The Edge - 31 October 2023

ceoMorningBrief tuesday, OCTOber 31, 2023 Issue 661/2023 theedgemalaysia.com US Treasury seen boosting auction sizes as budget deficit worsens p18 HOME: RM505 mil loss due to 8.5 mil expired Covid-19 vaccine doses, PAC report reveals p2 Mat Sabu: Chicken subsidies to be discontinued this Wednesday p4 Berjaya Land succeeds in overturning COA decision to cancel Selangor Turf Club plan p7 KNM seeking one-year extension to submit regularisation plan p8 WORLD: Warning signs grow Apple is losing Chinese consumers to Huawei p27 PNB, EPF and KWAP co-invest in Kulim II high-tech industrial asset for RM2 bil Report on Page 3. Report on Page 6. Malaysia, Singapore to review southern Johor airspace agreement bloomberg

TUESDAY OCTOBER 31, 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] RM505 mil loss due to 8.5 mil expired Covid-19 vaccine doses, PAC report reveals HOME BY CHOY NYEN YIAU theedgemalaysia.com KUALA LUMPUR (Oct 30): The report from the Public Accounts Committee (PAC) regarding the management of the Covid-19 outbreak revealed that the exact cost of the 8.5 million expired Covid-19 vaccine doses totalled RM505 million. “While the expiration date had been extended up to 18 months from the production date of the Covid-19 vaccine, as of June 1, 2023, 8.5 million vaccine doses worth RM505 million had still expired,” read the report, which was published on the official Parliament website on Monday. The report states that the Ministry of Health (MOH) procured vaccines based on projected demand, resulting in an excess of vaccines due to decreased vaccination demand, delays in receiving vaccine supplies, and donations from foreign countries. In total, Malaysia received 82.85 million doses of the Covid-19 vaccines up until April 2022, based on a forecast of 83.3 million doses required by the population. This includes 51.8 million doses required across 80% of the population to achieve herd immunity, combined with 31.5 million doses of booster shots for adults (two doses) and adolescents (one dose). To reduce the wastage from expired vaccines, Malaysia provided 1.89 million doses to other countries such as Bangladesh, Myanmar, Laos and Bosnia-Herzegovina, and also took steps to promote booster shots and improve public access for them, the report said. According to the report, due to the global shortage of medical equipment at the time, the country had to undertake emergency procurement of vaccines, ventilators, personal protective equipment (PPE), and other essential supplies to combat the Covid-19 epidemic. Read also: Absence of agreement means Pharmaniaga unit cannot be held accountable for 104 malfunctioning ventilators, says PAC The Public Accounts Committee report revealed on Monday that despite the extension of the expiration date by up to 18 months, 8.5 million vaccine doses worth RM505 million had still expired. THE EDGE FILE PHOTO “At that time, the world faced a crisis of medical equipment shortages, prompting a scramble to secure supplies. Failure to make immediate decisions would have denied the country essential supplies and potentially led to a loss of life,” the report added. The report also revealed that, given the exceptional circumstances during the movement control order (MCO) and the pressing urgency of the situation, deliberations, assessments, and procurement decisions for ventilators were conducted using the WhatsApp application, bypassing standard procedures. “Despite lacking experience and expertise in medical equipment procurement such as ventilators, Pharmaniaga Logistics Sdn Bhd (PLSB) was instructed to make advance payments for ventilators due to their existing relationship with the MOH. However, the absence of a written agreement between MOH and PLSB resulted in no party being held accountable for the malfunction of 104 ventilator units. To date, the uncertainty surrounding PLSB’s role has hindered legal action,” the report stated. The report also identified a discrepancy between MOH and PLSB regarding the warranty status of all 136 ventilator units. While PLSB’s quotation document indicated a warranty, it did not cover all 136 units and lacked proper documentation. Regarding PPE, the report noted that most PPE could be used before expiry, with only 850,000 boot covers at risk of expiring at the end of 2024, valued at RM927,000 if unused. “However, if the amount of this stock can be reduced then the value of the loss to MOH will also be reduced,” the report added. Therefore, the PAC recommended that the MOH ensures excess PPE is utilised before expiration and takes immediate action to verify the warranty status of all 136 ventilator units. Additionally, the PAC suggested that the government plays a role in promoting the local production of medical equipment and pharmaceuticals to reduce dependence on foreign countries and strengthen the public healthcare system. “In light of the lessons learned, the control officer must ensure that public interest is safeguarded during emergency procurement. Even in emergencies, documentation must be handled with due diligence,” the PAC added.

TUESDAY OCTOBER 31, 2023 3 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 30): Singapore and Malaysia are doing a feasibility study on the special economic zone (SEZ) ecosystem enhancement between both countries, to find out what should be the focus of the economic zone moving forward. Singapore Prime Minister Lee Hsien Loong said both countries will then sign a memorandum of understanding based on the outcome of the study, which is hoped to be done by early next year. “Preliminarily, I think there are three things you want to do [in the SEZ]. Firstly, improving the flow of goods between the two sides, because the SEZ may mean special tax arrangements and bonded warehouses, and therefore more easy border flows. “Secondly, better and easier arrangements on the flow of people who have to work on both sides of the causeway. They can go in and out, and then the companies in the SEZ are able to get the personnel they need, the right mix of professionals, skilled workers and other general workers,” he said during a joint press conference with Prime Minister Datuk Seri Anwar Ibrahim on Monday. Thirdly, he said, is for the SEZ to enhance the ecosystem of the Iskandar development region as well as Singapore. “Within the SEZ, it makes something meaningful for [the] Iskandar [region] as a place where investors will be focusing their attention, which means for companies in Singapore, they can think of having a presence on both sides, and therefore having more flexibility and being able to do things which they couldn’t do if they were only in Singapore or in Johor. “So we have great hopes. But it’s a lot of work for the Ministry of Trade and Industry (Singapore) and the Ministry of Economy on the Malaysian site. I think they will have to scramble, but we would like to see it done as soon as we can,” he said. During the joint press conference, both leaders also expressed their satisfaction with the ongoing cooperation under the purview of the Joint Ministerial Committee for Iskandar Malaysia (JMCIM), and welcomed the progress made by the respective Singapore PM says studying feasibility of special economic zone with Malaysia KUALA LUMPUR (Oct 30): Malaysia and Singapore have agreed to review the delegation arrangements for air traffic services over southern Johor that were delegated to Singapore 49 years ago. The discussion was raised after Prime Minister Datuk Seri Anwar Ibrahim went on a two-day working visit to Singapore in conjunction with the 10th Malaysia-Singapore Leaders’ Retreat that began on Monday. It is also worth noting that this is not the first time a review of the agreement has been agreed upon. In April 2019, during the Pakatan Harapan administration led by then prime minister Tun Dr Mahathir Mohamad, the federal government said that it wanted to reclaim the airspace in phases between 2019 and 2023, after delegating the airspace to Singapore since 1974. Since then, both countries had agreed to set up a high-level committee to review the operational letter of agreement between Kuala Lumpur and Singapore area control centres concerning Singapore arrivals, departures and overflights 1974 (LOA 1974). Malaysia and Singapore previously said that they would work out a schedule, and set up a timeline to move things forward. However, until today, the delegation agreement is still under review, despite being discussed over the last five years. “The leaders (Anwar and Singapore Prime Minister Lee Hsien Loong) agreed to review the delegation arrangements for the provision of air traffic services over Southern Peninsular Malaysia, which were recommended and approved by the International Civil Aviation Organization (ICAO) in 1973, and implemented through the LOA 1974,” Anwar and Lee said in a joint statement. “Both leaders tasked the respective transport ministers with deliberating and agreeing on a set of principles and outcomes to guide both civil aviation authorities to move forward as expeditiously as possible,” the joint statement said. Malaysia, Singapore to review southern Johor airspace agreement BY ANIS HAZIM theedgemalaysia.com Bernama It said that the review shall be in accordance with ICAO’s requirements for safe and efficient air traffic management, as well as accommodate both countries’ current and future operational needs. Recall that Malaysia and Singapore reached a deal back in April 2019, ending a months-long airspace dispute between the two countries. This subsequently saw Malaysia open up a restricted area near the countries’ border, while Singapore halted a new instrument landing system at the Seletar Airport. The new instrument landing system involved a flight path over Malaysian airspace, prompting Malaysia to take back control of southern Johor airspace. The dispute also affected Firefly’s plan to operate at the Seletar Airport, before resuming its flights in the same month. Read also: Malaysia ‘accelerating’ SarawakSingapore electricity export plan, exploring second power interconnector Zafrul: M’sia, S’pore agree to expand financing scope of Business Development Fund Industrial Cooperation, Immigration, Transportation Links, Innovation, Tourism, and Environment Work Groups. The leaders noted the establishment of a special task force under the JMCIM to study a Johor-Singapore SEZ, and noted the progress update provided by the task force at the retreat. The SEZ will tap into the complementary strengths of both countries to foster economic connectivity by improving the cross-border flows of goods, investments and people. The leaders also commended the Industrial Cooperation Work Group and agencies from both countries for working together closely to facilitate high-profile investments into and creating jobs in Iskandar Malaysia. Singapore is the second largest foreign investor in Iskandar Malaysia with S$9.5 billion or RM33 billion worth of investments committed between 2006 and June 2023. Read the full story

TUESDAY OCTOBER 31, 2023 4 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 30): MIDF Research said the removal of price controls and subsidies for chicken, starting next month, is a positive development for chicken producers. The government’s move will allow chicken producers to adjust prices based on market supply and demand, and pass on any increment on production costs to consumers, MIDF Research commented in a note issued after Agriculture and Food Security Minister Datuk Seri Mohamad Sabu announced the lifting of price controls and subsidies for chickens. The minister also announced that subsidies for grade A, B and C eggs would continue. MIDF noted that this will benefit chicken producers under its coverage such as Leong Hup International Bhd, on whom it has a “neutral” call and a target price (TP) of 50 sen. MIDF is of the view that the market price of chicken will not increase substantially after Removal of subsidies and price controls a positive move for poultry farmers, says MIDF Research KUALA LUMPUR (Oct 30): The government has agreed that subsidies and price controls on chicken will be discontinued from Wednesday (Nov 1), said Agriculture and Food Security Minister Datuk Seri Mohamad Sabu. He said, however, subsidies for grade A, B and C eggs would continue according to the existing mechanism. “The termination of subsidies for chicken is in line with the approach of retargeting subsidies in phases implemented by the government,” he told a press conference here on Monday. He said the government has allocated a total of RM3.8 billion in subsidies to cover the costs of chicken and eggs since February 2022. “The rationale for ending subsidies in bulk for chicken is to reduce leakages of subsidies, which are also enjoyed by foreigners and high-income groups,” he said. Also present at the press conference were Deputy Agriculture and Food Security Minister Chan Foong Hin, Treasury secretary general Datuk Johan Mahmood Merican and Domestic Trade and Cost of Living Ministry secretary general Datuk Mohd Sayuthi Bakar. Mohamad explained that the termination of chicken subsidies also took into account the current supply and price trends, with farm prices and production costs beginning to stabilise, leading to the current market prices being below the ceiling price. In this regard, he said the government would ensure the sale price of chicken, once floated, remains at a reasonable rate. “The government is expanding access to chicken supplies through continuous Agro Madani and Rahmah Sales programmes nationwide to provide options and assurance to the people to obtain chicken at reasonable prices and below the current ceiling price. “Through an engagement session with industry players on Oct 22, 2023, the government secured commitments from the industry to ensure that farmgate prices of chicken will not increase signifMat Sabu: Chicken subsidies to be discontinued this Wednesday icantly and burden consumers,” he said. Mohamad said the Domestic Trade and Cost of Living Ministry would implement monitoring and enforcement through the Price Control and Anti-Profiteering Act 2011 to ensure no excessive profit-taking activities and price manipulation by irresponsible parties at the retail level. He said the government would continue to collaborate with all stakeholders to ensure the supply and prices of chicken at the farms remain stable with no profiteering activities along the supply chain. “The government will continue to focus on strengthening the poultry farming industry through incentives to small- and medium-sized breeders and micro-credit schemes as working capital assistance for community breeders as well as the transformation programme of open chicken coops to closed chicken coops. “These measures will provide an improvement in terms of supply access directly from community breeders to wholesalers in the market,” he said. Meanwhile, Johan said that by ending chicken subsidies, the government could save about RM100 million a month. Bernama BY SL CHNG theedgemalaysia.com Read the full story the removal of subsidies and price controls, as chicken is a staple protein for Malaysians. It also believes that the market price of chicken will be closely monitored by the government, with the subsidy and price control removal not expected to have an impact on upcoming third quarter of calendar year 2023 (3QCY2023) results. Thus, the research firm said it is making no changes to its earnings forecasts and recommendations for now. As for egg producers, MIDF said they are unlikely to be impacted, given that the minister did not mention lifting price control on eggs. The latest move will be neutral for the likes of QL Resources Bhd, on whom MIDF has a “buy” call and a TP of RM6.75. MIDF pointed out that the average three-month futures of key commodities for animal feed are now trading below their two-year peak levels as of last Friday. This augurs well for chicken and egg producers as animal feed is a significant production cost component, it added. “Based on our channel checks, we have gathered that production costs for efficient and large poultry players are now below the price ceiling for live birds, and the production costs for egg producers are at least on par or slightly above the market price of chicken eggs,” it said. The research firm said it remained positive on the consumer sector, with a preference for consumer staples over discretionary items. “Our top picks are consumer staples that exhibit resilient demand, such as QL Resources and Fraser & Neave Holdings Bhd (F&N),” it said. MIDF tagged F&N with a TP of RM33.50 with a “buy” recommendation. Read also: Govt confident no more sudden spike in prices of chicken — Mat Sabu

tuesday october 31, 2023 5 The E dge C E O m o rning brief

TUESDAY OCTOBER 31, 2023 6 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 30): Malaysian Rating Corp Bhd (MARC Ratings) cautioned the renewed upside to inflation on food prices and a weaker ringgit, but said it is keeping its 2023 inflation forecast for Malaysia at 2.8% by the end of the year. In a statement on Monday, the rating agency said that in view of this, Bank Negara Malaysia is likely to maintain the overnight policy rate (OPR) at 3% for the rest of the year. The central bank is scheduled to make its decision on the OPR at its last Monetary Policy Committee meeting in 2023 this Thursday (Nov 2). The escalating geopolitical conflicts in the Middle East have led to higher oil prices, reignited concerns about inflation, and heightened overall economic uncertainties, said MARC Ratings. It said the ringgit continued its weakening trend in October despite a temporary pause in the dollar index’s rally against major currencies. Volatility in Asian currencies, especially the ringgit, may persist amid the recent safe-haven flow favouring the US dollar, it added. The local currency settled at 4.7655 against the greenback as at 5pm on Monday. The rating agency noted that the local bond market adopted a quieter and cautious stance as foreign investors closely tracked the depreciating ringgit movement in the absence of domestic catalysts. It pointed out that the local bond market reacted strongly to rising US Treasury yields fuelled by a hawkish outlook from the US Federal Reserve (Fed) officials’ commentaries and mounting fiscal concerns. Rising geopolitical tensions could either lead to higher yields should it result in inflation concerns or lower yields due to safe-haven flows, resulting in a volatile market. The persistent upward momentum is likely to continue due to the possibility of a rate hike, rising supply of US bonds and mounting inflationary concerns which will exert more pressure on the ringgit and domestic bond market, it said. That said, MARC Ratings noted that domestic consumption remained resilient, while the softer decline in exports together with better-than-expected economic performance and stable industrial production growth in China may indicate a potential rebound in Malaysia’s manufacturing sector. As further assessment is needed amid mixed economic signals, the US Fed is likely to keep rates steady at its November meeting to curb persistent inflation, despite potential growth slowdown, it said. Nonetheless, the US Fed will likely maintain its hawkish rhetoric, said MARC Ratings, adding that upcoming economic data will provide insights into how economic growth is evolving amid tight monetary conditions. It said that overall, tighter monetary conditions and a challenging external environment could constrain domestic growth ahead. For now, the rating agency said, Malaysia’s 2023 gross domestic product growth is within the Finance Ministry’s estimation of 4.0% (2022: 8.7%), based on potential support from oil prices, upside risk to exports, elevated consumer spending and recovering tourism. MARC Ratings warns renewed upside to inflation on food prices, weaker ringgit KUALA LUMPUR (Oct 30): Permodalan Nasional Bhd (PNB) together with the Employees Provident Fund (EPF) and Kumpulan Wang Persaraan (Diperbadankan) (KWAP) have co-invested in the Kulim II high-tech industrial asset, with a total investment value of RM2 billion. According to a joint statement, the co-investors have signed a sale and leaseback agreement with Osram Opto Semiconductors Sdn Bhd. Osram Opto is a wholly-owned domestic subsidiary of ams Osram AG, an Austria-based company known for its expertise in intelligent sensors and emitters. The sale and leaseback transaction is expected to conclude in December. PNB, the EPF, and KWAP will each have an equal ownership stake of 33.3%. The investment is for a 10-year period with a clear exit strategy. This offers an opportunity for the co-investors to invest in a high-quality and high-specification industrial real asset in Malaysia, which provides competitive returns. “In addition, the investment catalyses foreign direct investment by enabling our partner to deploy more capital in Malaysia. This aligns with one of the goals of the Madani PNB, EPF and KWAP co-invest in Kulim II high-tech industrial asset for RM2 bil Economy Framework, which aims to establish Malaysia as a leading Asian economy, and enhances our global competitiveness, resulting in high-impact growth investments for the country,” the statement wrote. The investment is also in line with Malaysia’s New Industrial Master Plan 2023, specifically in pursuit of its objective to advance economic complexity. The facility will foster the development of an ecosystem to support high-value added activities, such as semiconductor fabrication. “The injection of capital to the electrical and electronics sector enables ams Osram, a global leader, to establish the world’s first fully automated eight-inch LED and micro LED manufacturing facility. “[The facility] underscores Malaysia’s vision of becoming a prominent high-tech manufacturing hub that would rejuvenate the ‘Made in Malaysia’ brand. The products manufactured in ams Osram’s Kulim II will contribute to the country’s goal of expanding high-tech manufacturing exports and establishing a global presence, which solidifies additional employment opportunities in the country in the field of science and high-tech semiconductors,” the statement read. BY SYAFIQAH SALIM theedgemalaysia.com BY SL CHNG theedgemalaysia.com SHAHRILL BASRI/THE EDGE THE EDGE FILE PHOTO

TUESDAY OCTOBER 31, 2023 7 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 30): Cahya Mata Sarawak Bhd (CMS) said authorities’ investigation into the alleged conflict of interest involving its deputy group chairman Datuk Seri Mahmud Abu Bekir Taib and former chief information officer Karl Vink @ Khalid Abdullah has closed and been classified as “no further action (NFA)”. In a bourse filing on Monday, the group said it was informed of this via a letter from the Companies Commission Malaysia dated Oct 4. Abu Bekir is the son of Sarawak Yang di-Pertua Negeri Tun Abdul Taib Mahmud. CMS had in April 2021 reported to authorities a complaint pertaining to allegations of conflict of interest involving Abu Bekir and Vink received through its whistleblower channel. Following that, Abu Bekir voluntarily took a leave of absence from his position in the group to enable authorities to carry out a full and transparent investigation. However, after the group’s internal investigation concluded that the allegation involving Abu Bekir and Vink was “without basis”, Abu Bekir’s leave of absence was cancelled following the board’s request for him to stay on. Instead, CMS later suspended its thengroup chief financial officer (CFO) Syed Hizam Alsagoff for 30 days to facilitate investigations into allegations of possible financial mismanagement in relation to its investments and operations. KPMG, the independent consultant appointed to take up the investigation, in November 2021 highlighted several key findings, including the existence of gaps in the contract management processes, which contributed to an undisclosed project’s losses. Syed Hizam’s contract as group CFO lapsed in end-August 2021. Mukhnizam Mahmud was appointed in March 2022 to serve as the acting CFO. Taib’s daughters, Jamilah Hamidah Taib and Datuk Hajjah Hanifah Hajjar TaibAlsree, control a 12.55% stake in CMS through Majaharta Sdn Bhd. A 10.33% stake is in the name of their late mother Puan Sri Laila Taib, and Taib’s sons have individual shareholdings in the company — with Abu Bekir holding a 0.5% stake. Collectively, the Taib family has an equity interest of just below 33% in the group. Shares in CMS closed one sen or 0.9% lower at RM1.10, giving the group a market capitalisation of RM1.18 billion. Cahya Mata Sarawak: No further action in deputy chairman’s alleged conflict of interest case KUALA LUMPUR (Oct 30): The Federal Court on Monday set aside the Court of Appeal’s (COA) decision two years ago to cancel the Selangor Turf Club (STC) project mooted by Berjaya Land Bhd in 2004. In a bourse filing, Berjaya Land said the apex court allowed its appeal against the Selangor government and the director of the Selangor Country Planning Department (JPBD) with costs of RM80,000, and reinstated the orders made by the High Court in 2017. In 2004, Berjaya Land’s wholly-owned unit Berjaya Tagar Sdn Bhd entered into an agreement with the STC for the acquisition of three parcels of leasehold land measuring a total of 245 acres (99.15 hectares) in Sungai Besi for RM640 million, of which RM35 million was to be paid in cash and RM605 million to be satisfied by a transfer to the STC of 750 acres of land in Bukit Tagar with a newly built turf club. Berjaya Tagar had proposed to acquire the Bukit Tagar land from Berjaya City Sdn Bhd, a subsidiary of Berjaya Corp Bhd, and to appoint Berjaya City as the turnkey contractor of the new turf club. However, the Berjaya companies did not receive the necessary approvals following a change in the Selangor government after the 2008 general election. In 2017, Berjaya Land, Berjaya Tagar and Berjaya City won a judicial review application in the High Court against the Selangor government and JPBD, paving the way for the relocation of the STC to Bukit Tagar. However, in November 2021, the Selangor government succeeded in its appeal in the COA to cancel the construction of the new STC. Shares in Berjaya Land finished one sen or 1.79% lower at 28 sen on Monday, giving the group a market capitalisation of RM1.38 billion. Read also: BCorp buys additional 2.12% stake in BFood, raising shareholding to 57.43% at 71.4 sen per share Berjaya Land succeeds in overturning COA decision to cancel Selangor Turf Club plan BY SULHI KHALID theedgemalaysia.com BY IZZUL IKRAM theedgemalaysia.com BERJAYA.COM

TUESDAY OCTOBER 31, 2023 8 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 30): Educational materials publisher Sasbadi Holdings Bhd narrowed its net loss to RM1.48 million in its fourth financial quarter ended Aug 31, 2023 (4QFY2023) from RM2.25 million a year earlier, largely due to a reduction in provision of inventories writedown where RM3.04 million was recognised in the current quarter as compared with RM3.45 million recognised in 4QFY2022. Quarterly revenue was flat at RM16.79 million in 4QFY2023 compared with RM16.71 million a year ago. Nevertheless, the group managed to end its full financial year ended Aug 31, 2023 (FY2023) on an impressive note, with net profit surging 1,110.6% to RM10.18 million from RM841,000 in FY2022. Sasbadi attributed the improved yearly performance to higher sales of its academic books and contracts secured from the Ministry of Education, as well as higher contribution from the digital solution. It also declared a second interim dividend of 0.25 sen per share for FY2023, payable on Jan 3, 2024. In a bourse filing on Monday, Sasbadi said its net profit for FY2023 was the highest since FY2017. “This marks an exceptional return for our group despite challenging macroeconomic conditions including rising costs, weak ringgit strength, sluggish retail activity, and conservative consumer spending.” Revenue for FY2023 rose 39.6% to RM96.36 million from RM69.03 million in the previous year. Sasbadi said this was the group’s highest full-year revenue ever recorded since its inception. Company hits M&A trail from FY2024 Looking ahead, Sasbadi said it acknowledges that additional growth must be achieved through fresh sources of revenue. “A key strategy to achieve this for FY2024 and beyond is through mergers and acquisitions (M&As) that strategically fill niches, which our group has little/no market presence in. By acquiring the right companies, our group can swiftly launch into new business segments with signifiSasbadi posts record annual profit since FY2017, embarks on M&A to continue KUALA LUMPUR (Oct 30): A day prior to the Oct 31 deadline to submit its regularisation plan, KNM Group Bhd, which was recently embroiled in a boardroom tussle, announced that it needs another year to work on its regularisation plan. According to a bourse filing, the oil and gas engineering group submitted the extension of time application to Bursa Securities on Monday, seeking a one-year extension to Oct 30, 2024 to submit its regularisation plan. “The outcome of the application of the said extension of time application will be announced upon the decision received from Bursa Securities,” it added. KNM’s management has guided that the company is in the midst of listing its crown jewel Borsig on the Singapore Stock Exchange (SGX) to resolve its financial woes. The listing exercise on the SGX was first announced to the investing public almost two years back in December 2021. Interestingly, German businessman Andreas Heeschen has emerged as a new shareholder, buying a 7.91% stake or 320 million shares, although financially stressed KNM has been defaulted on loan repayments. A group of shareholders of KNM, led by Heeschen holding a 8.25% stake, wanted to remove the nine board members, including chairman Tunku Datuk Yaacob Khyra. However, they only managed to remove two directors — Tan Sri Dr Zulhasnan Rafique and Steve Ho Soo Woon — in an extraordinary general meeting on Oct 16. The boardroom fight happened in early September, slightly less than two months prior to KNM’s deadline to submit its regularisation plan. Coincidently, all these were unfolded shortly after the company completed two tranches of share placement at five sen and 5.4 sen respectively in the first half of the year. KNM’s share price started climbing from six sen on May 31 to a high of 17.5 sen on Oct 5. The stock closed at 10.5 sen KNM seeking oneyear extension to submit regularisation plan BY IZZUL IKRAM theedgemalaysia.com BY KANG SIEW LI theedgemalaysia.com on Monday, giving it a market capitalisation of RM405.51 million. KNM triggered Practice Note 17 (PN17) criteria on Oct 31 last year, after its auditor highlighted a material uncertainty related to its ability to continue as a going concern in its audited financial statements for the period ended June 30, 2022, with shareholders’ equity on a consolidated basis less than 50% of its share capital. Accordingly, the group was classified as an affected listed issuer under PN17, and was required to submit its regularisation plan to relevant regulatory authorities within a year — by Oct 31, 2023. During this period of time, KNM intended to sell its German-based machinery and equipment manufacturer Borsig GmbH to resolve its liquidity issues. However, the deal failed to materialise, leading the cash-strapped outfit to subsequently default on three credit facilities totalling about RM416.8 million in December 2022. KNM is in the midst of resolving its outstanding debt with creditors, with a proposed listing of Borsig forming the centrepiece of its scheme of arrangement. As of end-June this year, KNM’s borrowings stood at RM1.18 billion. It had been loss-making for eight consecutive quarters, with accumulated losses of RM1.21 billion. cant market share while improving the acquired companies’ financial performance by leveraging on our group’s competitive strengths, including improved economies of scale, in-house digital capabilities, and efficient, extensive supply chain. “In an industry where content is king, M&As will greatly expand our portfolio and accelerate our time to market in new business segments, thus spurring inorganic growth in a short span of time,” it said. Sasbadi has also set sights on the early childhood education (ECE) segment from FY2024. It plans to tap into the huge growth potential of Malaysia’s ECE segment by offering ECE course materials of the highest standard that provide a form of standardisation across kindergartens whilst ensuring specific learning goals are met. In separate filings, Sasbadi also announced the appointment of Law En Ruey, 38, the son of group managing director Law King Hui, as executive director of the company effective immediately. This comes as En Ruey’s sister Law Yi Chian, who is also an executive director, is taking a one-year sabbatical leave. Sasbadi shares closed unchanged at 17 sen on Monday, with 408,900 shares traded. Its market capitalisation stood at RM73.73 million. Year to date, the counter has risen 41.7%.

tuesday october 31, 2023 9 The E dge C E O m o rning brief

TUESDAY OCTOBER 31, 2023 10 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Oct 30): Foreign selling of Malaysian equities persisted and reached RM396.9 million last week, as the highest daily foreign outflow of RM150.4 million was seen last Wednesday, according to MIDF Research. This pushed the foreign selling net sold on Bursa Malaysia to RM4.13 billion year-to-date, MIDF said in its weekly fund flow report on Monday. MIDF said that foreign investors have been net sellers of domestic equities on a daily basis. When daily foreign outflow reached its highest on Wednesday, foreign investors were seen selling stocks like Hong Leong Bank Bhd to RM54 million, Kuala Lumpur Kepong Bhd (RM33.6 million) and Gamuda Bhd (RM22.4 million). “The top three sectors with the highest net foreign inflows were utilities (RM107.7 million), technology (RM18.5 million) and property (RM16.2 million), while the top three sectors with the highest net foreign outflows were financial services (RM181.9 million), consumer products and services (RM101.4 million) and construction (RM65 million),” it said. Meanwhile, local institutions have maintained their trend of purchasing domestic equities for the fourth consecutive week, with a net buying amount of RM493.1 million. The preferred sectors for the domestic buys include financial services (RM236 million), consumer products and services (RM76.4 million) and construction (RM50.3 million). The research house noted that local institutions have net bought RM4.88 billion of equities year-to-date. “Local retailers have persisted as net sellers of domestic equities for the third consecutive week, totalling RM96.2 million in net sales. Year-to-date, retailers have accumulated net sales amounting to RM756.8 million,” it said. In terms of participation, MIDF said that there was a decrease in average daily trading volume among retail by 3.6% and foreign investors by 26.1%, but saw an increase among institutional investors by 2.7%. Foreign selling of Malaysian equities persists, RM397 mil offloaded last week — MIDF KUALA LUMPUR (Oct 30): Practice Note 17 (PN17) company Barakah Offshore Petroleum Bhd’s independent auditor has issued a disclaimer of opinion on the group’s application of the “going concern” assumption in preparing its financial statements for the fiscal year ended June 30, 2023 (FY2023) despite incurring a net loss of RM4 million for the year. In a bourse filing on Monday, Barakah said auditor HLB Ler Lum Chew PLT also noted that the group’s current liabilities exceed its current assets by RM18.21 million, and that it had a deficit of shareholders’ funds of RM15.05 million. This indicates “the existence of a material uncertainty, which may cast significant doubt about the group’s ability to continue as a going concern”, the auditor was quoted as saying. According to Barakah’s latest annual report, its total borrowings increased KUALA LUMPUR (Oct 30): Gamuda Bhd will establish a joint venture (JV) company to develop a 187.5 MW hydroelectric power plant in Tenom, Sabah through a private finance initiative with the total project cost estimated to be around RM4 billion, including interest during construction. According to Gamuda, the project will be delivered via the JV company’s wholly-owned unit Upper Padas Power Sdn Bhd (project developer), and is estimated to have a construction period of five years and an initial operating period of 40 years. In its announcement with Bursa Malaysia, Gamuda said it has signed an agreement to form a JV company namely UPP Holdings Sdn Bhd. The group will hold a 45% stake in the JV company, while Sabah Energy Corp Sdn Bhd (SEC) and Kerjaya Kagum Hitech JV Sdn Bhd (KKHJV) will own the remaining 40% and 15% respectively. “It is the intention of the JV partners to fund the proposed JV via a combination of internally-generated funds and borrowings with minimum debt to equity ratio of 80:20,” said Gamuda. As at end-July 2023, Gamuto RM52 million, from RM49 million in FY2022, due to fluctuations in foreign exchange rates, as the group’s borrowings are mainly in US dollars. In its filing, Barakah outlined several measures implemented by the group to address the going concern matters, including proactively exploring business opportunities with non-oil and gas customers and oil and gas customers. It noted that the group in July secured contract amendment and contract extension from its existing customers for the provision of the Pan Malaysia maintenance, construction and modification contracts for 2018 to 2023 Package A (West Malaysia). The contracts, which expired in July, had been extended to December 2024. Barakah also noted that in August, the group received a letter of award from Brunei Shell Petroleum Co Sdn Bhd for the supply of engineering work, materials, fabrication, loadout, decommission, installation and commissioning of one unit of a single-point mooring buoy at the shoreline of Brunei Darussalam. It also pointed out that the licence suspension imposed against its wholly-owned subsidiary PBJV Group Sdn Bhd since July 2019 was lifted by Petroliam Nasional Bhd (Petronas) on April 6, 2023. Barakah said it expects to resolve the issues relating to the material uncertainty related to the going concern in the subsequent financial year. Shares in Barakah Offshore ended 1.5 sen or 27.27% lower at four sen on Monday, giving the group a market capitalisation of RM36.77 million. Auditor doubts Barakah Offshore’s ability to continue as going concern Gamuda to form JV to develop 187.5MW hydroelectric power plant in Sabah BY SULHI KHALID theedgemalaysia.com BY SYAFIQAH SALIM theedgemalaysia.com BY ANIS HAZIM theedgemalaysia.com da had RM6.92 billion in total borrowings. This project, upon completion, will provide additional generation capacity of 187.5MW for Sabah, delivering up to 1,052GWh of clean energy per annum,” said Gamuda. Barring unforeseen circumstances, the project is expected to start construction in 2024 with commercial operation to start in 2029. Shares of Gamuda closed down four sen or 0.87% at RM4.58, giving it a market capitalisation of RM12.35 billion.

tuesday OC T Ober 31, 2023 11 The E dge C E O m o rning brief home Chin Teck’s full-year net profit halves to RM53 mil on lower CPO, PK prices KUALA LUMPUR (Oct 30): British American Tobacco (Malaysia) Bhd’s (BAT Malaysia) net profit declined 20.89% to RM59.54 million or 20.90 sen per share for the third quarter ended Sept 30, 2023 (3QFY2023) compared with RM75.25 million or 26.4 sen per share in the previous year’s corresponding quarter as investment in tobacco heating and vapour products more than offset price adjustments — its first since 2018. Quarterly revenue was down by 9.01% to RM606.8 million from RM666.9 million in 3QFY2022, the tobacco group’s filing on Bursa Malaysia showed on Monday. BAT Malaysia attributed the lower earnings for 3QFY2023 to increased investment in launching tobacco heating and vapour products that provide reduced-risk alternatives to adult smokers while also implementing a modest price increase in its Premium and AP segments due to rising inflation and increased business costs, marking the group’s first price adjustment in five years. As a result, the group’s operating profit decreased 26.85% to RM84.95 million in 3QFY2023 from RM116.14 million in 3QFY2022. During the quarter, BAT Malaysia said it undertook the strategic decision to implement a modest price increase in its premium and aspirational premium (AP) segments prompted by rising inflation and increased cost of business. The group declared a third interim dividend of 19 sen per share, amounting to RM54.2 million, payable on Nov 28. For the cumulative nine months ended Sept 30 (9MFY2023), BAT Malaysia’s net profit was reduced 26.6% to RM147.38 million from RM200.79 million while revenue fell 8.26% to RM1.68 billion from RM1.83 billion due to volume weakness experienced by the group. BAT Malaysia managing director Nedal Salem said the group is confident that its purpose to Build A Better Tomorrow will drive long-term growth, backed by its new category segment. On top of that, it is also encouraged by the government’s consistent efforts to tackle the tobacco black market, which remains high. “We appreciate that the government acknowledges the severity of the tobacco black market, and continues to implement measures to tackle this issue, which causes Malaysia to lose RM5 billion annually in uncollected taxes. We believe that the recent measures announced during the tabling of the 2024 Budget, when implemented effectively, will further play a role in tackling the high levels of the tobacco black market. The BAT Malaysia’s 3Q net profit down 21% to RM59.5 mil, declares 19 sen dividend group is also supportive of the government’s decision to maintain the current excise level, to not further fuel the tobacco black market. “We are encouraged by the government’s commitment to regulate the vape industry in Malaysia. We strongly urge the government to adopt policies that are evidence-based and data driven to ensure that Malaysian vape consumers have access to reduced-risk products that are compliant with quality and safety standards. BAT Malaysia will strongly support any sensible, pragmatic regulations on vaping, in tandem with our purpose to build A Better Tomorrow,” he added. BAT Malaysia’s share price has fallen over 16% year-to-date to close at RM9.38 on Monday, giving it a market capitalisation of RM2.68 billion. by Syafiqah Salim theedgemalaysia.com by Sulhi Khalid theedgemalaysia.com KUALA LUMPUR (Oct 30): Chin Teck Plantations Bhd’s net profit for the full year ended Aug 31, 2023 (FY2023) dropped 50.36% to RM53.37 million, compared with RM107.52 million for the previous year, underpinned by higher administrative expenses and lower revenue. As a result, earnings per share declined to 58.42 sen from 117.68 sen, the company showed in a bourse filing on Monday. Annual revenue fell by 20.98% to RM205.67 million, against RM260.29 million previously, largely due to a significant decrease in average selling prices of crude palm oil (CPO), palm kennel (PK) and fresh fruit bunches (FFB). The group’s quarterly net profit for the fourth quarter ended Aug 31, 2023 (4QFY2023) declined by 41.87% to RM13.71 million, from RM23.59 million a year ago, underpinned by a loss in share of results of an associate and joint ventures. Quarterly revenue eased 22.17% to RM49.54 million, from RM63.65 million previously, on lower CPO, PK and FFB prices. Quarter-on-quarter, net profit came in higher by 19.86% from RM11.44 million, while revenue edged marginally higher by 5.34% from RM47.03 million for 3QFY2023. Moving forward, the group said its financial performance is highly dependent on CPO, PK and FFB prices. In view of the payment of interim and special dividends previously, the company did not recommend a final dividend in respect of FY2023. A first interim single-tier dividend of eight sen per stock unit and a special single tier dividend of two sen per stock unit were paid on Jan 31, 2023. A second interim single-tier dividend of eight sen per stock unit and a special single tier dividend of two sen per stock unit were paid on Aug 30. Shares in Chin Teck Plantations closed unchanged at RM7.67 on Monday, giving the company a market capitalisation of RM700.76 million. Since the beginning of the year, the stock has fallen by 10.40%. chin teck BAT Malaysia’s dividend trend 0 50 100 150 200 Net total dividend per share (sen) *nine-month period ended Sept 30, 2023 Source: Bursa Malaysia FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 *9MFY 2023 48 169 155 118 83 98 88

tuesday OC T Ober 31, 2023 12 The E dge C E O m o rning brief home news In brie f Ranhill eyes joint development of water facility project in Indonesia with China Energy Engineering KUALA LUMPUR (Oct 30): Ranhill Utilities Bhd plans to team up with China Energy International Group Co Ltd (CEIG) for the proposed development of a publicprivate regional drinking water supply facility project in Indonesia. In a bourse filing on Monday, Ranhill said it had inked a memorandum of understanding with CEIG to jointly pursue the Ir H Djuanda/ Jatiluhur II water supply project, as well as co-develop and cooperate on other potential projects in Southeast Asia. CEIG is a unit of China Energy Engineering Corp Ltd, a company jointly listed on the Hong Kong Stock Exchange and Shanghai Stock Exchange. According to the website of Indonesia’s Ministry of Public Works and Public Housing, the Ir H Djuanda/Jatiluru II project comprises the construction of the intake, transmission pipeline, water treatment plant and main development network. The project is to be 30% funded by equity and 70% debt. It carries a concession period of 30 years. — by Izzul Ikram MyEG gets three-year extension for JPJ-related online services KUALA LUMPUR (Oct 30): MyEG Services Bhd has received a threeyear contract extension from the Road Transport Department (JPJ) of its appointment as a collecting agent for the provision of vehicle registration services, driver and vehicle licensing, and electronic payment of summons services. This comes just two weeks after the e-government service provider was granted a two-year extension of its immigration related services contract. In a bourse filing on Monday, MyEG said the group and its wholly owned unit MyEG Sdn Bhd had received the letter of extension from JPJ for the period of May 23, 2023 to May 22, 2026. An agreement to formalise the extension will be announced by MyEG in due course, said the group, adding that the estimated total value of the extension will be dependent on the number of transactions performed over the period. — by Syafiqah Salim DNeX unit bags petroleum production and facility abandonment job from Petronas KUALA LUMPUR (Oct 30): Dagang NeXchange Bhd’s (DNeX) 90%-owned subsidiary Ping Petroleum Sdn Bhd has secured a contract from Petroliam Nasional Bhd (Petronas) in relation to the production of petroleum and abandonment of petroleum facilities. In a bourse filing on Monday, DNeX said the abandonment (decommissioning) work will cover petroleum facilities located in the Abu Cluster — about 250km off the east coast of Peninsular Malaysia. “The contract shall become effective commencing on the effective date and will remain valid for: a duration of 10 years; or until the execution of the abandonment work as per the abandonment plan,” it added. DNeX’s filing did not disclose a value on the contract it secured from the national oil and gas giant. — by Izzul Ikram the edge SNS Network teams up with Seagate Technology to provide enterprise data storage solutions in Malaysia KUALA LUMPUR (Oct 30): Information and communications technology (ICT) system and solutions provider SNS Network Technology Bhd is teaming up with Seagate Technology to provide enterprise data storage solutions in Malaysia. To formalise the collaboration, SNS Network had recently signed an agreement with Seagate, which will see SNS Network offering Seagate enterprise data storage solutions as part of its ICT services and solutions, according to a statement on Monday. The collaboration with Seagate — a global leader in mass-capacity data storage solutions — marked a significant milestone for the SNS group to enhance its capability as a leading ICT system and solutions provider to deliver comprehensive products and services to Seagate Technology Asean regional sales lead Joyce Lim (left) and SNS Network Technology Bhd executive director Kelvin Pah sealing the deal for the collaboration between Seagate Technology and SNS Network. its existing and potential customers from small and medium enterprises, public companies and government agencies in Malaysia, SNS Network executive director Kelvin Pah said on the collaboration. — by SL Chng Mitrajaya clinches RM84.5 mil contract for 31-storey block development in KL KUALA LUMPUR (Oct 30): Mitrajaya Holdings Bhd’s unit, Pembinaan Mitrajaya Sdn Bhd accepted a RM84.5 million contract for the construction of 31-storey block development in Mukim Batu, Kuala Lumpur. The unit clinched the two-year contract from GDP X Properties Sdn Bhd and the project is expected to be completed by December 2025, it said in a local bourse filing on Monday.  “The contract is expected to contribute positively to the earnings and net assets of MHB Group for the financial years ending Dec 31, 2024 to 2025 (FY2024 and FY2025),” it said. — by Sulhi Khalid PwC retires as Pintaras auditor after disagreement over audit fees KUALA LUMPUR (Oct 30): PricewaterhouseCoopers PLT (PwC) has retired as auditor for Pintaras Jaya Bhd as both parties were unable to reach a resolution on audit fees for the next financial year. In a Bursa Malaysia filing on Monday, the piling and foundation specialists said that the retirement of PWC was due “to a disagreement regarding the fees associated with conducting the audit for the next financial year”. The retirement of PWC was effective on Oct 20 after the conclusion of the group’s 34th annual general meeting (AGM) on the same day. The group said that it is currently in the process of identifying a suitable audit firm to be appointed as its new auditors as soon as possible. — by Anis Hazim

Tuesday oc t ober 31, 2023 13 The E dge C E O m o rning brief High blood pressure or hypertension affects a large percentage of the adult population worldwide. The worldwide prevalence of hypertension is 34%, according to a 2019 survey organised by the International Society of Hypertension among more than 1.5 million people from 92 countries. In Malaysia, three out of 10 people have hypertension but only half are aware of it. Hypertension is defined as having blood pressure of >140/90 mmHg, or >130/80 mmHg for those with diabetes or kidney failure. According to Sunway Medical Centre, Sunway City, consultant interventional cardiologist Datuk Dr Yap Yee Guan, there is no specific symptom or manifestation for hypertension other than elevated systolic and/or diastolic blood pressures. Hence, it is dubbed the silent killer. Occasionally, patients may have headache, dizziness, fatigue, nose bleed or blurred vision. “Hypertension is a strong risk factor for stroke, heart attack, heart failure, chronic kidney failure, blindness and aortic aneurysm,” he says. Uncontrolled hypertension causes considerable morbidity and excessive mortality. Medication dependence Blood pressure control with pharmacological therapy and lifestyle modification, being the cornerstone of hypertension treatment, have been shown to prevent hypertension-related complications and prolong longevity. However, Dr Yap explains that, despite the proven success of drug therapy, hypertension remains poorly controlled in the community due to missed diagnosis, undertreatment, side-effects of medications, non-compliance and patients’ reluctance to take medicine in the first place. In addition, in some cases, hypertension remains truly “resistant” to adequate therapy despite being on multiple medications. All in all, less than 25% of patients with hypertension have it under control. To offset these difficulties in the real world, Dr Yap describes a novel non-pharmacological treatment for hypertension, namely renal denervation, which has been developed as an adjunctive therapy in the treatment of hypertension. Novel non-pharmacological hypertension treatment Medical advancement to fight hypertension To understand how renal denervation works, one needs to know that the pathogenesis of hypertension is multifactorial and complex but the sympathetic nervous system plays an important aetiological role in elevating blood pressure (and the heart rate). Hence, interruption of the sympathetic nervous system is an established pharmacotherapy for hypertension but is fraught with adverse side effects. Renal denervation (disruption of the sympathetic innervation at the kidney level), however, is a more selective method and has a strong experimental foundation. Elegant studies using radiofrequency ablation of renal sympathetic nerves have shown a reduction in systemic blood pressure by lowering the sympathetic tone. Reduction of systemic vascular resistance is the reason for the antihypertensive effect of renal denervation. From an experimental bench to the clinical bedside, renal denervation is a valid therapeutic tool to lower blood pressure. Radiofrequency ablation of the renal nerves is the most common method of renal denervation. Recently, high-frequency ultrasound has also been applied to cause selective renal denervation and a reduction of the sympathetic tone. Renal denervation is a minimally invasive procedure. It takes around one hour to perform. An anaesthesia will be given to keep the patient comfortable throughout the procedure. During renal denervation, an interventional cardiologist: 1. Makes a small incision in the groin and inserts a catheter tube into the femoral artery. 2. Guides the catheter to the renal arteries (the blood vessels supplying blood to the kidneys). 3. Uses a radiofrequency or ultrasonic catheter to strategically damage the nerves around the renal arteries, by delivering radiofrequency (heat) energy or sending ultrasonic wave energy to the renal arteries. This energy destroys (ablates) the renal nerves without damaging the arteries. The reduced nerve activity causes a drop in blood pressure. Experimental and clinical studies have shown that renal denervation lowers blood pressure in hypertension. The development of renal denervation to treat hypertension was welcomed as a therapeutic breakthrough in medical science, enthuses Dr Yap. Showing success Dr Yap further adds that while the earlier results showed conflicting benefits, recent clinical trials showed that as compared with sham-controlled patients, renal denervation using a new generation of radio-frequency catheter significantly lowers blood pressure at six months for patients with mild to moderate hypertension who were not on antihypertensive drugs as well as those who were on one to two antihypertensive drugs, as evaluated through a 24-hour ambulatory blood pressure measurement (in the so-called SPYRAL HTN-OFF MED and SPYRAL HTN-ON MED). The antihypertensive effects of renal denervation, while small, were significant in both of the studies. These observations have rekindled the potential usefulness of renal denervation to some extent by the newer catheter technology and patient selection criteria. Similarly, the RADIANCE-HTN SOLO trial evaluated the efficacy of ultrasound-mediated renal denervation compared with sham controls in patients with mild to moderate hypertension who were off antihypertensive drugs for at least four weeks before the enrolment. At two months after the procedure, the fall in 24-hour ambulatory blood pressure was significant in the renal denervation group compared with the sham group. “The degree of 24-hour blood pressure reduction was similar between the two technologies in the SPYRAL HTN and RADIANCE-HTN SOLO studies, indicating that a clarified approach with refinements in procedural techniques and patient selection may indeed be the decisive factors in responses to renal denervation”, says Dr Yap. He further explains that the recently published Global SYMPLICITY Registry results (using radiofrequency technology) infuses some enthusiasm for the revival of renal denervation in hypertension. The data from 3,000 subjects from 196 centres in 45 countries suggests that renal denervation performed diligently in “high-risk” groups is effective in lowering the blood pressure in patients followed up to three years. All the patients had “uncontrolled” hypertension and co-morbidities (that is, diabetes, chronic kidney disease, congestive heart failure, arrhythmias and obstructive sleep apnoea) when the sympathetic nervous system was activated. Blood pressure reduction was similar in all the “high-risk” cohorts and in those with a propensity to suffer premature cardiovascular disease. The office blood pressure lowering effect was greater than ambulatory blood pressure levels. In some patients, the blood pressure fall was impressive, while in others it was modest. Clinical trials also showed that there is no evidence of significant procedure-related safety concern with renal denervation beyond the risks associated with femoral arterial access at the groin. According to Dr Yap, currently, renal denervation may be considered in the following categories of patients: 1. Patients with uncontrolled resistant hypertension. 2. Patients unable to tolerate antihypertensive drugs in the long term or patients who express a preference to undergo renal denervation in a tailored, shared decision-making process. 3. High cardiovascular risk patients who are vulnerable to hypertension-mediated organ damage and cardiovascular complications. Finally, Dr Yap emphasises that patients must be fully informed about the benefits, limitations and risks associated with renal denervation. Ultimately, a collective and consensual decision should be made between the patient and the cardiologist on an individualised treatment regime encompassing lifestyle modification, pharmacological therapy and renal denervation in the contemporary treatment of hypertension. Dato D r Ya p Yee Guan

tuesday OC T Ober 31, 2023 14 The E dge C E O m o rning brief home KUALA LUMPUR (Oct 30): The High Court (commercial division) on Monday granted three companies — Global Mariner Offshore Services Sdn Bhd, Blackstone Technology Sdn Bhd, and Dynac Sdn Bhd — an interim injunction against TH Heavy Engineering Bhd (THHE) and its liquidators to restrain them from calling for a creditors’ meeting, and therefore to maintain the status quo after the creditors’ meeting that had been held on Oct 4. The order was granted by judge Ong Chee Kwan via online proceedings, after THHE and the liquidators consented to the application. The three companies were represented by David Thomas Mathews, Olivia Loh and Lai Ann Xing. The three companies named THHE, liquidators Andrew Heng and Ashvin Mahendran, as defendants in the application which Ong granted the interim injunction, barring Ashvin as the chairman of the THHE creditors’ meeting to convene, re-convene, or hold or proceed with any creditors’ meeting. The court also restrained the defendants from doing any acts or taking any steps to alter the status quo after the THHE creditors’ meeting held on Oct 4 until the disposal of Global Mariner, Blackstone, and Dynac’s originating summons. THHE and the liquidators were represented by Mark Ho and Eldarius Yong. The decision on Monday was confirmed with The Edge by Mathews. Global Mariner was a joint-venture partner of THHE, where the High Court in July ordered THHE to pay Global Mariner US$63.42 million (RM288.72 million) in damages for breaching their shareholders’ agreement. As reported, THHE had applied to enter voluntary winding-up last month, and had called for a creditors’ meeting on Oct 4. Following that, Global Mariner, Blackstone Technology, and Dynac on Oct 19 filed an originating summons, sighted by The Edge, where it sought leave (permission) from the court to commence action or proceedings against THHE in the creditors’ voluntary liquidation and against Heng and Ashvin. Three companies obtain interim injunction against TH Heavy Engineering and liquidators KUALA LUMPUR (Oct 30): The High Court here has granted leave for a judicial review application filed by Parti Pribumi Bersatu Malaysia (Bersatu) against the Malaysian Anti-Corruption Commission (MACC) to challenge seizure orders over its bank accounts. Judge Datuk Ahmad Kamal Md Shahid in his brief decision via Zoom said that the application by Bersatu for judicial review has been given the nod. “Issues realised in enclosure one are not frivolous, vexatious or an abuse of the court process and are amenable to judicial review,” he said. A judicial review is when a government’s actions are subject to review by the judiciary. Now that leave has been granted, the merits of the judicial review can be heard. Ahmad Kamal then set Nov 28 for case management via E-review before the High Court senior assistant registrar to set the date for the judicial review proper. Bersatu was represented by Rosli Dahlan while the MACC’s legal representative was senior federal counsel Shamsul Bolhassan. On May 29, Captain (Retired) Datuk Muhammad Suhaimi Yahya, as a public Bersatu allowed to start judicial review against MACC over freezing of its accounts by Timothy Achariam theedgemalaysia.com by Hafiz Yatim theedgemalaysia.com officer of Bersatu, through Messrs Chetan Jethwani & Chas filed an application for leave to initiate a judicial review to challenge the MACC’s action of seizing the party’s bank accounts for investigation. He named former attorney general Tan Sri Idrus Harun as the first respondent, MACC chief commissioner Tan Sri Azam Baki as the second respondent, and 20 other individuals as the third to 22nd respondents. Bersatu claimed that on April 19, its CIMB and AmBank bank accounts were seized without any seizure order given to the party under Section 50(1) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001. Bersatu claimed that the MACC released a statement on April 20 that both accounts were seized on April 11, but had failed to inform the party of the date. In that statement, the anti-graft agency said that it seized the accounts after submitting an order in accordance with Section 50 of the Act. The MACC made the statement in response to a report by The Edge titled “Bersatu asks MACC why two accounts are still frozen after 90 days”. They claimed that the interests of THHE’s creditors, and that of its subsidiary THHE Fabricators Sdn Bhd (which is in members’ voluntary winding-up), will not be properly safeguarded or adequately dealt with under the voluntary winding-up process. Furthermore, the claimants allege that there is a genuine fear that the voluntary winding-up process was undertaken by THHE for reasons less than legitimate. They claim that there is reason to believe the voluntary winding-up process by THHE was to prevent a compulsory winding-up by the creditors from taking place, and put the liquidation in the hands of the directors’ choice of liquidators. Global Mariner, Blackstone Technology, and Dynac argued that there is cause to investigate whether there was any financial mismanagement or misappropriation of funds or undue preference given or whether THHE’s directors had discharged their duties properly. They further claimed that Heng and Ashvin do not have the requisite independence to act as interim liquidators or THHE’s liquidators, and are in a position of conflict from their relationship and previous engagements with THHE. The three companies claimed that Heng and Ashvin, as THHE’s interim liquidators, had acted unfairly and allegedly in breach of their statutory duties to THHE’s detriment and its creditors. The hearing of the three companies’ originating summons is fixed for Dec 14. bersatu.org

tuesday OC T Ober 31, 2023 15 The E dge C E O m o rning brief home KUALA LUMPUR (Oct 30): The Ministry of Defence (Mindef) is currently in the process of procuring two Maritime Patrol Aircraft from Italy, which are equipped with the capability to detect submarines in the South China Sea, with a specific focus on the Sabah region. Defence Minister Datuk Seri Mohamad Hasan explained that this procurement is necessary due to the limitations of the current long-range radar (LRR) used by the Malaysian Armed Forces at the Labuan Naval Air Base, where the system cannot Mindef to procure two Maritime Patrol Aircraft for submarine detection in South China Sea KUALA LUMPUR (Oct 30): Three suspects detained in connection with investigations into money-laundering activities involving a low-cost airline were released on police bail as of Monday. Bukit Aman Commercial Crime Investigation Department director Datuk Seri Ramli Mohamed Yoosuf said in a statement said two of the suspects were released on Sunday, while another suspect was released on Monday after the remand order expired. KUALA LUMPUR (Oct 30): Approvals to restructure loans and reduce interest on loans for buyers of “sick and abandoned” housing projects are subject to the discretion of the financier, said the Minister of Local Government Development Nga Kor Ming. The ministry’s initiatives to assist affected homebuyers include issuing letters to confirm the status of the projects, to be presented by the buyer to financial institutions, and entities such as the Employees Provident Fund (EPF) and the Public Sector Home Financing Board (LPPSA). This is in order for the homebuyers to apply for the entities to consider reduction of interest, and to restructure loan repayments as well as to allow a second EPF withdrawal for the purpose of home purchases, Nga said in a written reply in the Dewan Rakyat. Nga [PH-Teluk Intan] said this in reply to Datuk Khlir Mohd Nor [PN-Ketereh] who wanted to find out the federal government’s steps to address the issue of suspended projects, whereby buyers are still required to make payments although the project has stalled. As at end-August, Malaysia has 118 delayed private sector housing projects involving 8,128 buyers and 13,039 houses, and 490 sick projects involving 40,725 buyers and 79,278 houses, according to data from the National Housing Department. The government has established a task force on sick and abandoned private housing projects, Nga said, which focuses on four terms of reference namely tracking, resolving, preventing and forward modelling to address such projects. “The [task force] will continue to find the best alternative that is suitable and effective in preventing and recovering sick and abandoned private sector housing projects,” Nga said. Read the full story Three suspects remanded in connection with troubled MYAirline released on police bail Sick, abandoned housing projects’ loan restructuring subject to financier’s discretion, says Minister Bernama by Adam Aziz theedgemalaysia.com by Choy Nyen Yiau theedgemalaysia.com effectively detect submarines as its primary function is to monitor airspace. “Given that the South China Sea has been very ‘busy’ lately, the need for enhanced submarine detection capabilities has become evident,” Mohamad Hasan stated in response to a question from Datuk Seri Ikmal Hisham Abdul Aziz (Perikatan Nasional-Tanah Merah) during an oral question and answer session in the Dewan Rakyat on Monday. Mohamad also revealed that the ministry had already received approval from the National Security Council, and is in the process of acquiring an additional LRR, which will be placed on Pulau LayangLayang to extend the surveillance range beyond the exclusive economic zone. Furthermore, Mohamad said the radar coastal surveillance system (CSS) had been installed at 13 different locations along the North Eastern Sabah Safety Zone (ESSZone) coast from Kudat to the south ESSZone in Tawau. This system is intended to monitor the east coast of Sabah. “Eight radars were upgraded on Sept 16, involving the CSS 1206 radar. However, five AESA SPEXER 2000 CSS radars have suffered damage, and are no longer cost-effective to repair,” he said. To address these gaps in radar coverage, Mindef has identified the need to acquire six new gap filler radars, consisting of five replacements and one additional radar. Mohamad Hasan added that the total allocation for these radar acquisitions amounts to RM57 million, and this funding will be obtained under the 13th Malaysia Plan. On Sunday, a Bernama report said a lawyer from an investment company, who is believed to have connections with a co-founder of low-cost carrier MYAirline, was released on police bail last Friday. Last Thursday, four individuals, including a lawyer, were arrested and remanded for four days to assist investigations into a case that involved an investment company, i-Serve Technology & Vacation Sdn Bhd, because they were believed to have connections with the co-founder of MYAirline. Ramli said the four were a treasury assistant, research and development manager, lawyer and shareholder. On Oct 17, the police confirmed that a “Datuk”, who is a co-founder and majority shareholder of MYAirline Sdn Bhd, was arrested along with his wife and son to assist investigations under the Anti-Money Laundering, Anti-Terrorism Financing, and Proceeds of Unlawful Activities Act 2001. Sam Fong/ The Edge

tuesday OC T Ober 31, 2023 16 The E dge C E O m o rning brief home KUALA LUMPUR (Oct 30): Economy Minister Rafizi Ramli on Monday said the criteria for determining targeted groups eligible for social assistance will be expanded to include factors such as the assets of the individual. The expansion would complement the existing criteria related to income, household status, distance to workplace and locality, said Rafizi in his winding up speech at the Dewan Rakyat. “The aid determination process will now take into account the assets, such as properties, vehicles and land to provide a more comprehensive assessment of an individual’s financial situation. It is no longer solely based on income declaration,” he added. According to Rafizi, the development of the government’s Central Database Hub (Padu) system, which aims to consolidate socio-economic information from households across the country to streamline the implementation of targeted subsidies, has reached 72% as of October, and data from 29.8 million individuals has been uploaded to the system. “The Padu development work began in June 2023 and is expected to be launched in January 2024. Once launched, Padu will be accessible to the public for verification for three months, facilitating the rationalization of subsidies and other forms of government support,” he said. This, he added, will allow for further restructuring of subsidies by April 2024. Rafizi also announced that the government plans to present the Omnibus Act in Dewan Rakyat in June 2024 to allow the sharing of data between all government agencies through Padu. As of now, existing legislations do not allow sharing of data between agencies. To develop Padu, related agencies had to sign one-to-one agreements, the minister said. “It is important to inspire confidence among the people and the government machinery that the system will be fair to all recipients,” Rafizi said. This will then be expanded to look into the structure of existing agencies, including whether consolidations are required over the next four to five years.” “The Omnibus Act will not only ensure data security but also legally mandate the data-sharing process to guarantee the continuous operation of Padu as a comprehensive database,” he added. Regarding the mechanism for implementing targeted subsidies, Rafizi said he was scheduled to present the proposal to the Cabinet two weeks ago, but was unable to so as he was hospitalized. “I will submit the proposal to the Cabinet for a final decision as soon as possible. We have been discussing this for the past six months and the consensus is nearly reached,” he said. In response to a supplementary question from Syed Saddiq Syed Abdul Rahman (Muda-Muar) regarding the mechanism for rationalizing diesel subsidies, Rafizi said the mechanism was ready but would only be announced when implemented. “That’s why we didn’t provide details in the budget speech. We are concerned that this could trigger inflationary speculation, leading to price increases,” he explained. KUALA LUMPUR (Oct 30): The government intends to table a White Paper on the Progressive Wage Policy on Nov 30, which is the last day of the current Parliament sitting, said Minister of Economy Rafizi Ramli. While the policy was not mentioned during the recent Budget 2024 tabling, the government has provided allocation under the Ministry of Economy for the early implementation of the policy, Rafizi said during his ministry’s winding up session for Budget 2024 in the Dewan Rakyat. Details on the policy will be provided in the White Paper, which include the approach, related timeline and the structural issues needed to be addressed for the policy implementation, he added. “There have been lengthy discussions within the government, including three times during Cabinet meetings. We understand the implementation is a bold move... this is the first time the government will get involved directly to increase private sector wages,” he said. He noted the 1Q2023 formal sector wages report, which saw 2.2 million employees having less than RM2,000 in monthly salary despite the implementation of the fully voluntary productivity-linked wage system (PLWS) — introduced in 2007 — and the minimum wage policy. “As at August 2023, 97,799 employers undertook the PLWS involving 5.96 million employees, but wages have not been able to be increased,” he said. He also cited the wage compression phenomenon, where salaries for non-skilled employees saw increases to meet the minimum wage requirement, at the expense of semiWhite Paper on Progressive Wage Policy to be tabled on Nov 30 skilled and skilled employees, especially younger employees and those in the executive levels who saw no significant increases in wages in the period. Rafizi has said that the progressive wage policy will be implemented to complement the existing minimum wage policy. According to the 1Q2023 formal sector wages report by the Department of Statistics Malaysia, median monthly wages in March 2023 for citizen formal employees is RM2,600, with the number of citizen formal employees amounting to 6.45 million persons. The highest median monthly wages in March 2023 was recorded at RM3,500 for formal employees aged 45 to 49 and aged 40 to 44, accounting for nearly 20% of total formal employees. Meanwhile, the age group below 20 years received the lowest median monthly wages amounting to RM1,500, the report said. Read also: Rafizi returns to Parliament following heart stent placement procedure by Adam Aziz theedgemalaysia.com by Choy Nyen Yiau & Adam Aziz theedgemalaysia.com Criteria to determine eligibility for social assistance will include individual’s assets, says Rafizi Zahid Izzani/ The Edge

tuesday october 31, 2023 17 The E dge C E O m o rning brief

TUESDAY OCTOBER 31, 2023 18 THEEDGE CEO MORNING BRIEF WORLD (Oct 30): The World Bank is warning that even a small disruption to crude supplies due to escalating Middle Eastern conflict could remove between 500,000 and two million barrels a day from global markets. If that happens, prices could rise to between US$93 (RM442.91) and US$102 a barrel, the bank said in a report on Monday. The outlook could “darken quickly” if the latest conflict widens its scope, with a medium-sized disruption of three to five million barrels a day driving prices as high as US$121 a barrel. The biggest potential disruption foreseen by the bank could remove six to eight million barrels of oil per day, comparable in magnitude to the 1973 Arab oil embargo. That worst-case scenario could see prices reach US$157 a barrel. So far, the Israel-Hamas war has had minimal impact on the oil market, which “may reflect the global economy’s improved ability to absorb oil price shocks”, according to the report. The energy crisis of the 1970s led many countries to reinforce their defences against price volatility by reducing their dependence on oil, tapping into expanded energy resources and establishing strategic petroleum reserves, among other measures. Under the bank’s baseline forecast, oil prices are slated to average US$90 a barrel in the current quarter before declining to an average of US$81 a barrel next year amid lagging global economic growth. Overall commodity prices are projected to fall 4.1% next year before stabilising in 2025. Small disruption could drive oil to US$102, World Bank warns NEW YORK (Oct 30): The US Treasury is likely to boost the size of auctions for bills, notes, and bonds in the fourth quarter when it announces its financing plans this week to fund a worsening budget deficit, analysts said. Investors are paying close attention to this week’s quarterly refunding announcement as a sharp jump in long-term Treasury yields has been partly attributed to concerns about the US fiscal deficit. Since the end of July, the 10-year yield has climbed more than 100 basis points. “The market has associated the rise in Treasury yields with deficit concerns and reflects worries about the sustainability of those deficits,” said Guneet Dhingra, managing director and head of US rates strategy at Morgan Stanley in New York. The budget deficit is increasing due to several factors, including higher federal government borrowing costs arising from the Federal Reserve’s interest rate increases and quantitative tightening. Analysts at TD Securities expect the deficit to expand to US$1.85 trillion (RM8.8 trillion) in 2024 from US$1.69 trillion this year and project another US$677 billion of bills that mature in a year or less coming to market and about US$1.7 trillion in notes and bonds. So far this year, the Treasury has issued about $1.6 trillion of additional bills and roughly US$1.04 trillion in longer-term debt. The spotlight will also be on Monday’s announcement of borrowing estimates for the fourth quarter and the first quarter of 2024. It was the announcement on July 31 of US$1.007 trillion in funding needs for the third quarter that spooked the bond market, leading to the sharp increase in auction volumes. Morgan Stanley’s Dhingra, who expects the Treasury to rely on T-bills to finance its budget needs, said such a move could push the percentage of T-bills as a share of outstanding US debt to around 22%. That is slightly higher than the 15% to 20% range adopted by the Treasury. Tom Simons, US economist at Jefferies in New York, said the current market environment should support a more elevated T-bill percentage for some time because of a still-healthy appetite for shorter-term investments. The projected increase in longer-term deficits in the coming years, however, will keep Treasury raising auction sizes, analysts said. US Treasury seen boosting auction sizes as budget deficit worsens BY GERTRUDE CHAVEZ-DREYFUSS Reuters BY MIA GINDIS & JULIA FANZERES Bloomberg REUTERS The budget deficit is increasing due to several factors, including higher federal government borrowing costs arising from the Federal Reserve’s interest rate increases and quantitative tightening. REUTERS

TUESDAY OCTOBER 31, 2023 19 THEEDGE CEO MORNING BRIEF WORLD (Oct 30): HSBC Holdings plc chief executive officer Noel Quinn said China’s commercial property sector had reached a trough, but investors shouldn’t expect a swift reversal following the recent downturn. “The commercial real estate market in China has had a huge policy correction, and I think we are at the bottom of the market,” Quinn said on Bloomberg TV from London on Monday. “But it will take quite a while for that market to recover and regain momentum. So, I am not expecting a massive reversal in that sector in the next 12 months or so, but I do expect it to be a gradual improvement from where we are.” Investors are concerned about banks’ exposure to China’s property market, amid developer defaults and relatively sluggish economic growth. Standard Chartered plc shares plunged last week after profit missed estimates due to charges related to investments in China, and as chief financial officer Andy Halford said it remains difficult to call the bottom for commercial real estate. Of US$1.1 billion (RM5.24 billion) expected credit loss charges announced in HSBC’s third-quarter earnings on Monday, about US$500 million was related to the commercial real estate sector in mainland China. HSBC has charged a total of US$800 million against the China property portfolio this year. “There remains the potential for a further deterioration in credit conditions during the last three months of the year, given the continued uncertainty around liquidity support for state-owned enterprises and ongoing weakness in property market fundamentals,” HSBC said in a statement. “Borrowers are therefore subject to a high degree of performance uncertainty and offshore refinancing risk.” The firm pared its reliance on the sector, with its total mainland China commercial real estate exposure at US$13.6 billion, down roughly US$600 million from the second quarter, which it said was “mainly due to write-offs”. “I’m encouraged by some of the policy measures that were announced recently,” Quinn said on Bloomberg TV. “They will take time to have effect, so I’m not expecting a rapid turnaround, but I do think we are at the bottom of the market, and will now have to have a slow recovery.” HSBC’s Quinn says Chinese commercial property hit lowest point HONG KONG/LONDON (Oct 30): HSBC on Monday reported a fresh US$3 billion (RM14.3 billion) share buyback and a more than doubling of third-quarter profit that nonetheless missed forecasts as spending on technology and operations grew and inflation pushed wage expectations higher. The results from Europe’s biggest bank showed the pressure it is under to deliver returns to long-suffering investors now that interest rates worldwide are rising. HSBC indicated costs are likely to increase by up to 5% this year excluding an acquisition, more than its previous goal of a 3% rise, as technology and operating spending grows and it considers a boost to staff bonuses in the fourth quarter. The bank posted a pre-tax profit of US$7.7 billion for the July to September quarter, versus US$3.2 billion a year earlier, but the result trailed the US$8.1 billion mean average estimate of brokers compiled by HSBC. HSBC’s profit was below expectations and “costs are likely to be the area of controversy”, said London-based Jefferies analyst Joe Dickerson, though he added the share buyback was US$1 billion larger than his forecast. The London-headquartered bank with a market value of US$118.6 billion said it aimed to complete the share buyback by next February, lifting the total buybacks announced this year to US$7 billion. It also dished out the third interim dividend payout this year of 10 cents HSBC launches US$3 bil buyback, profit disappoints on rising costs lease, narrowing losses from 2.1% in the morning and outperforming the market’s wider financial index, which fell 1.21%. HSBC’s third-quarter revenues rose 2% in the Global Banking and Markets division that houses its investment bank, a more robust performance than rival Barclays’ 6% drop as HSBC’s large payments business benefited from higher interest rates. New flows into its wealth business gained traction, with US$34 billion of net new invested assets in the quarter and its wealth balance sheet growing by 12% compared with last year. The lender’s net interest margin of 1.70% was squeezed by two basis points compared with the prior quarter, reflecting an increase in customers migrating their deposits to term products, particularly in Asia. In the third-quarter results, the lender booked a US$500 million impairment related to the commercial real estate sector in mainland China. “We continue to monitor risks related to our exposures in mainland China’s commercial real estate sector closely, and there remains a degree of uncertainty in the forward economic outlook, particularly in the UK,” the company said in the results statement. HSBC’s Asia-focused competitor Standard Chartered reported last week an unexpected one-third plunge in third-quarter profit due to a nearly US$1 billion combined hit from its exposure to China’s real estate and banking sectors. BY SELENA LI & LAWRENCE WHITE Reuters BY JUN LUO Bloomberg The bank aims to complete share buyback by next February, lifting the total buybacks announced this year to US$7 billion. per share, bringing the total payout this year to 30 cents per share. The bank’s Hong Kong-listed shares were down 0.26% after the earnings reREUTERS

TUESDAY OCTOBER 31, 2023 20 THEEDGE CEO MORNING BRIEF WORLD (Oct 30): The sign atop Credit Suisse’s London headquarters has been removed, one of the most visible signs yet of the changes sweeping the bank as staff prepare to move to UBS Group AG’s building in the City of London. The facade of One Cabot Square in Canary Wharf, which has long borne Credit Suisse’s sign, was bare on Sunday, with the scaffolding used to remove it jutting out from the ledge above. The high-rise has been Credit Suisse’s London home since 1991, when the office block was initially completed. Renovations on the building were completed as recently as 2019. Staff are being relocated to UBS’ Five Broadgate office, the Swiss bank told employees in a memo last month. The sign may have come down, but that does not necessarily mean that its useful life is over. In 2010, a sign bearing the name of Lehman Brothers was sold for £42,050 (US$50,973 or RM242,871), far more than the £2,000-to-£3,000 auction estimate. UBS takes down Credit Suisse logo from Canary Wharf office (Oct 30): Broadcom Inc and software maker VMware Inc said their US$61 billion (RM290.51 billion) merger is on track to close before a November deadline, working to reassure investors while China drags out its review of the deal. The companies didn’t say in a joint statement on Monday how close they might be to an approval from Chinese regulators — the last major hurdle to completing the deal. But they said there’s “no legal impediment” to closing under US merger regulations. The agreement between the companies expires on Nov 26. They had maintained until last month that they expected to close by Oct 30. The combination of the US chipmaker and cloud software company, one of the biggest technology mergers ever, could become the latest casualty of an escalating fight between the US and China for tech dominance. Washington recently tightened export restrictions aimed at blocking China’s access to high-performing semiconductors. Meanwhile, there are signs that a new smartphone developed by China’s Huawei Technologies Co using an advanced chip is eating into the sales of Apple Inc’s iPhone 15 series. Chinese regulators have tanked several large merger deals in recent years by dragging their feet on approvals, which are required because the country is the world’s biggest buyer of many products, including semiconductors. In the most recent example, Intel Corp dropped its US$5.4 billion attempt to acquire Tower Semiconductor Ltd after failing to secure a nod in time. Last year, DuPont de Nemours Inc scuttled a proposed US$5.2 billion acquisition of Rogers Corp after failing to get timely clearance from Beijing. In 2018, US-based Qualcomm Inc scrapped a US$44 billion bid for Dutch chipmaker NXP Semiconductors NV after a drawn-out review by China’s State Administration for Market Regulation. Broadcom and VMware pointed out in their statement on Monday that the deal had already received legal clearance in other major markets, including the European Union, UK, South Korea and Japan. The Financial Times had previously reported that antitrust regulators in China may take longer to approve the combination given a tightening of US chip sanctions, sending shares in VMWare below the offer price. VMWare shares slid 2.2% to US$139.19 as trading got underway on Monday in New York. Under the deal terms, shareholders could choose to receive either US$142.50 in cash or 0.252 shares of Broadcom stock for each VMware share. About 96% of shareholders elected to receive the stock consideration, according to the statement. Broadcom shares were little changed at US$839.65. Failing to win approval from China could pose a significant setback for San Jose, California-based Broadcom, which derives about 35% of its revenue from the country. If the merger is terminated because the takeover doesn’t gain regulatory Broadcom sees US$61 bil VMWare deal closing despite China wait BY NICK TURNER & AMY THOMSON Bloomberg BY LUCCA DE PAOLI & MARION HALFTERMEYER Bloomberg approvals in time, Broadcom may be on the hook for a US$1.5 billion termination fee under the terms of the agreement. Broadcom chief executive officer Hock Tan aims to turn VMware into the centrepiece of his software operations after previously purchasing CA Technologies and Symantec Corp’s corporate security business. VMware, founded in 1998, pioneered so-called virtualisation programmes, which consolidated applications and workloads on a smaller number of server computers. The innovation made it easier for servers to handle more than one program. Failure to win approval from China would also mark the second time Broadcom has been ensnared by US-China tensions. In 2018, then US president Donald Trump blocked Broadcom’s hostile US$117 billion takeover of Qualcomm, scuttling a deal that had been scrutinised over a potential threat to US national security. Trump’s order came as Broadcom was in the midst of moving its headquarters from Singapore to the US. VMware agreed to the takeover in May 2022, setting a record for an acquisition by a chipmaker. The largest previous purchase was Advanced Micro Devices Inc’s US$34.1 billion takeover of Xilinx Inc. The deal included a so-called go-shop clause, which let VMware solicit competing offers, but no other suitors emerged. The VMware transaction was part of a flurry of dealmaking in 2022. Microsoft Corp agreed that January to buy video-game publisher Activision Blizzard Inc for $69 billion. A consortium backed by Vista Equity Partners set out to acquire software maker Citrix Systems Inc for US$13 billion, and Elon Musk announced a US$44 billion buyout of Twitter Inc in April. Those deals have all now closed. The Credit Suisse London headquarters before and after the sign was removed. PHOTOS BY BLOOMBERG

tuesday october 31, 2023 21 The E dge C E O m o rning brief H O N O U R I N G M A L AY S I A’ S B E S T P E R F O R M E R S I N ESG EXCELLENCE Knowledge Partner (Funds Category) Main Partner Auditor Official Broadcast Partner Automotive Partner In Collaboration With

TUESDAY OCTOBER 31, 2023 22 THEEDGE CEO MORNING BRIEF WORLD BERLIN (Oct 30): Inflation in Germany eased noticeably in October, falling to its lowest level since August 2021, pointing to a substantial cooling in headline inflation in the eurozone. German inflation eased in October to 3.0%, the federal statistics office said on Monday. German consumer prices, harmonised to compare with other European Union countries, had risen by 4.3% year-on-year in September. Core inflation, which excludes volatile food and energy prices, fell to 4.3% in October from 4.6% in the previous month. While headline inflation is likely to ease further in the first few months of the coming year, the core inflation rate should stabilise around 3% by spring at the latest, Commerzbank economist Ralph Solveen said. GDP falls less than expected Separate data on Monday showed Germany’s economy shrank slightly in the third quarter, as Europe’s largest economy continued to be weighed down by weak purchasing power and higher interest rates. German inflation eases in October to lowest level in two years, 3Q GDP shrinks (Oct 30): Singapore’s central bank said a resurgence in global food and oil prices could mount pressure on monetary authorities globally to further tighten their policies. “There are nascent supply-side sources of fresh price pressures”, as oil skirts close to US$100 (RM476.50) a barrel, the Monetary Authority of Singapore (MAS) said in its biannual macroeconomic review published on Monday. There “remains a risk that adverse supply side shocks from extreme weather events, including a strong El Niño, and an escalation in geopolitical tensions, could lead to a surge in food and energy prices”, it said. “Upside inflation surprises could prompt further policy tightening or keep rates elevated for longer.” Indonesia and the Philippines both delivered surprise interest rate hikes in the past weeks, and signalled they could do more to support their currencies and stem price risks. As for Singapore, which uses the exchange rate as its main policy tool and had kept settings unchanged earlier this month, the central bank chief Ravi Menon said the monetary policy “remains appropriately tight”. The MAS will “maintain the prevailing rate of appreciation of the S$NEER policy band”, the central bank said in the report on Monday, recapping its Oct 13 decision to keep the the Singapore dollar’s nominal BY MARIA MARTINEZ Reuters Gross domestic product (GDP) fell by 0.1% quarter-on-quarter in adjusted terms, the federal statistics office said. A Reuters poll had forecast the economy to shrink by 0.3%. Looking ahead, the ongoing passthrough of the ECB’s monetary policy tightening, still no reversal of the inventory cycle and new geopolitical uncertainties will continue weighing on the German economy, Brzeski said. “The German economy looks set to remain in the twilight zone between minor contraction and stagnation not only this year, but also next year,” he said. The contraction in the third quarter is not seen as an outlier as Commerzbank expects the German economy to contract again in the winter half-year. “Consumption is unlikely to recover as optimists had hoped,” Commerzbank’s chief economist Joerg Kraemer said. Household consumption fell in the third quarter, as high inflation continued to erode consumers’ purchasing power. While consumption in Germany was a drag on GDP, capital investment made a positive contribution, the statistics office said. Read also: Singapore expects economy to improve in second half of 2024 lowering imported inflation, Menon said. Singapore’s open economy is highly linked to international trade and financial conditions, and almost 40 cents of every dollar spent domestically is on imports. The MAS, which tightened monetary policy five times in the past two years, will next announce its decision in late January when it starts shifting to a quarterly release from a twice-yearly schedule. Singapore warns of global rate tightening on inflation risk BY ISHIKA MOOKERJEE Bloomberg effective exchange rate on an appreciating path. “There will be no change to its width and the level at which it is centred.” Traders see an average of 13 basis point hikes in the Asia-Pacific region, excluding China, over the next six months, according to market implied policy rates. The MAS chief signalled in an interview last Friday that authorities aren’t necessarily under pressure to do more, even as regional peers turn hawkish. Keeping the trade-weighted exchange rate on an appreciating path means it is continuing to strengthen against other currencies and REUTERS BLOOMBERG

tuesday OC T Ober 31, 2023 23 The E dge C E O m o rning brief world (Oct 30): Australia has walked away for the second time in three months from talks with the European Union (EU) towards a free trade deal, almost certainly pushing any agreement into next year or beyond. “We’ve not been able to make progress” in the talks with Europe, Australia’s Trade Minister Don Farrell said in a statement on Sunday from Osaka, where he met European representatives on the sidelines of a Group of Seven (G7) meeting. “Negotiations will continue, and I’m hopeful that one day we will sign a deal that benefits both Australia and our European friends.” The two sides have been working on a free trade agreement for more than five years and while there was broad consensus across most areas, a few remaining agricultural issues were threatening to derail the entire compact. Australia was pushing for greater access to the European market for its beef, mutton and sugar, while Brussels wants an end to the use of certain geographic locators on products such as Prosecco and feta. “The European Commission regrets the lack of progress made during talks in Osaka,” the body said in an emailed statement. “The Australian side re-tabled agricultural The talks in Japan were seen the last chance for a deal any time soon, with both sides warning before they began that that a failure to strike a deal now may delay it by months or even years. After Farrell and the Australians walked out of the last round of negotiations in July, neither Canberra nor Brussels was completely convinced that a deal could be struck, though there was cautious optimism that it could finally happen. In one sign that there was an expectation that the deal was ready to be done, the EU sent the Agriculture Commissioner Janusz Wojciechowski to Japan to participate in the talks. Farrell’s decision to walk away from the talks was applauded by Australian business groups, farmers, and even the centre-right opposition parties. The Australian Chamber of Commerce and Industry said they agreed with the government’s decision, while the National Farmers’ Federation (NFF) said the free trade deal would have “disadvantaged” the country’s agriculture sector. Other stakeholders were less sanguine. Read the full story Australia walks away from EU trade talks over agriculture (Oct 30): Qantas Airways said a regulator lawsuit accusing it of illegally selling thousands of tickets for cancelled flights ignores business realities, adding that most impacted travellers were put on other flights or reimbursed. The Australian Competition and Consumer Commission (ACCC), which sued the country’s flagship carrier in August, has said that in some cases, flights were on sale for several weeks after cancellation. “The ACCC’s case ignores a fundamental reality and a key condition that applies when airlines sell a ticket,” Qantas said in a statement on Monday. “While all airlines work hard to operate flights at their scheduled times, no airline can guarantee that,” it added, noting weather conditions and other unforeseen problems make delays and cancellations “inevitable and unavoidable”. In its defence filed to the Federal Court, Qantas said it was responsible for “many unacceptable delays” as it sought to restart international travel in 2022 after Covid restrictions were lifted. But it added that its actions never amounted to charging a “fee for no service”, as the ACCC has accused it of doing, “because customers were reaccommodated on other flights as close as possible to their original time or offered a full refund”. Australia’s Qantas says regulator lawsuit ignores reality as it files defence The ACCC declined to comment, saying the matter was before the court. Qantas customers have amassed hundreds of millions of dollars in credits for cancelled flights that were due to expire in December. After the ACCC lawsuit was filed, Qantas said it was removing the expiry date. The company’s statement on Monday did not refer to its initial plan to impose an expiry date. Qantas’ previous CEO brought forward his retirement and its chairman has said he will quit next year, both citing the ACCC lawsuit as the reason for their departure. The lawsuit is one of several sensitive topics that Qantas is expected to be asked about at its annual meeting on Nov 3, where groups like the Australian Shareholders’ Association have said they plan to vote against many of its resolutions. These include resolutions relating to remuneration for management and the re-election of some board members. The airline lost a civil lawsuit in September which found it illegally fired 1,700 ground staff in 2020 and replaced them with contractors specifically to prevent industrial action. A court is still to decide penalties for that case. Qantas has also been accused of quashing competition when it lobbied the federal government, successfully, to stop rival Qatar Airways from selling more flights to Australia. by Byron Kaye & Sameer Manekar Reuters by James Mayger, Ben Westcott & Jorge Valero Bloomberg While all airlines work hard to operate flights at their scheduled times, no airline can guarantee that. demands that did not reflect recent negotiations and the progress made between senior officials. The European Commission stands ready to continue negotiations.” reuters bloomberg

TUESDAY OCTOBER 31, 2023 24 THEEDGE CEO MORNING BRIEF WORLD (Oct 30): GoTo Group posted a narrower loss in the third quarter, bringing Indonesia’s largest technology company closer to breakeven after months of extensive cost cuts. Adjusted loss before interest, taxes, depreciation and amortisation narrowed Indonesia’s GoTo closes in on profit goal after slashing jobs (Oct 30): China Evergrande Group will look to use its subsidiaries’ shares as key components in any further debt-restructuring attempts, its legal representative said, pointing to a possible path of avoiding an asset-liquidation order. The equity-centred plan comes after the world’s most indebted developer shocked creditors and other observers last month when it said it would reassess its offshore-debt restructuring plan. The company said it was unable to meet Chinese requirements to issue new bonds, which would have been a crucial part of its debt overhaul. The new tactic now would involve shares in China Evergrande New Energy Vehicle Group Ltd and Evergrande Property Services Group Ltd, the lawyer said in a court hearing in Hong Kong on Monday to determine if Evergrande should be wound up. The lawyer’s comment came as a reply to judge Linda Chan’s question on how the developer would craft a new plan despite its inability to restructure through the “normal” means of issuing debt or shares. The lawyer didn’t elaborate on the equity plan details. Chan eventually gave Evergrande — the poster child for indebtedness in China’s troubled property market — a reprieve by adjourning proceedings until Dec 4 for it to hammer out another restructuring plan. Evergrande’s original proposal included an option for some creditors to get instruments tied to equity of the three firms. Their shares have all plunged more than 80% this year. Evergrande seems to have abandoned any hopes of issuing more debt. The lawyer said the company’s key goal is not trying to “overturn” Chinese regulators’ decision. Getting creditors’ backing for a new plan could prove challenging, as they are becoming increasingly frustrated at the case’s lack of progress. (Oct 30): McDonald’s Corp sales and profits beat expectations in the third quarter, thanks to higher prices and movie-inspired ads, but US customer traffic dipped for the first time this year. Comparable sales — which track restaurants open for at least 13 months — rose 8.8% in the period, surpassing the 7.8% average estimate of analysts polled by Bloomberg, according to financial results released on Monday. McDonald’s earnings, excluding some items, were US$3.19 (RM15.19) a share, also beating estimates. In the US, higher prices resulted in bigger cheque sizes, McDonald’s said. Marketing campaigns, expanding delivery and digital channels and better-run restaurants also helped. However, chief executive ofEvergrande units to be part of revised debt plan, rep says BY DOROTHY MA Bloomberg BY OLIVIA POH Bloomberg to 942 billion rupiah (US$59 million or RM282.95 million) from 3.7 trillion rupiah a year earlier, the company said on Monday. Net revenue, which strips out incentives to driver and merchant partners and promotions to users, fell 21% to 3.6 trillion rupiah after the company made accounting adjustments related to such incentives. Chief executive officer Patrick Walujo, who took over in June, is trying to bring GoTo to profitability on an adjusted basis by year end to show the ride-hailing and e-commerce company has long-term earnings potential. The managing partner of shareholder Northstar Group is continuing his predecessors’ campaign to reduce losses by cutting jobs, curbing promotional spending and tightening expense controls. Like rivals Grab Holdings Ltd and Sea Ltd, GoTo is trying to generate cash after years of rapid growth. At the same time, competition from those rivals is weighing on margins and user gains, even as more and more customers in Southeast Asia pay for the convenience of hailing a ride and getting food delivered to their door. In a boon to GoTo’s e-commerce business Tokopedia, rival TikTok this month suspended its online-retail operations in Indonesia to comply with curbs on social commerce. Read the full story BLOOMBERG BLOOMBERG McDonald’s tops estimates on higher prices as US visits dip BY DANIELA SIRTORI-CORTINA Bloomberg ficer Chris Kempczinski said traffic to US locations fell slightly in the third quarter. “One of the things that we saw industry-wide was that the low-income consumer, which we would say is US$45,000 and under, was negative from an industry standpoint,” Kempczinski said during a call with analysts, adding that customer traffic remained up for the full year. Global same-store sales increased at their slowest rate so far this year. This tracks with executives’ warning in July that the overall pace of growth would moderate as high inflation and interest rates take a toll on the economy.

tuesday october 31, 2023 25 The E dge C E O m o rning brief presents real estate matters Official Solar Partner Supported By built this year’s outstanding overseas proJect? Which Malaysian developer

TUESDAY OCTOBER 31, 2023 26 THEEDGE CEO MORNING BRIEF WORLD (Oct 30): Investors are missing a big opportunity to profit from the energy transition because they have an outdated view of the metals and mining industry, according to one of the sector’s most influential investors. “Our view from speaking to our clients and investors at large is that the opportunity within this space has been massively overlooked,” Evy Hambro, global head of thematic and sector investing at BlackRock Inc, said in an interview. “If you’re focused on sustainability, if you’re focused on the energy transition, don’t overlook this area. There’s a huge value opportunity.” Hambro said that recent changes in the mining industry meant that most investors needed to update their view of the sector. He pointed to a growing focus on reducing carbon emissions in metals production, a more disciplined approach to spending than in previous booms, and a rapid decrease in the cost of capital as governments throw money at miners amid concerns about supply security. Industry executives, analysts and specialist investors have for several years been predicting a bull market as the shift to a lower-carbon economy drives a wave of demand for the metals needed for electricity grids, electric-vehicle batteries and solar panels. Yet while prices rallied sharply in the rebound from the Covid pandemic, they have stagnated in the past year. “The story isn’t about now, the story is about what’s happening over the next 10 to 15 years,” Hambro said, arguing that the sector is undervalued. “If you wanted to rebuild the copper industry globally, you couldn’t do it for the market cap of the copper companies out there today. So, I think there’s a huge gap in that regard.” Hambro was an influential critic of miners’ overspending in the last boom, and he doesn’t want them to restart the era of profligacy even as he predicts a coming supply shortage. “We’re not saying companies must go out there and build: we don’t want them to verge away from capital allocation models that have helped rebuild trust within the sector over the last eight to nine years,” he said. BlackRock is also calling on metals companies to invest in decarbonization. “People pay premiums for companies that are lower carbon producers,” said Olivia Markham, who manages BlackRock’s mining investments together with Hambro. “If you look at the US steel industry, which is a much lower carbon intensity versus say the European steel industry, there’s a higher premium that is paid for that,” she said. “If we’re just simply stopping burning fossil fuels for the production of energy and continuing to burn them for the production of materials, and we need a lot more materials, then we’re not actually going to solve the challenge that we face,” said Hambro. BlackRock says buy metals companies if you care about climate (Oct 30): Investors hoping for a boost to stocks by year end will be disappointed, according to Morgan Stanley’s Michael Wilson. “Chances of a fourth-quarter rally have fallen considerably,” said Wilson, who was once again named as the best portfolio strategist by the latest Institutional Investor survey. “Narrowing breadth, cautious factor leadership, falling earnings revisions and fading consumer and business confidence tell a different story than the consensus, which sees a rally into year end.” Wilson’s bearish view on equities has been unfolding over the past three months, as investors fret about the impact of higher-for-longer interest rates. The S&P 500 entered a technical correction last Friday, amid rising volatility and hotter inflation numbers, with the benchmark closing 10% below a recent peak. Investors are now looking to guidance from the ongoing earnings season to assess the outlook for profits, and how companies are able to withstand headwinds like higher rates. Profit expectations are “too high for the fourth quarter and 2024, even in an economy that’s performing well”, Wilson said. Monetary and fiscal policy are unlikely to provide relief and could tighten further, while weak breadth — referring to the amount of stocks gaining — reflects how earnings remain at risk for most companies. The strategist said the stock market is taking notice that the impact of US Federal Reserve tightening is just starting to be felt across the economy, with interest rate-sensitive stocks underperforming in recent months while defensive sectors start to outperform with energy. “This performance backdrop reflects a market that is incrementally more concerned about growth than higher interest rates and valuations per se,” he said. Morgan Stanley’s Wilson sees year-end stock rally as unlikely BY FARAH ELBAHRAWY Bloomberg BY JACK FARCHY Bloomberg REUTERS

TUESDAY OCTOBER 31, 2023 27 THEEDGE CEO MORNING BRIEF WORLD SYDNEY (Oct 30): Australia’s red-hot rental housing market, supercharged by record migration and a chronic supply shortage, could be reaching a breaking point for affordability as tenants grapple with rising costs of living. Nationwide vacancies are at all-time lows and prices are up 30% over three years, forcing renters like Sydney office worker Lara Weeks into unenviable situations. With no way to afford stratospheric inner-city prices when her landlord decided to sell the apartment she lived in for 18 years, Weeks and her cat recently downsized from a two-bedroom to a one-bedroom farther from the city centre that costs 22% more. “I find it sad that I can’t stay in the area for similar money,” she said. Rent is now one of the country’s biggest drivers of inflation, which at an annual rate of 5.4% in the September quarter is well above the central banks’ targeted band of 2% to 3% and could lead to further interest rate hikes as early as next week. That in turn would push up the variable rate mortgages held by most Australian landlords who are typically private investors with one or a few properties rather than large corporations, pressuring them to lift rents further and forcing tenants to make tough decisions. “We’re already seeing people that are in houses move to units and then the next logical step is if a unit gets too expensive, you go into a share house,” said Cameron Kusher, chief economist at PropTrack under REA Group. Rent inflation is expected to peak at an annual rate of 10% in the next few quarters before easing, Reserve Bank of Australia Governor Michele Bullock said at a Senate hearing on Thursday. Real estate agents say there are initial signs of cooling in some areas. “Compared with the beginning of the year, it’s way quieter now,” said Christian Postiglione, an agent in Sydney’s expensive eastern suburbs, which include Bondi Beach. “We would have 40 to 50 groups per inspection around January and February... the volume is very kind of low now.” The increase in rents has more than made up for the fall at the start of the COVID-19 pandemic when Australia shut its borders and there was a net outflow of people. By the year ended in June, net migration rebounded to a record 500,000 people. Australia’s tight rental market forces tenants to make tough choices (Oct 30): There is growing evidence that Apple Inc’s latest iPhone is falling shy of its predecessor in China, suggesting a setback for the world’s most valuable company in its most important overseas market. The iPhone 15 series saw a 6% decline in sales in its launch month compared with the prior year, according to data from market researcher GfK that covers end-consumer sales for all channels. Mobile industry tracker IDC estimates Apple’s shipments were down 4% in the third quarter, with both identifying Huawei Technologies Co’s return to the mobile arena spotlight as a key event in the period. Huawei’s Mate 60 series recorded sales of close to 1.5 million in its launch month, more than doubling from a year ago, GfK said, despite facing supply constraints. “Against the backdrop of the strong growth of Huawei, Apple iPhone 15 series registered a 6% decline in sales,” said Hayden Hou, a senior China analyst at GfK. “Huawei Mate 60 series will continue to maintain its strong sales momentum going forward.” Shenzhen-based Huawei abruptly released its Mate 60 and 60 Pro smartWarning signs grow Apple is losing Chinese consumers to Huawei phones in the weeks leading up to the latest iPhone’s launch, drawing buyers and attention with its made-in-China Kirin processor, an apparent breakthrough in its fight to overcome US trade sanctions. Huawei’s net profit more than doubled in the September quarter, reflecting at least in part strong initial sales of the Mate 60 Pro. Counterpoint Research and Jefferies analysts released preliminary sales figures for China earlier this month, indicating the slump for Apple could be as big as a double-digit percentage as the country’s economic challenges hit consumer demand. With the iPhone 15, Apple upgraded several key features of its line-up, but has not been able to stir growth in the world’s biggest mobile market. Apple gets about 20% of its revenue from China, second only to the US. In addition, virtually all of the world’s iPhones are manufactured in China, through partners such as Foxconn Technology Group. But rising tensions between the US and China have put Apple in a precarious spot. BY STELLA QIU Reuters Read the full story Read the full story REUTERS BLOOMBERG BY JINSHAN HONG & VLAD SAVOV Bloomberg Rent is now one of the country’s biggest drivers of inflation, which at an annual rate of 5.4% in the September quarter is well above the central banks’ targeted band of 2% to 3% and could lead to further interest rate hikes as early as next week.

TUESDAY OCTOBER 31, 2023 28 THEEDGE CEO MORNING BRIEF WORLD Baltic Exchange shipping updates A weekly round-up of tanker and dry bulk market (Oct 27, 2023) CAPESIZE The week in the capesize market concluded with a continued trend of declining rates. In the Pacific region, despite the addition of a second major player later in the week, trading remained lacklustre. Rates for C5 fell by a total of US$2.20 (RM10.51) throughout the week, reflecting the prevailing bearish sentiment. The tonnage list expanded adding further pressure to rates. Brokers had noticed an increase in coal cargo activity from Indonesia and the East Coast (EC) of Australia, but this failed to significantly bolster the market. In the Atlantic market, the week followed a similar pattern of quiet trading conditions. Owners in this region attempted to adjust their offers to attract buyers, particularly in routes from South Brazil and West Africa to the Far East. However, the lack of demand led to declining rates and the bid-offer gap widened as market sentiment weakened. Overall, it was a challenging week for the capesize market, characterised by limited trading activity and declining rates, illustrated by the Baltic Exchange Capesize Index (BCI) 5TC starting the week at US$28,805 and ending the week at US$18,461. PANAMAX A moderate week for the Panamax sector, with a slower pace seen in both basins. Much of the focus in the Atlantic came ex-EC South America, with mid-week seeing a mini push for first-half November arrivals, with reports of an 82,000-dwt delivery Aps Santos early November achieving US$19,000 + US$900,000 perhaps the highlight. Further north, rates came under pressure with limited trade and a softer outlook ensued. Asia began the week on a positive note primarily led by strong grain demand, but an oversupply of nearby tonnage kept rates in check for the most part, with US$12,000 reportedly paid a few times on 82,000- dwt types delivery China for NoPac round trips. Indonesian coal demand was mostly endorsed by smaller/older types with rates flat at around the US$12,000 mark. Period activity remained meagre, although reports emerged of an 82,000-dwt type deliver India achieving US$14,500 for 11/13 months. ULTRAMAX/SUPRAMAX A subdued week overall with the Atlantic remaining positional in key areas such as the US Gulf, but the South Atlantic was finely balanced with a limited amount of fresh enquiry. From Asia, brokers spoke of very little fresh enquiry from the south with little demand from Indonesia. In North Asia similarly limited fresh enquiry from the NoPac saw tonnage list growing slightly. A 55,000- dwt was heard fixed from EC South America to EC Mexico at US$15,500. From the Continent, a little more scrap movement was seen. A 53,000-dwt open Poland fixing a trip via North Continent to Turkey at US$21,000. From Asia, limited activity saw a 55,000-dwt open Thailand fix a trip to EC India-Bangladesh in the low US$14,000s, while a 63,000-dwt open Malaysia fixed a trip via Indonesia to China at US$15,500. Elsewhere, a 63,000-dwt fixed delivery South Africa trip redelivery China at US$20,000 plus US$200,000 ballast bonus. HANDYSIZE The lone positive region this week was the US Gulf and US East Coast. Limited tonnage availability led to rumours of large handy’s fixing around US$20,000 for Petcoke cargo from Texas to the Mediterranean. On the Continent, activity was said to have improved with a 34,000-dwt fixing from the UK to Turkey with an intended cargo of scrap at US$13,000. The Mediterranean continued to soften and a 32,000-dwt fixed from Morocco to Argentina with a cargo of fertiliser at US$8,000 for the first 45 days and US$11,000 for the balance. Visible activity in the South Atlantic remained limited with a lack of fresh enquiry and 35,000- dwt fixed from Barcarena to Morocco at US$16,000. The Asia markets were also subdued with limited fresh enquiry. A 38,000- dwt was rumoured to have been fixed from North China to West Africa at US$8,500 while a 28,000-dwt was rumoured to have failed on subjects for a trip from China to Thailand at US$7,250. CLEAN LR2 LR’s in the MEG look to have lost steam this week following last week’s moderate firming. The 75Kt MEG/Japan TC1 index has remained stable with enough activity for it to climb from WS170 to WS173. Similarly, a 90kt MEG/UK-Continent TC20 run freight has hovered around the US$4.4 million level all week. West of Suez, Mediterranean/East LR2’s on TC15 has been somewhat inactive this week, with the index shedding just under US$80,000 to US$3.529 million. LR1 In the MEG, LR1’s have also been subject to some softening from their momentum slowing this week. The 55kt MEG/Japan index of TC5 dipped from WS175 to WS170. Similarly on the 65kt MEG/UK-Continent of TC8 lost circa US$85,000 to US$3.55m. On the UK-Continent, the 60Kt ARA/West Africa TC16 index saw an incremental improvement from WS175 to WS179.69 where it has sat for three days at time of writing. MR MR’s in the MEG felt a little busier this week but despite this there was not enough enquiry to pulls rates up. The 35kt MEG/ East Africa TC17 index, as a result, lost 16.07 points to WS228.57. UK-Continent MR’s consistent fixing activity assisted by some enquiry from further towards the Mediterranean in helped freight rates resurge a little. The 37kt ARA/US-Atlantic coast of TC2 added 13.5 points to its index climbing to WS154.75. TC19 (37kt ARA/West Africa) as usual mirrored this and is currently pegged at WS165 (+13.75). Read the full report

tuesday OC T Ober 31, 2023 29 The E dge C E O m o rning brief MARKETS Top 20 active stocks World equity indices Top gainers (ranked by %) Top losers (ranked by %) Top gainers (ranked by RM) Top losers (ranked by RM) NAME VOLUME CHANGE CLOSE YTD MARKET (MIL) (RM) CHANGE CAP (%) (RM MIL) Classita Holdings Bhd 189.0 0.000 0.065 -82.19 80.1 Kanger International Bhd 145.8 0.000 0.135 237.50 87.7 Sarawak Consolidated Industries 63.2 0.015 0.555 282.76 355.3 Widad Group Bhd 62.4 0.005 0.450 4.65 1,393.4 MQ Technology Bhd 50.4 0.005 0.030 -40.00 41.4 Key Asic Bhd 42.5 -0.010 0.080 23.08 111.5 Leform Bhd 42.2 0.000 0.245 18.70 362.8 My EG Services Bhd 42.0 -0.010 0.765 -11.09 5,706.6 Impiana Hotels Bhd 38.4 0.025 0.140 55.56 113.0 Salutica Bhd 37.5 0.075 0.845 218.87 357.9 BarakahOffshore Petroleum Bhd 36.2 -0.015 0.040 60.00 40.1 Bina Puri Holdings BHD 35.8 -0.005 0.060 50.00 202.2 Malaysian Resources Corp Bhd 31.6 -0.005 0.430 45.76 1,921.0 Meta Bright Group Bhd 31.0 0.005 0.265 55.88 631.3 Ekovest BHD 28.8 0.005 0.485 42.65 1,438.2 UEM Sunrise Bhd 25.3 -0.020 0.770 201.96 3,895.0 PESTECH International Bhd 24.9 0.040 0.360 16.13 354.4 Asdion Bhd 24.9 0.000 0.090 -5.26 41.8 Tanco Holdings Bhd 20.8 0.000 0.575 71.64 1,148.9 Sealink International Bhd 20.5 -0.020 0.200 100.00 100.0 Data as compiled on Oct 30, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) AT Systematization Bhd 0.010 100.00 14,940.2 -33.33 67.9 XOX BHD 0.015 50.00 112.4 0.00 75.8 Metronic Global Bhd 0.020 33.33 2,313.0 0.00 30.6 Impiana Hotels Bhd 0.140 21.74 38,429.3 55.56 113.0 Southern Steel Bhd 0.815 20.74 5,350.7 39.32 486.0 MQ Technology Bhd 0.030 20.00 50,376.5 -40.00 41.4 BSL Corp Bhd 0.040 14.29 1,198.7 -40.83 77.3 CME Group BHD 0.040 14.29 2997.4 33.33 41.3 SC Estate Builder Bhd 0.040 14.29 50.3 -11.11 43.0 PESTECH International Bhd 0.360 12.50 24,874.6 16.13 354.4 China Ouhua Winery Holdings 0.055 10.00 10.0 -15.38 36.7 DFCITY Group Bhd 0.330 10.00 5.5 -14.29 34.8 Khee San BHD 0.165 10.00 354.9 17.86 22.7 Rex Industry Bhd 0.110 10.00 162.8 -21.43 72.3 Salutica Bhd 0.845 9.74 37,511.3 218.87 357.9 Pan Malaysia Corp Bhd 0.235 9.30 4,134.1 23.68 181.3 Innity Corp Bhd 0.500 8.70 50.5 20.48 69.7 Kamdar Group M Bhd 0.190 8.57 54.5 15.15 37.6 Vinvest Capital Holdings Bhd 0.070 7.69 1,150.1 -63.16 67.8 BTM Resources BHD 0.075 7.14 1,132.1 -11.76 94.2 Data as compiled on Oct 30, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) Barakah Offshore Petroleum 0.040 -27.27 36,203.8 60.00 40.1 Saudee Group Bhd 0.025 -16.67 130.0 -44.44 37.2 TWL Holdings Bhd 0.025 -16.67 5,804.6 -28.57 121.8 Alam Maritim Resources Bhd 0.030 -14.29 3,341.5 20.00 46.0 Digistar Corp Bhd 0.060 -14.29 5.9 -14.29 27.9 Aldrich Resources Bhd 0.035 -12.50 3,372.7 16.67 39.0 Fitters Diversified Bhd 0.035 -12.50 66.6 -50.00 81.9 Zelan Bhd 0.035 -12.50 279.8 -50.00 29.6 Key Asic Bhd 0.080 -11.11 42,528.1 23.08 111.5 Asia Brands BHD 0.475 -10.38 15.2 -13.64 110.5 Citra Nusa Holdings Bhd 0.045 -10.00 120.0 -30.77 32.4 Reach Energy Bhd 0.045 -10.00 818.4 0.00 95.8 Vizione Holdings Bhd 0.045 -10.00 8,249.1 -18.18 92.1 Green Packet Bhd 0.050 -9.09 683.1 -9.09 99.7 MMAG Holdings Bhd 0.100 -9.09 1,536.4 -60.00 24.2 Sealink International Bhd 0.200 -9.09 20,450.3 100.00 100.0 Cheetah Holdings Bhd 0.115 -8.00 34.0 4.55 55.9 Timberwell BHD 0.520 -7.96 2.0 0 46.3 Bina Puri Holdings BHD 0.060 -7.69 35,782.2 50.00 202.2 Eduspec Holdings Bhd 0.060 -7.69 678.3 -40.00 64.0 Data as compiled on Oct 30, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) Nestle Malaysia Bhd 124.500 -1.400 174.2 -11.07 29,195.3 HextarTechnologies Solutions 23.800 -0.600 0.6 39.51 3,061.8 PPB Group Bhd 15.120 -0.320 521.6 -13.30 21,509.7 Unisem M Bhd 2.910 -0.180 4,946.8 5.43 4,694.1 Petronas Gas Bhd 17.020 -0.140 1,700.1 -0.58 33,678.0 Bintulu Port Holdings Bhd 5.150 -0.110 6.2 7.29 2,369.0 AEON Credit Service M Bhd 11.380 -0.100 210.4 -9.54 2,905.4 Ajinomoto Malaysia Bhd 15.480 -0.100 7.8 18.35 941.2 Pertama Digital BHD 4.040 -0.090 1,562.4 129.55 1,770.4 Dutch Lady MilkIndustries BHD 22.520 -0.080 3.7 -25.53 1,441.3 Malaysian PacificIndustries Bhd 26.600 -0.080 51.2 -7.51 5,290.6 JcbNext Bhd 1.520 -0.070 0.2 18.75 200.7 Oriental Holdings BHD 6.330 -0.070 146.4 -6.77 3,926.9 Aurelius Technologies Bhd 2.490 -0.060 267.0 36.07 981.2 Citaglobal Bhd 1.590 -0.060 3,309.3 9.66 664.0 D&O Green Technologies Bhd 3.230 -0.060 1,233.1 -24.53 3,999.7 EG Industries Bhd 1.400 -0.060 1,824.7 159.26 630.3 Hong Leong Capital Bhd 4.720 -0.060 2464.4 -24.84 1165.4 Kuala Lumpur Kepong Bhd 22.100 -0.060 301.2 -1.16 23,833.4 MBM Resources BHD 3.890 -0.060 237.8 29.78 1,520.6 Data as compiled on Oct 30, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) Southern Steel Bhd 0.815 0.140 5,350.7 39.32 486.0 Heineken Malaysia Bhd 23.960 0.100 44.8 -4.92 7,238.3 Panasonic Manufacturing M BHD 18.100 0.100 10.5 -20.96 1,099.5 Rapid Synergy Bhd 26.280 0.080 549.3 64.66 2,809.2 Salutica Bhd 0.845 0.075 37,511.3 218.87 357.9 CI Holdings Bhd 3.050 0.070 4.9 4.10 494.1 Riverview Rubber Estates BHD 3.160 0.070 7.2 -8.29 204.9 Malaysia Airports Holdings Bhd 7.360 0.060 876.5 12.20 12,280.6 Sime Darby Plantation Bhd 4.330 0.060 1,350.1 -6.88 29,945.0 Dominant Enterprise Bhd 0.800 0.050 12.7 -8.57 132.2 Genting Plantations Bhd 5.320 0.050 62.4 -14.78 4,772.9 MSM Malaysia Holdings Bhd 1.330 0.050 3,877.3 56.47 935.0 BP Plastics Holding Bhd 1.220 0.040 48.0 -3.17 343.4 Innity Corp Bhd 0.500 0.040 50.5 20.48 69.7 Oriental Interest Bhd 1.250 0.040 7.7 27.55 580.7 PESTECH International Bhd 0.360 0.040 24,874.6 16.13 354.4 Petronas Dagangan Bhd 22.700 0.040 328.8 -0.65 22,551.4 Ralco Corp BHD 0.820 0.040 2.5 -4.65 41.7 Westports Holdings Bhd 3.410 0.040 1,090.0 -10.26 11,628.1 DFCITY Group Bhd 0.330 0.030 5.5 -14.29 34.8 Data as compiled on Oct 30, 2023 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 32,417.59 -366.71 -1.12 S&P 500 * 4,117.37 -19.86 -0.48 NASDAQ 100 * 14,180.42 70.85 0.50 FTSE 100 * 7,291.28 51.24 0.70 AUSTRALIA 6,772.93 -53.93 -0.79 CHINA 3,021.55 3.77 0.12 HONG KONG 17,406.36 7.63 0.04 INDIA 64,112.65 329.85 0.52 INDONESIA 6,735.89 -22.90 -0.34 JAPAN 30,696.96 -294.73 -0.95 KOREA 2,310.55 7.74 0.34 PHILIPPINES 5,961.99 -56.50 -0.94 SINGAPORE 3,064.29 2.44 0.08 TAIWAN 16,149.68 15.07 0.09 THAILAND 1,395.85 7.62 0.55 VIETNAM 1,042.40 -18.22 -1.72 Data as compiled on Oct 30, 2023 Source: Bloomberg CPO RM 3,737.00 -38.00 OIL US$ 89.46 -1.02 RM/USD 4.7622 RM/SGD 3.4868 RM/AUD 3.0339 RM/GBP 5.7770 RM/EUR 5.0394 * Based on previous day’s closing