reintroduced, but hopes are low’ Another of Lee’s hopes for Budget 2024 is a 12-month pre-announced reintroduction of the goods and services tax (GST) at a lower introductory rate of 4% to 5% — compared with 2015’s 6% — towards addressing the nation’s unsustainable tax base. “Currently, direct tax to revenue stands at 52%, which is very high, while for indirect taxes including consumption taxBY IZZUL IKRAM theedgemalaysia.com Budget 2024 requires fiscal consolidation for Malaysia to avoid fiscal cliff, says SERC es and all this, it’s only about 18%. The government has to look into shifting its reliance on direct taxes to indirect taxes. “If you can bite the bullet and have a strong political will, why don’t you consider the GST?” he asked. Based on his dialogues with the government, Lee shared his view that the government is concerned about the GST potentially being regressive and impacting low-income households. “If it’s regressive, then you exempt most of the necessities, and give a bit more mitigation through cash handouts or vouchers. This was what I told Economy Minister Mohd Rafizi Ramli,” he said. Meanwhile, he suggested that another roadblock in the reintroduction of the GST may be linked to the policy’s political history. He underlined that it was first implemented in the Barisan Nasional era in 2015 under Datuk Seri Najib Razak’s administration, and was then opposed and abolished by the Pakatan Harapan (PH) government under Tun Dr Mahathir Mohamad in 2018. “Now if they come back and reintroduce it, it could be a slap on their (PH’s) face. But the government has to think of what is good for the country,” he noted. (From left) Socio-Economic Research Centre (SERC) researchers Bala Murugan and Ong Qing Sheng, executive director Lee Heng Guie, and researcher Lee Soon Thye at the media briefing and press conference on SERC’s quarterly economic tracker for July to September 2023. ZAHID IZZANI/THE EDGE

tuesday OC T Ober 3, 2023 9 The E dge C E O m o rning brief home KUALA LUMPUR (Oct 2): While Malaysia’s crude palm oil (CPO) production up to end-August this year lags behind the same period last year, the country’s annual CPO output could still be marginally higher this year than last, amid “fairly good” weather. Malaysian Palm Oil Association (MPOA) chief executive Joseph Tek Choon Yee expects annual CPO output to rise to 18.7 million tonnes this year from 18.45 million last year. “Assuming CPO production for September to December 2023 is higher by 5% to 10% versus 6.88 million tonnes recorded in the corresponding period last year, total CPO production this year could end up encircling a total of 18.7 million tonnes or 1% higher than last year. “Weather has been fairly good. Many workers are back in the estates and most have been upskilled during the first half of this year, although many are still relatively not as productive. In addition, East Malaysian CPO production is coming in strongly,” said Tek in a statement in conjunction with the MPOA’s National Palm Oil Conference 2023 (NPOC23) on Monday (Oct 2). Nonetheless, the ongoing recovery in CPO production is not without challenges. One major concern is the difficulty in harvesting tall palm trees due to the ageing profile of the oil palm trees. Additionally, there might be delayed effects resulting in lower production due to incomplete fertilisation programs, Tek added. Amid ‘fairly good’ weather, Malaysia’s palm oil production seen marginally higher this year KUALA LUMPUR (Oct 2): The Malaysian Palm Oil Association (MPOA) has shared its wishlist for Budget 2024, including a review of the windfall profit levy, reinvestment allowance for intensifying oil palm replanting, pre-requisite for sufficient workers, mechanisation, levies as well as support for sustainability initiatives. Speaking at MPOA National Palm Oil Conference (NPOC23), chief executive Joseph Tek Choon Yee stressed the necessity of thoroughly reviewing the windfall profit levy’s price threshold and rate, particularly in Sabah and Sarawak, where it unduly burdens oil palm growers. He urged the government to raise the windfall profit levy price by RM500 per tonne of crude palm oil (CPO) to RM3,500 per tonne for Peninsular Malaysia, from RM3,000 per tonne currently, and to RM4,000 per tonne from RM3,500 per tonne for Sabah and Sarawak, to account for the higher production cost. He said the government raised the windfall profit levy price thresholds for the palm oil sector in January last year. It went from RM2,500 to RM3,000 per tonne of crude palm oil (CPO) for Peninsular Malaysia and from RM3,000 to RM3,500 per tonne for Sabah and Sarawak. However, the levy rate in these two East Malaysian states was also raised, aligning it with Peninsular Malaysia at 3%, up from the previous 1.5%. “While the plantation industry welcomed the RM500 per tonne CPO raise in the price threshold at that point of time, oil palm growers from Sabah and Sarawak fittingly cried foul over what they deemed to be the unjust doubling up of the windfall profit levy rate since the growers also have to contend with state CPO sales tax of 5% and 7.5% in Sarawak and Sabah respectively. “The government needs to appreciate the struggles by growers in Sarawak and Sabah that their cost of production is averaging 20% higher than in Peninsular Malaysia due to higher transportation, logistics and input costs. In particular Sarawak, where many land planted with oil palm are in marginal soils and lower yield with oil extraction rates are realised,” Tek stressed. According to the MPOA chief executive, the government should acknowledge the state sales taxes for Sabah and Sarawak, and reduce the windfall profit levy for the two states from 3%, back to 1.5% in the upcoming budget set to be tabled next Friday (Oct 13). Stressing on the need to expedite the replanting of old and unproductive oil palm trees in Malaysia, he said MPOA has advocated for tax incentives to support large-scale replanting initiatives, in recognition of its pivotal role in ensuring the sector’s long-term productivity, bolstering the supply chain and sustaining competitiveness. Currently, there are 660,000 hectares (ha), roughly 11.6% of the total oil palm planted area in the country, with trees aged 25 years or older, necessitating immediate reMPOA: Windfall profit levy review, reinvestment allowance for oil palm replanting on Budget 2024 wishlist planting. If the current replanting rate, which is less than 2% of the total planted area per year, continues, the aged palm area will expand to 770,000ha by 2027, according to the association. By 2027, there will be close to two million hectares, constituting 33% of the total planted area, with trees which are 20-years-old and above. These tall and ageing trees are difficult to harvest and have much lower yield, the association said, adding that it is seeking the government’s support for replanting tax to be accorded to the private sector to entice larger footprints of accelerated replanting. Noting that upstream estates and plantation companies are presently excluded from the present Reinvestment Allowance (RA), MPOA appealed to the government to extend the RA incentive to specifically include replanting of oil palm and to allow utilisation of RA against the companies’ statutory income. Touching on foreign workers, Tek said the government should lift the freeze on foreign workers’ application, and increase the recruitment quota for foreign workers in the plantation sector. “Besides, there is a need for G2G (Government-To-Government) intervention to address ‘zero cost recruitment’ at source countries and expedite recruitment process with Malaysian Sustainable Palm Oil (MSPO) certification vis-a-vis other sectors,” he said. In addition, MPOA emphasised the need for facilitation and governance to unlock the potential of stranded biogas and also promote other sustainable practices in Budget 2024. Read the full story Read also: Ageing palm trees show a crisis looms for the world’s everything oil by Syafiqah Salim theedgemalaysia.com by Syafiqah Salim theedgemalaysia.com

tuesday OC T Ober 3, 2023 10 The E dge C E O m o rning brief home KUALA LUMPUR (Oct 2): The government is confident that the newly launched National Industry Environmental, Social and Governance (ESG) framework (i-ESG framework) can accelerate the country’s goal of achieving sustainable development goals as it aims to facilitate the transition towards sustainable practices among manufacturing companies, according to Investment, Trade and Industry (Miti) Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz. The i-ESG framework is a key enabler for the push for net zero mission which is against the backdrop of Malaysia’s commitment to reducing greenhouse gases by 45% in 2030 and becoming carbon neutral (net zero emission) by 2050. “I am confident that with the i-ESG framework’s phased approach, we can achieve our goals within seven years or less. We will begin with the ‘Just Transition’ phase (Phase 1.0) from 2024 to 2026, followed by the ‘Accelerate ESG Practices’ (Phase 2.0) from 2027 to 2030,” said Tengku Zafrul at the launching ceremony for the I-ESG framework on Monday (Oct 2). The i-ESG framework aims to prepare the manufacturing sector, especially micro, small, and medium enterprises (MSMEs), to embrace ESG principles. “MSMEs in the manufacturing sector must not be left to fend for themselves in adopting and embracing sustainable practices. The reason is MSMEs may not have the capacity or technical knowledge on ESG, and they must be supported because almost 98% of total business establishments in Malaysia are MSMEs, employing 7.3 million of our workforce Malaysian MSMEs also contribute 37.4% of the country’s GDP,” Tengku Zafrul said. i-ESG framework prepares manufacturing sector for US$12 trillion ESG-related market opportunities Noting that MSMEs in the manufacturing sector contribute 8% to gross domestic product (GDP) and 9% to exports, Tengku Zafrul acknowledged that MSMEs have a lot of potential to grow in the manufacturing and export sectors. He then cited a study titled Better Business, Better World, which has estimated that sustainability as a new source of growth could generate at least US$12 trillion (RM56.18 trillion) worth of market opportunities and 380 million jobs by 2030, almost 90% of which will be in developing countries. “In Southeast Asia alone, green businesses present an estimated US$200 billion opportunity by 2030. We can help our MSMEs tap into these opportunities by greening their operations and/or by capitalising on the green/circular economy as a new growth sector,” Tengku Zafrul said. On top of that, Tengku Zafrul said ESG principles have already gained increasing prominence, with Malaysia’s multinational corporation (MNC) investors and trading partners increasingly incorporating these components into their operations, procurement and sourcing requirements. Therefore, he stressed that it is crucial to ensure that MSMEs will not be shut out of ESG-sensitive supply chains — such as through bigger companies’ vendor ecosystem — and ESG-sensitive markets like the European Union market. “Hence, for MSMEs, identifying gaps and introducing appropriate operational policies and support systems are extremely important to ensure their continued participation in ESG-compliant PLCs) [public limited companies] and MNCs’ vendor ecosystems, as well as continued access to ESG-sensitive export markets,” he said. He added that the i-ESG framework has three key missions: to support manufacturing firms to learn, be agile and adopt ESG practices; to transform challenges into i-ESG Framework aims to speed up transition towards sustainable practices among manufacturing companies by Justin Lim theedgemalaysia.com opportunities; and to foster symbiotic public-private partnerships for value creation. “While the New Industrial Master Plan 2030 sets out the ‘what’ on ESG, this i-ESG framework presents the ‘how’, serving as a roadmap for businesses to integrate ESG considerations into their operations, and a tool for regulators to ensure compliance and accountability. The i-ESG framework Phase 1.0 (2024- 2026) prepares the groundwork and fosters the development of a robust ecosystem to help companies embark on their ESG journey,” said Tengku Zafrul. The framework consists of four pillars, namely standards, financing, capacity building and market mechanism. These components are supported by six key enablers, namely stakeholder engagement, human capital and capabilities, digitalisation, technology, financing and incentives as well as policies and regulations. During Phase 1.0, manufacturing companies, including MSMEs, will be supported on starting their sustainability/ESG journey through the self-readiness assessment, outreach, training/mentoring programmes, and financing options. Comprising i-ESGReady (a Readiness Assessment Programme), and iESGStart (a practical guide with step-by-step instructions, illustrative examples and templates), Phase 1.0 is meant to be a valuable reference for manufacturing businesses to begin their sustainability journey. In Phase 1.0, Miti will also conduct clinic sessions to empower and guide a total of 50 companies in producing their first sustainability report. The first clinic will be held in end-October 2023 and interested companies may contact their respective business associations and chambers. With the i-ESGReady and i-ESGStart, companies that have no sustainability reports at all should be able to produce their report within a year. This will eventually ensure their readiness to meet the more rigorous demands of Phase 2.0, Accelerate ESG (2027 - 2030). Miti has also begun its “KenalESG” outreach programme in Kuala Lumpur (200 companies), Penang (190 companies), and Johor (130 companies) to raise ESG awareness and introduce the i-ESG framework to industries. The programme will also be conducted in Sarawak, Kelantan, Terengganu, and Pahang by end-2023, while other states will be covered by the first quarter of 2024. The i-ESG framework aims to prepare the manufacturing sector, especially micro, small, and medium enterprises (MSMEs), to embrace ESG principles. the edge

tuesday october 3, 2023 11 The E dge C E O m o rning brief

tuesday OC T Ober 3, 2023 12 The E dge C E O m o rning brief home news In brie f JTI appoints Juliana Mohd Yahaya as MD KUALA LUMPUR (Oct 2): Japan Tobacco International (JTI) Malaysia has appointed Juliana Mohd Yahaya as its managing director, effective Oct 1. In a statement, JTI said Juliana will replace Khoo Bee Leng who is retiring after 30 years with the company. “She brings a wealth of experience to the role, having assumed various leadership positions at JTI’s global centre as well as in markets,” said JTI. Juliana joined JTI Malaysia in 2000 and has held various roles within the marketing and sales functions. She has also worked at JTI’s headquarters in Geneva as well as leadership roles across Asia and Europe. Additionally, she has been leading the Belgium and Luxembourg markets since 2020 prior to her appointment. “JTI Malaysia would also like to take this opportunity to thank Khoo Bee Leng for her dedicated service and leadership, and we wish her a happy retirement.” — by Sufi Muhamad Pestech’s unit secures RM21 mil smart meter contract from TNB KUALA LUMPUR (Oct 2): Pestech International Bhd’s unit Pestech Sdn Bhd (PSB) has received a RM21.17 million contract from Tenaga Nasional Bhd (TNB) for the supply and delivery of smart meters in line with TNB’s advanced metering infrastructure implementation. In a Bursa Malaysia filing on Monday, the group said PSB will implement the project together with its other unit, Pestech Energy Sdn Bhd which is spearheading the smart metering infrastructure business of the group. According to the group, the two-year project entails the supply and delivery of 79,800 units of single phase radio frequency smart meters together with 19,950 units of three phase radio frequency smart meters. “The award of contracts signifies the Group’s capability in continuously meeting the standard specifications and delivery performance as required by TNB. “It reaffirms the reliable track records built by the group in the smart metering and advanced meter infrastructure (AMI) business segment, allowing the group to tap on more prospects in the smart metering for other phases in TNB as well as in the region,” it said. The group added that since 2019 till to-date, the group had secured a total of RM139.8 million smart meters order from TNB, inclusive of the contract, interim orders and variation orders, which consisted of a total of 643,455 units of smart meters. — by Sulhi Khalid Sixteen areas in nine states record unhealthy API readings KUALA LUMPUR (Oct 2): Unhealthy air pollutant index (API) readings have spread to 16 places involving nine states in the country as of 9am on Monday. Based on the Malaysian API Management System (APIMS) website, Cheras in the federal capital recorded the highest API reading of 164, followed by Nilai (163) and Seremban (158) in Negeri Sembilan. Unhealthy API readings were also recorded in Putrajaya at 156; Petaling Jaya, Shah Alam and Banting, Selangor (157); and Port Dickson, Negeri Sembilan (156). A reading of 153 was recorded in three places — Bukit Rambai, Melaka; Batu Muda, Kuala Lumpur; and Johan Setia, Selangor. Other places with an API reading exceeding 100 were Klang, Selangor (152); Alor Gajah, Melaka (138); Taiping, Perak (137); Seberang Jaya, Penang (107); and Tangkak, Johor (104). Fortyfive APIMS stations throughout the country recorded moderate API levels, while seven had good readings. — Bernama Mahmood Razak Bahman is Puspakom’s new CEO KUALA LUMPUR (Oct 2): Puspakom Sdn Bhd has appointed Mahmood Razak Bahman as its new chief executive officer effective immediately. He replaces Shukor Ismail, who retired on Sept 30 after 11 years helming the government-appointed vehicle inspection company. Prior to this, Mahmood was head of group strategic communications at DRB-Hicom Bhd and had also served as a board member of Puspakom. In a statement on Monday, Puspakom said Mahmood brings with him experience in various industries, including oil and gas, fast-moving consumer goods and public transport development. “Between 2008 and 2016, Mahmood held senior management positions in organisations such as Sime Darby Plantation Bhd and Mass Rapid Transit Corp Sdn Bhd, where his last position was as director of operations and asset management. Puspakom chairman Tan Sri Abdul Hamid Bador expressed his confidence in Mahmood’s ability to bring the company to greater heights. He also thanked Shukor for his invaluable contribution in leading Puspakom’s growth since his appointment in 2012. “Shukor had played a pivotal role in shaping Puspakom for more than a decade and under his leadership, the company has risen to where it is today. His many contributions include the introduction of MyPuspakom, an online reservation and payment system that provides even more convenience to customers. “He had also spearheaded the creation of seamless processes through the implementation of cashless and paperless transactions, as well as various other initiatives towards improving the overall customer journey,” Abdul Hamid added. — by Kang Siew Li Genetec enhances boardroom diversity to comply with Main Market transfer KUALA LUMPUR (Oct 2): ACE Market-listed Genetec Technology Bhd announced a slew of boardroom changes on Monday to comply with regulatory requirements, as it seeks to transfer its listing to the Main Market of Bursa Malaysia. The contract manufacturer of automated industrial equipment revealed that its boardroom will see the resignations of two male members, namely non-independent non-executive director Hew Voon Foo, 62, and executive director Tan Moon Teik, 52. Meanwhile, it announced the appointment of Ong Siew Min, 57, as independent non-executive director, which raises the female composition in the six-member board to above the 30% threshold, as required by Securities Commission Malaysia (SC). The latest changes also increased the number of independent directors to four, from three previously, surpassing the regulatory need of having at least half of the boardroom constituted by independent members. Genetec had in August obtained the SC’s approval to transfer its listing to the Main Market, provided the group enhances its corporate governance by raising the number of independent directors on its board to over 50%, and women directors to 30%. Shares of Genetec closed four sen or 1.7% higher at RM2.43 on Monday, giving it a market capitalisation of RM1.84 billion. — by Chester Tay

tuesday OC T Ober 3, 2023 13 The E dge C E O m o rning brief home KUALA LUMPUR (Oct 2): The government will ensure that electric vehicle (EV) ownership is available to all income groups through targeted subsidies and financial assistance, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz. At the same time, the government is ramping up efforts to expand and enhance the country’s EV charging infrastructure. “As we look to the future and the upcoming Budget 2024, our focus remains on inclusivity, aligning with the Madani Economy Framework,” he said at the launch of the Tesla Centre launch in Cyberjaya on Monday. He noted that the implementation of policies and initiatives has had a positive impact on the local automotive industry, reflecting the government’s commitment to developing a holistic EV ecosystem in the country. The number of registered EVs increased to over 3,400 units in 2022 and exceeded 7,500 units by September 2023, compared to an average of 300 units in previous years. “Furthermore, investments in our EV industry have reached an impressive RM26.2 billion from 2018 up to March this year,” he said. Meanwhile, Zafrul said the EV policy must also be in tandem with the recently launched New Energy Transition RoadmZafrul: Putrajaya to ensure EV ownership available to all KOTA KINABALU (Oct 2): The process on the appointment of Sabah and Sarawak representatives within the the Inland Revenue Board (IRB) board of directors is expected to be tabled in the next Parliament sitting, scheduled from Oct 9 to Nov 30. Minister in the Prime Minister’s Department (Sabah, Sarawak Affairs and Special Functions) Datuk Armizan Mohd Ali said this would involve the tabling of the amendment bill, which is important to strengthen the appointment process through legislation. Although representatives from Sabah and Sarawak are now on the IRB board of directors, the appointments were done administratively and are retractable, he said, adding that the Federal Cabinet had on June 5 this year, passed a proposal to amend the IRB Act to provide for the appointment of the Sabah and Sarawak representatives as IRB board members. “We know the importance of having representatives (from) Sabah and Sarawak, so that Sabah and Sarawak have access to information related to revenue collection to make other demands, for example, related to special grants,” he added. He said this to reporters after a “Wacana Madani” programme with the Minister in the Prime Minister’s Department (Sabah, Sarawak Affairs and Special Funnctions), titled “MA63: Sabah’s 60-Year Aspirations in MaKUALA LUMPUR (Oct 2): Hektar Real Estate Investment Trust (Hektar REIT) will install 13 electric vehicle (EV) charging bays in six shopping malls under its portfolio starting Jan 1, 2024. The installation initiative stems from a collaboration between Hektar Asset Management Sdn Bhd, manager of Hektar REIT, and GMA Resources. Hektar Asset Management CEO and executive director Johari Shukri Jamil said: “This partnership amplifies Hektar REIT’s dedication to pioneering the future of transportation, ensuring unparalleled convenience and championing sustainability for our valued patrons.” Meanwhile, GMA Resources director Johan Azman Ghaus said: “After three decades in the energy sector, we are thrilled to embark on this EV charging bay collaboration with Hektar REIT, aligning with their energy transition effort to champion a sustainable environment. “It further underscores our belief that the renewables and EV sector will emerge as vital components of our portfolio and we look forward to future innovation opportunities in this space,” Johan added. According to a press release dated Oct 2, Hektar REIT will roll out more sustainability-focused initiatives in the future as part of its commitment to reduce its carbon footprint. Sabah, Sarawak reps appointment process into IRB board of directors expected to be tabled in Dewan Rakyat Hektar REIT to install 13 EV charging stations across six malls Bernama by Chelsea J Lim theedgemalaysia.com Bernama ap 2030 (NETR 2030). “This is important because there is no point in having thousands of EVs on the road if Malaysia is not ‘greening its grid’ fast enough by developing more and more Renewable Energy (RE) sources,” he said, noting that the NETR aims to accelerate investments in grid infrastructure, with incentives for RE development. On the same note, Zafrul said Tesla’s presence in Malaysia will enhance the EV ecosystem and boost the nation’s potential as a regional EV production hub, which could attract further investments in the sector. With Tesla’s presence, Malaysia is ready to expedite the transition to EVs, and the nation is set to see a surge in technological advancements, research, and development in the EV sector, he said. “We look forward to seeing more local talents being nurtured, more local businesses thriving in the EV supply chain, and more innovations that will put Malaysia on the global map of sustainable transportation,” he added. laysia” at Menara Kinabalu here on Monday. Armizan, who is Papar Member of Parliament, said the move was a commitment by the Federal Government that reflects the political will to interpret the Malaysia Agreement 1963 (MA63), particularly in resolving pending issues in the agreement. He said the matter was one of the pending issues in MA63 and had been raised by the Sabah and Sarawak governments in the MA63 Special Council Meeting on Oct 18 last year. The membership of Sabah and Sarawak representatives in the IRB was halted when the IRB and related laws were abolished and regulated by the IRB Department starting 1967, and then continued by the IRB, which was established in 1996 under the IRB Act. Meanwhile, Armizan reminded all parties to give meaning to the struggle for the demands in MA63, so that it can be implemented through the union and the Federal Constitution as a reference, as well as the Inter-Governmental Committee (IGC) report.

tuesday OC T Ober 3, 2023 14 The E dge C E O m o rning brief home SHAH ALAM (Oct 2): The High Court on Monday dismissed former prime minister Tun Dr Mahathir Mohamad’s discovery application against Datuk Seri Anwar Ibrahim to show any evidence to support the prime minister’s claims of nepotism and cronyism against Mahathir. Judicial Commissioner Zaharah Hussain ruled that there are no direct allusions or references to the documents requested in Anwar’s amended defence as what was claimed happened in the past. Furthermore, she ruled that Anwar can and ought to produce the documents to support his defences during the pre-trial case management stage. In dismissing the application, Zaharah who held the proceedings online ordered the 98-year-old politician to pay RM2,000 in costs to Anwar. This was confirmed for The Edge separately by Anwar’s lawyer Alliff Benjamin Suhaimi, who appeared with Phoebe Loi and Muhammad Rafique Rashid Ali, along with Akif Rusli who appeared for Mahathir. Zaharah fixed Nov 3 for case management for the parties to inform the court if there are any interlocutory applications. In July, Mahathir made a formal application against Anwar to show documents to support his claims of nepotism and cronyism against the former prime minister. Mahathir filed the RM150 million defamation suit against Anwar in May over claims that the prime minister, during a speech made during the PKR congress in March, said that “a leader of 22 years and 22 months” had enriched his own family. Anwar, in his defence to Mahathir’s suit, claimed that the statement he made at the party congress was true. Dr M’s discovery application in RM150 mil defamation suit against Anwar dismissed KUALA LUMPUR (Oct 2): Former attorney general Tan Sri Tommy Thomas’ legal action against the government and the special task force (STF) which looked into his memoir will now be heard by the Civil Division. High Court judge Datuk Wan Ahmad Farid Wan Salleh from the Appellate and Special Powers Division directed the matter to be heard before a judge of the Civil Division during his ruling in relation to the defendants’ application to strike out Thomas’ suit. “I’m not prepared to strike out this suit. However, I’m directing that this originating summons (OS) be converted into a civil suit, [and] for the matter to be heard and disposed of in a full trial,” he said during proceedings on Monday. He added that he will now seek directions from the managing judge as to which civil court will hear Thomas’ suit. “Since the matter will be heard before a judge of the Civil Division, I will refrain from making any determination on the constitutionality or legality of the STF,” he said, adding that there was no order as to cost. In his ruling, Wan Ahmad Farid said that he was not saying that the ex-AG had no cause of action, but that the reliefs sought by Thomas boil down to loss of reputation, where the usual legal action would be a defamation suit. The High Court judge also said that there was a dispute of facts involving Thomas’ claim of loss of reputation, which cannot be determined by mere affidavit evidence, but through a full trial involving witnesses. The defendants were represented by senior federal counsels Shamsul Bolhassan and Liew Horng Bin, while Mervyn Lai and Haikaldin Mahyidin appeared for Thomas. Ex-AG seeks declaration task force an unlawful body Thomas filed the OS in October last year against the government and all eight members of the STF. Among the declarations Thomas sought through the OS was that the STF formed to investigate claims made in his book titled My Story: Justice in the Wilderness was an unlawful body, because it was not appointed under authority of any written law. He is also seeking a declaration that the report prepared by them should be considered an illegal document and its publication, among others, violated Sections 499 and 500 of the Penal Code which concern criminal defamation. He claimed that the report had gravely impacted his reputation, and insinuated that he participated in corrupt acts and had exposed government secrets. The defendants had applied to strike out the suit in December last year on the grounds that the suit was vexatious and an abuse of the court process. The STF was chaired by Sarawak legal adviser and former state attorney general Datuk Seri Fong Joo Chung, and included former Sabah state secretary Datuk Seri Hashim Paijan and former Women, Family and Community Development Ministry secretary general Datuk Dr Junaidah Kamaruddin, who is also a former director general of the Legal Affairs Division. Tommy Thomas memoir: Ex-AG’s suit against govt, special task force to be heard before civil court judge by Tarani Palani theedgemalaysia.com by Hafiz Yatim theedgemalaysia.com In his ruling, Wan Ahmad Farid said that he was not saying that the ex-AG had no cause of action, but that the reliefs sought by Thomas boil down to loss of reputation, where the usual legal action would be a defamation suit. Former judge and former senior federal counsel Datuk Jagjit Singh Bant Singh as well as lawyers Datuk Shaharudin Ali and Balaguru Karupiah were also part of the STF. Task force set up in October 2021 Thomas’s memoir, published in January 2021, includes his account of his tenure as the AG from June 2018 to February 2020. The book drew criticisms from many quarters, including the Attorney General’s Chambers, lawyers, politicians and the public. Subsequently, numerous police reports were filed. In October 2021, the government led by then prime minister Datuk Seri Ismail Sabri Yaakob set up a task force to look into disclosures made in the book, including on the appointment of judges, excessive interference by the executive in the judiciary, and selective prosecution. A year later, the government declassified the STF’s report, which among others recommended that Thomas be investigated for possible offences.

tuesday Oct o ber 3, 2023 15 The E dge C E O m o rning brief home C M Y CM MY CY CMY K Smart CA-i Bundle - THE EDGE HPFC 130x190_FA(o).pdf 1 18/08/2023 5:51 PM JAKARTA (Oct 2): Indonesia’s environment ministry on Monday denied accusations that forest fires in Sumatra and its portion of Borneo island, which have blanketed some of its cities with thick haze, have also affected air quality in neighbouring Malaysia. Malaysia on Friday warned residents of high pollution levels in most areas on the west coast of Peninsular Malaysia and the western Borneo region of Sarawak, blaming trans-boundary haze from Indonesia, its Department of Environment said in a statement. Indonesia’s Environment Minister Siti Nurbaya Bakar responded by saying Jakarta has not detected any travelling haze from Indonesia to neighbouring countries. “We continue to follow up any development and there is no trans-boundary haze to Malaysia,” she said in a statement. At the moment, Indonesia is focusing on quelling forest fires in some provinces in Sumatra and Borneo with water bombing from helicopters, the minister added. As well as maritime boundaries, Malaysia shares a land border with Indonesia on Borneo island. Malaysia has not filed a diplomatic complaint from the haze, Indonesia’s foreign ministry spokesperson said. Indonesia’s dry season this year is its most severe since 2019 due to the impact of the El Nino weather pattern. While forest fires are typically started by farmers to clear land for plantations, Indonesia denies smog from forest fires drifted to Malaysia by Ananda Teresia & Danial Azhar Reuters authorities say putting out fires this year has been harder due to El Nino. More than 267,900 hectares (661,995.3 acres) of forests have been burned so far this year, bigger than a total of 204,894 hectares for all of 2022, according to the environment ministry’s data. This has brought haze into several cities in Sumatra and Borneo. Some areas in Central Kalimantan, Borneo, reported visibility of less than 10 metres (33 feet), state news agency Antara reported. Authorities ordered remote learning for students in Palembang and Jambi cities in southern Sumatra starting this week due to the severity of pollution, local media reported. A view shows the Ampera bridge covered with smog due to wildfires in Palembang, South Sumatra province, Indonesia, October 1, 2023. reuters

tuesday OC T Ober 3, 2023 16 The E dge C E O m o rning brief world (Oct 2): Rising rates are starting to weigh on US corporate profits and if they stay higher for longer it may upend a historical trend, according to Goldman Sachs Group Inc strategists. Borrowing costs for S&P 500 companies have ticked up by the largest amount in nearly two decades, on a year-on-year basis, strategists led by David Kostin said. If they remain at high levels for an extended period of time, this may prevent firms from taking on more leverage, hitting long-term profitability. For decades, falling interest costs and greater leverage have accounted for nearly one-fifth of an overall 8.8 percentage points increase in the return on equity (ROE) of S&P 500 firms, according to the strategists. “In the new ‘higher for longer’ rates environment, the key risk for S&P 500 ROE will be higher interest expenses and lower leverage,” Kostin wrote in a note published Friday. “A scenario in which interest expense and leverage persistently weigh on ROE would be a departure from the historical trend.” US stocks have struggled since the start of August, with the S&P 500 dropHigher rates starting to hit US profits, Goldman strategists warn (Oct 2): Office prices in the US are due for a crash, and the commercial real estate market faces at least another nine months of declines, according to Bloomberg’s latest Markets Live Pulse survey. About two-thirds of the 919 respondents surveyed by Bloomberg believe that the US office market will only rebound after a severe collapse. An even greater majority says that US commercial real estate prices won’t hit the bottom until the second half of 2024 or later. That’s bad news for the US$1.5 trillion (RM7.05 trillion) of commercial real estate debt that according to Morgan Stanley is due before the end of 2025. Refinancing it won’t be easy, particularly the roughly 25% of commercial property that is office buildings. A Green Street index of commercial property prices has already fallen 16% from its peak in March 2022. Commercial property values are getting hit hard by the Federal Reserve’s aggressive tightening campaign, which lifts a key cost of owning property — the expense of financing. But lenders looking to offload their exposure now are finding few palatable options, because there aren’t many buyers convinced the market is close to a bottom.“Nobody wants to sell at a huge loss,” said Lea Overby, an analyst at Barclays plc. “These are properties that don’t need to be sold for long periods of time, and that means holders are likely to delay a sale as long as they can.” Adding to the trouble is stress among regional banks, which held about 30% of office building debt as of 2022, according to a March report from Goldman Sachs Group Inc. Smaller banks saw their deposits shrink by nearly 2% over the 12 months ended in August, according to the Fed, after Silicon Valley Bank and Signature Bank collapsed. That translates to less funding for the banks, giving them less capacity to lend. Pain from higher interest rates can take years to filter through to owners of the US commercial real estate, which Morgan Stanley values at US$11 trillion (RM51.71 trillion) in total. Investors in office buildings, for example, often have long-term fixed-rate financing in place, and their tenants can be subject to long-term leases as well. It will take until 2027 for leases that are in place today to roll over to lower revenue expectations, according to research Severe crash coming for US office properties, investors say by Scott Carpenter & Sarah Holder Bloomberg by Michael Msika Bloomberg by Moody’s Investors Service published in March. If current trends hold, then revenues by then will be 10% lower than today. “It tends to be a slow reckoning for US real estate when rates change,” Barclays’s Overby said. “And the office sector is deeply distressed, which will take a long time to work out.” Even if there is a serious and prolonged downturn in US commercial real estate, including major loan losses from a cratering office sector, Overby isn’t worried it will threaten overall market stability. The property sector is large, but the debt is spread across a wide enough array of investors to absorb losses, she said. Besides high interest rates, offices are struggling with tenants cutting back or moving out, with the trend especially strong in the US, where office workers are more reluctant to badge in than in Europe or Asia. Some of the resistance to the return to offices could be attributed to commuting pains. More than 40% of MLIV Pulse respondents said they would be enticed to come to the office more often if they had better public transit options available. About 20% of respondents said that they moved farther away from their office during the pandemic and only 3% regretted their escape. Nearly a third said their commutes got longer than before Covid, probably either because they moved, or because of pandemic-era transit service cuts. ping about 6.5% on rising bond yields and subdued economic growth expectations. While the Federal Reserve paused its rate-hike campaign in September, hawkish messages from officials pushed the 10-year Treasury yield above 4.6% — its highest level in nearly 16 years. Against this backdrop, the strategists have identified stocks with low vulnerability to higher borrowing costs, including Cisco Systems Inc, Costco Wholesale Corp, Paychex Inc, Cognizant Technology Solutions Corp, as well as Visa Inc. Separately, Goldman strategists said US technology stocks may be about to turn a corner after the Nasdaq 100’s biggest monthly decline this year. The S&P 500’s profitability, ex-financials, has continued to decline this year from its peak in the second quarter of 2022, with increased interest expenses being the largest drag on earnings, the analysts wrote. They expect ROE to stabilise in 2024 with a low likelihood of increasing due to subdued economic growth. Read also: US consumer spending is signalling pain ahead — credit weekly Bloomberg

tuesday OC T Ober 3, 2023 17 The E dge C E O m o rning brief world (Oct 2): Developing economies in East Asia and the Pacific are set to see slower growth this year and next as the region reels from the impact of tighter finances and a weak global environment, according to the World Bank’s latest report. Gross domestic product (GDP) growth is estimated at 5% in 2023 and 4.5% in 2024, the World Bank said in its semi-annual outlook for East Asia and the Pacific. That compares with April forecasts of 5.1% for this year and 4.8% for the next. The latest estimates were still faster than the pace seen in other emerging markets, it said. China accounts for some of that drag. The world’s second-largest economy will likely expand 4.4% next year, down from the 4.8% previously projected, amid property woes, increasing debt, and a fading boost from the post-Covid reopening. The 2023 GDP forecast for China was kept at 5.1%. “What happens in China matters for the whole region,” the report read. “A 1% reduction in its growth is associated with a reduction in regional growth by 0.3 percentage point.” Excluding China, East Asia and the Pacific should see slightly faster growth in 2024, as the global economy improves and revives foreign demand for the region’s manufactured goods and commodities, the World Bank said. Geopolitical tensions, and possible natural disasters including extreme weather events are downside risks to the outlook, it said. World Bank cuts growth estimates for East Asia as China falters (Oct 2): Manufacturing activity remained muted in Asia ahead of the peak holiday season, extending its protracted slump this year. Factory activity in the region mostly worsened in September as lackluster global demand for goods drove a decrease in output and new work, according to the manufacturing purchasing managers’ index (PMI) published on Monday by S&P Global and au Jibun Bank. Japan’s PMI slowed slightly to 48.5 last month from 49.6 in August, falling even further from the 50 mark that separates expansion from contraction. Taiwan’s gauge posted sizeable jump to 46.4 from 44.3, signalling a softer downturn last month. The global slump has hit the export-oriented economy hard, keeping its PMI deep in the red since May 2022. The manufacturing revival in Southeast Asia likewise lost steam with even the region’s best performer Indonesia seeing expansion slow to 52.3 in September from 53.9 the month before. Factories in Vietnam saw activity shrink after a month of expansion, joining the likes of Thailand, Malaysia and Myanmar. Only the Philippines saw an improvement, flipping from contraction to expansion. The latest data flashes warning signs as manufacturing settles into its peak season ahead of the Christmas and New Year holidays. It undercuts cautious optimism that the global economy is finding itself on steadier footing, with consumer demand and exports firming up in some quarters. Asia’s manufacturing downturn deepens amid depressed demand by Claire Jiao Bloomberg by Claire Jiao Bloomberg Read also: China’s precarious economy signals more support is needed It promises to be a tricky path ahead for manufacturers as the onset of the El Nino dry spell and tighter oil supply threatens to revive cost pressures and keep borrowing costs higher for longer. Earlier, data out of China showcased how precarious the recovery could be. Its official manufacturing PMI rose to 50.2 last month — the first expansion since March. However, the more export-oriented Caixin manufacturing PMI fell to a lower-than-expected 50.6, although still in expansion territory after the nation rolled out stimulus. Bloomberg

tuesday OC T Ober 3, 2023 18 The E dge C E O m o rning brief world ABU DHABI (Oct 2): Fuel prices consumers pay at the pump will be driven by a willingness to keep investing in fossil fuels, the UAE’s energy minister said on Monday, as oil industry leaders reiterated the need for ongoing investment to smooth the energy transition. Speaking at the Adipec energy industry event in Abu Dhabi, minister Suhail al-Mazrouei said the Opec+ producer group cares “that the price is right for consumers, but right for the consumers for a very limited time only is short-sighted”. More investment is needed in oil and gas for prices to be “right at the pump”, he added. When asked whether high crude prices could threaten the health of the global economy, al-Mazrouei said Opec+ never targets a certain oil price. The group, which comprises the Organization of the Petroleum Exporting Countries (Opec) and allies led by Russia, in June agreed to extend their oil output cuts until the end of 2024. Saudi Arabia and Russia have also extended 1.3 million barrels per day (bpd) of additional voluntary cuts until the end of the year. That helped push Brent crude prices to above US$90 a barrel in early September, with the futures contract last week approaching the psychological threshold of US$100 a barrel. Opec Secretary General Haitham Al Ghais said at the same event that he is optimistic about oil demand growth, and that he saw under-investment as a risk to energy security. “We are... running quite low on spare capacity, we have said this repeatedly, and this requires a concerted effort by all of the stakeholders to see the importance of investing in this industry,” he said. Mazrouei said investment by both international and national oil companies was needed, and that “these investments need the financial world to be willing to finance oil and gas”. He later told reporters that his country is on track to expand its oil production capacity to 5 million bpd by 2027 from 4.2 million bpd currently. The CEO of US oil and gas producer Occidental Petroleum Vicki Hollub warned that low investments will drive energy prices higher. UAE energy minister: Investments to determine fuel prices at the pump (Oct 2): Lithium prices are spiralling down towards the lowest level in two years on concerns over the strength of Chinese demand for the material, a key ingredient in electric vehicle (EV) batteries. Prices of lithium carbonate in China fell to 166,500 yuan (RM106,122) a tonne last Wednesday, ahead of the Golden Week holidays, a loss of almost half from the recent peak in early June. The decline has been precipitous. Less than a year ago, the metal reached a record of 598,000 yuan a tonne. The slump has hammered lithium producers too, with the Sprott Lithium Miners ETF tumbling to the weakest since its inception in February, and Global X Lithium & Battery Tech ETF plunging to the lowest since 2020. Demand for lithium typically picks up in the fourth quarter in China — the world’s largest EV market — because of strong battery cell production and installation, and manufacturers usually replenish their feedstock ahead of that. But this year, that hasn’t happened. Sizable restocking has yet to materialise, said Susan Zou, an analyst with researcher Rystad Energy. Battery makers still have plenty of inventory to draw down, she said. While the drop in prices may curb supply, especially from lepidolite mines in China, the pace of the decline in demand means they could go lower, said Wanyi Shao, an analyst at Guotai Junan Futures Co. “Car and battery manufacturers have been cautious when it comes to restocking” because consumer demand is weaker than expected, she said. In China, carmakers are struggling to defend their market share amid economic uncertainty. EV sales growth in the Asian nation slowed to 37% in the second quarter from a year earlier, versus a global average of 50%, according to consultancy Counterpoint Research. Goldman Sachs Group Inc analysts including Aditi Rai see lithium carbonate prices falling further over the next 12 months. “For the rest of the year, the fundamental focus appears to be on a seasonal uptick in Chinese EV sales, and we think any disappointment relative to historical norms could put accelerated downward pressure on prices,” they wrote in a note dated Sept 21. Still, the current pullback provides a good buying opportunity for lithium stocks as demand growth over the next decade should support long-term prices, according to Wilsons Advisory. BloombergNEF expects global demand for lithium to grow nearly five times by the end of the decade. Read also: Tesla misses estimates for quarterly deliveries; shares fall Slumping lithium prices signal fear over China’s demand outlook by Yvonne Yue Li & Annie Lee Bloomberg by Maha El Dahan & Yousef Saba Reuters Demand for lithium typically picks up in the fourth quarter in China — the world’s largest EV market — because of strong battery cell production and installation, and manufacturers usually replenish their feedstock ahead of that. bloomberg

tuesday october 3, 2023 19 The E dge C E O m o rning brief world Join our Market Outlook Talk Learn rst-hand from the award-winning fund managers behind these prestigious achievements at our Market Outlook Talk. They will share how you can rise above any situation with our global expertise and local insights. Champion on the Global & Local Stage Disclaimer: The Manager, Manulife Investment Management (M) Berhad Registration No: 200801033087 (834424-U) (hereina‰er referred to as “Manulife IM (Malaysia)”) is a wholly owned subsidiary of Manulife Holdings Berhad and holds a Capital Markets Services License for fund management, dealing in securities restricted to unit trusts, dealing in private retirement schemes and nancial planning under the Capital Markets and Services Act 2007. Manulife IM (Malaysia) operates under the brand name of Manulife Investment Management which is the global wealth and asset management segment of Manulife Financial Corporation. 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WASHINGTON (Oct 3): Microsoft chief executive Satya Nadella called the idea that it is easy to change defaults on computers and smartphones as “bogus” as he took the witness stand on Monday in the US Justice Department’s once-in-a-generation antitrust fight with Alphabet’s Google. Nadella was dismissing an argument that Google has made — that it is easy to change defaults on devices. He said that Microsoft, itself a tech powerhouse, had sought to make its Bing search engine the default on Apple smartphones but was rebuffed. The government has argued that Google, worth more than US$1 trillion (RM4.7 trillion) with some 90% of the search market, illegally paid US$10 billion annually to smartphone makers like Apple and wireless carriers like AT&T and others to be the default search engine on their devices. The clout in search makes Google a heavy hitter in the lucrative advertising market, boosting its profits. “Changing defaults today is easiest on Windows and toughest on mobile,” Nadella said. “You get up in the morning and you brush your teeth and you search on Google,” he added in a reference to Google’s dominance in search. Judge Amit Mehta, who will decide the case being tried in the US District Court for the District of Columbia, asked Nadella why Apple would switch to Bing given the Microsoft product’s lower quality. The question suggests Google’s argument — that it is dominant because of its quality and not because of illegal activity — has caught the interest of the judge. Microsoft CEO calls Google mobile search argument ‘bogus’ by Diane Bartz Reuters Nadella responded that Microsoft had sought to show that Bing engineers would be able to “bridge the quality gap” with access to the number of queries made on Apple smartphones. Turning to the next big tech market, artificial intelligence, Nadella testified that tech giants’ efforts to build large content libraries to train its large language models and build AI “reminds me of the early phases of distribution deals.” “When I am meeting with publishers now, they say Google’s going to write this check and it’s exclusive and you have to match it,” he said. Nadella became CEO of Microsoft in 2014, long after the tech giant had faced its own federal antitrust lawsuit. That court fight, which began in 1998 and ended in a 2001 settlement, forced Microsoft to end some business practices and opened the door to companies like Google. As Google, which was founded in 1998, became an industry leading search engine, the two became bitter rivals. Both have browsers, search engines, email services and a host of other overlaps. They have recently become rivals in artificial intelligence, with Microsoft investing heavily in OpenAI and Google building the Bard AI chatbot among other investments. reuters

tuesday OC T Ober 3, 2023 20 The E dge C E O m o rning brief world (Oct 2): The central argument for buying shares in highly valued Big Tech companies this year — unmatched prowess in generating earnings — is starting to look prescient. The profit machines at the likes of Amazon.com Inc and Meta Platforms Inc are humming, with each seeing analyst projections for 2024 earnings per share rise by more than 10% in the past three months, according to estimates compiled by Bloomberg. Alphabet Inc’s estimates have risen 8%, while Nvidia Corp’s have soared 69%. Investors now face the task of deciding whether the recent weakness that plunged tech shares into a correction will persist as the economy slows, or whether the pullback has made valuations, though still stretched, tempting given Big Tech’s earnings bulwark. Anthony Zackery, associate portfolio manager at Zevenbergen Capital Investments LLC, is in the latter camp. “These are some of the best businesses ever created based on their scale, their quality of management, their growth durability and their profitability,” he said, adding that they look attractive from a longterm perspective. “We believe that they can outgrow the broader economy.” In normal times, such rapid increases in estimates would justify valuations that have been stretched to levels last seen in July. But these are not normal times — the Federal Reserve’s inflation battle has pushed Treasury yields to the highest in 16 years, amplifying recession angst. Investors punished big tech along with virtually every other sector in the market last month. Take Nvidia, the stock that became the face of this year’s AI frenzy, with its shares more than tripling and its price-to-projected earnings ratio hitting a high of 63 in May. Even as analysts rushed to raise their estimates, the stock has plunged 11% from its August high and it’s now priced at 29 times profit estimates. According to Goldman Sachs Group Inc analysts, the Nasdaq 100’s biggest monthly decline this year in September has left US tech stocks primed to turn a corner, given their historically cheap valuations at a time when earnings estimates are still rising. Still, for others such as Nicholas Colas, co-founder of DataTrek Research, the mood shift on markets — where recession fears have trumped AI euphoria — poses more than a passing threat. by Carmen Reinicke Bloomberg Big Tech profits are humming while stocks slide “Tech stocks have had an orderly selloff despite higher rates because the market thinks their earnings will continue to hold up,” he said. “The recent sharp ascent in rates could challenge that outcome, however.” A longer-term higher interest rate environment means that fundamentals will be even more important for picking winners in the technology sector, according to Lara Castleton, US head of portfolio construction and strategy at Janus Henderson Investors. Margins, solid leadership, competitive advantages as well as a shored up balance sheet are more in focus than they were in the last decade, she said. This is especially true for the megacap technology companies that have seen huge stock gains this year. “If there’s any sort of hiccups in the economy when you’re priced close to your historical averages or even higher, there’s just a lot more downside risk,” Castleton said. To be sure, Wall Street doesn’t unanimously see earnings jumping higher for all of the tech giants. Analysts have only slightly boosted next year earnings estimates for Apple Inc, up 0.2% in the last three months. And, the Street has trimmed its expectations for Microsoft Corp’s fiscal 2024 earnings by 0.2%. Still, bulls think megacap tech stocks are worth the risk, given their potential upside and appealing valuations. “For those who want to create wealth and build wealth over time, it will likely pay to own equities and big tech is still attractive relative to other pockets of the market,” Zackery said. In normal times, such rapid increases in estimates would justify valuations that have been stretched to levels last seen in July. But these are not normal times — the Federal Reserve’s inflation battle has pushed Treasury yields to the highest in 16 years, amplifying recession angst. Investors punished big tech along with virtually every other sector in the market last month. reuters

tuesday OC T Ober 3, 2023 21 The E dge C E O m o rning brief world (Oct 2): Birkenstock Holding Ltd set terms for an initial public offering that could raise as much as US$1.6 billion (RM7.5 billion), pushing ahead with the latest major test of demand for new listings. The German footwear maker is marketing 10.75 million new shares at US$44 to US$49 apiece, according to a filing Monday. Its controlling shareholder, private equity firm L Catterton, is offering 21.51 million shares at the same price. The Norwegian sovereign fund and T Rowe Price Group Inc veteran Henry Ellenbogen’s Durable Capital Partners LP have expressed interest in buying as much as US$300 million of stock in aggregate, according to the filing. Billionaire LVMH chairman Bernard Arnault’s family holding company, which has already invested in Birkenstock, may buy as much as US$325 million of shares. Birkenstock plans to use proceeds from the offering to repay debt. Bloomberg News reported last week that Birkenstock was preparing to kick off its road show in the SINGAPORE (Oct 2): US cryptocurrency exchange Coinbase has received a major payment institution (MPI) licence from the Monetary Authority of Singapore (MAS), following the in-principle approval from the state regulator last October. This licence will allow Coinbase to offer regulated digital payment token products and services. It will also pave the way for an enhanced range of DPT services to both individuals and institutions, according to a release from Coinbase on Monday. So far, more than a dozen firms have received the MPI and in-principle approvals from the MAS. Most recently, crypto exchange crypto. com and Boston-based stablecoin issuer Circle, were awarded the full licence in June. Birkenstock attracts Norwegian wealth fund to US$1.6 bil IPO (Oct 2): Alphabet Inc’s Google will begin to make its Chromebook laptops in India, the latest among global tech companies to expand assembly in the key growth market. Google is partnering with HP Inc to manufacture Chromebooks in the South Asian country, Alphabet chief executive officer Sundar Pichai said on Monday on X, formerly known as Twitter. The move will help Google boost supply in India and compete more effectively with Windows computers from companies such as Dell Technologies Inc and Asustek Computer Inc. It’s also another win for Prime Minister Narendra Modi’s US$2 billion (RM9.36 billion) incentive plan to have tech giants make India their production base. The country of 1.4 billion people has been expanding its electronics manufacturing sector as companies diversify production beyond China amid growing Washington-Beijing tensions. Local manufacturing will help Google maintain constant supply in India and avoid any potential curbs on imports. Chromebooks are typically priced at the lower end of the market and have thin profit margins, making them sensitive to any tariff measures. New Delhi is loosening its planned restrictions on imports of laptops, tablets and other IT hardware, giving manufacturers more time to prepare for potential curbs, Bloomberg reported previously. The Chromebooks will be built at a Flex Ltd facility near Chennai, in southern India, where HP has been making laptops and desktops since 2020. Production of the Chromebooks is set to start on Oct 2 and they are targeted mainly at the education sector, HP said in a statement. Google to make laptops in India in win for Modi’s tech push Coinbase awarded full major payment institution licence from Singapore’s MAS by Sankalp Phartiyal Bloomberg by Nicole Lim theedgesingapore.com by Ryan Gould & Eyk Henning Bloomberg Read the full story major test of demand for new listings. It’s tentatively planning to price the offering Oct 10 and start trading Oct 11, people with knowledge of the matter have said. The company is moving ahead after investor enthusiasm started to wane for some of the blockbuster listings of recent weeks. UK chip designer Arm Holdings Plc and grocery delivery startup Instacart, which both priced their listings at the top of their price ranges or higher, have slipped toward their issue prices or below amid a broader market retreat. Vietnamese internet startup VNG Ltd last month delayed its plans for a US listing after being advised to hold off until market demand improves, Bloomberg News has reported. Others are still doing well, with marketing and data automation provider Klaviyo Inc trading well above its IPO price. Birkenstock’s IPO comes more than two years after L Catterton and Arnault’s family investment company acquired a majority stake in the business at a valuation of about US$4 billion. reuters Bloomberg

tuesday october 3, 2023 22 The E dge C E O m o rning brief H O N O U R I N G M A L AY S I A’ S B E S T P E R F O R M E R S I N ESG EXCELLENCE Knowledge Partner (Funds Category) Main Partner Auditor Official Broadcast Partner Automotive Partner In Collaboration With

tuesday OC T Ober 3, 2023 23 The E dge C E O m o rning brief world Indonesian parliament approves US$1.8 bil capital top-up for state firms in 2024 JAKARTA (Oct 2): The Indonesian parliament’s financial committee on Monday approved a 28.2 trillion rupiah (US$1.82 billion) capital injection for several state companies by 2024, including for debtstrapped construction firms. The committee also approved a 36.8 trillion rupiah (US$2.37 billion) capital injection for several state firms for this year, the committee said in a livestreamed meeting. Construction firm Hutama Karya will receive the biggest chunk, amounting to 28.9 trillion rupiah this year and 18.6 trillion next year. Authorities have said Hutama Karya will be tasked with taking over some of the assets of troubled construction firm Waskita Karya. Another debt-laden construction company, Wijaya Karya, will get six trillion rupiah next year. However, the 2024 capital injection was below an original proposal of 22.5 trillion rupiah for Hutama Karya and eight trillion rupiah for Wijaya Karya. Waskita and Wijaya Karya, among Indonesia’s biggest construction firms, have been renegotiating their debt with lenders. The companies are overleveraged, having been assigned by the government to build massive infrastructure projects. Trading in Waskita shares has been suspended since May, after it failed to secure bondholder approval to defer a coupon payment. The committee also struck down a 10 trillion rupiah cash injection to state utility Perusahaan Listrik Negara (PLN). Finance Minister Sri Mulyani Indrawati said the government will review the urgency of such support for PLN after the decision. Hutama, Waskita, Wijaya Karya and PLN did not immediately respond to requests for comment. — Reuters Indonesia starts Southeast Asia’s first high-speed rail operations (Oct 2): Indonesia has opened Southeast Asia’s first high-speed rail to the public after years of delay and cost overrun. The train connecting the capital Jakarta to a nearby city of Bandung can ferry up to 600 passengers at a top speed of 350 kilometres (220 miles) an hour. The railway is called Whoosh, an acronym for “Time Saving, Optimal Operation, Reliable System” in Indonesian. The railway is the culmination of Indonesia’s decade of infrastructure boom as President Joko Widodo builds out roads, ports and airports to propel the country toward high-income status. Its opening also establishes a key part of the leader’s legacy, despite the train’s construction being marred by ballooning costs and years of setbacks. Initially set to be completed in 2019, the pandemic pushed back the project’s timeline while land acquisition problems led the overall cost to surge to US$7.2 billion (RM33.9 billion), from US$6 billion. Safety tests also delayed the railway’s opening from August. The project is part of China’s Belt and Road Initiative and built by a consortium involving China Railway International Co Ltd. — Bloomberg China Evergrande shares set to resume trade on Tuesday (Oct 2): China Evergrande Group said on Monday it has applied to the Hong Kong Stock Exchange for trading in its shares to resume on Tuesday, adding there is currently no other inside information related to the company that needs to be disclosed. On Thursday, trading in shares of the embattled Chinese property developer were suspended and the company later said its founder, Hui Ka Yan, was being investigated over suspected “illegal crimes”. The news signalled for the first time that authorities could hold the company’s billionaire founder accountable for the developer’s spiralling financial woes. Chairman Hui is being investigated on suspicion of transferring assets offshore while the indebted property developer struggles to complete unfinished projects, the Wall Street Journal reported on Monday. Evergrande did not respond to a Reuters request for comment. — Reuters Read the full story Thai baht at near 11-month low on deficit concerns; other Asian FX muted (Oct 2): Thailand’s baht slumped to a near 11-month low on Monday pressured by a stronger dollar and concerns over a widening fiscal deficit, while equities in Southeast Asia’s second-largest economy reversed course to trade marginally higher. Elsewhere in emerging markets, the Indonesian rupiah depreciated 0.5%, hovering near its ninemonth low of 15,525.00 per US dollar, while shares advanced 0.5% as data showed annual inflation came in near the lower end of the central bank’s target range in September. Indonesia’s 10-year benchmark bond yields touched an over six-month high, adding 4.2 basis points to 6.952%, as surging US Treasury yields and worsening property sector situation in China sparked a sell-off in local bonds. “Every development in the American economy and various statements from Fed officials, especially in terms of inflation and the labour market, will influence the movement of global investors in the Indonesian bond market,” analysts at Maybank said in a note. — Reuters Read the full story Read also: Thai PM touts stimulus plans, meets central bank chief after surprise rate hike news In brie f Vietnam says developer cheated 42,000 investors of US$1.2 bil (Oct 2): Vietnam police are seeking assistance from investors in an ongoing investigation into real estate firm Van Thinh Phat Holdings Group that allegedly defrauded and appropriated more than 30 trillion dong (RM5.6 billion), according to a statement on the government’s website. Some 42,000 investors lost money, according to the investigation, the statement said. The Ministry of Public Security detained the company’s chairwoman Truong My Lan last year for allegedly obtaining property through fraudulent means. The arrest of Lan and other company officials, who were believed to have connections with Saigon Commercial Bank, also known as SCB, led to a brief bank run on the lender. The investigation occurs as the country’s regulators also grapple with a property debt crisis that is weighing on the nation’s economy. Vietnam’s property sector woes raise risks for banks as real estate companies become less able to service debt, according to Moody’s Corp. Privately-held Van Thinh Phat, which has held prime land in the nation’s commercial hub of Ho Chi Minh City, also invests in financial services, according to its website last year. — Bloomberg Read the full story reuters

tuesday OC T Ober 3, 2023 24 The E dge C E O m o rning brief world (Oct 2): Two scientists won the Nobel Prize in medicine for research that laid the groundwork for some of the best-selling medicines of all time: the messenger-RNA (mRNA) vaccines against Covid-19. Katalin Kariko and Drew Weissman’s work helped pioneer the technology that enabled Moderna Inc and the Pfizer Inc-BioNTech SE partnership to swiftly develop shots. The vaccines have been given to hundreds of millions of people around the world, a key step toward easing the coronavirus pandemic. Kariko and Weissman will share the 11 million-krona (US$1 million) award, the Nobel Assembly at the Karolinska Institute in Stockholm said in a statement on Monday. The scientists showed how to solve one of the major problems of mRNA by tweaking it to avoid causing inflammation. Their research, published in 2005, was one of the building blocks that allowed it to be introduced into the body. “Through their groundbreaking findings, which have fundamentally changed our understanding of how mRNA interacts with our immune system, the laureates contributed to the unprecedented rate of Scientists behind Pfizer and Moderna mRNA vaccines win Nobel Prize (Oct 2): Donald Trump and his family business are set to stand trial in New York on Monday in a civil fraud case that could deal a major blow to the former US president’s real estate empire. Trump, the front-runner for the 2024 Republican presidential nomination, is accused by Democratic New York Attorney General Letitia James of inflating the value of his assets by billions of dollars to secure better loan and insurance terms. Trump plans to attend the first week of trial in state court in Manhattan, according to a court filing in an unrelated case. “I’m going to Court tomorrow to fight for my name and reputation against a corrupt and racist Attorney General, Letitia James, who campaigned on “getting Trump,” and a Trump Hating Judge who is unfair, unhinged, and vicious in his PURSUIT of me,” Trump said on Sunday night on his social media platform Truth Social. The trial comes a week after the judge presiding over the case found Trump liable for fraud and will largely concern the penalties he must face. James is seeking at least US$250 million (RM1.2 billion) in fines, a permanent ban against Trump and his sons Donald Jr and Eric from running businesses in New York and a five-year restriction on commercial real estate activities by Trump and his flagship Trump Organization. Trump has said the case is part of a political witch-hunt. Justice Arthur Engoron ruled last week that James had proven her fraud case against Trump, his two adult sons and 10 of his companies. Engoron described in scathing terms how they made up valuations. That included Trump calculating the value of his apartment in Trump Tower as if it were three times its actual size. “A discrepancy of this order of magnitude, by a real estate developer sizing up his own living space of decades, can only be considered fraud,” he said. Trump on Truth Social called the judge’s valuations fraudulent. Engoron cancelled business certificates for companies controlling pillars of Trump’s empire — including Trump Tower and his Donald Trump’s business empire in peril as civil fraud trial opens in New York by Jack Queen Reuters by Naomi Kresge & Kati Pohjanpalo Bloomberg vaccine development during one of the greatest threats to human health in modern times,” the Nobel Assembly said. Their work became the basis for a new type of inoculation. Instead of introducing a weakened or dead virus into the body to teach the immune system to recognise an infection, mRNA is used to prompt cells to produce what’s needed for a vaccine themselves. The approach is much quicker, and enabled Moderna and the Pfizer-BioNTech team to develop shots against Covid in less than 11 months. Kariko, born in Hungary, and Weissman, an American, laboured in relative obscurity for years with an approach that many other scientists had written off as too difficult to use. Read the full story golf clubs in New York — and said he would appoint receivers to oversee their dissolution. The ruling covers only a handful of the roughly 500 entities in Trump’s portfolio but includes some of his most valuable properties. The specifics of how that order will be implemented have not been decided, but the loss of those prized assets would be a major blow to Trump’s finances. If Engoron tacks on fines and business restrictions, that damage would compound. The trial is scheduled to run through early December. More than 150 people including Trump are listed as potential witnesses, but much of the trial will likely be a battle of experts opining on financial documents. James alleges Trump reaped hundreds of millions of dollars in ill-gotten savings by “grossly” inflating the values of his assets to get better deals from lenders and insurers. That included listing his Mar-a-Lago club and residence in Florida as being worth up to US$739 million even though deed restrictions capped it at US$28 million, James said. The case is one of several legal headaches Trump faces as he campaigns to retake the White House in the 2024 election. None have dented his commanding lead over rivals for the Republican nomination, though they have been a financial drain. Trump, the first sitting or former US president to be criminally charged, is under indictment in four separate cases. He has been charged in Florida over his handling of classified documents upon leaving office, in Washington DC in his efforts to undo his loss in the 2020 presidential election, in Georgia over moves to reverse the election results in that state and in New York in hush money payments he made to a porn star. Trump has denied wrongdoing and pleaded not guilty in all four cases. reuters

tuesday OC T Ober 3, 2023 25 The E dge C E O m o rning brief world NEW YORK (Oct 2): Airbnb Inc chief executive officer (CEO) Brian Chesky hasn’t had an easy 2023. First, there was the “Airbnbust” frenzy in March, in which hosts took up arms on Twitter (now X) about shrinking profit margins and a potential short-term rental bubble. Then competitor Vrbo beat Airbnb to a feature that customers have long requested with a loyalty programme. And in September, New York City vastly tightened its rules on short-term rentals, nearly squeezing Airbnb out of a market that in the early days represented roughly 80% of its business. Never mind the increasing strictness of return-to-office policies, which has hampered the flexibility that spurred Airbnb’s business in the pandemic years. By mid-September, when he rolled out a handful of site improvements, it seemed as if Chesky had found himself in a Catch-22, caught between the conflicting demands of guests and hosts. Top of mind among them: Guests want to spend less money and be guaranteed a better product, while hosts are worried about potential declines in bookings and their bottom lines. The new improvements are incremental and largely designed to benefit guests. They revolve around five common pain points, from affordability to customer service. On the cost side, the promise is to show consumers total prices per listing — including transparent and lower cleaning fees, a subject of particular ire — while giving hosts insights that ensure competitive nightly rates. Moreover, a new listing verification system is reducing calls to customer service by identifying and removing fake listings, and search was improved with new filters for king-size beds and pet-friendly homes. Chesky, who co-founded the company in 2008, has been prone over the years to hyping up small updates as major features. But the CEO I spoke with recently over Zoom was grounded and realistic, confessing that the latest improvements are, in fact, patches over deep cracks in Airbnb’s foundation. “We need to get our house in order,” he says. “We need to make sure the listings are great, we’re providing great customer service and we’re affordable. And I’ve told our team that we can get back to creating new and exciting things once we’ve fixed that foundation.” Here are six takeaways from a candid chat with Airbnb’s founder, ranging from by Nikki Ekstein Bloomberg Airbnb is fundamentally broken, says its CEO, and he plans to fix it his AI (artificial intelligence) ambitions to the company’s future in New York — and how he plans to rebuild the proverbial house. Airbnb still hasn’t nailed the core aspects of its service If you haven’t had the experience yourself, you’ve likely heard the horror stories: Someone shows up to their Airbnb and finds the pool is overgrown with algae. The heat doesn’t work. Or a booking gets canceled at the last minute leaving travellers without a place to stay. Consistency and reliability have become an enormous Achilles heel for Airbnb, an issue that Chesky has long described as a managerial crisis that requires wrapping his arms around millions of hosts in hundreds of thousands of locations — and not stripping them of their individuality. “Our system,” says Chesky — referring to the disruptive tech platform where “adventurous travellers” could buy and sell products (in this case, rooms or homes), process secure payments and leave reviews — “was designed for a much smaller company which grew like crazy”. “To use a precise metaphor, it’s kind of like we never fully built the foundation. Like, we had a house and it had four pillars when we needed to have 10.” Math aside, there are three core pillars Chesky says would add up to “a really great service”: affordable prices, reliability and proper customer support when things go wrong. But retrofitting a large house isn’t easy. “The bigger you are, the more effort it takes to increase quality,” Chesky says. “And that’s what we’ve been really focused on.” Lowering prices isn’t a liability for hosts. It’s their competitive advantage Consumers have shown an enduring willingness to splurge on travel, Chesky says — but the limit to that may be slapping a US$300 cleaning fee onto a weekend house rental that asks you to also take out the garbage, run the laundry, and clean the toilets. “A lot of people were introduced to our service from a pricing standpoint,” he says. And it remains a key business driver. “The more affordable Airbnbs are, the more bookings we get.” Chesky walks a delicate tightrope, as he tries to motivate profit-hungry hosts by encouraging (some of) them to shrink their margins. But affordability has to be a competitive advantage, especially in markets that have robust hotel scenes. “We want prices to move and to be more competitive visà-vis a hotels — that is really important,” he asserts, adding that hotel prices went up 10% in the last year but that prices for one-bedroom Airbnbs declined 1%. “When our hosts provide better deals, they tend to make more money.” He suggests the solution is in giving hosts dynamic pricing insights. “We’re [currently] giving tools to hosts to compare the prices of their listings to others in their neighborhood — and while we don’t yet have a hotel comparison, we do encourage them to look at rates for hotels in their area just so they have a sense of what travelers are getting on other platforms,” Chesky says. AI is the key to quality control While many companies are using generative AI to power customer service chatbots, Airbnb is applying the technology for quality control purposes. Read the full story To use a precise metaphor, it’s kind of like we never fully built the foundation. Like, we had a house and it had four pillars when we needed to have 10.” Airbnb Inc CEO Brian Chesky Bloomberg

tuesday october 3, 2023 26 The E dge C E O m o rning brief PRESENTS REAL ESTATE MATTERS Official Solar Partner Supported By

tuesday OC T Ober 3, 2023 27 The E dge C E O m o rning brief world (Oct 2): They are two of the best-known African leaders on the planet. The 2019 Nobel Peace Prize winner Abiy Ahmed, Ethiopia’s prime minister, and his compatriot Tedros Adhanom Ghebreyesus, who as head of the World Health Organization became the face of the global response to the coronavirus pandemic. Yet the two are now on opposite sides of a bitter power play exposed by previously undisclosed Ethiopian government documents that appear to show how the Abiy administration tried to discredit the global health leader with allegations of embezzlement and sexual misconduct ahead of his reappointment at the WHO in 2022. Tedros, who has denied all the allegations and hasn’t been charged with any crimes, says he is reluctant to return to his native Ethiopia — Africa’s second-most populous nation — without assurances that he and his family will be safe. The collapse in relations between the two men can be traced back to November 2020 — the month Abiy declared war on the ruling party of the Tigray region in northern Ethiopia. Prior to his appointment at the WHO, Tedros, a Tigrayan, had dedicated his professional life to the Tigray People’s Liberation Front, the political party that for three decades governed Ethiopia. But, as the conflict erupted, Tedros was drowning in terrifying data: more than 50 million cases of Covid-19 had been reported globally, no vaccines were available at that stage, and deaths were spiking in Europe and the US. Reports of massacres, human rights violations and indiscriminate killings on both sides of the Tigray conflict flooded in — the war would eventually kill more than 500,000 people, according to estimates by the US and European Union. Tedros, based in Geneva, feared for friends and family living in Tigray. “History looks favorably on those that manage to reach across, bridge division and move from war to peace,” Tedros wrote on Twitter on Nov 19 that year. On the same day, the head of the Ethiopian army accused Tedros in a televised statement of procuring weapons for the TPLF without providing evidence to support the allegation. Tedros denied the claims. By June 2021, the Financial Intelligence Centre in the Ethiopian Ministry of Finance had opened an investigation of Tedros, according to hundreds of internal documents seen by Bloomberg News that by Simon Marks Bloomberg The secret plot against the head of the World Health Organization Read the full story were made available by the Paris-based Platform to Protect Whistleblowers in Africa. In an interview with Bloomberg in August, Tedros, 58, called the probe part of a “smear campaign” based on his ethnicity and membership in the TPLF, which was itself accused of detaining and torturing opponents while in power. The WHO director general said that his family in Ethiopia was harassed and that he installed security cameras at his Geneva home after identifying what he said were plainclothes agents from Ethiopia. “They harassed my mother-in-law, and they detained my brother-in-law for two weeks in 2021,” Tedros said over Zoom from Geneva, recounting how Ethiopian authorities confiscated his apartment in the capital, Addis Ababa. “They searched the flat, found nothing and told my mother-in-law to take the books and furniture.” The apartment has not been returned to the family. The Ethiopian prime minister’s office, the finance ministry and the justice ministry didn’t respond to requests for comment. Compiled over several months in 2021, the documents are part of a report sent to judicial authorities and the federal police. They include bank statements, handwritten witness accounts and email correspondence among investigators, witnesses and banks. The intelligence unit probed allegations that Tedros was involved in embezzlement of state funds, sexual misconduct, illicit purchases of property in Addis Ababa, rigged tender offers and illegal procurement during his tenure as Ethiopia’s health minister from 2005 to 2012, the documents show. They paint a picture of an effort by the Ethiopian government to criminalize the head of the WHO, say former colleagues of Tedros who asked not to be identified for fear of reprisals. No charges appear to have been filed, although the intelligence unit recommended that the Tedros case, along with others against individuals, local companies and an international development organisation, be referred to the police and attorney general. The investigation coincided with the start of Tedros’ campaign to win a second term as director-general of the WHO, which Ethiopian diplomats in Geneva opposed. Despite that effort and criticism of his handling of the pandemic by some countries, Tedros was reappointed in May 2022. Bloomberg saw the documents before approaching Tedros, who said he was unaware of criminal proceedings against him in Ethiopia. He agreed to talk about the duress he and his family have been under but said he didn’t want to undermine attempts to implement a peace deal reached last November by the government and the TPLF. The documents were provided to the French group by Distributed Denial of Secrets, a nonprofit whistleblower website, and were shared with several other media organizations. Bloomberg verified the documents by analyzing attached metadata to check that they were created by their authors and confirmed the investigation with two Ethiopian officials who had direct knowledge of the matter. Both agreed to talk on the condition of anonymity as they are not authorized to speak publicly. Most of the allegations against Tedros supposedly came from officials working for the Ethiopian Public Health Institute and the Ethiopian Pharmaceuticals Supply Agency, established by Tedros to improve procurement procedures in the country. In one case of alleged misconduct, Tedros was investigated for allegedly violating a government procurement law by purchasing HIV test kits and epidemic drugs that were prohibited by the WHO. The original complaint was made by Atsbeha Gebregziagher, a researcher at the institute, according to a police statement. Bloomberg Tedros Adhanom Ghebreyesus

tuesday OC T Ober 3, 2023 28 The E dge C E O m o rning brief world Baltic Exchange shipping updates A weekly round-up of tanker and dry bulk market (Sept 29, 2023) Capesize This week the cape market has been marked by varying levels of activity and changing sentiments. At the beginning of the week, the Pacific market showed promise for owners, with support from East Coast Australia coal cargo contributing to a positive outlook and two major players driving momentum, from West Australia to China, resulting in a modest uptick in rates. Midweek, both the Pacific and Atlantic regions saw active engagement, leading to rate increases, particularly in C5 and the North Atlantic, due to tighter availability contributing to positive fixtures. However, towards the end of the week, the Pacific market experienced a dip in rates and activity, with a negative influence from the FFA market. In the Atlantic, there was a noticeable shift in sentiment, with charterers reducing bids, potentially driven by owners seeking coverage before upcoming holidays, encompassing Mid-Autumn Festival and Golden Week. Overall, it has been a week of mixed dynamics and evolving market conditions. Panamax A mixed week for the Panamax sizes, the Atlantic generally well supported in the north whilst from South America it returned overall an underwhelming week by comparison. Solid levels of mineral demand were duly backed up by some fresh US Gulf stems on the fronthaul runs, rates for trans-Atlantic peaked at US$19,500 midweek and appeared to taper away as the weekend approached, but with a tight tonnage count, the general feeling was much of the same for next. It was a lethargic Pacific market, perhaps due to anticipation of impending golden week holidays. A scrubber fitted 82,000-dwt conceding low US$15,000’s midweek for a NoPac trip, but this represented a one off with levels of US$13,000 more akin to true market value. Indonesia coal demand diminished week on week with smaller/ older types discounting rates to cover prior to Asian holidays. Period news included an 82,000-dwt type delivery Korea achieving US$13,500 basis 8/10 months. Ultramax/Supramax Negative sentiment crept into the Atlantic, with declining levels of cargo availability and a general slowing of activity across both basins. In the South Atlantic a 58,000-dwt fixed from Santos to South East Asia at US$15,750 plus a US$575,000 ballast bonus whilst a 61,000-dwt fixed from North Brazil to West Coast Central America at US$26,000 to a grain house. The US Gulf was said to have lost momentum after a bright start, where a 63,000-dwt fixed from SW Pass to Arabian Gulf-India range at over US$30,000 whilst later in the week similar vessels were being bid in the upper US$20,000’s. Asia saw activity slow as many took early cover with a 58,000-dwt fixing from North China for a round trip via the Philippines at US$16,000 whilst a 58,000-dwt opening In Thailand fixed via Indonesia to Cambodia at US$14,500. Period interest had remained active, with a 63,000-dwt fixing for a minimum of 100 days to about five months at US$17,000. Handysize A mixed week across the handy sector which lost momentum as activity slowed after a bright start. The South Atlantic was still experiencing a lack of cargo availability and numbers continued to soften with a 36,000-dwt fixing from Santos to Morocco at US$12,250, whilst a 30,000-dwt opening in Luanda fixed via Abidjan to China in the low teens. In the US Gulf, a 38,000-dwt fixed from the Mississippi to NC South America at US$16,000. The Mediterranean also saw activity slow and a 35,000-dwt opening in Gabes was fixed basis passing Canakkale for a trip to the US Gulf at US$15,500. On the Continent, a 39,000-dwt fixed from Rotterdam to WC South America with an intended cargo of fertiliser at US$19,000. With upcoming holidays in China, the Asia markets also slowed. A 38,000-dwt opening in Xiamen fixed a trip via Australia to China at US$12,000 and a 32,000-dwt fixing from Taiwan via Indonesia to the Philippines at under US$9,000. Clean LR2 LR2 freight levels have appeared to have been somewhat unsettled this week with no clear direction. TC1 has bubbled around the WS130-135 level with Baltic TCE hovering around the US$24,000/ day round trip. Meanwhile a run to the UK-Continent on TC20 took a less than 1% dip to US$3,825,000. West of Suez, Mediterranean/East LR2’s saw a circa US$70,000 rise on the TC15 index to creep over the US$3,000,000 mark to US$3,016,000. LR1 In the MEG, LR1’s weakened a little which was uprising considering the market around them. TC5 shed 4.68 points to WS155.63 and a TC8 run to the UK-Continent remained around the US$3,400,000 level. On the UK-Continent, after holding resolute for the last few weeks, TC16 finally saw a drop due to a couple of fixtures reported at WS155 late in the week. The index dipped to its current WS157.50 (-8.13). Read the full report

tuesday OC T Ober 3, 2023 29 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) KNM Group Bhd 131.23 0.015 0.140 180.00 566.2 Evergreen Max Cash Capital 130.97 -0.010 0.415 null 462.7 Fintec Global Bhd 100.54 -0.005 0.005 -50.00 29.6 Widad Group Bhd 64.58 0.000 0.510 18.60 1579.2 UEM Sunrise Bhd 60.88 -0.035 0.810 217.65 4097.4 Ekovest BHD 53.21 -0.040 0.515 51.47 1527.2 Sapura Energy Bhd 52.98 -0.005 0.050 42.86 799.0 Mlabs Systems Bhd 48.74 0.000 0.015 -25.00 21.7 Boustead Plantations Bhd 46.67 -0.190 1.270 96.90 2844.8 Sarawak Consolidated 41.37 0.000 0.455 213.79 291.3 Netx Holdings Bhd 37.75 0.005 0.150 150.00 137.9 Mercury Securities Group Bhd 36.17 0.010 0.310 0.00 276.8 My EG Services Bhd 31.54 -0.010 0.785 -8.76 5860.5 UCrest Bhd 31.46 0.000 0.175 40.00 129.8 MQ Technology Bhd 29.67 -0.005 0.025 -50.00 34.5 Kanger International Bhd 25.58 0.000 0.085 112.50 55.2 Malaysian Resources Corp Bhd 25.00 -0.005 0.455 54.24 2032.7 Meta Bright Group Bhd 24.82 0.005 0.240 41.18 567.7 Bumi Armada Bhd 24.60 -0.005 0.560 16.67 3316.7 CN Asia Corp BHD 23.13 0.000 0.200 -18.37 48.9 Data as compiled on Oct 2, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) Key Alliance Group Bhd 0.010 100.00 3,680.0 100.00 36.8 EA Holdings Bhd 0.010 100.00 1,101.2 -33.33 64.5 Green Ocean Corp Bhd 0.015 50.00 150.0 -25.00 31.7 AE Multi Holdings Bhd 0.015 50.00 130.0 -40.00 32.5 MMAG Holdings Bhd 0.015 50.00 399.0 -40.00 36.3 Talam Transform Bhd 0.025 25.00 332.1 66.67 107.4 Xidelang Holdings Ltd 0.025 25.00 250.0 0.00 52.9 Mikro MSC Bhd 0.270 14.89 11,106.3 28.57 289.8 Spring Art Holdings Bhd 0.195 14.71 4,221.1 8.33 81.1 Fitters Diversified Bhd 0.040 14.29 155.8 -42.86 93.7 PUC BHD 0.040 14.29 4,117.1 14.29 72.9 BSL Corp Bhd 0.040 14.29 7,842.7 -40.83 77.3 PESTECH International Bhd 0.335 13.56 21,366 8.06 329.8 Bahvest Resources Bhd 0.335 13.56 22,641.6 9.84 415.3 Green Packet Bhd 0.045 12.50 168.5 -18.18 89.8 Permaju Industries Bhd 0.045 12.50 12,680.1 0.00 87.5 KNM Group Bhd 0.140 12.00 131,233.2 180.00 566.2 Sinaran Advance Group Bhd 0.095 11.76 2,168.7 26.67 86.9 Parlo Bhd 0.145 11.54 8,159.2 20.83 87.2 Reach Energy Bhd 0.050 11.11 8,026.6 11.11 106.4 Data as compiled on Oct 2, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) Pegasus Heights Bhd 0.005 -50.00 425.0 -50.00 54.1 Fintec Global Bhd 0.005 -50.00 100537.8 -50.00 29.6 Asdion Bhd 0.020 -33.33 2,495.9 -78.95 8.9 AT Systematization Bhd 0.010 -33.33 5486.6 -33.33 67.9 TECHNA-X Bhd 0.015 -25.00 1400 -40.00 33.2 Focus Dynamics Group Bhd 0.015 -25.00 971.5 -25.00 95.6 MQ Technology Bhd 0.025 -16.67 29,672.4 -50.00 34.5 TWL Holdings Bhd 0.025 -16.67 1,820.8 -28.57 117.0 Handal Energy Bhd 0.095 -13.64 7,114.4 -38.71 25.3 Boustead Plantations Bhd 1.270 -13.01 46,667.1 96.90 2,844.8 Komarkcorp Bhd 0.035 -12.50 308.7 -36.36 40.4 XOX Networks Bhd 0.035 -12.50 1,144.0 16.67 39.7 Dolphin International Bhd 0.260 -10.34 1,364.7 4.00 34.8 DGB Asia Bhd 0.130 -10.34 4,445.6 -13.33 24.5 Cheetah Holdings Bhd 0.130 -10.34 1,607.4 18.18 63.2 SKB Shutters Corp Bhd 0.695 -10.32 8,511.4 82.89 91.7 Minetech Resources Bhd 0.045 -10.00 1,120.0 -18.18 68.8 Hong Seng Consolidated Bhd 0.045 -10.00 2,606.2 -79.55 229.9 SWS Capital Bhd 0.325 -9.72 1,871.2 10.17 89.4 Barakah Offshore Petroleum 0.050 -9.09 1390.3 100 50.1 Data as compiled on Oct 2, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) Malaysian Pacific Industries 27.000 -0.460 25.0 -6.12 5,370.2 Panasonic Manufacturing 18.920 -0.220 11.7 -17.38 1,149.3 PPB Group Bhd 15.280 -0.200 1,243.5 -12.39 21,737.3 Boustead Plantations Bhd 1.270 -0.190 46,667.1 96.90 2,844.8 Petronas Chemicals Group Bhd 7.070 -0.120 982.4 -17.79 56,560.0 Chin Hin Group Bhd 3.900 -0.120 653.6 20.74 6,900.7 ViTrox Corp Bhd 7.350 -0.090 155.6 -3.92 6,948.1 Tenaga Nasional Bhd 9.900 -0.090 2,494.1 2.80 57,294.6 Formosa Prosonic Industries 2.680 -0.090 508.2 -17.03 683.7 SKB Shutters Corp Bhd 0.695 -0.080 8,511.4 82.89 91.7 Petronas Gas Bhd 16.760 -0.080 1,674.9 -2.10 33,163.5 YTL Power International Bhd 1.980 -0.070 12,902.2 176.92 16,042.3 IHH Healthcare Bhd 5.780 -0.070 4,818.8 -5.52 50,904.4 Greatech Technology Bhd 4.300 -0.070 252.7 -11.16 5,390.4 Malpac Holdings BHD 1.130 -0.070 2 9.71 84.8 AFFIN Bank Bhd 2.070 -0.060 1,300.9 1.97 4,857.2 LTKM BHD 1.520 -0.060 383.6 7.04 217.5 Country View Bhd 1.040 -0.060 1.0 8.33 104.0 Batu Kawan Bhd 20.120 -0.060 0.5 -9.78 7,914.8 Malayan Cement Bhd 3.610 -0.060 801.6 70.28 4729.8 Data as compiled on Oct 2, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) Rapid Synergy Bhd 25.200 0.600 228.1 57.89 2693.8 Nestle Malaysia Bhd 127.000 0.500 38.5 -9.29 29781.5 Petronas Dagangan Bhd 22.640 0.260 134.800 -0.9 22491.8 Harrisons Holdings Malaysia 8.590 0.210 7.9 29.56 588.2 United Plantations BHD 16.800 0.160 138.0 11.92 6968.4 Southern Acids Malaysia BHD 3.500 0.130 6.0 -4.11 479.3 MBM Resources BHD 3.800 0.110 1406.499 26.77774 1485.4 Pertama Digital BHD 3.490 0.100 1997.1 98.30 1529.4 Press Metal Aluminium Holdings 4.790 0.080 2453.8 -1.84 39467.8 Paragon Union BHD 2.650 0.080 140 42.47 222.1 Kuala Lumpur Kepong Bhd 21.480 0.080 602.7 -3.94 23164.8 Khind Holdings Bhd 2.700 0.080 1.2 -12.90 113.5 Heineken Malaysia Bhd 24.400 0.080 35.1 -3.17 7371.2 CI Holdings Bhd 3.180 0.080 1.6 8.53 515.2 JF Technology Bhd 1.160 0.070 2733.5 43.21 1075.4 FCW Holdings BHD 1.100 0.070 0.1 5.77 275.0 Kein Hing International Bhd 1.450 0.060 847.3 -31.6 157.9 Hartalega Holdings Bhd 2.050 0.060 4838.9 20.59 7005.8 Carlsberg Brewery Malaysia 20.060 0.060 51.9 -12.33 6133.3 Toyo Ventures Holdings Bhd 1.460 0.050 1068 48.98 156.2 Data as compiled on Oct 2, 2023 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 33,375.39 -132.11 -0.39 S&P 500 * 4,283.42 -4.63 -0.11 NASDAQ 100 * 14,815.72 100.48 0.68 FTSE 100 * 7,608.08 -104.71 -1.38 AUSTRALIA 7,033.21 -15.43 -0.22 CHINA 3,110.48 3.16 0.10 HONG KONG 17,809.66 436.63 2.51 INDIA 65,828.41 320.09 0.49 INDONESIA 6,961.46 21.57 0.31 JAPAN 31,759.88 -97.74 -0.31 KOREA 2,465.07 2.10 0.09 PHILIPPINES 6,304.53 -16.71 -0.26 SINGAPORE 3,208.86 -8.55 -0.27 TAIWAN 16,557.31 203.57 1.24 THAILAND 1,469.46 -1.97 -0.13 VIETNAM 1,155.25 1.10 0.10 Data as compiled on Oct 2, 2023 * Based on previous day’s closing Source: Bloomberg CPO RM 3,727.0023.00 OIL US$ 90.83-1.37 RM/USD 4.7172 RM/SGD 3.4389 RM/AUD 3.0178 RM/GBP 5.7379 RM/EUR 4.9715