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TUESDAY, AUGUST 3, 2021 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 226/2021

CEOMorningBrief

GLOVE STOCKS ON THE LAST LEG OF THEIR RALLY? p4

TUESDAY, AUGUST 3, 2021 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 226/2021

CEOMorningBrief
HOME: Covid-19: Malaysia reports new record high deaths of 219, with active cases nearing 200,000 p2
July manufacturing subdued by surging Covid-19 infections p5

Maybank Singapore sues NFC chairman, children for defaulting on housing loans worth S$2.53m p6
Constitutional crisis? — A legal opinion p15

WORLD: HSBC steps up dividend plans, eyes buybacks as outlook brightens p19

Perlis, S’wak and
Labuan to move into
Phase three of PPN

this Wednesday
— PM Muhyiddin

Report on Page 3.

tuesday august 3, 2021 2 TheEdge CEO morning brief

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KUALA LUMPUR (Aug 2): Daily fatal- Covid-19: Daily Covid-19 figures:
ities linked to Covid-19 climbed to a new Malaysia reports
high of 219 on Monday, while Malaysia re- new record high As at Aug 1, 2021:
ported another 15,764 new infections that
pushed its active cases — which carry trans- deaths of 219, Vaccine doses administered 480,122
mission risks — to a new peak of 199,051. with active cases
The previous highest daily fatalities were nearing 200,000 % of population fully vaccinated 21.24
207, recorded on both July 27 and 28.
% of population with at least 43.55
The latest fatalities raised the country’s one dose
Covid-19 death toll to 9,403, according to
Health director-generalTan Sri Dr Noor Hish- As at Aug 2, 2021:
am Abdullah in a statement.Year to date, 8,932
people across the country have been killed Number of new cases 15,764
by the coronavirus, compared with the 471
fatalities recorded for the whole of last year. Number of individuals tested 105,785

While new daily infections fell to 15,764 Positivity rate (%) 14.90
from 17,150 a day ago — after staying
above the 16,000 mark for six consecu- by syafiqah salim Category 1 8,783 (87.7%
tive days — the rise in actives continued as theedgemarkets.com [no symptoms]
new cases surpassed new recoveries, which unvaccinated)
came in at 11,767, for 38 straight days. • 64 cases from Category 4 (pneumonia Category 2
Total recoveries nationwide now stand at requiring oxygen therapy); 73.4% un- [mild symptoms] 6,695 (64.5%
937,732 versus cumulative infections de- vaccinated
tected at 1.15 million. Category 3 unvaccinated)
• 87 cases from Category 5 (critical cases [with pneumonia]
The latest infections were detected requiring assisted ventilation); 97.7% 135 (63.7%
after 105,785 individuals were screened unvaccinated Category 4
across the country, representing a posi- There are now 1,063 patients in inten- [with pneumonia, requiring unvaccinated)
tive rate of 14.9%. oxygen therapy]
sive care, including 532 who need respira- 64 (73.4%
The bulk of them came from Selangor, tory assistance. Category 5
with 6,067 infections, followed by Kua- [critical & requiring assisted unvaccinated)
la Lumpur (1,536), Johor (1,222), Sabah R0 falls to lowest in 10 days ventilation]
(1,166) and Kedah (1,108), Negeri Sembi- The Ministry said the country’s basic 87 (97.7%
lan (862), Perak (748), Penang (667), Kelan- reproduction number for the coronavi-
tan (552), Pahang (475), Melaka (463), rus, the R0 (pronounced R-Naught), fell unvaccinated)
Terengganu (425), Sarawak (411), Putra- to 1.08 on Aug 1 from 1.1 a day before.
jaya (46), Perlis (nine) and Labuan (seven). Number of patients in ICU 1,063
continues on Page 3
98.2% of cases show little to no symptoms ICU capacity utilisation (%) 76.59
The ministry said 15,478 of the new Cov-
id-19 cases (98.2%) were in Category 1 Number of deaths 219
and 2, while 286 cases or 1.8% were in
Categories 3, 4 and 5. Close to eight in 10 Updated as at 7.30pm, Aug 2, 2021
infections (77.6%) were those who were Sources: CITF, MoH
not vaccinated.The breakdown of the cases
are as follows: Daily Covid-19 deaths since Active cases reach a new record
• 8,783 cases from Category 1 (no symp- March 1, 2021 high on August 2

toms) ; 87.7% unvaccinated 200000 Total number 199,051
• 6,695 cases from Category 2 (mild of active cases
Malaysia’s Covid-19
symptoms); 64.5% unvaccinated death toll: 9,403
• 135 cases from Category 3 (patients 250 (as of Aug 2, 2021) 219
150000
with pneumonia) ; 63.7% unvaccinated 200

150 100000

100 50000
23,433
50
0 Jan 1, 2021
0 Aug 2, 2021 Aug 2, 2021
March 1, 2021 Sources: Ministry of Health,
CPRC Kebangsaan
Sources: Ministry of Health,
CPRC Kebangsaan

tuesday august 3, 2021 3 TheEdge CEO morning brief

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Perlis, S’wak and Sam Fong/The Edge filepix of vaccines – it is not comparable.
Labuan to move “Take the vaccine you were offered, get
into Phase three Efficacy trials of
different vaccines the vaccine in your arm, make yourself safe
of PPN this are not comparable, and make the world safe,” she said this at
Wednesday — just take what is a virtual media briefing today during the
PM Muhyiddin offered and protect 3rd International Conference of Pharmacy
& Health Sciences (ICPHS 2021) hosted
Bernama yourself, says by Universiti Kuala Lumpur Royal Col-
vaccine developer lege of Medicine Perak (UniKL RCMP).
KUALA LUMPUR (Aug 2): Perlis, Sar-
awak and Labuan will move into Phase by syafiqah salim Lambe, who oversaw the University of
Three of the National Recovery Plan theedgemarkets.com Oxford’s Covid-19 vaccine programme at
(PPN) beginning thisWednesday, Prime The Jenner Institute, which led to the de-
MinisterTan Sri MuhyiddinYassin said. KUALA LUMPUR (Aug 2): Just trust velopment of the Oxford-AstraZeneca vac-
the regulator and take whatever brand of cine, has now been administered to almost
In a post on his official Facebook approved Covid-19 vaccine offered to you, half a billion people around the world.
account, Muhyiddin said this decision Professor Teresa Lambe, the principal re-
was made at the special National Secu- searcher (Oxford Covid-19Vaccine Devel- Themed ‘Modern Research, Innovation
rity Council (MKN) meeting, which opment) atThe Jenner Institute, University and Practice:The Need of the Hour’, the
he chaired this evening, after the three of Oxford, UK, advised the public. conference provides a platform for local
states showed very good results. and international academics, researchers,
“For me, you need to look at the re- healthcare professionals and students for an
“Congratulations and well done… al-world effectiveness data, trust the regu- exchange of ideas, knowledge and expertise
[but] I would like to remind that stand- lator and trust the safety monitoring board in related areas of interest and research in
ard operating procedures (SOPs) and et cetera on the recommendations of the the fields of pharmacy and health sciences.
regulations must continue to be ad- best vaccine in your country.
hered to and all efforts to improve the Currently, Malaysia’s national vacci-
[Covid-19] pandemic situation in the “You cannot compare the efficacy nation programme uses Pfizer-BioNTech
respective states must continue. across the trials of these different kinds that is reportedly 95% effective against
the coronavirus, as well as AstraZeneca
“I hope with the cooperation of all par- (62% to 90% efficacy) and Sinovac (51%).
ties nationwide, more states would be able
to move into the next phase… we must be The Coordinating Minister of the National
optimistic and move forward so that Ma- Covid-19 Immunisation Programme (PICK)
laysia’s recovery [plan] can be carried out Khairy Jamaluddin said in June that vaccine
systematically and safely,” he said. recipients were not allowed to choose the type
of Covid-19 vaccine they wanted to receive.
Meanwhile, the prime minister said
relaxations for economic sectors and It was reported at the time that some
for individuals who have completed two elderly recipients who turned up for their
doses of the Covid-19 vaccine will be vaccination appointments at the Kuala
announced soon. Lumpur Convention Centre had reject-
ed the Sinovac vaccine and asked for the
He said the matter needs to be scru- Pfizer vaccine instead.
tinised carefully to ensure the govern-
ment’s efforts to revive the economy Khairy said theWorld Health Organiza-
and the people’s quality of life can be tion had also approved Sinovac and given
carried out smoothly and efficiently. assurance that the vaccine was safe to use.

“InsyaAllah, I will be announcing the from Page 2 43.55% of the nation’s population having
relaxations in the near future, which I received their first dose, including 6.95 mil-
hope will benefit those fully vaccinated This is the lowest the R0 has been in 10 lion or 21.24% who had completed their
and also help our economic sectors, while days.The previous low was 1.07 on July 22. two-dose regimen.
also taking into account the people’s safe- Read also:
ty,” he said. Muhyiddin said the govern- The R0 projects the average number EMCO at five localities in three states
ment’s strategy is to vaccinate as many of people each new Covid-19 patient from Wednesday, says Hishammuddin
adults in the country as possible to ensure will infect — or what is termed the ef- Click here
Malaysia’s recovery plan runs smoothly. fective reproduction number. An R0 of Walk-in vaccination: 3,600-8,000 vaccine
less than 1.0 means the infection is not doses to be administered daily at KLCC
“The more people vaccinated means spreading. PPV Click here
more people are protected; there will be Delta variant in Pasir Puteh may have
less pressure and burden on the country’s 480,122 vaccine doses administered spread to other districts, says Kelantan
health system,and more economic and so- on Aug 1 health authorities Click here
cial sectors can be safely opened,” he said. Malaysia administered 480,122 doses of
the Covid-19 vaccine on Sunday (Aug 1)
— down from 519,111 shots the day be-
fore — with 298,236 going to individuals
who got their first dose and 181,886 shots
going to second-dose recipients.

Cumulatively, 21.2 million Covid-19
vaccine doses had been administered as
of Sunday, with 14.25 million people or

TUESDAY AUGUST 3, 2021 4 THEEDGE CEO MORNING BRIEF

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Glove stocks on the last leg of their rally?

BY AHMAD NAQIB IDRIS Top Glove Corp Bhd RM Hartalega Holdings Bhd RM
theedgemarkets.com
10 20
KUALA LUMPUR (Aug 3): While the
valuations for rubber glove makers can 8
still be seen as attractive currently, the
pandemic-driven rally these counters 6 15
have seen may be able to gather much
steam if one looks at analysts’ earnings 4 RM3.92 10 RM7.03
forecasts for 2022 onwards. Aug 2, 2021 Aug 2, 2021
2 RM6.543
Most analysts’ “buy” calls are based RM1.872 5
on the strong earnings growth forecasts
in 2021. 0 April 1, 2020
April 1, 2020
However, equity markets are usually Source: Bloomberg
six months ahead at least. Source: Bloomberg

This explains why the stellar quarterly Kossan Rubber Industries Bhd Supermax Corp Bhd RM
earnings figures have failed to whet inves-
tors’ appetite for glove stocks, despite the RM 12
fresh waves of infections globally. 10

Several glove companies are expect- 8 8
ed to release their quarterly earnings
this month. Some quarters foresee in- 6
vestment analysts to take the chance
to downgrade the sector when they re- 4 RM3.33 4 RM3.20
view the latest profit numbers amid the Aug 2, 2021 Aug 2, 2021
downward pattern of the rubber glove RM2.363 RM0.761
average selling prices, let alone the ad- 2 0
ditional new capacity that will come on
stream. April 1, 2020 April 1, 2020

Looking at Top Glove Corp Bhd’s Source: Bloomberg Source: Bloomberg
earnings forecasts, for example, ana-
lysts are expecting the world’s largest This translates into an estimated ment Bank Bhd’s monthly rating sum-
rubber glove maker to post a net profit earnings per share (EPS) of 44 sen for mary, the TPs on Hartalega and Top
of RM8.91 billion for its financial year its FY22, versus the EPS of RM1.09 for Glove were lowered from RM15.76
2021 (FY21) ending Aug 31, 2021 ac- FY21, based on projections. At the clos- and RM6.49 respectively as at June 4
cording to Bloomberg data. This would ing price of RM3.92, Top Glove shares to RM13.80 and RM5.60 as at July 30.
be a 376% year-on-year (y-o-y) jump are trading at a price-earnings ratio (P/E
from RM1.87 billion the year before. ratio) of 8.9 times. Pre-Covid-19 pan- Hong Leong Investment Bank Bhd also
demic, glove stocks were trading at a trimmed its TP for Top Glove to RM6.66
Similarly, Hartalega Holdings Bhd is P/E ratio of less than five times. on July 7, from RM6.76 in mid-June,
expected to post RM3.89 billion for its while Public Investment Bank Bhd low-
FY22 ending March 31, 2022 (up 35% The same goes for the other big four ered itsTP for Kossan to RM3.65 on July
y-o-y), Kossan Rubber Industries Bhd glove makers, as well as the smaller play- 28, from RM6.10 on June 11.
to report RM3.3 billion for its FY21 ers like Rubberex Corp (M) Bhd and
ending Dec 31, 2021 (up 203% y-o-y), Comfort Gloves Bhd. BIMB, on the other hand, cut its TP
while Supermax Corp Bhd is seen to for Supermax to RM3.15 on July 8, from
post a net profit of RM3.7 billion for its Rubberex is expected to post a net RM7.30 on May 7.
FY21 ended June 30, 2021 (up 602% profit of RM175 million for its FY22
y-o-y). ending Dec 31, 2022, 26% lower than That said, the raging Delta variant
the RM238 million in its current financial worldwide would mean a relatively strong
However, analysts’ earnings projec- year, while Comfort Gloves is expected demand for rubber gloves at the front
tions for these companies are substan- to see a 42% y-o-y decline in net profit to line of the battle with the virus. No one
tially lower from 2022 onwards, which RM215 million for its FY23 ending Jan would rule out that could possibly delay
may indicate that the second half of 31, 2023, from RM373 million in its cur- the normalisation of global demand.
2021 could be the last leg of high growth rent financial year ending Jan 31, 2022.
and supernormal profits for the glove Read also: Hartalega prospects strong
makers. Target prices (TPs) for these coun- as short-term glove demand to remain
ters have also been lowered in recent high — chairman Click here
Beyond 2022, the valuations for these months. Looking at Kenanga Invest-
stocks look vastly different. Top Glove
is projected to post RM3.73 billion in
net profit for its FY22, a 58% y-o-y
drop from the forecast earnings for the
preceding year.

tuesday august 3, 2021 5 TheEdge CEO morning brief

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July manufacturing subdued
by surging Covid-19 infections

BY Surin Murugiah Malaysia Manufacturing PMI vs Gross Domestic Product
theedgemarkets.com
Malaysia Manufacturing PMI Gross domestic product
KUALA LUMPUR (Aug 2): Malaysian sa, >50 = growth since previous month %yr/yr
manufacturers continued to report that
operating conditions were severely ham- 60 20
pered by a renewed rise in COVID-19
infections. 55
10
IHS Markit said both production lev-
els and new orders moderated further in 50
July, with the former being scaled back
to the greatest extent since April 2020. 45 0

However, it said that more positively, 40
employment levels stabilised, ending a -10
period of three consecutive reductions,
as manufacturers noted a renewed de- 35
gree of optimism about the year-ahead
outlook, underpinned by hopes that re- 30 -20
strictions would lift as the current wave '13 '14 '15 '16 '17 '18 '19 '20 '21
recedes, boosting domestic and external
demand. Sources: IHS Markit, Department of Statistics Malaysia.

The headline IHS Markit Malaysia signalling a stabilisation of employment improvement from June’s record low.
Manufacturing Purchasing Managers’ in July, ending a three-month period of Panel members attributed the im-
Index (PMI) — a composite single-fig- job shedding.
ure indicator of manufacturing perfor- proved outlook to hopes that national
mance — edged up from 39.9 in June Preparation for orders in the future and international restrictions would lift
to 40.1 in July. reportedly required additional capaci- and aid a recovery in production and
ty,though some businesses comment- sales.
IHS Markit said that in remaining ed on difficulty in hiring workers from
well below the 50.0 no-change level, the abroad. IHS Markit chief business economist
latest reading pointed to a steep decline Chris Williamson said Malaysia’s man-
in operating conditions, albeit one that Input costs meanwhile increased for ufacturing sector continued to be bad-
was fractionally softer than that seen in the fourteenth consecutive month in ly hit by the ongoing pandemic in July,
June. July, reflecting higher prices for a range though companies are already planning
of raw materials and higher freight costs. for better times ahead.
It said looking at the historical rela-
tionship between the PMI and official The overall rate of inflation was steep He said production fell sharply for a
statistics, the latest reading is represent- overall and the quickest since May. second successive month as the recent
ative of a downturn in both industrial rise in infections and containment meas-
production and GDP, as the survey in- Manufacturers sought to partially ures associated with the Delta variant
dicates that the manufacturing sector re- pass these higher costs to clients in the both dampened demand and disrupted
mains heavily impacted by the pandemic. form of higher output charges, although supply chains.
the rate of inflation was the softest re-
IHS Markit said survey gauges of both ported for five months. Williamson said both domestic de-
output and new orders signalled further mand and export orders fell sharply at
marked reductions in July. Shortages of materials, as well as de- the start of the third quarter, while sup-
lays in receiving shipments caused av- plier delays continued to develop at one
It said the former saw the rate of de- erage supplier lead times to lengthen to of the fastest rates yet recorded by the
crease quicken from June to reach the the greatest extent since May. survey.
fastest since the first wave of the pan-
demic in April 2020. At the same time, both purchases and “There was better news in terms of
inventory levels fell. Some firms noted the outlook, however, with companies
Companies reported that renewed that supply delays had hindered restock- becoming more optimistic after the rise
pandemic restrictions dampened de- ing efforts and, in some cases, curtailed of the Delta variant had pushed confi-
mand and client confidence in both do- production. dence in June to its lowest on record.
mestic and international markets.
Backlogs of work consequently de- “More companies are now seeing
That said, the reduction in new export creased for the third month running in some light at the end of the tunnel, and
sales was considerably softer than aggre- the latest survey period. employment consequently stabilised.
gate new orders, as some firms comment-
ed on pockets of demand improving in IHS Markit said despite headwinds “There was also better news on pric-
Europe and the US in particular. from supply shortages amid a renewed es. Although input cost inflation ticked
surge in COVID-19 infections, Malay- up slightly, it continued to run well be-
However, according to IHS Markit, sian manufacturers displayed a renewed low the steep rates recorded earlier in
a brighter picture came from the jobs sense of optimism regarding the outlook the year, helping push selling price in-
market, with Malaysian goods producers for output in the coming year. flation down to its lowest since Febru-
ary,” he said.
It said the degree of sentiment was
modest overall, but marked a welcome

tuesday august 3, 2021 6 TheEdge CEO morning brief

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KUALA LUMPUR (Aug 2): Petroliam Petronas JV Meanwhile, Natural GasWorld, quoting
Nasional Bhd (Petronas) and Indian Oil embarks on new the PressTrust of India, reported that Indi-
Corp Ltd’s equally-owned joint venture an Oil Corp owns the largest network of
(JV) company Indian Oil Petronas Pvt Ltd retail venture petrol pumps in India.
(IPPL) is planning to launch a new fuel in India
and gas retail venture, the latest develop- “It also has licences to retail CNG (com-
ment in the two-decade-old JV between the by justin lim pressed natural gas) to automobiles and
Malaysia and India national oil companies, theedgemarkets.com piped cooking gas to households in sever-
according to news reports quoting Indian al geographical areas,” Natural GasWorld
Oil Corp chairman SM Vaidya. reported.

It was reported that IPPL will get into Natural GasWorld reported that IPPL
retailing of transportation fuel besides nat- is a liquefied petroleum gas importer.
ural gas in India.
According to Natural Gas World, the
“The entire energy pie is increasing Press Trust of India quoted Vaidya as say-
so there is no question of cannibalising,” ing the JV will “diversify into natural
Vaidya was quoted as saying by The Eco- gas and transportation fuel retailing
nomic Times on Friday (July 30). business”.

“We intend to get the best practices of At the time of writing today, Petronas
global companies into India. But it will had not issued a statement in response to
not be at the cost of our own (Indian Oil news reports on IPPL’s plan to launch its
Corp) market share,” he said. new fuel and gas retail venture.
Read also: Petronas Carigali confirms con-
It was reported that Indian Oil Corp tractor’s staff test positive for Covid-19 in
did not share more details on investments, Bintulu Click here
timeframes, or the sourcing of fuel as those
details are still being worked out.

KUALA LUMPUR (Aug 2): Maybank Sin- Maybank Maybank Singapore granted a loan of
gapore Ltd has filed a suit against National Singapore sues S$5.38 million in 2010 to the first two
Feedlot Corp Sdn Bhd (NFC) chairman NFC chairman, defendants to finance the purchase of a
Datuk Seri Dr Mohamad Salleh Ismail and luxury condominium in Marina Bay.
his two children for defaulting on two hous- children for
ing loan facilities for properties in Singapore. defaulting on Again, Mohamad Salleh and Wan
housing loans Shahinur Izran defaulted on the month-
Maybank Singapore, which is the plain- worth S$2.53m ly instalment payments of S$8,700, with
tiff, filed the suit at the High Court registry S$5.06 million being the outstanding
here on July 19 through law firm Messrs by emir zainul amount due as at June 4, 2018, together
Benjamin Dawson. The suit named Mo- theedgemarkets.com with all accrued interests.
hamad Salleh as the first defendant, while
his childrenWan Shahinur Izran andWan Patrick Goh/The Edge Maybank Singapore also then exercised
Izzana Fatimah Zabedah were named as its rights by repossessing and selling the
second and third defendants respectively. Datuk Seri Dr Mohamad Salleh Ismail property through a private treaty sale at the
price of S$4.68 million.The sale, however,
Mohamad Salleh is the husband of for- price of S$3.2 million.The sale, however, was insufficient to settle the whole out-
mer women, family and community devel- was insufficient to settle the whole out- standing amount, and as at Dec 29, 2020,
opment minister Tan Sri Shahrizat Abdul standing amount, and as at Dec 29, 2020, the sum of S$1.17 million remains due.
Jalil, who is also formerWanita Umno chief. the sum of S$1.37 million remains due.
The suit alleged that all three defend-
According to the statement of claim sight- For the second housing facility, ants have failed, ignored and/or neglected
ed by theedgemarkets.com today, Maybank to pay the sum demanded, which resulted
Singapore is seeking the court’s judgement in the bank pursuing the matter through
on a total of S$2.53 million being the out- the Malaysian courts.
standing amount under the loan facilities
that the defendants still owed with the bank. It is worth noting that the family is also
embroiled in a RM250 million suit by the
For the first housing loan facility, Malaysian government. Under the suit, the
Maybank Singapore granted a loan of government is seeking RM253.62 million,
S$4.37 million in 2009 to the three de- representing the sum owed by NFC, with
fendants to finance the purchase of a lux- a 2% interest from May 1, 2019.
ury apartment in Orchard Scotts.
They are accused of misappropriating
However, the three defendants default- and wrongly using RM118 million from a
ed in the monthly instalment payments of RM250 million loan granted to NFC by
S$7,225, with S$3.94 million being the the government in December 2007 to set
outstanding amount due as at June 22, up and operate a national feedlot centre
2018, together with all accrued interests. in Gemas.
Read also: Maybank Indonesia 1H profit
After the defendants failed to pay the falls on Covid-19 impact Click here
sum demanded, Maybank Singapore then
exercised its rights by repossessing and sell-
ing the property through an auction at the

TUESDAY AUGUST 3, 2021 7 THEEDGE CEO MORNING BRIEF

tuesday august 3, 2021 8 TheEdge CEO morning brief

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Sime Darby “The strength of our two major markets BNM, Bank
banks on RM2.6b — China and Australia — coupled with the Indonesia include
cash as company geographical diversity of our regional opera- direct investment,
tions which span 18 countries, has enabled
eyes first share us to maintain our growth trajectory, as ev- income and
buyback idenced by the 89% increase in net profit transfer in
to RM1.2 billion for the nine-month period ringgit-rupiah
by Izzul Ikram ended March 31, 2021 (9MFY21). settlement
theedgemarkets.com
“Additionally, as demonstrated by our Bernama
KUALA LUMPUR (Aug 2): Sime Darby recent announcements relating to the dis-
Bhd said the diversified group’s prospects posal of non-core assets, we have stayed true KUALA LUMPUR (Aug 2): Bank Ne-
remain strong, particularly in its core busi- to our focus on our core businesses,” the gara Malaysia (BNM) and Bank Indone-
nesses of heavy equipment distribution, car spokesperson said. sia have announced that the expansion of
dealerships and hospital operations, and the local currency settlement framework
that its estimated RM2.6 billion cash is a The spokesperson, however, did not elab- to include direct investment, income and
source of confidence at a time when the glob- orate on how Sime Darby plans to use its transfer, in addition to trade, as eligible
al economy is contending with the impact estimated bank balances, deposits and cash underlying transactions effective today.
of Covid-19-pandemic-driven movement that amounted to about RM2.6 billion as at
restrictions. March 31, 2021, compared with RM1.69 “It also includes expansion of eligible
billion as at June 30, 2020. users of the framework, such as individ-
Sime Darby’s estimated RM2.6 billion uals, and additional foreign exchange
cash, which the group refers to as “dry pow- Sime Darby’s net profit rose to RM300 policy flexibilities, such as more simple
der”, is also expected to be handy as the million in 3QFY21 from RM115 million a documentation requirement, to facilitate
company prepares for its first share buyback. year earlier, as revenue climbed to RM11.02 the operationalisation of the framework,”
billion from RM8.43 billion. For 9MFY21, BNM said in a statement today.
In an emailed statement to theedgemarkets. its cumulative net profit rose to RM1.21 bil-
com, a Sime Darby spokesperson said the lion from RM643 million a year earlier, while It said this expansion is part of con-
group continues to see strong demand for revenue jumped to RM33.14 billion from tinuous effort to facilitate wider use of
luxury cars in China and that the Australian RM28.11 billion. local currencies for settlement of trade
market holds upside potential in both the and direct investment between Malaysia
heavy equipment and automotive markets. Sime Darby’s latest reported net assets and Indonesia.
per share stood at RM2.30.
The group’s heavy equipment distribu- Given the expansion, BNM and Bank
tion and car dealerships are placed under At Bursa Malaysia’s 5pm close today, Indonesia have also appointed additional
the group’s industrial and motors segments, Sime Darby’s share price settled unchanged qualified commercial banks in both coun-
while the healthcare unit runs the group’s at RM2.15 for a market value of about tries to support the operationalisation of
hospital operations. RM14.62 billion based on the company’s the expanded ringgit-rupiah settlement
6.8 billion issued shares. framework.
Besides its core operations in the indus-
trial, motors, logistics, and healthcare seg- Sime Darby’s share price chart since 2006 In general, the appointed banks are ex-
ments, Sime Darby is also involved in the showed that its shares closed at their highest perienced in facilitating trade and direct
insurance segment in Malaysia. of RM3.33 on Jan 11, 2008, and was at its investment between the two countries,
lowest at 35 sen on Feb 20, 2009. have a wide customer base and have estab-
“Our prospects remain strong particularly lished strong business relationships with
in the areas of our core businesses namely Sime Darby, which recently appoint- banks in the counterpart country, it said.
industrial and motors, as well as in growing ed CGS-CIMB Securities Sdn Bhd as the
our healthcare division.The group is bullish stockbroker to facilitate the group’s share The settlement framework was first
given the dry powder we have on our balance buy-back, said it believes there is value in the launched on Dec 11, 2017 in accordance
sheet in addition to the gains we are making group’s shares and that buy-back will provide with the memorandum of understanding
in the markets that we operate in,” said the some support to its share price. (MoU) between BNM and Bank Indo-
Sime Darby spokesperson. nesia that was signed on Dec 23, 2016.
“We are preparing for the possibility of a
share buy-back, as we feel that our shares are
undervalued,” the spokesperson said with-
out specifying when Sime Darby’s first share
buy-back may happen.

Based on Sime Darby’s Bursa filings since
Jan 3,2000,the group has not done any share
buy-backs all this while.

TUESDAY AUGUST 3, 2021 9 THEEDGE CEO MORNING BRIEF

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KUALA LUMPUR (Aug 2): Pecca Group Pecca to buy relevant in the new business environment.
Bhd is buying a 51% stake in healthcare controlling stake This dynamism and agility led us to the
products distributor Rentas Health Sdn in MD daughter’s diversification into the healthcare business,
Bhd for RM100 million in a cash and stock which we believe would be the business of
deal to venture into the healthcare-relat- healthcare the future,” said Hwa Cheng in a separate
ed business, to expand its revenue stream. product statement.

The 51% stake purchase shall be sat- distribution biz “We believe the demand for masks,
isfied via a combination of RM50 million for RM100m PPE and other Covid-19 products will
cash and the issuance of 11.99 million new be here to stay as more officials describe
Pecca shares at an issue price of RM4.17 BY JUSTIN LIM Covid-19 as an endemic, similar to the
apiece to Teoh Zi Yuen, the daughter of theedgemarkets.com likes of HIV and Hepatitis C.To continue
Pecca’s founder and managing director maintaining our competitive edge, we will
(MD) Datuk Teoh Hwa Cheng. er customer outreach and to achieve busi- dedicate efforts to R&D (research and de-
ness synergy between its existing healthcare velopment) which has always been the in-
ZiYuen holds 99.99% in Rentas Health, business and Rentas Health’s business. gredient of success for our group for more
said the car-upholstery specialist in a Bursa than 25 years. We are optimistic to make
Malaysia filing, adding the proposed ac- “We are a dynamic company that is new R&D breakthroughs in the short to
quisition is deemed a related party transac- quick to acknowledge that business con- medium term.With this new business add-
tion. Hwa Cheng currently holds a 49.63% ditions have significantly changed because ed into our group, we are now ready to
stake in Pecca. Post-acquisition, his stake of the Covid-19 pandemic.We saw imme- roll out our vision for Pecca 2.0, our new
in Pecca will shrink to 46.58%. diate need to embrace new ways of doing growth ecosystem that will pave Pecca to
business in order to ensure that we remain new heights,” he added.
The deal comes with a profit guarantee,
where Rentas Health guarantees it would Pecca has appointed independent advis-
achieve an audited profit after tax (PAT) er FHMH Corporate Advisory Sdn Bhd to
of no less than RM23 million for the fi- advise Pecca’s non-interested sharehold-
nancial year ending June 30, 2022. Of this, ers on the acquisition, which is expected
the profit attributable to Pecca is RM11.73 to be completed in the fourth quarter of
million, calculated based on the 51% equi- 2021. The cash portion of the price tag
ty interest to be acquired by Pecca. will be funded using internal funds and
bank borrowings.
Rentas Health, which started its busi-
ness operations on March 20, 2020, is Pecca will also seek shareholders’ ap-
primarily involved in the supply of medi- proval on its proposed diversification into
cal equipment that include Covid-19 test healthcare, as it expects the business to
kits and personal protective equipment divert 25% or more of the group’s net as-
(PPE). It is the distributor of two face mask sets as well as contribute over 25% of the
brands, namely Rentas Health and Callie, group’s net profit in the future.
as well as an appointed agent for BioSe-
woom Real-Q 2019-nCoV Detection Kit. The trading of Pecca shares, which was
halted today prior to the announcement,
Through the proposed acquisition, the will resume tomorrow.The stock was last
group said it will be able to tap into the traded at RM4.14, giving it a market cap-
existing customer base and distribution italisation of RM778 million.
networks of Rentas Health to attain a wid-

KUALA LUMPUR (Aug 2): British news- Britain’s The “We are happy to set the record straight,”
paper The Sunday Mirror has issued a pub- Sunday Mirror it added.
lic apology on allegations of exploitation at issues apology
a facility managed by ATA IMS Bhd that on allegations The British newspaper added that on
manufactures for Dyson and others. of exploitation June 20 it published an article making
allegations about a facility managed by
“We accept that the photograph accom- at Dyson ATA IMS that manufactures for Dyson
panying the article did not show accom- manufacturer and others.
modation for any Dyson-assigned workers
and we apologise for its inclusion. ATA IMS At the time of writing, shares in ATA
IMS were up 20 sen or 8.1% to RM2.67,
“We also accept that Dyson’s third par- BY SULHI KHALID valuing the company at RM3 billion.Year
ty suppliers are regularly and thoroughly theedgemarkets.com to date, the stock has risen by 13%.
audited by both Dyson and independent,
internationally recognised auditing compa-
nies, and that Dyson states that the allega-
tions do not relate to their products man-
ufactured by ATA Industrial,” The Sunday
Mirror noted in a July 25 article.

“We would like to make clear that the
article was not suggesting Dyson knew or
was complicit in any alleged poor treatment
of ATA’s workers and we apologise if any
readers understood it in this manner.

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Revenue Group Bidders of Malaysia’s five digital banking licenses
consortium
submits 1. Consortium of Paramount Corp Bhd, Star Media Group Bhd, RCE Capital Bhd, Prosper
Palm Oil Mill Sdn Bhd and an unnamed technology partner
application for
digital banking 2. A 40:60 JV between AEON Credit Service (M) Bhd and parent AEON Financial Service Co Ltd
3. Consortium of Green Packet Bhd, Zico Holdings Inc and M24 Tawreeq Sdn Bhd
licence 4. Consortium of Pertama Digital Bhd, Crowdo Holdings Pte Ltd and INFOPRO Sdn Bhd
5. A 40:60 JV between RHB Bank Bhd and Axiata Group Bhd via Boost Holdings Sdn Bhd
BY SURIN MURUGIAH 6. Consortium of Sunway Bhd and partners
theedgemarkets.com 7. ManagePay Systems Bhd with up to 3 partners
8. Consortium of iFAST Corp, LTAT’s Koperasi Angkatan Tentera Malaysia, THZ Alliance, and
KUALA LUMPUR (August 2):A consorti-
um comprising Revenue Group Bhd,Sarawak 99 Speedmart founder Lee Thiam Wah
State and Kenanga Investment Bank Bhd has 9. Consortium of Boustead Holdings Bhd, Angkatan Koperasi Kebangsaan Malaysia Bhd and
submitted its application for a digital banking
licence from Bank Negara Malaysia (BNM). an independent insurance brokerage company
10. C onsortium of AirAsia Group Bhd via BigPay, MIDF, private equity firm Ikhlas Capital Master
In a bourse filing today, Revenue said
SSG Digital Resources Berhad, a special Fund Pte Ltd, and another foreign conglomerate
purpose vehicle for the consortium had on 11. C onsortium of Hextar Global Bhd, with DNeX’s major shareholder Arcadia Acres Sdn Bhd,
June 29 submitted the application for a dig-
ital banking licence from BNM. and Fass Payment Solutions Sdn Bhd’s SPV Ihsan Equity Sdn Bhd
12. C onsortium of PUC Bhd with two state governments and a conglomerate
It said the Consortium, which benefits 13. C onsortium of Revenue Group Bhd, Kenanga Investment Bank Bhd, and the Sarawak state
from the complementary strengths of its three
strategic partners, aims to improve and trans- government
form the lives of underserved and unserved
List is non-exhaustive.
Sources: Bursa Malaysia, The Edge

Malaysians, including individuals and micro/ Group to bid for a digital banking licence.
small/ medium businesses, through transpar- In a separate announcent, Revenue said
ent and affordable digital banking solutions.
trading in its securities will be halted for one
The announcement today confirms a re- hour from 9am today and resume at 10am.
port by The Edge, which cited sources as say-
ing that the Sarawak state government was Revenue was last traded at RM1.88, giv-
teaming up with Kenanga IB and Revenue ing it a market capitalisation of RM861.05
million.

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Analysts raise target price for Unisem
after stellar 2Q results

KUALA LUMPUR (Aug 2): Unisem (M) by Cheryl Poo spite depreciation of the US dollar versus
Bhd’s stellar set of quarterly results has theedgemarkets.com the ringgit, which together with increased
gained analysts’ bullish outlook for the interest income contributed to earnings.
coming quarters with some upping their expenditure (capex) of RM156 million
target prices (TPs) for the stock. mainly catered for plant capacity expansion Hong Leong Investment Bank (HLIB)
for assembly and testing in Chengdu and Research forecast Unisem’s 3QFY21 rev-
“Unisem remains a good proxy for Ipoh, leading to higher capex of RM293.7 enue to be up 5% to 8% q-o-q, with good
growth momentum in the semiconductor million — increasing 76.4% year-on-year order visibility across all market segments.
sector, which is expected to remain robust (y-o-y) — in 1HFY21.
at least for the next two to three quarters. The research house said today that the
Thus, we expect earnings growth to per- “Given the upbeat outlook for semi- positive estimate took into consideration its
sist in the upcoming quarters on sustained conductor consumption and application clients’ forecasts and past loadings, short-
demand and optimistic forecasts from all ahead, we expect capital spending to re- ages of wafer and substrates and lead frame
customers,” RHB Research said in a re- main elevated to support the group expan- shortages, as well as a two-week closure of
port today as it maintained its “buy” call sion as well as new customer acquisition Unisem’s Ipoh plant.
on the stock and raised itsTP to RM10.02 plans,” MIDF said.
from RM9.17, in line with the anticipat- On dividends, HLIB noted that Un-
ed results. For 2QFY21, Unisem raked in a net isem had approved an interim tax-ex-
profit of RM54.64 million, up 60% from empt dividend per share (DPS) of two
“Management expects sequential- RM33.95 million for the same period last sen (2QFY20: two sen) going ex on Aug
ly stronger quarters ahead, sustained by year, and improving 20% from RM45.4 16, and year to date (YTD), DPS also
strong demand across power management, million for 1QFY21. At RM402.23 mil- amounted to two sen versus the same for
radio frequency, automotive and consum- lion, revenue was 30% higher than RM310 1HFY20.
er electronics products in the upcoming million last year and 7.6% higher quar-
two to three quarters, coinciding with the ter-on-quarter (q-o-q). “Traditionally, Unisem divvies three
seasonally strong 2H (second half) for the times every financial year,” it added.
semiconductor industry,” it added. In a July 30 filing with Bursa Malay-
sia, Unisem attributed the improvement in Despite risks arising from the trade war
MIDF Research also upped its TP for revenue to higher sales volume and an in- and Covid-19 pandemic, HLIB noted im-
the stock to RM10 from RM8.62 previ- crease in average selling prices (ASPs) de- proved prospects for the company that in-
ously as it upgraded its call to “buy” from clude the closure of its loss-making Batam
“neutral”. plant, favourable foreign exchange (forex)
and a healthy balance sheet.
The research house said in a report to-
day that it was inputting higher revenue HLIB maintained its “buy” call on the
forecasts for the financial year ending Dec stock with a TP at RM9.88, pegged at 33
31, 2021 (FY21) and FY22 on the premise times FY22 earnings per share (EPS).
of strong demand across products and ser-
vices, namely wafer level packaging and mi- Meanwhile, CGS-CIMB Research reit-
cro-electro-mechanical systems (MEMs). erated its “add” call for Unisem andTP of
It also expects a better profit margin due RM10.50, two standard deviations (SD)
to better economies of scale. above the sector mean in view of the global
semiconductor supercycle.
“As such, our FY21 and FY22 earn-
ings estimates have been revised upwards “We think the higher multiple is jus-
by 21.7% and 13.1% to RM233.4 mil- tified since Unisem was reinstated as a
lion and RM265.5 million respectively,” constituent of the FTSE4Good Index in
MIDF said. June 2021. The stock trades at 24 times
CY22F P/E (calendar year 2022 forecast
It added that Unisem’s second quarter price-earnings), which is a 10% discount
ended June 30, 2021 (2QFY21) capital to the Malaysian outsourced semicon-
ductor assembly and test sector P/E of
Analysts’ recommendation on Unisem (M) Bhd as at Aug 2, 2021 27 times CY22F,” CGS-CIMB said in a
report today.
Reserch house Recommendation Target price (RM)
KAF Research Hold 8.64 It is worth noting that Unisem had also
Kenanga Research 9.80 proposed a one-for-one bonus issue reward
RHB Research Outperform for its shareholders.
Affin Hwang Investment Bank Buy 10.02
MIDF Research Buy 10.00 “We are positive on the bonus issue.
TA Securities Holdings Buy 10.00 Although it does not alter the company’s
CGS-CIMB Research Buy 11.80 fundamentals, we expect this corporate
Hong Leong Investment Bank Add 10.50 exercise to boost the stock’s liquidity and
Buy improve near-term trading sentiment.The
9.88 group expects to complete the exercise in
4QFY21,” CGS-CIMB said.

At the time of writing today, shares in
Unisem were up 33 sen at RM8.68, valu-
ing the company at RM6.7 billion.

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Analysts still upbeat on banks despite
loans growth moderating and asset quality

weakening in June

KUALA LUMPUR (Aug 2): Analysts re- by Tan Siew Mung sive qualities, over CIMB (TP: RM4.60).
mained upbeat on banks despite the sec- theedgemarkets.com For mid-sized banks, he favours RHB
tor’s moderating loan growth and weaken-
ing asset quality in June. Meanwhile, Hong Leong Investment (TP: RM6.85) over AMMB Holdings
Bank Research’s analyst Chan Jit Hoong Bhd (TP: RM2.85), as the former has a
UOB KayHian’s analyst Keith Wee said in a separate note that June’s loan higher CET1 ratio and a larger fair val-
said in a note today that the banking sys- growth was trending below his 3.5% to ue through other comprehensive income
tem’s loans growth for June moderated to 4% full-year FY21 growth estimates, re- reserve to buffer against potential yield
a 3.4% year-on-year (y-o-y) growth from sulting in him revising his forecast down curve volatility.
3.9% in May, though he thinks this could to 3% to 3.5%.
be “temporary” as the stricter lockdown For small-sized banks, he prefers BIMB
from June onwards could have impacted According to Chan, asset quality for Holdings Bhd (TP: RM5.20) and Affin
loan disbursements, which are likely to re- the sector also showed some weakness as Bank Bhd (TP: RM2.15) over Alliance
cover from 3Q21. gross impaired loans (GIL) ratio nudged Bank Malaysia Bhd (TP: RM 2.60). He
up 3bps month-on-month to 1.62%. said he likes the former given its positive
Wee is still expecting 2021’s system loan long-term structural growth drivers and
growth to stage a modest recovery to 4%, “We expect to see GIL ratio continue better asset quality, while the latter has
versus 3.4% in 2020. climbing but would not be overly worried value unlocking potential.
as banks have made heavy pre-emptive pro-
While the extended lockdown has raised visioning in FY20 and we reckon credit risk CGS-CIMB Research analyst Winson
concerns of an upside risk to credit cost this has been adequately priced in by the mar- Ng noted in a report today that the in-
year, he believes this is unlikely to surpass ket, looking at the elevated net credit cost dustry’s total loan expanded 1.6% in the
2020’s credit cost level of 82 basis points (NCC) assumption used for FY21 by both first half, translating into an annualised
(bps), as most banks have adequately set us and consensus (above the normalized rate of 3.2%.
aside provisions for the vulnerable groups. run-rate but below FY20’s level),” he said.
“This was within our projected loan
“Even if we were to assume that sector “Also, the government and BNM will growth of 2.5% to 3.5% for 2021, even if
2021 credit cost [was] to mirror 2020’s 82 remain supportive in helping troubled bor- we factor in a slowdown in loan growth in
bps versus our current estimates of 65 bps, rowers, limiting a significant deterioration the second half. Furthermore, the auto-
we are still expecting the sector to deliver in GIL ratio,” he added. matic loan moratorium, which banks start-
a 12% y-o-y earnings growth (versus cur- ed to offer on July 7, should lend support
rent 25% growth estimates). This will be He also retained his “overweight” call to banks’ loan growth as loans under mor-
underpinned by a slight improvement in on the banking sector, saying he remained atorium would not be paid down within
net interest margin, stronger loans growth optimistic on the sector taking into con- three-six months,” he said.
and mid-single-digit non-interest income sideration the Covid-19 vaccination roll-
growth,”Wee said. out, undemanding valuations, and ample He said the increase in GIL ratio was
market liquidity. “Hence, any selldown is expected, given the credit risks triggered
He kept his “overweight” call on the an opportunity to accumulate, in our opin- by the Covid-19 pandemic, and expects
sector, saying “the sector’s current con- ion,” he added. the GIL ratio to continue to rise to his
solidation phase provides an excellent op- projected 2% at end-2021.
portunity for investors to accumulate on For large-sized banks, Chan likes
weakness”. Malayan Banking Bhd (Maybank) (TP: Ng also noted total provision for banks
RM9.40) for its strong dividend yield, and only increased by RM978.1 million in
“The sector is still expected to register Public Bank (TP: RM4.50) for its defen- 2Q21, versus RM2.04 billion in 1Q21,
a healthy earnings growth even if provi- and versus RM1.24 billion in 2Q20.
sions were to surprise on the upside in
2021 while common equity tier 1 (CET1) From that, he deduced that the downcy-
ratio at 14.8% is well above the minimum cle in banks’ loan loss provisioning (LLP)
requirement,” he said. continued in 2Q21F, with likely y-o-y and
quarter-on-quarter drops in 2Q21F LLP.
CIMB Group Holdings Bhd (target
price [TP]: RM5.10) is Wee’s top pick “This, together with the expected y-o-y
for the banking segment, as he believes expansion in banks’ net interest margin,
the group is best positioned in the sector should have been the earnings drivers for
to benefit from the economic recovery and banks in 2Q21F. These likely more than
reopening theme, given its strong earnings offset the weaker loan and fee income
growth off a low base, attractive valuations, growth (due to the lockdown), leading to
large cap and liquid high beta nature. y-o-y increases in banks’ 2Q21 core net
profit (stable or higher q-o-q),” Ng said.
He also likes Hong Leong Bank Bhd
(TP: RM22.30) and Public Bank Bhd He also kept his “overweight” call on
(TP: RM4.60) for their solid asset quali- banks, premised on the sectory’s expected
ty track records, and RHB Bank Bhd (TP: net profit growth recovery to a projected
RM6.35) for its strong capital position and 9.4% in 2021. His picks are Public Bank
well-balanced growth. (TP: RM5.30), Hong Leong Bank (TP:
RM20.78) and Maybank (TP: RM9.10).

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KUALA LUMPUR (Aug 2): Straits Inter Straits Inter safe water depths of up to 30 metres.
Logistics Bhd said its unit Victoria STS Logistics gets “The development will advance the in-
(Labuan) Sdn Bhd has received approval green light to
from the Marine Department to develop develop Asia’s troduction of state-of-the-art multi-func-
an integrated offshore ship-to-ship (STS) largest STS energy tional energy transhipment facilities that
transhipment hub within the port limits of transhipment hub will be able to accommodate LNG carriers
Victoria Bay, Labuan. up to the size of a Q-Max and Very Large
in Labuan Crude Carrier,” said Straits.
Victoria STS is a 70% owned subsid-
iary of Fajar Maritime and Logistics Sdn by syafiqah salim Noting thatVictoria Bay is strategically lo-
Bhd, which in turn is a 60% owned sub- theedgemarkets.com cated along international shipping and energy
sidiary of Straits. trade routes, Straits said the proposed hub
is set to be one of the largest offshore LNG
“The company has mobilized its re- and LPG energy transhipment hubs in Asia.
sources and infrastructure in prepara-
tion to commence operation of the STS The hub, it added is also strategically lo-
Transhipment Hub in the fourth quarter cated within the vicinity of Labuan Liberty
of 2021,” Straits said in a statement today. Port, which is managed and operated by
Megah Port Management Sdn Bhd (MPM),
The oil trading and fuel bunkering ser- a 51%-owned subsidiary of the group.
vice provider said Victoria STS has also
received approval from the Marine De- Straits said since its announcement on
partment on the marine risk assessment. July 12 on the hub, it has received numer-
ous enquiries from both international and
The assessment, it said, was done as local entities that are interested in partner-
part of the requirements to be complied ing the group to develop the hub into Asia’s
before Jan 8, 2022 to develop the hub. largest STS Transhipment Hub.

“The company expects to commence and “We are engaged in discussion with
complete the development of the STS Energy many parties in preparation for this pro-
Transhipment Hub, which includes setting ject and Straits is gearing to kickstart this
up the key facilities and equipment such as within the next few months.The other enti-
tugboats, pneumatic fenders, LNG cryogenic ties within the Straits Group will also stand
equipment and single point mooring system to benefit from the business spin-offs of
by the fourth quarter of 2021,” it said. this project,” said Straits Group managing
director Datuk Seri Ron Ho Kam Choy.
Straits said the hub will be its flag-
ship energy project which will be locat- Shares of Straits rose half a sen or 2.5%
ed within the port limits of Victoria Bay to 20.5 sen today, giving the group a market
deep water area spanning 3,309 hectares, capitalisation of RM160.06 million. The
supporting an initial six STS berths with counter saw 6.99 million shares traded.

news In brief

Cahya Mata extends CFO Sunway Malls facilitating up to RM200m in working capital to assist
suspension till Aug 31 retailers facing cash-flow crunch
KUALA LUMPUR (Aug 2): Sunway Malls announced today that it is facilitating up to RM200
KUALA LUMPUR (Aug 2): Cahya Mata million in working capital to assist its retailers through financing facilities provided by RHB
Sarawak Bhd (CMS) has further extended Banking Group and Credit Guarantee Corporation Malaysia Bhd (CGC). The financing
the suspension of its group chief financial facilities — the Sunway Malls SME Retailers Relief Financing Programme will be made
officer (CFO) Syed Hizam Alsagoff until available to the mall group’s retailers across seven malls, it added in a statement. Under the
Aug 31, to accommodate the additional scheme, qualified retailers under Sunway Malls can apply for RHB financing facilities of up
time required by independent consultant to RM500,000 with a loan tenure of seven years, where up to 80% of the principal financing
KPMG Management & Risk Consulting amount is guaranteed by CGC. There is also an option for an overdraft facility of up to 30% of
Sdn Bhd, whom it appointed in June the financing limit with one of the lowest interest rates in the market. — theedgemarkets.com
to review the financial management
of certain investments and contracts, Dolphin International proposes second share placement in eight months
to complete its job. In a bourse filing to raise RM24m
today, CMS said it expects the results KUALA LUMPUR (Aug 2): Dolphin International Bhd plans to raise about RM24.17
of the review to be announced by the million through a private placement — equivalent to 35% of its market capitalisation of
end of August. Previously the group’s RM70 million — to fund its food and beverage business, to repay borrowings and for the
board decided to extend Syed Hizam’s group’s working capital. This is the second private placement that Dolphin International
suspension by 60 days to accommodate proposed this year. The previous placement was announced on Jan 16, from which it
KPMB’s review. The group first raised RM13.4 million by placing out 186.32 million shares at 7.19 sen apiece. In a bourse
suspended Syed Hizam for 30 days filing, the company said the new placement entails the issuance of up to 335.67 million
on May 5 to facilitate investigations placement shares, representing 36% of the group’s total issued shares, at an issue price to
into allegations of possible financial be decided to third party investors to be identified. The expected proceeds raised is based
mismanagement in relation to the on an indicative price of 7.2 sen per placement share. — by Justin Lim/theedgemarkets.com
company’s investments and operations. —
by Syafiqah Salim/theedgemarkets.com

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bloomberg Sarawak

election to be
held within
60 days after
revocation of
Emergency
Proclamation
— EC

Roads to Calling for the resignation of Prime Bernama
Parliament Minister Tan Sri Muhyiddin Yassin, the
closed, opposition opposition MPs criticised the move by the KUALA LUMPUR (Aug 2):The Sar-
assemble at ruling government led by Muhyiddin to awak state election will be held within
Dataran Merdeka revoke the Emergency Ordinances despite 60 days from the date the Emergency
and demand for denial by Yang di-Pertuan Agong that he Proclamation for Sarawak is revoked
PM’s resignation had given his consent to the revocation. or annulled, said Election Commis-
sion (EC) secretary Datuk Ikmalru-
by Surin Murugiah The MPs then proceeded to Dataran din Ishak.
theedgemarkets.com Merdeka.
He said the EC had taken note of
KUALA LUMPUR (Aug 2): Major roads Among the opposition MPs marching Prime Minister Tan Sri Muhyiddin
leading to the Parliament building in Kuala to Dataran Merdeka were Bagan MP Lim Yassin’s statement on July 31 on the
Lumpur have been closed, while opposi- Guan Eng, Amanah president Mohamad Emergency Proclamation by Yang
tion Members of Parliament (MPs) were Sabu and Semporna MP Datuk Seri Mohd di-Pertuan Agong Al-Sultan Abdul-
prevented from entering Dewan Rakyat. Shafie Apdal. Using loud hailers, the MPs lah Ri’ayatuddin Al-Mustafa Billah
stressed that the government led by Mu- Shah.
In separate live feeds on social media, hyiddin had acted in bad faith.
opposition MPs including Nurul Izzah “The declaration of the proclama-
Anwar, Segambut MP HannahYeoh and Anwar said the government had diso- tion by Yang di-Pertuan Agong was
Kota Kinabalu MP Chan Foong Hin said beyed the wishes of the King as well as dis- made in accordance with Clause (1)
the roads to Parliament were closed de- regarded the public, and thus must resign. of Article 150 of the Federal Con-
spite the postponement of today’s sitting. stitution to suspend the state elec-
Meanwhile, Shafie said the Dewan Rak- tion and that this proclamation
Dewan Rakyat was ordered shut for yat Speaker had undertaken that questions shall extend throughout the state
two weeks from July 29 after Covid-19 about the Emergency Ordinances will be of Sarawak from Aug 2, 2021 to
cases were detected among attendees answered today. Feb 2, 2022,” he said in a statement
last week. today.
“But Parliament is shut, using Covid-19
After being prevented from entering as an excuse. According to him, an ordinance
Parliament by police, several opposition was promulgated by the King under
lawmakers from PKR, DAP and Aman- “Legally, we have the right to be in Par- Clause (2B) of Article 150 of the Fed-
ah instead gathered at Dataran Merdeka. liament,” he said. eral Constitution, known as the Emer-
gency (Essential Powers) (Sarawak)
De facto opposition leader Datuk Seri Yeoh, meanwhile, tweeted that the op- Ordinance 2021 P.U. (A) 324.
Anwar Ibrahim and former prime minister position MPs planned to debate the emer-
Tun Dr Mahathir Mohamad also voiced gency proclamation and its ordinances in He said under the provisions of
their dissatisfaction over the blockade by Dewan Rakyat but were blocked by police. Clause (3) of Article 21 of the Con-
the police. stitution of the State of Sarawak, the
“An MP with a walking stick, [another] State Legislative Assembly that should
seven-month pregnant as well as those aged have been dissolved after five years
above 90 came along. This is our duty,” from its first meeting had no effect
she said. pursuant to Section 3 (1) of the Emer-
gency Ordinance.
The opposition MPs finally dispersed
after a face-off with Federal Reserve Unit The Sarawak State Legislative As-
(FRU) personnel in riot gear. sembly should have stood dissolved
Read also: Umno to hold special Supreme on June 7, five years from the date
Council meeting on Tuesday on political of its first meeting. However, the
developments Click here provision could not take effect due
to the implementation of the Emer-
gency (Essential Powers) Ordinance
2021.

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Constitutional crisis? — A legal opinion

(Aug 1): 1. Great controversy has been by Rosli Dahlan something about the revocation of the
stirred regarding the recent parliamenta- theedgemarkets.com emergency ordinances that apparently were
ry session. I hope this explanation will help done without the consent of theYDPA. Set
to clarify the misconceptions and heated (a) Formal entry ofTuanYang di-Pertua. out below is the black letter of the Hansard
statements which falsely suggest there is a (b) Prayers as shall be approved by the for that day:-
constitutional crisis. House.The prayers for a joint session shall
The Parliamentary Session be accordingly amended to include refer- “Dato’ Takiyuddin bin Hassan
2.This Parliamentary Session was a Special ences to the Senate and to members of the [Kota Bharu]: Saya ada tiga perka-
Session. It was called by virtue of Standing Senate and shall be read by the Setiausaha ra sahaja. Respons kepada yang saya
Order 11(3). Dewan Rakyat. hormati Yang Berhormat Ketua Pem-
(c)Taking of Oath by any new member. bangkang untuk memandu perjalanan
3. Standing Order 11 states as follows:- (d) Messages from the Seri Paduka mesyuarat ini. Baik, isu mengenai Ti-
“11. (1) The first sitting of the House BagindaYang di-Pertuan Agong. tah Yang di-Pertuan Agong. Saya in-
(e) Announcements by Tuan Yang gin menunjukkan di sini secara bertu-
in each Session shall be held in such place di-Pertua. lis bahawa pemberitahu daripada Yang
on such day and at such hour as the Seri (f) Petitions. Amat Berhormat Perdana Menteri kepa-
Paduka Baginda Yang di-Pertuan Agong (fa) Minister’s Question Time. da Tuan Yang di-Pertua yang berbunyi.
may by Proclamation appoint. (g) Questions to Ministers for oral Izinkan saya baca. “Dengan hormatn-
answers. ya, saya ingin memaklumkan bahawa
(2) Subject to the provisions of para- (h) Motion on matters of urgent public Seri Paduka Baginda Yang di-Pertuan
graph (1), the Leader or Deputy of the importance. Agong telah memperkenankan untuk
House shall determine at least 28 days be- (i) Statements by Ministers. kerajaan memanggil Mesyuarat Khas
fore the commencement of each Session, (j) Tributes. Penggal Ketiga, Parlimen Ke-14 bagi
the dates on which the House shall meet (k) Obituary speeches. Dewan Rakyat yang bersidang pada 26
in the Session: (l) Personal explanations. Julai sehingga 2 Ogos 2021”. Dokumen
(m) Presentation of Government Bills speak louder than words. Ini adalah....
Provided that the Leader or Deputy (First Reading).
Leader of the House may vary from time (n) Motions relating to the Order of Dato’ Seri Dr. Shahidan bin
to time the dates so fixed. Business (to be moved by a Minister). Kassim [Arau]: Faham tidak?
(o) Public Business.
(3) If, during an adjournment of the (p) Motions for the introduction of Dato’Takiyuddin bin Hassan [Kota
House, it is represented toTuanYang di-Per- non-Government Bills. Bharu]: Yang kedua,TuanYang di-Pertua,
tua by the Prime Minister that the public (q) Other items of business in the order saya ingin mengesahkan pada hari ini di
interest requires that the House should meet they appear on the Order Paper for the day. dalam Dewan ini – saya tertakluk kepada
at an earlier date than that to which the kalau saya bercakap tidak benar, baha-
House was adjourned,TuanYang di-Pertua (2) The House may, at any time, upon wa Kerajaan Persekutuan memutuskan
shall give notice thereof forthwith and the a motion (to be moved by a Minister) to tidak akan menasihatkanYang di-Pertuan
House shall meet at the time stated in such be decided without amendment or debate Agong untuk mengisytiharkan Proklama-
notice.The business set down for that day which may be made without notice and si Darurat baharu apabila tamat 1 Ogos
shall be appointed by the Prime Minister shall take precedence over all other busi- 2021. [Tepuk]
and notice thereof shall be circulated not ness, decide to proceed to any particular
later than the time of meeting.” business out of the regular order. Yang ketiga, yang terakhir. Please lis-
ten to me. Kerajaan telah buat keputusan
4.This was a Special Session called upon (3) A foreign dignitary may as shall be berdasarkan kepada Perkara 150(3) un-
an adjournment of the last sitting of the decided by the Government address the tuk membatalkan semua Ordinan Daru-
House. It was a session that was called by House or the House jointly with the Sen- rat yang telah dibuat semasa Proklamasi
the Prime Minister making representations ate and such address may be given at any Darurat ini. Oleh sebab telah di revoke,
to the Speaker of the House.The purpose time during sitting of the House.” maka isu ungkai ataupun annulment su-
of this special session was to discuss mat- dah tidak lagi relevan....[Dewan riuh].
ters of public interest. In this case, it was 7. It is therefore clear that unlike Stand- Terima kasih.”
to discuss the Covid-19 Pandemic and the ing Order 14, Standing Order 11 does
Government’s response to it. not provide for votes on motions or bills 9. The allegation that has been levelled
etc. The only business that is provided against the Law Minister and the Gov-
5. The business of the Special Sessions for in Standing Order 11 is that which ernment is that it has revoked the Emer-
is to be determined by the Prime Minis- is determined by the Prime Minister. In gency Ordinances without the consent of
ter. This is unlike an ordinary sitting of this instance, the Prime Minister set the the YDPA.
Parliament. business of the House so as to allow the
Prime Minister and the Cabinet to brief 10. As one can see this is not the case.
6. In an ordinary sitting of Parliament the Parliament on the Covid-19 National Re- The Minister did not mislead parliament.
order of business is determined by Stand- covery Plan. He stated facts.The government had de-
ing Order 14. Standing Order 14 is repro- The Statement by the Law Minister cided not to advise the YDPA to declare
duced below:- 8.The law minister is alleged to have said a fresh emergency after 01.08.2021 and
the Government had decided to revoke
“14. (1) Unless the House otherwise the Emergency Ordinances made during
directs, the business of each sitting shall the Proclamation of Emergency.
be transacted in the following order:
continues on Page 16

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from Page 15

The Process of Emergencies
11. Emergencies are regulated under

Article 150 of the Federal Constitution.
Article 150 is reproduced below.

“150. Proclamation of emergency di-Pertuan Agong to issue a new Procla- pursuance of the Proclamation and, to the
(1) If theYang di-Pertuan Agong is sat- mation under Clause (1) or promulgate extent that it could not have been validly
isfied that a grave emergency exists where- any ordinance under Clause (2B). made but for this Article, any law made
by the security, or the economic life, or while the Proclamation was in force, shall
public order in the Federation or any part (4) While Proclamation of Emergency cease to have effect, except as to things
thereof is threatened, he may issue a Proc- is in force the executive authority of the done or omitted to be done before the
lamation of Emergency making therein a Federation shall, notwithstanding any- expiration of that period.”
declaration to that effect. thing in this Constitution, extend to any
(2) A Proclamation of Emergency matter within the legislative authority of 12. From Article 150 (1) and (2B) it is
under Clause (1) may be issued before a State and to the giving of directions to clear that theYDPA does two things. His
the actual occurrence of the event which the Government of a State or to any of- Majesty issues a ‘proclamation’ of emer-
threatens the security, or the economic life, ficer or authority thereof. gency and His Majesty ‘promulgates’ ordi-
or public order in the Federation or any nances under the Emergency.There is no
part thereof if theYang di-Pertuan Agong (5) Subject to Clause (6A), while a provision for the YDPA to revoke, annul
is satisfied that there is imminent danger Proclamation of Emergency is in force, or cancel the proclamation or the prom-
of the occurrence of such event. Parliament may, notwithstanding anything ulgated ordinances.
(2A) The power conferred on theYang in this Constitution make laws with respect
di-Pertuan Agong by this Article shall in- to any matter, if it appears to Parliament 13. It is also clear that by virtue of Article
clude the power to issue different Procla- that the law is required by reason of the 40 of the Federal Constitution, theYDPA
mations on different grounds or in differ- emergency; and Article 79 shall not apply is constitutionally bound to accept the ad-
ent circumstances, whether or not there is to a Bill for such a law or an amendment to vice of the Government and act in accord-
a Proclamation or Proclamations already such a Bill, nor shall any provision of this ance with such advice.The only instances
issued by theYang di-Pertuan Agong un- Constitution or of any written law which of personal discretion for the exercise of
der Clause (1) and such Proclamation or requires any consent or concurrence to any power provided to theYDPA is when
Proclamations are in operation. the passing of a law or any consultation the words “in his discretion” are used.This
(2B) If at any time while a Proclamation with respect thereto, or which restricts the principle was codified by amendment of
of Emergency is in operation, except when coming into force of a law after it is passed the Federal Constitution. The principle
both Houses of Parliament are sitting con- or the presentation of a Bill to the Yang has been affirmed by the Federal Court
currently, the Yang di-Pertuan Agong is di-Pertuan Agong for his assent. and has been repeated and adopted mul-
satisfied that certain circumstances exist tiple times.
which render it necessary for him to take (6) Subject to Clause (6A), no provi-
immediate action, he may promulgate such sion of any ordinance promulgated un- 14. In Teh Cheng Poh v. Public Prosecu-
ordinances as circumstances appear to him der this Article, and no provision of any tor [1979] 1 MLJ 50, the Privy Council,
to require. Act of Parliament which is passed while when describing the Emergency powers
(2C) An ordinance promulgated un- a Proclamation of Emergency is in force of theYDPA said:-
der Clause (2B) shall have the same force and which declares that the law appears
and effect as an Act of Parliament, and to Parliament to be required by reason “Although this, like other powers under
shall continue in full force and effect as if of the emergency, shall be invalid on the the Constitution, is conferred nominally
it is an Act of Parliament until it is revoked ground of inconsistency with any provi- upon theYang di-Pertuan Agong by virtue
or annulled under Clause (3) or until it sion of this Constitution. of his office as the Supreme Head of the
lapses under Clause (7); and the power Federation and is expressed to be exercisable
of theYang di-Pertuan Agong to promul- (7) At the expiration of a period of six
gate ordinances under Clause (2B) may be months beginning with the date on which continues on Page 17
exercised in relation to any matter which a Proclamation of Emergency ceases to be
respect to which Parliament has power to in force, any ordinance promulgated in
make laws, regardless of the legislative or
other procedures required to be followed,
or the proportion of the total votes required
to be had, in either House of Parliament.
(3) A Proclamation of Emergency and
any ordinance promulgated under Clause
(2B) shall be laid before both Houses of
Parliament and, if not sooner revoked,
shall cease to have effect if resolutions
are passed by both Houses annulling such
Proclamation or ordinance, but without
prejudice to anything previously done by
virtue thereof or to the power of theYang

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from Page 16 17. The law on this subject has remained Shorn of the formal language and ni-
unchanged since the late 1970s. There is ceties, the substance of the statements
if he is satisfied of a particular matter, his no doubt that the YDPA is bound to act were:-
functions are those of a constitutional on the advice of the Government to either
monarch and except on certain matters proclaim an emergency or to promulgate a) That the YDPA had not consented
that do not concern the instant appeal, he any ordinance and finally to revoke them. to the revocation of the Emergency Or-
does not exercise any of his functions under There is no discretion in the matter. dinances because the YDPA wanted the
the Constitution on his own initiative but is Emergency Ordinances to be debated in
required by art 40(1) to act in accordance 18.When we examine Article 150(3) with Parliament;
with the advice of the Cabinet. So when the statements of the Law Minister, it is
one finds in the Constitution itself or in clear that there has been no misleading of b)That the revocation of the Emergency
a Federal law powers conferred upon the Parliament or any constitutional violation. Ordinances were to circumvent (“mem-
Yang di-Pertuan Agong that are expressed belakangi”) the constitutional function of
to be exercisable if he is of the opinion or 19. Article 150(3) envisages two ways in the YDPA;
is satisfied that a particular state of affair which an emergency ordinance can be
exists or that particular action is necessary, brought to an end. It can be laid before the c) That the revocation was backdated
the reference to his opinion or satisfaction House and the House can pass a resolution to 21 July 2021 notwithstanding that the
is in reality a reference to the collective to annul it or it can be ‘sooner revoked’. application for consent of the YDPA was
opinion or satisfaction of the members of In other words, the Emergency Ordinanc- only received on 23 July 2021;
the Cabinet, or the opinion or satisfaction es which the Law Minister referred to as
of a particular Minister to whom the Cab- being revoked by the Government would d) That the power to revoke the Emer-
inet have delegated their authority to give fall within this proviso to Article 150(3). gency Ordinances was a power that vests
advice upon the matter in question.” in the YDPA and not exclusively in the
20. In addition to the methods outlined Cabinet; and
15.TheYDPA, with the deepest of respect, above, the Proclamation of Emergency
does not have the discretion to refuse the in this case had a sunset provision. It was e)That theYDPA has directed that the
advice of the Government. Chang MinTat J due to naturally expire on 01.08.2021. By revocation of the Emergency Ordinances
made this clear in N Madhavan Nair v. Gov- virtue of Article 150(7), any ordinances be laid before and debated by Parliament
ernment of Malaysia [1975] 2 MLJ 286:- promulgated under the Proclamation of before theYDPA signs the revocation.
Emergency would likewise lapse and cease 23. The YDPA has not been properly ad-
“As I have earlier shown, executive pow- to have effect 6 months after the Procla- vised of his constitutional role.This can be
er is in the hands of the Yang Dipertuan mation ceased to have effect. seen as follows:-
Agung and his Cabinet.Though theYang
DiPertuan Agung is with customary and 21. Consequently, there has been no mis- a)TheYDPA’s power is to proclaim the
loyal courtesy asked to be pleased to prom- leading of Parliament or constitutional vi- Emergency and promulgate the Ordinanc-
ulgate the Ordinance, it is clear that he as olation because the Government:- es under Article 150(1) and 150(2B);
the Constitutional Monarch does not re-
fuse. He has no discretion in the matter a) Called for the special sitting of Par- b)That decision to proclaim and prom-
but surely the events of those days were liament under Standing Order 11; ulgate is not a personal decision of the
clearly sufficient and only too apparent YDPA or a personal power to be exercised.
to show the necessity for the Ordinance b) The business of the meeting was to It is to be carried out on advice of the cab-
without any agreement.” brief the House on the Covid-19 Recov- inet and must be followed;
ery Plan;
16. As recently as 2001, a five man bench c) There is similarly no power of revo-
of the Federal Court restated the position c) There was no business set by which cation. Even if there is a formal require-
in Abdul Ghani bin Ali v. Public Prosecutor any motions or bills could be debated or ment for the written assent of theYDPA,
[2001] 3 MLJ 561:- voted upon. Standing Order 14 was not the YDPA is bound to accede and carry
in effect.There was no ordinary business out the advice of the Government;
“In his book, Governments & Crisis of the House to be transacted;
Powers, which is a legal study on the use d) There is certainly no power to di-
of emergency powers, Cyrus V Das said d)The Law Minister did in fact inform rect that the revocation of the Emergen-
at p 237 that although a debate had pre- the House about the ‘decision of the Gov- cy Ordinances to be tabled and debated
viously ranged on the subject, there can ernment’ not to seek a further proclama- before the House before the YDPA can
be no doubt now that the Privy Council tion of Emergency; consent to it;
opinion on theTeh Cheng Poh case settles
the point firmly that the Yang di-Pertuan e)The Law Minister also informed the e) TheYDPA does not have the power
Agong does not have a personal discretion House that “the Government has made to direct what is to be laid before and vot-
under art 150(1) but has at all times to act the decision pursuant to Article 150(3) to ed on in Parliament.That is exclusively a
on Cabinet advice. revoke all the Emergency Ordinances”; Government power; and

It is my considered view, based on the f) The Government did lay before the f) The Emergency Ordinances are not
constitutional provisions and the authori- House the Emergency Ordinances; and bills of Parliament that they have to be de-
ties cited, that theYang di-Pertuan Agong, bated and voted on before they are signed.
in acting under cl (1) of art 150 of the g)There was no need to debate or move 24. TheYDPA is being advised to exceed
Constitution in the position of a consti- a motion on the continued existence of the his authority under the constitution. In this
tutional monarch, must act on the advice Emergency Ordinances given the fact that respect the Minister of Law had simply
of the Cabinet as provided in art 40 of the the Government had made the decision to stated the facts. The Cabinet had decid-
Constitution.” ‘sooner revoke’ them under Article 150(3). ed to revoke the Emergency Ordinances.
The Statement by the Palace There was therefore no need to debate it
22. The Palace issued two statements. in Parliament. While theYDPA may have
suggested to the Government that it be so
debated, the Government was under no
constitutional duty to do that.

T U E S D A Y A U G U S T 3 , 2 0 2 1 18 T H E E D G E C E O M O R N I N G B R I E F

IF YOU ARE
NOT PART OF
THE SOLUTION

YOU WILL BE
PART OF

THE PROBLEM

Vaccinations reduce infections and save lives*
Get yourself vaccinated

Get your family, friends and colleagues
to register for vaccination

Join the race to build herd immunity

*Covid-19 Vaccines Advice

– World Health Organization

*Benefits of Getting Covid-19 Vaccines

– US Centre For Disease Control & Prevention

THIS IS A COMMUNITY SERVICE MESSAGE ON FIGHTING COVID-19

t u e s d a y a u g u s t 3 , 2 0 2 1 19 T h e E d g e C E O m o r n i n g b r i e f

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LONDON/SINGAPORE (Aug 2): HSBC HSBC steps up first half of the year.
Holdings Plc is accelerating plans for dividend plans, Revenue at the investment bank was
shareholder payouts, as it said the global eyes buybacks as
economy was starting to emerge from the outlook brightens down more than a fifth, as trading reve-
worst effects of the pandemic. nue slumped on lower market volatility.
by Harry Wilson, Banking revenue at the unit also dropped
The bank said it now expects to meet Ambereen Choudhury & Denise Wee on lower client activity and lower inter-
its target of paying out 40% to 55% of est rates.
earnings in dividends this year, rather than Bloomberg
next. It is also examining the possibility of Wealth overhaul
share buybacks, the latest lender to unveil interim dividend, after adjusted sec- HSBC began a fresh restructuring this year
such plans after the Bank of England re- ond-quarter profit doubled from a year that aims to refocus the bank on the Asian
moved restrictions imposed at the height earlier to top analyst estimates, according markets where it makes most of its money.
of the pandemic. to a statement Monday.The jump came as The bank wants to manage more assets for
Europe’s biggest lender joined its British the region’s wealthiest residents – a lucra-
“We definitely feel more confident,” peers in reversing loan provisions that it tive but highly competitive market. In May,
Chief Financial Officer Ewen Stevenson booked in the early stages of the pandemic. HSBC sold 90 branches in the US, mark-
said on BloombergTelevision. “We will keep ing a retreat from mass-market banking
buybacks under review” together with div- Costs were higher than expected, driv- in the country. Weeks later, the company
idends. en by spending on technology and higher agreed a potential disposal of its unprofit-
performance-related pay, even after HSBC able French retail business.
HSBC is one of the biggest dividend reduced headcount by around 3,500 in the
payers in European banking, and after a “We have taken firm steps to define the
year of restrictions is expected to set aside bloomberg future of our US and continental Europe
more than any of its rivals this year and businesses, and further enhanced our glob-
next, according to estimates collated by al wealth capabilities,” Chief Executive Of-
Bloomberg Intelligence. ficer Noel Quinn said in the statement.

The bank will pay a 7 cents a share The bank said it has hired 600 wealth
managers in Asia in the first half of the year
and is eyeing deals in the region.

“We are currently looking at a num-
ber of smaller opportunities in the wealth
space across Asia, spanning insurance, as-
set management and traditional wealth,”
CFO Stevenson said in a phone interview
Monday, adding on a call with analysts
that the lender was looking at three or four
potential deals, each about US$500 mil-
lion in size.

Click here to read the full story

Read also: HSBC exits or downsizes 77 of-
fices as hybrid work takes hold Click here

TOKYO (Aug 2): Mitsubishi UFJ Finan- Japan’s biggest MUFG’s credit-related costs in the
cial Group Inc (MUFG), Japan’s largest bank MUFG first quarter came in at ¥5.1 billion,
lender by assets, on Monday reported doubles quarterly versus ¥145 billion in the same period
that first-quarter net profit doubled year- profit as credit last year.
on-year as credit-related costs dropped
sharply. costs drop The lender had estimated ¥350 billion
of credit-related costs for the current fi-
MUFG, which owns about 20% ofWall by Takashi Umekawa nancial year which runs through March.
Street investment bank Morgan Stanley, Reuters
reported profit of ¥383.1 billion (US$3.49 In contrast, net interest income —
billion) for the three months to June 30, year, three major lenders including MUFG mainly derived from its traditional lend-
against ¥183.5 billion a year earlier. collectively booked ¥1.1 trillion in cred- ing business — came in at ¥496.9 bil-
it-related costs, which nearly doubled year- lion for the quarter, marking a 5.9%
The bank retained its full-year profit on-year, amid the Covid-19 pandemic. year-on-year rise, as corporate clients
forecast of ¥850 billion. That compared rushed to borrow to overcome the pan-
with an average forecast of ¥859 billion demic fallout.
from nine analyst estimates compiled by
Refinitiv. Peers Sumitomo Mitsui Financial
Group Inc and Mizuho Financial Group
Japanese banks have been struggling Inc last week both reported their net
with years of ultra-low interest rates and profits for the quarter more than dou-
a shrinking population. In the past financial bled as credit-related costs dropped.

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Tide of US debt set to recede,
countering effect of Fed taper

NEW YORK (Aug 2): For the first time by Liz Capo McCormick it could start with the auctions being held
in more than five years, the US Treasury Bloomberg next week.
in coming months will be scaling back its
mammoth quarterly sales of notes and lion from this year. If the majority are right, the Treasury
bonds,Wall Street dealers said — in a shift For notes and bonds alone, net issuance will keep the refunding at US$126 billion,
so large it is likely to more than counter the composed of the following:
Federal Reserve’s (Fed) looming reduction will be about US$1 trillion less next year
in purchases. versus 2021, the bank said. Meantime, the • US$58 billion of three-year notes
Fed will only be buying, from the second- • US$41 billion of 10-year notes
TheTreasury Department onWednes- ary market, US$316 billion of such secu- • US$27 billion of 30-year bonds
day will announce its so-called quarterly rities in 2022, given its tapering — down It is a far cry from the pattern since even
refunding of longer-term securities, when from US$960 billion this year, JPMorgan before the pandemic struck.TotalTreasury
it typically lays out any coming changes to forecasts. debt outstanding has surged by about 50%
debt-issuance strategy.While most dealers since late 2017, to US$21.7 trillion.
expect no change in the US$126 billion ReducedTreasuries issuance could fur- Much of the increase in 2020 came in
size of recent refundings, many see offi- ther diminish any lingering concerns about the form of bills, as the Treasury rushed
cials setting the stage for a reduction from a 2013-style taper tantrum, when markets to accumulate cash to use for emergency
November. took fright at the prospect of Fed stimulus relief spending.T-bills hit some 25% of the
withdrawal.The slide inTreasury yields in total share of the Treasury debt pile out-
Issuance has been going the other way recent months had already helped quell standing last year.
for years, thanks to surging federal budget such worries. It is now about 20%, after cutbacks in
deficits in the wake of president Donald issuance to work down what had been a
Trump’s tax cuts and later the emergency Apart from the refunding, theTreasury record cash pile.The Treasury Borrowing
spending caused by the pandemic. Even is currently grappling with manoeuvres to Advisory Committee, made up of major
with Congress negotiating new spending avoid hitting the federal debt limit, after a dealers and investors, advised a recom-
on infrastructure and social programmes, two-year suspension of the ceiling ended mended range of 15% to 20%.
borrowing needs are set to drop, as law- on Sunday. Economists and strategists alike The Treasury on Monday releases its
makers plan fresh revenue measures for anticipate Congress will act to boost or quarterly financing estimates, and will
those multi-year initiatives. suspend the limit again before the Treas- give a fresh reading on cash balance as-
ury runs out of room to avert a payments sumptions for coming quarters. Details on
“Their financing needs will fall very default in the fall. plans for bill issuance should be revealed
sharply from 2021 into 2022,” said Meghan on Wednesday.
Swiber, a rates strategist at Bank of America Primary dealers, which trade directly The shrinking of the deficit — to
Corp. “We thinkTreasury needs to imple- with the Fed, are not united on when the US$1.2 trillion next year from US$3 tril-
ment cuts sooner rather than later — or it scaling down in issuance of so-called cou- lion this year, in the latest Congressional
risks being overfunded,” she said. pons — notes and bonds — will occur. Budget Office projections — is mainly a
reflection of the pandemic’s retreat.
The reduction in sales will likely — if Among those in the November camp: “Of course, these debt reductions aren’t
economists’ forecasts are right — come • Bank of America coming because we are getting anywhere
during a time when the Fed will be reduc- • Credit Suisse Group AG near having balanced budgets,” said John
ing its purchases of Treasuries. Fed chair • Deutsche Bank AG Briggs, global head of desk strategy at Nat-
Jerome Powell said last week that policy- • JPMorgan west Markets. “Our equilibrium end state
makers had begun discussing the timing • NatWest Markets — say, after August 2022 — will still have
and pace of future tapering.Analysts expect • Societe Generale the debt higher than before the pandemic,
them to start by early 2022. • Wells Fargo & Co. with the recognition that deficits are going
Goldman Sachs Group Inc and Mor- to be here for a long time.”
JPMorgan Chase & Co predicts total net gan Stanley see the February refunding
issuance of debt, including bills, at US$1.46 as a more likely starting point. But Bar-
trillion for 2022, down about US$860 bil- clays plc and RBC Capital Markets said

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NEW DELHI (Aug 2): India said it has no Tesla’s India sells every other car on Indian roads, glum
plans to cut import duties on electric vehi- plans dealt blow about the uptake of electric cars in the nation.
cles, weeks after Tesla Inc appealed to the as minister rules
government to slash taxes, and its billion- “Unfortunately the technology presently
aire chief Elon Musk floated the possibility out tax cut available leads to electric cars being pro-
of a local factory once it starts selling whol- duced at a cost much higher than the con-
ly-built units from overseas in the world’s by agini Saxena ventional cars,” Maruti’s Chairman R.C.
second-most populous nation. Bloomberg Bhargava said in the company’s annual re-
port Monday. “This, along with the lack of
“No such proposal is under considera- bloomberg charging infrastructure makes it very diffi-
tion in Ministry of Heavy Industries,” jun- cult to sell electric cars to people who can
ior minister Krishan Pal Gurjar told parlia- Tesla is seeking to make inroads into only afford small cars.”
ment on Monday, referring to the ministry Asia’s third-largest economy, where elec-
in charge of making policies for the auto tric vehicles account for less than 1% of The market penetration of electric vehi-
industry. He added that the government is annual car sales, compared with about 5% cles will be “very small” given that only 5%
however taking steps to promote the use of in China. The sparse charging infrastruc- of cars sold in India are priced above 1.5
electric cars by lowering domestic taxes and ture and expensive cost have deterred large million rupees (US$20,169), said Bharga-
adding charging stations. scale adoption of electric vehicles in India, va, who heads the local unit of Japan’s Su-
unlike China whereTesla set up its first fac- zuki Motor Corp. The per capita income
The reply to lawmakers may be perceived tory outside of the US and now dominates in India is only US$2,000 — 5% of that in
as part of the tug-of-war between Prime electric-car sales. Europe and Japan — which puts expensive
Minister Narendra Modi’s administration, electric cars beyond the reach of most con-
which wants to boost local manufacturing, Those deterrents have also turned Maruti sumers, he said.
and Tesla, which is urging India to allow it Suzuki India Ltd, the top local carmaker that
to import cars more cheaply, before it com- Such statistics have raised concerns that
mits to setting up a factory in the country. without progress in cleaning up poorer na-
Tesla last month wrote to the transport and tions’ roads, global warming won’t be kept
industry ministries requesting them to cut below dangerous levels, even as richer na-
import duty on electric cars to 40% from tions plan to phase out combustion-engine
the current range of 60%-100%, Bloomberg vehicles to combat climate change. Most
News had reported. EVs are sold in the US, China and Europe,
where state-backed purchasing incentives
A Tesla factory to produce cars in In- and investments in charging infrastructure
dia is “quite likely” if the electric auto- make it easier for customers to abandon
maker can first begin sales with imported combustion cars.
vehicles, Chief Executive Officer Musk
said in a subsequent tweet. Musk has for To achieve net-zero emissions, Maruti
years showed his eagerness to enter one will work on hybrid models, improve tech-
of the world’s most-promising automobile nology for cars running on compressed natu-
markets, but complained that Indian rules ral gas and look into biofuels, Bhargava said.
prohibit him from testing the waters first “The use of hydrogen is also an interesting
with imports, as high duties make Tesla alternative and should be considered spe-
cars “unaffordable.” cially to reduce dependence on importing
Lithium.”

FRANKFURT (Aug 2): Euro-area facto- European est level since at least 1985, according to
ries are hiring new workers at record pace factories hire a separate survey.
to keep up with persistently strong orders. workers at record
pace to fill orders The International Monetary Fund has
Job creation was particularly pro- raised its economic forecasts for the 19-na-
nounced in Germany and Austria last by Jana Randow tion region, predicting momentum in the
month, according to an IHS Markit survey Bloomberg bloc’s four largest economies will pick up
of purchasing managers. Manufacturers in the coming months.The European Cen-
continued to face substantial supply-chain bloomberg tral Bank is bracing for a “strong” increase
bottlenecks and passed on rising costs to in output in the current quarter, though it
customers. has also warned that resurgent infections
and supply constraints risk damping the
With economies around the world re- recovery.
covering from the coronavirus pandem-
ic, Europe’s factories are running at full “Manufacturers and their suppliers are
steam. Businesses in North Asia are also struggling to raise production fast enough
benefitting from rising global demand, to meet demand, driving prices ever high-
while a slump in activity in Southeast er,” said ChrisWilliamson, an IHS Markit
Asia — currently seeing one of the world’s economist. “Capacity constraint indicators
worst Covid-19 outbreaks — serves as a continue to flash red.”
reminder of how quickly the crisis can
flare up again. New orders jumped in July, fuelling a
considerable increase in backlogs of work.
Still, confidence in the outlook for the Widespread shortages of materials and
euro area is running high. A gauge measur- poor transport availability produced re-
ing economic sentiment rose to the high- cord gains in input costs and selling prices.

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(Aug 2): SPAC bosses are finding they Blank-cheque us Tsang, is among the new listing hope-
have to speed up their deal hunt if they IPOs show time fuls. It aims to raise US$80 million to buy
want to attract investors these days. is money with a company in the technology or e-com-
merce industry in Asia.
About half the blank-cheque compa- speedier deal
nies that filed for US listings since the chases Neo Technology Acquisition Corp
start of June are giving themselves an in- and Singularity Acquisition Corp, both
itial period of 18 months or less to find by Crystal Kim & Crystal Tse run by little-known China dealmakers,
an acquisition target, according to data Bloomberg will also have just a year to find a target.
compiled by SPAC Research.That’s a big Both can be extended multiple times,
change from earlier in the boom, when bloomberg each time by three months, if they can’t
more than 80% set their duration at a find a deal within the initial window and
standard 24 months. The shorter durations are helping their sponsors deposit more funds into a
these blank-cheque companies stand out trust account.
Stock buyers are getting more selec- among the more than 300 SPACs wait-
tive as the market for special purpose ing to sell shares in NewYork. A SPAC I Investor demands
acquisition companies cools, making it Acquisition Corp, led by former Franklin The duration of blank-cheque compa-
more difficult for lesser-known issuers to Templeton Investments executive Claudi- nies is going to be a topic that investors
raise capital. Hedge funds investing with will push back on, according to Jennifer
borrowed money are more willing to bet Deason, the chairman of Beyond Acqui-
on an unproven team if they can profit sition Corp.
quickly — or at least get their money
back soon if it doesn’t pan out. “It’s the market,” Deason, whose
blank-cheque firm started trading in
“Pricing IPOs is difficult with so many July, said in an interview. “There are a
in the market,” said Nicholas Skibo, a lot of SPACs out there, and the pendu-
managing partner at Gritstone Asset lum swings back and forth in terms of
Management, which invests in SPACs. supply and demand.”
“So you either have to be a world-class
sponsor or you have to provide an in- The shorter timespans mean these new
centive.” blank-cheque companies have deadlines
closer to those of SPACs that are already
Time crunch listed, said Steven Halperin, co-head of
Seasoned dealmakers from former Face- capital solutions at investment bank Mo-
book Inc executive Chamath Palihapitiya elis & Co.
to billionaire investor Paul Singer are still
taking their time with their latest SPACs, The benefit for serial dealmakers,
giving themselves two years to find a tar- though, is that they may not need too
get. Newcomers are promising to deliv- much time to seal a deal.
er a deal in half that time, with many of
the SPACs that unveiled listing plans last “For a repeat issuer, the sponsor will
week intending to merge with a private already have the experience and poten-
company within 12 months. tially a shortlist of targets required to
complete the SPAC lifecycle in a shorter
timeframe,” Halperin said.

SINGAPORE (Aug 2): Singapore’s Grab Grab loss Commission guidance.
Holdings Inc, set to go public in the US narrows on food Grab said the change will not affect
through a deal with a blank-cheque com- delivery ahead
pany, reported a narrower loss for the its historical balance sheet, cash flow,
first quarter as the pandemic boosted of US SPAC gross merchandise value (GMV), gross
demand for food delivery. merger billings, adjusted net sales, or adjusted
earnings before interest, taxes, depreci-
Net loss shrank to US$652 million by Yoolim Lee ation and amortisation.
in the quarter ended March 31 from Bloomberg
US$771 million a year earlier, South- The company also provided an update
east Asia’s most valuable start-up said quarter as it works on an audit of the on its post-merger board. Grab co-found-
in a statement on Monday. Adjusted net past three years. er Tan Hooi Ling and Rich Barton, chief
sales, a revenue measure that does not executive officer (CEO) of Zillow Group
comply with international accounting Quarterly revenue based on Interna- Inc and a director of Altimeter Growth,
standards, rose 39% to US$507 million. tional Financial Reporting Standards, will join as independent members on the
or IFRS, rose to US$216 million from six- person board.They will replace two
Grab reported its first-ever quarter- just US$1 million a year ago, after Grab outgoing members, who are represent-
ly financial results in a filing connect- changed its accounting methods to com- atives of shareholders SoftBank Group
ed to its planned merger with Altime- ply with US Securities and Exchange Corp and Toyota Motor Corp. Other in-
ter Growth Gorp, the special-purpose dependent directors include Uber Tech-
acquisition company (SPAC) of Brad nologies Inc CEO Dara Khosrowshahi,
Gerstner’s Altimeter Capital Manage- Ng Shin Ein, and Oliver Jay.
ment. Grab has postponed the US$40 Click here to read the full story
billion deal — one of the largest-ever
mergers with a SPAC — to the fourth

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SAN FRANCISCO (Aug 2): Square Inc, Square to buy The deal should also help boost Cash
the digital-payments platform led byTwit- Afterpay for App’s total user base by adding Afterpay’s
ter Inc founder Jack Dorsey, agreed to buy US$29 bil to tap 16 million users to Cash App’s existing user
Australian buy-now, pay-later company younger users base of 70 million annual users, Ahuja said.
Afterpay Ltd for US$29 billion in its larg-
est-ever acquisition. by Kurt Wagner, Angus Whitley Larger competitors have pushed into
& Peter Elstrom the market recently, adding to the challeng-
The all-stock offer values Afterpay Bloomberg es for Afterpay and its peers. Apple Inc is
shares at A$126.21 each, 31% higher teaming up with Goldman Sachs Group
than Friday’s closing price of A$96.66, Bloomberg Inc on a buy now, pay later service that
the companies said in a statement. Still, would be tied with Apple Pay, Bloomberg
that’s less than Afterpay’s February high of stallments. It’s particularly popular with News reported in July. Afterpay shares fell
A$158.47.The stock jumped as much as younger consumers — who may not have a 10% the day following the report.
29% to A$125 in Sydney trading Monday. credit card — to buy clothes, beauty prod-
ucts and homewares.There are no fees or Afterpay shareholders may reject the
Square said the buy-now, pay-later con- interest on the loan as long as people pay proposed Square offer, Bloomberg Intel-
cept represents a chance to capitalize on a on time, according to Afterpay’s website. ligence analysts Matt Ingram and Regan
shift away from traditional credit, especially Burrows wrote.They pointed out the offer
among younger consumers.The plan is for is below the stock’s peak earlier this year
Square to integrate Afterpay into both its and its growth is much faster than the US
consumer Cash App, and its Seller prod- company.
uct for small businesses, Chief Financial
Officer Amrita Ahuja said in an interview. Under the proposed agreement, After-
pay co-founders and co-CEOs Anthony
“It’s very different from the tradition- Eisen and Nick Molnar would join Square
al consumer-financing business model,” and help lead Afterpay’s merchant and
Ahuja said, describing “buy now, pay lat- consumer businesses as part of Square’s
er” as an “alternative” to traditional credit. Seller and Cash App division.
“Since our founding days we have seen it as
a key priority for our customers, whether The acquisition would be easily the big-
merchants or consumers, to get fast access gest deal for an Australian company, eclips-
to funds,” she added, but declined to say ing the US$16.6 billion a group of pension
whether Square would offer other tradi- funds last month bid for Sydney Airport,
tional finance options, like a credit card. only to have the offer rejected as too low.
Click here to read the full story
Afterpay lets consumers purchase items
on credit and pay later with a series of in-

LONDON (Aug 2): Parker-Hannifin UK’s Meggitt the best owner,”Williams said in an inter-
Corp, the US maker of industrial mo- soars on US$8.8b view. “This is a company we’ve liked for
tion-control systems, agreed to buy Meg- a long time.”
gitt Plc for £6.3 billion (US$8.8 billion) in buyout by
cash to strengthen its hand in a rebounding Parker-Hannifin The deal is so big it will rule out fur-
aerospace industry. ther M&A by Parker-Hannifin for the
BY Charlotte Ryan next three years, Williams said, as the
Shares of Meggitt surged the most on Bloomberg company focuses on investment, divi-
record after the 170-year-old company dends and paying down debt to get lev-
said its board would recommend the 800 Bloomberg erage ratios down.
pence-per-share offer, 71% above Friday’s
closing price. The massive premium will coming out of its biggest slump in history, The deal is the latest example of US
make it harder for a rival to jump in and as demand for aircraft returns. buyers eyeing UK aerospace. Cobham
snatch the Coventry, England-based target, Ltd, the UK defence contractor that was
after a string of buyouts of UK aerospace “We wanted a price that would be very acquired by US private equity firm Ad-
and defence firms by US suitors. compelling, that would gain shareholder vent International Corp in early 2020, last
support and would be very clear that we’re month made a £2.6 billion buyout ap-
The deal would be the biggest ever for proach for Ultra Electronics Holding Plc.
Parker-Hannifin, which has accelerated its
buyout activity under Chairman and Chief Senior Plc, a UK supplier of aerospace
Executive OfficerTomWilliams.The com- parts to Boeing Co and Airbus SE, reject-
pany, which supplies a variety of industries, ed a buyout offer from Texas-based Lone
was on a tear before the coronavirus pan- Star Funds last month.
demic, with the US$4.3 billion purchase of
filtration-products manufacturer Clarcor Parker-Hannifin said it would offer
in 2017, and materials-science specialist commitments to the UK, including a
Lord Corp for US$3.7 billion in 2019. pledge to continue supplying the govern-
ment, and maintain existing technology
Adding Meggitt will nearly double the and manufacturing in the country. A ma-
size of Parker’s aerospace systems unit, it jority of Meggitt’s board will continue to
said in a statement. That would position be British, it said.
the Cleveland-based company to better Click here to read the full story
compete in an aviation sector that’s just

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Keppel Corp makes S$2.2 bil offer
to acquire SPH’s non-media portfolio;

SPH valued at S$3.4 bil

SINGAPORE (Aug 2): Keppel Corpora- by Felicia Tan In a separate statement, SPH reasoned
tion has proposed to acquire the non-me- theedgesingapore.com that the privatisation of the entire company
dia portfolio of Singapore Press Holdings is the “preferred solution” in which share-
(SPH) for S$2.2 billion on Aug 2. S$1.729 per share in SPH. holders receive a better valuation outcome
Shareholders will also receive any fi- where the control premium is paid for the
This includes SPH’s businesses and entire company.
assets such as its purpose-built student nal dividend declared by the board for the
accommodation (PBSA) and senior liv- FY2021. The move also maximises value and
ing businesses, stakes in SPH REIT and minimises disruption for its sharehold-
its REIT manager, as well as its other de- According to Keppel, the acquisition ers, SPH adds.
velopment assets. will boost its Vision 2030 plans, where
it seeks to move beyond “a developer The proposed transaction is expected to
The move, which comes after the group model to providing urban development be completed by December and is subject
proposed to spin off its media business into solutions”. to the approvals of Keppel’s and SPH’s
a not-for-profit entity on May 6, values shareholders at their respective extraor-
SPH’s non-media business at S$3.4 billion. The group adds that SPH possesses a dinary general meetings (EGMs).
“quality portfolio of businesses and assets
Keppel Corporation, through its whol- which are strongly aligned with Keppel’s Upon the completion of the scheme,
ly-owned subsidiary, Keppel Pegasus, will business”.The acquisition will also com- SPH will be delisted. It will then become
acquire all the issued and paid-up ordinary plement and strengthen three out of four a wholly-owned subsidiary of Keppel.
shares in the capital of SPH via a scheme focus areas for Keppel, which are Urban
of arrangement. Development, Connectivity and Asset Keppel will hold a remaining 20% stake
Management. each in both SPH REIT and Keppel REIT.
Under the terms of the scheme, share-
holders will receive a total of S$2.099 per The proposed acquisition would also “The proposed acquisition of SPH is
share, which comprises 66.8 cents in cash, allow Keppel to consolidate its existing very much in line with Keppel’s Vision
0.596 issued units in Keppel REIT valued ownership of M1 and the jointly-owned 2030, where we seek to grow Keppel’s
at 71.5 cents and 0.782 units in SPH REIT Genting Lane data centre. business as a provider of solutions for
valued at 71.6 cents from a distribution sustainable urbanisation through organ-
in-specie by SPH. Furthermore, the addition of SPH RE- ic and inorganic options. This is a rare
IT’s assets under management (AUM) will opportunity to acquire SPH’s non-me-
The consideration represents a 16.2% potentially grow Keppel Capital’s pro for- dia portfolio, which fits very well with
premium over the one-month volume ma AUM by about 27% to S$47 billion Keppel’s business and growth strategy,”
weighted average price (VWAP) of SPH’s from S$37 billion as at end-2020. says Loh Chin Hua, CEO of Keppel
shares as at July 30. It also represents a Corporation.
11.6% premium to the last traded price Had the scheme been effective Jan Click here to read the full story
of $1.88 per share on July 30 and a 21.4% 1, Keppel’s earnings per share (EPS)
premium to the three-month VWAP of would have increased from 16.5 cents
to 17.5 cents.

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Oil Search, Santos Heineken sees Bloomberg
to merge into ‘material’
commodity was grappling with the toughest inflation
US$16 billion LNG since the 2008 financial crisis.
powerhouse costs crimping
earnings Heineken shares, which had gained
Bloomberg 7.7% this year before today, were little
by Thomas Buckley changed in Amsterdam on Monday.
by James Thornhill Bloomberg
Bloomberg Heineken said it would also sell less
LONDON (Aug 2): Heineken NV, the beer in 2021 than in years before the pan-
SYDNEY (Aug 2): Australia’s second- and world’s second-largest brewer, joined rival demic due to the impact of Covid-19 in
third-biggest oil and gas companies are set Anheuser-Busch InBev NV and scores of key African and Asian markets, even as
to merge to become one of the largest in the other consumer goods companies from half-year earnings beat estimates as bars
region and in the top 20 globally. Nestle SA to Unilever plc in warning that reopened across the world.The subdued
soaring commodity costs will depress earn- performance of its Asia division amid lock-
Oil Search Ltd on Monday said it agreed ings in the near term. downs in Southeast Asian markets was a
to an improved all-share offer from Santos “surprise”, the CEO said by phone.
Ltd that would give its equity holders 0.6275 Although the maker of Heineken lager
new Santos share for each one held, giving has annual hedging contracts in place that Restrictions in South Africa also hurt
them about 38.5% of the merged group. cover about 90% of its exposure to com- performance, he said.
The combined entity would have a market modity inflation, the price of aluminium
capitalisation of about US$16 billion, vying and freight is rising at such a pace that the Still, the company delivered strong rev-
withWoodside Petroleum Ltd to be Austral- beermaker sees a “material effect” on prof- enue and volume numbers as restrictions
ia’s biggest independent liquefied natural it next year, chief financial officer Harold eased in the first half of the year.
gas (LNG) producer. van den Broek said by phone. Heineken
will seek to offset some of the impact by Growth was led in the half-year period
The move follows a wave of tie-ups raising prices, he said. by Heineken’s namesake lager, with ship-
among exploration and production com- ments of the brand rising by about a fifth
panies in the US shale patch, as smaller pro- The company is experiencing inflation- on demand from countries such as Brazil,
ducers seek to cut costs while majors look to ary pressures not seen at any time in the China,Vietnam, and Nigeria. Heineken’s
exit carbon-intensive operations. It may not past decade, chief executive officer (CEO) operating profit on an organic basis rose to
be the last deal in Australia this year, with Dolf van den Brink said in an interview €1.63 billion (US$1.93 billion). Analysts
Woodside said to be eyeing BHP Group’s with Bloomberg TV, echoing recent com- expected €1.23 billion.
petroleum business in the nation, accord- ments from Unilever that the maker of
ing toWood Mackenzie Research Director Dove soap and Ben & Jerry’s ice cream Budweiser maker AB InBev reported
Andrew Harwood. results last week that missed estimates be-
cause of currency-related effects and higher
“We’ve been expecting to see more consol- commodity and marketing costs.
idation among international E&Ps, following
the lead of the US independents that have Unacademy value Co., according to a statement from the
sought strength and resilience in scale,” he tops US$3.4b company Monday.
said in a statement.“The Santos-Oil Search inTemasek-led
merger follows the consolidation template, funding round The coronavirus pandemic has boost-
bringing together two firms with overlapping ed the popularity of online education as
interests, building scale in a strategic resource by Saritha Rai students and professionals seek to up-
theme, LNG in this case, and on terms that Bloomberg grade their skills, while schools and offic-
provide additional value upside potential for es have shuttered. Indian digital educa-
both sets of shareholders.” (Aug 2): India’s online education tion peer Byju’s has become the country’s
startup Unacademy said its valuation most valuable startup and is expanding
Monday’s announcement comes less reached US$3.44 billion in a funding aggressively through acquisitions.
than two weeks after Oil Search rejected round led by Temasek Holdings Pte, a
an earlier proposal that offered 0.589 share nearly 10-fold increase in the past year Unacademy was founded by Gau-
in Santos. and a half as the coronavirus boosts de- rav Munjal, Hemesh Singh and Ro-
Click here to read the full story mand for remote learning. man Saini in 2015. It specializes in test
preparation for a wide array of competi-
The startup raised US$440 million in tive fields including India’s civil service,
a Series H round, with General Atlantic, banking and programming through a
Tiger Global Management, SoftBank roster of celebrity teachers. It has more
Vision Fund and Mirae Asset Securities than 50,000 educators and 62 million
users and offers courses in 14 Indian
languages.

The Bangalore-based company also
got funding from entrepreneurs Ritesh
Agarwal of Oyo Hotels and Homes Pvt
and Deepinder Goyal of Zomato Ltd.

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Pfizer, Moderna reuters
raise Covid-19
vaccine prices
in EU — report

by Sabahatjahan Contractor
Reuters

BENGALURU (Aug 1): Pfizer Inc and curement deal but lower than the previous- adult population by the end of the summer.
Moderna Inc have raised the prices of their ly agreed US$28.50 because the order had In May, the EU said it expected to have
Covid-19 vaccines in their latest European grown, the report said, citing one official
Union supply contracts, the FinancialTimes close to the matter. received more than a billion doses of vac-
reported on Sunday. cines by the end of September from four
The European Commission said onTues- drug makers.
The new price for the Pfizer shot was day that the EU was on course to hit a tar-
€19.50 (US$23.15) against €15.50 previ- get of fully vaccinating at least 70% of the Pfizer and Moderna were not immediate-
ously, the newspaper said, citing portions ly available for comment to Reuters.
of the contracts seen.

The price of a Moderna vaccine was
US$25.50 a dose, the contracts show, up
from about €19 (US$22.60) in the first pro-

COPENHAGEN/LONDON (Aug 2): Eu- Fund managers’ Some asset managers are already fac-
ropean fund managers are gradually having ESG claims face ing scrutiny as questions are raised over
to acknowledge that claims of sustainability credibility test as their ESG classifications. The Wall Street
across their portfolios may be inflated, as Journal reported Sunday that DWS Group
new regulations force the industry to take gaps found GmbH, the fund management firm con-
a more measured approach. trolled by Deutsche Bank AG, has at times
by Tasneem Hanfi Brögger overstated the ESG content of its portfoli-
“It’s clear that the Sustainable Finance & Alastair Marsh os, citing its former sustainability chief and
Disclosure Regulation is starting to work its Bloomberg internal emails. Desiree Fixler, who start-
purpose of aligning ESG definitions across ed in DWS’s newly created role of group
the industry,” said Mandeep Jagpal, an eq- reuters sustainability officer in September 2020,
uity analyst at RBC Capital Markets in was dismissed earlier this year.
London. “Asset managers are now rethink- 2025, which would be well over a third of
ing what can and should be classified as an the global total in assets under manage- In a statement to the newspaper, DWS
‘environmental, social or governance in- ment, according to Bloomberg Intelligence. said it’s always been transparent and stands
vestment,’ although there may still be some by the annual report, audited by KPMG.
variation in interpreting the new rules.” The expectation is that the rollback of A representative confirmed the comments
ESG labelling will continue across the asset when contacted by Bloomberg News.
Europe’s asset management industry al- management industry, Jagpal said. “I think
ready had to remove the ESG label from an the gap will continue to close for the next The second-quarter reports of some of
estimated US$2 trillion in assets between 12 months or so, as asset managers make Europe’s biggest publicly traded asset man-
2018 and 2020, as tougher regulations were progress on the more onerous disclosure agers have revealed a difference between
gradually put in place. Europe’s Sustainable requirements under SFDR, but it’s hard to ESG-labeled products and what can be
Finance Disclosure Regulation, which took say whether it will close all the way,” he said. defined as ESG under SFDR.
effect in March, requires asset managers to
document claims of sustainability in their Amundi SA’s results show the manager
portfolios, as policy makers in the region had total ESG assets under management of
set the world’s most ambitious agenda to €798 billion (US$948 billion), though only
drive capital away from carbon emitters. €680 billion of that was defined under the
SFDR framework. At DWS, the gap was
A poll conducted last year by Schroders even wider, with €459 billion carrying an
Plc revealed that 60% of 650 institutional ESG label at the end of last year, though
investors said “greenwashing,” where the only €87 billion qualified under the SFDR
environmental benefits of an investment framework as recently as June 30.
strategy are exaggerated or misrepresented,
was the biggest thing standing in the way For now, investors appear to be unde-
of their sustainability goals. terred by the reporting gap. “It seem DWS
was still able to generate excellent flows
Meanwhile, demand for ESG assets over the year so far,” RBC’s Jagpal said.
seems insatiable, providing a lucrative “Including €8 billion into ESG funds, of
source of business for fund managers.The which half were in the second quarter, after
market is set to exceed US$50 trillion by SFDR was implemented.”

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NAME VOLUME CHANGE CLOSE YTD MARKET
(MIL) (RM) CHANGE CAP
(%) (RM MIL)

RESINTECH BHD 113.4 0.140 0.735 129.69 100.8

GREENYIELD BHD 90.2 0.08 0.38 100 126.8

SERBA DINAMIK HOLDINGS BHD 89.1 -0.015 0.380 -78.41 1409.7

SAUDEE GROUP BHD 80.3 -0.015 0.120 -71.22 85.9

PUC BHD 78.3 0.010 0.190 18.75 237.5

SERSOL BHD 60.3 -0.050 0.500 156.41 107.7

DAGANG NEXCHANGE BHD 54.5 -0.005 0.715 217.78 2128.3

ADVANCE SYNERGY BHD 54.0 0.000 0.165 10.00 153.3

M3 TECHNOLOGIES ASIA BHD 44 -0.01 0.055 -15.38 49.1 World equity indices

DATASONIC GROUP BHD 38.9 0.015 0.475 -9.52 1368.9

TANCO HOLDINGS BHD 36.8 -0.005 0.205 310 320.1 CLOSE CHANGE CHANGE CLOSE CHANGE CHANGE

YBS INTERNATIONAL BHD 35.5 0.05 0.465 151.35 114.6 (%) (%)
DOW JONES 34,935.47 -149.06 -0.42 INDONESIA 6,096.54 26.50 0.44
SALUTICA BHD 35.3 0.000 0.600 42.86 231.0

FOCUS DYNAMICS GROUP BHD 34.8 0 0.04 -93.85 254.9 S&P 500 4,395.26 -23.89 -0.54 JAPAN 27,781.02 497.43 1.82

GLOBALTEC FORMATION BHD 34.3 0.05 0.73 75.9 196.4 NASDAQ 100 14,959.90 -88.46 -0.59 KOREA 3,223.04 20.72 0.65

MAG HOLDINGS BHD 33.1 -0.01 0.18 -10 250.8 FTSE 100 7,079.86 47.56 0.68 PHILIPPINES 6,446.31 176.08 2.81

GOLDEN PHAROS BHD 30.7 0.095 0.525 114.29 72.9 AUSTRALIA 7,491.45 98.83 1.34 SINGAPORE 3,161.22 -5.72 -0.18

BUMI ARMADA BHD 29.5 -0.015 0.41 17.14 2421.9 CHINA 3,464.29 66.93 1.97 TAIWAN 17,503.28 255.87 1.48

CABNET HOLDINGS BHD 27.5 0.03 0.375 44.23 67 HONG KONG 26,235.80 274.77 1.06 THAILAND 1,525.11 3.19 0.21

LYC HEALTHCARE BHD 26.8 0.045 0.345 4.55 148.9 INDIA 52,950.63 363.79 0.69 VIETNAM 1,314.22 4.17 0.32

Data as compiled on Aug 2, 2021 Source: Bloomberg Data as compiled on Aug 2, 2021 Source: Bloomberg

Top gainers (ranked by %) Top losers (ranked by %)

NAME CLOSE CHANGE VOLUME YTD MARKET NAME CLOSE CHANGE VOLUME YTD MARKET
(%) (‘000) CHANGE CAP (%) (‘000) CHANGE CAP
(%) (RM MIL) (%) (RM MIL)

GREENYIELD BHD 0.380 26.670 90232.7 100.00 126.8 KEY ALLIANCE GROUP BHD 0.025 -28.57 25338.2 -50.00 58.9

RESINTECH BHD 0.735 23.53 113359.5 129.69 100.8 COMPUGATES HOLDINGS BHD 0.015 -25.00 1030.0 -25.00 46.0

GOLDEN PHAROS BHD 0.525 22.090 30715.5 114.29 72.9 NEXGRAM HOLDINGS BHD 0.020 -20.00 3406.0 -55.56 73.5

CHUAN HUAT RESOURCES BHD 0.650 17.120 8017.8 49.43 109.6 M3 TECHNOLOGIES ASIA BHD 0.055 -15.38 44006.4 -15.38 49.1

LYC HEALTHCARE BHD 0.345 15.000 26778.6 4.55 148.9 LIEN HOE CORP BHD 0.320 -14.67 222.5 23.08 106.4

HARN LEN CORP BHD 0.935 14.720 12930.1 28.08 166.0 MNC WIRELESS BHD 0.030 -14.29 1929.3 -33.33 52.8

KOBAY TECHNOLOGY BHD 4.000 13.960 10402.8 402.09 1201.1 GREEN OCEAN CORP BHD 0.030 -14.29 6108.9 -66.67 52.8

IDIMENSION CONSOLIDATED BHD 0.085 13.330 5962.9 6.25 23.1 JOHAN HOLDINGS BHD 0.095 -13.64 17592.2 -50.00 111.0

YBS INTERNATIONAL BHD 0.465 12.050 35461.4 151.35 114.6 JOE HOLDING BHD 0.035 -12.50 309.0 -68.18 107.1

YLI HOLDING BHD 0.420 12.000 3226.5 -6.67 43.2 XOX BHD 0.035 -12.5 5030.5 -68.18 141.3

VISDYNAMICS HOLDINGS BHD 1.040 11.230 11315.3 37.75 181.4 SCOMI GROUP BHD 0.035 -12.50 1374.4 16.67 33.6

TOP BUILDERS CAPITAL BHD 0.05 11.11 2237.3 -56.52 33.4 QUALITY CONCRETE HOLDINGS 1.330 -11.33 838.8 33.00 77.1

CHINA OUHUA WINERY HOLDINGS 0.050 11.110 3629.8 -16.67 33.4 MLABS SYSTEMS BHD 0.040 -11.11 16711.1 -50.00 48.3

CLASSIC SCENIC BHD 0.790 10.490 550.0 74.59 190.4 SAUDEE GROUP BHD 0.120 -11.11 80261.8 -71.22 85.9

ATA IMS BHD 2.700 9.310 5809.0 13.45 3247.7 DGB ASIA BHD 0.045 -10.00 5646.9 -80.00 60.8

YGL CONVERGENCE BHD 0.300 9.090 18151.0 93.55 76.7 BRAHIM’S HOLDINGS BHD 0.190 -9.52 1.0 -42.42 58.4

EMICO HOLDINGS BHD 0.305 8.930 1477.9 7.02 35.1 SERSOL BHD 0.5 -9.09 60336.9 156.41 107.7

CABNET HOLDINGS BHD 0.375 8.700 27474.7 44.23 67.0 ARTRONIQ BHD 0.355 -7.79 9145.2 -29.70 102.6

EUROSPAN HOLDINGS BHD 1.29 8.4 1733.8 113.22 57.3 KEJURUTERAAN ASASTERA BHD 0.66 -7.69 17024.7 13.14 1116.6

HEXTAR GLOBAL BHD 1.3 8.33 9749.6 131.11 1707 BERTAM ALLIANCE BHD 0.12 -7.69 231.3 -7.69 29.8

Data as compiled on Aug 2, 2021 Source: Bloomberg Data as compiled on Aug 2, 2021 Source: Bloomberg

Top gainers (ranked by RM) Top losers (ranked by RM)

NAME CLOSE CHANGE VOLUME YTD MARKET NAME CLOSE CHANGE VOLUME YTD MARKET
(RM) (‘000) CHANGE CAP (RM) (‘000) CHANGE CAP
(%) (RM MIL) (%) (RM MIL)

MALAYSIAN PACIFIC INDUSTRIES 45.56 1.06 286.3 75.5 9061.7 HONG LEONG FINANCIAL GROUP 17.020 -0.220 144.9 -5.76 19492.1

KESM INDUSTRIES BHD 13.98 0.82 176.3 2.95 601.3 HENGYUAN REFINING CO BHD 4.110 -0.210 721.9 -31.39 1233.0

VITROX CORP BHD 19.62 0.72 989.5 33.47 9264.8 QUALITY CONCRETE HOLDINGS 1.33 -0.17 838.8 33 77.1

KOBAY TECHNOLOGY BHD 4 0.49 10402.8 402.09 1201.1 KOSSAN RUBBER INDUSTRIES 3.330 -0.130 4669.1 -24.38 8496.9

CHIN TECK PLANTATIONS BHD 6.93 0.33 14.8 3.57 633.1 TOYO VENTURES HOLDINGS BHD 2.020 -0.130 50.5 19.53 216.1

NESTLE MALAYSIA BHD 133.3 0.3 13.4 -4.03 31258.9 SAM ENGINEERING & EQUIPMENT 10.680 -0.120 2239.2 44.91 1445.5

PANASONIC MANUFACTURING 32.5 0.28 5.4 5.52 1974.2 TRANSOCEAN HOLDINGS BHD 3.86 -0.11 103.7 388.61 174.1

UNISEM M BHD 8.6 0.25 3470.4 39.16 6936.2 OM HOLDINGS BHD 2.530 -0.100 148.1 0.00 1868.7

PETRONAS GAS BHD 15.48 0.24 598.6 -9.61 30630.8 SIME DARBY PLANTATION BHD 3.300 -0.100 5640.7 -33.56 22821.9

PENTAMASTER CORP BHD 5.54 0.24 5850.4 9.7 3946.2 RIVERVIEW RUBBER ESTATES BHD 3.000 -0.100 3.6 -1.04 194.6

CARLSBERG BREWERY MALAYSIA 21.46 0.24 46.6 -7.66 6561.4 MALAYSIA SMELTING CORP BHD 2.020 -0.080 564.7 41.26 848.4

UWC BHD 5.97 0.23 6070.2 21.84 6570.8 LPI CAPITAL BHD 13.760 -0.080 61.1 0.29 5481.7

ATA IMS BHD 2.7 0.23 5809 13.45 3247.7 KEIN HING INTERNATIONAL BHD 1.090 -0.080 3349.4 52.45 118.7

GREATECH TECHNOLOGY BHD 6.63 0.21 3820.4 45.71 8300.8 LOTTE CHEMICAL TITAN HOLDING 2.540 -0.080 3825.7 -8.30 5785.0

MI TECHNOVATION BHD 4.1 0.21 8610.8 4.06 3363 DUOPHARMA BIOTECH BHD 2.780 -0.080 835.6 -17.75 1963.6

PETRONAS DAGANGAN BHD 18.6 0.2 159.9 -13.08 18478.2 DUTCH LADY MILK INDUSTRIES BHD 33.020 -0.080 4.4 -11.95 2113.3

INARI AMERTRON BHD 3.5 0.17 20286 27.52 12879.9 MULPHA INTERNATIONAL BHD 2.010 -0.080 91.4 50.00 634.4

WESTPORTS HOLDINGS BHD 4.22 0.16 1779.2 -1.86 14390.2 MISC BHD 6.630 -0.070 1710.4 -3.49 29594.6

D&O GREEN TECHNOLOGIES BHD 5.45 0.15 3321.5 139.04 6459.4 PERUSAHAAN SADUR TIMAH M’SIA 3.780 -0.070 34.0 -3.08 488.0

RESINTECH BHD 0.735 0.14 113359.5 129.69 100.8 MALAYSIA AIRPORTS HOLDINGS 5.71 -0.070 784.7 -3.55 9474

Data as compiled on Aug 2, 2021 Source: Bloomberg Data as compiled on Aug 2, 2021 Source: Bloomberg