Koleksi The Edge 18 November 2022

DUTCH COURT SENTENCES THREE TO LIFE IN PRISON
FOR 2014 DOWNING OF MH17 p14

FRIDAY, NOVEMBER 18, 2022 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 479/2022

CEOMorningBrief
HOME: Fitch Solutions projects BN to win GE15, revive GST p2
Malaysian firms to see moderate 3Q earnings amid unabated economic headwinds p6
MISC 3Q net profit more than doubles to RM821m, declares seven sen dividend p8

WORLD: Fund titans are buying China stocks on bets worst is now over p15
Alibaba posts surprise loss as China Covid curbs take a toll p16

SHAHRILL BASRI/ THEEDGE

DNeX’s one-third Malaysia
market value wiped posts
off on dispute with slowest
export
Chinese partner
over SilTerra growth in
15 months
Report on Page 3. in October
amid soft

global
demand

Report on Page 4.

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Fitch Solutions projects BN
to win GE15, revive GST

KUALA LUMPUR (Nov 17): Fitch Solu- by surin murugiah pragmatically and continue its policy of
tions Country Risk and Industry Research theedgemarkets.com openness to foreign investments.
has projected Barisan Nasional (BN) to
win the 15th general election (GE15). Policy implications “Our country risk team also believes
The firm said a new BN term would lead to a that the BN coalition may bring back the
In a note on Wednesday (Nov 16), the greater level of state intervention in the econ- GST tax which bodes well for Malaysia’s
firm said this outcome will predominant- omy, an expansion of racial affirmative action medium-term fiscal outlook,” it said.
ly impact the consumer and retail sector policies and a re-introduction of the goods
through income-boosting policies and the and services tax (GST) that was abolished by Consumer and retail sector
lowering of certain taxes, freeing up and in- the then-PH government back in June 2018. Fitch Solutions said a BN victory will lead
creasing disposable incomes for households, to the consumer and retail sector being im-
especially those towards the lower end of the It said BN has been a champion of af- pacted through the income-boosting poli-
income distribution (annual disposable in- firmative action policies, and should they cies that BN has promised to implement.
comes of less than US$10,000 [RM45,470]). return to power, these affirmative action
regimes could be expanded again. It said this would provide support
It said a victory by the other two politi- for the continued expansion of the mid-
cal coalitions Pakatan Harapan (PH) and It said these policies previously entailed dle-class and higher consumption growths.
Perikatan Nasional (PN) will likely have a preferential access for Bumiputeras to tertiary
similar impact for the sector, largely because education, entry to professional and manageri- “We expect policy continuity to extend
of increased social support for households, al positions and ownership of equity and assets. to Malaysia’s long-standing efforts to alle-
but specific policies that are exclusive to the viate poverty and achieve the ‘high-income
two coalitions have a low chance of imple- “Nevertheless, we expect the BN co- nation’ status first set out in the Wawasan
mentation due to their slimmer odds at vic- alition government to govern relatively 2020 (Vision 2020) goal.
tory in the November polls.
“BN has set out a programme with a
Fitch Solutions said with all coalitions few key pillars in order to achieve this goal.
committing to a general trend of social pay-
ments programmes, all outcomes will have “The programme is made up of several
a similar impact on the consumer and retail benefits, ranging from a guarantee national
sector in the short term, largely being felt monthly income to tax relief to both con-
through increased spending on essential cate- sumers as well as companies to boost em-
gories, with food and non-alcoholic drinks as ployment and production,” it said.
well as clothing and footwear most impacted.
The firm said Malaysia has seen strong
growth in household incomes over the two
decades of which BN was the ruling gov-
ernment for the majority of the period.

It said household disposable in-
comes in 2023 are forecasted to average
RM111,600, more than three times that
of 2002’s RM36,100.

“Average household disposable incomes
are forecast to grow strongly over the me-
dium term (2023-2026), at an annual av-
erage of 5.5% to RM128,200 in 2026.

“The proportion of total households in
this disposable income bracket in Malay-
sia is also forecast to grow over the next
five years, increasing its dominant position
in the consumer base over the medium
term,” it said.

Read also: EC issues voting guidelines

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DNeX’s one-third market
value wiped off on dispute with
Chinese partner over SilTerra

KUALA LUMPUR (Nov 17): Shares of by Shazni Ong the terms and conditions of the sharehold-
Dagang NeXchange Bhd (DNeX) hit limit theedgemarkets.com ers’ agreement and subscription agreement
down onThursday (Nov 17), after its 60% which provide for MIMAS becoming a
investment in SilTerra Malaysia Sdn Bhd Dagang NeXchange Bhd shareholder upon issuance of the ICPS
is stuck in limbo. and not their conversion. If so, this puts
Vol (mil) RM the [manufacturing] licence, and thus the
Its share price fell as much 30 sen or 35 1.4 operations of SilTerra, at risk.”
nearly 40% in the afternoon trading ses-
sion, before closing at 50.5 sen, down 25 30 1.2 DNeX and DNeX Semi will seek the
sen or 33.11%, slashing its market value 25 necessary relief to have the shareholders
to RM1.59 billion.The last time it fell be- agreement and subscription agreement
low 50 sen was on Feb 11, 2021, when it 20 1.0 declared null and void.
traded at 43 sen.
15 0.8 Nonetheless, it said it does not ex-
With 300.33 million shares trans- pect any material financial impact from
acted amid the heavy selling pressure, 10 76 sen 0.6 the commencement of the arbitration
DNeX topped the most-active list on 5 50.5 sen proceeding, other than legal cost to be
Bursa Malaysia. incurred.
0 0.4
In a bourse filing on Thursday, DNeX Oct 26, 2021 Nov 17, 2022 “SilTerra remains a 60%-owned sub-
said its wholly-owned subsidiary DNeX sidiary of DNeX Semi, which in turn is
Semiconductor Sdn Bhd (DNeX Semi) Source: Bloomberg a subsidiary of the company. No material
had issued and served a notice of arbitra- operational impact is expected [to] arise
tion to commence arbitration proceedings amounting to RM100 million, to be is- from the arbitration,” it added.
against MimastronicsTechnologies Co Ltd sued to and subscribed by MIMAS.This
(MIMAS). would result in MIMAS holding a 33% Arcadia Acres Sdn Bhd is the largest
stake in DNeX Semi. shareholder of DNeX with a 11.37% stake,
MIMAS is wholly owned byTethystron- followed by Taiwan’s Hon Hai Precision
icsTechnologies Co Ltd (TTCL), a special The point of contention is whether prior Industry Co Ltd (known globally as Fox-
purpose vehicle ultimately owned by Bei- approval is needed from the Ministry of conn Technology Group), which saw its
jing Integrated Circuit Advanced Manufac- International Trade and Industry (MITI) stake pared down to 3.8% due to the di-
turing and High-End Equipment Equity for the proposed investment. lution effect from the conversion and ex-
Investment Fund Center (CGP), which ercise of warrants in DNeX.
also holds 40% equity interest in SilTerra. MIMAS is of the view that such approv-
al was not required and maintains that the Hon Hai, the main assembler of Apple
DNeX owns the remaining 60% of Sil- shareholders agreement and subscription Inc’s iPhones, first emerged as a substan-
Terra. In March 2021, Khazanah Nasion- agreement, both dated Jan 21, 2022, are tial shareholder of DNeX in June 2021,
al Bhd sold then loss-making SilTerra to valid and enforceable. after acquiring a 5.03% stake.
DNeX and the China-based equity fund
for RM273 million cash. However, DNeX disagrees. It was reported that Hon Hai’s ultimate
“Vide MITI’s letter dated Feb 28, 2022, target is to have a direct stake in SilTerra.
DNeX and CGP Fund have committed DNeX and CGP learned that prior ap-
to a capital injection of at least RM200 mil- proval from MITI was required in relation The semiconductor boom has made Sil-
lion by way of subscribing for new shares to the proposed investment,” said DNeX Terra — though mainly producing low-end
to be issued by SilTerra. Based on DNeX’s in the filing. chips — a sought-after asset in the indus-
60% stake, the capital injection by DNeX “DNeX and DNeX Semi consider such try, more so after the outbreak of the global
will amount to about RM120 million. approval as necessary, more so in light of chip crunch, partly attributed to the tech
war between the US and China.
Both parties sought to opt for the is-
suance of irredeemable convertible pref- It’s interesting to see if the dispute will
erence shares (ICPS) in DNeX Semi, lead to the emergence of a new share-
holder in SilTerra.

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reuters

Malaysia posts slowest export growth
in 15 months in October amid
soft global demand

KUALA LUMPUR (Nov 17): Malay- by sufi muhamad was also reflected in the second month of
sia’s October exports expanded at the theedgemarkets.com growth slowdown in Malaysia’s imports
slowest rate in 15 months, growing 15% of intermediate goods since September.”
year-on-year (y-o-y) to RM131.6 billion, Meanwhile, the rise in imports was at-
driven by increases in domestic exports tributed to increased imported crude pe- With that, it maintained its cautious
and re-exports. troleum by RM6.8 billion, followed by stance on Malaysia’s exports, expecting a
E&E products (RM5.6 billion), petroleum marginal gain of 1.5% in 2023, versus an
The export value was lower than the products (RM4.2 billion), and transport estimated 26% expansion in 2022.
RM144.3 billion recorded in September. equipment (RM3.1 billion).
“The persistence of a high statistical base
Meanwhile, October imports in- UOB Global Economics & Markets Re- for two consecutive years in 2021 and 2022
creased 29.2% y-o-y to RM113.5 billion. search noted that the recent external trade is also expected to take a toll on the export
This brought total trade in the month to growth outturns in September and Octo- growth momentum going into 2023. To
RM245.2 billion. ber suggest that Malaysia’s merchandise counter this, the ratification of the Region-
trade activity has entered a soft patch, in al Comprehensive Economic Partnership
As imports grew faster than exports, tandem with weakening global demand. (RCEP) and the Comprehensive and Pro-
the trade surplus shrank to RM18.1 bil- gressive Agreement forTrans-Pacific Partner-
lion versus a record high of RM31.8 bil- “Volatile commodity prices and exchange ship (CPTPP), as well as the semiconductor
lion in September. rates were also factors weighing on the trade supply chain resilience-linked memorandum
growth momentum amid a global tech down of cooperation signed between the US and
Chief statistician Datuk Seri Dr Mohd cycle. Moreover, other global leading indi- Malaysia, are anticipated to be key positive
Uzir Mahidin said in a statement that do- cators continued to point to rising recession catalysts holding up Malaysia’s export growth
mestic exports totalled RM101.2 billion, risk going into 2023, sparked by prolonged prospects in the near term,” it opined.
which stood at 76.9% of total exports, Russia-Ukraine war, tighter global monetary
and grew by 10.8% y-o-y. and financial conditions, as well as China’s MIDF Research, meanwhile, expects
Covid zero policy,” the research house said more moderate growth rates for both ex-
“Meanwhile, re-exports were regis- in note on Thursday (Nov 17). ports and imports in the remaining months
tered at RM30.4 billion (23.1% of total of 2022, as the low-base effect diminishes.
exports), widening by 31.6%.” On the trade outlook, UOB said the fall
in Malaysia’s manufacturing purchasing Having said that, the research house
Uzir further explained that the rise managers index from 49.1 in September maintained its growth projections for ex-
in exports was due to higher exports to to 48.7 in October implies further loss of ports at 26% and imports at 30.5%.
Singapore by RM4.1 billion, followed by momentum in manufacturing production,
South Korea (RM1.9 billion), and Japan mainly due to subdued demand conditions, “Based on the latest data, external de-
(RM1.8 billion). Imports, on the other with the strongest moderation in new export mand remained robust despite concerns
hand, were buoyed by increased imports orders since June 2021, which led firms to over slowing global growth.”
from Saudi Arabia by RM5 billion, Chi- scale back output for the third month run-
na (RM4 billion), and Taiwan (RM3.3 ning and the most since March 2022. MIDF added that the trade sector
billion). stands to benefit from elevated commodity
“Accordingly, Malaysian manufacturers prices, growing external demand for E&E
In terms of exported products, Uzir lowered input purchases for the second and commodities (petroleum and palm oil),
said petroleum products increased by straight month and depleted stock levels, and continued rise in global production and
RM8.1 billion, followed by electrical resulting in the fastest decline in post-pro- international trade activities. Imports will
and electronics products (E&E) (RM8 duction inventories in seven months.This also expand further on the back of growing
billion), liquefied natural gas (RM4.1 domestic demand, and increased business
billion), and crude petroleum (RM1.5 activities and consumer spending.
billion).

friday NOVEMBER 18, 2022 5 TheEdge CEO morning brief

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Malaysian firms to see moderate 3Q earnings
amid unabated economic headwinds

KUALA LUMPUR (Nov 18): With the by Priyatharisiny Vasu putting Malaysian planters at an unfavour-
3Q corporate earnings reporting season theedgemarkets.com able position, said CGS-CIMB Securities’
kicking off, investors are wondering which Ivy Ng Lee Fang and Nagulan Ravi.
sector will wrap the year big. Plantation headed for a weak quarter
on low CPO prices and high costs “We project palm oil stocks to rise 8.2%
Analysts The Edge spoke to said a slew The plantation sector was the darling month-on-month to 2.5 million tonnes by
of major global events are still weighing among investors when crude palm oil the end of October, as higher output trump
on these companies’ performance for the (CPO) prices touched the RM7,000 range higher exports,” the analysts said in a note.
rest of the year.These include high infla- earlier this year. But not all good times are
tion and interest rates, moderating com- meant to last, as prices have tapered off 4-5% y-o-y core net profit growth
modity prices, global energy crisis, Cov- since. Analysts are now less positive on for banking sector on NIM and loan
id-19-induced supply chain disruptions this sector. expansion
and strong US dollar. CGS-CIMB’s analystWinson Ng foresees
Hong Leong Investment Bank Re- three major positive trends for banks in
Let’s take a look at what investors could search’s ChyeWen Fe said plantation earn- the 3Q22 results announcement. Banks
anticipate for companies from these five ings will be affected by lower CPO prices are expected to expand net interest mar-
key sectors. and fresh fruit bunch (FFB), as well as gin (NIM) by 6-8 basis points, post robust
higher costs of production. loan growth of above 6% at end-September
Mixed outlook for O&G service 2022, and register a decline of 40% y-o-y
providers, as more upstream players “Most planters will likely post a y-o-y in loan loss provisioning.
pivot to alternate energy decline in their upstream plantation earn-
Despite high crude oil prices remaining ings, on the back of higher production costs On the flip side, he expects lethargic
at above US$90 per barrel, not all local arising mainly from the full impact of min- 3Q22 non-interest income, which like-
oil and gas (O&G) companies will make imum wage hike in Malaysia and higher ly to be flattish or even lower y-o-y and
significant jumps in their core earnings, fertiliser prices,” said Chye in a research quarter-on-quarter (q-o-q) (excluding the
said Areca Capital Sdn Bhd’s CEO note on Nov 16. one-off gain of RM1.022 billion by Affin
Danny Wong. Bank for the divestment of its stake in Af-
Malaysia imposed a minimum wage fin Hwang Asset Management).
This is because of the long-term risk of RM1,500 per month effective May 1
of bigger upstream players pivoting away this year. “A wider increase of around 5% y-o-y in
from fossil fuels to alternative energy to 3Q22 overheads versus a rise of 3.2% y-o-y
limit carbon emissions, likely resulting Chye added that planters with high ex- in 2Q22, and a q-o-q increase in gross im-
in fewer long-term contracts for service posure to upstream operations in Indone- paired loan ratio. Most of the above trends
providers. sia will likely fare better than those that are reflected in our assumptions, barring
have high exposure in Malaysia, given the potentially weaker-than-expected non-in-
“As there is more scrutiny of ESG change in export levy structure and pos- terest income,” he added.
standards on oil production, O&G service sibly higher FFB output.
providers may face challenges if produc- However, Ng said this could be part-
ers do not increase production or capital “As for the integrated players, volatile ly offset by stronger net interest income
expenditure (capex) in new exploration feedstock prices, coupled with elevated growth from robust loan momentum.
activities.They may spend more capex on freight cost, will likely hinder profitability
cleaner energy. For this reason, I do not at the downstream segment.” The research outfit estimates a total
see service providers growing for the up- core net profit of RM7.1 billion to RM7.2
coming quarter,” said Wong. Indonesia’s palm oil export tax of billion for the banking sector in 3Q22 (ex-
US$33/tonne (RM151/tonne) for Oct 1-15 cluding Affin Bank’s one-off divestment
However, TA Securities’ analyst Ky- 2022 was lower than Malaysia’s RM322/ gain), versus RM6.84 billion in 3Q21 and
lie Chan Sze Zan remains positive on the tonne.This has made Indonesian palm oil RM7 billion in 2Q22.
prospects of upstream service providers more competitive till at least end-October,
being leveraged towards steady O&G capex “This represents core net profit growth
momentum. of 4-5% y-o-y (1-3% quarter-on-quarter/q-
o-q) in 3Q22.We reiterate our ‘overweight’
“We expect a recovery in daily charter call on banks, predicated on the potential
rates, fleet utilisation and new contract re-rating catalysts of expansion in NIM
awards.The catalyst is higher capex spend amidst the OPR (overnight policy rate)
from Petronas and other oil companies in upcycle, and robust loan growth. Our picks
these areas: expansion projects, well drill- for the sector are RHB Bank Bhd, Hong
ing, production enhancement, and plat- Leong Bank Bhd and Public Bank Bhd,”
form and facilities maintenance,” she said he added.
in an Oct 17 research note.
Semiconductor to remain flat on cost
For perspective, Petronas’ 1H22 capex pressure and low demand
spending surged 49% year-on-year (y-o-y) Technology and semiconductor-related
to RM18.9 billion, which reflects a recov- companies are expected to slow down in
ery back to pre-Covid spending levels.The 3Q22 in terms of financial performance,
oil major expects domestic activities to
heighten in the upcoming quarters. contin u es on Page 7

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Inari reports
steady 1Q net
profit, declares
2.6 sen dividend

by Shazni Ong
theedgemarkets.com

KUALA LUMPUR (Nov 17): Inari Inari, the country’s largest outsourced new opportunities coming onshore into
Amertron Bhd’s net profit eased 0.63% semiconductor assembly and test (OSAT) Malaysia’s OSAT ecosystem, [while] at the
to RM106.25 million for the first quar- player, declared a first interim dividend of same time, bringing up our new China JV
ter ended Sept 30, 2022 (1QFY23), from 2.6 sen, payable on Jan 6, 2023. site inYiwu to begin manufacturing during
RM106.93 million a year earlier, amid the second half of FY24.
comparatively lower loading volume off- The group said it is cautious on
set by favourable movement in foreign ex- growth in its recurring radio frequen- “The group also expects to continue
change. cy and optoelectronics business for the benefitting from the strong US dollar for
rest of FY23, in view of global economic FY23,” the group added.
Earnings per share fell to 2.86 sen from uncertainties arising from inflation, con-
2.98 sen, the semiconductor contract man- flicts and supply chain disruption due to Inari’s share price finished down three
ufacturer’s bourse filing showed. Covid lockdowns. sen or 1.15% at RM2.58 on Thursday
(Nov 17), bringing the group a market
Quarterly revenue dropped 12.55% to “Meanwhile, the group is working on capitalisation of RM9.63 billion.
RM377 million, from RM431.12 million
in 1QFY22.

On a quarter-on-quarter basis, the
group’s net profit rose by 23.24% from
RM86.22 million posted in 4QFY22, as
revenue grew 12.14% from RM336.18
million.

from Page 6 industry is grappling with export restric- OPR (overnight policy rate) hike may
tions from the US government, which not have been reflected in 3Q earnings,
as the sector is undergoing inventory ad- is ratcheting up pressure on its allies to the previous interest rate increases have
justment and responding to higher infla- prevent shipment of cutting-edge chips hindered buyers,” he added.
tion situation, said Ronnie Tan of Mer- to a growing list of Chinese companies.
cury Securities Sdn Bhd. Real Estate InvestmentTrusts (M-RE-
However, Malaysia is likely to capture ITs) growth also looks moderate on the
“After the surge in demand for out- the spillover effects in terms of the re- back of oversupply of office spaces, as
sourced semiconductor assembly and location of industries from China and the pandemic diminished demand for
test (OSAT) services and semiconductor the US to this region, in order to mini- such spaces.
equipment in the last two years, I think mise future risks arising from increased
the industry is slowing down due to rising US-China tensions. According to research by real estate
interest rates and high inflation, which agency Knight Frank, the cumulative
impacts consumer purchasing power,” “Malaysia is among the leading coun- supply of retail space in Klang Valley is
he told The Edge. tries in terms of investments [in] the expected to increase from 68.4m sq ft in
semiconductor, telecommunications 2022 to 71.9m sq ft in 2023, and 73.7m
Global smartphone shipments fell and technology industries, as it has a fa- in 2024. Some of the notable new malls
9.7% y-o-y to 302 million units in 3Q vourable ecosystem, including talent, in- that are expected to open in 2023 are
this year, according to International Data frastructure and a business-friendly en- The ExchangeTRX (1.3m sq ft) and 118
Corporation (IDC) data. vironment,” the research outfit added. Mall (850k sq ft).

“Bear in mind that interest rate hikes Property earnings still impacted by “With the risk of an economic slow-
in some countries such as the US may weak buyer sentiment down, this will further compound the
compress the valuation of the semicon- The property overhang issue, coupled downward pressure on rental reversion
ductor industry. As a matter of fact, Ma- with interest rate upcycle and rising in- and occupancy rates,” said analyst Loong
laysia’s semiconductor and tech valuation flation, have dented buyer sentiment, said Kok Wen from RHB Investment Bank
is very high compared to some of the Areca’s Wong, adding that such weak Bhd in a note on Nov 7.
other peers in other countries,” said Tan. sentiment could impinge on core profit
growth for property players. She added that despite the negative
Having said that, he is of the view that outlook, retail REITs have shown to be
there is still light at the end of the tunnel “Outlook for this sector looks chal- resilient in surviving the pandemic.
for semiconductor segments that contin- lenging on the back of rising interest
ue to benefit from the mass adoption of rates, which is not positive news for prop- “While growth may be limited, good
electric vehicles (EVs). erty loan applications. Although the last management by REITs and the strength
of key malls should ensure stability,” she
Meanwhile, PublicInvest Research in said.
a note on Oct 25 said the semiconductor

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MISC 3Q net profit Kelington’s 3Q provider’s revenue contribution was
more than doubles net earnings led by Malaysia (47%), followed by
double on healthy Singapore (34%), China (15%) and
to RM821 mil, order book Taiwan (3%).
declares seven sen
by Sufi Muhammad The ultra-high purity segment re-
dividend theedgemarkets.com mained the primary contributor at
RM206.6 million, or 56% of total rev-
by Surin Murugiah KUALA LUMPUR (Nov 17): Ke- enue during the quarter under review.
theedgemarkets.com lington Group Bhd saw its net prof- This was followed by the general con-
it double to RM15.7 million for the tracting division (RM121.6 million),
KUALA LUMPUR (Nov 17): MISC Bhd’s third quarter ended Sept 30, 2022 industrial gases division (RM20.5 mil-
net profit for the third quarter ended Sept 30, (3QFY22), from RM7.96 million in lion) and process engineering division
2022 more than doubled to RM820.6 million the same quarter a year ago, driven by (RM14.1 million).
from RM401 million a year earlier on higher higher contribution from all of its op-
revenue and operating profit. erating segments. On prospects, Kelington said it con-
tinues to enjoy a healthy order book re-
In a Bursa Malaysia filing on Thursday Quarterly revenue more than tri- plenishment rate in its ultra-high purity,
(Nov 17), the company said revenue for pled to RM366.39 million, against process engineering and general con-
the quarter rose to RM3.61 billion from RM106.37 million previously. tracting segments. As at Sept 30 2022,
RM2.69 billion, driven by higher revenue it has secured new contracts amount-
from all segments. Its basic earnings per share in- ing to RM1.36 billion during the year.
creased to 2.4 sen, from 2.29 sen a
Earnings per share doubled to 18.4 sen year ago. “Including the projects carried for-
from nine sen. ward from previous years, our total
In terms of geographical breakdown, order book stood at RM2.4 billion,
MISC declared a dividend of seven sen the integrated engineering solutions of which RM1.6 billion remains out-
per share, to be paid on Dec 14. standing,” it noted.

For the cumulative nine months ended At market close on Thursday (Nov
Sept 30, MISC posted a lower net profit of 17), Kelington’s share price fell five sen
RM1.18 billion versus RM1.37 billion a or 3.7% to RM1.30, giving it a market
year ago on the back of revenue of RM9.69 capitalisation of RM838.82 million.
billion against RM7.59 billion.
Dayang Enterprise The group also announced an interim
Reviewing its performance, MISC presi- 3Q net profit dividend of 1.5 sen, payable on Dec 14.
dent and group chief executive officer Cap-
tain Rajalingam Subramaniam said the com- surges on increased For the first nine months of FY22,
pany remains steadfast in executing ongoing work orders Dayang posted a net profit of RM108.68
projects with continued discipline and focus. million, compared with a net loss of
by Shazni Ong RM30.45 million in the same period
“Our robust financial standing places theedgemarkets.com of FY21, as revenue grew 62.94% to
us on the progressive path to deliver sus- RM761.89 million, from RM467.58
tainable value to our stakeholders. KUALA LUMPUR (Nov 17): Dayang million.
Enterprise Holdings Bhd’s third quarter
“At the same time, we will be steering net profit surged 178.67% to RM52.9 On prospects, Dayang said most of
our mid to long-term ambitions to pursue million, from RM18.98 million a year its resources in the fourth quarter are in
new business opportunities as we advance earlier, mainly driven by increased work the midst of demobilising and in prepa-
to the net-zero future with greater synergy orders and contracts from oil majors. ration for FY23.
and collaboration with our stakeholders
and partners,” he said. Also contributing to the jump in earn- Citing the monsoon season, Dayang
ings are higher vessel utilisation rates, said the expectation is that activities re-
On its prospects, MISC said spot rates and a RM7.4 million insurance claim lating to the group’s nature of work in
continued to surge in the LNG shipping mar- received for an incident involving Dayang the form of maintenance, construction
ket in the third quarter of 2022, driven by Topaz in 2020, the Sarawak-based oil and modification (MCM) and hook-up
strengthening winter season demand towards and gas service provider said in a bourse and commissioning (HUC) would drop,
year-end in Asia and Europe, high European filing. given the safety of its vessels’ personnel.
demand due to the prolonged Russia-Ukraine
war, and tight vessel availability. Earnings per share for the third quar- “During this time, preparation, main-
ter ended Sept 30, 2022 (3QFY22) rose tenance, upgrading and planning will
It said in the near term, prospects remain to 4.57 sen, from 1.64 sen for 3QFY21. be carried out to get ourselves ready for
positive backed by growing global demand for 2023.We work very closely with our cli-
liquefied natural gas (LNG) amidst the on- Quarterly revenue climbed 51.16% ent on the look ahead for the 2023 pro-
going European energy crisis and additional to RM338.34 million from RM223.84 gramme.
LNG infrastructure investment, which would million, thanks to strong economic re-
further support LNG growth despite tonne- covery from the Covid-19 disruptions “At the same time, while the MCM
mile demand coming under some pressure in 2021, as well as favourable oil prices. contract, with improved rates, has been
from trade pattern shifts to shorter distances. extended till the end of 2023, we expect
new tenders to be issued imminently,”
MISC said it aims to replenish its order the group said.
book, including venturing into carbon cap-
ture and storage as well as renewables. As of September, Dayang’s outstand-
ing estimated call-out contracts is about
RM1.58 billion.

friday NOVEMBER 18, 2022 9 TheEdge CEO morning brief

HONOURING MALAYSIA’S
BEST PERFORMERS IN
ESG EXCELLENCE

FULL RESULTS TO BE REVEALED SOON

INTRODUCING THE INAUGURAL

In Collaboration With

Main Partner Knowledge Partner Auditor Official
(Funds Category) Broadcast Partner

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S P Setia’s Mega First 147% to RM4.9 million (from RM1.98
3Q profit surges posts 34% rise in million) for the resources division, on high-
over six times to 3Q profit, lifted by er revenue.
RM70 mil, driven higher contributions
from all divisions Meanwhile, the investment holding
by southern and other division reported a PBT of
projects by syafiqah salim RM18.4 million, compared to a small
theedgemarkets.com loss of RM400,000 a year ago.The sharp
by justin lim turnaround was mainly due to a RM12.3
theedgemarkets.com KUALA LUMPUR (Nov 17): Mega First million share of profit from joint ventures
Corp Bhd’s net profit grew 34.43% to and associates, and a higher foreign ex-
KUALA LUMPUR (Nov 17): S P RM119.46 million for the third quarter change gain of RM8.8 million.
Setia Bhd’s net profit surged more ended Sept 30, 2022 (3QFY2022), from
than six times to RM70.18 million RM88.86 million for the previous year’s For the nine months ended Sept 30,
in the third quarter ended Sept 30, corresponding quarter, spurred by high- 2022, Mega First’s cumulative net prof-
2022 (3QFY2022) from RM11.01 er profit contributions from all business it increased 20.88% to RM301.63 mil-
million in 3QFY2021, underpinned divisions. lion from RM249.52 million a year ago,
by higher contribution from its prop- as revenue soared 53.9% to RM975.78
erty development business. The group’s earnings per share for the million from RM634.05 million amid
quarter rose to 12.64 sen from 9.38 sen higher sales.
Group revenue grew 44.8% to for 3QFY2021.
RM860.94 million from RM594.55 Excluding the one-off bargain gain of
million, its bourse filing showed. No The stronger profit came as revenue RM125.1 million in 4QFY2021, Mega
dividend was declared. jumped 59.8% to RM371.53 million from First expects to continue to register
RM232.5 million previously, according to healthy year-on-year earnings growth in
For the cumulative nine months a filing with the local bourse. 4QFY2022, bolstered mainly by its renew-
ended Sept 30, 2022 (9MFY2022), able energy division.
S P Setia’s net profit grew 35.22% to Notably, the renewable energy division
RM217.78 million from RM161.05 saw its profit before tax (PBT) expand “In the meantime, the group’s manu-
million in 9MFY2021, as revenue rose 15.7% to RM114.3 million from RM98.85 facturing activities, including joint venture
to RM2.75 billion from RM2.73 billion. million, mainly on higher hydropower en- and associates, are expected to face head-
RM2.7 bil sales in first nine ergy income in Laos, while PBT for the winds from slowing consumer demand and
months of 2022 packaging division grew 16.2% to RM8.8 intensifying competition on heightened risk
In a separate statement, S P Setia million (from RM7.55 million), and by of a global recession,” the group comment-
said it secured total sales of RM2.7 ed on its prospects.
billion in 9MFY2022 mainly from
local projects, which contributed Mega First, which is currently trading
RM2.34 billion or about 87% of to- at a historical price-earnings ratio of 6.42
tal sales; the balance RM359 million times, closed unchanged at RM3.28 on
came from international projects. Thursday (Nov 17). At the close, the group
was valued at RM3.24 billion.
SP Setia president-cum-chief ex-
ecutive officer Datuk Choong Kai Higher gross profit, es, in tandem with global market prices,
Wai said RM478 million of complet- finance income lift mitigated by lower volume of natural gas
ed inventories were sold and RM592 sold during the quarter.
million of bookings were secured as Gas Malaysia’s
at Sept 30, 2022. 3Q net profit by 53% Compared to the immediate preceding
quarter, net profit decreased 10.9% from
Choong said the group is set to by syafiqah salim RM107.34 million, despite revenue rising
achieve its sales target of RM4 billion theedgemarkets.com 4.9% from RM1.78 billion for 2QFY2022.
set for FY2022 backed by unbilled
sales totalling RM8.4 billion, which KUALA LUMPUR (Nov 17): Gas Ma- The group did not declare any dividend
will provide earnings visibility to the laysia Bhd recorded a third-quarter net for the latest quarter.
group in the short to mid term. profit of RM95.66 million, up 53.4% from
RM62.36 million a year earlier, on higher For the first nine months of
S P Setia is currently anchored by gross profit, finance income and contribu- FY2022, net profit expanded 63.21%
47 ongoing projects and an effective tions from joint-venture companies. to RM294.32 million from RM180.33
remaining land bank of 6,687 acres, million a year earlier, on the back of a
with a gross development value of Earnings per share for the quarter end- rise in revenue to RM5.43 billion from
RM119.47 billion as at Sept 30,2022.S ed Sept 30, 2022 (3QFY2022) rose to RM3.91 billion.
P Setia shares closed 0.5 sen or 0.95% 7.45 sen from 4.86 sen for 3QFY2021,
higher at 53 sen onThursday, giving it a the group’s filing with Bursa Malaysia The group said it expects to deliver a
market capitalisation of RM2.16 billion. showed. satisfactory performance for FY2022, add-
ing that it will take prudent measures to
Quarterly revenue increased 34.82% maintain its operational efficiency to re-
to RM1.86 billion from RM1.38 billion main competitive, and seek opportunities
on higher average natural gas selling pric- to grow its businesses.

Shares in Gas Malaysia closed up two
sen or 0.59% at RM3.40 each on Thurs-
day (Nov 17), giving the group a mar-
ket capitalisation of RM4.37 billion.The
stock has risen 29% year-to-date from
RM2.64.

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KUALA LUMPUR (Nov 17): The Se- SC wins insider The SC said insider trading continues
curities Commission Malaysia (SC) has trading suit to be a high priority, and that the judge-
won its claim in a civil suit against Da- ment sends a strong and clear message to
tuk Ng Back Heang, a former executive against former the public that insider trading, where inside
director of Patimas Computers Bhd, for Patimas information is misused for personal gain,
insider trading. will not be tolerated by the SC.
Computers
In a statement on Thursday (Nov 17), executive director This is the second successful claim by
the SC said that Ng, 68, was ordered by the SC against a former director of Pati-
the High Court on Nov 16 to pay the reg- by Surin Murugiah mas for insider trading.
ulator a sum of RM1.24 million, which is theedgemarkets.com
three times the losses he avoided as a result In April this year, the SC’s civil claim
of the insider trading. the edge file photo against the former deputy chairman of Pa-
timas, Datuk RaymondYapWee Hin, was
The SC said the case was heard by Ju- allowed and the High Court orderedYap
dicial Commissioner Tuan Muhammad to pay to the SC a sum of RM3.28 million,
AminWanYahya, who found that Ng had which was three times the loss avoided by
breached Section 188(2)(a) of the Capital him as a result of insider trading activities,
Markets and Services Act 2007. as well as a civil penalty of RM1 million.

Ng was also ordered to pay a civil pen-
alty of RM700,000 to the SC.

He is barred from being appointed as
a director of a public listed company for
five years. The High Court also granted
the SC RM100,000 in costs.

The breach occurred when Ng dis-
posed of 16.5 million Patimas shares that
he owned between May and July 2012
while in possession of material non-pub-
lic information.

The said information was in relation
to audit queries and issues about suspi-
cious transactions between Patimas and
its top debtors.

KUALA LUMPUR (Nov 17): Kejuruter- Kejuruteraan Revenue generation will come from its
aan Asastera Bhd (KAB) is targeting sig- Asastera eyes growing asset portfolio in clean energy gen-
nificant growth in its sustainable ener- 50% bottom line eration, renewable energy generation, and
gy solutions (SES) segment, with about contribution provision of energy-efficient solutions.
50% contribution to its bottom line in from sustainable
the coming years. energy solutions In addition to the existing SES business,
Lai said the group is in discussions with
KAB managing director Datuk Lai segment asset owners as well as potential clients for
Keng Onn said the SES segment’s contri- more acquisitions and projects in Malaysia
bution to the group’s bottom line will be at by Syafiqah Salim and regionally.
least 25% in the financial year ending Dec theedgemarkets.com
31, 2022 (FY2022), before rising to 50%. “The order book for the energy segment
and is expected to grow exponentially will be quite a huge jump with upcoming
“SES is one of the businesses we really going forward. projects. We have a lot of energy projects
want to focus on, and we will grow that in the pipeline,” he said.
business. I think the profit margin in the KAB’s first-half net profit fell to
SES segment is much better than in the RM1.24 million from RM2.95 million, Currently, the group’s estimated capital
engineering segment. We expect a profit although revenue rose to RM95.63 mil- expenditure for existing contracts and po-
margin of 15% to 25% in the SES segment. lion from RM89.92 million a year earlier. tential projects amounts to RM52.3 million
for solar photovoltaic projects of over 17,000
“As for revenue contributions, we are The growth in the SES segment will be kWp in capacity, and RM220 million for
looking at a steady growth from 20% to supported by the recognition of potential clean energy projects of up to 65MW.
40% [from the SES segment] in the next concession revenue of more than RM500
three to four years,” according to Lai. million until 2046 from existing contracts On another note, shareholders also
in Malaysia and Thailand, as well as on- approved KAB’s proposed private place-
The group still faces challenges in the going acquisitions. ment, representing approximately 20% of
engineering segment as raw material pric- the group’s existing issued shares, to raise
es fluctuate, Lai noted at a virtual press RM134 million for working capital and
conference onThursday (Nov 17) after an repayment of bank borrowings funding
extraordinary general meeting. existing and future SES projects.

The group’s SES segment recorded AtThursday’s noon break, shares in KAB
revenue of RM6.8 million for FY2021. had dipped 1.5 sen or 3.16% to 46 sen each,
Then for the first half ended June 30, giving the engineering and energy solutions
2022 alone, revenue stood at RM8.2 mil- provider a market value of RM823.01 mil-
lion — surpassing the FY2021 figure — lion.The stock has jumped 84% year-to-date.

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BEST CALL

AWARDS 2022

NOMINATIONS ARE NOW OPEN

The Edge is proud to bring back its annual Please include the following details in your WINNERS WILL
Best Call Awards to recognise good nomination: BE JUDGED
fundamental stock analysis and its importance • The “buy”, “sell” or contrarian “hold” call; ON THE MERITS
in making investment decisions. • Why the call was great and if you made OF EACH CALL,
NOT BY THE
The 17th edition of the awards is open for money from following it; NUMBER OF
nominations from the general investing public, • The analyst and/or brokerage house that PEOPLE WHO
readers of The Edge, fund managers, private VOTED FOR IT
investors, heads of research and equity made the call;
analysts on what they think is the best “buy” or • When the call was made (the date of the
“sell” recommendation for 2022, and why.
research report and the report, if any);
Nominations can also be for a good research • Your name and contact number (yes,
report on Bursa Malaysia-listed companies,
from which you learnt something, as well as you can submit your own great call too!).
a contrarian “buy” or “hold” recommendation
that proved correct when everyone else was Please send your nominations
saying “sell”. to [email protected]
by 5pm, Dec 2, 2022

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KUALA LUMPUR (Nov 17):YNH Prop- YNH to raise Under the asset-backed MTN pro-
erty Bhd is raising RM422.5 million to RM422.5 mil gramme, YNH executive chairman and
pare down bank borrowings and for work- via disposal of executive director Datuk SrYu Kuan Chon
ing capital requirements.This will be done two retail malls will be subscribing to the first tranche of
via disposal of its two retail malls to ALX in related-party the junior MTNs.
Asset Bhd in a related party transaction. transaction
Kuan Chon’s brother, DatukYu Kuan
Recall that two months ago,YNH an- by justin lim Huat, who is the managing director of
nounced an asset-backed securitisation theedgemarkets.com YNH, is also deemed interested in the
exercise to raise up to RM500 million proposed disposal.
fresh capital. ing capital requirement with the remaining
of RM5.6 million for defray costs related Kuan Chon is the single largest share-
In a bourse filing on Thursday (Nov to the proposed disposal of two proper- holder ofYNH, holding a 24.41% direct
17),YNH announced the disposal sum of ties and asset-backed MTNs programme. interest and an 8.17% indirect interest.
RM270.5 million for 163 Retail Park shop- This is followed by Kuan Huat, who has
ping centre in Mont Kiara, Kuala Lum- Post disposal,YNH is expected to pare a 4.48% direct interest and a 24.86%
pur; and RM152 million for Aeon Seri down its borrowings to RM472.14 million indirect interest.
Manjung in Perak. or a gearing ratio of 0.37 times, compared
to 0.66 times as at Dec 31, 2021. ALX Asset was incorporated to carry out
163 Retail Park is a seven-storey the functions of a special purpose vehicle in
shopping centre sitting on 226,800-sq relation to the proposed asset-backed MTNs
ft freehold land and is owned byYNH’s programme. It is a wholly-owned subsidi-
wholly-owned subsidiary D’Kiara Place ary of Premier SPV Management Sdn Bhd.
Sdn Bhd.
“The proposed disposals represent an
Meanwhile, Aeon Seri Manjung is a opportunity for the group to unlock the
two-storey shopping centre, together with value of and monetise its investments in
car park bays sitting on a commercial free- the properties.The group is expected to re-
hold land measuring 1.32 million sq ft.The cord a pro forma net gain of approximately
property is currently held in trust by Kar RM61 million from the proposed disposals
Sin Bhd as the registered proprietor for and is expected to improve the net assets
YNH Hospitality, a unit ofYNH. and earnings of the group,” saidYNH.

YNH said the total consideration of The proposed disposals require approv-
RM422.5 million will be satisfied by ALX al fromYNH’s shareholders at an extraor-
Asset entirely in cash, through the issu- dinary general meeting to be convened.
ance of the medium-term notes (MTNs)
under a proposed asset-backed MTNs AmInvestment Bank has been appoint-
programme of up to RM500 million in ed to act as the principal adviser for the
nominal value. proposed disposals, which are expected
to be completed by the first half of 2023.
Of the total proceeds, the bulk of which
or RM335 million has been earmarked for Having gained 56% year-to-date, shares
repayment of bank borrowings.YNH also ofYNH closed two sen or 0.48% lower at
intends to utilise RM81.9 million for work- RM4.13 on Thursday, giving it a market
capitalisation of RM2.17 billion.

Bloomberg

Disney acquires
Genting Hong
Kong’s half-built
cruise ship in latest

expansion

by Christopher Palmeri
Bloomberg

(Nov 17): Walt Disney Co acquired a Genting Hong Kong Ltd’s Dream The ship will accommodate 6,000
still-under-construction ship that will be Cruises, and the shipyard, both ran into passengers and 2,300 crew, the com-
among the largest in the world, in the lat- financial difficulties during the pandemic. pany said.
est expansion of its cruise line business.
Disney plans to sail the ship interna- Disney has been able to generate pre-
The vessel, formerly known as the Glob- tionally. It will be painted with the line’s mium prices for its cruises, which feature
al Dream, will be completed in the former signature white, black and red colouring. the company’s characters and theater pro-
MVWerften shipyard, by the same builder, More details, including its name, features ductions, as well as other whimsical ele-
MeyerWerft, that produced three other Dis- and itineraries, will be announced at a later ments. Its newest vessel, the DisneyWish,
ney ships, the company said in a blog post. date. Financial terms were not disclosed. was launched this year.

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bloomberg

1MDB-Tanore
trial vacated
for the day

Dutch court Russia invaded Ukraine in February by Tarani Palani
sentences three and claims to have annexed the Donetsk theedgemarkets.com
to life in prison province where the plane’s wreckage and
for 2014 downing victims’ remains were once scattered across KUALA LUMPUR (Nov 17): The
cornfields. 1Malaysia Development Bhd-Tanore
of MH17 (1MDB-Tanore) trial has been vacated
Steenhuis said the men did not enjoy for the day as the prosecution does not
by Stephanie van den Berg any immunity from prosecution, as they have a new witness lined up.
& Toby Sterling were not members of the Russian armed
Reuters services. Addressing the court, deputy pub-
lic prosecutor (DPP) Ahmad Akram
AMSTERDAM (Nov 17): Dutch judg- “There is no reasonable doubt” that Gharib said that the prosecution tried
es on Thursday convicted three men of MH17 was shot down by a BUK missile to reach about five witnesses but they
murder for their role in the 2014 shooting system, Steenhuis said. were not available to testify on Thurs-
down of Malaysia Airlines flight MH17 day (Nov 17).
over Ukraine, and sentenced them to life Victims’ representatives said the rul-
in prison. ing is an important milestone, though the “As promised yesterday (Wednesday,
suspects remain fugitives.They are all be- Nov 16), I tried to call the witnesses
A fourth man was acquitted. lieved to be in Russia, which will not ex- — the other witnesses the prosecution
MH17 was a passenger flight that was tradite them. is supposed to call — however, none
shot down over eastern Ukraine on July 17, of them are available because of short
2014, killing all 298 passengers and crew. Moscow denies any involvement or notice.
“Only the most severe punishment is responsibility for MH17’s downing and
fitting to retaliate for what the suspects in 2014, it also denied any presence in “Two [witnesses are] overseas.Three
have done, which has caused so much suf- Ukraine. or four can’t make it because of short
fering to so many victims and so many notice for various reasons,” he said.
surviving relatives,” Presiding judge Hen- In a briefing in Moscow on Thursday,
drik Steenhuis said, reading a summary deputy foreign ministry spokesman Ivan The DPP added that the prosecu-
of the ruling. Nechaev told reporters that the govern- tion did have The Edge Media Group
Families of victims stood weeping and ment would examine the court’s findings. chairman Tan Sri Tong Kooi Ong on
wiping away tears in the courtroom, as standby to be cross-examined. Tong,
Steenhuis read the verdict. “We will study this decision because the prosecution’s 43rd witness, com-
The three men convicted were former in all these issues, every nuance matters,” pleted his examination-in-chief on
Russian intelligence agents Igor Girkin and he said. Wednesday.
Sergey Dubinskiy, and Leonid Kharchen-
ko, a Ukrainian separatist leader. The four men were charged with shoot- The court was told that lead defence
A fourth, Russian Oleg Pulatov, was ing down an airplane and with murder counselTan Sri Muhammad Shafee Ab-
acquitted on all charges. in a trial that was held under Dutch law. dullah will be cross-examining Tong.
At the time, the area was the scene of Muhammad Shafee, however, was un-
fighting between pro-Russian separatists Phone call intercepts that formed a key well from a dental procedure and had a
and Ukrainian forces, the precursor of this part of the evidence against the men sug- medical certificate (MC) for three days.
year’s conflict. gested they believed they were targeting
a Ukrainian fighter jet. Messrs Shafee & Co lawyer Rahmat
Hazlan informed the court on Thurs-
Of the suspects, only Pulatov had plead- day that Muhammad Shafee’s gums still
ed not guilty via lawyers he hired to repre- hurt from the procedure and he is still
sent him.The others were tried in absentia on MC.
and none attended the trial.
Rahmat said they will be prepared
Victims of MH17, which had been en next Monday (Nov 21) for Tong’s
route from Amsterdam to Kuala Lumpur, cross-examination as well as any other
came from 10 different countries. More witnesses the prosecution has lined up.
than half were Dutch.
The trial before High Court judge
The investigation was led by the Neth- Datuk Collin Lawrence Sequerah is set
erlands, with participation from Ukraine, to resume next Monday.
Malaysia, Australia and Belgium.
In this trial, former prime minister
Datuk Seri Najib Razak, 69, is on trial
on four counts of abuse of power and 21
counts of money laundering, involving
RM2.28 billion of 1MDB funds.

Najib was present in court on
Wednesday dressed in a dark blue suit,
flanked by prison guards. Also present
in the public gallery was his wife Datin
Seri Rosmah Mansor.

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(Nov 17): FranklinTempleton Investments Fund titans are The turnaround has been a long time
and Eastspring Investments are joining a buying China coming. Chinese stocks had been slid-
growing list of money managers snapping stocks on bets ing for more than a year, with as much as
up Chinese stocks on bets that Beijing’s worst is now over US$6 trillion being wiped off total market
pivot away from Covid Zero will bring sig- capitalization between a peak last February
nificant gains. by Ruth Carson & John Cheng and a low set last month when President
Bloomberg Xi Jinping secured a third term.The rally
China’s world-beating rally this month then began due to easing of Covid restric-
has solidified convictions that recent losses tions and improving Sino-US ties.
are a thing of the past as a property rescue
plan and easing on virus controls bolster sen- The Hang Seng China Enterprises In-
timent.The MSCI China Index has gained dex has jumped 25% this month to be
more than 24% in November, while a gauge one of the best-performing major index-
of global shares has advanced just 5%. es globally, having led losses worldwide
through October.
“The worst is already priced in and
you’ve got plenty of upside” for Chinese Beijing’s efforts to loosen some of its
equities, said Bill Maldonado, chief invest- Covid restrictions are a step in “the right
ment officer at Eastspring in Singapore, direction,” saidTempleton’s Sekhon, whose
which oversees US$222 billion. “You’d be firm oversees US$1.3 trillion. Along with
buying now and expecting things to kind thawing US-China relations that have “set
of rebound on a three-to-six-month basis.” a floor on market sentiment,” local equities
are now at an inflection point that present
The view is echoed by Templeton’s a chance to buy, he said.
Manraj Sekhon, who said “it’s time to get
involved in China if you haven’t already.” For Eastspring’s Maldonado, the op-
portunities includes companies linked to
The bullish take from two investment vet- the electronic vehicle boom, green tech-
erans — who have more than half a century nology and the semiconductor industry.
of markets experience combined — coincides
with calls from Fidelity International and “Valuations had gotten very cheap and
China Asset Management, which have also earnings expectations had gotten very, very
expressed confidence in the nation’s assets. low,” he said.

Goldman sees China rebound coming as Covid-19 policy fuels optimism

(Nov 17): China’s move to ease the Bloomberg in the second quarter as case numbers
two biggest risks facing the economy dropped and the fear factor faded.
— Covid-19 restrictions and a property chief global economist of Bloomberg Eco-
slump — is fuelling optimism about a nomics, said onThursday at the New Econ- “We think Chinese growth is likely to
rebound in growth next year, prompt- omy Forum in Singapore. “The outlook display a similar pattern next year,” the
ing some economists to upgrade their for 2023 is a little brighter than it appeared Goldman economists said.
key forecasts. a few days ago.”
Fiscal policy will likely stay accom-
Goldman Sachs Group Inc said on Bloomberg Economics now sees upside modative in the first half of next year
Thursday (Nov 17) China’s gross do- risk increasing to its China growth projec- before normalising in the following six
mestic product (GDP) growth will likely tions of 3.5% for this year and 5.7% for months, they said, when consumption
pick up in the second half of 2023 and 2023. ANZ upgraded its growth forecast and services are expected to “rebound
into 2024, after the economy weathers for next year to 5.4% from an earlier pre- sharply”. Monetary policy will normal-
the initial negative impact exiting its diction of 4.2%. Morgan Stanley expects ise upon reopening, with interest rates
Covid zero strategy in the spring. private consumption to jump 7% next year, expected to “drift higher” as credit de-
climbing from an estimated 1.7% this year. mand picks up, they said.
Australia and New Zealand Banking
Group Ltd (ANZ) onWednesday raised Goldman’s economists estimated that Goldman expects the growth boost
its growth forecast for next year to above annualised quarter-on-quarter growth will from China’s reopening to linger into
5%, while Morgan Stanley this week pre- accelerate to 10% in the third quarter next the first half of 2024, predicting GDP to
dicted a surge in consumer spending. year from just 2% in the second quarter, expand 5.3% for the whole of that year.
assuming that China starts reopening in
Confidence in China’s outlook has April. That will help full-year GDP ex- With fiscal policy expected to turn
improved since Beijing recalibrated its pand 4.5% in 2023, rebounding from an less expansionary, infrastructure invest-
Covid-19 control rules and introduced a expected 3% this year, the economists led ment will probably decelerate “signif-
sweeping package of measures to aid prop- by Hui Shan wrote in a note onThursday. icantly” to only 2% next year from a
erty financing last week.While the moves projected 12% this year, the economists
are unlikely to give an immediate boost Two halves said. Property investment will likely re-
to growth, especially with Covid-19 cases The economists pointed out that places in main “sluggish”, contracting 10% in
currently surging in China, they could help East Asia, including South Korea, Taiwan 2023, deeper than this year’s estimated
reduce the drag on consumption and put and Hong Kong, saw real private consump- 9% decline, they said.
a floor under the property market slump. tion fall during the first quarter of their re-
spective reopenings, followed by a recovery Weakening global demand means
“The last few days have brought some exports will probably shrink 2% in
unexpected good news,”Tom Orlik, the 2023 after rising 8.5% this year, Gold-
man estimated.

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bloomberg

Jack Ma’s Ant
incurs 63%

profit fall amid
regulatory
overhaul

Alibaba posts Once the most valuable company in China, by Lulu Yilun Chen & Zheping Huang
surprise loss as Alibaba has lost about US$600 billion of mar- Bloomberg
ket value since Beijing launched its sweeping
China Covid crackdown on the private sector nearly two (Nov 17): Ant Group Co incurred
curbs take a toll years ago.The government forced its finance a steeper profit decline in the three
affiliate,Ant Group Co, to call off what would months ended in June, as the fintech
by Jane Zhang have been the world’s largest initial public of- giant molds itself to appease Chinese
Bloomberg fering in 2020, then launched reforms that regulators.
undercut Alibaba’s business model.
(Nov 17): Alibaba Group Holding Ltd re- The Hangzhou-based company con-
ported a surprise loss after quarterly revenue Cost optimization — particularly at the tributed 2.4 billion yuan (US$335 mil-
barely grew, as China’s rigid Covid controls relatively younger grocery and overseas busi- lion) to Alibaba Group Holding Ltd’s
continue to sap consumer sentiment. nesses — is likely boosting Alibaba’s margins earnings, a filing showed on Thursday.
for the time being. But longer term, it still Based on Alibaba’s one-third stake in
Revenue rose a slightly less-than-expected has to come up with an answer to increas- Ant, that translates to an estimated 7.3
3% to 207.2 billion yuan (US$29 billion) in ingly effective competition. billion yuan of profit for Ant’s June
the September quarter, versus the 209 billion quarter, down 63% from a year earli-
yuan average projection. It reported a net While Alibaba’s Singles’ Day sales were in er. Ant’s earnings lag a quarter behind
loss of 20.6 billion yuan versus estimates for line with last year’s performance, smaller rival Alibaba’s.
a profit of 18.8 billion yuan, after adjusting JD.com Inc, which escaped the worst of the
for market investments. The company also 2021 sector crackdown, is overtaking Alibaba Representatives with Ant declined
green-lit a US$15 billion expansion to its in sales growth and notched another record to comment.
buyback program. during the “11.11” shopping festival.
The fintech business controlled by
Alibaba is focusing on shoring up its bottom Up-and-coming rivals including short billionaire Jack Ma has been expand-
line as Covid policies and antitrust measures video platforms are drawing users away.The ing in Southeast Asia, while seeking to
imposed during last year’s tech sector crack- number of merchants that participated in become a financial holding company
down sap growth.This month, the company Singles’ Day events between Oct 31 Oct and at home. Ant has been restructuring its
failed to disclose full sales results for its signa- Nov 11 on Douyin, the Chinese version of operations, including beefing up capital,
ture Singles’ Day shopping festival for the first Tiktok, increased about 86% from the previ- curbing consumer lending and shuffling
time in 14 years, suggesting a disappointing ous year.The number of buyers on Kuaishou management.
turnout for its most important annual event. increased by about 40% year-on-year during
And Chinese retail sales contracted 0.5% in the same event, Jefferies estimates. Its consumer finance unit is raising
October — the first decline since May and 10.5 billion yuan in a scaled-down cap-
worse than expectations for marginal growth. Facing stagnation at home, Alibaba has ital boost from investors, after China
revived an outward expansion that slowed Cinda Asset Management Co unex-
Still, investors point to signs Xi Jinping’s in recent years in the face of competition pectedly backed out of its investment
administration is retreating from its Covid from Amazon.com Inc and Tencent Hold- plan this year.
Zero framework — easing the logistics tan- ings Ltd-backed Sea Ltd.
gles that have weighed on Alibaba’s business A subsidiary of Sunny OpticalTech-
— and growing supportive of tech firms. Subsidiary Lazada Group is preparing to nology Group Co will take 1.1 billion
make its maiden foray into Europe, building yuan of Chongqing Ant Consumer
Chinese tech shares recovered some of their on its success in Southeast Asia. But the US Finance Co’s capital, for a 6% stake.
losses this month, after the Communist Party market remains relatively less hospitable. Jiangsu Yuyue Medical Equipment &
began pulling back from its Covid-Zero play- Supply Co plans to add 524 million
book and offered more incentives to the Bid- Washington added Alibaba to a growing yuan, taking a 4.99% stake. Ant Group
en administration to work together. Xi’s shift roster of companies facing removal from US will contribute 5.25 billion yuan to re-
on those fronts, coupled with perceptions of stock exchanges due to a longstanding audit tain its 50% holding, while a group of
a renewed focus on reviving the world’s No dispute between the two countries. Though other backers are also investing.The in-
2 economy, is spurring speculation that Bei- US audit officials completed their first on- vestment proposal is still pending reg-
jing will begin to unshackle the private sector. site inspection round of Chinese companies ulatory approval.
including Alibaba this month, it’s still unclear
whether Chinese firms will pass muster.The In a filing in July, Alibaba reiterated
company is seeking a primary listing in Hong that Ma “intends to reduce and thereaf-
Kong that would enable it to tap more main- ter limit his direct and indirect econom-
land investors, while also maintaining its list- ic interest in Ant Group over time” to a
ing status on the NewYork Stock Exchange. percentage that doesn’t exceed 8.8%.

Read the full story

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world

(Nov 17): Amazon.com Inc on Wednes- reuters braced it for more complex tasks than
day said it has laid off some employees in checking the news or weather.
its devices group as a person familiar with Amazon lays off
the company said it still targeted around some devices unit A project inspired by a talking com-
10,000 job cuts, including in its retail di- staff as it targets puter in science fiction show Star Trek,
vision and human resources. Alexa had garnered headcount that grew
10,000 cuts to 10,000 people by 2019.
The announcement, Amazon’s first
since media outlets including Reuters re- by Jeffrey Dastin At the time, Amazon touted sales of
ported its layoff plans on Monday, herald- Reuters more than 100 million Alexa devices, a
ed a dramatic shift for a company known figure it has not since refreshed publicly.
for its job creation and added shape to the voluntary buyouts to some human-resourc- Founder Jeff Bezos later said the company
latest dismissals befalling the technology es staff, the source familiar with Amazon’s often sold Alexa devices at a discount and
sector. job-cut plans said. sometimes below cost.

Amazon executive Dave Limp in a blog For years, the online retailer aimed to While Amazon has toiled to encode
post said the company had decided to con- make Alexa, the voice assistant that pow- intelligent answers to any question Alexa
solidate teams in its devices unit, which ers gadgets it sells, ubiquitous and present might expect from users, Alphabet Inc’s
popularized speakers that consumers com- to place any shopping order, even though Google and Microsoft Corp-backed Ope-
mand through speech. It notified the em- it was unclear how widely users have em- nAI have had breakthroughs in chatbots
ployees it cut on Tuesday. that could respond like a human without
any hand holding.
“We continue to face an unusual and
uncertain macroeconomic environment,” Dozens of individuals posted on the
he said. “In light of this, we’ve been work- professional networking site LinkedIn to
ing over the last few months to further pri- say Amazon had laid them off, among them
oritize what matters most to our customers people who claimed to work on privacy
and the business.” for Alexa and software for the company’s
cloud gaming service Luna.
Plans, still in flux, to eliminate around
10,000 roles through reductions in more Following the layoff news, shares pared
units would amount to about a 3% cut in losses and closed down about 2%.
Amazon’s roughly 300,000-person corpo- Read the full story
rate workforce.The company has offered

(Nov 17): Tencent Holdings Ltd’s plan to Tencent’s US$20 certain companies at the expense of others.
dole out US$20 billion of stock in meal de- bil Meituan The JD and Meituan dividends may buy
livery giant Meituan triggered a broad sell- goodwill with the government, which has
off of Chinese internet stocks onThursday. stake cut ignites pushed for the dismantling of such barriers
internet sell-off and for tech firms to share the wealth.
The benchmark Hang SengTech Index
slid more than 5% in hectic morning trade. by Zheping Huang & John Cheng Chinese tech shares recovered some of
Meituan dived as much as 6.7%, while oth- Bloomberg their losses this month, after the Commu-
er Tencent investees including Kuaishou nist Party began pulling back from its Cov-
Technology and Bilibili Inc plunged more The move emerged asTencent reported id-Zero playbook and offered more incen-
than 7%. revenue shrank for the second straight quar- tives to the Biden administration to work
ter, underscoring the extent to which China’s together. Xi’s shift on those fronts, cou-
Tencent pledgedWednesday to distribute worsening economy is hurting its mammoth pled with perceptions of a renewed focus
the majority of its Meituan shares to inves- private sector.The company’s exit from JD on reviving the world’s No 2 economy, is
tors, ramping up plans to reduce its extensive and now much of Meituan comes after Xi spurring speculation that Beijing will begin
holdings across the world’s largest internet Jinping imposed a series of withering curbs to unshackle the private sector.
industry.The decision marks a milestone in on the industry in 2021, including restric-
Tencent’s evolution from a sprawling inter- tions on play time and content. On Wednesday, executives reassured
net empire with investments across much investors that Tencent will soon resume
of China’s tech sphere to a more focused The move marks another retreat forTen- winning crucial licenses to release new
gaming and social media operator. cent, which along with Alibaba Group Hold- major titles, reviving growth in domestic
ing Ltd held sway over much of China’s tech gaming. “The overall regulatory environ-
“Tencent’s distribution of Meituan shares sector for more than a decade. Apart from ment is trending towards a more support-
could be dragging sentiment as market wor- JD and Meituan,Tencent also owns part of ive environment,” president Martin Lau
ries about further divestments from its sig- Didi Global Inc.And this year, it sold about told analysts on a conference call.
nificant holdings of Chinese tech shares,” US$3 billion worth of shares in Southeast
said Vey-Sern Ling, the managing director Asia’s biggest internet company, Sea Ltd. China’s internet industry has made
of Union Bancaire Privee. peace with a new era of sedate growth, shift-
Beijing has punished the country’s tech ing focus to enhancing profitability from
Tencent, which had announced plans giants for anti-competitive behavior, includ- chasing market share after Beijing’s crack-
to pare its stake in online retailer JD.com ing maintaining closed ecosystems that favor down wiped more than US$1 trillion off
Inc, will dole out more than 958 million their combined market value in 2021.While
Class B stock in Meituan as a special div- regulators have eased up on their campaign
idend. The stock to be paid out, valued at against tech, the once-freewheeling sector
about HK$155 billion (US$19.8 billion remains saddled by weak consumer spend-
or RM90.14 billion) at Wednesday’s close, ing and strict Covid restrictions.
marks about 91% ofTencent’s Class B stake.

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(Nov 17): Grab Holdings Ltd reported a Grab’s cost cuts Grab said it slowed hiring, streamlined
narrower third-quarter loss than analysts had help ride-hailing functions and reduced incentive spending
estimated, helped by cost cuts by the South- company weather and corporate costs as a percentage of the
east Asian ride-hailing and delivery giant. value of the goods and services it provides.
tough times The company plans to bring down its “re-
The net loss for the quarter through gional headcount”, chief financial officer
September narrowed to US$327 million BY OLIVIA POH & YOOLIM LEE Peter Oey said on a conference call, with-
(RM1.49 billion) from US$970 million Bloomberg out providing numbers.
a year earlier, the Singapore-based com-
pany said on Wednesday (Nov 16). Ana- BLOOMBERG Its delivery business unit reached break-
lysts estimated a US$360 million loss on even on the basis of adjusted earnings be-
average. Revenue more than doubled to fore interest, taxes, depreciation and am-
US$382 million, dispelling some fears that ortisation (Ebitda), three quarters ahead
rising inflation and a gloomy economic of the target. Revenue and adjusted Ebitda
outlook would damp customer spending. at the ride-hailing unit doubled.
Grab also slightly raised its revenue fore-
cast for the year. Grab’s continued recovery in the mo-
bility segment and steady margins are “en-
Like technology companies worldwide, couraging”, Citigroup analyst Alicia Yap
Grab is contending with the effects of a de- said in a note.
teriorating economic climate and a height-
ened investor focus on profitability. The The company has sharpened its focus
company, which had been one of South- on its core services, distancing itself from
east Asia’s hottest start-ups, has struggled the long-held strategy to become the re-
since it went public via a merger with a US gion’s “superapp”. The superapp vision
blank-check company last year. Its shares, was aggressive, but led to extensive losses.
which have fallen about 70% since, rose Grab lost US$3.4 billion in 2021, and had
0.6% in NewYork trading. piled up almost US$1 billion of losses in
the first two quarters of this year.
The company is trying to balance
spending on growth with its effort to reach Grab also expressed confidence in cus-
profitability, as concerns about a recession tomer demand even as the tech industry fac-
trigger lay-offs, closures of business units es economic challenges. It said it expects an-
and other measures to rein in expenses nual revenue of US$1.32 billion to US$1.35
across the tech industry. Regional rivals billion, compared with its previous guidance
GoTo Group and Sea Ltd — both also of US$1.25 billion to US$1.3 billion.
loss-making — are implementing job cuts,
and said they would reduce expenses to Grab’s cash and cash equivalents fell
stem costs. to US$2.4 billion at the end of Septem-
ber, from about US$2.8 billion at the
end of June.

(Nov 17): Singapore charged the founder Singapore charges face imprisonment as well as fines.
of Hyflux Ltd and several people linked Hyflux founder Local authorities started investigating
to the collapsed firm with offences relat- with disclosure
ed to the disclosure of information, a step offences Hyflux and its directors in 2020. Last year,
toward resolving one of the nation’s most a Singapore court ordered the liquidation
high-profile corporate scandals. BY JOYCE KOH & AMEYA KARVE of Hyflux, capping a drawn-out saga that
Bloomberg left many investors and creditors with loss-
Olivia Lum, who was the firm’s chief es. Tens of thousands of retail investors
executive officer, was charged onThursday THE EDGE SINGAPORE bought Hyflux’s 6% perpetual preference
(Nov 17) for failing to disclose information shares that were sold in 2011.
related to a water treatment and power
project to the exchange as well as during In their statement, authorities said they
the sale of preference shares to the public investigated DBS Bank Ltd, Singapore’s
in 2011, according to a statement by the biggest lender, for its role as issue man-
police, the Monetary Authority of Singa- ager in the 2011 offer of S$200 million
pore and the Accounting and Corporate (US$146 million) preference shares.They
Regulatory Authority, or Acra. said “no further action will be taken after
reviewing the evidence obtained”.
Lum, now 61, was also charged for
breaching accounting rules in the compa- The outcome of Acra’s inspection of
ny’s 2017 financial statements. Lum, who the audits conducted by KPMG LLP, who
appeared in court in a black shirt and short was Hyflux’s auditors, will be finalised in
hair, was once one of the most-lauded fe- due course, according to the statement.
male entrepreneurs in the country and her
rags-to-riches story was well-known. Following a spate of high-profile corporate
scandals in recent years, Singapore has tight-
Former chief financial officer ChoWee ened oversight and pushed for more disclo-
Peng, now 53, and four independent di- sure to burnish its appeal as a global wealth
rectors of the company at the time were hub.The city-state is a popular destination
also charged. If convicted, the accused for some of the world’s wealthiest individu-
als, due in part to its stability and rule of law.

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BLOOMBERG

An US$18 bil demic. But investors have since dumped Saudi Aramco
wipeout is harsh high-profile tech shares, even as the broad- to pump US$7
er Indian stock market has outperformed bil into biggest
reality of five global peers and scaled new peaks. petrochemical
famed Indian IPOs investment in
“Valuations of these companies were South Korea
BY FILIPE PACHECO & ASHUTOSH JOSHI not supported by fundamentals and the
Bloomberg balance sheets, and their cash burn was BY JOYCE LEE
high,” said Arun Malhotra, a portfolio Reuters
(Nov 17): Five of the most-hyped technol- manager with CapGrow Capital Advi-
ogy initial public offerings (IPOs) in India sors LLP. As large investors curtail their SEOUL (Nov 17): Saudi Aramco
over the past 16 months have floundered holdings, unlocked shares are adding to plans a US$7 billion (RM31.84 bil-
since listing, shedding more than US$18 supply and this is accelerating the price lion) investment in a South Korean
billion in value. declines, he said. affiliate’s factory in the port city of
Ulsan to turn out more high-value
Concerns over valuations and rising Paytm parent One 97 Communications petrochemical products, the com-
global rates have taken the biggest toll Ltd plunged as much as 10% on Thurs- pany said on Thursday (Nov 17).
on the parent of payments firm Paytm. day after early investor SoftBank Group
The other victims include delivery start- Corp lowered its stake following the end The project, named Shaheen, is
up Zomato, the owner of beauty e-retailer of its IPO lock-up period. UberTechnolo- the Saudi firm’s biggest investment
Nykaa, logistics firm Delhivery and the gies Inc, an early investor in Zomato Ltd, in the Asian nation to develop one
operator of online insurance marketplace similarly exited the online food-delivery of the world’s largest refinery-inte-
Policybazaar. firm in August. grated petrochemical steam crack-
ers, Aramco said in a statement.
Indian IPOs raised a record US$18 bil- “New investors should not bottom
lion in 2021 on government efforts to foster fish in these stocks if the company has Saudi Aramco owns more than
startups combined with easy-money policy no clear path to profitability,” said Abhay 63% of South Korean refiner S-Oil
and a surge in retail trading during the pan- Agarwal, a fund manager at Piper Serica Corp.
Advisors Pvt.
Read also: Paytm shares slump 10% after Construction of the new plant
SoftBank unit cuts stake will begin in 2023, and be complet-
ed by 2026. It will have produc-
tion capacity of up to 3.2 million
tonnes a year, along with a facility
to produce high-value polymers,
Aramco said.

The steam cracker is expected
to process by-products from crude
processing, including naphtha and
off-gas, to make ethylene, and is
also expected to produce propyl-
ene, butadiene and other basic
chemicals.

On completion of the project,
S-Oil’s chemical yield, by volume,
could almost double to 25%,
Aramco said.

Global petrochemical demand
growth is “anticipated to accelerate,
driven in part by rising consump-
tion from Asia’s emerging econo-
mies”, chief executive officer Amin
Nasser said in the statement.

The project is well positioned
to meet rising demand from Asia’s
industries, he added.

The news came in conjunction
with Saudi Arabian Crown Prince
Mohammed Salman’s visit to South
Korea on Thursday.

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Inside a once-US$10 bil crypto
empire that’s suddenly cracking

(Nov 17): Suspended withdrawals at cryp- BY KATIE GREIFELD & VILDANA HAJRIC Cracks started to surface after Genesis
tocurrency brokerage Genesis amid the Bloomberg got caught up in the bankruptcy of hedge
widening crypto-market meltdown have fund Three Arrows Capital. Genesis was
cast an unwanted spotlight on Barry Sil- Silbert first bought Bitcoin in 2012, the biggest creditor ensnared in that col-
bert, the man at the helm of the Digital when the industry was in its early aughts. lapse after the fund failed to meet mar-
Currency Group empire. Among the firm’s earliest employees were gin calls. DCG assumed some liabilities
Michael Moro, who departed the CEO role and filed a US$1.2 billion claim against
Silbert, who rarely does press inter- at Genesis in August, as well as Ryan Selkis, a Three Arrows, which is under liquida-
views or speaks at the multitude of indus- co-founder of researcher Messari, and Melt- tion. Genesis said in October — before
try conferences, founded the Stamford, em Demirors, the chief strategy officer of ri- the FTX blowup — that lending plunged
Connecticut-based crypto conglomerate val digital-asset investment firm CoinShares. 80% in the third quarter.
DCG in 2015, according to the 46-year-
old’s LinkedIn profile. Last year, DCG’s With Genesis’s halted “Genesis Global Capital, Genesis’s
valuation reached US$10 billion, after it redemptions, the health lending business, made the difficult de-
sold US$700 million of stock in a private of DCG is called into cision to temporarily suspend redemp-
sale led by SoftBank Group Corp. DCG question, a spiral that tions and new loan originations. This
had 66 employees at the start of Novem- decision was made in response to the
ber and holds more than 200 companies follows the shocking extreme market dislocation and loss of
in its portfolio. blowup of the Bahamas- industry confidence caused by the FTX
based crypto exchange implosion,” said company spokesperson
DCG’s reach is vast. In addition to Amanda Cowie. “This impacts the lend-
embattled lender Genesis, it also con- FTX and its former ing business at Genesis and does not
trols digital-asset manager Grayscale chief executive, Sam affect Genesis’s trading or custody busi-
Investments, which offers the world’s nesses. Importantly, it has no impact on
largest crypto fund. DCG is also the Bankman-Fried. the business operations of DCG and our
parent of crypto-mining service provid- other wholly owned subsidiaries.”
er Foundry Digital, news publication Grayscale has been relatively unscathed
Coindesk and exchange Luno, among by the latest upheaval — the firm was Amid the recent brewing turmoil,
others. DCG declined a request for an quick to say on Wednesday that its prod- DCG has reshuffled its C-suite. Mark
interview with Silbert. ucts are functioning as normal. Even still, Murphy was promoted to president from
the asset manager is dealing with its own chief operating officer as part of a re-
Within the crypto space, DCG’s might set of issues. The US$10.7 billion Gray- structuring that saw about 10 employees
is well-known. The private firm’s portfo- scale BitcoinTrust (ticker GBTC) is trad- exit the company. Meanwhile, a handful
lio has over the years included everything ing at a record discount to the Bitcoin of Genesis’s trading-desk personnel have
from exchanges like Coinbase to hard- it holds, given that the trust’s structure also departed, as have its head of market
ware-maker Ledger to crypto-focused doesn’t allow it to redeem shares. Gray- insights and its chief risk officer.
bank Silvergate. scale sued the US Securities and Exchange
Commission in June after the regulator Silbert founded DCG after he sold
“They’re a pretty big deal in crypto,” denied the firm’s application to convert SecondMarket, a private-asset market-
said Wilfred Daye, the chief executive of- GBTC into an exchange-traded fund. place that was acquired by Nasdaq in
ficer of Securitize Capital, a digital-asset 2015. Last year he told the Wall Street
management firm. “Their footprints are But even with the record discount, Journal that he sees Standard Oil as an
everywhere.” GBTC is seen as a cash cow for Gray- inspiration for his digital-asset firm. Pri-
scale — and by extension, for DCG. The or to SecondMarket, Silbert also worked
With Genesis’s halted redemptions, trust charges shareholders a 2% annual at Houlihan Lokey, after he graduated
the health of DCG is called into ques- fee.That means that even though GBTC from Emory University, his LinkedIn
tion, a spiral that follows the shocking has shed billions of dollars in value since profile shows.
blowup of the Bahamas-based crypto total assets peaked at more than US$40 Read also:
exchange FTX and its former chief ex- billion last November, Grayscale would still FTX fallout hits crypto lender Genesis;
ecutive, Sam Bankman-Fried. Genesis collect more than US$200 million in fees Bankman-Fried, celebs sued
was the crown jewel of Silbert’s king- from the trust per year at current asset lev- Bankman-Fried regrets filing for FTX
dom, having established itself as one of els, according to calculations by Bloomberg. bankruptcy, criticises regulators in Vox
the largest and most well-known brokers, interview
allowing funds and market-makers to Genesis’s move Wednesday only af- FTX case has raised serious
borrow dollars or digital currencies to fects its lending business, according to allegations, says Singapore’s Wong
amplify their trades. interim chief executive Derar Islim, who
said the company’s spot and derivatives
“There are many lessons to be learned trading and custody businesses “remain
here,” said Campbell Harvey, a finance fully operational”. However, the decision
professor at Duke University. “In the fu- to halt withdrawals comes after a painful
ture, the level of due diligence will likely stretch for the brokerage.
increase. It is no longer acceptable to have
substantial exposure to opaque offshore
entities — no matter how popular their
founders are.”

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NEWS IN BRIEF

BLOOMBERG

Singapore firm weighs US$146 mil IPO, ending listing drought

(Nov 17): Legend Logistics Ltd is exploring an initial public offering in Singapore to raise

as much as S$200 million (US$146 million), according to people with knowledge of the

matter, in what would be the largest IPO in the city-state in nearly a year. The logistics firm

is working with financial advisers on the potential first-time share sale, said the people. A

listing could take place as soon as 2023, said the people, who asked not to be identified as

the process is private. Deliberations are ongoing and the size and timing of the IPO could

still change, the people said. The offering would boost the first-time share sale market

in Singapore, which has hosted only US$348 million worth of IPOs this year, down 15%

from the same period a year earlier, according to data compiled by Bloomberg. At US$146 Taiwan approves tax breaks in fight
million, Legend’s offering would be the biggest in the city-state since Digital Core REIT for more chip investments

Management Pte raised US$647 million in an IPO in November 2021. — Bloomberg

(Nov 17): Taiwan has expanded tax

REUTERS Hong Kong to reduce Covid testing breaks for companies that invest in
requirement for arrivals technology research and production in
an attempt to strengthen the island’s

(Nov 17): Hong Kong will cut in half the semiconductor industry, and help

number of laboratory Covid-19 tests new maintain its leading position in the global

arrivals must undergo starting next week. chip supply chain. Tech firms will now be

Travellers will be swabbed for testing at the able to lower their income tax bill by a

airport, and then must arrange one additional quarter if their spending on research and

nucleic acid test on their second day in development hits a set level, according

the Asian financial hub, Under Secretary to the amendments approved on

for Health Libby Lee said at a briefing on Thursday (Nov 17) by Taiwan’s Cabinet.

Thursday with reporters. The other two tests The measure also gives another 5% tax

currently required, conducted on days four break to companies whose investment in

and six, will no longer be needed, she said. advanced equipment reaches a set level,

The change is possible because the number of and is aimed at encouraging them to keep

infections tied to new arrivals has remained spending on production and development

Indonesia central bank hikes rates stable, even as case counts rise across the in Taiwan. Over the past year, many
by 50bps again, to ‘strengthen’ city, Lee said. The current Omicron strain countries have ramped up support for
monetary response of the virus that’s circulating has a short their domestic chip industries, promising
incubation period, meaning that the precise to give tens of billions of dollars in

JAKARTA (Nov 17): Indonesia’s central laboratory tests should be able to uncover subsidies to companies that increase

bank raised its key interest rate by 50 most infections brought in from abroad, production in those markets and diversify

basis points (bps) for a third consecutive she said. The move was designed to reduce away from China and Taiwan. Those

month on Thursday, saying it will inconvenience for travellers, Lee said. Daily promises have led to a rash of new

strengthen its response to “high” inflation rapid antigen tests for seven days are still factories being built or planned in the

expectations amid a strong economic required, she said. — Bloomberg US, Japan and Europe, worrying some in

backdrop. Bank Indonesia (BI) raised the Taiwan that its pre-eminent position in

seven-day reverse repo rate to 5.25%, as Read the full story the semiconductor industry is at risk. —
expected by the majority of economists Bloomberg

polled by Reuters. It also raised its

other policy rates by the same amount. Philippine central bank sticks to aggressive anti-inflation stance
Governor Perry Warjiyo told an online

news conference that the “front-loaded” MANILA (Nov 17): The Philippine central bank raised its key policy rate by 75 basis points on

and “pre-emptive” move was aimed at Thursday and signalled more rate hikes ahead, worried by potential threats to the economy

anchoring inflation expectations and from a weakening peso and the prospect of entrenched inflation. Bangko Sentral ng Pilipinas

stepping up support for the rupiah. While Governor Felipe Medalla, who had already signalled early this month that he would vote to

the global economy was slowing and some hike rates by three-quarters of a point, has stressed that a hefty rate hike was needed to head

countries were facing recession risks, he off currency declines. “[If peso weakness] is allowed to continue, that depreciation ... could

said activity in Southeast Asia’s largest also trigger disanchoring of price expectations,” Medalla told a news briefing after the rate

economy was improving. The central announcement. “We do not want inflation to get out of hand and be entrenched,” he said,

bank stuck to its forecast that growth hinting of more tightening ahead, albeit at a less aggressive pace. The central bank’s latest

will be at the upper end of its 4.5%-5.3% forecasts indicate that inflation would not return to the 2%-4% target range until 2024,

forecast range in 2022, adding GDP will after averaging 5.8% this year and 4.3% next year. Medalla said he was confident that the

be “high” next year. With Thursday’s move, economy, which expanded at a faster-than-expected 7.6% rate in the third quarter, could

BI has increased interest rates by a total withstand further rate hikes. Thursday’s adjustment, the sixth this year, brought the rate

of 175bps since August, matching the on the central bank’s overnight reverse repurchase facility to 5.0%, the highest in nearly 14

scale of its last tightening cycle in 2018. — years, and compares with the US Federal Reserve’s 3.75%-4% policy rate. — Reuters

Reuters

F R I D A Y N O V E M B E R 1 8 , 2 0 2 2 22 T H E E D G E C E O M O R N I N G B R I E F

MARKETS

CPO RM 3,845.00-177.00 OIL US$ 92.48-0.38 RM/USD 4.5527 RM/SGD 3.3118 RM/AUD 3.0483 RM/GBP 5.4101 RM/EUR 4.7186

Top 20 active stocks

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

DAGANG NEXCHANGE BHD 300.33 -0.250 0.505 -33.55 1,593.9

ADVANCE SYNERGY BHD 254.47 0.005 0.125 13.64 316.1

TOP GLOVE CORP BHD 70.17 -0.035 0.925 -64.29 7,406.8

MALAYAN UNITED INDUSTRIES BHD 46.67 0.005 0.090 28.57 290.3

PERDANA PETROLEUM BHD 34.21 0.020 0.110 -4.35 243.9

CITAGLOBAL BHD 32.24 -0.005 0.230 -2.13 431.7

MALAYSIA STEEL WORKS KL BHD 31.32 0.005 0.365 15.87 247.4

WIDAD GROUP BHD 30.69 -0.005 0.380 4.11 1,046.0

PUBLIC BANK BHD 28.19 0.010 4.310 3.61 83,660.1 World equity indices

NWP HOLDINGS BHD 25.97 -0.010 0.205 -16.33 116.3

MY EG SERVICES BHD 25.77 -0.010 0.805 -24.77 5,987.6 CLOSE CHANGE CHANGE CLOSE CHANGE CHANGE

HARTALEGA HOLDINGS BHD 23.33 -0.140 1.810 -68.41 6,185.6 (%) (%)
DOW JONES 33,553.83 -39.09 -0.12 INDONESIA 7,044.99 30.60 0.44
VELESTO ENERGY BHD 22.62 0.000 0.135 12.50 1,109.1

TANCO HOLDINGS BHD 22.39 0.005 0.355 47.92 632.7 S&P 500 3,958.79 -32.94 -0.83 JAPAN 27,930.57 -97.73 -0.35

YEW LEE PACIFIC GROUP BHD 19.85 0.010 0.335 0.00 178.4 NASDAQ 100 11,699.09 -172.06 -1.45 KOREA 2,442.90 -34.55 -1.39

AVILLION BHD 18.35 0.000 0.090 -14.29 102.0 FTSE 100 7,310.75 -40.44 -0.55 PHILIPPINES 6,403.74 11.65 0.18

TWL HOLDINGS BHD 17.63 -0.005 0.030 -40.00 113.2 AUSTRALIA 7,135.65 13.41 0.19 SINGAPORE 3,286.04 19.87 0.61

AHB HOLDINGS BHD 17.54 0.000 0.110 -15.38 41.3 CHINA 3,115.44 -4.55 -0.15 TAIWAN 14,535.23 -2.12 -0.01

CIMB GROUP HOLDINGS BHD 17.19 0.060 5.410 -0.73 57,698.2 HONG KONG 18,045.66 -210.82 -1.15 THAILAND 1,614.95 -5.03 -0.31

BORNEO OIL BHD 16.61 0.000 0.020 -33.33 175.7 INDIA 61,750.60 -230.12 -0.37 VIETNAM 969.26 26.36 2.80

Data as compiled on Nov 17, 2022 Source: Bloomberg Data as compiled on Nov 17, 2022 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)

PEGASUS HEIGHTS BHD 0.010 100.00 402.5 0.00 108.2 VSOLAR GROUP BHD 0.005 -50.00 87.5 -66.67 24.2

KEY ALLIANCE GROUP BHD 0.010 100.00 9,104.1 -33.33 36.8 NEXGRAM HOLDINGS BHD 0.005 -50.00 12,787.4 -50.00 22.1

JOE HOLDING BHD 0.020 33.33 0.1 -42.86 61.2 AT SYSTEMATIZATION BHD 0.010 -33.33 1,778.0 -66.67 60.0

DGB ASIA BHD 0.020 33.33 1,144.1 -33.33 35.7 EA HOLDINGS BHD 0.010 -33.33 1,426.9 -50.00 64.5

PASUKHAS GROUP BHD 0.020 33.33 369.9 -20.00 38.1 DAGANG NEXCHANGE BHD 0.505 -33.11 300,330.4 -33.55 1,593.9

CME GROUP BHD 0.040 33.33 367.1 -33.33 40.1 GREEN OCEAN CORP BHD 0.015 -25.00 70.0 -50.00 31.7

PERDANA PETROLEUM BHD 0.110 22.22 34,212.6 -4.35 243.9 TECHNA-X BHD 0.025 -16.67 5,856.3 -66.67 55.4

PAN MALAYSIA HOLDINGS BHD 0.085 13.33 8,735.4 6.25 79.0 ADVANCE INFORMATION 0.110 -15.38 3,632.3 -15.38 29.3

KEY ASIC BHD 0.045 12.50 628.0 -35.71 61.4 DOLPHIN INTERNATIONAL BHD 0.030 -14.29 8,396.0 -57.14 40.1

MARCO HOLDINGS BHD 0.180 12.50 7,340.7 24.14 189.8 TWL HOLDINGS BHD 0.030 -14.29 17,628.7 -40.00 113.2

WMG HOLDINGS BHD 0.100 11.11 1.0 5.26 44.5 SEDANIA INNOVATOR BHD 0.215 -14.00 12,152.1 -58.25 74.7

PNE PCB BHD 0.060 9.09 70.6 -29.41 33.6 MQ TECHNOLOGY BHD 0.035 -12.50 4,999.9 -30.00 43.8

MIKRO MSC BHD 0.180 9.09 3,056.1 -5.26 106.1 KANGER INTERNATIONAL BHD 0.035 -12.50 6,679.1 -82.50 21.9

COMPUTER FORMS MALAYSIA BHD 1.230 7.89 2,175.7 96.80 321.0 ANCOM LOGISTICS BHD 0.105 -12.50 3,631.8 -38.24 49.7

MEGA SUN CITY HOLDINGS BHD 0.070 7.69 32.1 -36.36 41.4 NETX HOLDINGS BHD 0.075 -11.76 1,637.3 -48.28 62.7

GOLDEN LAND BHD 0.300 7.14 37.0 -27.71 64.4 LAMBO GROUP BHD 0.040 -11.11 996.1 -52.94 61.6

TA WIN HOLDINGS BHD 0.075 7.14 13,643.8 -40.00 256.8 SMTRACK BHD 0.045 -10.00 4,045.3 -76.32 40.5

ANEKA JARINGAN HOLDINGS BHD 0.155 6.90 95.1 -22.50 91.7 TRIVE PROPERTY GROUP BHD 0.045 -10.00 119.7 50.00 56.9

CAM RESOURCES BHD 0.315 6.78 0.4 -5.97 60.3 MARINE & GENERAL BHD 0.095 -9.52 644.5 72.73 68.8

TOWER REAL ESTATE INVESTMENT 0.490 6.52 1.4 -12.5 137.4 SENI JAYA CORP BHD 0.530 -9.40 50.1 -19.70 102.9

Data as compiled on Nov 17, 2022 Source: Bloomberg Data as compiled on Nov 17, 2022 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)

PETRONAS DAGANGAN BHD 22.820 0.340 154.0 10.78 22,670.6 HEXTARTECHNOLOGIES SOLUTIONS 13.120 -0.780 87.5 422.71 1,687.9

DKSH HOLDINGS MALAYSIA BHD 4.680 0.250 6.6 -2.50 737.8 DAGANG NEXCHANGE BHD 0.505 -0.250 300,330.4 -33.55 1,593.9

PETRONAS GAS BHD 17.060 0.200 567.2 -4.66 33,757.2 KUALA LUMPUR KEPONG BHD 21.420 -0.200 1,114.1 -1.65 23,094.1

AMWAY MALAYSIA HOLDINGS BHD 5.030 0.200 25.0 -6.14 826.9 BLD PLANTATION BHD 10.800 -0.200 5.0 19.87 1,009.8

BATU KAWAN BHD 21.480 0.180 13.1 -5.37 8,453.7 NEW HOONG FATT HOLDINGS BHD 2.530 -0.150 0.1 11.95 209.2

HONG LEONG BANK BHD 20.660 0.160 4,382.1 10.96 44,785.1 HARTALEGA HOLDINGS BHD 1.810 -0.140 23,336.4 -68.41 6,185.6

HENGYUAN REFINING CO BHD 4.540 0.130 1,402.7 17.31 1,362.0 GREATECH TECHNOLOGY BHD 3.730 -0.110 1,273.2 -44.58 4,673.1

ALLIANZ MALAYSIA BHD 13.400 0.120 107.5 4.20 2,384.8 KOBAY TECHNOLOGY BHD 2.650 -0.110 1,553.6 -56.05 859.1

MISC BHD 7.200 0.110 1,854.4 2.13 32,139.0 SIGNATURE INTERNATIONAL BHD 3.130 -0.100 950.4 126.81 907.2

PANASONIC MANUFACTURING 22.700 0.100 2.9 -21.45 1,378.9 TENAGA NASIONAL BHD 8.380 -0.100 3,397.0 -10.28 48,210.8

HONG LEONG FINANCIAL GROUP 18.780 0.100 188.5 8.30 21,507.7 UNITED MALACCA BHD 5.400 -0.100 10.5 5.63 1,132.8

MALAYSIAN PACIFIC INDUSTRIES 26.100 0.100 62.0 -47.12 5,191.2 TELEKOM MALAYSIA BHD 5.350 -0.090 5,646.4 -2.73 20,442.4

IMASPRO CORP BHD 5.700 0.100 23.4 129.84 456.0 PENTAMASTER CORP BHD 4.020 -0.080 181.4 -27.57 2,859.5

COMPUTER FORMS MALAYSIA BHD 1.230 0.090 2,175.7 96.80 321.0 VITROX CORP BHD 6.980 -0.080 46.5 -29.92 6,593.7

IOI CORP BHD 4.100 0.080 1,253.6 9.92 25,452.7 PETRON MALAYSIA REFINING 4.430 -0.070 518.4 1.14 1,196.1

UMW HOLDINGS BHD 3.340 0.080 341.8 12.46 3,902.1 HIL INDUSTRIES BHD 0.990 -0.070 9.8 7.03 328.6

PPB GROUP BHD 16.300 0.080 615.6 -4.68 23,188.4 WESTPORTS HOLDINGS BHD 3.370 -0.070 237.0 -16.79 11,491.7

RHONG KHEN INTERNATIONAL 1.410 0.070 0.4 -14.55 273.1 SIME DARBY PLANTATION BHD 4.310 -0.070 1,643.9 14.63 29,806.7

COASTAL CONTRACTS BHD 2.130 0.070 340.0 55.47 1,122.0 MR DIY GROUP M BHD 2.000 -0.060 3,208.2 -16.9 18,857.9

AEON CREDIT SERVICE M BHD 12.660 0.060 110.6 -6.71 3,232.2 UNITED PLANTATIONS BHD 14.700 -0.060 198.4 7.25 6,075.5

Data as compiled on Nov 17, 2022 Source: Bloomberg Data as compiled on Nov 17, 2022 Source: Bloomberg