CEOMorningBrief FRIDAY, M AY 3 1 , 2 0 2 4 ISSUE 773/2024 theedgemalaysia.com A NEW ERA BEGINS The SD Guthrie story started over 200 years ago in a tiny backwater in the Far East called Singapura. Over the ensuing 200 years, we became a leader in our industry, with extensive upstream operations and a thriving downstream business, serving customers in more than 90 countries. And all of it sustainably and responsibly managed. We have now set our sights beyond the palm oil industry because there is much more we can do. Two new business verticals – renewable energy and, green industrial parks – make plenty of sense because we have the capacity, the ability and the ambition to achieve even greater success. Unlocking Nature's Superpower Formerly known as Sime Darby Plantation Berhad SDGuthrie.com SD Guthrie Berhad. 200401009263 (647766-V)
CEOMorningBrief FRIDAY, M AY 3 1 , 2 0 2 4 ISSUE 773/2024 theedgemalaysia.com MARK MOBIUS TURNS BULLISH ON CHINESE STOCKS AMID RECENT RALLY p21 WWW.SUENJEWELLERS.COM Registration no. 1117920-W EXCLUSIVELY AVAILABLE AT HOME: Mah Sing the latest to jump on data centre bandwagon p4 BNM, insurers working on new insurance policies with cost-sharing provisions p6 Boost Bank set for June 6 launch — Axiata p7 After six years, prosecution finally wraps up its case in 1MDB-Tanore trial p16 WORLD: Saudi Arabia may announce landmark Aramco share sale Thursday — Reuters p26 Major shareholders seize opportunities to unlock value as stocks rally Reports on Page 3. PDC mulling suit against The Edge over report on controversial Batu Kawan project Report on Page 2. ANZ exits AMMB, while major shareholders of Malayan Cement and Sunway trim stakes.
FRIDAY MAY 31, 2024 2 THEEDGE CEO MORNING BRIEF published by ( 2 6 6 9 8 0 - X ) tel . 603-77218000 Level 3, Menara KLK, 1 Jalan PJU 7/6, Mutiara Damansara, 47810, Petaling Jaya, Selangor, Malaysia publisher + ceo . Ho Kay Tat editor-in-chief . Kathy Fong chief commercial officer . Sharon Teh chief operating officer . Lim Shiew Yuin editors . Jenny Ng . Tan Choe Choe to contact editors: [email protected] to advertise: [email protected] the edge ceo morning brief Read from desktop or mobile device. You can print in A4 to read. Set print mode to fit or shrink oversize page. to get on emailing list [email protected] KUALA LUMPUR (May 31): Penang Development Corporation’s (PDC) lawyers are currently reviewing The Edge’s report on the controversial land deal in Batu Kawan, as it considers legal action against the publication. Appropriate steps will be taken soon, Penang Chief Minister Chow Kon Yeow said at the state assembly, according to Buletin Mutiara, a Penang state government news portal. “Legal action against The Edge’s report is under review by PDC’s lawyers, and appropriate steps will be taken in due course,” Chow reportedly said in his winding-up speech during the State Legislative Assembly session on Thursday. According to the report, Chow said PDC has initiated legal action against a former director over a matter concerning the development of Batu Kawan Industrial Park 2 (BKIP2) (Phase One). The Penang state government takes seriously the allegations that the state and PDC had wrongly signed a land sale agreement with Umech Land Sdn Bhd, Chow reportedly stated. “PDC has taken legal action after receiving a mandate from the PDC board and a notice of claim was issued on May 8 this year. “Furthermore, PDC’s lawyers are currently filing a lawsuit in the Penang High Court against this individual,” the report read. It did not name the former board member. To recap, PDC last year signed a joint development agreement (JDA) with Umech Land Sdn Bhd to develop a RM3.5 billion mega industrial project, dubbed Batu Kawan Industrial Park 2 (BKIP2), by teaming up with the PDC. Under that agreement, which has since been terminated, PDC, as proprietor of the land, would have been entitled to RM646.02 million — an amount that was “derived from negotiations” with Penang’s development arm based on the market price in the vicinity of the land. Umech Construction Sdn Bhd, which claimed to have financial backing from Dubai, was the initial partner that the state government had identified. But Umech Construction’s financial capability to undertake the project, which had an estimated development cost of RM3.5 billion, was questionable, given that it only had a paid-up capital of RM10 million and a gearing ratio of 215% as at Dec 31, 2021. It is unclear whether it was because of Umech Construction’s weak financial position that Umech Land ended up signing the JDA with PDC instead. Sunway Bhd emerged as a Umech Land shareholder via the subscription of a 70% stake on Sept 25 — two days before the JDA signing on Sept 27, 2023. Umech Land was originally a 70:30 joint venture between by Karen Cheng Pui Kwan and Nathaniel Rajakumar, respectively. Cheng and Nathaniel are also shareholders in Umech Construction. The project put PDC and Sunway under intense public scrutiny, while the Penang Chinese Chamber of Commerce (PCCC) queried the state government for not undertaking an open tender for the project. The PCCC claimed that the price tag of RM646 million, or RM27 per square feet, significantly undervalued the land. PDC subsequently called off the controversial deal on Oct 17 last year, and issued a request for proposal (RFP) for the project instead. Anwar: FedEx eyeing business expansion in Malaysia Bernama BY JUSTIN LIM theedgemalaysia.com KUALA LUMPUR (May 30): Multinational express transportation company FedEx plans to expand its business in Malaysia, especially involving its existing facilities at several airports, according to Prime Minister Datuk Seri Anwar Ibrahim. In a post on Facebook, Anwar said this was revealed during his meeting with FedEx Corp president and chief executive officer of airline and international Richard Smith, who paid him a courtesy call at his office in Putrajaya Thursday. “FedEx currently operates 30 flights weekly in Malaysia, connecting local industries to its global network across 220 countries and territories,” he said. Anwar said that during the meeting, he also received positive feedback regarding the government’s approach to translating the Madani Economy agenda. “Among other things, FedEx sees the proposed Johor-Singapore Special Economic Zone (JS-SEZ) as a significant future economic growth collaboration that should be leveraged,” he said. PDC mulling suit against The Edge over report on controversial Batu Kawan project HOME Note: Dear readers, there will be no CEO Morning Brief on Tuesday (June 4, 2024) as we are taking a break for Agong’s Birthday. We will be back on Wednesday (June 5, 2024). For the latest news during the holidays, check out https://www.theedgemalaysia.com/.
FRIDAY MAY 31, 2024 3 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 30): Malaysia’s recent stock market rally has provided opportunities for substantial shareholders to take some profit off the table. Just Thursday alone, substantial stakes in three companies, namely AMMB Holdings Bhd (KL:AMBANK), Sunway Bhd (KL:SUNWAY) and Malayan Cement Bhd (KL:MCEMENT), were made available for investors. ANZ exits AMMB Australia & New Zealand Banking Group Ltd (ANZ) is inviting bids to sell its remaining 5.17% stake in AMMB. It is learnt that ANZ could fetch up to RM701.16 million from the share sales. This is the last tranche of AMMB shares that the Aussie banking group has in hand. The sale would mark the exit of ANZ from Malaysia’s sixth-largest lender by assets. According to a term sheet sighted by The Edge, ANZ’s wholly-owned subsidiary ANZ Fund Pty Ltd is putting up its remaining 171.02 million shares in AMMB for sale at an offer price of RM4.05 to RM4.10. The offer price range represents a 2.84% to 4.03% discount to AMMB’s closing price of RM4.22 on Thursday. The offer is set to close on Thursday night with the trade date fixed for Friday. CIMB Investment Bank and BofA Securities are the joint bookrunners for the block of shares being put up via ANZ Fund. In March, ANZ, which has long made known its intention to let go of its block of AMMB shares, offloaded a 16.5% stake in AMMB for RM2.1 billion, slashing its stake to 5.17%. AMMB’s largest shareholder currently is the Employees Provident Fund (EPF), with a 14.3% stake, followed by founder Tan Sri Azman Hashim’s 11.8% stake. Sunway’s Cheah family vehicle trims stake The Cheah family’s private vehicle Sungei Way Corp Sdn Bhd is looking to sell up to a 3.52% stake in Sunway Bhd for RM704 million. Sungei Way is offering up to 200 million shares — base 150 million shares coupled with a 50-million-share upsize option — at RM3.52 apiece, according to people familiar with the matter. The offer price represents a 2.76% discount to Sunway’s closing price of RM3.62 on Thursday and a 4.8% discount to the counter’s five-day volume weighted average price of RM3.6975. The Edge learnt that the offer closed at 7pm on Thursday with the share transfer set to take place on Friday. CGS International is the sole placement agent for the deal. Following the share sale, Sungei Way’s stake would be 45.05%, dropping from 48.57% currently. Founder and chairman Tan Sri Dr Jeffrey Cheah Fook Ling’s total stake would be trimmed to 70.94% — comprising 10.88% direct and 60.05% indirect stakes. The patriarch of the Sunway Group, together with his family, would remain Sunway’s largest shareholder, followed by EPF’s 5.22% stake. Shares in Sunway ended unchanged at RM3.62 on Thursday, valuing the group at RM20.54 billion. YTL cuts stake in Malayan Cement, brings up public shareholding spread YTL Cement Bhd, 98%-owned by YTL Corp Bhd (KL:YTL), is seeking to sell a 5% stake in building materials group Malayan Cement for up to RM325.4 million. According to a term sheet, YTL Cement is offering its 66 million shares in Malayan Cement through an accelerated bookbuilding process, pricing them at RM4.93 per share. This represents a discount of up to 5.19% to Malayan Cement’s closing price of RM5.20 on Thursday, and a 6.29% discount to the stock’s five-day volume weighted average price of RM5.2610. At RM5.20, Malayan Cement is valued at RM6.88 billion. Maybank Investment Bank is the bookrunner for the block of shares being offered. Upon completion of the deal, YTL Cement’s shareholding in Malayan Cement is expected to fall to 73.58%, from 78.58% previously, according to the company’s last disclosure of its shareholding on January 23. The deal would also increase Malayan Cement’s public shareholdings to above the 25% level. Recall that YTL Cement’s RM5.16 billion merger deal with Malayan Cement in 2022 gave rise to YTL BY IZZUL IKRAM & CHOY NYEN YIAU theedgemalaysia.com FBM KLCI Source: Bloomberg May 10, 2023 May 30, 2024 1,300 1,400 1,500 1,600 1,700 1,604.26 1,425.68 points FBM Top 100 Source: Bloomberg May 10, 2023 May 30, 2024 9,500 10,250 11,000 11,750 12,500 11,835.52 10,142.34 points FBM Mid 70 Source: Bloomberg May 10, 2023 May 30, 2024 13,000 14,000 15,000 16,000 17,000 18,000 17,619.89 13,576.32 points Major shareholders seize opportunities to unlock value as stocks rally CONTINUES ON PAGE 4
FRIDAY MAY 31, 2024 4 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 30): Water and power supply remain a major challenge in Johor, despite the southernmost state in Peninsular Malaysia experiencing a boom in data centres due to its proximity to Singapore and the spillover effects of the US-China trade war, according to Johor Bahru city council (MBJB) Mayor Datuk Mohd Noorazam Osman. To tackle these issues, he suggested enhanced collaboration between the government and private sector, including building desalination plants for adequate water supply and Water, power remain major issues for Johor’s data centres, says JB mayor KUALA LUMPUR (May 30): Property developer Mah Sing Group Bhd (KL:MAHSING) announced it is setting up a joint venture to develop a data centre in Bangi, Selangor. Mah Sing is the latest to jump on the data centre bandwagon amid expectations of strong future demand from the artificial intelligence (AI) sector. Among other public-listed companies that have announced their own data centre ventures include YTL Power International Bhd (KL: YTLPOWR) and Sime Darby Property Bhd (KL:SIMEPROP). Under the joint venture with Bridge Data Centres Malaysia V Sdn Bhd (BDC), Mah Sing will reserve a 17.55-acre land to develop the data centre that would consume up to 100 megawatts (MW), according to an exchange filing. The shareholding structure of the JV has yet to be finalised. BDC — based in Singapore and mainly operates data centres in India and Malaysia — will prepare the preliminary planning and design of the project, as well as secure hyper-scale or artificial intelligence data centre customers for the data centre facilities. “Mah Sing has earmarked 150 acres of a land bank at Southville City for further expansion into a leading Data Centre Hub with a planned capacity of up to 500 megawatts,” it said. “The collaboration with BDC... is just the beginning.” Under the terms of the joint venture, BDC will make an initial payment of RM5 million to Mah Sing for the land reservation. Both parties agreed that the surrounding land is valued at RM200 per sq ft. HowevMah Sing the latest to jump on data centre bandwagon BY HEE EN QI theedgemalaysia.com BY SYAFIQAH SALIM theedgemalaysia.com partnering with developers to create industrial parks equipped with adequate power and water infrastructure for high-tech industries. “People are too hyped about data centres nowadays, but the issue in Johor is water and power. Areas with potential for power supply are Pasir Gudang and Kulai,” he said during a panel discussion at The Johor Conversations 2024. “As a local authority, I believe that while promoting investments is important, it should not come at the expense of the local and domestic needs of the people,” he added. The Johor Conversations 2024, titled Pursuing Growth Through Infrastructure, Innovation, Technology, and Sustainability, was organised by GovInsider together with the state government’s investment agency, Johor Corp (JCorp). Johor is the largest data centre market in Malaysia, attracting investments from multinational corporations (MNCs) with regional presence. It is the ninth-largest data centre market in the Asia Pacific, news reports quoted resource site Baxel earlier this month. er, for the purpose of the agreement, Mah Sing stated that the reference price for the value of the land should be RM160 per sq ft. The proposed joint venture with BDC “represents a strategic shift towards diversifying the group’s revenue streams beyond traditional property development,” said Mah Sing, which primarily develops homes, offices and retail spaces. “The recurring income [from data centres] would create a recession-resistant business model to mitigate the risks associated with the cyclical nature of property development,” it added. To recap, Sime Darby Property will build and lease out a hyperscale data centre at its Elmina Business Park in a deal worth RM2 billion. According to the Ministry of Investment, Trade and Industry (Miti), it has secured a commitment by Google to invest US$2 billion (RM9.4 billion) to house Google’s first data centre and Cloud region in Malaysia. The site of Google’s data centre will be located at Sime Darby Property’s Elmina Business Park, in Greater Kuala Lumpur. YTL Power is collaborating with Nvidia Corp to build an AI infrastructure that will be powered by Nvidia technology, with the first phase of the data centre expected to commence operations by the middle of this year. The data centre, which will provide AI computing services, will be owned and managed by YTL Power’s 60%-owned unit YTL Communications Sdn Bhd. It will be hosted in YTL Power’s 500MW solar-powered Green Data Centre Park in Johor. PHOTO COURTESY OF MAH SING Cement owning an over 78% stake, and back then, Bursa Malaysia had accepted a public shareholding spread of 21.37%. However, Bursa also advised Malayan Cement to use its best endeavours to increase the percentage of public shareholding spread to 25%. The KLCI has rallied by 10.3% since the beginning of the year, after the government urged government-linked companies (GLC) and government-linked investment companies (GLIC) to repatriate their earnings abroad in a bid to ease pressure on ringgit. The FBM Top 100 Index has climbed 13%, while the FBM Mid 70 has climbed 20.6%, year to date. As the rally in Bursa Securities starts showing signs of tapering from its recent high [See charts], it will be interesting to see if there will be more stake sale by substantial shareholders in the near future before the government-linked market players run out of ammunition. FROM PAGE 3 The collaboration agreement was signed by Mah Sing’s property subsidiaries CEO Benjamin Ong (seated, left) and Bridge Data Centres president Eric Fan (seated, right), and witnessed by Deputy Prime Minister Datuk Seri Fadillah Yusof (centre). Read the full story
FRIDAY MAY 31, 2024 5 THEEDGE CEO MORNING BRIEF
FRIDAY MAY 31, 2024 6 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 30): Malaysia is strategically positioned to capitalise on the artificial intelligence (AI) boom, and emerge as the premier data centre hub in Asean, said Digital Minister Gobind Singh Deo. In a statement on Thursday, Gobind said the AI boom had initiated a global race for computing, accelerating demand for land, energy, and water resources, to power next-generation AI data centres. He said Malaysia can capitalise on this trend, with its abundance of resources and safe geographical location for investors seeking diversification. Additionally, he said Malaysia had demonstrated the right policy mix over the years, coupled with strong execution, to emerge as a global leader in the digital infrastructure space. As such, in terms of connectivity, Malaysia boasts an award-winning fifth-generation (5G) network helmed by Digital Nasional Bhd (DNB), an agency under the Ministry of Digital. “Malaysia’s 5G coverage has reached over 80% of populated areas, and recorded 11.9 million 5G service subscriptions, representing an adoption rate of 35.4%, in just under three years since its formation,” he said. Gobind said this at the Leaders TalkX: Digital Advancing Sustainable Development: A Trusted Connected World, in conjunction with the World Summit on the Information Society Malaysia strategically positioned to capitalise on AI boom, says Gobind KUALA LUMPUR (May 30): Bank Negara Malaysia (BNM) and insurers are working on new insurance plans with cost-sharing provisions amid rising healthcare costs that will inflate claims and lead to higher premiums for consumers, an association of insurers said. Medical claims payout increased 26% in 2023 following a 34% surge a year earlier, according to the Life Insurance Association of Malaysia (LIAM) that represents 16 foreign and local life insurers. The higher medical claims are expected to add pressure on premium increases in the future, LIAM said. “Policyholders are provided options to manage the cost of their insurance premiums,” LIAM president Raymond Lew wrote in the association’s latest annual report. “These include lowering their premium by converting it to a cost-sharing plan and reviewing or altering their policy benefits to suit their situation.” Repricing of premiums is a standard feature of medical reimbursement coverage but insurance policies become unsustainable when the premiums collected are insufficient to cover the expected claims expenses. Policyholders have sought or resumed medical consultations as Malaysia recovers from the Covid-19 pandemic, leading to a sharp rise in medical claims in 2022 and 2023. Medical claims are surging Claims data from 2018 shows that hospital supplies and services accounted for 60%-70% of claimable surgical and non-surgical treatment costs in Malaysia, LIAM said. The costs are not regulated and are increasing faster than other hospitalisation costs, the association flagged. BNM, insurers working on new insurance policies with cost-sharing provisions BY JASON NG theedgemalaysia.com Bernama The total claims payout in 2023 climbed 14.9% to RM15.4 billion in 2023 from RM13.4 billion in 2022, driven by an increase of 41.4% in disability payment and 26.2% in medical claims, data from the association show. New business total premium, meanwhile, rose 11.6% to RM13.4 billion in 2023 from RM12 billion in 2022, thanks to strong growth in group policies and investment-linked policies. “We look forward to a collective effort by the government, regulators, private hospitals, and consumers to address the issue of medical cost and premium inflation,” Lew said. That includes understanding the necessity of every medical procedure, option for daycare instead of admission to hospital, request for itemised billings, and opting for co-payment to promote responsible usage of medical and health insurance and to reduce pressure on premium increases, it said. Policyholders, meanwhile, are urged to educate themselves on their medical policies, explore alternative treatments, question unreasonable billing, and consider optimal medical treatments, LIAM added (WSIS)+ 20 Forum High-Level Event in Geneva, Switzerland, on Tuesday. On the regulation aspect, the minister said Malaysia is actively involved in shaping cooperation in the digital economy at the Asean level, via the highly anticipated Digital Economy Framework Agreement (Defa). Defa is forecast to unlock up to US$2 trillion (RM9.41 trillion) in value for the Asean digital economy by 2030 through harmonised trade rules, interoperability standards, and enhanced collaboration with member nations. Apart from the new Cyber Security Bill 2024 tabled in March, Gobind said the Department of Personal Data Protection is in the final stages of drafting a bill to amend the Personal Data Protection Act 2010 (Act 709). Concurrently, a national data-sharing bill is being drafted by the National Digital Department, another agency under the Ministry of Digital, he noted. “Collectively, these efforts are integral components of the ministry’s overarching goals to foster a holistic regulatory environment that meets the needs of citizens, businesses, and investors in the digital sphere,” he added. To fully realise the potential of the digital economy, he said the ministry believes that investments in digital infrastructure and a robust regulatory framework must be matched by a strong supply of digitally savvy, future-proof talent. The Ministry of Digital has acknowledged the fine balance required to leverage emerging technologies while mitigating potential risks. “Through a targeted policy and regulatory approach centred on digital infrastructure, regulation, and talent development, the ministry is committed to laying a strong foundation to propel Malaysia as a digital leader in Asean and beyond,” he concluded. ZAHID IZZANI/THE EDGE
FRIDAY MAY 31, 2024 7 THEEDGE CEO MORNING BRIEF HOME Axiata aims to complete Indonesian merger by year-end Boost Bank set for June 6 launch — Axiata BY JUSTIN LIM theedgemalaysia.com BY JUSTIN LIM theedgemalaysia.com Axiata Group Bhd CEO and MD Vivek Sood believes there is a fairly large underbanked population in Malaysia, specifically when it comes to SMEs and MSMEs. These two segments will be the target audience for Boost Bank. KUALA LUMPUR (May 30): Axiata Group Bhd’s (KL:AXIATA) chief executive officer and managing director Vivek Sood said Boost Bhd will launch its digital bank next Thursday (June 6). The digital bank is a 60:40 joint venture between Boost Holdings Sdn Bhd and RHB Bank Bhd. Axiata’s unit Axiata Digital Services Sdn Bhd (ADS) holds a 78% stake in Boost Holdings, while Great Eastern Digital Pvt Ltd owns the remaining 22% equity interest. Upon its launch, Boost Bank will be the third digital bank in Malaysia. GXBank, backed by Singapore-headquartered Grab Holdings Inc and the Kuok group, was launched on Nov 30 last year, followed by Japanese retail giant’s Aeon Bank earlier this month. Sood believes there is a fairly large underbanked population in Malaysia, specifically when it comes to small and medium enterprises (SMEs), and micro, small and medium enterprises (MSMEs). These two segments will be the target audience for Boost Bank. “We have done well serving them the wallet side payments. So while the competition will be there, we think we are very well placed, because in a way, we’ve been doing that outside of banks. It’s now going to be replicated in a bank, and hopefully with deposits, we should be able to get funding at a relatively lower cost. “Having said that, I think it’s early days for us to comment [on] whether the competition will be intense, [and] how the market is going to be shaping up, but we think there is sufficient market available for at least the three of us who want to sustain,” he told a press conference in conjunction with Wednesday’s release of Axiata’s quarterly results. According to Sood, Boost’s e-wallet has more than 11 million users and over 630,000 merchant touchpoints in Malaysia. Shares in Axiata settled three sen or 1.1% higher at RM2.77 on Thursday, bringing the group a market capitalisation of RM25.43 billion. Year-to-date, the stock has gained 16%. On Wednesday, Axiata announced its revenue increased 13% year-on-year to RM5.66 billion in the first quarter ended March 31, 2024 (1QFY2024) from RM5 billion a year ago. It also snapped its streak of losses and reported a net profit of RM60.03 million in 1QFY2024. But its quarterly net profit was still 19% lower compared with RM73.85 million a year ago, due to higher foreign exchange losses and finance costs. PATRICK GOH/THE EDGE KUALA LUMPUR (May 30): Axiata Group Bhd (KL:AXIATA) aims to complete the merger of its Indonesian mobile unit XL Axiata with Smartfren Telecom by the end of 2024, its top executive said on Thursday. Due diligence is ongoing, said chief executive officer and managing director Vivek Sood at a press conference after Axiata’s annual general meeting. However, he acknowledged the merger would take time and there may be challenges in integrating the companies. “You have to look at what the joint plans are there and prepare for the definitive agreements,” Vivek said. “The phase we are going through includes preparing the structure of the organisation, looking at the combined strategy” and potential synergies among others, he said. Vivek is optimistic that the merger would boost the combined entity’s competitiveness in the Indonesia market and challenge existing leaders. Currently, XL Axiata is the third largest player in Indonesia with about 57 million subscribers, while Sinar Mas’ PT Smartfren Telecom has an estimated subscriber base of 36 million. “The combined subscribers of both entities would make us closer to our competitors,” he said. Two weeks ago, Axiata signed a non-binding agreement with conglomerate Sinar Mas to explore combining their Indonesian units. Both Axiata and Sinar Mas intend to remain joint controlling shareholders of the merged entity, the company said. Axiata runs five main businesses in Indonesia — XL Axiata, Link Net, edotco, Boost and ADA. Axiata has been shedding assets and acquiring new ones as part of its efforts to boost profitability. The company announced the sale of its businesses in Myanmar in April this year and Nepal in December last year. Axiata said subsidiary edotco Group Sdn Bhd would sell its Myanmar tower business for US$150 million or RM713 million, cash, citing worsening macroeconomic and operating environment. Following the divestment in Myanmar, edotco will focus on growing its business in the Philippines and Indonesia, said Axiata’s group chief finance officer Nik Rizal Kamil Nik Ibrahim. Shares in Axiata closed three sen or 1.1% higher at RM2.77, bringing the group a market capitalisation of RM25.43 billion Read also: Axiata keeps revenue growth target and dividend commitment of 10 sen per share for FY2024 “The combined subscribers of both entities would make us closer to our competitors,” — Vivek.
FRIDAY MAY 31, 2024 8 THEEDGE CEO MORNING BRIEF HOME ACE Marketbound Agricore expects stronger ringgit to lift margins RGB International bags RM382 mil contract from Philippines’ state casino regulator; declares six sen dividend BY ANIS HAZIM theedgemalaysia.com BY HEE EN QI theedgemalaysia.com KUALA LUMPUR (May 30): Electronic gaming machine maker RGB International Bhd (KL:RGB) has secured a contract worth US$81.33 million (RM382.97 million) from the Philippines’ state-owned casino regulator Philippine Amusement and Gaming Corp (Pagcor). RGB, whose share price has climbed 54% year to date, said the contract was awarded to its wholly-owned unit RGB (Macau) Ltd to supply and deliver slot machine equipment for Casino Filipino Branches. The project involves supplying 1,968 electronic gaming machines (EGMs) along with their related accessories, light-emitting diode (LED) signage and displays, according to the group’s filing on Thursday. “The services to be provided under this project include logistics arrangement, installation of EGMs, signage and displays, as well as engineering technical and product training,” it said. RGB said the new job win is expected to contribute positively to its earnings and enhance its net assets for the financial year ending Dec 31, 2024 (FY2024). RGB also announced its net profit more than doubled to RM22.18 million in the first quarter ended March 31, 2024 (1QFY2024) from RM10.54 million a year earlier. Quarterly revenue also jumped twofold to RM210.11 million from RM95.16 million. The better earnings were driven by higher contributions from its sales and marketing division, and technical support and management division. The group declared an interim dividend of six sen per share, with June 27 as the ex-date and July 12 as the payment date. Shares in RGB settled down two sen or 4.60% to 41.5 sen on Thursday, valuing the company at RM635.22 million. KUALA LUMPUR (May 30): Food ingredient supplier Agricore CS Holdings Bhd (KL:AGRICOR) — which is slated to be listed on the ACE Market on June 21 — expects better margins ahead, amid wide anticipation that the ringgit will strengthen against the greenback. According to the group, its profit margin declined to 5% for the financial year ended December 31, 2023 (FY2023), from 5.8% in FY2022, due to the increase of material costs, as a result of the unfavourable Malaysian ringgit against the US dollar. Agricore’s chief financial officer Lim Swee Chuan said the group only managed to pass on 50% of the cost increase to customers, but it expects better times ahead once the ringgit strengthens. “In the food industry, when the price increases because of the commodity, it is very hard to drop. The ringgit depreciated around 3% against the USD last year. We suffer a little bit now, but if the ringgit strengthens in future, we will be very happy,” he told reporters after the prospectus launch on Thursday. According to its prospectus, Agricore’s major suppliers hail from other countries such as Canada, Thailand, India, and Myanmar. Meanwhile, its customers are mainly Malaysians. Lim further added that the company would focus on boosting sales to offset volatility in the currency exchange. “By having more sales, we can improve our bottomline. This [listing exercise] is a very good platform for us to gain brand awareness, tap into the market and raise money for expansion,” he said. “We have also received enquiries from big food manufacturers, such as Mamee,” he continued. “In the past, we could not cater to their requests due to limited working capacity, but with the expansion, we can increase our topline.” He said the consumer sentiment has been improving and the business would remain resilient against uncertainties in the economic environment. “Food ingredients are used in daily consumption. We are not worried about inflation and the business is resilient to economic downturns. Even during the MCO (movement control order), we did much better,” he said. Meanwhile, the removal of the diesel subsidy and the increase in the sales and service tax (SST) would not pose a significant impact on the group, according to Lim. According to the prospectus, Agricore reported double-digit revenue growth over the past three years, with a three-year compound annual growth rate (CAGR) of 14.9%. Meanwhile, its net profit exhibited a compound annual growth rate of 31.4% over the same period. For FY2023, the group reported a revenue of RM135 million, up 10% from RM122.7 million in FY2022. Net profit declined 4% to RM6.8 million in FY2023, from RM7.1 million in FY2022. Agricore’s chief financial officer Lim Swee Chuan said the group only managed to pass on 50% of the cost increase to customers, but it expects better times ahead once the ringgit strengthens. SAM FONG/THE EDGE Read also: Agricore starts taking orders for RM25.9 mil IPO
FRIDAY MAY 31, 2024 9 THEEDGE CEO MORNING BRIEF
FRIDAY MAY 31, 2024 10 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 30): Genting Bhd (KL:GENTING) said its net profit for the first quarter ended March 31, 2024 (1QFY2024) surged several folds, mainly contributed by its leisure and hospitality segment in Malaysia and Singapore. The diversified conglomerate’s net profit made a big leap to RM588.87 million from RM98.04 million, while quarterly revenue jumped 27.6% to RM7.43 billion from RM5.82 billion. Genting did not declare any dividend for the quarter under review. In a bourse filing, Genting said the profit contributed by its leisure and hospitality segment in Singapore — which houses Resorts World Sentosa — doubled to RM1.32 billion from RM646.6 million. This was largely thanks to the increased visitorship during the Chinese New Year festive season, as well as the relaxation of visa regulations between China and Singapore which came into effect in February. Meanwhile, profit contributed from its hill-top casino also increased by 32% to RM733.1 million from RM555.9 million due to higher volume from both gaming and non-gaming segments. Looking ahead, Genting expects the operating environment for the regional gaming market to improve amid the optimistic outlook for international tourism. Meanwhile, its 49%-owned Genting Malaysia Bhd (KL:GENM) is cautious about its near-term prospects for leisure and hospitality but remains positive on the industry’s long-term prospects. “In Malaysia, economic expansion is expected to continue given improvements in external demand and domestic spending, although the lingering effect of inflation will continue to be influenced by domestic policy decisions and financial market developments,” said Genting. For its plantation division, its Strong hospitality recovery brings Genting’s 4Q profit back to prepandemic level KUALA LUMPUR (May 30): Malaysia Airports Holdings Bhd (KL:AIRPORT) has reported a more more than three-fold rise in its first quarter net profit from a year earlier fuelled by higher passenger volumes. Net profit for the three months ended March 31, 2024 (1QFY2024) soared to RM189.99 million or 10.53 sen per share, compared with RM58.19 million or 2.65 sen per share in the same period last year, MAHB’s bourse filing showed. Quarterly revenue increased 30.64% year-on-year to RM1.35 billion from RM1.03 billion, thanks to higher passenger numbers resulting from new airline operations, school holiday travel, the Chinese New Year festive season, and the implementation of a 30-day visa-free waiver for China and India travellers to Malaysia, the group said. The airports operator did not declare any dividend for the quarter. Moving ahead, MAHB anticipates a further recovery in passenger traffic beyond pre-pandemic levels by 2024, which will be supported by the relaxation of visa requirements that can stimulate passenger arrivals. “MAHB continues to work closely with the Malaysian government to further facilitate passenger arrivals, including expanding the use of e-Gate to China and India passengers,” it said. Still, the group acknowledged that its performance may be affected by aircraft availability, global inflation, fuel prices, and geopolitical risks. “The group remains steadfast in optimising its costs, with its core cost per passenger expected to further improve in tandem with passenger growth,” the airports operator said, adding that it will also closely monitors the prevailing conflict in West Asia and the possible impact on its MAHB’s 1Q net profit triples to RM190 mil BY LUQMAN AMIN theedgemalaysia.com BY HEE EN QI theedgemalaysia.com More on corporate earnings: PPB Group’s 1Q net profit falls 11% as cinema ops’ losses pile up MISC’s 1Q net profit rises 24% to RM760 mil, declares dividend of eight sen Bumi Armada’s 1Q net profit up 19.7% on higher vessel operations revenue 55.4%-owned Genting Plantation Bhd (KL:GENP) expects an overall growth in fresh fruit bunches (FFB) production but flags that ongoing replanting activities would have a moderating effect on the production. “In the short term, Genting Plantation expects palm oil prices to remain supported at current levels due to favourable price spreads against other edible oils,” it said. Genting’s plantation division saw its profit increase by 14% year-on-year to RM146.1 million from RM128.7 million. Shares of Genting were up seven sen or 1.46% to RM4.85, valuing the group at RM18.8 billion. Year-to-date, the counter has climbed 28 sen or 6.13%. operations and costs as airlines reroute flights to avoid specific airspace. During the quarter under review, MAHB said revenue from its airport operations increased by 31.7% to RM1.27 billion from RM960.7 million in the year-ago 1Q, while its aeronautical segment revenue increased to RM733.9 million from RM553.8 million. “This surge was driven by the growth in traffic, with total passenger numbers for the group reaching 31.3 million from 26.8 million passengers in the corresponding quarter last year,” MAHB said. Its Malaysia operations saw a rise in 1Q passenger traffic to 21.8 million from 18.7 million passengers a year earlier. Likewise, its Turkiye operations continued to show passenger traffic growth, increasing from 8.1 million to 9.5 million passengers during the same period. Meanwhile, its non-aeronautical segment revenue increased to RM531.8 million from RM406.9 million, largely due to better contribution of commercial revenue from its Malaysia and Turkiye operations. Revenue from its non-airport operations also increased by 16.1% to RM85.6 million from RM73.7 million due to higher revenue from hotel, agriculture, project and repair maintenance businesses. MAHB shares closed five sen or 0.51% higher at RM9.93, valuing the group at RM16.57 billion. SUHAIMI YUSUF/THE EDGE
FRIDAY MAY 31, 2024 11 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 30): Datasonic Group Bhd (KL:DSONIC) posted a 70.02% year-on-year jump in its latest quarterly net profit, driven by strong demand for passports, identity cards and financial card personalisation services. The net profit for its fourth quarter ended March 31, 2024 (4QFY2024) was RM38.6 million against RM22.7 million a year earlier, while revenue rose 10.34% to RM115.74 million from RM104.9 million, the group’s bourse filing showed. For the full financial year (FY2024), net profit increased 20.8% to RM92.26 million from RM76.37 million in FY2023, while full-year revenue grew 6.85% to RM368.3 million from RM344.7 million. This marks the group’s highest quarterly and annual earnings to date. Datasonic announced a fourth interim dividend of 1.3 sen per share, bringing total dividends for FY2024 to three sen, compared to two sen in FY2022. Datasonic executive chairman Tengku Datuk Seri Abu Bakar Ahmad Tengku Abdullah said the group anticipates the high demand for passports, ID cards and financial card personalisation services to continue. The group also projects a rise in orderbook for auto-gates with facial recognition systems for foreign visitors. In addition, new revenue streams are expected from the foreign workers segment and other businesses aligned with the group’s core competencies, Abu Bakar he said in a statement. Additionally, Abu Bakar said that the group has secured its first overseas project in a West African country this month. The details of the contract, however, could not be disclosed due to a non-disclosure agreement, a spokesperson told The Edge. Shares of Datasonic rose half a sen or 0.98% to close at 51.5 sen on Thursday, giving the group a market capitalisation of RM1.51 billion. Datasonic posts record 4Q and full-year earnings, secures first overseas project in West Africa KUALA LUMPUR (May 30): Hong Leong Bank Bhd (KL:HLBANK), the banking arm of tycoon Tan Sri Quek Leng Chan, said on Thursday its net profit rose 12% year-on-year (y-o-y) in the third quarter, thanks to higher interest income and provision writeback. Net profit for the three months ended March 31, 2024 (3QFY2024) was RM1.04 billion compared to RM929.96 million over the same period a year earlier, Hong Leong Bank said in an exchange filing. Net interest income rose 15% y-o-y to RM1.22 billion while non-interest income fell 38% to RM212.1 million. “To pursue regional growth opportunities and build a strong Asean franchise, we continue to enhance our transaction banking network with top-notch digital capabilities while supporting our employees to develop to their greatest potential,” Hong Leong Bank said. In 3QFY2024, Hong Leong Bank booked writeback of impairment losses on loans, advances and financing totalling RM26.3 million. Operating expenses, meanwhile, were marginally higher at RM576.85 million. No dividend was declared for the quarter. For its first nine months, net profit climbed KUALA LUMPUR (May 30): Press Metal Aluminium Bhd (KL:PMETAL) said its net profit climbed 44.7% year-on-year (y-o-y) for the first quarter, thanks to higher sales volume and a stronger US dollar. “We have a positive start in 2024 following an upturn in economic activities, especially in the Asian market which drove higher demand for aluminium,” Press Metal said. The company declared a first interim dividend of 1.75 sen for the quarter under review, the same amount in the previous year’s corresponding period. Prices of aluminium have rallied along with other base and precious metals. The three-month aluminium futures have gained nearly 7% so far this year on the London Metal Exchange, thanks to robust demand and supply concerns. Going forward, the company said it 7.1% to RM3.16 billion versus RM2.95 billion over the same period last year. Net interest income was steady at RM3.57 billion while non-interest income fell to RM831 million for the nine-month period due to lower income from investment and trading. “We remain cautiously optimistic with the business outlook and macroeconomics for the remainder of FY2024, as we focus on the execution of our business strategies to deliver sustainable outcomes to our stakeholders,” Hong Leong Bank managing director Kevin Lam said in a statement. Net interest margin — a measure of profitability from interests charged on loans after deducting returns paid to depositors — came in at 1.85% at the end of March, thanks to strong lending growth. Current-account-savings-account growth stood at 7.6%, while gross loans and financing grew 7.8%. In terms of asset quality, gross impaired loans — debts deemed unrecoverable as a percentage of total loans — came in at 0.57% while loan impairment coverage was 154.4% at the end of the period. Hong Leong Bank’s common equity tier 1 capital — a measure of a bank’s capital strength based on the highest quality of regulatory capital — stood at 12.5%. Shares of Hong Leong Bank closed four sen or 0.2% lower at RM19.26, valuing the bank at RM41.75 billion. Hong Leong Bank’s 3Q profit up 12% on higher interest income, writeback Press Metal’s 1Q profit jumps 45%, declares 1.75 sen dividend BY JASON NG theedgemalaysia.com BY HEE EN QI theedgemalaysia.com BY SYAFIQAH SALIM theedgemalaysia.com aims to tap into the US-China trade war. “The trade war has resulted in the implementation of tariffs and the imposition of restrictive policies toward certain countries,” Press Metal said. “Although this may complicate supply chain and metal flow, we will seek to leverage these shifting dynamics to our advantage.” Read the full story Read also: Hong Leong Financial Group’s 3Q net profit rises 11% as commercial bank unit fares well Alliance Bank books record revenue of RM2.02 bil in FY2024, declares 11.45 sen dividend
FRIDAY MAY 31, 2024 12 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 30): IOI Properties Group Bhd’s (KL:IOIPG) net profit for its third quarter ended March 31, 2024 (3QFY2024) rose 90.9% to RM220.21 million from RM115.38 million a year earlier, mainly thanks to the completion of a land sale in Johor The group said the RM211.1 million recognised from the land sale also helped revenue increase 59.8% to RM902.19 million, from RM564.67 million in 3QFY2023. Topline growth was also fuelled by higher commercial properties sales, successful leasing progress of IOI City Mall Phase 2 and contribution from W Hotel KL, the group said in a bourse filing on Thursday. IOI Properties did not declare any dividend for 3QFY2024. For the nine months ended March 31, 2024 (9MFY2024), IOI Properties posted a 55.4% decline in net profit to RM516.15 million as compared to RM1.16 billion in the same period a year earlier. “However, excluding fair value gain, reversal of inventories written down, and impairment loss, the underlying profit before tax (PBT) in 9MFY2023 derived at RM688.5 million,” the group said, noting that the underlying PBT for 9MFY2024 stands 8% lower at RM630.2 million. “The decline in PBT was primarily due to the weaker contribution from our property development segment in China, which recorded lower sales,” it added. IOI Properties said sales from its property development segment stood at RM1.59 billion for the nine-month period, 92% of which was contributed by local projects. “Within Malaysia, the sales secured were largely from Johor at RM669.3 million, led by sales from established townships such as Bandar Putra Kulai and Taman Kempas Utama,” the group said. Looking to the final quarter of the financial year, IOI Properties said the group is optimistic of a satisfactory performance, adding that its property development segment in the Klang Valley is poised to improve with a strong pipeline of launches while its Johor projects are well-capitalised on various proposed initiatives taking shape in the state. “Complementing the property development segment, the recurring income from established property investment portfolios and improving prospects for the hospitality and leisure segment will provide the group with a strong foundation for sustained earnings ahead,” it added. Shares in IOI Properties ended four sen or 1.61% lower at RM2.44 on Thursday, valuing the group at RM13.43 billion. More on corporate earnings: QL Resources closes FY2024 with 35% growth in 4Q profit, record high annual profit Leong Hup’s 1Q net profit doubles on Indonesian ops turnaround Bintulu Port’s 1Q net profit doubles to RM45 mil, declares three sen dividend IOI Properties’ 3Q net profit up 91%, boosted by RM211 mil Johor land sale KUALA LUMPUR (May 30): Panasonic Manufacturing Malaysia Bhd (KL:PANAMY) declared a final dividend of RM1.21 per share for the financial year ended March 31, 2024 (FY2024), payable on Sept 20, 2024. This brings the annual dividend per share to RM1.36, about 11.5% higher than RM1.22 per share in FY2023. However, the payout ratio dropped marginally to 89% in FY2024 versus 92% in FY2023. The home appliance maker’s net profit more than doubled to RM17.58 million in the fourth quarter ended March 31, 2024 (4QFY2024), from RM7.35 million a year ago, on the back of higher revenue achieved, lower material costs and higher share of profit from the associated company. Its share of profit from the associated company surged to RM5.95 million, from RM824,000 a year ago, according to the consumer electronic product manufacturer’s bourse filing. Quarterly revenue increased 6.11% to RM207.48 million, from RM195.53 million a year before, on higher export sales. Earnings per share for the quarter swelled to 29 sen versus 12 sen in 4QFY2023. For FY2024, the group’s net profit grew 15.62% to RM92.65 million, from RM80.13 million in FY2023. Annual revenue dropped 8.7% to RM905.69 million, from RM991.63 million a year before. Panasonic attributed the lower revenue Panasonic declares bumper dividend of RM1.21 but payout ratio drops slightly achieved for FY2024 to the discontinuance of the kitchen appliances business since the end of the last financial year, and lower export sales in fan products, mainly in the Vietnam market, as demand slowed. It also said an insurance claim was received in FY2023 for the flood incident amounting to RM22.3 million recognised as other operating income. If excluding the insurance claims, the profit before tax for FY2024 would be an improvement of approximately 55% compared to last year. On its outlook, Panasonic said the business environment is likely to remain volatile for FY2025. To maintain its business competitiveness, it said it will continue to intensify its efforts to produce new products (water-related business) and expand its current product line-up. “The company has made further progress in the utilisation of technology in its manufacturing facilities to improve productivity and increase efficiency whilst continuing to implement cost reduction measures to reduce overall costs of production and to improve profitability. “With these measures in place, the company will strive to meet these challenges ahead with agility and resilience,” it added. Shares in Panasonic increased eight sen to close at RM20.06 on Thursday, giving the group a market capitalisation of RM1.22 billion. Year-to-date, the stock has gained 11%. BY JUSTIN LIM theedgemalaysia.com BY IZZUL IKRAM theedgemalaysia.com 0 50 100 150 200 Panasonic Manufacturing Malaysia’s dividend Annual dividend per share (sen) *Financial year ends on March 31 Sources: Bursa Malaysia, company’s annual report FY2020 FY2021 FY2022 FY2023 FY2024 198 163 122 136 83
FRIDAY MAY 31, 2024 13 THEEDGE CEO MORNING BRIEF SUEN No. 119 Jalan Maarof, Taman Bangsar, 59000 Kuala Lumpur | T: 603-22848618 NEW LOCATION SEIBU Ground Floor @ TRX 55188 Kuala Lumpur T: 603-48209802 603-48209801 | E. [email protected] I W. www suenjewellers.com Registration no. 1117920-W EXCLUSIVELY AVAILABLE AT FOPE.COM ANYWHERE, ANYTIME. FOPE PHOTOGRAPHED BY THOMAS LOHR CEO Morning Brief ROP - Digital.indd 1 19/04/24 09:41
FRIDAY MAY 31, 2024 14 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 30): Media Chinese International Ltd (KL:MEDIAC), which mainly publishes Chinese-language newspapers, may reduce its workforce by as much as 44% as part of an ongoing restructuring, said Kenanga Investment Bank. The company could shrink its workforce to around 1,000 from 1,800 people “in future”, according to Kenanga said in a note to clients. Manpower accounts for about 50% of Media Chinese’s costs, followed by newsprint at around 20%, the research house noted. Media Chinese “believes it can extract significant cost savings by downsizing its workforce and encouraging its employees to multitask”, Kenanga said. If publishing costs rise further, Media Chinese may shutter its printing plants in Johor and Penang, and centralise print operations in Selangor, the research house added. Shares in Media Chinese have declined 3.7% so far in 2024, following a sharp drop over the past years, as the company grappled with dwindling earnings and losses. The company posted its biggest net loss since 1998 at RM61 million for the latest financial year ended March 31, 2024 (FY2024). Media Chinese’ financial trouble is part of a wider global trend of escalating cost and slump in revenue from falling sales and advertising expenditure for the industry. In addition, media firms have also struggled to monetise their digital content. Last year, Astro Malaysia Holdings Bhd (KL:ASTRO) implemented a voluntary separation scheme to cut operating expenses, following the footsteps of Media Prima Bhd (KL:MEDIA) and Star Media Group Bhd (KL:STAR). Media Chinese exploring AI use in news In addition to cost control measures, Media Chinese is also considering measures to integrate artificial intelligence (AI) in its operations, and is hopeful that it could monetise its intellectual property or news content in future, Kenanga flagged. Media Chinese, which publishes China Press, Sin Chew Daily, and Nanyang Siang Pau, among other titles, is collaborating with local publishers through the Malaysian Newspapers Publishing Association to “collectively approach and engage multinational AI companies”, the research house said. Last week, OpenAI announced a multi-year agreement to bring in news content of News Corp, which owns The Wall Street Journal and Fox News, among other assets. Still, Media Chinese is more sanguine about reaching commercial agreements with emerging AI players in China, such as Baidu and Tencent, given its niche in Chinese language content, Kenanga said. Based on the efficiency gains offered, Media Chinese estimated that at least 30% of its staff could be laid off within two years following the adoption of AI, Kenanga added. Read the full story More from brokers: IJM Corp shares hit record high after 4Q beat Mercury Securities tells investors to subscribe to KTI Landmark, fair value at 36 sen Paramount shares log worst day in over seven months as 1Q disappoints Media Chinese may shrink workforce by 44% — Kenanga KUALA LUMPUR (May 30): Shares in Lagenda Properties Bhd (KL:LAGENDA) hit their lowest in nearly four years on Thursday, amid a fallout from anti-corruption investigations into one of the developer’s key personnel. The counter fell as much as 27% or 31.5 sen to 85.5 sen, its lowest since November 2020, adding to Wednesday’s (May 29) 30% plunge. The two-day decline wiped out some RM674 million from the stock’s market capitalisation. At market close on Thursday, shares in Lagenda settled at five sen or 4.27% lower at RM1.12 after 289.81 million shares traded, valuing the company at RM937.81 million. Bursa Malaysia has suspended intraday short selling (IDSS) for Lagenda Properties again on Thursday, after the stock hit the limit down. Lagenda’s IDSS will only be reactivated on May 31 (Friday) at 8:30am, according to the local bourse. Apex Securities, who is the sole research house that has a “hold” call on the counter, noted that “the ongoing investigation has indirectly tarnished the group’s reputation”. Apex emphasised the need for proactive communication from Lagenda’s management in addressing key stakeholders’ queries regarding financial impact, business operations and the group’s sustainability to restoring investors’ confidence. The research house has trimmed its target price for Lagenda Properties to RM1.12 (based on a higher discount rate at 50% to RNAV), to account for perceived “weak effective management practices”. Still, there is potential for an upward re-rating if the investigation yields a favourable outcome and subsequently restores Lagenda’s reputation, it noted. Lagenda Properties shares extend decline to near four-year low Lagenda currently has four “buy” ratings, with the consensus 12-month target price standing at RM2.04, according to Bloomberg data. Read also: Epicon shares soar, advancing after clarifying Lagenda-linked MACC probe BY LUQMAN AMIN theedgemalaysia.com BY JASON NG theedgemalaysia.com Lagenda Properties Bhd 0 50 100 150 200 250 300 May 30, 2023 May 30, 2024 1.0 1.5 2.0 Vol (mil) RM *RM1.12 RM1.17 *As at market close on May 30, 2024 Source: Bloomberg
FRIDAY MAY 31, 2024 15 THEEDGE CEO MORNING BRIEF HOME Penang studying prospect of forming special financial zone GEORGE TOWN (May 30): The Penang government, through the Penang Institute, is looking into the prospect of forming a special financial zone in the state as an engine of growth, the Penang state legislative assembly was told on Thursday. Chief Minister Chow Kon Yeow said the study is evaluating Penang government-linked companies and business sentiments and identifying whether the formation of the zone would increase business efficiency, spur capital injections and eliminate barriers to trade. “For now, the research is at the discussion stage with the stakeholders. The state will then apply to the federal government to establish the special financial zone,” he said when winding up the address by Penang governor Tun Ahmad Fuzi Abdul Razak. — Bernama Petronas teams up with Sinopec to explore energy opportunities KUALA LUMPUR (May 30): Petroliam Nasional Bhd (Petronas) on Thursday announced it has partnered with China Petrochemical Corporation (Sinopec) to explore opportunities to drive growth and innovation across the energy value chain. The national oil corporation said the memorandum of understanding with Sinopec will focus on sustainable expansion in areas that include commodity and specialty chemicals, crude oil and liquefied natural gas (LNG) trading, lubricants and digital solutions. Petronas’ collaboration with the oil and gas enterprise headquartered in Beijing also aims to drive decarbonisation efforts across various industries, including transportation, shipping, manufacturing, aviation and power, said Petronas in a statement. — by Luqman Amin NEWS IN BRIEF KUALA LUMPUR (May 30): The government said it will prioritise addressing the issue of unlicensed abandoned private housing projects, including by collaborating with stakeholders. According to Deputy Minister of Housing and Local Government Datuk Aiman Athirah Sabu, there are 175 unlicensed abandoned private housing projects remaining in Peninsular Malaysia. Aiman said the ministry is committed to continuing the agenda of the task force on sick and abandoned private housing projects (TFST), specifically targeting unlicensed abandoned private housing projects. “[The ministry] is ready to collaborate with relevant stakeholders and remains committed to addressing the issue of sick and abandoned private housing projects across the country,” she said in a statement on Thursday. Unlicensed private housing projects are those developed without obtaining an advertising permit and developer’s licence from the National Housing Department. Meanwhile, Aiman said that in the first four years of 2024, the ministry has sucHousing ministry to focus on abandoned housing projects, ready for stakeholder collaboration BY CHOY NYEN YIAU theedgemalaysia.com cessfully rehabilitated 20,489 private housing units across 177 projects, with a gross development value (GDV) of RM14.89 billion. These projects include 163 that obtained certificates of completion and compliance (CCC), 11 projects that transitioned from “sick” status to “progressing smoothly”, and three abandoned projects. “Up to April 30, TFST identified 205 delayed private housing projects and 438 sick private housing projects, while the number of abandoned private housing projects remained at 115, with a combined GDV of RM189.67 billion,” Aiman said. While statistics on sick, delayed, and abandoned private housing projects are dynamic, she emphasised that they are steadily decreasing. Datuk Aiman Athirah Sabu said that in the first four years of 2024, the ministry has successfully rehabilitated 20,489 private housing units across 177 projects. Vizione bags RM750 mil related-party contract for apartment construction job KUALA LUMPUR (May 30): Vizione Holdings Bhd (KL:VIZIONE), which is valued at RM73.72 million, has secured a RM750 million contract from a company partially owned by its directors for construction works on a mixed development in Gombak, Selangor. The integrated construction engineering outfit will undertake the main contract works for Phase 2 and 3 of the development under the contract it received from property developer Fields Of Forest Sdn Bhd (FOFSB). Phase 2 comprises various blocks of serviced apartments, shoplots and a parking complex, while Phase 3 comprises serviced apartments and shoplots. The work is expected to be completed within three years after the group receives the architect’s instruction, said Vizione. “The contract is expected to contribute positively to the future earnings of the company,” it added. Vizione noted that work for the contract will require it to enter into recurrent related-party transactions which have yet to be mandated. Its managing director Datuk Ng Aun Hooi and executive director Bee Jian Ming are indirect shareholders of FOFSB. Based on back-of-theenvelope calculations, Ng controls a 50.64% effective stake in FOFSB, while Bee controls 5.28%. Another 40% stake in FOFSB is held by Lau Beng Wei, while a 4.08% stake is controlled by Istilah Sari (M) Sdn Bhd. Shares in Vizione ended unchanged at four sen, giving it a market capitalisation of RM73.72 million. — by Izzul Ikram PHOTO VIA FACEBOOK/KPKT
FRIDAY MAY 31, 2024 16 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (May 30): The High Court has awarded the family of death-in-police-custody victim S Balamurugan a sum of RM316,000 in damages, following the court finding that the 44-year-old’s death was due to blunt force trauma, as evidenced by 20 marks of injuries, and a pathologist determining that the cause of death was due to a heart attack brought on by the injuries. The sum was awarded by High Court Judge Su Tiang Joo, who decided on the quantum following the assessment of damages. He awarded general damages of RM100,000, aggravated damages of another RM200,000, and special damages of RM16,000. The judge also awarded costs of RM22,000 to be paid by the police and government. Balamurugan’s brother, Balraj, and another, named the Inspector General of Police, four police officers attached to the North Klang district police headquarters, and the government, as defendants in the suit. On Aug 30, 2022, High Court Judge Datuk Ahmad Bache ruled that the government and police were liable for Balamurugan’s death in 2017 as they were found to be negligent, that he had been subjected to unlawful imprisonment, that there had been breach of statutory duty, and that there had been assault and battery against him that caused his death. Following the finding, the court ordered damages to be assessed, and this was done on Thursday. Prior to the High Court decision in 2022, the Enforcement Agencies Integrity Commission also had an inquiry, where several inmates who were with Balamurugan testified that he was beaten by a police officer. As a result, Balraj filed the suit decided by Ahmad. Balraj was represented by Zaid Malek and Nabila Khairuddin, while senior federal counsel Nur Ezdiani Roleb and federal counsel Afiz Nazrin Zaharinan appeared for the defendants. Balamurugan was arrested as a suspect involved in theft of a vehicle. More court stories: MACC officer: Najib told us he kept some ‘donation’ funds for political ‘contingency’ Appeal hearing for Sarawak Report editor deferred due to counsel’s internet connection issues HHRG served court order for Mareva injunction to freeze RM58.18 mil assets Fahmi allowed to transfer suit against Papagomo for three defamation suits to be heard together High Court awards RM316,000 to family of deathin-custody victim S Balamurugan KUALA LUMPUR (May 30): The 1Malaysia Development Bhd (1MDB)-Tanore trial, which is now in its sixth year, has finally been partially concluded, with the prosecution closing its case on Thursday. Parties will now make submissions, after which the court will decide on whether former prime minister Datuk Seri Najib Razak — the sole accused in this trial — will be called to enter his defence, or walk free of the 25 abuse of power and money laundering charges related to misappropriation of the strategic development company’s funds. A total of 50 prosecution witnesses took to the stand, including former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi, former 1MDB chairman Tan Sri Mohd Bakke Salleh, former Bank Negara Malaysia (BNM) governor Tan Sri Dr Zeti Akhtar Aziz, and once fugitive, former company general counsel Jasmine Loo Ai Swan. “With that, since there are no more witnesses by the prosecution and no other cross-examination by the defence.[...] I would like to close the prosecution’s case. After 235-trial days in the span of six years and 50 prosecution witnesses, the prosecution rests,” deputy public prosecutor (DPP) Ahmad Akram Gharib informed the court late on Thursday afternoon. Akram said the prosecution has prepared a list of witnesses to be presented for the defence. He added that the list has grown through the course of the trial. “Some [witnesses] have passed away. We have 49 witnesses offered to the defence,” he said. Trial judge Datuk Collin Lawrence Sequerah then set July 26 for the first round of submissions, and all parties are to be done with their submissions by Aug 9. For the moment, oral submissions have been set for Aug 19 until Aug 22. The court had also sat on two Saturdays — a first in 1MDB cases — in an effort to wrap up the case. Sequerah is also no longer a High Court judge, as he was elevated to the appellate court in Jan 2023. The trial began on Aug 28, 2019 with the late Datuk Seri Gopal Sri Ram leading the prosecution. The former Federal After six years, prosecution finally wraps up its case in 1MDBTanore trial Court judge passed away in Jan 2023 due to a lung-infection. Najib, who was charged in 2018, faces four counts of abuse of power for using his position as the then prime minister, finance minister, and chairman of 1MDB’s board of advisers to receive gratifications worth US$620 million (RM2.27 billion). He also faces 21 money-laundering charges. The ex-finance minister is currently serving his prison sentence after the apex court had dismissed his appeal and review in his SRC International Sdn Bhd case. In February, the Federal Territories Pardons Board reduced the ex-prime minister’s initial 12-year jail sentence and fine of RM210 million to six years and RM50 million. Najib still has two pending court cases — a money-laundering trial concerning SRC and a RM6.6 billion criminal breach of trust (CBT) trial. In the RM6.6 billion CBT trial, Najib is charged along with former treasury secretary general Tan Sri Mohd Irwan Serigar Abdullah of misappropriation of government funds to pay International Petroleum Investment Company (IPIC). The trial is slated to begin on Tuesday, June 4. BY TARANI PALANI & TIMOTHY ACHARIAM theedgemalaysia.com BY HAFIZ YATIM theedgemalaysia.com Read also: Zeti: 80% of AmBank’s wrongdoing was during tenure of former MD Ashok Ramamurthy
FRIDAY MAY 31, 2024 17 THEEDGE CEO MORNING BRIEF HOME PETALING JAYA (May 30): Any parties wishing to verify the process for the award of Selangor’s demand-responsive transit (DRT) pilot project can request for documents or meeting minutes from the authorities, said Menteri Besar Datuk Seri Amirudin Shari. He said his administration is always open to sharing such information without needing to ‘hide’ anything. “There is no problem, because we have the freedom of information (enactment) that allows them to obtain documents. There is nothing unusual about it. “We have the house (state assembly) committee, and we can make the information available. They can even request for the meeting minutes, which also involved the Land Public Transport Agency (APAD),” Amirudin told reporters after attending the opening of the Selangor International Junior Golf Championship 2024 and PKNS Masters Selangor 2024 here on Thursday. On Wednesday, the Center to Combat Corruption and Cronyism (C4) urged the Selangor government to provide full details of the appointment of Asia Mobility Technologies Sdn Bhd, whose chief executive officer Ramachandran Muniandy is the husband of Youth and Sports Minister Hannah Yeoh, for the pilot project. Asia Mobiliti has only been given a licence to provide the proof of concept (POC) for the DRT project. Amirudin emphasised that through an open tender process, only two companies, Badan Bas Coach Sdn Bhd and Hannah Yeoh’s husband company gone through open tender, says Selangor MB Asia Mobility, had the authorisation from the APAD to conduct the POC. “So you need to understand and not dispute whether it was an open tender or not, [because] from the start, the question itself was wrong and manipulated by those who wanted to take advantage or create issues,” the menteri besar said. He said that if one of the companies was dropped during the POC process, there would be no comparison to determine which company could provide the best service. Responding to a call from Gombak Setia assemblyman Muhammad Hilman Idham from Perikatan Nasional for the state government to cancel the existing contract, due to claims it was awarded without an open tender, Amirudin said that Prasarana and Kumpool Sdn Bhd would be invited to conduct a POC once they receive authorisation from the APAD. The Malaysian Anti-Corruption Commission recently said it had conducted a preliminary investigation into the DRT issue, and found no wrongdoing in the matter. DRT is a new technology that can more efficiently connect users to major public transportation systems, including reducing wait times and optimising routes. Bernama EMBRACING SUSTAINABILITY N AV I GAT I N G N E W F R O N T I E R S , 11 & 12 JUNE 2024 9.00AM TO 6.00PM KUALA LUMPUR CONVENTION CENTRE miaconference.mia.org.my Terms & Conditions Apply 3,500 DELEGATES 80 SPEAKERS 16 SESSIONS Organised by Diamond Sponsor SPECIAL ADDRESS President, International Federation of Accountants (IFAC) Asmâa Resmouki OFFICIATED BY Minister of Finance II YB Senator Datuk Seri Amir Hamzah Azizan OPENING REMARKS President, Malaysian Institute of Accountants YBhg Dato’ Seri Dr. Mohamad Zabidi Ahmad David Madon Director, Sustainability, Policy & Regulatory Affairs, IFAC Nor Yati Ahmad Accountant General of Malaysia Dato’ Mohd Muazzam Mohamed Group CEO, Bank Islam Malaysia Berhad Esther An Chief Sustainability Officer, City Developments Limited, Singapore Wan Ahmad Ikram Wan Ahmad Lotfi Executive Vice President, Perbadanan Insurans Deposit Malaysia (PIDM) BC Ang Chief Digital Officer, Wezmart Group Luis Piacenza Head of ESG / Partner, Crowe Spain Michael Heaney Partner, Ernst & Young Consulting Sdn Bhd Perpetua George Director, Asia Pacific Sustainability, Biodiversity, PwC Malaysia Dr. Paul Winrow Partner - Sustainability Reporting & Assurance, Mazars UK Dipankar Ghosh Partner - Business Advisory Services Leader – Sustainability & ESG, BDO Antony Leong Partner, Audit & Assurance, Grant Thornton Malaysia PLT Meet Our Distinguished Speakers and many more... see you at MIA Conference 2024! Media Partner MIAC24_TheEdge_HalfPage_262x180mm_Ad02.indd 1 28/05/2024 4:07 PM BERNAMA
FRIDAY MAY 31, 2024 18 THEEDGE CEO MORNING BRIEF HOME Lumut copter crash mainly due to Fennec going off course, says RMN chief Surge in holiday travel leaves thousands stranded at Labuan ferry terminal Bernama Bernama LABUAN (May 30): Over a thousand travellers found themselves stranded at the Labuan Roll-On Roll-Off (Ro-Ro) Ferry Terminal as the ferry services between Labuan and Menumbok struggled to meet the soaring demand of the “Balik Kampung” exodus. This exodus sees more than 10,000 residents from Sabah, Sarawak, and Labuan heading to mainland Sabah and Sarawak in conjunction with the Kaamatan Festival, Gawai Day celebration, and the mid-term school break. Labuan Point Enterprise, the ticketing management company overseeing the Labuan-Menumbok-Labuan Ro-Ro ferry service, announced on Thursday they have added two extra daily trips to manage the unexpected surge in demand. Robert Ling, the company’s manager noted the current schedule comprises seven trips, but with the increased demand, daily trips have been increased to nine to 11 daily. He said this effort involves the combined operations of the ferries Kimanis 1, Putrajaya 1, Joy Star, and Goodwill Star. “Despite the additional trips, hundreds of vehicles remain on the waiting list each day, the waiting line of vehicles stretches over 100 metres, reaching the Labuan Square field,” he said on Thursday. Datuk Chin Hon Vui, chairman of Labuan Mainland Link Sdn Bhd, the operator of the four ferries said the ferries could not operate around the clock but only until 8pm due to capacity limitations, crew availability, and for safety reasons. “We never anticipated this incredible surge in demand... the situation is unprecedented, even compared to Hari Raya and Chinese New Year celebrations. “I believe it’s due to the extended holidays for the Kaamatan Festival, Gawai Day, and the school break,” Chin said. Additionally, the Binabalu operator for the Galaxy and Blue Ocean ferries is providing three trips daily between Labuan and Menumbok. However, the next available tickets are only for June 2, indicating the high demand and limited availability. Labuan Marine Department director Alimudin Amirudin as the holiday season continues, authorities are urging travellers to plan their journeys accordingly and remain patient as ferry services work to accommodate the increased passenger and vehicle traffic. “Even today, the operator requested an additional trip for May 30 and 31, which we will approve in the interest of the travellers,” he said. KUALA LUMPUR (May 30): The tragic crash involving two Royal Malaysian Navy (RMN) aircraft on April 23 was mainly caused by the Fennec helicopter deviating from its designated altitude and course, and entering the flight path of the AW139 helicopter, according to the board of inquiry’s findings. RMN chief Admiral Tan Sri Abdul Rahman Ayob said the board of inquiry also concluded that the secondary factor of the crash was the channelised attention of the AW139 helicopter crew, who were focused on changing course, thereby limiting their reaction to avoid the collision. All 10 RMN personnel on board the two helicopters were killed in the crash at the RMN base in Lumut. However, Abdul Rahman said the board of inquiry’s report did not attribute the crash to human error, because the Fennec helicopter was not equipped with a black box. “There is no data to conclude human error occurred, because the Fennec aircraft did not have a black box,” he said at a press conference on Thursday to release the final report on the crash. The Maritime Operations Helicopter (HOM-AW139) carrying seven personnel According to Abdul Rahman, the board of inquiry used the black box analysis report from the AW139 helicopter to aid the investigation, while for the Fennec aircraft, the flight profile was reconstructed through flight simulations using a real helicopter. He said the board of inquiry also obtained cooperation, expertise and insights from the helicopter manufacturers, Leonardo Helicopter and Airbus Helicopter, to assist in the investigation. “Airbus Helicopter confirmed that there were no devices with non-volatile memory on the Fennec aircraft that could assist the investigation,” he said. Abdul Rahman said the autopsy reports confirmed that there were no issues of hypoglycemia or signs of fatigue among all the aircrew, and no use of prohibited substances. “There were no recorded or identified elements of mental illness, and all aircrew involved were medically certified as fit to fly. The cause of death for the 10 crash victims was multiple injuries due to the aviation crash,” he said. Read the full story Vehicles and passengers getting into a ferry at the Labuan Roll-On Roll-Off (Ro-Ro) Ferry Terminal. Over a thousand travellers found themselves stranded at the terminal due to a surge in travellers to the mainland for the Kaamatan Festival, Gawai Day celebration, and the midterm schoo holidays. Emergency personnel working at the site of the Royal Malaysian Navy helicopter crash in Lumut on April 23. and the Fennec with three crew members were rehearsing for the RMN’s 90th anniversary celebration. REUTERS BERNAMA
FRIDAY MAY 31, 2024 19 THEEDGE CEO MORNING BRIEF WORLD (May 30): US economic activity continued to expand from early April through mid-May but firms grew more pessimistic about the future while inflation increased at a modest pace, a US Federal Reserve (Fed) survey showed on Wednesday, as central bankers mull how long they will need to keep interest rates at current levels. The US central bank’s latest temperature check on the health of the economy also showed that the jobs market continues to gradually cool back down towards more normalised levels. The survey, released roughly every six weeks, comes as policymakers remain uncertain on when to start a rate-cutting cycle after holding interest rates in the range of 5.25% to 5.50% for the past 10 months. They are keenly watching trends in activity, jobs and pricing pressures in order to make their decision. “National economic activity continued to expand...however, conditions varied across industries and districts,” the Fed said in its survey, known as the “Beige Book”, which polled business contacts across the central bank’s 12 districts through May 20. “Overall outlooks grew somewhat more pessimistic amid reports of rising uncertainty and greater downside risk.” Most Fed districts reported slight or modest growth in activity, while two noted no change in activity, the survey said. The Fed’s benchmark interest rate is set to remain unchanged at the next policy meeting on June 11-12 and Fed officials, while all but ruling out another rate hike, have indicated they need consistent encouraging inflation data over a number of months before lowering borrowing costs after being stung by bigger-than expected price increases the first three months of the year. While that worrying trend seems to have reversed in April and there are signs consumers are pulling back on spending, inflation currently remains, by the Fed’s preferred measure, almost a percentage point higher than its 2% target rate. US firms grow more pessimistic on economic outlook, Fed survey shows (May 30): The US economy grew more slowly in the first quarter than previously estimated after downward revisions to consumer and equipment spending and a key measure of inflation ticked down, keeping the Federal Reserve on track to possibly begin cutting interest rates before the end of the year. Gross domestic product — the broadest measure of economic activity — grew at an 1.3% annualised rate from January through March, the Commerce Department reported on Thursday, down from the advance estimate of 1.6% and notably slower than the 3.4% pace in the final three months of 2023. The downgrade of first-quarter growth followed recent softness in other readings of retail sales and equipment spending. Details of the report showed that consumer spending growth, revised down by 0.5 percentage point to a 2.0% annualised rate, mostly reflected a larger-than-earlier-reported drop in household spending on goods. Outlays for big ticket durable goods like motor vehicles and parts dragged on growth by the most since the third quarter of 2021. That drag outpaced upward revisions in the report to business and residential investment. A measure of inflation during the first quarter was also revised down to 3.3% from 3.4%, the stiffest quarterly price-pressure growth in a year. After easing through much of last year, measures of inflation came in higher than expected to start 2024, driving Fed policymakers to push back expectations for when they’ll be able to pivot to interest rate cuts. US Treasury yields ticked lower after the modest downward revision to inflation in the first quarter, and equity index futures pared losses ahead of the opening bell on Wall Street. A separate report showed the goods deficit in April, the gap between exports and imports, widened to the highest level since May 2022, as strong domestic demand for imports was not matched by export trade. “Prices and consumption were both light in the GDP report. Jobless claims were also higher than expected and the trade deficit was wider. These numbers all point to slower growth and slower inflation. It keeps hopes of a rate cut alive,” said David Russell, global head of market strategy at TradeStation. Investors in contracts tied to the Fed’s policy rate slightly added to just about even odds that the central bank could begin to cut rates in September. The downward revision to GDP brings the first-quarter’s growth rate to the lowest since the second quarter of 2022, when the economy contracted, and leaves output below the 1.8% rate that officials at the Fed see as its longer-run, noninflationary potential. The soft start to the year is not expected to have persisted into the current second quarter, however, thanks in part to continued strength in the job market. Jobless claims higher, still low That robustness was evident in the number of Americans filing new claims for unemployment benefits last week. While jobless claims ticked higher, the underlying strength in the labour market still shows signs of persisting and should continue to support the economy. Initial claims for state unemployment benefits rose 3,000 to a seasonally adjusted 219,000 for the week ended May 25, the Labor Department said on Thursday. Economists polled by Reuters had forecast 218,000 claims. The so-called continuing claims tracking those who collect benefits beyond the first week rose 4,000 to a seasonally adjusted 1.791 million during the week ending May 18, the claims report showed. The labour market is steadily rebalancing in the wake of 525 basis points worth of interest rate hikes from the Fed since March 2022 to slow demand in the overall economy. The level of layoffs remains muted overall, however, with the cooling more of a result of less hiring. Consumers hold back US economic growth in first quarter, inflation cools BY LINDSAY DUNSMUIR Reuters BY LINDSAY DUNSMUIR Reuters BLOOMBERG
FRIDAY MAY 31, 2024 20 THEEDGE CEO MORNING BRIEF WORLD China Vanke in advanced talks with banks for US$6.9 bil loan China weighs record fine for PwC over Evergrande auditing work Bloomberg Bloomberg (May 30): China is poised to impose a record fine on PricewaterhouseCoopers LLP (PwC) and suspend some of the global auditor’s local operations over its role in one of the nation’s biggest alleged financial fraud cases, according to people familiar with the matter. The Ministry of Finance (MOF) may announce the penalties on PwC as soon as this week over its auditing work for China Evergrande Group, said the people, asking not to be identified discussing a private matter. PwC faces a fine of at least one billion yuan (RM649.73 million), the people said. That would exceed the previous record fine for an accounting firm, the 212 million yuan handed out to Deloitte Touche Tohmatsu Ltd in 2023. Part of the penalties could also include a halt of operations at some of PwC’s mainland offices, the people said, adding the decision isn’t final and the specifics could be subject to change. The MOF and PwC didn’t immediately respond to Bloomberg requests for comments. PwC has been under the spotlight after China launched one of the biggest investigations of financial fraud in history involving developer Evergrande. Authorities earlier this year levied a 4.18 billion yuan fine against the once high-flying real estate firm and said the company’s main unit, Hengda, overstated its revenue by 564 billion yuan in the two years through 2020. The penalty will damage PwC’s reputation and “adversely affect the public confidence in accounting”, said Pingyang Gao, a professor in accounting and law from HKU Business School. “I wouldn’t be surprised if the share of the auditing market by those global franchise in China would shrink.” PwC already lost a handful of Chinese clients in May alone, adding to a list of more than a dozen firms it has stopped auditing in the country in the last two years. China Taiping Insurance Holdings Co, China Merchants Bank Co and People’s Insurance Company (Group) of China Ltd were among them. The penalties come as President Xi Jinping has increased focus on tackling financial risks and crime to stabilise the world’s second largest economy. At a Politburo meeting on Monday, Xi instructed the financial regulators and local governments to implement new rules and make sure financial oversight has “teeth”. PricewaterhouseCoopers Zhong Tian LLP, a Shanghai-registered firm that is part of PwC’s global network, was Hengda’s auditor during the period in question. The firm served as Evergrande’s auditor for more than a decade until it resigned in January 2023 due to what the developer said were audit-related disagreements. (May 30): China Vanke Co, the Chinese state-backed developer that’s become the latest flashpoint in the nation’s property crisis, is in advanced talks with major banks for a loan of about 50 billion yuan (US$6.9 billion or RM32.43 billion), people familiar with the matter said. If signed, it would be the largest loan in the Asia-Pacific, excluding Japan, since Taiwan-based National Housing and Urban Regeneration Center’s US$14 billion deal in 2022, according to Bloomberg-compiled data. Talks over the facility, led by Industrial & Commercial Bank of China (ICBC), began a few months ago after financial regulators instructed the banks to offer funding support to the developer, said the people, who asked not to be identified as the matter is private. China’s second largest developer, once considered a sound player in the sector, particularly given the state-backing, has been raising funds to calm investors’ concern over its liquidity strains. The sheer deal size and the hastened efforts to get it across the finish line would reflect the parties’ determination to avoid what would amount to one of the biggest defaults in the years-long industry crisis. Vanke’s 4.2% notes due June 7 climbed to 99.6 cents on the dollar on Thursday, according to Bloomberg-compiled data, signalling strong investor expectation for timely payment. But its notes due in 2029 still trade at 60 cents, showing lingering doubt over its long-term debt outlook. The company has 1.06 trillion yuan in total liabilities as of March, according to its latest financial report. The latest facility that the company seeks would be backed by about 80 billion to 90 billion yuan worth of real estate assets, the people added. They are part of an asset package, totalling about 130 billion yuan, that Vanke has been putting together to use as collateral, they said. The ICBC-led deal would be the second mega loan Vanke received this year. The ongoing talks with the lenders have already resulted in another 20 billion yuan syndicated loan that Vanke signed last week with financial institutions, including China Merchants Bank. About six to seven banks plan to participate in the 50 billion yuan facility, including China Construction Bank (CCB) and Ping An Bank, two of the people said. Proceeds will be used to repay bonds and other private debt, also known as non-standard debt, they said. Banks are still in the process of choosing collateral, according to two of the people. The transaction is not final and subject to changes, the two people added. China Vanke Co is in advanced talks with major banks for a loan of about 50 billion yuan (US$6.9 billion or RM32.43 billion) in a fundraising effort to calm investors’ concern about its ability to stave off default. Read the full story BLOOMBERG BLOOMBERG
FRIDAY MAY 31, 2024 21 THEEDGE CEO MORNING BRIEF WORLD (May 30): Asia’s largest commercial real estate investment trust said that Hong Kong authorities should resume issuing multi-entry permits for Shenzhen visitors, to boost retail spending. While Hong Kong residents have been increasingly travelling across the border, “we need a two-way flow,” Link REIT chief executive officer George Hongchoy said in an interview on Thursday. Allowing Shenzhen residents to make unlimited trips to Hong Kong would not only increase sales at the company’s malls, but also lift overall consumer sentiment amid a slower-than-expected retail recovery, he said. Link REIT has more than 30 shopping developments in Hong Kong’s New Territories district near the Shenzhen border. The company enjoys a 98% occupancy rate across its entire Hong Kong retail portfolio, because many of its malls are located near housing estates, allowing it to tap local demand. Still, the firm “can’t be complacent,” Hongchoy said. In 2009, Hong Kong introduced a multiple-entry permit that allowed eligible Shenzhen residents to make unlimited trips within a one-year period. In 2015, the permit was restricted to one trip a week, due to concerns about overcrowding and parallel trading. In January, the Hong Kong government said that authorities are exploring the resumption of multi-entry permits. Read the full story Asia’s largest REIT calls for Hong Kong to resume multi-entry visas from Shenzhen (May 30): Mark Mobius said Chinese shares are “looking good” as the recent rebound signals confidence, reversing a call he made in April for investors to avoid them. The 87-year-old money manager turned bullish on Chinese equities about three to four weeks ago, when he saw a chance for recovery as the government rolled out measures to support the real estate sector. That was “a light at the end of the tunnel”, the co-founder of Mobius Capital Partners LLP said at a media roundtable in Hong Kong Thursday. “When you’re investing, you don’t want to step in front of a high speed train coming at you. So you step aside and let the train pass, let the market go down fast,” he said. “When it reaches the botMark Mobius turns bullish on Chinese stocks amid recent rally as he expects the weakening yuan to fuel the country’s exports. India preferred Yet, when asked whether the Chinese stock market will outperform India’s, Mobius said, “not this year”. India is his preferred market and he remains “very bullish”, though he warned that those stocks have gone up a lot and there is a chance of a correction. The MSCI India Index is up nearly 10% year-to-date. Mobius favours technology hardware companies in China, including the socalled “fabless” companies that work on the software for chips, and Chinese electric vehicle makers, some of which he says are “superior to Tesla”. He expects Taiwanese equities to continue performing well, and remains bullish on Taiwan Semiconductor Manufacturing Co. He finds onshore-listed A shares more attractive than the H shares traded in Hong Kong, given that “the Shanghai market is deeper in terms of exposure to China itself”. Mobius plans to launch a new emerging-market fund in September, with a minimum investment of US$500,000 (RM2.35 million). The fund will consist of 30 stocks globally and target high networth individuals. BY SANGMI CHA Bloomberg BY KRYSTAL CHIA Bloomberg tom, then you can begin to look — OK — now is the time to begin to look at the recovery.” The MSCI China Index rose more than 30% between a low point in January and a top on May 20. The rally, driven by a volley of policies to tackle the country’s property crisis and stimulate consumer demand, has lost steam over the past week amid profit taking. Mobius predicts economic growth of 4% to 5% Money manager Mark Mobius turned bullish on Chinese equities about three to four weeks ago, when he saw a chance for recovery as the government rolled out measures to support the real estate sector. BLOOMBERG BLOOMBERG
FRIDAY MAY 31, 2024 22 THEEDGE CEO MORNING BRIEF WORLD LONDON (May 30): Banks and investment firms in the European Union cannot shirk boardroom responsibility and a legal obligation to protect customers when using artificial intelligence (AI), the bloc’s securities watchdog said in its first statement on AI. The European Securities and Markets Authority (ESMA) on Thursday set out how financial firms regulated in the 27-country bloc can use AI in day-to-day operations without falling foul of the EU’s MiFID securities law. While AI holds promise in enhancing investment strategies and client services, it also presents inherent risks, and the potential impact on retail investor protection is likely to be significant, ESMA said. “Importantly, firms’ decisions remain the responsibility of management bodies, irrespective of whether those decisions are taken by people or AI based tools,” ESMA said. “Central to the use of AI in investment services is the unwavering commitment to act in clients’ best interest, an overarching requirement which applies irrespective of the tools that the firm decides to adopt in the provision of services.” The statement covers not just instances where AI tools are developed or adopted by a bank or investment firm itself, but also the use of third-party AI technologies, such as ChatGPT and Google Bard, with or without the direct knowledge and approval of senior management, ESMA said. “The firm’s management body should have an appropriate understanding of how AI technologies are applied and used within their firm and should ensure appropriate oversight of these technologies,” ESMA said. EU watchdog says banks must take full responsibility when using AI (May 30): UBS AG has been fined 50,000 Swiss francs (RM257,401) by Swiss authorities for failing to report cases of suspected money laundering linked to the (May 30): Large US banks may be more exposed to commercial property than regulators appreciate because of credit lines and term loans they provide to real estate investment trusts (REITs), according to a new study. Big banks’ exposure to CRE lending grows by about 40% when that indirect lending to REITs is added, wrote researchers including Viral Acharya, a professor of economics at New York University. That’s largely been missed in the debate about the risks the troubled industry poses to lenders, they argue. “Everyone is focusing on on-balance sheet loans by banks,” Acharya, a former deputy governor at the Reserve Bank of India (RBI), said in an interview. “We should not get caught in a blind spot that large banks have relatively less exposure than smaller banks.” REITs have faced challenges since the start of the pandemic as working from home threatens the long-term value of offices while high borrowing costs have hurt many multifamily investments. Some investors responded by pulling money from trusts over the past two years, including those managed by Starwood Capital Group and Blackstone Inc, which limited redemptions to preserve liquidity. ex-president of Yemen, Ali Abdullah Saleh. UBS neglected to report the cases “despite well-founded suspicion that the origin of the funds was from corruption,” the Swiss Finance Ministry said in an emailed response to questions. Broadcaster SRF initially reported the fine on Thursday. The case was particularly serious as UBS allowed account holders to withdraw funds so they couldn’t be frozen, the ministry said. UBS didn’t immediately respond to a request for comment. Swiss banks are legally obliged to report any suspicious financial activity to MROS, the Money-Laundering Reporting Office of Switzerland. Prosecutors can press criminal charges against banks if they believe those institutions didn’t do enough to screen clients and their cash for obvious ties to illicit activity. The penalty of 50,000 Swiss francs is the highest possible the ministry could hand down to a legal entity such as UBS AG; fines against a natural person would have been higher, the ministry said. The proceedings against UBS began in 2021, and it took two years for prosecutors to obtain the relevant files from the bank, the ministry said. UBS fined by Swiss for failing to report Yemenlinked accounts New study warns US banks have a commercial property blind spot BY HUGO MILLER & BASTIAN BENRATH Bloomberg BY TODD GILLESPIE Bloomberg BY HUW JONES Reuters Read the full story BLOOMBERG BLOOMBERG REUTERS
FRIDAY MAY 31, 2024 23 THEEDGE CEO MORNING BRIEF WORLD (May 30): McDonald’s top US executive denounced viral reports of runaway Big Mac prices as painting an inaccurate picture of the company, which has seen its profits surge by roughly a third since 2019 and is now preparing to roll out US$5 (RM23.56) combo meals. “I can tell you that it frustrates and worries me, and many of our franchisees, when I hear about an US$18 Big Mac meal being sold,” said McDonald’s USA president Joe Erlinger in an open letter published on the burger giant’s website on Wednesday. “More worrying, though, is when people believe that this is the rule and not the exception, or when folks start to suggest that the prices of a Big Mac have risen 100% since 2019.” McDonald’s profits have increased by almost a third between 2019 and 2023. McDonald’s gross profit in 2023 was slightly more than US$14.56 billion. In 2019, it was nearly US$11.18 billion. McDonald’s has in recent months emphasised itself as a value brand. This month, the company confirmed it would roll out a US$5 combo meal for a limited time this summer. Prices at McDonald’s are set by franchisees, which run 95% of the company’s more than 13,700 stores in the US, according to the company. The US$18 Big Mac, widely reported in the media, was sold at a franchised store in Darien, Connecticut, a town where the median household income is more than US$250,000, according to US Census Bureau figures from 2021. Erlinger said the average price of a Big Mac in the US is US$5.29, up 21% since 2019, as opposed to far larger increases suggested by “poorly sourced” reports. An infographic accompanying the letter cited “myths” attributed to, among others, social media posts and an article in the Minneapolis Star Tribune newspaper. McDonald’s top US exec denounces viral reports of runaway prices (May 30): HP Inc reported quarterly revenue that topped analysts’ estimates, including the first increase in PC sales in two years, an optimistic signal for a long-awaited rebound in the market. Revenue from HP’s computer unit increased 3% to US$8.43 billion (RM39.74 billion) in the fiscal second quarter, compared with the US$8.28 billion expected by analysts. The business had been declining since May 2022 on a year-on-year basis. The jump was due to commercial sales, which rose 6% to US$6.24 billion. Consumer sales continued to decline, slipping 3% to US$2.18 billion, the company said on Wednesday in a statement. The PC market had seen a historic decline over the last two years after many consumers, businesses and schools purchased laptops in the early months of the Covid-19 pandemic. In the first quarter, shipments picked up 1.5% — the first increase since the end of 2021 — industry analyst IDC said in April. PC makers have been hopeful those numbers signalled the end of the slump, and that growth would accelerate in 2024, with the launch of machines equipped with a new version of Microsoft Corp’s Windows software as well as hardware equipped with chips to handle artificial intelligence (AI) tools. AI PCs, such as those HP unveiled last week during a Microsoft conference, will be about 10% of total shipments in the second half of the year, chief executive officer Enrique Lores said in an interview. The financial impact will be “much more relevant” in 2025 and 2026, as HP expects the number to climb to about 50% of shipments three years after launch, he added. HP reports sales that top estimates on first PC boost since 2022 BY BRODY FORD Bloomberg BY WAYLON CUNNINGHAM Reuters BLOOMBERG REUTERS
FRIDAY MAY 31, 2024 24 THEEDGE CEO MORNING BRIEF WORLD Tesla hits back at Glass Lewis after critical report on Musk over US$56 bil pay package American Airlines CEO vows a reset as downbeat outlook sinks shares BY RAJESH KUMAR SINGH, PRATYUSH THAKUR & SHIVANSH TIWARY Reuters BY DANA HULL Bloomberg (May 30): American Airlines chief executive officer Robert Isom on Wednesday promised a reset of the carrier’s sales and distribution strategy after the carrier cut its earnings forecast for the current quarter despite robust demand for travel. The downbeat outlook led to a 15% drop in American’s shares in morning trade, dragging down the broader the NYSE Arca Airline index. Isom blamed the changes to the airline’s sales strategy for softer customer bookings, adding American was evaluating its strategy “holistically and piece by piece”. “The degree our approach has driven customers away from American, we are unequivocally committed to getting those customers back,” he said at the Bernstein Strategic Decision conference. On Tuesday, the company announced the departure of chief commercial officer Vasu Raja who was spearheading the new sales and distribution strategy. Under the strategy, American sought to rework its contracts with corporate travel agencies and customers, cutting perks and discounts. It also slashed its sales team. Raja also aggressively pushed a plan that sought to compel customers to make bookings directly with the airline instead of through third-party sites and travel agencies. Isom said some of the changes aimed at driving up direct bookings have been called off. “Sometimes we need to reset,” he said. “And in this case, we do.” American will also slow its seat capacity growth in the second half of the year to address supply-demand imbalances in the domestic market that are hurting its pricing power. The airline had said on Tuesday it now expects second-quarter adjusted earnings in the range of US$1 to US$1.15 per share, compared with previous expectations of US$1.15 to US$1.45. Analysts at JPMorgan said American’s diminished guidance speaks more to its flawed initial forecast rather than any broad-based shift in passenger demand. (May 30): Tesla Inc blasted Glass Lewis Inc in a letter to shareholders, days after the proxy adviser urged investors to reject a proposed US$56 billion (RM263.93 billion) pay package for chief executive officer Elon Musk. In the letter titled “What Glass Lewis Got Wrong About Tesla”, the electric-vehicle (EV) maker said the adviser “omits key considerations, uses faulty logic, and relies on speculation and hypotheticals”. The company urged shareholders to ignore Glass Lewis’s advice, and vote in favour of Musk’s compensation package and a company proposal to reincorporate in Texas, from Delaware. “Tesla is one of the most successful enterprises of our time,” the letter, published on Thursday, said. “We have revolutionised the automotive market.” The EV maker’s board has been working to rally shareholder support ahead of its June 13 annual meeting. The most controversial proposal investors are being asked to weigh is Musk’s large compensation package. The pay deal was initially crafted — and supported by most shareholders — in 2018, but a Delaware judge nullified it earlier this year. In her ruling, she said the board wasn’t transparent enough with investors, and it wasn’t in their best interest. Over the weekend, Glass Lewis called the payout “excessive” and criticised Musk for committing to run too many ventures at once. In its response, Tesla said the compensation agreement “motivated” Musk to achieve “extraordinary growth”. “Stockholders should care enormously about value creation,” the Tesla letter said. “And not about whether Elon’s perceived ‘focus’ was strong enough.” Musk has been a loud critic of companies like Glass Lewis and Institutional Shareholder Services Inc, another influential proxy advisory firm. He posted on social media in January 2023 that too much power is concentrated in their hands, “because so much of the market is passive/ index funds, which outsource shareholder voting decisions to them”. “ISS and Glass Lewis effectively control the stock market,” Musk wrote. REUTERS REUTERS
FRIDAY MAY 31, 2024 25 THEEDGE CEO MORNING BRIEF WORLD (May 30): Singapore aims to increase the amount of power it allocates for data centres by as much as 35%, according to Janil Puthucheary, senior minister of state at the Ministry of Communications and Information. The city-state will free up about 300 megawatts of capacity in the short term via resource allocation and efficiency enhancements, with possibly another 200 megawatts to come through partnerships with clean energy providers, Puthucheary said in an interview with Bloomberg TV. Data centres currently require about 1,400 megawatts of power capacity, according to government data. Singapore has emerged as a hot destination for data centre developers in Asia due to its location and favourable business environment. However, imported natural gas currently accounts for more than 90% of its power generation, meaning an increase in data centres will create more pollution. “In the short term, any increase in energy is going to be associated with an increase in emissions,” Puthucheary said. “That’s the way it is if you are using fossil fuels. That’s why right up front we have to reduce consumption, increase efficiency, and put that green energy component on the agenda.” Singapore to free up more power for data centre expansions SINGAPORE (May 30): Singapore will invest about US$222 million (S$300 million) as part of a new national quantum computing strategy to advance its research on the technology, Deputy Prime Minister Heng Swee Keat said on Thursday. “We will establish a new National Quantum Processor Initiative to build capabilities in the design and build of quantum processors in Singapore,” he said in a speech at the Asia Tech x Singapore Summit. The investment will be over five years, government officials said. Tech firms such as Microsoft, Alphabet’s Google and IBM, as well as nation-states across the world, are racing to create machines that can take advantage of quantum mechanics and potentially be capable of making scientific calculations that would otherwise take traditional computers millions of years. (May 30): Las Vegas Sands Corp plans another development in Singapore to complement its casino resort there, including more space for live entertainment. The company will give more details later year, chief executive officer Rob Goldstein said on Wednesday (May 29) at an investor conference. It will have fewer rooms than the existing Marina Bay Sands resort, but will have a casino, restaurants and an arena. “Singapore is going through a growth spurt,” Goldstein said. “All of a sudden, Singapore’s become a hugely important market”. Sands, which shares the market with rival casino operator Genting Singapore, said first-quarter revenue in the country increased 37% to US$1.16 billion. Based on current trends, Singapore could see US$7 billion in gambling revenue overall Singapore to invest US$222 mil to boost quantum computing capability — DPM Sands plots entertainmentfocused expansion in Singapore BY FANNY POTKIN Reuters BY CHRISTOPHER PALMERI Bloomberg BY SING YEE ONG Bloomberg this year, on its way to US$10 billion in the near future, Goldstein said. Sands said last month that construction on the expansion could begin in July 2025. Drawings show a new hotel tower and a 15,000-seat performance venue. The project is separate from a US$1.75 billion refurbishment of the existing property. The company is interested in hosting concerts from the likes of Taylor Swift and Bruno Mars, as well as Asian acts, Goldstein said. “Entertainment is a very important part of the mix,” he said. “We’re proposing to build a very big part of that into our new building in Singapore.” Singapore’s Deputy Prime Minister Heng Swee Keat BLOOMBERG BLOOMBERG BLOOMBERG Janil Puthucheary, Singapore’s senior minister of state at the Ministry of Communications and Information The Marina Bay Sands resort in Singapore.
FRIDAY MAY 31, 2024 26 THEEDGE CEO MORNING BRIEF WORLD NEW YORK (May 30): Major developing economies are expected to see net capital inflows this year rise by nearly a third to US$903 billion (RM4.25 trillion), though much of that hinges on global growth holding up, a banking trade group report said. The 32% net increase is expected to be mostly driven by a strong recovery in foreign direct investment and by cash directed at equity portfolios, said the report published by the Institute of International Finance (IIF) which covers 25 countries across emerging markets, including China, India, Russia and Mexico. Even as global growth, seen at 3.1% this year, is forecast to be below the 3.8% average through 2000-2019, “a global ‘soft landing’ scenario makes for a positive picture for capital flows to EMs,” said the report, which was published late on Wednesday. “Global trade has also shown signs of a modest recovery in the past few months, driven by a pick-up in EM trade volumes.” Capital flows are a component of a country’s balance of payments, alongside the current account balance and changes in reserves. Non-resident capital flows consist mostly of foreign direct investment (FDI) as well as portfolio investments into stocks and bonds. Net inflows of FDI are projected to jump to US$426 billion in 2024, while net flows into foreigners’ portfolios could hit US$259 billion, from US$161 billion in 2023, as China, a massive source of outflows over the last two years, modestly recovers. The report’s universe includes six economies each from Emerging Europe, Latin America and Africa/Middle East, and seven from Asia. Across other geographical regions, robust growth and solid macro fundamentals will drive a rebound in foreign capital flows to Asia excluding China. JPMorgan’s inclusion of India in its benchmark local currency bond index, which is due to begin next month, “could lead to additional inflows into local currency-denominated government debt and bring down bond yields, while also providing some support for the rupee,” the IIF report said. Read the full story Capital flows to emerging markets to net US$903 bil in 2024, IIF says DUBAI (May 30): Saudi Arabia may announce a landmark secondary share offering in oil giant Aramco later on Thursday, pending final approval, people with knowledge of the matter said. The share offering is expected to be launched on Sunday, the sources said. Final approval would come from Crown Prince Mohammed bin Salman. The offering is the culmination of a years-long effort to sell another chunk in one of the world’s most valuable companies after its record-setting IPO in 2019 that raised US$29.4 billion (RM138.4 billion). Sources told Reuters last week the offering could happen as soon as June, with one adding it could raise around US$10 billion. Since the IPO, Aramco has continued to be a cash cow for the Saudi government Saudi Arabia may announce landmark Aramco share sale Thursday — Reuters as it finances a mammoth economic drive to end its “oil addiction”, as the crown prince once called it. The company bolstered dividends to almost US$98 billion in 2023 from the US$75 billion it had been paying annually, despite profit having dropped by nearly a quarter. It expects an outlay of US$124.3 billion this year. Aramco has also invested in refineries and petrochemical projects in China and elsewhere, expanded its retail and trading businesses, and sharpened its focus on gas, making its first foray into liquefied natural gas abroad last year. Banks including Citi, Goldman Sachs, and HSBC are managing the sale, Reuters has previously reported. Saudi Arabia’s de-facto ruler MbS, as the crown prince is known, has poured hundreds of billions of dollars through the kingdom’s sovereign wealth fund into mega projects, and everything from electric vehicles to sports and a new airline, to diversify the economy away from hydrocarbons and create jobs. But lower oil prices and production weighed on economic growth last year while spending increased, leading to a fiscal deficit of around 2% of GDP, with a similar deficit expected this year. Read the full story BY HADEEL AL SAYEGH & MAHA EL DAHAN Reuters BY RODRIGO CAMPOS Reuters BLOOMBERG REUTERS
FRIDAY MAY 31, 2024 27 THEEDGE CEO MORNING BRIEF WORLD Early results show ANC losing majority in South Africa’s election Fourteen Hong Kong democrats found guilty in landmark subversion trial BY JAMES POMFRET & JESSIE PANG Reuters BY ALEXANDER WINNING & KOPANO GUMBI Reuters HONG KONG (May 30): Fourteen Hong Kong pro-democracy activists were found guilty and two were acquitted on Thursday, in a landmark subversion trial that critics say could deal another blow to the city’s rule of law and its reputation as a global financial hub. The verdicts in Hong Kong’s biggest trial against the democratic opposition come more than three years after police arrested 47 democrats in mass dawn raids at homes across the city. They were charged with conspiracy to commit subversion under a China-imposed national security law. Sentencing will come at a later date for those found guilty, with prison terms ranging from three years to life for this national security offence. Thirty-one defendants pleaded guilty, and four of them have become prosecution witnesses. The US and some other countries have criticised the trial as politically motivated, calling for the accused to be immediately released. Security was tight around the High Court, where diplomats from the US, Britain and Europe have attended proceedings. Scores of police officers and vehicles patrolled the area. Some supporters queued overnight to secure a spot. “I came because it’s a critical stage and a historical moment” for Hong Kong, said a man who gave only his surname, Chiu, 35, who began waiting at midnight. The defendants “all stood up for themselves and for Hong Kong people, hoping to make a change”. The defendants are accused of a “vicious plot” to paralyse government and force the city’s leader to resign through an unofficial pre-selection ballot in a July 2020 citywide election. The democrats maintain it was an unofficial attempt to select the strongest candidates in a bid to win a historic majority in Hong Kong’s legislature. Mass pro-democracy protests erupted in Hong Kong in 2019 against Beijing’s plans for security legislation that democrats argued infringed on freedoms guaranteed when Hong Kong was handed back to China by the British in 1997. Most of the accused have been detained since Feb 28, 2021, and were subjected to marathon bail hearings. People take photos of the result board at the National Results Operation Centre of the Electoral Commission of South Africa, which serves as an operational hub where results of the national election are displayed, in Midrand, South Africa on Thursday. MIDRAND, South Africa (May 30): The African National Congress (ANC) appeared on course to lose the parliamentary majority it has held for 30 years, partial results from South Africa’s national election showed, in what would be the most dramatic political shift since the end of apartheid. With results in from 13.9% of polling stations, the ANC’s share of the vote in Wednesday’s election stood at 42.6%, with the pro-business Democratic Alliance (DA) on 25.8% and the Marxist Economic Freedom Fighters (EFF) on 8.5%, data from the electoral commission showed. If the final results were to resemble the early picture, the ANC would be forced to make a deal with one or more other parties to govern — a situation that could lead to unprecedented political volatility in the coming weeks or months. “There will be checks and balances on the ANC power, but the ultimate risk is that the infighting could make governance ineffective,” said Simon Harvey, head of foreign exchange analysis at Monex Europe. He added that the speed at which a coalition could be formed would be an indication of what was to come. “If it is protracted, you may start to worry about a political gridlock going forward,” he said. The uncertainty weighed on South African markets. The rand slipped more than 1% against the US dollar to hit its weakest level in four weeks while the wider equity index dropped more than 2% in its worst day in six weeks and the country’s international bonds lost as much as one cent in the dollar. The ANC has won national elections held every five years since the landmark 1994 election, which marked the end of apartheid and the ascent of Nelson Mandela as president. REUTERS People take photos of the result board at the National Results Operation Centre of the Electoral Commission of South Africa, which serves as an operational hub where results of the national election are displayed, in Midrand, South Africa on Thursday. REUTERS
FRIDAY MAY 31, 2024 28 THEEDGE CEO MORNING BRIEF MARKETS Top 20 active stocks World equity indices Top gainers (ranked by %) Top losers (ranked by %) Top gainers (ranked by RM) Top losers (ranked by RM) NAME VOLUME CHANGE CLOSE YTD MARKET (MIL) (RM) CHANGE CAP (%) (RM MIL) LAGENDA PROPERTIES BHD 289.810 -0.050 1.12 -9.68 937.8 KAWAN RENERGY BHD 106.195 0.150 0.61 - 338.3 MY EG SERVICES BHD 95.710 0.020 1.06 30.06 7,906.6 EPICON BHD 85.380 0.030 0.35 -26.60 205.2 DATAPREP HOLDINGS BHD 74.860 0.005 0.16 -8.82 114.4 WCT HOLDINGS BHD 74.210 0.055 0.60 21.21 850.3 SIME DARBY PROPERTY BHD 60.960 0.040 1.24 98.40 8,433.0 BUMI ARMADA BHD 60.480 0.020 0.59 18.18 3467.8 MAH SING GROUP BHD 56.060 0.190 1.71 106.02 4,377.8 JCY INTERNATIONAL BHD 48.240 0.025 0.53 138.64 1,111.2 SNS NETWORK TECHNOLOGY BHD 47.170 0.010 0.61 159.6 983.8 VELESTO ENERGY BHD 43.960 -0.005 0.275 19.57 2,259.3 SMART ASIA CHEMICAL BHD 43.413 0.030 0.470 - 173.8 AHB HOLDINGS BHD 39.54 0.000 0.125 -3.85 93.0 ANEKA JARINGAN HOLDINGS BHD 37.480 0.010 0.205 7.89 135.1 DAGANG NEXCHANGE BHD 37.210 -0.005 0.450 12.50 1,529.6 SEALINK INTERNATIONAL BHD 37.170 0.020 0.265 55.88 132.5 EA TECHNIQUE (M) BHD 36.800 0.015 0.430 32.31 228.1 PUBLIC BANK BHD 35.930 0.000 4.080 -4.90 79,195.6 CAPITAL A BHD 33.820 -0.015 0.845 2.42 3,596.0 Data as compiled on May 30, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) KEY ALLIANCE GROUP BHD 0.010 100.00 296.5 0.00 36.8 KAWAN RENERGY BHD 0.615 32.26 106195.8 - 338.3 NEXGRAM HOLDINGS BHD 0.025 25.00 4,247.6 -44.44 22.2 DESTINI BHD 0.030 20.00 713.4 -50.00 49.9 REACH ENERGY BHD 0.030 20.00 388.5 -25.00 63.9 TECHNA-X BHD 0.300 20.00 2,735.0 0.00 70.5 AWANBIRU TECHNOLOGY BHD 0.435 14.47 19,838.6 11.54 342.9 BARAKAH OFFSHORE PETROLEUM 0.040 14.29 869.1 14.29 40.12 MAH SING GROUP BHD 1.710 12.50 56,063.7 106.02 4,377.8 SAPURA ENERGY BHD 0.045 12.50 3,149.0 0.00 826.9 HARVEST MIRACLE CAPITAL BHD 0.105 10.53 28,766.7 -12.50 129.2 WCT HOLDINGS BHD 0.600 10.09 74212.1 21.21 850.34 ASTEEL GROUP BHD 0.110 10.00 7295.4 4.76 53.34 CITRA NUSA HOLDINGS BHD 0.055 10.00 186.5 0.00 39.54 SERSOL BHD 0.110 10.00 202.7 -15.38 80.46 ASIAN PAC HOLDINGS BHD 0.115 9.52 16547.2 9.52 171.22 EPICON BHD 0.345 9.52 85382.2 -26.60 205.21 MANAGEPAY SYSTEMS BHD 0.115 9.52 874.9 -4.17 106.53 SUPERLON HOLDINGS BHD 1.28 9.4 2620.3 47.98 203 NOTION VTEC BHD 1.43 9.16 22959.4 346.88 738.02 Data as compiled on May 30, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) G3 GLOBAL BHD 0.025 -16.67 1,146.9 -16.67 94.3 TA WIN HOLDINGS BHD 0.030 -14.29 3,087.9 -25.00 103.1 EURO HOLDINGS BHD 0.075 -11.77 1,765.8 -11.76 99.6 INDUSTRONICS BHD 0.040 -11.11 764.3 -20.00 28.3 PERMAJU INDUSTRIES BHD 0.040 -11.11 710.1 -20.00 78.0 SMTRACK BHD 0.040 -11.11 12,180.0 -20.00 52.0 PDZ HOLDINGS BHD 0.045 -10.00 1,023.7 -10.00 26.5 SYSTECH BHD 0.420 -9.68 4,115.5 -9.68 269.9 TRC SYNERGY BHD 0.445 -9.18 4,824.1 20.27 209.72 MALAYAN UNITED INDUSTRIES 0.055 -8.33 328.0 -8.33 177.4 SENTORIA GROUP BHD 0.055 -8.33 4,051.9 -38.89 33.7 SECUREMETRIC BHD 0.225 -8.16 12,552.6 55.17 129.8 INGENIEUR GUDANG BHD 0.060 -7.69 4,050.7 -53.85 91.0 AVILLION BHD 0.065 -7.14 16,375.0 30.00 73.7 ARTRONIQ BHD 0.200 -6.98 5,943.9 -76.88 81.6 TSR CAPITAL BHD 0.270 -6.90 75.0 10.20 47.1 HHRG BHD 0.210 -6.67 3,746.6 -37.31 182.3 GRAND CENTRAL ENTERPRISES 0.360 -6.49 20.3 2.86 70.9 UNIQUE FIRE HOLDINGS BHD 0.295 -6.35 13,286.8 -6.35 118.0 HANDAL ENERGY BHD 0.075 -6.25 650.7 -37.50 30.8 Data as compiled on May 30, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) MALAYSIAN PACIFIC INDUSTRIES 38.740 -0.760 180.3 37.38 7,706.5 CARLSBERG BREWERY MALAYSIA 19.200 -0.280 214.3 -0.41 5,870.4 CHIN HIN GROUP BHD 3.220 -0.200 1104.2 82.44 11,395.0 UNITED PLANTATIONS BHD 25.100 -0.200 315.9 43.24 10,411.1 YTL POWER INTERNATIONAL BHD 5.070 -0.180 16149.2 99.61 41,280.8 AJINOMOTO MALAYSIA BHD 16.440 -0.160 212.2 16.38 999.5 HEINEKEN MALAYSIA BHD 24.000 -0.160 94.4 -0.58 7,250.4 ALLIANZ MALAYSIA BHD 21.940 -0.140 17.4 18.98 3,904.7 TELEKOM MALAYSIA BHD 6.260 -0.140 6281.5 12.79 24023.6 GUAN CHONG BHD 4.300 -0.130 6108.0 134.97 5050.4 LYSAGHT GALVANIZED STEEL BHD 2.900 -0.110 7.5 30.63 120.6 DIALOG GROUP BHD 2.440 -0.100 15896.1 17.87 13,767.9 GENETEC TECHNOLOGY BHD 2.190 -0.100 4329.3 -7.20 1,700.9 NESTLE (MALAYSIA) BHD 127.600 -0.100 92.0 8.50 29,922.2 KECK SENG MALAYSIA BHD 6.150 -0.080 106.2 28.66 2209.72 PETRONAS DAGANGAN BHD 19.420 -0.080 522.5 -11.08 19292.88 PETRONAS GAS BHD 18.200 -0.080 332.5 4.60 36,012.9 DAYANG ENTERPRISE HOLDINGS 2.75 -0.070 2,603.3 71.88 3,183.9 FRASER & NEAVE HOLDINGS BHD 32.62 -0.060 46.2 16.53 11,964.3 GREATECH TECHNOLOGY BHD 5.18 -0.060 442.4 7.92 6,496.8 Data as compiled on May 30, 2024 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) DUTCH LADY MILK INDUSTRIES 35.980 1.080 71.1 55.35 2,302.7 IJM CORP BHD 2.770 0.230 24050.8 47.34 9,712.1 PRESS METAL ALUMINIUM 5.590 0.220 21627.0 16.22 46,059.5 MAH SING GROUP BHD 1.710 0.190 56063.7 106.02 4,377.8 KAWAN RENERGY BHD 0.615 0.150 106195.8 - 338.3 HAP SENG CONSOLIDATED BHD 4.520 0.130 526.7 -0.66 11,253.3 PERTAMA DIGITAL BHD 2.480 0.130 7398.2 -4.98 1086.8 PTT SYNERGY GROUP BHD 2.180 0.130 1932.4 81.67 437.0 AURELIUS TECHNOLOGIES BHD 3.610 0.120 1087.1 38.85 1,422.6 NOTION VTEC BHD 1.430 0.120 22959.4 346.88 738.0 ECO WORLD DEVELOPMENT 1.600 0.110 9549.4 52.38 4,711.0 SUPERLON HOLDINGS BHD 1.280 0.110 2620.3 47.98 203.0 KUALA LUMPUR KEPONG BHD 21.460 0.100 2132.2 -1.65 23,528.9 TEX CYCLE TECHNOLOGY (M) BHD 1.380 0.100 3,562.8 100.00 348.8 BRITISH AMERICAN TOBACCO 8.440 0.080 85.0 -9.15 2,409.87 PANASONIC MANUFACTURING 20.060 0.080 83.8 11.44 1,218.6 ALLIANCE BANK MALAYSIA BHD 3.870 0.070 1,935.1 14.16 5,991.17 GAMUDA BHD 6.150 0.070 8,807.8 33.99 17,036.8 GENTING BHD 4.850 0.070 5,602.7 4.98 18,675.29 KLUANG RUBBER COMPANY 6.340 0.070 5.3 75.14 394.14 Data as compiled on May 30, 2024 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 38,441.54 -411.32 -1.06 S&P 500 * 5,266.95 -39.09 -0.74 NASDAQ 100 * 18,736.75 -132.69 -0.70 FTSE 100 * 8,183.07 25.32 0.31 AUSTRALIA 7,628.20 -37.43 -0.49 CHINA 3,091.68 -19.34 -0.62 HONG KONG 18,230.19 -246.82 -1.34 INDIA 73,885.60 -617.30 -0.83 INDONESIA 7,034.14 -106.09 -1.49 JAPAN 38,054.13 -502.74 -1.30 KOREA 2,635.44 -41.86 -1.56 PHILIPPINES 6,371.75 -39.66 -0.62 SINGAPORE 3,323.38 0.18 0.01 TAIWAN 21,364.48 -298.02 -1.38 THAILAND 1,351.52 1.69 0.13 VIETNAM 1,266.32 -6.32 -0.50 Data as compiled on May 30, 2024 * Based on previous day’s closing Source: Bloomberg CPO RM 3,993-41.00 OIL US$ 82.89-0.71 RM/USD 4.7045 RM/SGD 3.4815 RM/AUD 3.1109 RM/GBP 5.9802 RM/EUR 5.0872