CEOMorningBrief TUESDAY, NOVEMBER 28, 2023 ISSUE 676/2023 theedgemalaysia.com ANWAR: THAILAND’S PORT, LAND BRIDGE PROJECT WILL BENEFIT MALAYSIA p2 ESG Awards 2023 HOME: AirAsia adds over five million seats for China, India and Malaysia flights in 2024 p6 RHB Bank’s 3Q earnings drop 6.5% on lower net fund based income p7 Best 2023 IPO Oppstar hits record low after 1H results miss p11 PN17 firm Perak Corp partners Advancecon to develop RM1 bil project in Perak p12 WORLD: Negotiators close to agreeing extension of Gaza truce, say Egyptian security sources p20 Report on Page 3. Rafizi: Govt to roll out targeted subsidy for RON95 petrol in 2H2024 THE EDGE FILE PHOTO
TUESDAY NOVEMBER 28, 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] Anwar: Thailand’s port, land bridge project will benefit Malaysia Dewan Rakyat approves Budget 2024 via voice vote BUKIT KAYU HITAM (Nov 27): Thailand’s plan to build sea ports and a land bridge which will shorten the journey of ships without the need to go through the Straits of Melaka will also benefit Malaysia, especially northern Peninsular Malaysia. Prime Minister Datuk Seri Anwar Ibrahim said the government will ensure Malaysia benefits from and is involved in the project. He added that Thai Prime Minister Srettha Thavisin assured the involvement of Malaysia in the project. “The land bridge is still in the initial stage but in the discussions [with Srettha], it will involve Malaysia especially northern peninsula. “We have benefits [from the project], whether in terms of facilities there or equity is still too early for discussion. “But the spirit displayed by the Thai prime minister was clear when he told me that they will make sure Malaysia will benefit and be involved in the project,” said Anwar at a media conference after a one-day working visit to Sadao, Songkhla Province in Thailand near here on Monday. At the Asia Pacific Economic Cooperation Summit in San Francisco recently, Srettha was reported to have raised the idea KUALA LUMPUR (Nov 27): Dewan Rakyat passed the RM393.8 billion Budget 2024 on Monday with a majority voice vote after 24 days of debate. Speaker Tan Sri Johari Abdul announced this after debates on the allocations for the Ministry of Education (MOE) and the Ministry of Higher Education (MOHE) at the committee stage were completed. In the afternoon, 28 members of Parliament (MPs) participated in debates during the committee stage for MOE’s allocations, while 21 MPs debated MOHE’s allocation. Budget 2024, themed Reformasi Ekonomi, Memperkasakan Rakyat, comprises an operating expenditure of RM303.8 billion and development expenditure of RM90 billion, including Bernama HOME BY CHOY NYEN YIAU theedgemalaysia.com of the project costing RM131 billion via the construction of new ports in Ranong on the west and Chumpon on the east which will be connected by rail and road. The 90-kilometre route is expected to shorten the journey by sea by four days and save 15% in cost between the Gulf of Thailand and the Andaman Sea. Meanwhile, Anwar described Srettha as being committed to settle issues raised involving the two countries. “In the detailed discussions with Srettha, the Thai prime minister said Phuket will benefit [from tourism] and he [has] ordered [the] Thai tourism minister to distribute the impact to Langkawi for greater synergy between the countries. “This attitude of sharing is rare in the RM2 billion in contingency savings. The Ministry of Finance received the highest allocation of RM66.6 billion under Budget 2024, still lower than the RM81.4 billion it received under Budget 2023, followed by MOE with RM58.7 billion, up from RM55.2 billion previously, and the Ministry of Health with RM41.2 billion, up from RM36.3 billion previously. Starting Nov 28, Parliament will resume discussion on government affairs and Bills, as well as Private Members’ Bills. The current Dewan Rakyat sitting will continue until Nov 30 before taking a break until the house reconvenes next year. Read also: 15 experts appointed to Parliamentary Special Select Committee on Finance and Economy 15 academicians in the field of economics from public universities and private institutions of higher learning have been appointed as experts to the 15th Parliamentary Special Select Committee on Finance and Economy. relationship between two countries, so I express my appreciation for his attitude and this is not once, in several previous meetings in Putrajaya in San Francisco and before that in New York, I saw him being consistent. “There cannot be a bilateral relationship that only benefits one country and less to the other country. So, that’s why when we have benefits we share with him, and in tourism, he remembers us,” he said. Earlier, Anwar held a one-day working visit to Sadao, Songkhla Province near here with a focus on discussing issues related to Malaysia and Thailand’s bilateral cooperation with Srettha. The visit, which was at Srettha’s invitation, was aimed, among other things, at seeing the progress of the road alignment project connecting the Bukit Kayu Hitam Immigration, Customs, Quarantine and Security (ICQS) checkpoint in Malaysia and the Customs, Immigration and Quarantine (CIQ) Complex in Sadao, Thailand. Anwar, who was accompanied by several ministers, deputy ministers and senior government officials, also held a foureyed meeting with Srettha before the two leaders then visited the meeting point of the Road Alignment Project Connecting Bukit Kayu Hitam ICQS and CIQ Sadao.
TUESDAY NOVEMBER 28, 2023 3 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Nov 27): Micro-enterprises will be eligible for targeted subsidies for packet cooking oils when the government starts implementing it next year, according to Deputy Domestic Trade and Cost of Living Minister Fuziah Salleh. Fuziah commented on subsidised cooking oil during the oral question and answer session in Dewan Rakyat on Monday. She pointed out that the current subsidised packet cooking oils are only meant for households, not commercial or industrial users who consume large quantities. “But moving forward, the ministry will include micro-enterprises, as we feel that micro-enterprises also need subsidies for packet cooking oil. Thus, we will fine-tune the targeted groups. And once we receive the relevant data from the Padu database, we can improve the existing mechanism,” she said, adding that an estimate of 5.8 million households from B40 and M40 would be eligible to receive subsidised cooking oil. In response to an inquiry from Titiwangsa Member of Parliament (MP) Datuk Seri Johari Abdul Ghani, Fuziah agreed that direct cash aid “might be the best way” to avoid leakages. She revealed that this is the direction the ministry is heading toward; however, the mechanism is not ready yet. Earlier, Johari, former finance minister II, proposed that Putrajaya should adopt cash transfers for households in need, instead of continuing subsidising packet cooking oil, to curb leakages. Johari said the government produced 60 million packets of cooking oil a month, or 720 million packets a year. The subsidised packets of cooking oil, according to him, were found to be illegally exported, with Micro enterprises to also get targeted packet cooking oil subsidies KUALA LUMPUR (Nov 27): The government will roll out a targeted subsidy programme for RON95 petrol in the second half of 2024 (2H2024), said Economy Minister Mohd Rafizi Ramli. He stressed the unsustainability and unfairness of a system in which the top 20% of income earners receive 53% of blanket fuel subsidies, which is neither a sustainable nor a fair model. “The government will roll out a RON95 subsidy programme in 2H2024, as we look to optimise our resources towards those that need it most. I know analysts keep asking why it takes so long, because we’ve seen how it’s done in other countries. The sequencing is important, which means getting everything ready. Once we roll it out, it is expected that there will be unhappiness here and there, there will be teething problems, but we can’t afford the U-turn,” Rafizi said in his opening address at the National Economic Outlook Conference organised by the Malaysian Institute of Economic Research (MIER) on Monday. “We have seen so many U-turns, we have seen good policies that have been implemented rather haphazardly and ended up causing so much public backlash that politicians usually turn it around. That’s why I have been accused of being defensive, when it takes us a year to prepare the foundation, but I don’t mind,” said the minister. Earlier this month, Rafizi said in the Dewan Rakyat that targeted subsidies for petrol and diesel are likely to be introduced next year, after the launch of the central database system known as Padu in January 2024. The programme will be implemented using three mechanisms, which are based on individual net disposable income, net disposable household income through social protection or assistance schemes, as well as a combination of household and individual earnings, which will be implemented using a subsidy card. These efforts are in line with the government’s central position of widening the fiscal paradigm the government works in. “Given that our public finances ran a fiscal deficit of more than 5% for three consecutive years, we must find new avenues to mobilise our resources and reduce Rafizi: Govt to roll out targeted subsidy for RON95 petrol in 2H2024 BY SYAFIQAH SALIM & LEE MING HUI theedgemalaysia.com BY CHOY NYEN YIAU theedgemalaysia.com Read also: Targeted subsidies not expected to hike industry costs, says Ahmad Maslan wholesalers selling them to micro-enterprises at a higher price. “Recently, certain parties were found purchasing the subsidised packet cooking oil and using it as biodiesel because the recycled oil price is higher than the subsidised price,” Johari added. Thus, he raised the question on whether the government intends to continue the existing mechanism to subsidise packet cooking oil. “If every B40 household uses about 5kg (kilogrammes) of cooking oil a month, we can allow them to continue purchasing [it] at RM2.50 per kg by giving cash transfers for the difference between the market price and the subsidised price,” said Johari. With this mechanism, Johari said that the cooking oil packets can be sold at the market rate, while the government will get to address the leakage and save on subsidies. wastage within the system. One inescapable dimension of this is addressing our revenue inadequacy by increasing our tax collection. Spending more money than we have is never conducive to a dynamic, sustainable state,” said Rafizi. Progressive wage policy to be tabled as white paper on Thursday On the labour market front, Rafizi said the progressive wage policy will be tabled as a white paper in Parliament on Thursday, as the government looks to fix the systemic issue of the country’s low wages. “It remains shocking to me that our median wage is only RM11 above the poverty line in this country. The real challenge in the future is how to tap into the best talents. Better talents will translate into better productivity, and you can only attract good talents with reasonable employee compensation. “Having said this, we remain mindful that wage growth must be productivity-driven through upskilling efforts. This has been emphasised via the five HGHV (high-growth, high-value) sectors identified in the Mid-Term Review [of the 12th Malaysia Plan], where we want to focus on creating a greater proportion of technological-frontier jobs,” Rafizi added.
TUESDAY NOVEMBER 28, 2023 4 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Nov 27): The Malaysian economy, as measured by its gross domestic product (GDP), is expected to grow between 4.3% and 4.6% in 2024, driven by the resurgence of the tourism sector, an improved labour market, and a rebound in the electrical and electronics sector, according to the Malaysian Institute of Economic Research (MIER). “We can see from Budget 2024 that mega projects, especially in infrastructure, can boost our economy. More can be expected from the tourism sector as well, after the Covid-19 pandemic,” said MIER board member Tan Sri Dr Sulaiman Mahbob on Monday. “There are also some signs of inflation reduction, as the latest consumer price index (CPI) data showed [that] the country’s inflation has dropped to 1.8%, the lowest in two years. For 2023, I think we can achieve around 3.9% of GDP [growth],” he said at the National Economic Outlook Conference organised by MIER. Sulaiman, who is also the chairman of Malaysian Investment Development Authority (Mida), said Malaysia attracted RM703.7 billion worth of approved investments in the last three years, and that the multiplier effect could boost the country’s employment growth. On the performance of the ringgit, he expects the local currency to hover around 4.40 against the US dollar. At the time of writing, the ringgit was trading at 4.6798 against the US dollar, after weakening 0.12% from its previous close. “We expect the ringgit to strengthen in the second half (2H2024). One of the factors is the increase in [sales and] service tax (SST) to 8% (from 6%), as the government will be able to generate revenue and then put the [country’s] fiscal position on a stronger footing,” Sulaiman said. “In terms of economic fundamentals, we remain solid. We have a diversified economy, adequate reserves and the right regulatory framework. There is no need for pegging, or for capital control,” he added. Separately, Bank Negara Malaysia assistant governor Fraziali Ismail noted the probable soft landing of the US economy, and that the factors impeding the recovery of currencies, including the ringgit, are gradually diminishing. “There is an increasing likelihood that the worst is behind us. Why am I saying that? There are signs that inflation in the US is slowing down. Because many quarters are no longer expecting the US to hike their interest rate in the fourth quarter. What we are seeing is that the US is likely to hit a soft landing,” he said. MIER sees GDP growth at 4.3%- 4.6% in 2024, ringgit at around 4.40 GEORGE TOWN (Nov 27): The Penang Development Corp (PDC) has never given any land to the private sector to be developed into industrial parks, said Chief Minister Chow Kon Yeow. Chow, who is also the Padang Kota assemblyman, said this is because the PDC’s industrial land bank is at strategic locations and can be marketed to investors in promoted industries. “However, the PDC now faces constraints in developing a new industrial land known as Batu Kawan Industrial Park 2 (BKIP2), due to its location and non-conducive surroundSHAH ALAM (Nov 27): The Ministry of Communications and Digital on Monday assured that the National Digital Identity or Digital ID project will not jeopardise the security of personal data of Malaysians. Minister Fahmi Fadzil said the initiative undertaken by Mimos Bhd, in collaboration with several other agencies, had been used in several countries, such as Estonia, Singapore and the United Arab Emirates. “There were claims that certain countries refused to implement it, but many countries have done so because of its numerous benefits. It will also reduce costs for application development. “[Once implemented,] the data of the Malaysian people will be safe from being stolen by malicious parties. Therefore, the issue of personal data security can be controlled,” Fahmi said in response to allegations that some individuals were trying to scare the public on social media regarding the development of the initiative. The minister earlier officiated the Malaysia-Japan Digital Transformation and Innovation Seminar 2023 at the Management dan Science University on Monday. Elaborating, Fahmi said the initiative and policy are not something new, but were announced in 2021. “It is a policy to standardise, especially the ‘sign-in’ process across ministries, as we see that each ministry will have its own applications and registrations, which led to the information or databases being held by many parties. That’s why we want to have single sign-in registration, in addition to solving security issues,” he said. Prior to this, the media reported that the government had approved an initial allocation of RM80 million for the development of the National Digital ID project as an effort to expedite the implementation of the self-verification platform, which is believed to further enhance the efficiency of public services. ings,” he said when replying to a question from Lim Guan Eng (DAP-Air Putih) at the state assembly sitting on Monday. Chow also said that the PDC had successfully developed nine industrial parks in Penang to ensure a sustainable industrial ecosystem in the state. He said the PDC will continue its role as the main industrial land developer in Penang, even though currently, several private developers are also involved in some developments. “With over 50 years of experience and expertise, the PDC is confident that the industrial parks it developed will continue to attract domestic and foreign investors. “The PDC will develop industrial land in strategic locations without involving the private sector,” he said. Chow added that the PDC will only collaborate with the private sector for highrisk areas that are not strategically located and in less competitive areas. Meanwhile, he said the PDC had about 324 hectares of industrial land, and is focusing on the development of industrial land in the Bandar Cassia Technology Park and BKIP3 in the eastern area of Batu Kawan. Chow: PDC has never given land to private sector to develop as industrial parks National Digital ID project won’t jeopardise personal data security — Fahmi Bernama Bernama BY SYAFIQAH SALIM & LEE MING HUI theedgemalaysia.com
TUESDAY NOVEMBER 28, 2023 5 THEEDGE CEO MORNING BRIEF
TUESDAY NOVEMBER 28, 2023 6 THEEDGE CEO MORNING BRIEF HOME BEIJING (Nov 27): A Beijing court on Monday began compensation hearings for the Chinese relatives of passengers on board Malaysia Airlines flight MH370, which mysteriously disappeared over the Indian Ocean almost a decade ago, the plaintiffs said. Over 150 Chinese passengers were on the flight which vanished en route from Kuala Lumpur to Beijing on March 8, 2014. Malaysian investigators did not rule out the possibility that the aircraft had been deliberately taken off course, and debris confirmed or believed to be from the aircraft has washed up along the coast of Africa and on islands in the Indian Ocean. Relatives of these passengers said they were demanding compensation from Malaysia Airlines, Boeing, aircraft engine maker Rolls-Royce and Allianz insurance group among others. The court did not release any details on the case, but state media said more than 40 relatives were seeking between 10 million and 80 million yuan (RM6.5 million and RM52.4 million) each in compensation. Malaysia Airlines, Rolls-Royce, Allianz and Boeing did not immediately respond to requests for comment. Holding up signs saying “resume the search” and “re-establish an international Chinese families of missing MH370 plane seek compensation in court KUALA LUMPUR (Nov 27): AirAsia on Monday announced an expansion of its services covering China, India and Malaysia, totalling 230 weekly flights for the first quarter of 2024, with up to 5.2 million seats per year. The increase in capacity via AirAsia Malaysia and AirAsia X Malaysia comes in response to the anticipated surge in travel demand, following the announcement of a 30-day visa-free entry for travellers from the two countries to Malaysia from Dec 1, 2023, Capital A Bhd chief executive officer Tan Sri Tony Fernandes said. The announcement also coincides with the recent announcement of the easing of travel restrictions for Malaysians to China from Dec 1 this year. “The 30-day visa-free entry for the citizens of China and India will surely provide a welcome boost for Malaysia’s tourism and its economy, ahead of the upcoming peak travel season, while boosting economic bonds between these great nations,” Fernandes said in a statement here on Monday. “As a vital player in the aviation sector, we stand ready to add capacity to support demand for affordable and accessible air travel in the region.” AirAsia Aviation Group Ltd group CEO Bo Lingam said the group see this as an AirAsia adds over five million seats for China, India and Malaysia flights in 2024 Bernama BY LAURIE CHEN Reuters investigation team”, Jiang Hui, a spokesperson for the bereaved families, said Malaysia Airlines left them with no choice but to go to court to seek answers. “’We are not responsible anymore’ is their attitude,” said Jiang, whose mother was on board. There was a heavy police presence outside Chaoyang District People’s Court in Beijing before the hearing, with reporters cordoned off and unable to interact with the family members. Some of the relatives, who spoke to reporters after the hearing, said they wanted the resumption of search efforts and for Malaysia Airlines to directly communicate with them as well as to provide them with psychological counselling. Many said these demands were more important than the monetary compensation. “My mother died last year and she brought up my son. Until the very end I hid from her what really happened to him,” said Beijing resident Bao Lanfang, 71, who lost her son and daughter-in-law on board. She said her husband had recently died after suffering from severe depression because of the incident. In March, another group of relatives urged the Malaysian government to allow US seabed exploration firm Ocean Infinity to mount a new search for the missing plane. opportunity not only to enhance regional connectivity in two of the carrier’s largest markets, but also to act as a catalyst for significant economic growth. “With an estimated 4.6 million guests expected to travel on our extensive network of 26 routes in China and India in 2024 alone, we are ready to play a pivotal role in achieving Malaysia’s ambitious tourism targets of 25 million international tourists annually,” he said. Reportedly the largest foreign low-cost carrier in China, both AirAsia Malaysia and AirAsia X Malaysia fly 17 routes into the country, with a total of 156 flights weekly. AirAsia and AirAsia X fly from Kuala Lumpur to Guangzhou, Quanzhou, Kunming, Guilin. The two airlines have also increased frequencies to nine routes into India, with a total of 74 flights weekly, where AirAsia flies from Kuala Lumpur to Bengaluru, Kolkata, Cochin, Hyderabad, Chennai, Trichy, and Trivandrum, a new destination from February 2024. Meanwhile, the China Embassy in Malaysia also announced that Malaysian citizens holding ordinary passports who enter China for business, tourism, family visits and transit purposes can enjoy visa-free travel for up to 15 days from Dec 1, 2023 to Nov 30, 2024. Jiang Hui, who lost his mother, wears a ‘Pray for MH370’ cap as he speaks to the media following a court hearing on compensation for those who lost their loved ones on the Malaysia Airlines flight MH370 that went missing in 2014, in Beijing, on Monday. REUTERS SUHAIMI YUSUF/THE EDGE
TUESDAY NOVEMBER 28, 2023 7 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Nov 27): UMW Holdings Bhd’s net profit for the third quarter ended Sept 30, 2023 (3QFY2023) jumped 71.91% to RM173.11 million from RM100.70 million a year ago, as it recorded higher revenue with improved contributions from all its businesses, driven by sustained demand. The conglomerate’s quarterly revenue rose 18.97% to RM4.83 billion from RM4.06 billion, with its automotive segment — its largest contributor — showing a 17.4% increase in revenue to RM4.02 billion, its bourse filing showed. At the same time, its equipment segment’s topline rose 14.6% to RM451.95 million, and its manufacturing and engineering business posted a 44.3% revenue jump to RM363.81 million from RM252.17 million previously. For the nine months ended Sept 30, the group’s net profit came up to RM611.12 million, almost double the RM309.09 million it made in the corresponding period last year, as it recorded a one-off RM218.1 million disposal gain on the sale of its 140- acre land in Serendah, and stronger revenue — which grew 19.75% to RM13.70 billion from RM11.44 billion, as all its businesses saw improved toplines. Moving forward, the group expects its automotive segment’s sales to continue to perform well in the last quarter of FY2023, as it expects the demand for vehicles to remain strong, supported by high industry order backlog. “The sales momentum will be further supported by the year-end sales promotions as well as new model launches. The improving supply chain has led to higher vehicle production, thus reducing the delivery lead-time to customers. This is also expected to help drive sales of new vehicles,” it said. At the same time, it said outlook for its equipment continues to remain favourable, though the last quarter of FY2023 is expected to be softer than the prior quarters. “The heavy equipment sub-segment continues to exhibit strength, primarily driven by the increased demand in the mining sector in Papua New Guinea and the plantation sector in Malaysia. Furthermore, the ongoing infrastructure projects in Malaysia, Singapore, and Papua New Guinea are expected to contribute positively to this sub-segment. Nevertheless, the sub-segment remains vigilant on the potential impact of the ongoing political uncertainties in Myanmar,” the group noted. As for its manufacturing and engineering business, the group said the auto components and lubricants sub-segments are expected to benefit from the sustained demand in the original equipment market, in line with the expected higher demand for new vehicles in the last quarter of the year. Overall, the group expects to deliver a “satisfactory performance for the year”. Shares in UMW dipped one sen or 0.2% to close at RM4.90 on Monday, giving the group a market capitalisation of RM4.90 billion. Year to date, the stock has climbed 42.03%. UMW’s 3Q profit jumps 72% on sustained demand KUALA LUMPUR (Nov 27): RHB Bank Bhd’s net profit declined 6.5% to RM649.95 million for the third quarter ended Sept 30, 2023 (3QFY2023), from RM695.41 million a year ago, mainly due to lower net fund based income. Earnings per share fell to 15.16 sen for 3QFY2023, from 16.51 sen for 3QFY2022, the group showed in a stock exchange filing on Monday. Net interest income dropped 17% to RM915.61 million for 3QFY2023, from RM1.10 billion for the previous corresponding quarter. For the cumulative nine-month period ended Sept 30, 2023 (9MFY2023), RHB’s net profit grew 16% to RM2.22 billion from RM1.91 billion for 9MFY2022, despite net interest income falling by 14% to RM2.69 billion from RM3.12 billion previously. RHB said the improvement in 9MFY2023 was mainly due to lower allowances for credit losses and higher non-fund based income. Expected credit losses reduced 81.4% to RM71.4 million for 9MFY2023, primarily due to write-backs of management overlay, said RHB. “Excluding write-backs, normalised credit cost stood at 0.24% (9MFY2023), compared with 0.35% for the same period last year,” it added. The group’s gross loans grew 3.4% to RM219.4 million for 9MFY2023, mainly driven by mortgage, personal finance, auto finance, small and medium enterprises (SMEs) and Singapore. Year-to-date customer deposits increased by 4.0% to RM236.1 million, mainly from growth in retail and SME deposits. Current account saving accounts made up 26.9% of total deposits, said RHB. The cost-to-income ratio rose to 47.1% for 9MFY2023, versus 44.3% a year ago, amid higher personnel costs, which RHB attributed to collective agreement adjustments, coupled with higher establishment and marketing costs. RHB Bank’s 3Q earnings drop 6.5% on lower net fund based income “Despite the headwinds, the group continued to uphold its strong financial performance in 3QFY2023, and consequently for 9MFY2023, as it navigated the challenging operating environment,” said group managing director and chief executive officer Mohd Rashid Mohamad. “The group’s fundamentals remained strong, as reflected in the healthy capital and liquidity position. We will remain vigilant as risks from external factors, including recent developments in geopolitical tensions as well as challenges in certain markets where we operate, may dampen growth,” he said in a statement on Monday. Mohd Rashid said RHB is on track to achieving its sustainable financial services target under the group’s five-year Sustainability Strategy and Roadmap. “On a cumulative basis, we have attained over RM19 billion, equivalent to 99% of our RM20 billion target. We will be revising our sustainable financial services commitment upwards to ensure we continue to expand and maximise our impact in supporting our customers in their sustainability journey,” he said. Shares in RHB were trading one sen or 0.2% higher at RM5.61 at Monday’s noon market break, giving the group a market capitalisation of RM24.05 billion. BY CHESTER TAY theedgemalaysia.com BY SULHI KHALID theedgemalaysia.com More on corporate earnings: Tan Chong posts RM51 mil net loss in 3Q on inflationary pressures, stiffer competition Microlink’s 2Q net profit down 98% as margins shrink
TUESDAY NOVEMBER 28, 2023 8 THEEDGE CEO MORNING BRIEF HOME Tourism activities, hot weather drive Spritzer’s 3Q profit to record high Sime Darby’s 1Q profit lifted by Malaysia Vision Valley land sale, stronger revenue BY ADAM AZIZ theedgemalaysia.com BY JUSTIN LIM theedgemalaysia.com KUALA LUMPUR (Nov 27): Sime Darby Bhd’s net profit for its first quarter ended September (1QFY2024) rose to RM589 million from RM207 million in 1QFY2023, as all segments improved, led by the industrial division, coupled with a RM251 million gain on disposal of Malaysia Vision Valley land to Sime Darby Property Bhd. Revenue in the quarter rose 14.76% to RM13.98 billion, from RM12.18 billion, led by higher revenue in the motors segment, its filing showed. This was the strongest quarterly revenue for the group since 4QFY2012, when it recorded RM14.12 billion revenue with RM1.1 billion net profit, and when its plantation and property divisions were still operating within the Sime Darby listed entity. The improved performance in the industrial segment was supported by contribution from Onsite Rental Group, which Sime Darby acquired in April 2023. The overall positive motors performance was attributable to the Malaysian operations, it said, citing slowdown in China which resulted in lower profit margins in the region. Quarterly earnings per share amounted to 8.6 sen, from 3.1 sen in 1QFY2023. On a quarter-on-quarter basis, Sime Darby’s revenue rose 5.2% from RM13.29 billion. Segment-wise, the industrial segment saw a 4.5% decrease in segment results, while normalised motors segment grew 11.5% on higher Malaysian operations profits. In a statement, Sime Darby’s group chief executive officer Datuk Jeffri Salim Davidson pointed to the successful acquisition of South Australia’s Caterpillar industrial machinery dealer Cavpower Group. “South Australia is home to over 150 mining companies, and we are confident that there are tremendous opportunities for the heavy equipment and rental business,” Jeffri said. He also pointed to Sime Darby’s full exit from the healthcare business through its RM5.68 billion divestment of Ramsay Sime Darby Health Care Sdn Bhd to Columbia Asia Healthcare Sdn Bhd earlier this month. Additionally, Sime Darby in August proposed to acquire a 61.2% stake in UMW Holdings Bhd from Permodalan Nasional Bhd for RM3.57 billion, with aims to make a general offer and take UMW private. ”Looking forward, we are highly optimistic that the UMW deal will help to broaden our earnings and allow us to capitalise on the mass volume segment, while unlocking further value by leveraging our proven strengths and capabilities in the automotive sector,” Jeffri said. Shares of Sime Darby rose two sen or 0.84% to RM2.39 at the noon market break, giving it a market capitalisation of RM16.29 billion. KUALA LUMPUR (Nov 27): Spritzer Bhd’s net profit surged 48.5% to a record high of RM16.97 million in the third quarter ended Sept 30, 2023 (3QFY2023), from RM11.43 million a year ago, as the company sold more bottles of drinking water amid recovery in tourism activities plus hot weather. The leap in quarterly net profit was bigger than in quarterly revenue, which grew 10.85% to RM132.56 million, from RM119.59 million a year ago. Earnings per share expanded to 5.32 sen in 3QFY2023, from 3.63 sen in the year before, according to Spritzer’s bourse filing. Its share price closed at all-time high of RM1.69, valuing the manufacturer at a price-earnings ratio of 11.2 times with a market capitalisation of RM540 million. Quarterly revenue growth was mainly driven by an increase in sales volume of bottled water from the manufacturing segment. However, the company noted that its trading segment, which is principally involved in the sale of plastic packaging materials, did not do well during the quarter under review. For the cumulative nine months of FY2023 (9MFY2023), its net profit jumped 41% to RM36.27 million, from RM25.7 million the year before, as revenue expanded 12.7% to RM365.67 million, from RM324.6 million in the same period. “Our innovative branding, marketing and promotional activities have also enabled us to deliver a good performance thus far,” it said. On its prospects, Spritzer’s directors are optimistic that the group will be able to further strengthen its market leadership position in the bottled water industry and generate a favourable performance in the financial year ending Dec 31, 2023. More on corporate earnings: Guan Chong 3Q net profit up 10%, declares two sen dividend LKL International returns to the black in 3Q, aborts plans to promote Singapore firm’s medical products in M’sia Spritzer quarterly net profit and revenue Net profit (RM mil) Revenue (RM mil) Financial year ends Dec 31 Source: Bursa Malaysia 0 5 10 15 20 60 90 120 150 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY2021 FY2022 FY2023 16.97 6.06 4.08 5.99 8.11 6.65 7.62 11.43 11.27 7.16 12.15 132.56 76.05 75.03 79.33 100.61 98.82 106.20 119.59 108.70 109.42 123.69
TUESDAY NOVEMBER 28, 2023 9 THEEDGE CEO MORNING BRIEF
TUESDAY NOVEMBER 28, 2023 10 THEEDGE CEO MORNING BRIEF HOME MRCB 3Q profit down 94% as revenue drops Weak consumer sentiment pulls Heineken Malaysia’s 3Q profit lower DNeX’s quarterly profit nears three-year low BY JUSTIN LIM theedgemalaysia.com BY JUSTIN LIM theedgemalaysia.com BY ANIS HAZIM theedgemalaysia.com KUALA LUMPUR (Nov 27): Heineken Malaysia Bhd’s net profit for the third quarter ended Sept 30, 2023 (3QFY2023) dropped 19.69% to RM87.33 million, from RM108.74 million a year before, due to weak consumer sentiment driven by rising cost of living and macro-economic concerns. Earnings per share fell to 28.91 sen in 3QFY2023, from 35.99 sen a year ago, the brewer’s filing with Bursa Malaysia showed. Quarterly revenue declined 16.77% to RM599.66 million, from RM720.47 million a year earlier. The lower sales were due to weaker consumer sentiment, coupled with a strong base in the same quarter of last year as there was a surge in sales following the re-opening of the economy and international borders. The board of directors did not recommend any dividend in respect of the quarter under review. For the cumulative nine months of FY2023 (9MFY2023), its net profit also decreased albeit by 6.64% to RM287.73 million, from RM308.19 million in 9MFY2022, as revenue shrank 7.48% to RM1.91 billion, from RM2.06 billion during the same period. The higher promotional and marketing expenses incurred also dragged the group’s earnings for 9MFY2023. Commenting on the results, its managing director Roland Bala said 2023 remains challenging as the market goes through corrections following the rebound in 2022 coupled with weaker consumer sentiment due to macroeconomic concern On its outlook, Roland said in light of cautious consumer spending due to macroeconomic concerns, the group anticipates the market to remain challenging. “In the absence of the one-off prosperity tax, we also look forward to a positive impact on the group’s net profit this year,” he added. The share price of Heineken Malaysia closed down two sen or 0.09% to RM23.38, bringing the group a market capitalisation of RM7.06 billion. Year-to-date, the stock has fallen 7%. KUALA LUMPUR (Nov 27): Technology, energy and IT company Dagang Nexchange Bhd (DNeX) posted a net profit of RM13.3 million for the financial quarter ended Sept 30, 2023, on the back of a revenue of RM327.45 million. The quarterly performance is the lowest since 2021, when it posted a net profit of RM2.15 million in the financial quarter ended March 31, 2021. There is no comparative for the quarter under review as the company has changed its financial year end to Dec 31, from June 30. On a quarter-on-quarter (q-o-q) basis, the group posted a 72% drop in net profit from RM47.51 million in the immediate preceding quarter, 2QFY2023, despite revenue increased 19.1% q-o-q from RM275.02 million. The lower q-o-q earnings were due to lower contributions from the information technology (IT) segment and corporate segment. IT segment’s profit before tax fell 26.17% to RM16.16 million, from RM21.89 million previously, while the corporate segment’s loss before tax widened to RM4.62 million, from RM4.16 million previously. For the cumulative 15-month financial period, it incurred a net loss of RM105.35 million on the back of a revenue of RM1.63 billion. On its outlook, DNeX said it aims to leverage its competitive strengths developed across three core business segments to remain resilient amidst this challenging environment. For the technology segment, the group said it continues to remain focused on improving its product mix with emerging technologies such as microelectromechanical systems (MEMS) and silicon photonics that carry higher average selling prices and profit margins. On its energy segment, DNeX said announcements by Opec+ to extend their voluntary oil production cuts is expected to support oil prices, which bodes well for the group given its role as an upstream producer. Over on its IT segment, the group said its strategic plan involves expanding service offerings by advancing our capabilities and seizing opportunities in new technology areas such as internet of things (IoT), Big Data and analytics. “This will put us in a strong position when tendering for large-scale IT and digitalisation projects from the public and private sectors, locally and abroad,” it added. KUALA LUMPUR (Nov 27): Malaysian Resources Corp Bhd (MRCB) reported a net profit of RM1.46 million or 0.03 sen in the third quarter ended Sept 30, 2023 (3QFY2023), down 93.84% year-on-year from RM23.70 million or 0.53 sen a year ago. Quarterly revenue declined 41.43% to RM503.74 million in 3QFY2023 from RM860.02 million in 3QFY2022, according to the property and infrastructure company’s filing to Bursa Malaysia on Monday. MRCB said the decline in revenue was due to much lower contributions from the property development and investment division, as well as the engineering, construction and environment division, following the completion of three major infrastructure construction projects last year and two major property development projects in the first half of 2023 (1HFY2023). For the cumulative nine months ended Sept 30, 2023 (9MFY2023), the group’s net profit came in lower at RM20.80 million, a 59.87% drop from RM51.83 million in 9MFY2022, as revenue fell 22.17% to RM1.85 billion versus RM2.37 billion a year earlier. On prospects, the group said that it has about RM4 billion worth of properties earmarked for launch in 2024 under its property development and investment division, which will underpin a new growth cycle for the group. “The company’s immediate priorities moving forward remain on enhancing cashflow by monetising its unsold completed stock, which stood at RM550 million on Sept 30, 2023,” it noted. More on corporate earnings: Kumpulan Perangsang Selangor’s 3Q profit halves on lower revenue and higher costs UOA Development earnings down 47% amid lower revenue, higher tax expense Read the full story
TUESDAY NOVEMBER 28, 2023 11 THEEDGE CEO MORNING BRIEF HOME Panda Eco System Bhd Source: Bloomberg 9am 4.55pm Nov 27, 2023 26 sen 29 sen Sen IPO price at 16 sen 10 20 30 KUALA LUMPUR (Nov 27): Retail management solutions provider Panda Eco System Bhd made its debut on the ACE Market of Bursa Malaysia on Monday with an opening price of 29 sen — a premium of 81% to its initial public offering price (IPO) of 16 sen. The most actively traded counter of the day with 190.37 million shares done, the stock pared some gains to end the trading day at 26 sen, still up 62.5% or 10 sen. Phillip Capital has valued Panda Eco at 22 sen, and ascribed a 18 times price-earnings multiple (in line with its domestic software peers) on earnings per share (EPS) estimated for the financial year ending Dec 31, 2024 (FY2024). In a note on Monday, the research house, which does not have a rating for the counter, estimated a three-year profit compound annual growth rate of 10% from FY2021 to FY2024, driven by the company’s local business expansion and offering of new innovative products. “Panda Eco stands out in terms of its product stickiness and high switching costs, [as well as a] niche and stable tarPanda Eco gains 62.5% on ACE debut KUALA LUMPUR (Nov 27): Oppstar Bhd, whose initial public offering (IPO) was the best so far this year as it gained 285.71% on its debut on the ACE Market in March, saw its share price skid to a record low of RM1.33 on Monday after its financial results for the first six months ended Sept 30, 2023 (1HFY2024) missed expectations. The counter ended Monday 28 sen or 17.39% lower than its last Friday’s closing price of RM1.61. Its market capitalisation stood at RM846.15 million. Oppstar also ended the day as the fourth biggest loser on the local bourse amid heavy turnover, with 11.76 million shares traded, about four times its 200-day average trading volume of 2.76 million shares. The integrated circuit design service provider has shed RM1.10 or 45.27% from a high of RM2.43 at the close on March 15, which was its maiden trading day. Oppstar’s initial public offering price was 63 sen. Kenanga Research said Oppstar’s net profit for 1HFY2024 of RM9.34 million missed its expectations, accounting for only 33% of its full-year forecast, and 32% of the full-year consensus estimate. “The variance against our forecast came largely from a sharper-than-expected decline in contributions from certain turnkey projects at their tail ends,” it said. The company’s 1HFY2024 revenue stood at RM29.71 million. There were no comparable results from a year ago, as the company was only listed in March 2023. For the second quarter ended Sept 30, 2023 (2QFY2024), Oppstar posted a net profit of RM4 million, a 24.88% decline from RM5.33 million reported for 1QFY2024. Best 2023 IPO Oppstar hits record low after 1H results miss Earnings per share declined to 0.63 sen per share, from 0.84 sen for 1QFY2024. Meanwhile, revenue shrank by 10.54% to RM14.03 million for 2QFY2024, from RM15.68 million previously. In a note on Monday, the research house maintained its target price (TP) of RM1.82 and “market perform” rating for the stock, but lowered its FY2024 net profit forecast by 10% to RM25.60 million to reflect a larger earnings gap between the company’s old and new projects. “We maintain our TP of RM1.82, based on an unchanged 30 times FY2025 price-earnings ratio (PER), which translates into an about 25% discount (previously 15%) to the mean forward PER of its larger international peers, given the widened gap in terms of the size between Oppstar and its international peers. “We like Oppstar for: i) its foothold and growing presence in the front-end semiconductor space with high entry barriers, specifically stringent qualification requirements; ii) its strong design capabilities in leading-edge process nodes; and iii) its diverse customer base, both from the east and the west, given its strong working relationships with various foundries. “However, its tepid profit performance at this juncture leaves the group vulnerable to temporary fluctuations during transitions between projects,” said Kenanga Research. Read the full story BY LAM JIAN WYN theedgemalaysia.com BY SURIN MURUGIAH theedgemalaysia.com Oppstar Bhd 0 50 100 150 200 Mar 15, 2023 Nov 27, 2023 1.0 1.5 2.0 2.5 Vol (mil) RM RM1.33 RM2.42 At market close on Nov 27, 2023 Source: Bloomberg get market of retailers and grocers. “In addition, Panda Eco should be able to capitalise on the digitalisation movement incentivised by the government for small and medium enterprises in Budget 2024. “Key risks include the absence of longterm contracts and competition risks,” it said. Meanwhile, Rakuten Trade has a “buy” recommendation on Panda Eco, with a target price of 30 sen, and said it expects Panda Eco to register core net earnings of RM8.1 million for FY2023, and RM10.2 million for FY2024. “[We recommend] ‘buy’, with a fair value of 30 sen, based on 20 times price-earnings ratio (the average of peers with similar market capitalisation) over FY2024 EPS,” it said. Read also: Panda Eco prices IPO at 16 sen, seeks to raise RM17.5m on ACE Market Critical Holdings sets IPO price at 35 sen per share, to raise RM39 mil
TUESDAY NOVEMBER 28, 2023 12 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Nov 27): Maxis Bhd said its wholly-owned subsidiary on Monday failed in its bid to initiate a judicial review with regards to additional assessments with penalties imposed by the Inland Revenue Board (IRB). The group said the High Court dismissed Maxis Broadband Sdn Bhd’s (MBSB) application to commence judicial review in respect of the additional assessment and penalty of RM140 million for the years of assessment 2016 and 2017, and RM71.7 million for the year of assessment 2021. In a bourse filing, Maxis said that based on the advice of MBSB’s legal counsel, an appeal against the court’s decision will be filed at the Court of Appeal along with an application for a stay of enforcement pending the appeal. On March 31, 2021, MBSB was served with an additional assessment notice of RM230 million for years of assessment 2018 and 2019. Before that, on Nov 20, 2020, MBSB had also been slapped with a RM140 million tax bill for the years of assessment 2016 and 2017. These brought the total additional assessment across the five years from 2016 to 2020 to RM477 million, which Maxis went on to challenge in court. Shares in Maxis closed two sen or 0.50% lower at RM3.95, giving the group a market capitalisation of RM30.94 billion. Maxis unit fails in bid to initiate judicial review against IRB KUALA LUMPUR (Nov 27): Debt-ridden Perak Corp Bhd has appointed Advancecon Holdings Bhd’s wholly-owned subsidiary Advancecon Development Sdn Bhd as a joint venture (JV) partner to jointly develop the main infrastructure for the Silver Valley Technology Park Industrial Hub, and carry out sale of completed industrial lots with main infrastructure on 39 pieces of leasehold land in Hulu Kinta, Perak, which has an estimated total gross development value (GDV) of RM1.03 billion. In a filing with Bursa Malaysia on Monday, Perak Corp said it has issued a letter of award to Advancecon for the proposed joint development measuring 798.24 acres. The project is subject to the execution of a joint development agreement in due course. The proposed joint development will be for five years, subject to the approval of the relevant authorities, shareholders of Perak Corp at an extraordinary general meeting to be convened and Bursa Malaysia Securities on Perak Corp’s regularisation plan. It is also subject to the written undertaking from Perbadanan Kemajuan Negeri Perak, who is owner of the land and the holding corporation of Perak Corp. Under the JV, Perak Corp will be entitled to a revenue share of 35% based on the net development value while Advancecon will be entitled to 65%. “As Perak Corp is classified as an affected listed issuer under Practice Note 17 (PN17), the proposed joint development provides an avenue for the company to raise funds to channel towards the group’s business operations which will improve the group’s overall cash flow position, as well as strengthening its financial position as part of its regularisation effort,” said Perak Corp. It slipped into PN17 status in February 2020 as a result of a default in payment and its inability to declare solvency. “The proposed joint development is part of the measure to raise the necessary cash required for the group’s business regularisation plans, which are still in the midst of being finalised as at the date of this announcement. The group plans to make the requisite announcement for its proposed regularisation plan in the fourth quarter of 2023,” Perak Corp added. In view that the proposed joint development is a component of Perak Corp’s regularisation plan, shareholders’ approval for the proposed joint development will be sought together with the regularisation plan concurrently. The proposed joint development is expected to contribute positively to the earnings per share and net assets per shares of Perak Corp for the financial year ending Dec 31, 2024 (FY2024) onwards until the expiry of the project. Advancecon intends to fund the proposed joint development via internal funds and/ or external borrowings. Perak Corp shares ended the day up one sen or 2.44% at 42 sen on Monday, valuing it at RM42 million. Advancecon shares closed unchanged at 29 sen, with 132,000 shares traded. Its market capitalisation stood at RM169.57 million. PN17 firm Perak Corp partners Advancecon to develop RM1 bil project in Perak Velesto secures contract extension from Carigali Hess worth US$74 mil BY KANG SIEW LI theedgemalaysia.com BY EMIR ZAINUL theedgemalaysia.com BY SULHI KHALID theedgemalaysia.com KUALA LUMPUR (Nov 27): Velesto Energy Bhd said the contract between its unit Velesto Drilling Sdn Bhd and Carigali Hess Operating Company Sdn Bhd has been extended for another one year and six months with an estimated contract value of US$74 million (RM346.39 million). The contract, which entails the provision of a 10K jack up drilling rig, will commence from April 19, 2024 until Oct 18, 2025, Velesto said in a filing with Bursa Malaysia on Monday. “Velesto Energy will continue to assign NAGA 8 for the extension period of the contract,” it said, referring to its premium independent-leg cantilever jack-up rig that has a drilling depth capability of 30,000 feet and a rated operating water depth of 400 feet. Velesto added that the extension of the contract is expected to contribute positively towards its earnings and net assets. Carigali Hess first awarded Velesto Drilling the contract in 2019, and it was worth US$131 million (RM541.17 million) at the time. Carigali Hess, an oil and gas joint venture between PCJDA Ltd and Hess Oil Company of Thailand Ltd, is involved in gas production in the joint development area administered by the Malaysian-Thailand Joint Authority. The contract initially commenced in the second half of 2020 for three years, with three extension options of six months each. Velesto’s shares closed up one sen or 4.44% at 24 sen on Monday, for a market capitalisation of RM1.89 billion.
TUESDAY NOVEMBER 28, 2023 13 THEEDGE CEO MORNING BRIEF
TUESDAY NOVEMBER 28, 2023 14 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Nov 27): Citing the inversion of the yield spread between the 10-year and two-year US Treasury (10-2Y UST) rates, a banker and fund managers said the US may still fall into a recession in the next six months. The 10-2Y UST yield spread, which has been inverted since mid-2022, is seen as an indicator signalling a coming recession within a 24-month period, according to Hong Leong Investment Bank Bhd head of Treasury and Markets Chong Poh Choon. “Interestingly, we are actually at 17 months [since the yield spread inverted], so we probably have another six months to see whether this hypothesis is correct,” he said during a panel discussion at the MARC Malaysian Bond & Sukuk Conference 2023: Sustainable Transition to a Greener Economy on Monday (Nov 27). “Assuming the hypothesis is correct, there’s a recession going to a rate cut. So the yield curve will have to steepen — dragging down short-dated bonds,” he added On the other hand, the term structure of interest rates — the relationship between interest rates or bond yields and different terms or maturities — should normalise if the hypothesis is incorrect, according to Chong. “Overall, the conclusion is I personally see both the US and our government securities’ yield curves to steepen into 2024,” he said. AXA Investment Management chief investment officer Ramkumar Rasaratnam concurred that the inverted 10-2Y UST yield spread points towards an impending recession, but noted that the unemployment rate and payroll numbers are also key economic indicators to closely watch. “When we look at recessions in the past, for example in the US, the unemployment rate accelerates very quickly, from very low to very high, or from very high to very low. “But based on what’s priced at the moment [in the markets] based on general consensus forecast is a soft landing, which is generally no recession and a Risk of US recession still looms over next six months, say banker and fund managers BY IZZUL IKRAM theedgemalaysia.com Read also: ESG bonds to be a major growth area for Malaysia’s capital market, says banker return to normality next year,” he said. Meanwhile, Maybank Asset Management Sdn Bhd head of Fixed Income Ben Eeh said the current state of the global economy going into next year gives him a sense of deja vu with interest rates seemingly peaking again, inflation cooling, advanced economies’ growth slowing and the risk of a hard landing in the US. However, Eeh said he is positive on Asian equity, citing its cheap valuation, and currencies because he believes the basket underperformed in 2023, adding that there will be more support from investment inflow. “I think we (Maybank Asset Management) are more constructive for next year, we are long-term on dollar bonds, and we think there will be more than just income from yield, it will come from price appreciation. “It could potentially hit double digits next year if it turns out exactly as what the market is expecting — pricing in four rate cuts to the US Federal Funds Rate of 100 basis points next year,” he said. “I think there is good potential [that] we can have a very good return next year,” he added. UMediC proposes to transfer listing from ACE to Main Market KUALA LUMPUR (Nov 27): Medical equipment supplier UMediC Group Bhd, which was just listed over a year ago in July 2022, is now planning to transfer its listing from the ACE Market to the Main Market of Bursa Malaysia. UMediC said in a bourse filing that it has met the requirements issued by the Securities Commission Malaysia for the proposed transfer, including in terms of profit and public shareholding spread, with a healthy financial position. For the fourth financial quarter ended July 31, 2023 (4QFY2023), UMediC's net profit surged fivefold to RM3.37 million, from RM568,000 a year earlier, on the back of higher demand for medical devices and consumables from both public and private hospitals. Revenue for the quarter jumped to RM12.02 million, from RM7.41 million a year ago. For the full year, net profit rose to RM10.32 million from RM6.43 million a year prior, despite posting a lower revenue of RM45.43 million versus RM50.74 million. UMediC's shares closed unchanged at 75 sen apiece on Monday — more than double its initial public offering price of 32 sen — giving the group a market capitalisation of RM280 million. — by Emir Zainul NEWS IN BRIEF Siab secures RM107 mil residential development project in KL KUALA LUMPUR (Nov 27): Siab Holdings Bhd has secured a RM106.80 million residential development project in Pantai Sentral, Kuala Lumpur. The project entails the construction of a 32-storey apartment block with 336 units and a floor of resident facility, the construction group said in a filing with Bursa Malaysia on Monday. Siab said its unit Siab (M) Sdn Bhd secured the award from Murni Lapisan Sdn Bhd (MLSB), with the duration of the project being 34 months. The project is expected to contribute positively to the earnings and net assets of the company for the financial year ending Dec 31, 2023 and throughout the duration of the project, the group added. — by Sulhi Khalid Sapura Resources to settle RM168 mil debt via convertible secured loan stocks KUALA LUMPUR (Nov 27): Sapura Resources Bhd said it will settle its RM168 million debt with Jurudata Sdn Bhd (JSB) via the issue of redeemable convertible secured loan stocks (RCSLS) in the group, due to its weak cash flow position which makes it difficult to secure bank borrowings. The 373.33 million nine-year zero coupon RCSLS will be issued at 45 sen per stock and has a tenure of nine years before JSB may convert them into Sapura Resources shares, the group said in a bourse filing. Sapura Resources had received the advances from JSB between September 2022 and November 2023 after it was unable to meet its monthly lease payment obligations to Impian Bebas Sdn Bhd (IBSB) for 15 months from February 2022 until April 2023, as part of a master lease agreement for the office tower Permata Sapura. JSB is owned 92.18% by Sapura Technology Bhd and 7.82% by Teledata Sdn Bhd. Sapura Resources said the issuance of the RCSLS is expected to assist the group in settling the advances while preserving its cash and bank balances, which can be used for other purposes such as working capital. — by Emir Zainul Read the full story
TUESDAY NOVEMBER 28, 2023 15 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Nov 27): PublicInvest Research has upgraded its sector rating for rubber gloves from “underweight” to “neutral”, as it believes the worst is over with the glove makers returning to the black. The research firm also raised its calls on recently turned-around Hartalega Holdings Bhd and Kossan Rubber Industries Bhd from “underperform” to “neutral”, with new target prices (TPs) of RM2.11 for Hartalega and RM1.38 for Kossan, on anticipation of higher sales volumes and stabilised average selling prices (ASPs). PublicInvest also noted that Kossan remains the “most resilient”, with a 46.56% net cash-to-market cap. It maintained still loss-making Top Glove Corp Bhd’s “underperform” rating, with a TP of 63 sen, given the company’s low net cash position and utilisation rate. “Although we believe the worst is over, with the glove makers turning profitable moving into the first half of 2024 (1H2024), we do not expect earnings to revert to pre-Covid levels anytime soon,” it added. The research firm warned that ASPs are not expected to rise meaningfully, given the prevailing pricing competition from Chinese glove players. “We believe the recent positive movements in share prices were reflective of anticipated earnings improvement. Nonetheless, we remain cautious about the Chinese players, which are currently running at near capacity, and should they continue to expand, Malaysian glove players’ market share would be eroded,” it added. Notably, PublicInvest said the glove manufacturers had shown a quarter-on-quarter improvement in their recent results, signalling a positive trend in their performance, primarily attributed to elevated sales volumes and decreased costs of raw materials. It noted that raw material prices, specifically nitrile butadiene and natural latex (accounting for about 30% of total production cost), trended downwards from April to July 2023, leading to better operating margins. “However, nitrile butadiene prices are expected to rise in 1H2024, due to an increase in feedstock prices, while latex prices are expected to stay flat. We also note that natural gas prices (which account for about 20% of total cost) have been trending upwards from US$2.60 (RM12.17)/MMBtu in August 2023 to US$3.10/MMBtu in October, which will translate into higher gas tariffs in 1H2024,” it said, adding that the hike in cost can be offset by capacity rationalisation as well as higher sales volumes. PublicInvest Research upgrades glove sector to ‘neutral’ on turnaround KUALA LUMPUR (Nov 27): IOI Properties Group Bhd’s share price fell 6.36% or 11 sen to an intra-morning low of RM1.62, despite analysts expressing their optimism on its earnings outlook. The counter then pared some losses to close at RM1.65, down eight sen or 4.62%, as 18.38 million shares changed hands. Last Friday, the property developer announced that its net profit fell by 72.8% to RM174.45 million during the quarter under review, due to 6.3% lower revenue of RM648.05 million, coupled with the inclusion of a fair value gain on investment property amounting to RM470.41 million in 1QFY2023. However, analysts were unperturbed by its poorer year-on-year (y-o-y) performance, as the results mostly met their expectations, while its core net profit had swelled quarter-on-quarter (q-o-q) thanks to higher share of results from joint ventures and improved contributions from its property investment segment. TA Securities raised its target price (TP) for IOI Properties to RM2.09 from RM1.88 previously, after increasing its TP-to-book multiple to 0.5 times from 0.45 times. “We like IOI Properties’ significant value within its investment properties portfolio, especially upon the completion of IOI Central Boulevard,” it said. According to the research house, IOI Properties said in a briefing that it plans to launch luxury condominium development Marina View in Singapore, which has a potential gross development value (GDV) of S$2.6 billion (RM9.09 billion), in the third quarter ending March 31, 2024 (3QFY2024). “Management notes a subdued out- IOI Prop stumbles after 1Q profit drops, but analysts upbeat on outlook look for the China property market due to a weaker-than-expected economic recovery. With most of the group’s residential units already completed, management sees an advantage in building confidence among buyers looking for properties for immediate use. The group will focus on driving the sales of completed inventories in China. “Meanwhile, IOI Properties is expecting better performance in the retail and hospitality sectors for FY2024, driven by the second phase of IOI City Mall as well as higher occupancies and average daily room rates, while its IOI Central Boulevard Towers in Singapore is scheduled for completion by the end of 2023. “It was reported that about 40% of IOI Central Boulevard Towers’ net lettable area of 1.26 million sq ft had been committed, with another 20% in the advanced stages of negotiation. As the supply of new office space remains limited, particularly in the Central Business District, demand for high-quality offices remains strong. BY LAM JIAN WYN theedgemalaysia.com BY ISABELLE FRANCIS theedgemalaysia.com Read the full story Read the full story More from brokers: MIDF raises target price on MSM as outlook ‘starts stabilising’ As D&O’s earnings bottom out, analysts mixed on outlook and valuation Malaysian glove makers’ net cash and market cap Company Market cap Net cash* Net cash/ (RM mil) (RM mil) Market cap (%) Hartalega 8,601.42 1,525.61 17.74 Top Glove 7,207.3 390.08 5.41 Kossan 4,414.3 2,055.40 46.56 *Hartalega and Kossan’s net cash as at Sept 30, 2023, Top Glove’s net cash as at Aug 31, 2023 Source: Public Invest Research
TUESDAY NOVEMBER 28, 2023 16 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Nov 27): Former 1Malaysia Development Bhd (1MDB) president and chief executive officer Arul Kanda Kandasamy has filed an application seeking the court’s permission to amend his defence to 1MDB’s US$6.59 billion (RM30.83 billion) lawsuit against him over the losses it suffered in its investment in 1MDB-Petrosaudi Ltd and its dealings with International Petroleum Investment Company (IPIC), as well as to file a counterclaim over the termination of his contract extension. The application was filed on Nov 17 through his solicitor Messrs Sanjay Mohan. In his proposed amended defence and counterclaim sighted by The Edge, Arul Kanda, who was acquitted in the 1MDB audit tampering trial in March this year, is seeking close to RM57 million in aggravated, exemplary and general damages from 1MDB. The former 1MDB top executive said the Malaysian government had, based on recent public statements, recovered more than its alleged losses of RM53.5 billion from 1MDB’s investments and transactions. “The defendant (Arul Kanda) states 1MDB has recovered a surplus of between RM1.4 billion and RM9.4 billion and hence it (1MDB) has no legal basis to pursue any further claim as it had recovered all of its alleged losses and pursuing a claim against him would amount to an abuse of process and unjust enrichment,” the document read. Other than Arul Kanda, former Treasury secretary-general Tan Sri Mohd Irwan Serigar Abdullah has also been named as a defendant in the US$6.59 billion suit that 1MDB filed. Arul Kanda also said in his amended defence that pursuant to a recent announcement by 1MDB and the Malaysian government, the dispute between 1MDB and IPIC and its subsidiary Aabar Investments PJS had been settled and hence there is no further legal basis for 1MDB to continue its claim against him. “1MDB is stopped from pursuing a claim against me for the alleged losses it incurred in relation to the IPIC/Aabar PJS transaction as 1MDB has compromised its claims against IPIC/Aabar PJS. Any claim by 1MDB against me would now amount to unjust enrichment and it would be an abuse of process for 1MDB to continue the claim when it has settled its dispute with IPIC/Aabar PJS,” he added. Counterclaim on termination of employment extension Arul Kanda further claimed that around Feb 23, 2018, 1MDB had entered into an employment extension agreement with him, which was approved by 1MDB’s board of directors and Minister of Finance Inc — 1MDB’s sole shareholder. Among the conditions were to extend his employment to June 30, 2018, and to pay him an ex-gratia bonus of RM5 million — of which RM2.5 million remains unpaid. In addition, he said 1MDB did not pay his salary for the months of May and June. “The ex-gratia bonus payment paid to me was a result of my various achievements when employed by 1MDB that resulted in the reduction of its debt by approximately RM20 billion. “In addition, I was instrumental in ensuring (that 1MDB was) making payment of all interest and principal repayments on time, restarting the stalled TRX project, securing participation of third parties such as Prudential, HSBC and Lendlease for the TRX project; (and) recommencing and completing the stalled construction of eight air force bases in Malaysia,” he added. BY HAFIZ YATIM theedgemalaysia.com Arul Kanda seeks to amend defence and file counterclaim to 1MDB’s US$6.59 bil suit against him Read also: 1MDB critic Khairuddin’s unlawful detention appeal postponed, to be heard in open court as public interest matter Besides that, Arul Kanda said he was the one who secured the RM9.83 billion sale of Edra’s equity and the 60% sale of Bandar Malaysia equity for RM7.41 billion. Following the change in political landscape in May 2018, Arul Kanda claimed that the then finance minister made a dishonest and untrustworthy allegation against him that was published in The Edge on May 24, 2018, and that this formed the backdrop to his termination which he claimed was a wrongful dismissal. “I further state that 1MDB did not give me adequate opportunity to address the alleged concerns of the former minister of finance and/or 1MDB prior to the termination of my Employment Extension Agreement. The finance minister and 1MDB have no legal basis to terminate my employment without any evidence of wrongdoing,” he added. Arul Kanda further claimed that the termination of his employment agreement was allegedly made to stop him from receiving his May and June salaries that amounted to RM202,600, and the balance ex-gratia payment of RM2.5 million. He also claimed that the alleged losses suffered by 1MDB had taken place prior to him joining 1MDB on Jan 5, 2015, and that a police report lodged subsequently had resulted in him being charged with the 1MDB audit tampering case, in which he said he was wrongly accused and had been recently acquitted. He said he had to undergo the criminal trial, which resulted in his passport being withheld, before the KL High Court acquitted him, with the appeal by the Attorney General’s Chambers dismissed by the Court of Appeal on Sept 12, 2023. Hence, he is seeking damages for the losses he suffered — including loss of salary and ex-gratia payment — and special damages of RM54 million for loss of income, along with general, aggravated and exemplary damages. In former 1MDB president and CEO Arul Kanda Kandasamy's proposed amended defence and counterclaim, he is seeking close to RM57 million in aggravated, exemplary and general damages from 1MDB. SUHAIMI YUSUF/THE EDGE Read the full story
TUESDAY NOVEMBER 28, 2023 17 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Nov 27): The High Court has awarded medical glove maker WRP Asia Pacific Sdn Bhd a sum of RM15.6 million from its chief executive officer Datuk Lee Son Hong and his wife Too Sooi Keng, who are both directors of the company, for breach of their fiduciary duties. In one of her last judgments before retiring as High Court Judge, Liza Chan Sow Keng ruled on Nov 17 that the pair had breached their fiduciary duties to WRP Asia Pacific under the Companies Act 2016 and ordered the pair to pay the sum, comprising RM13.1 million and a finance charge of RM2.53 million. She also ordered that interest be charged at 5% per annum from the date of judgment until the full payment of the judgment sum. Chan made the order after ruling that Lee and Too had funnelled RM13.1 million from the RM32.78 million that was paid by WRP Asia to its glove dipping line contractor, KSG Engineering Sdn Bhd, into Equatorion Sdn Bhd — a company controlled by Too with a 66.7% stake. The funds were channelled into Equatorium purportedly for the supply of auxiliary equipment to WRP Asia, but no such equipment was provided, causing WRP Asia a loss of RM13.1 million. In her judgment, Chan said the couple had been found to be in breach of their duties to WRP, which resulted in the company suffering the loss. “In the face of demonstrably overwhelming evidence, the couple in my view has a case to answer in respect of the fictitious supply of auxiliary equipment by CEO and his wife ordered to pay WRP Asia Pacific RM15.6 mil for breach of duty PUTRAJAYA (Nov 27): The Court of Appeal has postponed its decision on the appeal by former Felda chairman Tan Sri Isa Samad against his conviction, a six-year jail sentence and RM15.45 million fine for corruption. The appellate court’s three-member bench, comprising judges Datuk Vazeer Alam Mydin Meera, Datuk Ahmad Zaidi Ibrahim and Datuk SM Komathy Suppiah, was initially scheduled to deliver its decision on Isa’s appeal on Tuesday. One of the counsels representing Isa, Siti Sarah Khalil, when contacted by Bernama, said the defence team received a notice from the court informing that the decision date Tuesday has been vacated and will be replaced with a case management to set the new date for the court to deliver its decision. On Oct 14, this year, the bench reserved its decision in the appeal after it completed hearing submissions from the defence and prosecution. Isa, 73, was found guilty by the High Court on Feb 3, 2021 on nine bribery charges amounting to RM3 million in the Felda acquisition of the Merdeka Palace Hotel & Suites in Kuching, Sarawak. The offences allegedly took place on the 49th Floor of Menara Felda, Platinum Park, No 11, Persiaran KLCC, Kuala Lumpur between July 21, 2014, and Dec 11, 2015. High Court judge Datuk Mohd Nazlan Mohd Ghazali (now Court of Appeal Verdict on Isa Samad’s appeal against graft conviction postponed Bernama BY TIMOTHY ACHARIAM theedgemalaysia.com judge) handed down a sentence of six years for each offence with a cumulative total of 54 years’ imprisonment and a fine of RM15.45 million or 18 years’ imprisonment in lieu of the fine. The High Court ordered the sentence to run concurrently, which means Mohd Isa was to serve only six years. Isa, who was also the former Negeri Sembilan menteri besar, filed the notice to appeal on Feb 4, 2021. He was also allowed to be released on bail of RM1.5 million pending disposal of his appeal. He was also required to report to the nearest police station on the first of every month until the appeal is settled. Equatorion through fabricated invoices and receipts, secretly profiting from the sum of RM13.1 million, and gaining a personal benefit from that point through their breaches of duties as directors,” she said. She also said their fate was sealed when the couple declined to testify during trial, in which 10 witnesses were called. “The couple irrevocably undermined their position by not testifying. It can be forgiven for concluding that both were avoiding cross examination. It behoves them to give evidence to rebut the plaintiff’s (WRP’s) case,” she said. Hence, from evidence adduced in the course of the trial, the couple had “undoubtedly personally profited from the KSG transactions”, because a “substantial portion of the money” ended up in Lee’s personal accounts, she added. “It is a pure and simple case of the proverbial harap pagar, pagar makan padi (rely on the fence, the fence eats the paddy),” Chan added. Nathalie Annette Kee from Messrs Thomas Philip represented WRP Asia in the case, while Emily Wong from Messrs Wong & Co represented the couple. BERNAMA
TUESDAY NOVEMBER 28, 2023 18 THEEDGE CEO MORNING BRIEF HOME NEWS IN BRIEF Fahmi mulls filing defamation suit over Coldplay concert PUTRAJAYA (Nov 26): Communications and Digital Minister Fahmi Fadzil is considering filing a lawsuit against those who have defamed him over the organisation of the Coldplay concert recently. Fahmi said there was an individual who made a graphic poster claiming he expressed the phrase “Alhamdulillah”, following the smooth progress of the programme at the Bukit Jalil National Stadium on Wednesday. He said the comment made by the individual was based on a media report on his response to the concert being held. “To me, this is defamatory, malicious, and actually taken out of context from what I said, and my full reply to the reporter can be found on the website (a news report). “I will ask my lawyer to investigate all parties involved in disseminating this defamatory graphic poster, and we will take legal action against them...there are parties with motives to distort the facts from my statement,” Fahmi told a press conference at the end of PKR’s 2023 Annual National Congress at the Putrajaya International Convention Centre here on Sunday. Earlier, a post on Facebook went viral, claiming that Fahmi was “grateful” for the execution of the Coldplay concert, accompanied by a graphic showing the minister against the backdrop of the concert with the caption “Coldplay Concert: Alhamdulillah, running smoothly — Fahmi Fadzil”. — Bernama Home Ministry to expedite Federal Constitution amendment on citizenship PUTRAJAYA (Nov 26): The Home Ministry will expedite the Federal Constitution amendment on citizenship, Minister Datuk Seri Saifuddin Nasution Ismail said. He added that it is his ministry’s priority, and at this time, the amendment had passed the discussion session at the Cabinet level and presented to the Conference of Malay Rulers. “Now, the wording and language used in the bill are being finetuned,” he said during the winding-up session of PKR’s 2023 Annual National Congress at the Putrajaya International Convention Centre here on Sunday. The Home Ministry was reported to have finalised whether the amendment on citizenship would be made to the Federal Constitution, or would only involve existing acts and regulations. On the parole system, mandatory attendance orders and licensed release of inmates, he said that besides reducing congestion in prisons, the programmes also had a positive result, when only one out of 800 inmates involved landed back in prison. — Bernama Read the full story Visa liberalisation strengthened with integrated enforcement, control measures — Saifuddin PUTRAJAYA (Nov 27): The implementation of the visa liberalisation plan from Dec 1 will be strengthened with integrated control and enforcement measures by enforcement agencies, Home Minister Datuk Seri Saifuddin Nasution Ismail said. He added that the setting up of a special team by the Immigration Department to monitor the entry and exit of China and Indian tourists was part of the measures. “Monitoring will be done from the final date, the 30th day according to the duration of their stay in the country. From then, monitoring will be reported periodically as a control and enforcement mechanism,” he said in a statement on Monday. Prime Minister Datuk Seri Anwar Ibrahim announced an incentive under the visa liberalisation plan on Sunday, namely the 30-day visa exemption for China and Indian nationals to Malaysia from Dec 1, 2023. Saifuddin Nasution added that checks would be intensified in areas frequented by foreign nationals such as Masjid India, Lowyat Plaza and Bukit Bintang to tackle illegal immigrants, and to conduct intelligence gathering and enforcement actions on employers hiring or protecting them. He also informed that the strict procedure regarding the Not-to-Land (NTL) notice will be retained, and airlines are responsible for checking and ensuring tourists entering Malaysia had confirmed return tickets and hotel booking throughout their stay in Malaysia, while suggestions to make filling in the Malaysia Digital Arrival Card (MDAC), which is integrated with the Immigration Department’s MyIMMs, mandatory are being explored to ensure that tourists’ entry data is recorded. — Bernama Read the full story Amendment to Suhakam Act tabled in Dewan Rakyat for first reading KUALA LUMPUR (Nov 27): The amendment to the Human Rights Commission of Malaysia (Suhakam) Act 1999 (Act 597) was tabled for first reading in Dewan Rakyat on Monday, including the addition of a new section stating that Suhakam must be informed of action taken following violations referred to the body. Other amendments include ensuring that at least 30% of Suhakam members consist of women and one person with disabilities. In a statement, Law and Institutional Reform Minister Datuk Seri Azalina Othman said the amendment aims to strengthen the function and role of Suhakam as an independent body that protects and promotes human rights in Malaysia. “The proposed amendments also involve empowering the Office of the Children’s Commissioner (OCC) through the appointment of a chief children’s commissioner and two other children’s commissioners, in addition to granting additional powers to Suhakam to further enhance the protection of children’s rights in Malaysia,” she said. Through these proposed amendments, Azalina said the unity government is confident that the human rights protection ecosystem in Malaysia will improve, and Suhakam will be able to exercise its powers and functions more effectively. The Bill’s second reading and debate session are expected to take place on Wednesday. Meanwhile, Azalina also tabled the Mutual Assistance in Criminal Matters (Amendment) Bill 2023 for first reading on Monday. The proposed changes include allowing a foreign country to lodge a request for assistance in criminal matters directly with the attorney general in certain circumstances. — by Choy Nyen Yiau
TUESDAY NOVEMBER 28, 2023 19 THEEDGE CEO MORNING BRIEF
TUESDAY NOVEMBER 28, 2023 20 THEEDGE CEO MORNING BRIEF WORLD A Hamas spokesperson said the group would try to find more hostages to release and thus prolong the truce. BY BASSAM MASOUD & DAN WILLIAMS Reuters Negotiators close to agreeing extension of Gaza truce, say Egyptian security sources Read also: Beijing frets over Taiwan opposition split as parties go on the attack over China ties North Korea vows more satellite launches, beefs up military on border New Zealand’s new government sworn in, parliament expected to open next week Omar Abdullah Al Hajj, 17, released on Sunday, told Reuters he’d been kept in the dark about what was happening in the outside world. “We were 11 people crammed into a single room where usually there are six. There was never enough food and I was never told how long I was going to stay,” he said. “I can’t believe I’m free now but my joy is incomplete because we still have our brothers who remain in prison,” said Al Hajj, whom Israel’s Justice Ministry accused of belonging to the Islamic Jihad militant group and posing a security threat which it did not specify. The truce agreed last week is the first halt in fighting in the seven weeks since Hamas attacked Israel, killing 1,200 people and taking about 240 hostages back into Gaza. In response to that attack, Israel has bombarded the enclave and mounted a ground offensive in the north. Some 14,800 Palestinians have been killed, Gaza health authorities say, and hundreds of thousands displaced. GAZA/JERUSALEM (Nov 27): Egyptian, Qatari and US negotiators closed in on an extension of a four-day truce in Gaza that expires on Monday, Egyptian security sources said, amid rising international pressure to roll over a deal which has paused seven weeks of fighting. Palestinian group Hamas is seeking a four-day extension while Israel wants dayby-day extensions, with negotiations continuing over which Palestinian prisoners would be freed, the sources said. An Israeli official earlier reiterated Israel’s position that it would agree to an extra day of truce for each additional 10 hostages freed and to release three times the number of Palestinians each time. The number of additional days is capped at five, the official added. A Palestinian official, familiar with the truce talks, said both Hamas and Israel had shown a positive attitude to requests to extend the pause in fighting, but added that “a final decision hasn’t yet been reached”. On Sunday, Hamas freed 17 people, including a 4-year-old Israeli-American girl, bringing the total number the militant group has released since Friday to 58, including foreigners. Israel freed 39 teenage Palestinian prisoners on Sunday, taking the total number of Palestinians freed under the truce to 117. Under the terms of the current deal, Hamas is due to release in total 50 Israeli women and children held hostage in Gaza, which means that 11 remained to be freed on Monday. There is no limit in the deal on the number of foreigners it can release. An Israeli government spokesperson said on Monday that the total number of hostages still held in Gaza was now 184, including 14 foreigners and 80 Israelis with dual nationality. Both Israel and Hamas raised concerns over Monday’s lists and Qatari mediators were working with them to resolve the issues and avoid delays, an official briefed on the matter told Reuters. Israeli Prime Minister Benjamin Netanyahu’s office said it was reviewing the list of Palestinian prisoners it had received from Hamas for release on Monday and would provide further information when possible. Hamas spokesperson Osama Hamdan, speaking to Lebanon’s LBC broadcaster, said the group would try to find more hostages to release and thus prolong the truce. Hamas has previously said it is not holding all the hostages who were brought to Gaza. Once the truce ends, Netanyahu said at the weekend, “we will return with full force to achieve our goals: the elimination of Hamas; ensuring that Gaza does not return to what it was; and of course the release of all our hostages.” Brief respite Palestinians in Gaza said on Monday they were praying for an extension of the truce. Some were visiting homes reduced to rubble by weeks of intensive Israeli bombardment, while others queued for flour and other essential aid being delivered by the United Nations’ relief agency UNRWA. The al-Sultan family, among hundreds of thousands of people displaced from their homes in the north of the Gaza Strip, snatched a few hours of sorely needed relaxation by the sea. “We used these four days (of truce) and came to the beach in Deir Al-Balah to allow our children to have some fun,” their mother, Hazem Al Sultan, said. “We are anticipating the end of these four days, and we don’t know what will happen to us next.” Palestinians gave the freed prisoners a jubilant reception in Ramallah, according to Palestinian news agency Wafa. Israel's military operates in the Gaza Strip during a temporary truce between Israel and the Palestinian Islamist group Hamas, Nov 27, 2023. PHOTO BY ISRAEL DEFENSE FORCES VIA REUTERS
TUESDAY NOVEMBER 28, 2023 21 THEEDGE CEO MORNING BRIEF WORLD (Nov 27): Predictions of a record high for the S&P 500 next year are intensifying, with Deutsche Bank Group AG strategists setting one of Wall Street’s most bullish targets yet. The team led by Binky Chadha expects the benchmark to hit 5,100 points by the end of 2024 — implying gains of about 12% from current levels — against a backdrop of cooling inflation and a rebound in corporate earnings. “Despite above-trend growth, core inflation has fallen,” the strategists wrote in a note. “Continued declines would return inflation to its pre-pandemic range without requiring slower growth.” Moreover, given that any recession “is widely anticipated and expected to be mild and short, we see only a modest short-lived selloff.” After broadly failing to predict the equity rally in 2023, market forecasters have turned more optimistic about the outlook for next year as investor sentiment improves and expectations of a recession are dialed back. RBC Capital Markets strategist Lori Calvasina and Bank of America Corp’s Savita Subramanian both expect the S&P 500 to climb to 5,000 points. The index hit an all-time peak of 4,796.56 in January 2022. Deutsche Bank’s Chadha said he expects corporate earnings to jump 10% in the event of a mild and short recession. However, if gross domestic product were to grow by 2%, the strategist said he sees profits rising 19%. Analysts expect earnings to rise 11% in 2024 after a 0.4% drop this year, according to data compiled by Bloomberg Intelligence. Chadha was among the few strategists who correctly predicted a rally in the S&P 500 in the first quarter of 2023. The index is also close to his end-2023 target of 4,500 points. Deutsche Bank expects US stocks at record high by end-2024 (Nov 27): The Biden administration will announce a redoubling of measures to strengthen supply chains on Monday, expanding an effort it credits with helping to ease post-pandemic inflation. Central to the effort is a new White House Council on Supply Chain Resilience, a cabinet-level body that President Joe Biden will inaugurate Monday. The council will conduct a quadrennial supply chain review, mirroring similar strategic documents prepared for national defense and homeland security. The first review is due at the end of 2024. “We’re pleased with the progress on supply chains that was showing up in lower prices for everything from turkeys to gas prices for families this Thanksgiving, but we’re determined to keep working,” White House economic adviser Lael Brainard told reporters ahead of the announcement. (Nov 27): Global goods trade is recovering from a recent slump amid stronger demand for autos and electronics, the World Trade Organization said in a report that warned geopolitical strains are making the short-term outlook “highly uncertain.” The WTO’s periodic goods barometer rose to 100.7 from the previous reading of 99.1 announced in August, the Geneva-based organisation said in a report Monday. The baseline of 100 indicates growth over the next quarter that’s in line with medium-term trends. “Merchandise trade volume will gradually revert toward its medium-term trend in the second half of 2023, although uncertainty remains high due to mixed economic data and rising geopolitical tensions,” according to the report posted on the WTO’s website. While electric vehicle sales may be buoying global commerce, a “weak result for raw materials may be partly due to weakening property markets as interest rates remain elevated,” the report said. Last month the WTO cut its forecast for 2023 global merchandise trade to an increase of 0.8%, from an April prediction for a year-overyear gain of 1.7% and well below the 2.6% average over the past decade. For 2024, the WTO forecast goods trade will increase 3.3%. An analysis by the Federal Reserve Bank of San Francisco in June concluded that supply chain pressures following the pandemic accounted for 60% of the surge in US inflation. The White House has been eager to adopt that explanation because it would mean that the pandemic — not the government’s fiscal stimulus in response — was the primary driver of higher prices. As part of the rollout, the Biden Administration will announce a set of bureaucratic actions, according to two White House officials who briefed reporters Sunday. They include an invocation of the Defense Production Act to invest US$35 million (RM163.7 million) in starting materials for sterile injectable medicines, and a new report on US reliance on high-risk foreign suppliers to the pharmaceutical supply chain. The existing Freight Logistics Optimisation Works programme, a public-private information-sharing agreement that allows major shippers to see real-time logistics data to better predict bottlenecks, will announce new participants and add containerized shipments of agricultural products. The Department of Energy will announce almost US$300 million in grants to coal communities to convert to what it calls “clean energy supply chains.” White House touts new supply chain measures as inflation eases Global goods trade rebounds on demand for cars — WTO BY GREGORY KORTE Bloomberg BY BRENDAN MURRAY Bloomberg BY SAGARIKA JAISINGHANI Bloomberg Read also: Political noise distracts central Europe’s rate-setters UK’s Sunak hails US$37 bil investments before FDI summit British bank CEOs highlight investment need at government summit
TUESDAY NOVEMBER 28, 2023 22 THEEDGE CEO MORNING BRIEF WORLD (Nov 27): Hong Kong’s exports rose last month for the first time in more than a year as trade with mainland China improved, providing some optimism for the financial hub’s economic outlook. Overseas shipments grew 1.4% in October from a year earlier to HK$379.9 billion (RM227.65 billion), the Census and Statistics Department said on Monday. That was better than the median estimate of a 2.9% drop in a Bloomberg survey of economists, and marked the first month of growth for exports since April 2022. Imports grew 2.6% from a year earlier to HK$405.6 billion, roughly in line with economists’ estimates. It was the first gain since June 2022. The trade deficit was HK$25.8 billion. The city saw pickups across Asia, with total exports to the region growing 5.2% in the month. Shipments to mainland China expanded 5.6%, reversing several straight months of declines. Those to India, Vietnam and Thailand rose by double digit percentages. Exports to Singapore, the Philippines and Taiwan still fell, though. Shipments to the US rose 0.5%. “Overall export performance largely remained weak” despite the rise in exports, a government spokesman said in a statement accompanying the release. “The difficult external environment amid heightened geopolitical tensions and tight financial conditions will continue to weigh on Hong Kong’s export performance in the near term.” Hong Kong recently lowered its economic growth forecast for this year in a sign that tough times are still ahead for the financial hub amid a muted post-pandemic recovery. Gross domestic product is expected to expand 3.2% in 2023, the Census and Statistics Department said earlier this month, lower than a previous prediction that the economy would grow in a range of 4% to 5%. Hong Kong’s exports unexpectedly grow on China demand Beijing bourse tells ‘major shareholders’ to refrain from selling, sources say BP enters Japan’s power retail market Reuters BY YUKA OBAYASHI Reuters Bloomberg TOKYO (Nov 27): BP said on Monday that it has entered Japan’s power market, after receiving approval from the industry ministry to operate as a retail electricity provider. BP, focused on transforming itself into an integrated energy company, said in a statement that the move was part of its plan to expand its investment in several areas of growth, including renewable energy and electricity. The oil major, which has been a supplier of liquefied natural gas (LNG), oil, petroleum products and lubricants to Japan for more than 60 years, plans to expand into low-carbon energy in the coming decades, as it seeks a business model that can survive the global transition from fossil fuels. BP Energy Japan (BPEJ), part of BP’s trading and shipping division, will operate the new business, according to the statement. Further details of the company’s business plan were not immediately available. Read also: South Korea probing sales of exotic notes linked to Chinese stocks Stressed HK developers lure private credit as funding gap looms Hong Kong cash demand sends local bank rate to 16-year high BLOOMBERG SHANGHAI/BEIJNG (Nov 27): The Beijing Stock Exchange has de facto implemented a new policy that prevents major shareholders of companies listed on its bourse from selling stock, worried that such sales could douse a long-desired rally, three people familiar with the matter said. The bourse, launched two years, ago was set up to help facilitate funding for innovative small companies, dubbed “little giants”, but had languished due to lack of investor interest. But the market’s benchmark 50 Index has surged 46% this month on the back of recent measures by authorities. These include lowering the required amount of funds an investor must have in their stock account to invest, improving trading mechanisms and encouraging mutual funds to participate in the market. A “major shareholder” is one with a stake of 5% or more and is required to make a public filing with the relevant stock exchange before selling shares, according to rules for China’s bourses. The Beijing exchange has been rejecting those filings, said the people who were not authorised to speak to media and declined to be identified. It was not immediately clear how long this new policy would remain in place, they added. The Beijing exchange and the China Securities Regulatory Commission did not immediately reply to requests for comment. The bourse said separately in a statement on Monday morning ahead of this Reuters article that it was closely monitoring trading to ensure normal market order. The so-called window guidance - where directives are made orally without written documents — is aimed at protecting the rally, the sources said. One noted that without the guidance, the share price surge “could prompt institutional shareholders to reduce their holdings which could knock the index down again.” The Beijing bourse currently houses 232 listed companies with a combined market capitalisation of 366 billion yuan (RM233.8 billion). By comparison, the Shanghai bourse is home to 2,256 listed firms worth 47 trillion yuan in total, while almost 3,000 companies listed in Shenzhen have a total market capitalisation of 31.9 trillion yuan.
TUESDAY NOVEMBER 28, 2023 23 THEEDGE CEO MORNING BRIEF WORLD (Nov 27): Jack Ma sparked speculation about his next endeavours after the billionaire seeded a small company to process and sell farming produce, in his latest venture since retreating from the spotlight at the height of a government-led industry crackdown. The co-founder of Alibaba Group Holding Ltd set up “Hangzhou Ma’s Kitchen Food” last week, with an initial registered capital of 10 million yuan (US$1.4 million or RM6.54 million), according to corporate database Tianyancha. The business involves the sale of packaged agricultural products, according to information on China’s National Enterprise Credit Information Publicity System. Ma’s whereabouts and activities have been the topic of intense discussion since 2020, when he stepped away from the limelight after Beijing clamped down on his twin companies — Alibaba and Ant Group Co — as part of a broader campaign to contain an increasingly powerful private sector. Ma, whose comments about China’s outmoded financial system helped trigger the crackdown, has since largely devoted his time to agricultural pursuits though his foundation. He joins a spate of well-known entrepreneurs from the likes of Tencent Holdings Ltd to Meituan who have devoted major sums towards the Communist Party’s “common prosperity” initiative. Chinese President Xi Jinping’s administration has in recent years made elevating backward rural areas one of the cornerstones of the party’s efforts. In March, Ma visited a school in Hangzhou in a carefully arranged public visit regarded as a sign he was beginning to resume public activities. He’s mostly focused on projects in agriculture and education, another of his passions. Few other details have emerged about his latest venture. Senior officials of his foundation hold top posts at the newly created firm, according to the South China Morning Post. An Alibaba representative directed Bloomberg’s request for comment to the Jack Ma Foundation, which didn’t respond to requests for comment. Jack Ma gets back into business with ‘Ma’s Kitchen Food’ (Nov 27): Alibaba Group Holding Ltd has shuttered its quantum computing research lab, a sign that the Chinese e-commerce and cloud operator is considering more cutbacks to bulk up its bottom line. Alibaba will donate its equipment to Zhejiang University in Hangzhou, where the company is based, a company spokesperson said on Monday. The lab’s closure will result in the loss of about 30 staff, some of whom Alibaba may help find positions at the same college, a person familiar with the matter said, asking to remain unidentified discussing private decisions. China’s e-commerce leader is in the middle of an overhaul spearheaded by Joseph Tsai and Eddie Wu, two confidantes (Nov 27): China’s world-beating solar sector will start seeing smaller equipment makers being forced out next year as prices keep falling, according to one of the leading manufacturers. Extremely low panel prices are harming profitability across the sector, Gao Jifan, chairman of Trina Solar Co, said during a panel at the BloombergNEF Shanghai Summit on Monday. “Under the current bidding prices, there is no profit across the entire supply chain, and there is no way that this is sustainable,” he said. With the top five or six manufacturers still expanding capacity, smaller companies will be “squeezed out”, he said. The predicted shake-out is happening even as installations continue to pick up pace. There has been 142.6 gigawatts added in China in the first 10 months of the year, compared with a record 87.4 gigawatts in the whole of 2022. The installations, however, have been dwarfed by a surge in manufacturing capacity as the sector gears up to meet an even-bigger expected increase in consumption later in the decade. This disconnect has hit major manufacturers, with Longi Green Energy Technology Co’s net income falling 44% from a year earlier in the third quarter. of co-founder Jack Ma who took over the company in September. This month, the pair announced that they were killing the much-anticipated spin-off and listing of the cloud services division, an about-face that spurred speculation about other changes to Alibaba’s long-term road map. Before that surprise decision, the firm was in the midst a complicated six-way split that would break the company up into component businesses from commerce and entertainment to logistics. Last week, Tsai and Wu took the first steps towards revamping the cloud arm, which has been bleeding market share to state-backed rivals. The company appointed three new executives to head up major business lines within Alibaba Cloud, with two reporting directly to chief executive officer Wu. The Damo Academy — which Ma himself inaugurated with much fanfare in 2017 — was supposed to be Alibaba’s “moonshot” division, responsible for exploring and delivering on cutting-edge technologies. The academy has driven research into fields as disparate as the metaverse, robots and semiconductor design. Chinese media outlets first reported the lab shutdown. To keep a lid on costs, Alibaba has downsized its workforce since 2022, and has laid off more than 30,000 employees in past quarters. Alibaba shuts quantum computing lab in sign of broader cutback Major Chinese solar manufacturer sees industry shake-out coming BY JANE ZHANG Bloomberg Bloomberg BY JANE ZHANG Bloomberg Read also: Huawei smart-car deal sparks gains in China automaker, suppliers China investors face tens of billions in losses over Zhongzhi Xi to make first visit to Shanghai since 2021, says SCMP Read the full story
TUESDAY NOVEMBER 28, 2023 24 THEEDGE CEO MORNING BRIEF WORLD (Nov 27): Singapore’s Changi Airport is testing an artificial intelligence (AI)-driven system that could potentially halve time spent on passenger security checks, the Straits Times reported on Sunday. The trial at Terminal 3 uses AI and machine learning to screen and interpret images from X-ray machines that check cabin baggage at the boarding gate. This reduces time needed to process these images and chances of human error, the newspaper said, citing the city state’s airport operator. Initial results show the new system is performing as well as, or better than, human security screeners in flagging some prohibited items, according to the report. The development is still in its early stages, with an eventual goal to raise the level of automation. Tests for the AI screening system come as the number of travellers to the financial hub is expected to rebound to pre-pandemic levels by next year, and continue to increase thereafter. Singapore is currently building its fifth airport terminal, while its high-speed rail linkage with Malaysia’s southern state of Johor is expected to be ready in a few years. Changi Airport testing AI security screening to cut time — report WASHINGTON (Nov 27): The US, Britain and more than a dozen other countries on Sunday unveiled what a senior US official described as the first detailed international agreement on how to keep artificial intelligence safe from rogue actors, pushing for companies to create AI systems that are “secure by design”. In a 20-page document unveiled on Sunday, the 18 countries agreed that companies designing and using AI need to develop and deploy it in a way that keeps customers and the wider public safe from misuse. The agreement is non-binding and carries mostly general recommendations such as monitoring AI systems for abuse, protecting data from tampering and vetting software suppliers. Still, the director of the US Cybersecurity and Infrastructure Security Agency, Jen Easterly, said it was important that so many countries put their names to the idea that AI systems needed to put safety first. “This is the first time that we have seen an affirmation that these capabilities should not just be about cool features and how quickly we can get them to market or how we can compete to drive down costs,” Easterly told Reuters, saying the guidelines represent “an agreement that the most im- (Nov 27): A five-month rally in MediaTek Inc looks set to extend as booming demand for smartphones and a promising new artificial intelligence (AI) chip brighten the company’s outlook. The Taiwanese tech firm’s stock has soared almost 40% since the end of June, outperforming a 2% advance in the Philadelphia Stock Exchange Semiconductor Index and a 7% rise in its US-based rival Qualcomm Inc. The gains have been fueled by robust appetite for mobile devices that utilise the company’s chips, especially in China. The buzz surrounding MediaTek casts a spotlight on growing competition between semiconductor firms that are exploiting the use of AI to grab a larger share of the smartphone business. Investors see the Taiwanese firm’s Dimensity 9300 chip as a game-changer that will help it to steal a march over Qualcomm, the current leader in the high-end mobile market. The bullishness surrounding MediaTek’s shares is growing. Analysts have boosted estimates for the company’s earnings per share by 13% since the end of July, while short interest on the stock has fallen from a June peak. They have also lifted its estimated price target by 27% since a July low. MediaTek’s “valuation relative to its growth prospect into next year still looks attractive,” said Robert Mumford, an investment manager at GAM Hong Kong Ltd. “The handset cyclical recovery and MediaTek’s new system-on-chip — a cutting edge product released at the right time — plus potential AI product rollout, are all tailwinds.” portant thing that needs to be done at the design phase is security”. The agreement is the latest in a series of initiatives — few of which carry teeth — by governments around the world to shape the development of AI, whose weight is increasingly being felt in industry and society at large. In addition to the US and Britain, the 18 countries that signed on to the new guidelines include Germany, Italy, the Czech Republic, Estonia, Poland, Australia, Chile, Israel, Nigeria and Singapore. The framework deals with questions of how to keep AI technology from being hijacked by hackers and includes recommendations such as only releasing models after appropriate security testing. It does not tackle thorny questions around the appropriate uses of AI, or how the data that feeds these models is gathered. The rise of AI has fed a host of concerns, including the fear that it could be used to disrupt the democratic process, turbocharge fraud, or lead to dramatic job loss, among other harms. Europe is ahead of the US on regulations around AI, with lawmakers there drafting AI rules. France, Germany and Italy also recently reached an agreement on how artificial intelligence should be regulated that supports “mandatory self-regulation through codes of conduct” for so-called foundation models of AI, which are designed to produce a broad range of outputs. The Biden administration has been pressing lawmakers for AI regulation, but a polarised US Congress has made little headway in passing effective regulation. The White House sought to reduce AI risks to consumers, workers, and minority groups while bolstering national security with a new executive order in October. 18 countries ink agreement to make AI ‘secure by design’ AI chip boom fuels Taiwan firm’s 40% rally, beating Qualcomm and peers BY RAPHAEL SATTER & DIANE BARTZ Reuters BY CHARLOTTE YANG Bloomberg BY AMEYA KARVE Bloomberg Read the full story Read also: TikTok owner ByteDance fires hundreds, slashes games arm in major retreat
TUESDAY NOVEMBER 28, 2023 25 THEEDGE CEO MORNING BRIEF WORLD (Nov 27): Singapore’s High Court granted injunctions against the estranged brother of Prime Minister Lee Hsien Loong, preventing him from making defamatory statements against two of the country’s ministers. The injunctions announced Monday were sought by Law Minister K Shanmugam and Foreign Minister Vivian Balakrishnan. The officials had previously demanded Lee Hsien Yang withdraw allegations made in a Facebook post on July 23 in relation to state-owned residences that they rented. They also sought damages, which they said would be donated to charity. The court ruled that Lee Hsien Yang’s refusal to remove the social media post, and to continue to highlight it in other online posts, signalled that it is likely he “will repeat the defamatory allegations.” A decision on damages is scheduled for a later hearing, the court said. Lee Hsien Yang had responded on July 29, saying that the ministers misinterpreted his comments about them and that he had not asserted they “acted corruptly or for personal gain,” as alleged. The state issued him with a fake news notice for the July 23 post and ordered him to correct it. Earlier, a government review into the homes rented by the two ministers found no evidence of corruption or criminal wrongdoing. Court grants injunction against PM Lee’s brother (Nov 27): The combination of elevated global interest rates and pre-existing weaknesses remain a threat to world financial-market stability, Singapore’s central bank has warned. Fragilities built up during the Covid-19 pandemic may be exposed if central banks maintain their restrictive monetary policy settings, as was seen in the spate of US bank failures in March, the Monetary Authority of Singapore (MAS) said in its annual Financial Stability Review. Emerging markets may also face deepening public debt risks as shown by a number of defaults over the past year, which may lead to risk aversion and outflows, the SINGAPORE (Nov 27): DBS, UOB and OCBC have launched features allowing customers to lock up funds in their bank accounts to safeguard against unauthorised transfers and malware scams. This is amid rising scam cases reported in the city-state. DBS and POSB have launched digiVault, which will be progressively rolled out to customers from Nov 27 onwards. It will be available to all customers by Dec 7. With digiVault, customers can lock up their money digitally in a designated account, from which funds cannot be digitally transferred out. To access the funds in digiVault, customers will need to personally visit a branch and verify their identities. In addition to digiVault, customers can lock up their fixed deposits, preventing premature digital fund withdrawals or changes to maturity instructions. From Nov 27 to Feb 29, 2024, customers who open and deposit money into a digiVault account can earn an additional 1.80% per annum interest on their average daily balance in digiVault, given as a lump sum cash gift at the end of the promotional period. Separately, UOB has introduced LockAway Account, which will be rolled out from Nov 30. Customers can only access their locked up funds at bank branches, although the bank is evaluating ATM withdrawals depending on customer feedback. There will not be a minimum initial deposit or balance requirement for LockMAS said. Other risks to financial stability include rising geopolitical tensions, climate change, the Israel-Hamas conflict, Russia’s war on Ukraine, and a slowing Chinese economy, according to the report. Still, Singapore remains well placed to cope with the challenging environment as banks’ credit quality has continued to be strong and most corporates and households have weathered the pass-through of interest rate hikes with no significant increase in loan delinquency, MAS said. Rental pressures to abate On the closely watched property front, the MAS said rental pressures in the residential market should “continue to abate” with a large supply of units being completed. The momentum in price rises has also moderated, and demand is expected to be restrained by high interest rates and moderation in wage growth, according to the MAS. Foreign demand in Singapore’s private residential property market has fallen to about 4% of total transaction activity in 2023, down from more than 6% in the first quarter before the latest round of cooling measures were introduced, it said. Singapore warns of potential vulnerabilities from higher rates DBS, UOB and OCBC to allow customers to lock-up funds amid rising scam cases BY MARCUS WONG Bloomberg BY KHAIRANI AFIFI NOORDIN theedgesingapore.com BY AMBEREEN CHOUDHURY Bloomberg Away Account. However, no cheque book will be issued and existing cards cannot be linked to the account. OCBC Singapore customers also can access the OCBC Money Lock feature from Nov 30. The feature will be available to all new and existing OCBC current and savings accounts. Customers in Singapore can unlock their funds at OCBC branches or OCBC ATMs located at the branches from Nov 30 onwards. This will be expanded to all OCBC ATMs island-wide by the end of December 2023. Those residing overseas can unlock funds by submitting a request via the Secured Mailbox in the OCBC Digital app or Internet Banking. Read also: Singapore’s banks now more concerned about illegal money flows, says MAS BLOOMBERG
TUESDAY NOVEMBER 28, 2023 26 THEEDGE CEO MORNING BRIEF WORLD iPhone maker Hon Hai plans US$1.6 bil in India expansion bid MELBOURNE (Nov 27): Nickel Industries Ltd is inviting electric vehicle and battery makers including Tesla to its Indonesian facilities, as it seeks potential investors to the plant, the Australian company’s chief executive said on Monday. The producer of nickel pig iron is expanding into high purity nickel for the EV industry and is building a US$2.3 billion plant in Indonesia’s Morowali, that will supply products such as nickel sulphate, matte and mixed hydroxide precipitate (MHP). Nickel Industries owns a 55% stake in the plant, with China stainless steel maker Tsingshan holding the rest. Nickel Industries is seeking investors for a stake of as much of 20% in the plant, as partner Tsingshan dilutes its holding, CEO Justin Werner said. “We would be open to an automaker taking a stake,” Werner told Reuters, adding that Tesla, Panasonic and Northvolt were among companies that have visited, or will soon visit the Indonesian plant. Indonesia produces more than half of the world’s nickel and is expected to account for nearly three-quarters of global supply by the end of the decade, as EV and battery manufacturers increase their foothold in the country. US carmaker Ford in March took a stake in a US$4.5 billion nickel processing plant in Indonesia, with PT Vale Indonesia and China’s Zhejiang Huayou Cobalt. Nickel Industries’ high pressure acid leach (HPAL) plant is expected to be completed by the end of 2025 and will supply around 70,000-80,000 tonnes of nickel product per year, Werner said, adding that the plant is expected to sign up customers by mid-2024. It will be looking to place some 7,000- 8,000 tonnes of MHP, around 10,000 tonnes of class 1 nickel matte and 30,000- 40,000 tonnes of either MHP, cathode or nickel sulphate, depending on market conditions, he added. Thailand to lower 2023 growth forecast after weak 3Q Nickel Industries seeks investors for Indonesian plant, invites Tesla, Panasonic to visit BY KITIPHONG THAICHREON Reuters BY MELANIE BURTON Reuters BY JANE LANHEE LEE Bloomberg (Nov 27): iPhone maker Hon Hai Precision Industry Co plans to expand its footprint in India with another NT$50 billion (US$1.6 billion or RM7.42 billion) investment for construction projects. The announcement, made in an exchange filing in Taiwan late Monday, didn’t give any further details, saying only that the investment was for “operational needs”. A spokesperson for the company declined to say where the new facilities would be or what they would build. The news comes as Hon Hai, also known as Foxconn, and other Taiwanese electronics manufacturers continue to diversify their businesses outside of China as tensions rise between Washington and Beijing. BANGKOK (Nov 27): Thailand’s previous 2023 economic growth forecast of 2.7% will be lowered after a weaker-than-expected third quarter, Deputy Finance Minister Krisada Chinavicharana said on Monday. About half of Foxconn’s revenue comes from business with Apple Inc. The company has been making iPhones and other products in India for several years, including the latest iPhone 15. In September, a Foxconn representative in India said on LinkedIn that the Taiwanese company plans to double the size of its business in the South Asian country. India’s Karnataka state government in August announced that Foxconn planned to invest US$600 million on two component factories in the southern Indian state. That included a plant that will make mechanical enclosures for iPhones and a semiconductor equipment manufacturing plant it will operate with Applied Materials Inc, the government said at the time. Those two projects are on top of a US$700 million facility Foxconn aims to build on a 300-acre (121-hectare) site close to the airport in Bengaluru, the capital of Karnataka, Bloomberg News previously reported. That plant is likely to assemble iPhones. It was not immediately clear if the latest investment announcement is to cover those projects or additional ones. Foxconn already operates nine production campuses and more than 30 factories employing tens of thousands of people in India, where it takes in around US$10 billion of revenue annually. Southeast Asia’s second-largest economy expanded much slower than expected, at 1.5%, in the July-September quarter from a year earlier, the slowest this year, due to declining exports and government spending. For next year, while the ministry is aiming for economic growth of slightly higher than 3%, it will try to push for even more with upcoming government stimulus measures, he told reporters. The finance ministry’s current forecasts are for 2.7% economic growth in 2023 and 3.2% growth in 2024. BLOOMBERG Read also: Thailand’s employment growth weakest in five quarters in Q3 as economy slows
TUESDAY NOVEMBER 28, 2023 27 THEEDGE CEO MORNING BRIEF WORLD Baltic Exchange shipping updates A weekly round-up of tanker and dry bulk market (Nov 24, 2023) CAPESIZE For the first half of the week, the market faced subdued activity, particularly in the Pacific with a slight downward movement on rates on C5. The Atlantic market also experienced limited activity, with discussions on C3 reflecting a somewhat subdued sentiment. As the week progressed, the Pacific saw lower trading volumes, resulting in a decline in market activity and increased pressure, with rates on C5 dropping by approximately a further 85 cents. However, the Atlantic witnessed heightened activity late in the day, particularly originating from South Brazil and West Africa to the Far East. A positive shift occurred in the pacific on Thursday, with two out of three miners actively participating in the market, accompanied by a handful of operator-controlled cargoes, halting the rate decline on C5 and leading to a notable recovery of lost ground. As the week draws to a close, all three miners have been present and C5 has surged by US$1.35. The Atlantic market also saw increased activity, contributing to significant rate recovery, especially from South Brazil and West Africa to the Far East routes, with the early arrival demanding a significant premium. The North Atlantic, although relatively quiet, maintained positive sentiment due to a fresh influx of cargoes and constrained tonnage supply, resulting in significantly stronger fixtures towards the end of the week. The BCI 5TC started the week at US$22,447 and dropped to US$20,029 by mid-week to close today at US$28,071. PANAMAX Another week of upward momentum in the Panamax market, with the North Atlantic trips seeing the largest gains. In the Pacific, healthy coal enquiry from Australia and Indonesia kept rates relatively stable on the week, whilst solid grain demand ex NoPac also lent support in the north of the basin. There has been slower trade volume from South America, although an 81,000- dwt delivery Singapore fixed at US$14,250 for a trip via EC South America redelivery Far East. In the east ex Australia, an 81,000 dwt delivery Japan achieved a shade over US$15,000 for an Australian mineral round trip whilst from Indonesia some contrasting rates, with a 75,000 dwt vessel agreeing to US$14,000 for an Indonesia to China trip. In the early part of the week, a 75,000 dwt vessel fixed at US$12,500 for a similar run. A flurry of period fixtures, including reports of an 82,000 dwt delivery Japan-China achieving US$14,500 for two years employment. ULTRAMAX/SUPRAMAX The positive momentum continued throughout the week despite the holiday in the United States and Japan. The Atlantic saw sustained demand from key areas such as the US Gulf and it was a similar story from South America, with a 53,000 dwt heard to have fixed delivery Santos for a fronthaul in the mid US$15,000s plus mid US$500,000s ballast bonus. In the US Gulf a 56,000 dwt fixed at US$30,000 for a trip to the United Kingdom. Mixed signals from the Asian arena but overall it remained cautiously optimistic. A 61,000 dwt open North China fixing an Australian round at US$11,500, while further south, a 58,000 dwt open Sarawak was fixed for a trip via Indonesia redelivery China at US$13,000. Sustained demand in the Indian Ocean saw a 63,000 dwt fixing delivery Visakhapatnam for a trip via South Africa for a fronthaul at around US$14,500. It was also worth noting that period activity increased a 63,000-dwt open Italy was heard for 3 to 5 months trading at US$18,500. HANDYSIZE The Atlantic saw daily improvements due to limited tonnage availability. On the US East Coast, charterers continued to source tonnage from further afield with a 38,000 dwt fixing from Tyne, UK via St Lawrence to the Continent-Mediterranean at US$18,000 whilst a 38,000 dwt opening in Casablanca was fixed basis delivery Escoumins via Quebec to the UK-Continent at US$27,500. In the Mediterranean, a 39,000 dwt fixed from Nemrut Bay to the US Gulf at 12,000 for the first 45 days and US$13,500 for the balance. In the South Atlantic, a large handy was rumoured to have been bid in the upper teens for a trip from Recalada to North Coast South America. In Asia, sentiment was also showing signs of positivity but at present limited information had yet to surface. Period activity was said to be limited as owners look to maximise income from the present improved markets, although a 35,000 dwt opening in Mundra was fixed for 2 to 3 LL at US$9,900. CLEAN LR2 LR’s in the MEG have regained some strength this week. The 75kt MEG/Japan TC1 index rose almost 10 points to WS133.61 (about US$25,000/day TCE). The 90kt MEG/UK-Continent TC20 run to the UK-Continent also recovered, rising almost US$200,000 to over US$3.6m. West of Suez, Mediterranean/East LR2’s on TC15 added another US$25,167 to be last assessed at a little above US$3.625m. LR1 In the MEG, LR1 freight levels did not follow the bigger units. The rate for 55kt MEG/Japan (TC5) dropped another six points to WS126.25. For the 65kt MEG/ UK-Continent (TC8) market, the rate has fallen from US$2.96m to US$2.9m. On the UK-Continent, the 60kt ARA/ West Africa (TC16) market has had another positive week, with the rate 11 points firmer at WS200.81, which translates to a round trip daily TCE of just shy of US$44,500. Read the full report
TUESDAY NOVEMBER 28, 2023 28 THEEDGE CEO MORNING BRIEF MARKETS Top 20 active stocks World equity indices Top gainers (ranked by %) Top losers (ranked by %) Top gainers (ranked by RM) Top losers (ranked by RM) NAME VOLUME CHANGE CLOSE YTD MARKET (MIL) (RM) CHANGE CAP (%) (RM MIL) PANDA ECO SYSTEM BHD 190.4 0.100 0.260 — 174.5 HONG SENG CONSOLIDATED BHD 149.2 0.000 0.025 -88.64 127.7 TOP GLOVE CORP BHD 73.1 -0.020 0.880 -2.76 7,047.2 WIDAD GROUP BHD 65.2 0.000 0.465 8.14 1,439.9 LEFORM BHD 60.7 0.005 0.300 45.35 444.3 SIME DARBY PROPERTY BHD 45.1 0.030 0.660 46.67 4,488.6 SARAWAK CONSOLIDATED INDUSTRIES 40.8 0.015 0.690 375.86 441.8 BINA PURI HOLDINGS BHD 36.2 0.005 0.070 75.00 235.9 MY EG SERVICES BHD 29.7 -0.005 0.795 -7.60 5,930.3 UEM SUNRISE BHD 27.3 -0.030 0.765 200.00 3,869.7 VELESTO ENERGY BHD 26.7 0.010 0.235 56.67 1,930.7 TANCO HOLDINGS BHD 23.9 0.005 0.580 73.13 1,165.5 CSH ALLIANCE BHD 23.5 -0.005 0.055 37.50 76.0 PERDANA PETROLEUM BHD 22.7 -0.015 0.210 68.00 466.2 GENTING MALAYSIA BHD 21.9 0.050 2.700 0.37 15,302.9 YTL CORP BHD 21.2 0.030 1.540 165.52 16,885.2 EKOVEST BHD 20.6 -0.005 0.460 35.29 1,364.1 YTL POWER INTERNATIONAL BHD 20.0 0.020 2.300 221.68 18,635.0 ARTRONIQ BHD 19.5 0.005 0.855 20.42 348.8 RGB INTERNATIONAL BHD 19.2 0.005 0.305 72.84 470.0 Data as compiled on Nov 27, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) ZEN TECH INTERNATIONAL BHD 0.020 33.33 1823.4 0.00 52.6 G3 GLOBAL BHD 0.025 25.00 4064.2 -16.67 94.3 ALAM MARITIM RESOURCES BHD 0.035 16.67 230.1 40.00 53.6 OCR GROUP BHD 0.075 15.38 3302.7 -25.00 99.9 MERCURY INDUSTRIES BHD 1.100 14.58 9.0 13.99 70.7 TA WIN HOLDINGS BHD 0.040 14.29 1338.7 -27.27 137.4 BSL CORP BHD 0.040 14.29 1936.4 -40.83 77.3 SC ESTATE BUILDER BHD 0.040 14.29 5069.2 -11.11 43.0 ARK RESOURCES HOLDINGS BHD 0.365 10.61 1.1 28.07 25.4 EITA RESOURCES BHD 0.890 9.88 7698.3 14.84 231.5 ASIA MEDIA GROUP BHD 0.115 9.52 50.0 -23.33 27.5 THRIVEN GLOBAL BHD 0.120 9.09 154.0 26.32 65.6 TRIVE PROPERTY GROUP BHD 0.060 9.09 283.1 -14.29 75.8 KHEE SAN BHD 0.140 7.69 140.3 0.00 19.2 AHB HOLDINGS BHD 0.140 7.69 8417.8 16.67 92.1 BINA PURI HOLDINGS BHD 0.070 7.69 36188.0 75.00 235.9 NEXTGREEN GLOBAL BHD 1.060 7.61 4236.1 41.33 961.1 KAREX BHD 0.720 7.46 6116.1 -1.37 758.5 IVORY PROPERTIES GROUP BHD 0.080 6.67 0.1 0.00 39.2 SENTORIA GROUP BHD 0.080 6.67 6818.3 -11.11 49.1 Data as compiled on Nov 27, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) EA HOLDINGS BHD 0.005 -50.00 10,070.2 -66.67 32.3 MLABS SYSTEMS BHD 0.005 -50.00 48.2 -75.00 7.2 AT SYSTEMATIZATION BHD 0.005 -50.00 750.2 -66.67 33.9 LAMBO GROUP BHD 0.015 -25.00 22.0 -72.73 23.1 FOCUS DYNAMICS GROUP BHD 0.015 -25.00 1,237.2 -25.00 95.6 TALAM TRANSFORM BHD 0.015 -25.00 9,690.0 0.00 64.4 PERTAMA DIGITAL BHD 2.450 -21.73 7,313.5 39.20 1,073.6 XIDELANG HOLDINGS LTD 0.020 -20.00 1,561.5 -20.00 42.3 OPPSTAR BHD 1.330 -17.39 11,760.9 0.00 846.1 NEXGRAM HOLDINGS BHD 0.025 -16.67 231.8 -64.29 16.2 DFCITY GROUP BHD 0.320 -15.79 1.0 -16.88 33.8 XOX NETWORKS BHD 0.030 -14.29 31.2 0.00 34.1 PINEAPPLE RESOURCES BHD 0.870 -11.22 494.0 -3.33 42.2 INDUSTRONICS BHD 0.040 -11.11 319.5 -46.67 28.3 BERTAM ALLIANCE BHD 0.125 -10.71 50.0 92.31 31.0 KEN HOLDINGS BHD 0.575 -10.16 16.8 7.48 103.1 SAPURA ENERGY BHD 0.045 -10.00 4,819.7 28.57 719.1 ZELAN BHD 0.045 -10.00 715.1 -35.71 38.0 GREENYIELD BHD 0.185 -9.76 861.5 -7.50 100.3 XOX TECHNOLOGY BHD 0.050 -9.09 1,580.0 11.11 44.7 Data as compiled on Nov 27, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) PERTAMA DIGITAL BHD 2.450 -0.680 7,313.5 39.20 1,073.6 NESTLE MALAYSIA BHD 120.900 -0.600 109.8 -13.64 28,351.1 PETRONAS DAGANGAN BHD 22.060 -0.500 616.2 -3.45 21,915.6 UNITED PLANTATIONS BHD 16.500 -0.280 2,585.4 9.92 6,844.0 OPPSTAR BHD 1.330 -0.280 11,760.9 0.00 846.1 NEW HOONG FATT HOLDINGS BHD 3.350 -0.240 184.6 16.72 277.0 RAPID SYNERGY BHD 27.780 -0.220 386.7 74.06 2,969.6 PETRONAS CHEMICALS GROUP BHD 7.090 -0.210 2,898.0 -17.56 56,720.0 HEXTARTECHNOLOGIES SOLUTIONS 23.500 -0.200 11.5 37.75 3,023.3 LPI CAPITAL BHD 11.820 -0.180 86.3 -6.49 4,708.9 PANASONIC MANUFACTURING M BHD 17.840 -0.160 3.8 -22.10 1,083.7 CARLSBERG BREWERY MALAYSIA BHD 19.660 -0.160 138.3 -14.07 6,011.0 TENAGA NASIONAL BHD 9.840 -0.160 2,866.9 2.18 56,947.3 PMB TECHNOLOGY BHD 2.830 -0.150 683.6 -32.62 4,587.0 HONG LEONG BANK BHD 19.080 -0.120 283.6 -7.20 41,360.1 PINEAPPLE RESOURCES BHD 0.870 -0.110 494.0 -3.33 42.2 KLUANG RUBBER CO MALAYA BHD 3.660 -0.110 1.1 -7.58 227.5 HARRISONS HOLDINGS MALAYSIA BHD 8.630 -0.100 3.7 30.17 590.9 IMASPRO CORP BHD 5.300 -0.090 1,360.4 -9.40 424.0 UWC BHD 3.700 -0.090 324.2 -7.96 4076.2 Data as compiled on Nov 27, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) FRASER & NEAVE HOLDINGS BHD 27.300 0.200 50.5 26.51 10,013.1 MASTER-PACK GROUP BHD 3.020 0.180 147.9 28.51 165.0 MERCURY INDUSTRIES BHD 1.100 0.140 9.0 13.99 70.7 APM AUTOMOTIVE HOLDINGS BHD 2.380 0.130 524.6 30.05 465.3 MALAYSIAN PACIFIC INDUSTRIES 27.000 0.120 64.8 -6.12 5,370.2 KUALA LUMPUR KEPONG BHD 21.400 0.120 236.4 -4.29 23,078.5 MBM RESOURCES BHD 4.370 0.110 1,169.0 45.79 1,708.2 SIME DARBY PLANTATION BHD 4.440 0.100 1,240.8 -4.52 30,705.8 MALAYAN CEMENT BHD 4.140 0.100 3,132.8 95.28 5,424.2 UCHI TECHNOLOGIES BHD 3.560 0.090 2,424.0 10.54 1,625.5 EITA RESOURCES BHD 0.890 0.080 7,698.3 14.84 231.5 ALLIANZ MALAYSIA BHD 18.360 0.080 52.4 29.66 3,267.5 MSM MALAYSIA HOLDINGS BHD 1.460 0.080 6,518.3 71.76 1,026.4 NEXTGREEN GLOBAL BHD 1.060 0.075 4,236.1 41.33 961.1 PADINI HOLDINGS BHD 3.860 0.070 72.7 15.68 2,539.5 GENTING BHD 4.600 0.070 12094.2 2.68 17712.7 TOYO VENTURES HOLDINGS BHD 1.510 0.070 369.7 54.08 187.0 SHH RESOURCES HOLDINGS BHD 1.620 0.070 19.4 145.45 162 COMINTEL CORP BHD 1.480 0.070 579.1 82.72 669.7 KLCCP STAPLED GROUP 7.010 0.060 255.1 4.47 12655.4 Data as compiled on Nov 27, 2023 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 35,390.15 117.12 0.33 S&P 500 * 4,559.34 2.72 0.06 NASDAQ 100 * 15,982.01 -19.38 -0.12 FTSE 100 * 7,488.20 -8.79 -0.12 AUSTRALIA 6,987.64 -53.11 -0.75 CHINA 3,031.70 -9.27 -0.30 HONG KONG 17,525.06 -34.36 -0.20 INDIA 65,970.04 -47.77 -0.07 INDONESIA 7,013.41 3.78 0.05 JAPAN 33,447.67 -177.86 -0.53 KOREA 2,495.66 -0.97 -0.04 PHILIPPINES 6,269.50 23.30 0.37 SINGAPORE 3,086.42 -8.39 -0.27 TAIWAN 17,137.42 -150.00 -0.87 THAILAND 1,393.42 -4.01 -0.29 VIETNAM 1,088.06 -7.55 -0.69 Data as compiled on Nov 27, 2023 Source: Bloomberg CPO RM 3,888.00 -2.00 OIL US$ 79.23 -1.35 RM/USD 4.6807 RM/SGD 3.4978 RM/AUD 3.0875 RM/GBP 5.9015 RM/EUR 5.1247 * Based on previous day’s closing