29-August-2023

CEOMorningBrief TUESDAY, AUGUST 29, 2023 ISSUE 627/2023 theedgemalaysia.com PHASE TWO OF NETR TO FOCUS ON BIOMASS, WASTE-TO-ENERGY, CARBON CAPTURE p7 HOME: BNM: Malaysia’s domestic banks have limited exposure to Country Garden p4 Oppstar remains shielded from chips industry slowdown amid resilient demand for IC design, says CEO p6 Mida digitises certificates to ease doing business in Malaysia p19 WORLD: China’s worsening economic slowdown is rippling across the globe p20 Ambani appoints children to Reliance board, wife steps down p26 Report on Page 2. Is the prosecution not appealing against acquittal of Najib and Arul Kanda in 1MDB audit case? Malaysia’s exports, imports see double-digit y-o-y drops in July Report on Page 3. ZAHID IZZANI/ THEEDGE

tuesday AU G UST 29, 2023 2 The E dge C E O m o rning brief published by ( 2 6 6 9 8 0 - X ) tel . 603-77218000 Level 3, Menara KLK, 1 Jalan PJU 7/6, Mutiara Damansara, 47810, Petaling Jaya, Selangor, Malaysia publisher + ceo . Ho Kay Tat editor-in-chief . Kathy Fong chief commercial officer . Sharon Teh chief operating officer . Lim Shiew Yuin editors . Jenny Ng . Tan Choe Choe Lam Jian Wyn to contact editors: [email protected] to advertise: [email protected] the edge ceo morning brief Read from desktop or mobile device. You can print in A4 to read. Set print mode to fit or shrink oversize page. to get on emailing list [email protected] PUTRAJAYA (Aug 28): There are questions over whether the prosecution intends to proceed with its appeal against the acquittal of ex-prime minister Datuk Seri Najib Razak and former 1Malaysia Development Bhd (1MDB) president and chief executive officer Arul Kanda Kandasamy over charges in relation to the now-defunct fund’s audit report. It is understood that the prosecution was supposed to submit the petition in the first week of July, but it has yet to do so. Case management of the matter was called in the Court of Appeal on Monday (Aug 28) before senior assistant registrar Nurul Azrina Mohamed Yusof, who decided to hold another case management on Wednesday. The case management on Wednesday is for the court to decide if the next session should be held before the appellate court’s deputy registrar, or whether it should be mentioned before the Court of Appeal’s bench. This comes as no petition of appeal was filed by the prosecution despite the fact that the time of filing has elapsed. The prosecution filed their notice of appeal earlier on March 9. Najib was represented by lead defence counsel Tan Sri Muhammad Shafee Abdullah, Muhammad Farhan Shafee and Alaistair Brandah Norman, while Datuk N Sivananthan and Jasmine Cheong appeared for Arul Kanda. Deputy public prosecutor Mohd Fuad Abdul Aziz appeared for the prosecution. Sivananthan confirmed the outcome when contacted by The Edge. Normally, the petition of appeal would contain the grounds for why the losing party is appealing against the decision. When asked whether this is a possible sign that the prosecution is not appealing against the decision, Sivananthan answered in the affirmative. Alaistair confirmed the outcome of the case management on Monday with The Edge when contacted, adding that the defence home by Hafiz Yatim & Tarani Palani theedgemalaysia.com Is the prosecution not appealing against acquittal of Najib and Arul Kanda in 1MDB audit case? had taken the position that the appeal is defective. “This matter has now been fixed for another case management on Aug 30, either before the deputy registrar or the panel of the Court of Appeal, as we have taken the position that the appeal is defective,” he said. Under Section 53(1) of the Courts of Judicature Act, the appealing party has to file the petition of appeal within 10 days upon the completion of the record of appeal. Section 53(3) of the Act stipulates that if a petition is not filed within the time prescribed by this Section, the appeal shall be deemed to have been withdrawn, but nothing in this subsection shall be deemed to limit or restrict the powers of extending time conferred upon the Court of Appeal by Section 56. This means the Court of Appeal may decide to extend the period of the filing of the petition of appeal, which may explain the date fixed on Wednesday. The Edge is trying to reach the Attorney General’s Chambers’ Appellate and Trial Division for confirmation. It was previously reported on July 21 that Arul Kanda had also sent a letter of representation for the prosecution to drop its appeal against him. Najib and Arul Kanda acquitted in March On March 3, the former prime minister was acquitted of abuse of power with regard to the audit report, while Arul Kanda was also acquitted of abetting Najib, without their defence being called. Court of Appeal judge Mohamed Zaini Mazlan, who was presiding over the trial in the High Court, ruled that there was no prima facie case against the duo. The judge agreed with Najib’s defence team that the prosecution had failed to prove a causal link between the amendments made in the audit report to the first audit report and the purported alleged gratification. “There is no evidence to explicitly prove that the second accused (Najib) had directed the amendments made to exonerate him from civil and criminal liability. He was merely concerned that the report would be spun politically. “The prosecution has failed to prove how the items removed or amended could give rise to civil or criminal liability to Najib. In my opinion, the items taken out or amended from the earlier audit report would not give rise to criminal or civil liability to the accused. The amendments as stated by the auditor general are justified.” Zaini also observed that the items amended or taken out were known to the Public Accounts Committee and openly discussed. “Therefore, I find the presumption under Section 23 (2) of the Malaysian Anti-Corruption Commission (MACC) Act 2009 could not apply, as the prosecution had failed to prove gratification,” the judge said in his verdict. Zaini, in granting a discharge, acquittal and a certificate of indemnity under Section 63(3) of the MACC Act to Arul Kanda, said he was satisfied that the former 1MDB president had made a “true and full discovery” of all things for which he was examined. This is the first case in which a co-accused was offered a certificate of indemnity under this Section of the Act. Former 1Malaysia Development Bhd president and chief executive officer Arul Kanda Kandasamy Zahid Izzani/ The Edge

tuesday AU G UST 29, 2023 3 The E dge C E O m o rning brief home PUTRAJAYA (Aug 28): A three-member Court of Appeal bench on Monday (Aug 28) unanimously granted a stay application by Shell Gas Holdings (M) Ltd from paying RM883,693,017 in tax for the assessment year of 2017 to the Inland Revenue Board (IRB), pending the hearing of its appeal for leave. The bench, which was led by Datuk Lee Swee Seng, granted the stay sought by Shell Holdings, noting that there were special circumstances to warrant a stay, as the amount represents a huge sum, and the company has a good tax payment record. The other judges who heard the application were Datuk Che Mohd Ruzima Ghazali and Datuk Azizul Azmi Adnan. Shell Gas had filed a judicial review application against the finance minister in relation to a tax assessment raised for 2017, after the IRB ruled that the gains from its disposal of 15% shares owned by Shell Gas in Malaysia LNG Tiga Sdn Bhd were subject to income tax. Shell Gas contends that the gains were capital receipt, and thus should not be subjected to income tax. This is especially so given that Shell Gas had owned the shares for about 22 years as an investment. However, the Shah Alam High Court dismissed Shell Gas’ application for leave on July 3, from hearing the merits of the application and refused stay. This resulted in the stay application sought in the Court of Appeal by the company on Monday. Following the granting of the stay, the bench fixed Oct 2 for case management of the appeal. Shell Gas was represented by counsel S Saravana Kumar and Felicia Wong from Rosli Dahlan Saravana Partnership, while the Ministry of Finance was represented by federal counsel V Krishna Priya from the Attorney General’s Chambers. Appellate court stays Shell’s RM884 mil tax payment pending appeal hearing KUALA LUMPUR (Aug 28): Malaysia’s exports and imports both recorded double-digit y-o-y declines in July, extending the y-o-y losing streak to five consecutive months. Exports fell 13.1% y-o-y to RM116.8 billion from RM134.3 billion, while imports dropped 15.9% y-o-y to RM99.7 billion from RM118.5 billion. On a month-on-month (m-o-m) basis, July’s exports contracted 5.8% from RM123.95 in June, while imports inched up 1.3% from RM98.4 billion. As a result, July’s total trade fell 14.4% y-o-y to RM216.41 billion from RM252.81 billion. According to DOSM, all but electrical and electronic products contributed to the decline in July’s exports. Compared to July 2022, the exports of refined petroleum products dropped 48.3% to RM9.2 billion, while the exports of palm oil and palm oil-based products decelerated 34.6% to RM8 billion; liquefied natural gas declined 39.7% to RM3.8 billion. The exports of crude petroleum were down by 20.6% to RM2.1 billion, while timber and timber-based products dropped 10.3% to RM1.9 billion; natural rubber shrank 19.8% to RM335.2 million. These were partly offset by exports of electrical and electronics (E&E) products that constituted 43.2% of total exports, which rose 7.3% to RM50.5 billion. As for imports, the contraction was due to the decline of both imports of intermediate and capital goods, but partially offset by the increase in consumption goods. The three main categories of imports by end-use represented 68.7% of total imports. Intermediate goods, making up 49.1% of total imports, fell by 20.9% to RM48.9 billion due to lower imports of parts and accessories of capital goods (except transport equipment), industrial supplies, fuel and lubricants, and food and beverage (F&B) products. Capital goods, which contributed 10.6% of total imports, dropped 3.6% to RM10.5 billion, owing to the lower imports of transport equipment. However, consumption goods, which made up 9% of total imports, increased by 5.9% to RM9 billion, resulting from the higher imports of F&B and durable goods. Trade surplus up 7.9% y-o-y, but down 33.11% from June Malaysia’s trade surplus, which is the difference between exports and imports, was RM17.09 billion in July, up 7.9% from the RM15.84 billion recorded in the same month a year earlier, marking three straight months of year-on-year growth, though at a declining rate. However, the July trade surplus is 33.11% lower than the RM25.55 billion recorded in June, the Department of Statistics Malaysia’s (DOSM) data showed. In June, Malaysia’s trade surplus grew 10.2% y-o-y from RM23.18 billion, and is up 62.7% from RM15.7 billion in May 2023. In May, the trade surplus was up 22.7% y-o-y from RM12.8 billion, and is up 24.3% from RM12.63 billion in April. For the cumulative seven months of 2023 (7MFY2023), Malaysia’s trade surplus dipped 2.5% to RM135.35 billion from RM138.83 billion in the first seven months of 2022 (7MFY2022), as both exports and imports contracted. Cumulative exports for 7MFY2023 fell 5.9% to RM820 billion from RM870.96 billion in 7MFY2022, while cumulative imports dropped 6.5% to RM684.65 billion from RM732.14 million. This resulted in a lower total trade of RM1.5 trillion for 7MFY2023, down 6.1% from RM1.6 trillion posted previously. Malaysia’s exports, imports see double-digit y-o-y drops in July by Justin Lim theedgemalaysia.com by Hafiz Yatim theedgemalaysia.com Source: Department of Statistics Malaysia (DOSM) Malaysia’s trade surplus from Jan 2022 to July 2023 0 10 20 30 40 RM bil Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July 27.98 18.24 19.15 26.24 23.38 12.80 23.18 15.84 17.29 31.84 18.50 21.80 17.09 18.13 19.5726.69 12.63 15.70 25.55 2022 2023

tuesday AU G UST 29, 2023 4 The E dge C E O m o rning brief home KUALA LUMPUR (Aug 28): Several real estate developer stocks caught investors’ interest, following Putrajaya’s unveiling intention to turn Johor’s Forest City, developed by China’s beleaguered Country Garden, into a special financial zone. Ekovest Bhd was the most actively traded stock at Monday’s market break, with 119.88 million shares changing hands. It climbed six sen or 13% to 51.5 sen a share, giving it a market capitalisation of RM1.39 billion. Iskandar Waterfront City Bhd (IWCity), on the other hand, rose eight sen or 13.4% to 67.5 sen, with 90.47 million shares traded, being the second most actively traded across Bursa Malaysia. The current share price valued IWCity at RM621.76 million. Meanwhile, UEM Sunrise Bhd, the master developer of Iskandar Puteri in Johor, climbed 4.5 sen or 6.7% to 71.5 sen, giving it a market cap of RM3.62 billion. S P Setia Bhd too gained eight sen or 9.6% to 91 sen, valuing it at RM3.71 billion. Last Friday, Prime Minister Datuk Seri Anwar Ibrahim reportedly said the government’s bid to create a special financial zone in Forest City is meant to boost investment, growth and economic activities in Johor. According to him, Johor’s strategic location next to Singapore and having a complete basic infrastructure can attract more investors, especially when the cost in Singapore is considered very high nowadays. In a note to investors, Maybank Investment Bank Bhd (Maybank IB) said the designation of Forest City as a special financial zone had raised the development potential of southwestern Johor. “This strategic move not only fosters economic diversification and balances growth in the different regions of Iskandar Malaysia, it also offers sizable job creation potential and heightens Iskandar Malaysia’s investment attractiveness,” it said. Maybank IB said local developers which focus on affordable landed properties in the region should benefit from the spillover effects of the special financial zone. RHB Research, meanwhile, said more catalytic developments may potentially shift towards the Malaysia-Singapore Second Link area, given the vast land resources and well-developed infrastructure, and Forest City is situated next to it. “Unlike the Johor Bahru city centre or vicinity surrounding the causeway that is already crowded, the Second Link area has plenty of land bank, and well-developed infrastructure and amenities,” it said in a note. “UEM Sunrise remains the best proxy for this Johor thematic play, followed by Sunway Bhd, given their sizeable exposure to the state’s property market,” it said. The incentives that Anwar announced include multiple entry visas, fast track entry for those working in Singapore, and a flat income tax rate of 15% for knowledge workers. RHB said this move should help to revitalise the Forest City, which had received lots of negative publicity in the last few years. “We believe industry players will be looking forward to the announcement of the special economic zone, as it should cover specific industrial and new economic sectors (such as data centres and renewable energy),” it said. Maybank also said the latest initiative has the potential to attract a growing number of Chinese family funds seeking more affordable alternatives in this region, besides Singapore. “Additionally, the special financial zone could also benefit from the spillover effects of Singapore’s initiative to develop the Jurong Lake district as its second central business district (CBD),” it said. “Currently, business activities are concentrated in Johor’s CBD, which will be further boosted by the upcoming Johor Bahru-Singapore Rapid Transit System, while the southeastern region is driven by oil and gas activities,” it added. While the special financial zone initiative offers significant potential, Maybank said efficient transportation networks and infrastructure offered by Forest City are crucial to attract investors. Developers with Johor exposure shine after govt bid to turn Forest City into special zone SINGAPORE (Aug 28): Malaysia’s central bank said on Monday (Aug 28) that banks incorporated in the Southeast Asian nation faced limited financial stability risk arising from exposure to China’s largest property developer, Country Garden. Such banks’ exposure to Country Garden Real Estate Sdn Bhd (CGRE), the developer’s wholly-owned subsidiary in Malaysia, amounted to less than 0.1% of total banking system loans and bonds by June 2023, the bank told Reuters in an email. “CGRE is servicing their loans promptly and the local group of companies have adequate funds to meet their payment obligations,” Bank Negara Malaysia (BNM) added. On Monday, the Chinese firm said its US$100-billion Malaysian project in Forest City, Johor was proceeding as planned and it had sufficient assets, despite concerns over its financial strength. The Malaysian central bank said it required financial institutions to consider the current and prospective property market conditions in their viability assessment for financing property development and construction projects. BNM: Malaysia’s domestic banks have limited exposure to Country Garden debt crisis could hamper a broader economic recovery and spill overseas. Country Garden is building its largest overseas development, the massive Forest City project, across four reclaimed islands in the southern Malaysian state of Johor, bordering the wealthy city state of Singapore. But the project, now home to about 9,000 people, has faced challenges since its 2016 launch, seeing demand fall sharply following China’s move to stem capital outflows and the Covid-19 pandemic. Last week, Malaysian Prime Minister Datuk Seri Anwar Ibrahim said the project would be designated a “special financial zone” to attract investment, and help cut the cost of doing business there. Read also: China’s Country Garden says US$100 bil Forest City project in Johor on track Embattled Chinese developer Country Garden said that its Forest City project in Johor, Malaysia was proceeding as planned, and it has sufficient assets despite concerns about its financial strength amid debt woes. by Yantoultra Ngui Reuters by Chester Tay theedgemalaysia.com “In the property sector, risks from unsold units from CGRE’s various projects in the country remain manageable,” it added. “The current development with Country Garden Holdings Ltd in China is not expected to pose any material impact on the overall property market activity and prices in Malaysia,” BNM said. The Chinese property developer’s comments came after it missed two dollar coupon payments this month, totalling US$22.5 million, fuelling fears that the country’s property

Tuesday A ugus t 29, 2023 5 The E dge C E O m o rning brief

tuesday AU G UST 29, 2023 6 The E dge C E O m o rning brief home KUALA LUMPUR (Aug 28): Mercury Securities Group Bhd, which is slated to be listed on the ACE Market of Bursa Malaysia on Sept 19, expects better revenue recognition from the margin financing component of its stockbroking business post listing. Mercury Securities managing director Chew Sing Guan based its confidence on the margin financing business’ compounded annual growth rate of 36% from financial year 2019 (FY2019) to FY2022. Margin financing, which loosely means borrowing money from a brokerage company and using that money to buy stocks, is a credit facility given to individuals, public listed companies and corporations to finance the purchase of shares listed on Bursa Malaysia Securities Bhd. Upon listing, Mercury Securities has allocated RM26.86 million from its total targeted initial public offering (IPO) proceeds of RM39.27 million to expand this business. The proceeds are based on the issuance of 157.09 million shares at an issue price of 25 sen per share. “Corporate financing brings in good income, but it’s a high cost. With margin financing with the right client, this is probably the best return for our bucks. We know the market, we know ‘who is doing what to who’ which position us in the best place to pick and select the best margin clients. “We are still lending to small investors. With the IPO proceeds, we will be able to concentrate on the big ticket borrowers,” he said. He said Mercury Securities is using internally generated funds to give out credit facility, but the IPO proceeds will give greater allocation to expand the provision of margin financing facility to its existing and new stockbroking clients. He said this in turn will help further enhance revenue for the stockbroking segment via margin income in addition to brokerage fees generated from purchase and sale of quoted securities made by margin clients. In FY2022, Mercury Securities’ stockbroking business contributed 69.7% to revenue while corporate financing contributed 30.27%. On the corporate finance segment of the business, Chew said the IPO component is the most profitable part at the moment, adding Mercury Securities is currently engaged with eight more companies to assist them on their listing journey. Upon its listing on the ACE Market, Mercury Securities will have a market capitalisation of RM223.25 million based on the issue price of 25 sen per share and its enlarged issued share capital of 893 million shares. Read the full story Read also: ACE Market-bound stockbroking firm Mercury Securities to raise RM39 mil from IPO ACE Marketbound Mercury Securities expects better revenue from margin financing business KUALA LUMPUR (Aug 28): Integrated circuit (IC) designing firm Oppstar Bhd is not experiencing any slowdown in customers’ enquiries, despite the ongoing slowdown in the semiconductor industry. “IC design is the very first step in electronic products creation. [For] a mid-sized chip, it takes about a year and a half, sometimes up to two years, just to do the design. For ODM (original design manufacturer) players, [if] they have cash holding, normally they will not stop their new product development. “Because their new products [will] only [be] released two- to three years down the road, if they stop it, when the economy recovers, they would have missed it,” Oppstar chief executive officer Ng Meng Thai told The Edge after the group’s annual general meeting. Although certain ODMs slowed down in their pace of kicking off new projects, Ng said there is shortage of IC designers to fulfil demand. “The whole world is running short of IC design talent; that is why we continue to receive enquiries from customers,” he said. Ng said the group’s current workforce consists of 254 engineers, up from 225 engineers as at end-March, and remains on track to meet its target of having up to 500 engineers over the next three years. Unlike a typical semiconductor company, IC design firms do not involve massive investment in production plants or machineries. Their capacity in terms of volume and complexity of a project goes by the size of the talent pool they can access. As demand for IC design remains strong, chief technology officer Cheah Hun Wah said Oppstar is riding on this trend to expand capacity by hiring more engineers, as well as trying to enhance its technical know-how, in order to provide a wider range of solutions in fulfilling different customers’ needs. “We are going to reshape segments of our design functions. Yester-years were about how Oppstar remains shielded from chips industry slowdown amid resilient demand for IC design, says CEO we transform Oppstar to be a public company through IPO (initial public offering). PostIPO, we are going to be much aggressive. “In the past few years, [when] there was [the Covid-19] pandemic, we pushed ourselves through. Today, yes there is [industry] correction, geopolitical and all that, but at Oppstar, we continue to move forward. We have our track record: our turnkey design [businesses] continue to progress,” Cheah said, adding that the management will also continue to enhance its post-silicon validation services. Earlier this year, Oppstar bought out the remaining 42.5% stake in Oppstar Microelectronics Sdn Bhd from Sophic Automation Sdn Bhd for RM325,000. Oppstar Microelectronics is principally involved in the provision of post-silicon validation services, and Oppstar said the acquisition enabled it to expand the line of services, which is expected to complement the group’s core activities of IC design. Oppstar’s share price has more than doubled to RM1.65 on Monday (Aug 28), from its IPO price of 63 sen. It hit a high of RM2.43 on its maiden trading day. The company is valued at RM1.05 billion at the closing price of RM1.65 on Monday. Read also: Oppstar does not deal with US sanctioned entities, says CTO by Chester Tay theedgemalaysia.com by Priyatharisiny Vasu theedgemalaysia.com

tuesday AU G UST 29, 2023 7 The E dge C E O m o rning brief home KUALA LUMPUR (Aug 28): Malaysia’s upcoming Hydrogen Economy and Technology Roadmap will underline ways for the nation to attract investments for the production of this new commodity in order to become a main green hydrogen export hub by 2027. “It would be remiss” not to mention green hydrogen’s potential as a fuel alternative, said Minister of Natural Resources, Environment and Climate Change Nik Nazmi Nik Ahmad. “The federal government, in collaboration with state governments and utilities like TNB (Tenaga Nasional Bhd), is excited to explore the prospect of harnessing a new energy carrier and the knockon economic effects it would bring,” Nik Nazmi said. “We aim to unlock the hydrogen economy through the NETR (National Energy Transition Roadmap) and the Hydrogen Economy and Technology Roadmap (HETR), which is targeted to be rolled out later this year,” the minister said when launching The Energy Transition Conference 2023 here on Monday (Aug 28). Malaysia, a key producer of natural gas, has been exploring hydrogen as a new resource in light of rising demand for green energy. This is in light of its gas-like nature, which means it can be stored and transported, unlike other existing raw RE such as solar, hydro and wind. While hydrogen itself does not emit carbon when consumed as a fuel source, production of the molecules using green energy has been very expensive — said to cost at least US$250 (RM1,164) per barrel of oil equivalent, as opposed to the selling price of crude oil of about US$70- per-barrel range at present. Proponents of hydrogen include national oil and gas company Petronas as well as the Sarawak state government, which intends to utilise its vast hydro electricity generation capacity to support green hydrogen production. The state has also tested its first hydrogen-powered autonomous rapid transit tram this month. National utility outfit TNB is also looking at hydrogen, in a bid to explore hydrogen-fired gas plants. Malaysia is among the world’s largest producers of natural gas, which fuels almost half of domestic electricity consumption. It is also a key exporter to countries like Japan, which said in June it wanted to generate US$107 billion in investments for hydrogen supply in the next 15 years to speed up its own decarbonisation journey. Malaysia’s launch of the hydrogen roadmap will come on the heels of NETR, whose second phase is set to be launched on Tuesday (Aug 29) and represents one of its new government’s key economic transformation agenda that seeks to turn Malaysia’s need to transition to renewables into a growth opportunity — considering the nation’s RE potential and position within Asean — to support the Asean grid and its rising demand for green energy. Malaysia to launch hydrogen roadmap this year as it seeks hydrogen investments KUALA LUMPUR (Aug 28): The government will announce on Tuesday (Aug 29) the extension of the first phase of the National Energy Transition Roadmap (NETR), known as Phase 2, which will focus on biomass, waste-to-energy usage, carbon capture and storage (CCS), and hydrogen integration, among others. Energy Commission chief executive officer Datuk Abdul Razib Dawood said the roadmap will be “more than policy” covering across sectors, with discussion on “more actionable items” after the first phase announced in July 27. “In the second phase of the NETR, we will discuss more actionable items on how to reach the 2050 targets,” he said at the dialogue session on “Forward-thinking Policies and Regulations that Shape the Energy Transition” at the the Energy Transition Conference 2023 on Monday. He highlighted that the primary challenge in energy transition is to increase the renewable energy (RE) capacity, pointing out that solar projects are currently the only viable option in Malaysia, while other forms of RE are still in their early stages of development. “We need at least 2.5 gigawatts RE installation per year to achieve 70% of RE in the power mix by 2050. But, first the grid has to be ready to take on these RE projects,” Abdul Razib said. Phase two of NETR to focus on biomass, waste-toenergy, carbon capture On CCS and hydrogen, he said that while it is still nascent, it is essential to get the infrastructure ready. “We have to start somewhere you know, maybe we need a government funding system to begin with. But of course, we aspire to be a hub (hydrogen) for this region. “And of course, the last is CCS, which Petronas has already started to embark on, but it is still at the nascent stage and also expensive. But, we need to be ready,” he said. Nonetheless, Abdul Razib stressed that it is important for the country to strike a balance of creating high value jobs in its RE journey. Phase 1 of the NETR saw six key energy transition levers announced: energy efficiency, RE, hydrogen, bioenergy, green mobility, and carbon capture, utilisation and storage. Phase 1 of the NETR, which was announced on July 27, saw 10 flagship “catalyst projects and initiatives” introduced which, according to Economy Minister Mohd Rafizi Ramli, could open up energy transition investment opportunities of RM435 billion to RM1.85 trillion by 2050. Rafizi said for Phase 1 of the NETR, total committed investments stood at RM25 billion, estimated to create 23,000 high-impact, high-quality jobs, and reduce 10,000 gigagrams of carbon dioxide equivalent annually. by Intan Farhana Zainul theedgemalaysia.com by Adam Aziz theedgemalaysia.com The Edge file photo Read also: Nik Nazmi: Developed nations bear responsibility for aiding developing counterparts in energy transition

tuesday AU G UST 29, 2023 8 The E dge C E O m o rning brief home KUALA LUMPUR (Aug 28): Those involved in facilitating the energy transition must look beyond balancing the energy trilemma, and look into the missing component of equity and inclusiveness to ensure no one is left behind in the process, said Tenaga Nasional Bhd (TNB) chairman Datuk Abdul Razak Abdul Majid. Speaking during the welcoming address for The Energy Transition Conference 2023 here, Abdul Razak said the pace of facilitating a responsible energy transition “will require the joint commitment from all” including policymakers, suppliers and even customers. “The energy future is undoubtedly uncertain, but one fact remains: it is constantly evolving. “The threat of climate change and the need to secure energy security loom large, demanding our immediate attention and collective action. “The transformation of the global energy system is well underway, but our path to transition is not without its challenges. The threat of climate change and the need to secure energy security loom large, demanding our immediate attention and collective action,” Abdul Razak added. Malaysia has made ambitious commitments towards energy transition, including accelerating the nation’s medium- and long-term renewable energy capacity target, facilitating the installation of 10,000 public electric vehicle charging facilities nationwide by 2025, and to allow residential solar rooftops leasing, previously allowed only for commercial and industrial customers. The current government has highlighted energy transition as a key component in its economic transformation agenda, in light of rising demand for renewable energy in the region and abundant untapped supply of the energy resource in the country. At the same time, debates have been ongoing around the costs of the intermittent energy resource. This year, the government has also revised tariffs for green energy higher, to reflect international pricing and support the viability of future private investments into renewable energy projects. TNB, which organised the Energy Transition Conference, acknowledges its role within the electricity value chain, and is “determined to actively participate in the agenda for a responsible energy transition programme”, Abdul Razak said. The national utility company’s strategy, he pointed out, includes concerted planning on generation decarbonisation, enabling flexible renewable energy, cross-border grid exchanges, and empowering cross-sectorial electrification and prosumers’ participation. “With these initiatives, TNB will usher our stakeholders to witness an increase in renewable energy capacity, enhanced energy efficiency through smart and digital technologies, broader adoption of solar, emerging renewable technologies be it hydrogen, ammonia or storage facilities and a more concentrated regional collaboration in green energy exchanges,” Abdul Razak said. The Energy Transition Conference 2023 hosts conversations around three economic pillars of Power, Transportation and Cities, which Abdul Razak said mirrors TNB’s approach in cleaner power generation, future grid and supply network, sustainable cities, and transportation sector electrification. The two-day conference has drawn over 2,000 attendees with 68 speakers from across the globe, and supported by 33 partner organisations. Prime Minister Datuk Seri Anwar Ibrahim is expected to share more details on the National Energy Transition Roadmap (NETR) on the second day of the conference. Energy transition must be inclusive, needs joint commitment of stakeholders — TNB chairman KUALA LUMPUR (Aug 28): Malaysia’s fuel subsidy policy is contradictory to its promotion for the adoption of electric vehicles (EVs) and hampers the country’s overall push for more EV use, according to Gentari deputy CEO and chief green mobility officer Shah Yang Razalli. “When we look at the fundamental driver of EV adoption, we can’t help but talk about total cost of ownership parity or TCO parity. In simple terms, is it cheaper to buy and operate an EV throughout its lifetime compared to an equivalent ICE (internal combustion engine) vehicle?” he said during a breakout session at the Energy Transition Conference on Monday (Aug 28). What cuts down on EV-to-ICE cost parity are financial incentives – in the form of outright purchase subsidies as well as additional incentives such as free public charging, parking or tolls – while also disincentivising the use of hydrocarbon-based fuels in the way of fuel taxes or carbon taxes. “The parity that we see [in Norway] is [EVs are] about 30% [cheaper than ICE equivalents]. For countries with good sustainable EV adoption, we see about 20% to 30% [parity in favour of EVs] to be the right amount,” he noted. Touching on Malaysia’s situation, Shah said the import tax and excise duty exemption on completely buildup-up (CBU) EVs instituted by the government are a good start, but noted that its ongoing fuel subsidy is contradictory to its EV push – resulting in EVs being 20% more expensive to own and operate than ICE equivalents in Malaysia. Malaysia’s fuel subsidy holding back EV adoption, says Gentari deputy CEO Looking at regional examples of countries that attained price parity, Shah said beyond tax exemptions, these countries also offered subsidies in terms of reducing the outright purchase price of EVs, as well as disincentivising the use of fuel for ICE vehicles. “Note that none of these countries, like India and Thailand, had fuel subsidies to begin with. But they have instituted some sort of duty or tax or in some cases carbon tax on the use of fuel for ICE [vehicles],” he added. Nonetheless, Shah opined that Malaysia is on the right track in terms of facilitating the adoption of EVs, and noted that the industry and consumers are anticipating the unveiling by Prime Minister Datuk Seri Anwar Ibrahim of Part 2 of the National Energy Transition Roadmap on Tuesday (Aug 29), which Shah believes should further supercharge EV adoption. Read also: EV adoption in Malaysia outpacing charger deployment, says Gentari deputy CEO by Izzul Ikram & Adam Aziz theedgemalaysia.com by Adam Aziz theedgemalaysia.com

TUESDAY AUGUST 29, 2023 9 THEEDGE CEO MORNING BRIEF

TUESDAY AUGUST 29, 2023 10 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 28): The renewable energy (RE) sector is not getting enough financial support from banks, despite abundant business opportunities and Malaysia’s target to have a 70% RE energy mix by 2050, the Energy Transition Conference heard on Monday (Aug 28). Uzma Bhd chief executive officer Datuk Kamarul Redzuan Muhamed said that while there are many green-related financing options available, it is difficult to tap the facilities, especially for companies that are in the oil and gas (O&G) industry. “There are a lot of programmes that are available out there, but the actual fact is that it’s very hard to reach these facilities. “The yardstick of awarding these bonds or green financing and whatnot, is still using the same yardstick of looking at the internal rate of return (IRR) and I think we’re going to have the same problem,” he said during a panel discussion on “transforming brown assets into green assets” at the conference. “At the same time, we also have that single customer limit, because at the end of the day, in Malaysia, we only have one off-taker for RE,” added Kamarul, referring to Tenaga Nasional Bhd’s role as the sole off-taker, which according to him, creates an unfavorable situation in the development of the RE market. He pointed out that companies in the O&G sector that have transition plans also face funding difficulties, as their current core business is not being funded, hence making it difficult for them to fund their transition journey. “I feel that financial distribution needs to also fund what are called ‘brown assets’, because green assets and green businesses are very hard businesses. You need to go out and raise debt, and to raise that, you still need to have your equity portion funded. And that equity portion has to be funded by your current core business. “For a lot of companies that want to transition, they cannot find the funding because the existing business has not been funded,” Kamarul said. Uzma is one of the local O&G companies that is diversifying into solar projects, which it bagged under the Large Scale Solar 4 (LSS4) programme. It is developing a solar photovoltaic facility of 50MW (megawatt) capacity. Kamarul said that while RE is a low risk-low return investment, the question is how long would the low risk-return take, because as a company, it needs to strike a balance in its investment. “There should be some level of protection, because solar panel prices have been volatile for the past years,” he added. Meanwhile, CIMB Group chief sustainability officer Luanne Sieh said banks are already offering “transition finance” for companies, but the rules are pretty strict because many companies are using “transition” as a “nice name”. “A lot of companies are saying they are on a transition journey and put it on their website, but are they really transitioning? That is the challenge the banks are facing. “So to attract transitioning finance, companies need to make sure they have clear goals at the mid- to long term, from 2030 to 2040 to 2050. Make sure you have technology pathways and roadmaps and make sure you have clear metrics. Lastly, make sure you have a clear carbon offset and only as a last resort, because the financial sector wants to see the real transition,” she said during the panel discussion. RE sector not getting sufficient support from banks, energy conference told KUALA LUMPUR (Aug 28): Inequality in renewable energy (RE) investments and deployments continued to grow, even as the world posted a record year in capacity additions in 2022, said the International Renewable Energy Agency (Irena) director general Francesco La Camera at the Energy Transition Conference 2023 held on Monday (Aug 28). Global RE capacity addition rose to 295GW (gigawatts) in 2022, compared with just slightly above 150GW as recently as in 2018, according to Irena’s World Energy Transition Outlook Report 2023. However, RE investments have been unequal across regions, with more than half of the world’s population receiving only 15% of such investments. Disparities in per capita investments in the sector “have more than doubled” in 2021, compared with 2015 levels, La Camera said, pointing to per capita capacity of around 1.2MW (megawatt) in Oceania and Europe, compared with as low as 0.04MW in Africa, and 0.1MW in the Middle East. “85% of this investment benefits less than 15% of the population. We need to address this imbalance urgently, by quadrupling annual investment and more equitable financial flow,” La Camera said during the plenary session at The Energy Transition Conference 2023. While Irena studies found that RE costs have been decreasing, equitable energy actions must be ensured. “Expanding RE deployments to developing nations being deprived of access, is a moral imperative,” he said. According to the Energy Transition Commission, the transition would require 6.5 billion tonnes of end-use materials from 2022 to 2050, of which 95% would be steel, copper and aluminium, with the remaining 325 million tonnes or 5% derived from critical minerals such as lithium, cobalt, As RE inequality persists, critical materials supply constraint looms ahead — Irena DG graphite and other rare earth minerals. The trends expected by Irena in the foreseeable future of energy transition include physical constraints, as demand for critical materials like rare earth elements rise, aside from development of disruptive innovations, and potentials of scaling up circular economy both to address consumption of such materials. “The energy transition will be the main driver of demand for critical minerals, and no country can fulfill its demand for all critical materials alone. This is a chance to rewrite the legacy of the extractive industry,” La Camera said. At the same time, key geopolitical risks loom over the supply of such materials, ranging from resource nationalism to export restrictions, presence of mineral cartels and market manipulations. “The most important variable in energy transition is time,” La Camera said. “We need to triple the existing RE capacity to meet the 1.5°C pathway (by 2050). And if we do not do it now (the annual commitment increases over time), we will not have the capacity to do all this. The costs will rise dramatically, and we simply cannot get the results done (in addressing the temperature rise),” he added. BY ADAM AZIZ theedgemalaysia.com BY INTAN FARHANA ZAINUL theedgemalaysia.com Read also: Gas pricing model key for sustainable power generation in Malaysia’s energy transition, says MGA chief

TUESDAY AUGUST 29, 2023 11 THEEDGE CEO MORNING BRIEF Sunway’s Next Smart Sustainable City Paved Walkways & EV Charging Fibre-Ready & Integrated Home Management Auxilliary Police, License Plate Recognition & Integrated Command Centre Energy Efficient Fixtures & Design Recycle & Redeem Waste Management System +607 509 6575 www.sunwaycityiskandarputeri.com SUNWAY CITY ISKANDAR PUTERI SALES GALLERY G-01 & G-02, Hab Citrine, Sunway Citrine, Persiaran Medini 3, Sunway City Iskandar Puteri, 79250 Iskandar Puteri, Johor SUNWAY ISKANDAR SDN BHD (964451-A)

TUESDAY AUGUST 29, 2023 12 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 28): AirAsia X Bhd (AAX) posted its fourth consecutive quarterly net profit in the second quarter ended June 30, 2023 (2QFY2023) amounting to RM5.54 million, compared to a massive net loss of RM652.52 million in the same period last year as quarterly revenue soared 379% on the back of a surge in international travel as borders reopened. A bourse filing on Monday (Aug 28) showed the medium and long-haul airline operator recording revenue of RM512.91 million for the quarter, compared to RM107.18 million in 2QFY2022 as more aircraft were brought back to service. As of 30 June 2023, the company had 11 aircraft activated, compared to five a year ago. As a result, seat capacity grew by over 26 times year-on-year (y-o-y) to 818,422 seats flown. During the quarter under review, the company carried a total of 621,984 passengers, delivering a surge of 70 times y-o-y, with a passenger load factor (PLF) of 76%, which is 47 percentage points higher than the 29% PLF reported for the corresponding quarter ended June 30, 2022. Available seat kilometres (ASK) was recorded 25 times higher y-o-y, standing at 3,509 million, with a recovery rate of 42% against the corresponding period in 2019. Compared to the same period last year, the number of sectors flown increased by over 27 times from 81 sectors to 2,234 sectors as of 30 June 2023. In terms of costs, the company’s cost per available seat kilometre normalised to 11.75 sen, driven by higher maintenance costs led by utilisation-driven maintenance cost components. Revenue per available seat kilometre came in at 14.61 sen as the average base fare rationalised to RM533 this quarter on the back of an increase in ASK capacity. “Consequently, the number of corresponding flying and ground crews has inAAX posts fourth consecutive quarterly profit in 2QFY2023 on air travel rebound MPI earnings plunges 90% in 4Q on weak demand, high inventory and energy costs BY SYAFIQAH SALIM theedgemalaysia.com BY ISABELLE FRANCIS theedgemalaysia.com KUALA LUMPUR (Aug 28): Malaysian Pacific Industries Bhd (MPI) net profit plunged 89.9% to RM8.14 million or 4.09 sen per share in the fourth quarter ended June 30, 2023 from RM80.49 million or 40.47 sen per share a year ago due to weak end-market electronics demand, elevated inventories and higher energy costs. Revenue fell 21% to RM482.43 million from RM612.04 million. In a filing to Bursa Malaysia, the company said although revenue was flat compared with the preceding quarter, the global semiconductor revenue for different end-markets fluctuated from quarter to quarter. The group recorded a pre-tax profit of RM16.7 million compared with pretax loss of RM3.4 million in the preceding quarter due to better cost managemet and favourable US dollar against ringgit. For the full year ended June 30, its net profit declined 81% to RM61.33 million from RM328.85 million. Revenue fell by 15% to RM2.04 billion from RM2.4 billion a year ago. MPI shares closed 42 sen or 1.6% lower at RM26.30, valuing the company at RM5.5 billion. creased by 172% and 209%, respectively. The maintenance cost on the other hand increased on the back of higher utilisation and weakening of currency against the US dollar,” it said. The group recorded earnings before interest, taxes, depreciation and amortisation (Ebitda) of RM100.53 million versus a loss before interest interest tax, depreciation and amortisation of RM691.47 million a year ago. Compared to the immediate preceding quarter, AAX’s net profit dropped 98.31% from RM328 million in 1QFY2023 due to higher cost maintenance and overhaul as well as aircraft lease, while revenue slipped 6.55% from RM548.84 million due to a low-sales season in the quarter under review. Looking ahead, AAX chief executive officer Benyamin Ismail said the group remains on track to have at least 16 aircraft operational by the final quarter of 2023 and that it is confident the group will maximise the positive impact of the market once the peak travel season begins at year-end. “We are also driving our commercial ambitions with new and improved product offerings across all revenue segments. The team works diligently to further enhance our pricing strategy, introduce new products and optimise our sales channel via airasia.com to further elevate the user experience,” he said. For the first half ended June 30, 2023 (1HFY2023), AAX registered RM333.54 million in net profit on a revenue of RM1.06 billion. In comparison, net profit came in at RM32.97 billion in the same period a year earlier, after RM33.6 billion of provisions made for default under contracts and liabilities had been forgiven and reversed during the year following the completion of its debt restructuring process. Revenue for the period was RM220.2 million. On AAX’s Practise Note 17 (PN17) status, Benyamin said that the group had submitted a waiver application to Bursa Securities in July and that material announcements will be made in accordance with due process. As of end-June, AAX’s cash balance was RM269 million while shareholders’ equity stood at RM96.1 million. Shares of AAX closed down three sen or 1.2% to RM2.48 on Monday, giving it a market value of RM1.11 billion. The stock has risen over 313% year-to-date. *On Aug 18, 2022, the financial-year end of the group was changed from June 30 to Dec 31 Source: Bursa Malaysia AirAsia X’s quarterly financial performance -750 -500 -250 0 250 500 750 -750 -500 -250 0 250 500 750 Net profit/loss (RM mil) Revenue (RM mil) 2Q 3Q 2022 FY2023* 4Q 1Q 2Q 107.2 100.1 339.3 548.8 512.9 -652.5 25.1 153.5 328.0 5.5

TUESDAY AUGUST 29, 2023 13 THEEDGE CEO MORNING BRIEF HOME C M Y CM MY CY CMY K Smart CA-i Bundle - THE EDGE HPFC 130x190_FA(o).pdf 1 18/08/2023 5:51 PM KUALA LUMPUR (Aug 28): IOI Properties Group Bhd closed its financial year ended June 30, 2023 (FY2023) with net profit doubling to RM1.39 billion from RM686.74 million in FY2022, thanks to a 26% increase in operating profit in its property investment portfolio and a fair value gain that contributed RM716.8 million, while revenue was largely unchanged at RM2.59 billion. In a statement, the group said its stronger annual profit demonstrates its robustness in managing through economic fluctuations and business cycles as the value of its investment properties matures. It announced an interim dividend payout of five sen per share, higher than the four sen it announced for FY2022. The last time the group paid a five sen dividend was in FY2018. For FY2023, IOI Properties said its property development segment achieved sales with contracts exchanged of RM1.96 billion, of which 85% was from local projects, while the remaining 15% was from overseas projects in China and Singapore. “In Malaysia, the sales secured were largely from the Klang Valley region at RM854.1 million, led by our integrated development at IOI Resort City in Putrajaya and our matured township at Bandar Puteri Puchong in Selangor,” said the group in a statement. “Johor continues to outperform with a sales contribution of RM772 million. This was led by the established townships at Bandar Putra Kulai and Taman Kempas Utama. Notably, Bandar Putra Kulai has been IOI Properties pays five sen dividend as annual profit doubles to RM1.39 bil BY SYAFIQAH SALIM theedgemalaysia.com leading our sales with wide product offerings ranging from single-storey, double-storey terrace and semi-detached residential products catered for homeowners, to bustling commercial shop offices for business proprietors. In total, RM1.19 billion worth of properties were launched during the year with an average take-up rate of 69%,” the group added. The stronger yearly profit came despite a 19.52% drop in its final quarter’s net profit to RM235.37 million from RM292.48 million a year ago, mainly due to its property development segment’s lower performance. Quarterly revenue dipped 6.91% to RM666.46 million from RM715.94 million. Looking ahead, IOI Properties said its diverse product offering in established townships will see mid-priced residential and commercial units offered at 16 Sierra, Bandar Puteri Puchong, Bandar Puchong Jaya, Warisan Puteri, Bandar Puteri Bangi while industrial plots are offered in the rebranded IOI Industrial Park located at Banting in the Klang Valley. “Over in Johor, capitalising on the strong demand, launches will be focused in Bandar Putra Kulai followed by launches at the townships of Bandar IOI Segamat, Taman Kempas Utama and our industrial park at iSynergy in Senai,” said IOI Properties.

TUESDAY AUGUST 29, 2023 14 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 28): SkyWorld Development Bhd reported a net profit of RM42 million or 7.32 sen per share for its first quarter ended June 30, 2023 (1QFY2024), on the back of a revenue of RM210.82 million. There are no comparative year-on-year figures, as the property developer was only listed on Bursa Malaysia on July 10. The group said the quarterly revenue was derived mainly from the progressive revenue recognition from ongoing projects, and the sales of completed inventories. Compared with the preceding quarter (4QFY2023), SkyWorld’s net profit declined 27.84% from RM58.21 million, mainly due to lower gross profit recognised, mitigated by lower administrative expenses. Revenue fell 6.7% from RM225.95 million in 4QFY2023, primarily due to lower progressive revenue recognised from two ongoing projects, SkyAwani IV Residences and EdgeWood Residences. SkyWorld founder and non-independent executive chairman Datuk Seri Ng Thien Phing said that the group has unbilled sales of RM951.9 million, which will be progressively recognised in the upcoming years. Ng said the group also plans to launch new projects in the Klang Valley, with a total estimated gross development value exceeding RM1 billion as part of its 2024 strategy. “Moving forward, we remain committed to adaptability and resilience, traits that have guided us through the tests of time, and customer satisfaction, as we continue to focus on our ongoing and future developments,” he added. SkyWorld posts RM42 mil quarterly net profit driven by ongoing projects KUALA LUMPUR (Aug 28): Technology, energy and IT company Dagang Nexchange Bhd (DNeX) reported a 70.4% drop in its net profit to RM47.51 million for the three months of April 1 to June 30, 2023, from the RM160.59 million it made in the corresponding three months in the previous year, as its tech business fell into a loss amid lower wafer shipments. Its tech business reported a loss before tax of RM25.72 million, as opposed to a profit before tax (PBT) of RM85.66 million previously. At the same time, its energy business was affected by a lower net average selling price of Brent crude oil of US$74.7 per barrel (/bbl) during the quarter, compared with US$115.01/bbl previously, which resulted in PBT dropping about 30% to RM22.4 million, from RM31.97 million. The conclusion of some projects in its IT segment also led to a 22.6% drop in PBT to RM21.89 million, from RM28.26 million. Earnings per share dropped to 1.51 sen from 5.09 sen, its bourse filing showed. No dividend was declared. It recently changed its financial year end from June 30 to Dec 31. Group revenue fell about 40% to RM275.02 million from RM450.57 million, with its biggest contributor, the technology business, seeing a 49.6% topline drop to RM128.08 million from RM254.09 million. For the 12 months ended June 30, 2023, DNeX reported a net loss of RM118.66 million, compared to a net profit of RM549.59 million in the corresponding 12 months in 2022, dragged primarily by a 98.4% PBT decline at its technology business to RM7.96 million, from RM490.86 million. Excluding the one-off negative goodwill from business combination of RM264.51 million and a one-off impairment loss of RM9.51 million that the group recorded in the previous year, the group would have made a PBT of RM179.91 million in 12MFY2023, down RM178.29 million from the RM358 million it made previously, due to lower revenue. KUALA LUMPUR (Aug 28): Malakoff Corp Bhd registered a net loss of RM318.73 million or 6.52 sen per share for the second quarter ended June 30, 2023 (2QFY2023), compared with a net profit of RM119.15 million or 2.44 sen per share a year earlier. The group said the significant decline in earnings was mainly due to substantial negative fuel margins of RM556.2 million and RM14.9 million at Tanjung Bin Power Sdn Bhd (TBP) and Tanjung Bin Energy Sdn Bhd (TBE) coal plants, impacted by higher weighted average fuel costs. In addition, earnings were also dragged by a lower contribution from GB3 Sdn Bhd following the expiry of the power purchase agreement on Dec 30, 2022, higher operating insurance costs as well as lower share of profit from associates and joint ventures, said the independent power producer (IPP) in a bourse filing. Revenue increased by 2% to RM2.36 billion from RM2.32 billion in 2QFY2022, primarily due to a higher energy payment and capacity income from TBE given the higher applicable coal price and shorter duration of plant outage as well as higher energy payment from Segari Energy Ventures Sdn Bhd due to an increase in despatch factor. Notably, this is Malakoff’s second straight quarterly loss. In 1QFY2023, the group recorded a net loss of RM99.1 million on a revenue of RM2.29 billion. Notwithstanding the poor financial performance, Malakoff declared an interim dividend of 1.5 sen per share, to be paid on Oct 27. Read the full story DNeX’s profit for April-June dives as tech biz falls into the red Malakoff posts net loss in 2Q as coal plants hit by fuel costs BY TAN CHOE CHOE theedgemalaysia.com BY SYAFIQAH SALIM theedgemalaysia.com BY ANIS HAZIM theedgemalaysia.com DNEX

TUESDAY AUGUST 29, 2023 15 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 28): RGB International Bhd, whose shares fell in active trading on Monday (Aug 28), has clarified that the group only undertakes the outright sale of gaming machines, and has no involvement or ownership in slot clubs in the country. In a bourse filing on Monday, the Penang-based gaming solutions provider also said that it “had not and will not condone any form of political funding”. The group said it was responding to an article entitled RGB International Bhd Syarikat Judi Taja Hamzah, VIP, PN: CEO dan Tan Sri di tahan SPRM? published by Sabahkini2.com on Sunday. “The company’s directors are thus offering their full cooperation to the Malaysian Anti-Corruption Commission (MACC) investigation,” said RGB International. “The company’s directors have no link to any politician in the country.” According to a report in Utusan Malaysia on Sunday, 13 individuals including an individual with the Tan Sri title were arrested by the MACC last Wednesday on suspicion of being involved in the ownership of companies that supplied gambling slot machines. They allegedly received funds from companies that were granted licences to operRGB International rejects claim of involvement in slot clubs, political funding ate slot machine activities in private clubs owned by the companies, with the funds used to finance campaigns during the 14th and 15th general elections and the recent state elections. RGB International, in its filing, stressed that it adopts a zero-tolerance approach towards bribery and corruption and upholds the highest standard of compliance. To uphold this commitment, the group said it established an anti-bribery and corruption policy in 2015 which sets out standards for directors, employees, agents, consultants, suppliers and vendors to comply with in conducting business. “If any parties deviate from the company’s zero tolerance approach, the company will take necessary action to protect the interest of its shareholders and all relevant stakeholders,” it added. RGB shares fell 13.89% or five sen to close at 31 sen on Monday, with 139.46 million shares changing hands, making the counter the second most actively traded on Bursa Malaysia. The stock hit a speed bump after reaching a 16-year high of 42 sen on Aug 21. Over the past week, it has declined 26%. Its market value has come down by RM170 million to RM480 million. BY JUSTIN LIM theedgemalaysia.com Catch all the excitement via: BursaMalaysia.com thebursabullcharge [email protected] RGBGAMES.COM

TUESDAY AUGUST 29, 2023 16 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 28): Mah Sing Group Bhd’s net profit increased by 17% to RM50.48 million or 2.08 sen per share in the second quarter ended June 30 (2QFY2023), from RM43.03 million or 0.85 sen per share a year ago, on the back of higher property sales. The group achieved robust earnings in 2QFY2023, with a pre-tax profit of RM75 million and a revenue of RM644.2 million. This reflects a 25.5% and 18.9% improvement in pre-tax profit and revenue respectively, compared to the preceding year’s corresponding quarter. For the first half ended June 30, 2023 (1HFY2023), the group’s net profit grew 17% to RM100,53 million, from RM86.21 million. During the cumulative period, revenue and pre-tax profit were at RM1.29 billion and RM150.8 million respectively, as compared to RM975.2 million and RM115.8 million a year ago. During the six-month period, property sales increased by 20% to RM1.2 billion, compared with RM1 billion a year ago. The group’s property development division achieved an operating profit of RM177.9 million, supported by a revenue of RM1.04 billion. This marked a 20.1% increase in operating profit and a 39.6% rise in revenue compared to the corresponding year, due to increased property sales and the gradual recognition of revenue from ongoing construction progress. In a statement, Mah Sing’s founder and group managing director Tan Sri Leong Hoy Kum said, “The group’s impressive sales momentum was mainly driven by the strong take-up rates for our M Series developments, as reflected in our 1HFY2023 results. He said its affordable segment boosted its unbilled sales to RM2.34 billion. “With more new launches planned for the second half of 2023, the group is confident of meeting the full-year sales target of minimum RM2.2 billion,” added Leong. The group has approximately RM929.7 million in cash and bank balances, and investments in short-term funds. Free cash flows from timely completions and vacant possession of properties reduced net gearing to a low of 0.12 times as of end-June 2023. KUALA LUMPUR (Aug 28): Solarvest Holdings Bhd has secured a contract to install a 14-megawatt peak (MWp) rooftop solar photovoltaic (PV) system at Toyo Tyre Malaysia Sdn Bhd (TTM)’s tyre manufacturing plant in Kamunting, Perak, the largest of its kind in the area. Clean energy expert Solarvest will undertake the engineering, procurement, construction, and commission works for the installation of the solar PV system at TTM’s main buildings/facilities, covering a rooftop area of 96,000 square metres. The expected generation of 14 MWp of clean energy allows TTM to offset 12,195 tonnes of carbon dioxide annually through its RE100 initiatives.Malaysian Investment Development Authority (Mida) chief executive officer Datuk Wira Arham Abdul Rahman emphasised TTM’s strong dedication to maintaining sustainable operations. “As the world transitions to a low-carbon future and a greener economy, Mida is taking steps to help businesses overcome the challenges and capture the opportunities of the green transition. “We applaud TTM’s RE100 initiatives, which underscore its firm commitment to environmental, social, and governance (ESG) principles within their corporate framework,” he said in a joint statement by Mida and Solarvest on Monday (Aug 28). Meanwhile, Solarvest executive director and group chief executive officer Davis Chong Chun Shiong said the company is confident in its ability to assist TTM in achieving optimal energy efficiency for the plant, while ensuring timely project completion. “There is a growing interest in clean energy adoption, especially among commercial and industrial (C&I) players, as corporate sustainability initiatives gain momentum and in anticipation of carbon pricing mechanisms. “Our job pipeline remains strong, with a tender book of approximately 2.2 gigawatts, comprising large-scale power plants, C&I, and overseas projects. As a decarbonisation partner, Solarvest is committed to promoting energy transition through efficient renewable energy solutions and innovative green technologies,” Chong added. Mah Sing’s earnings up 17% in 2Q on the back of better property sales Solarvest to install rooftop solar PV system for Toyo Tyre’s Kamunting plant BY ISABELLE FRANCIS theedgemalaysia.com Bernama KUALA LUMPUR (Aug 28): FGV Holdings Bhd recorded a net loss of RM12.9 million for the second quarter ended June 30, 2023 (2QFY2023), versus a net profit of RM374.02 million a year ago, due to lower crude palm oil (CPO) prices and the impairment loss of its Indonesian plantation assets. This is the plantation giant’s first quarterly net loss since 1QFY2021, when it posted a RM35.42 million net loss. FGV said the plantation sector’s profit dropped 97.8% to RM13.76 million from RM620.82 million, as average selling CPO price decreased to RM4,000 per tonne from RM5,254 in 2QFY2022. In addition, CPO sales volume fell 17% and production costs ex-mill rose 37%. On the back of the lower CPO prices, FGV’s quarterly revenue declined 39.48% to RM4.49 billion from RM7.43 billion in 2QFY2022. The lower quarterly results also pushed FGV into the red for the first half of FY2023 with a net loss of RM805,000, compared with a net profit of RM743.26 million in the same period last year. Halfyear revenue fell 31.57% to RM9.09 billion from RM13.28 billion. The plantation sector’s earnings were further eroded by lower margin achieved in the downstream business. FGV recognised impairment loss of property, plant and equipment totalling RM48.68 million, including impairment of Indonesian plantation assets worth RM47.29 million. Fresh fruit bunches (FFB) production fell to 780,000 tonnes from 960,000 tonnes, while yield decreased to 2.91 tonnes per hectare from 3.5 tonnes per hectare. Read the full story FGV posts first quarterly loss in over two years on lower CPO prices plus impairment BY SYAFIQAH SALIM theedgemalaysia.com

TUESDAY AUGUST 29, 2023 17 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Aug 28): A Malaysian Anti-Corruption Commission (MACC) digital forensic officer had on Monday (Aug 28) denied providing an incomplete report with regards to a conversation between businessman G Gnanaraja and former senior director of Consortium Zenith Construction Sdn Bhd (CZCSB) Datuk Ahmad Zarul Mohd Zulkifli, which was earlier not tendered in Lim Guan Eng’s graft trial. Wan Mohd Firdaus Wan Yusof, the eighth prosecution witness in Lim’s undersea tunnel graft trial disagreed with such suggestions made by lead counsel Gobind Singh Deo during the trial at the Sessions Court here. Gobind had suggested that Wan Mohd Firdaus did not provide the full forensic report of the conversation, compared to the report in Gnanaraja’s cheating case which was previously heard at the Shah Alam Sessions court where there were discussions on “chocolates” and “big boss”. The “chocolates” and “big boss”, Lim’s defence contended, referred to the purported “money” and former prime minister Datuk Seri Najib Razak, and this bit was earlier missing in the report in the former Penang chief minister’s trial. Through Wan Mohd Firdaus, the defence tendered the full forensic report over the conversation. The witness agreed with Gobind that he was asked by his superior to do a forensic investigation on Zarul Ahmad’s handphone on November 2019. Gobind: If we look at this (Lim’s) trial, there is an incomplete report over the discussion between Gnanaraja and Zarul and questions surrounding the true identity of “big boss”. Wan Firdaus: I do not agree. Gobind: I put it to you that in this case, you are given a specific directive to remove the earlier discussion in order to suppress evidence and to implicate my client (Lim). This is a clear-cut attempt to fix him up? Wan Firdaus: I do not know. Witness could not remember earlier report in Gnanaraja’s case The witness agreed that he was asked to prepare the forensic report to Gnanaraja’s case in Shah Alam and the conversation was between Gnanaraja and Zarul Ahmad. When confronted about the discrepancy of his report here in Lim’s case and Gnanaraja’s case, Wan Firdaus said the report in Gnanaraja’s case was tabled more than a year before Lim’s case and he could not remember. As Gobind pressured the MACC officer further, Wan Firdaus said there were several other MACC officers looking at both Gnanaraja and Zarul’s handphone and doing forensic on it. He further denied the discrepancy in Gnanaraja’s forensic report and the one brought to Lim’s case. Gobind: I put it to you that you intend to suppress the evidence in this court by hiding the fact that “chocolates” refer to bribes and “big boss” refers to Najib and the date July 23, 2017 refers to the former premier’s birthday? Wan Firdaus: I disagree. Read the full story MACC forensic officer denies providing incomplete evidence in Guan Eng trial KUALA LUMPUR (Aug 28): Former Bank Negara Malaysia (BNM) governor Tan Sri Dr Zeti Akhtar Aziz told the High Court on Monday (Aug 28) that the central bank had recommended that 1Malaysia Development Bhd (1MDB) be fined RM23 million in 2015 for its financial mistakes; however, the then attorney general had reduced the fine to RM15 million. She previously testified through her witness statement that on Aug 14, 2015, pursuant to BNM’s legislation, the central bank proceeded to revoke the three permissions granted to 1MDB and directed the sovereign wealth fund to repatriate back to Malaysia all funds that were illegally and falsely remitted abroad, and that a press statement was issued regarding BNM’s action on Oct 9, 2015. She said 1MDB was fined because of its inability bring the monies back and to provide evidence on the status of the funds. “With an agreement that had to be obtained from the AGC, the compound amounting to RM15 million was imposed and was paid by 1MDB on May 25, 2016,” she had previously read from her witness statement. At the trial on Monday, Zeti said that while she had recommended a fine of RM23 million to be imposed on 1MDB, the attorney general at that time, whom she did not name, had slashed the amount. “In order to impose the fine on 1MDB, we needed the consent of the attorney general…. The attorney general reduced the fine recommended by us (the central bank),” she said. She was responding to a question by Tan Sri Muhammad Shafee Abdullah, who is the lead counsel for the only accused in the case, former prime minister Datuk Seri Najib Razak. While she did not mention the name of the AG, Tan Sri Apandi Ali was serving as AG during the period 1MDB was fined. He served between July 27, 2015 and June 4, 2018. Zeti: BNM wanted to fine 1MDB RM23 mil in 2015, but AG reduced penalty to RM15 mil Shafee also asked her if Najib had ever asked or requested to waive the fine, but she denied any knowledge of this. Previously, Zeti testified that BNM had recommended that former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi, former executive director Casey Tang and ex-chief investment officer Nik Faisal Ariff Kamil be charged for their roles in 1MDB. She had also testified that BNM had sent an investigation paper to Apandi in 2016, where she recommended initiating criminal prosecution and to charge senior officers of 1MDB. Of the three people she named, only Shahrol is in the country while Tang and Nik Faisal are still at large. None of them were charged after her recommendation was made at that material time in 2016. Najib is on trial on four counts of abuse of power and 21 counts of money laundering involving RM2.28 billion of 1MDB funds. The trial before judge Datuk Collin Lawrence Sequerah continues on Tuesday (Aug 29). Read also: Zeti: Meeting with AmBank MD about Najib’s account was mere ‘courtesy call’ BY TIMOTHY ACHARIAM & TARANI PALANI theedgemalaysia.com BY HAFIZ YATIM theedgemalaysia.com

TUESDAY AUGUST 28, 2023 18 THEEDGE CEO MORNING BRIEF TO BE REVEALED SOON HONOURING MALAYSIA’S BEST PERFORMING MID-CAP COMPANIES Presented by 2023

TUESDAY AUGUST 29, 2023 19 THEEDGE CEO MORNING BRIEF HOME LABUAN (Aug 28): The Pan Borneo Highway project has achieved remarkable progress amid ongoing efforts to enhance Sabah’s road infrastructure, according to the Chartered Institute of Logistic and Transport, Sabah chapter (CILT Sabah). CILT Sabah public and government liaison Daniel Doughty said the Sabah portion of the project was spearheaded by a minister with an engineering background, and this helped overcome numerous challenges and contributed to the progress. “The anticipation surrounding the trip by the Yang di-Pertuan Agong’s convoy from Tawau, Sabah to Kuching, Sarawak (using the highway) on Sept 3, is mounting. “The Sabah Infrastructure Development Minister’s hands-on approach to planning and executing the delayed Pan Borneo Highway project has played a pivotal role in bringing it closer to completion,” he told Bernama on Monday (Aug 28). Doughty said the state’s land transport connectivity has long grappled with a heavy reliance on the existing road network. “To address this, substantial funding from the federal government has been allocated to bolster maintenance efforts, and the allocation remains a critical factor in ensuring the efficacy of the road network and the seamless movement of people and goods,” he said. He was of the view that the path to Sabah’s future prosperity lies in the implementation of a comprehensive multimodal transport strategy. “The extension of the Sabah rail network, particularly the connection between the northern and eastern coasts, holds immense promise. “Integration with proposed linkages such as the Trans-Borneo Railway necessitates meticulous planning. The benefits of a well-connected railway network are manifold, including congestion alleviation, strengthened economic ties between urban and rural areas, and the inherent cost-effectiveness of rail transport compared to roads,” he said. Doughty said this advantage opens doors for the efficient movement of bulk cargo within the state and throughout Borneo. “The Ministry of Infrastructure Development has taken a proactive stance to address these challenges, and shape Sabah’s transport landscape. “The establishment of the Sabah Logistic Council under the ministry’s purview marks a significant step. “The council is diligently working on formulating a comprehensive Sabah logistics masterplan. This initiative signifies unwavering support for the ministry’s endeavours in tackling long-standing road infrastructure and logistics challenges in the state,” he said. As Sabah advances towards a more strategically planned future, the collaboration between visionary leadership, dedicated agencies and the anticipated royal presence sets a promising trajectory, Doughty said. “While there is still work to be done, the recent accomplishments stand as a testament to the progress achieved and the potential that lies ahead for Sabah’s transport infrastructure,” he said. Read also: Fadillah receives courtesy call from Quanzhou mayor Digital content grant recipients told to implement projects accordingly Significant progress in Pan Borneo Highway project — Sabah transport institute KUALA LUMPUR (Aug 28): The Malaysian Investment Development Authority (Mida) has digitised three key certificates in the manufacturing sector to streamline government processes and delivery systems, and to improve the ease of doing business in Malaysia. The digitised certificates, namely the Manufacturing Licence, permit under the Petroleum Development Act (PDA Permit Certificate) and the Pioneer Status Certificate, will be made available on the InvestMalaysia Portal (https://investmalaysia.mida.gov.my). Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the digitisation of manufacturing certificates is a significant step towards modernising, rethinking and re-engineering public services. “The move offers investors a more inclusive, seamless and personalised service, which is very much aligned with one of the objectives of the New Industrial Master Plan 2030. “Through this digitalisation initiative, the Ministry of Investment, Trade, and Industry (Miti), through Mida, aims to improve accountability, transparency and cybersecurity — all of which will further reinforce Malaysia’s positioning as a digital hub for the region,” he said in a statement today. Mida chief executive officer Datuk Arham Abdul Rahman said the move would shorten processing time and improve client charter Mida digitises certificates to ease doing business in Malaysia commitment to investors while completing digital transformation goals in supporting the industry’s current and future needs. “This is a statement of our ambition to better leverage data and harness new technologies, and to drive broader efforts to build a digital economy. “It will allow Mida to respond to investors’ needs more effectively, and Mida will continue to be innovative and lead the way with supportive facilitation that promotes the ease of doing business,” he said. A standout feature of this initiative is the integration of the Digital Organisation Trustmark seal, featuring both the renowned Miti Trustmark (featured in the Manufacturing Licence and PDA Permit certificates) and Mida Trustmark (featured in the Pioneer Status Certificate). “These seals are embedded in the certificates, strengthening the security of the documents in line with the provisions of the Digital Signature Act 1997 and the Digital Signature Regulation 1998. “Moreover, the digitally enhanced certificates will incorporate a secure QR Code, providing a means of verification that assures these documents’ authenticity, which users can scan using a verification tool,” added Mida. Bernama Bernama Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the digitisation of manufacturing certificates is a significant step towards modernising, rethinking and re-engineering public services. THE EDGE FILE PHOTO

TUESDAY AUGUST 29, 2023 20 THEEDGE CEO MORNING BRIEF WORLD (Aug 28): China will extend preferential income tax policies for foreigners working in the country through the end of 2027, in a move that sends an encouraging signal to foreign businesses in China. The Asian nation will continue to waive taxes on foreign workers’ benefits, including subsidies for housing, language training and children’s education, according to a statement from its finance ministry on Monday (Aug 28). Earlier this month, the European Union Chamber of Commerce in ChiChina extends preferential tax policies for foreigners to 2028 (Aug 28): China’s economy was meant to drive a third of global economic growth this year, so its dramatic slowdown in recent months is sounding alarm bells across the world. Policymakers are bracing for a hit to their economies as China’s imports of everything from construction materials to electronics slide. Caterpillar Inc says Chinese demand for machines used on building sites is worse than previously thought. US President Joe Biden called the economic problems a “ticking time bomb”. Global investors have already pulled more than US$10 billion (RM46.5 billion) from China’s stock markets, with most of the selling in blue chips. Goldman Sachs Group Inc and Morgan Stanley have cut their targets for Chinese equities, with the former also warning of spillover risks to the rest of the region. Asian economies are taking the biggest hit to their trade so far, along with countries in Africa. Japan reported its first drop in exports in more than two years in July after China cut back on purchases of cars and chips. Central bankers from South Korea and Thailand last week cited China’s weak recovery for downgrades to their growth forecasts. It’s not all doom-and-gloom, though. China’s slowdown will drag down global oil prices, and deflation in the country means the prices of goods being shipped around the world are falling. That’s a benefit to countries like the US and UK still battling high inflation. Some emerging markets like India also see opportunities, hoping to attract the foreign investment that may be leaving China’s shores. But as the world’s second-largest economy, a prolonged slowdown in China will hurt, rather than help, the rest of the world. An analysis from the International Monetary Fund shows how much is at stake: when China’s growth rate rises by one percentage point, global expansion is boosted by about 0.3 percentage point. China’s deflation “isn’t such a bad thing” for the global economy, Peter Berezin, the chief global strategist BCA Research Inc, said in an interview on Bloomberg TV. “But, if the rest of the world, the US and Europe, falls into recession, if China remains weak, then that would be a problem — not just for China but for the whole global economy.” Here’s a look at how China’s slowdown is rippling across economies and financial markets. Trade slump Many countries, especially those in Asia, count China as their biggest export market for everything from electronic parts and food to metals and energy. The value of Chinese imports has fallen for nine of the last 10 months as demand retreats from the record highs set during the pandemic. The value of shipments from China’s worsening economic slowdown is rippling across the globe Bloomberg Bloomberg na called on the Chinese authorities for an “urgent clarification” as to whether non-taxable allowances for foreign employees would apply beyond the end of this year, saying an extension of the policy would demonstrate a firm commitment to the foreign business community, as well as Chinese firms that hire foreign nationals. On Monday, the chamber welcomed the four-year extension of the individual income tax regime, or IIT, for foreign nationals, describing it as “very positive news.” “Having continually advocated this issue at all levels of government, the European Chamber believes it can help to stem the outflow of foreign talent that has taken place over the last few years,” the group said in a statement. “Announced on the margins of the start of the new school year, it will be extremely welcome news for families that have made the decision either to come to or remain in China.” Africa, Asia and North America were all lower in July than they were a year ago. Africa and Asia have been the hardest hit, with the value of imports down more than 14% in the first seven months this year. Part of that is due to a drop in demand for electronics parts from South Korea and Taiwan, while falling prices of commodities such as fossil fuels are also hitting the value of goods shipped to China. So far, the actual volume of commodities such as iron or copper ore sent to China has held up. But if the slowdown continues, shipments could be impacted, which would affect miners in Australia, South America and elsewhere around the world. Deflation pressure Producer prices in China have contracted for the past 10 months, meaning the cost of goods being shipped from the country is falling. That’s welcome news for people around the globe still struggling with high inflation. The price of Chinese goods at US docks has fallen every month this year and that is likely to continue until factory prices in China return to positive territory. Economists at Wells Fargo & Co estimate that a ‘hard landing’ in China — which they define as a 12.5% divergence from its trend growth — would cut the baseline forecast for US consumer inflation in 2025 by 0.7 percentage points to 1.4%. Read the full story Read also: Markets show China needs a stimulus ‘bazooka’ to woo investors BLOOMBERG

TUESDAY AUGUST 29, 2023 21 THEEDGE CEO MORNING BRIEF is your company one of them? honouring Malaysia’s outstanding corporate performers TM Main Sponsor Official Car Supporting Sponsor

TUESDAY AUGUST 29, 2023 22 THEEDGE CEO MORNING BRIEF WORLD HONG KONG (Aug 28): Asia’s top refiner, Sinopec Corp, is not interested in acquiring Shell’s refinery or petrochemical plant in Singapore although it is keen on participating in a shale gas project in Saudi Arabia, the Chinese company’s president said on Monday (Aug 28). Sinopec president Yu Baocai was speaking after sources last week told Reuters that Shell had hired Goldman Sachs to advise on a potential sale of its Singapore assets and that Sinopec was among the companies reviewing them. However, Yu, speaking at a briefing in Hong Kong after the state-run oil and gas giant reported a 20% decline in interim earnings, said that Sinopec is interested in participating in Saudi Arabia’s Jafurah shale gas project. This is in line with an earlier Reuters report saying Sinopec and TotalEnergies were in separate discussions with state-run Saudi Aramco to invest in the Jafurah project, the largest shale gas development outside the US, with reserves estimated at 200 trillion cubic feet of raw gas. Yu also said that Sinopec was one of the international companies invited by the Sri Lankan government to build a refinery there, and that it was evaluating the matter. Sri Lanka shortlisted Sinopec and commodities trader Vitol to become potential investors in a proposed export-oriented refinery in Hambantota. Separately, Sinopec is set to start operating a retail fuel business in the island nation next month. Yu also said that Russian oil makes up a small fraction of Sinopec’s international crude purchases and that it will make “dynamic adjustment” in future buying based on the global market situation. Chinese refiners have benefited from cheap crude oil supplies from Iran, Venezuela and Russia as Western sanctions have forced those producers to sell oil at deep discounts to keep revenue flowing. Although Chinese state majors have shied away from Iranian and Venezuelan oil, Sinopec has been taking in Russian supplies, traders have said. Sinopec not interested in acquiring Shell’s Singapore assets (Aug 28): Tech billionaire Terry Gou denied Beijing could pressure him through his extensive operations in the country, which include much of Apple Inc’s supply chain — in comments that came as he said he’d run in Taiwan’s next presidential election. If China were to confiscate assets of Hon Hai Precision Industry Co, it would hurt the interests of major global pension funds, and “no foreign investor will dare to invest”, he said at the launch of his campaign in Taipei. He also name-checked key customers including Apple, Tesla Inc, Amazon.com Inc and Nvidia Corp, saying any halt to production due to political pressure would disrupt supply chains, something China would need to explain to the world. “I will not bow to China’s threats,” he said, adding that he had no “personal” assets in China, and that he doesn’t take instructions from Beijing. He also described China’s economy as being in a “terrible” condition. Foxconn Technology Group, the company Gou founded, said in a statement after his remarks that it had more than 800,000 shareholders, and is jointly owned by investors at home and abroad. “As the founder, Gou already handed over the baton four years ago, and no longer participates in the daily management of the company,” it said. “It can be said that it is a very good example of succession for a global company, and the company in the future will build on the foundation established by the founder to bring the business to the next level.” Hon Hai shares were unchanged at the close on Monday (Aug 28) in Taipei. They are up 8.1% this year. In seeking the presidency, Gou has argued he can improve fractious relations between Taipei and Beijing, and deliver “50 years” of peace. His group’s extensive operations in China have raised concern that Beijing could pressure him through his businesses. Foxconn is China’s largest private employer. Its Hon Hai Precision unit has a market value of US$47 billion (RM218.76 billion). Gou is the fourth entrant into Taiwan’s presidential race, with elections due in January. He’ll face competition for votes with Hou Yu-ih of the opposition Kuomintang, which also champions better ties with Beijing. Vice President Lai Ching-te of the ruling Democratic Progressive Party has been leading opinion polls, followed by Ko Wenje of the Taiwan People’s Party. Read also: Foxconn founder upends Taiwan vote by launching presidential bid Foxconn’s Terry Gou says Apple, Tesla links mean China can’t pressure his business BY CHIEN-HUA WAN & ADRIAN KENNEDY Bloomberg BY ALISON LUI Reuters I will not bow to China’s threats,” he said, adding that he had no “personal” assets in China, and that he doesn’t take instructions from Beijing. He also described China’s economy as being in a “terrible” condition.

TUESDAY AUGUST 29, 2023 23 THEEDGE CEO MORNING BRIEF WORLD (Aug 28): Shares of Vietnamese electric-vehicle maker Vinfast surged 30% in premarket trading on Monday (Aug 28), extending a rally from last week that more than quadrupled its market value to US$160 billion (RM744.8 billion). The company made a blowout debut on Wall Street this month and has quickly grown in valuation to become the third-most valuable automaker — only behind Tesla and Toyota. But Vinfast’s small amount of publicly available shares has made the stock prone to volatility, with shares jumping or slumping more than 14% in 11 of the past 12 sessions. The stock was on track to add nearly US$50 billion to its market capitalisation, based on the premarket share price of US$90.55. That potential one-day gain will be more than the individual valuations of major US automakers Ford Motor and General Motors. Vinfast is almost entirely controlled by Pham Nhat Vuong, Vietnam’s richest man and founder of parent conglomerate Vingroup, with a stake of about 99.7%, according to a filing. Despite the market enthusiasm, Vinfast faces a long road before it can start competing meaningfully with Tesla and legacy automakers that are pouring billions of dollars to grab a share of the EV market. Only 137 Vinfast EVs were registered in the US through June, according to S&P Global Mobility. The firm is also entering the US and European markets at a time when EV demand is slowing and Tesla has waged a price war to defend its dominance. Vinfast expects to sell as many as 50,000 electric vehicles this year, compared with Tesla’s projection to deliver 1.8 million cars. To drive sales, Vinfast is breaking away from the direct-to-consumer approach used by Tesla and turning to dealers. The company is also building a US$4 billion factory in North Carolina. Vinfast rallies on after becoming world’s third-most valuable automaker (Aug 28): BYD Co reported its weakest revenue growth in more than a year in a potential sign of the damage discounting has done in China, the world’s biggest auto market. Revenue rose just 67% to around 140 billion yuan (RM82.8 billion) in the three months ended June, according to Bloomberg calculations based on first-half earnings published Monday (Aug 28). Still, net income more than doubled after the company sold a record number of plug-in hybrid and fully electric vehicles. Fuelled by rebounding sales in China, BYD last month reported preliminary firsthalf net income of 10.5 billion yuan to 11.7 billion yuan. China’s auto market has been embroiled in a fierce price war this year. BYD’s still-robust financial performance will help it as it navigates another period of market discounting with a preferred strategy of cutting prices on new models releases. On the weekend, BYD unveiled a slightly cheaper range of 2023 Tang vehicles at the Chengdu Auto Show. The continued strong sales volume performance in recent months has enabled BYD to maintain its lead over Volkswagen AG as China’s best-selling car brand this year, having leapfrogged the German auto giant in the first quarter. Known for selling affordable cars to the masses, BYD has also been making drives in bolstering its appeal to a wider range of consumers. The EV maker has unveiled two luxury brands, Yangwang and Fang Cheng Bao, enabling it to sell EVs in the one million yuan price category, more than double the cost of some of its existing higher-end vehicles. The company has also pushed two cheaper models, called the Seagull and Dolphin, to undercut its peers as well. While BYD has a seemingly unassailable lead at the top of the market, weaker foreign rivals and smaller Chinese EV players are making moves to bolster their capabilities, especially in the so-called smart EV, autonomous driving space. Xpeng Inc snapped up Didi Global Inc’s smart car business Monday in a US$744 million deal. Xpeng’s appeal in the intelligent vehicle space has also won it a US$700 million investment from Volkswagen AG in July, itself seeking to turn around its fortunes in the rapidly changing China auto market. BYD’s growth slows as China’s auto price war takes its toll China’s Xpeng to acquire Didi’s EV unit in deal worth up to US$744 mil BY DANNY LEE Bloomberg BY JOSH YE Reuters Reuters Didi’s development of an EV car had invited speculation that it had ambitions to shift into manufacturing, but the announcement — Didi’s first major transaction since its apps were restored to China app stores in January after a regulatory crackdown on its business — suggests the company is moving in another direction. HONG KONG (Aug 28): Chinese EV maker Xpeng said it would buy Didi’s electric car development business — a deal worth up to US$744 million (RM3.4 billion) that will see it supply vehicles to the ride-hailing giant, boosting production and cutting costs. Shares in Xpeng, one of China’s smaller electric vehicle manufacturers and currently loss-making, shot up 11% in Hong Kong trade on the news which comes on the heels of a stake sale to and partnership with Germany’s Volkswagen. CONTINUES ON PAGE 24 The all-stock deal with Didi calls for Xpeng to launch an A-class model next year under a new brand, in a project called MONA, which will be priced in the 150,000 yuan price tier. Xpeng’s current offerings are mostly priced above 200,000 yuan. “As an EV startup, we are not as skilled as established automakers like Volkswagen in terms of scale and cost management in the 150,000 yuan segment... the partnership with Didi will ensure better-than-expected initial scale for the car and achieve a combination of goals in innovation and supply chain management,” Xpeng chief executive He Xiaopeng told Chinese media, according to a company-provided transcript.

TUESDAY AUGUST 29, 2023 24 THEEDGE CEO MORNING BRIEF WORLD (Aug 28): China Evergrande Group delayed key votes on its offshore-debt restructuring plan just hours before they were to occur on Monday (Aug 28), adding to uncertainty in a protracted process to finalise one of the country’s biggest restructurings ever. The distressed developer, at the epicenter of a property crisis that’s unleashed record delinquencies in a threat to China’s financial markets, delayed the meetings for the group and some units to Sept 25-26, it said in a filing. Evergrande cited a desire to let creditors evaluate recent developments, including resumption of trading of its stock, as well as the terms of the proposals. Its shares slumped as much as 87% in Hong Kong trading following a 17-month halt, becoming a penny stock. “Not enough votes is probably the reason for the delay,” said Ting Meng, a senior credit strategist at Australia & New Zealand Banking Group, adding that it is uncertain whether the meeting will be further delayed later. While resumption of share trading helps creditors gauge value as they think about how to vote, the sharp drop in the stock price has likely given them more concerns, she said. Investor patience is running thin. Evergrande shot past previous targets in unveiling its restructuring plan, and global money managers are still seeking clarity on what they might recover some 20 months after the firm’s first public bond default. The last-minute change on Monday is also the second such abrupt delay from a major distressed Chinese developer in just days, after Country Garden Holdings Co pushed back voting last Friday on its request to extend payment on an onshore bond. Evergrande did finally unveil its restructuring plan in March. But in its last update in April, it said that support still fell short from a key group of investors known as Class C creditors that entail nearly US$15 billion (RM69.82 billion) of claims. The company didn’t provide any further updates on Monday on the support level it’s gathered. Creditors had been slated to meet on Monday evening Beijing time at the offices of law firms Sidley Austin LLP in Hong Kong and Maples & Calder in the British Virgin Islands to cast their votes on the defaulter’s offshore debt restructuring plan. The company reported a loss attributable to shareholders of 33 billion yuan (US$4.5 Evergrande delays restructuring votes just hours before start BY PEARL LIU Bloomberg He added that the car would also be sold to retail customers and he expects sales of at least 100,000 MONA cars a year. Didi’s development of an EV car had invited speculation that it had ambitions to shift into manufacturing, but the announcement — Didi’s first major transaction since its apps were restored to China app stores in January after a regulatory crackdown on its business — suggests the company is moving in another direction. Slower demand and excess manufacturing capacity in China’s EV industry have intensified competition and made it hard for relative newcomers such as Didi to enter the market. Smartphone maker Xiaomi only recently won a regulatory nod to manufacture EVs — two years after first announcing such plans, sources have said. Didi’s decision to partner with Xpeng over other EV makers likely marked recognition of Xpeng’s technology and the deal will benefit Xpeng as the sedan Didi has developed would be suitable for selling to other businesses, said Yale Zhang, managing director at Shanghai-based consultancy Automotive Foresight. “It looks like a very good strategic move,” he said. Under the deal, Didi will gain around 3.25% of Xpeng, with the EV maker issuing shares at HKUS$64.03 each, worth US$474 million in total. The offer price represents a 1.7% discount to its closing price on Friday. If vehicle delivery targets are fulfilled, Didi’s stake could climb to 5.26% for a deal value of up to US$744 million. Didi said the two companies will explore strategic cooperation in a number of areas, including marketing, financial and insurance services. Other possible areas of cooperation include charging, robotaxis and jointly developing an international market. Didi has been working with Chinese carmakers to develop robotaxis which it aims to put in service by 2025. Xpeng, which is also listed in New York, has been grappling with expanding losses and slumping sales amid an industry-wide price war started by Tesla in January. Its US-listed shares were up 4% in pre-market trade. CEO He said in April that he expected to see only eight automakers survive in the Chinese auto market - the world’s biggest — by 2030. That compares with 65 auto manufacturers currently. XPeng sold some 41,000 EVs in the first half, accounting for nearly 2% of battery vehicle sales in China. By comparison, rivals BYD sold 550,000 EVs while Tesla sold 294,000 EVs. FROM PAGE 23 billion or RM21.06 billion) for the six months ended June 30, according to a filing with the Stock Exchange of Hong Kong on Sunday. Monday’s delay wasn’t the first time Evergrande has rescheduled creditor meetings. It received court approval to hold votes on its offshore debt restructuring plan in July, with the so-called scheme meetings originally scheduled for last week. The gatherings had previously been pushed back several days, which the builder said was to give creditors time to consider the implications of a stock sale by the developer’s electric-vehicle unit. Based on March’s road map, Evergrande creditors can receive new notes maturing in 10 to 12 years, or a combination of new debt and instruments tied to the shares in the automaker, the developer’s property-services unit or the builder itself. Evergrande recently sought Chapter 15 bankruptcy protection in New York, a move that if granted would protect it from creditors in the US while it works on a restructuring deal elsewhere. Evergrande disclosed in April that more than 77% of Class A creditors, which account for US$17 billion of claims and include an ad-hoc group of bondholders, had acceded to a restructuring support agreement. The figure among Class C creditors that include margin loans and repurchase obligations was “more than 30%”. That’s short of the 75% needed from each creditor group to implement a restructuring through schemes of arrangement. In a court hearing in July, an Evergrande lawyer said the developer prepared fresh information for creditors, including a recovery analysis done by Deloitte. Average recovery for Evergrande notes would be 22.5%, versus 3.4% if the firm gets liquidated, he added. BLOOMBERG

TUESDAY AUGUST 29, 2023 25 THEEDGE CEO MORNING BRIEF H O N O U R I N G M A L AY S I A’ S B E S T P E R F O R M E R S I N ESG EXCELLENCE Knowledge Partner (Funds Category) Main Partner Auditor Official Broadcast Partner Automotive Partner In Collaboration With

TUESDAY AUGUST 29, 2023 26 THEEDGE CEO MORNING BRIEF WORLD (Aug 28): Mukesh Ambani said he will spend the next five years of his chairmanship of India’s most valuable company grooming his children to transform Reliance Industries Ltd into a digital and green energy behemoth. The three children of Asia’s richest man were appointed as non-executive directors, while his wife, Nita, will step down from the board, “to devote more of her time to the Reliance Foundation” charity where she serves as founding chairperson, the company said in a statement on Monday (Aug 28). During Reliance’s annual general meeting, Ambani told shareholders that Nita will still continue to attend all board meetings as a permanent invitee. Reliance’s shares erased earlier gains in Mumbai trading and were down 1% at the close, the lowest since July 7. “I shall continue to perform my duties and responsibilities as chairman and managing director for five more years, with greater vigour,” Ambani said. “I shall groom and empower all the next-gen leaders at Reliance and prepare them for the challenges and opportunities of the future.” The board moves are part of 66-yearold Ambani’s wider attempts to give a clear future leadership plan for the oil-to-consumer conglomerate after a messy family power struggle following the death of his father more than a decade ago. Three years ago Ambani outlined the deepening role of his children, Isha, Akash and Anant in the business, handing over leadership positions to them at Reliance’s key energy, retail and digital services businesses. ‘Collective leadership’ “I shall especially mentor Akash, Isha and Anant so that they can provide collective Ambani appoints children to Reliance board, wife steps down leadership and dependably take Reliance to greater heights of growth and value in the decades ahead,” Ambani said. Reliance’s founder, Dhirubhai Ambani, died without a will in 2002, triggering an ugly and very public clash between Mukesh and his younger brother, Anil, who were both involved in the business at that time. The tussle eventually snowballed and their mother was forced to intervene and divvy up the businesses between the two brothers. Ambani has since built Reliance into India’s largest company by market value and is now attempting to diversify the oil-to-chemicals powerhouse into consumer and technology businesses, as well as renewable energy. The tycoon called the leadership announcements “an emotional moment,” recalling the days when his father set up the company in a single-room office in a crowded Mumbai market place. “It reminds of that day in 1977, when my father inducted me into the board of directors,” he said during the once-a-year speech to investors, which has over time evolved into an eagerly-awaited platform for announcing new initiatives at India’s largest corporate, akin to Warren Buffett’s annual letters to Berkshire Hathaway shareholders. “Today I see both my father and me in Isha, Akash, and Anant.” Read also: Adani’s bid to remake Mumbai slum spurs residents’ doubts, favouritism claims BY PR SANJAI Bloomberg BY JAYSHREE P UPADHYAY Reuters Indian regulator’s probe faults Adani group on disclosure rules — sources (Aug 28): An investigation of India’s Adani group by the market regulator has uncovered violations of rules on disclosures by listed entities and limits on the holdings of offshore funds, two sources with direct knowledge of the matter said. The Securities and Exchange Board of India (SEBI) launched the inquiry after US-based Hindenburg Research raised governance concerns around the Gautam Adani-led group, shaving more than US$100 billion (RM465.5 billion) from the market value of its companies. The ports-to-power conglomerate had denied wrongdoing in January. The sources, who sought anonymity ty once the investigation is complete, however. India’s Supreme Court, which is overseeing SEBI’s investigation of the Adani group, is set to hear the matter on Tuesday (Aug 29). But SEBI has no plans to make the report public until the regulator has passed its orders on the Adani investigation, one of the sources said. On Monday the group did not respond to a Reuters request for comment on the regulator’s findings. SEBI also did not respond to an email on the matter. Reliance Industries Ltd chairman Mukesh Ambani appointed his three children to the board to continue its succession plan as his wife, Nita, also stepped down. The board moves are part of 66-year-old Ambani’s wider attempts to give a clear future leadership plan for the oil-toconsumer conglomerate after a messy family power struggle following the death of his father more than a decade ago. India’s Supreme Court, which is overseeing SEBI’s investigation of the Adani group, is set to hear the matter on Tuesday. as they were not authorised to speak to the media, characterised the violations as being of a “technical” nature that would attract no more than a monetary penal- CONTINUES ON PAGE 27 BLOOMBERG

TUESDAY AUGUST 29, 2023 27 THEEDGE CEO MORNING BRIEF WORLD (Aug 28): Shares in Japanese companies that are especially reliant on China demand plunged, after users online in Asia’s biggest economy called for a boycott over the release of treated wastewater from the wrecked Fukushima nuclear plant. Tokyo-based cosmetics firm Shiseido Co fell 2.6% to a nine-month low, on a day when the broader Topix Index gained 1.5%. Its revenue from China accounts for 30% of the total, according to Bloomberg-compiled data. Shiseido’s local competitors including Pola Orbis Holdings Inc and Kose Corp also declined. Department store Takashimaya Co dropped over 3%, and Don Quijote operator Pan Pacific Holdings Corp fell more than 4%. China said last week that it will suspend seafood imports from the country, with its Foreign Ministry saying in a statement that it’s asked Japan to “stop this wrongdoing”. Chinese chat pages have been flooded with posts about boycotting Japanese products, including on Weibo, one of the country’s largest social media platforms. “The Chinese government’s reaction to the treated water has been surprisingly severe,” said Hajime Sakai, the chief fund manager at Mito Securities Co. “Local media reports of cancellations of Japan tours and boycotts have raised concerns that the impact on inbound business may spread unexpectedly, as China prepares for the travel demand season.” The reaction from investors reflects public worries, even though the International Atomic Energy Agency said the move is in line with global safety standards, and would have a negligible impact on people and the environment. Signs that consumers are steering clear of Japanese products are especially disappointing for companies that had expected their sales to be bolstered by China’s resumption of group tours to its neighbouring nation earlier this month. But the share sell-off may be short-lived, considering that China’s boycotts haven’t lasted long in the past, according to Asymmetric Advisors Pte Ltd strategist Amir Anvarzadeh. China’s Fukushima backlash is starting to weigh on Japanese stocks Boycott list For now, the boycott is a hot topic online in China. One post on Weibo lists dozens of Japanese brands to avoid buying, including Shiseido, Panasonic, Uniqlo, Mitsubishi, Aeon and Nomura. The post has received more than 10,000 “likes” since it was published on Aug 24. “I’ll never buy Japanese cosmetics again, not to mention seafood,” one user identified with a nickname posted on Weibo on Monday (Aug 28). “I won’t touch anything where the water source might be tainted.” But despite the online protests, some analysts say that demand for Japanese products will return after a while, especially when foreign exchange moves have made those goods cheaper for Chinese shoppers. “Japan’s products are highly sought after by the Chinese tourists, and the weak yen is only going to make them more attractive,” said Charu Chanana, a market strategist at Saxo Capital Markets. BY WINNIE HSU & SHIRLEY ZHAO Bloomberg On Friday, SEBI told the Supreme Court it had very nearly completed its investigation into the Adani group’s dealings. One key finding had been violations in disclosing certain related-party transactions, the sources said. “Transactions with a related party need to be identified and reported,” said one of them. “If not done, it could give an incorrect picture of the Indian listed company’s financials.” In its court filing the regulator said it had examined 13 instances of related-party transactions. The penalty could go up to a maximum of 10 million rupees for each violation by each entity, the sources added. The inquiry also found that holdings of offshore funds in some Adani companies were not in line with the rules, they said. Indian law allows an offshore investor to invest a maximum of 10% in an Indian company via the foreign portfolio investor route with any larger investment classed as a foreign direct investment. “There are some inadvertent breaches of this limit by some offshore investors,” said the second of the two sources, but declined to give details. It was not immediately clear how big a fine the company could face for such breaches. Reuters could not determine the specific companies the regulator has investigated. In its January response to Hindenburg’s accusations, the Adani group said all related party transactions had been fully identified and disclosed. The group could not comment on the trading pattern of offshore investors as they were public shareholders, it added. SEBI follows quasi-judicial processes before it publishes an order against an entity, which include giving it an opportunity to defend itself. The regulator can recommend actions ranging from monetary penalties to a ban from stock markets, depending on the seriousness of the violations. But it was not immediately clear what penalties the regulator will eventually recommend in the Adani investigation. FROM PAGE 26

TUESDAY AUGUST 29, 2023 28 THEEDGE CEO MORNING BRIEF WORLD (Aug 28): Some of the most widely used drugs in the US may be heading for lower prices under Medicare, a move that could save taxpayers billions of dollars and squeeze profits for big pharmaceutical companies. The US government is preparing to release a list this week of 10 drugs that the health programme for the elderly will be able to negotiate prices for — one of the key elements of President Joe Biden’s signature Inflation Reduction Act (IRA). Analysts expect Johnson & Johnson’s Xarelto blood thinner and Eli Lilly & Co’s Jardiance for diabetes to be among the medications chosen. The ability for the government to haggle over prices is a marked change for pharma companies that have long been able to charge whatever they think a medication is worth, even as most other industrialised companies bargain hard. With the IRA now enabling Medicare to come to the table over products that have long been on the market, drugmakers are girding for the prospect of lower revenue from some of their biggest sellers. For taxpayers, the savings could be significant: Negotiations could save US$36.5 billion (RM169.47 billion) for the US from 2026 to 2028, according to Wells Fargo Securities. Drugmakers are suing the government to stop the squeeze. “They’re going to earn less money,” said Spencer Perlman, an analyst with policy research firm Veda Partners. “That’s just a fact.” Medicare spends more than US$200 billion on outpatient prescription drugs annually. Eliquis, the Bristol-Myers Squibb Co blood thinner used to prevent heart attacks and strokes, cost the programme more than US$12 billion in 2021 alone. Under the IRA, the price ceiling for a selected drug will be set somewhere between 75% and 40% of its average price, with steeper discounts for drugs that have been on the market longer. Medicare will halve its costs for the chosen drugs on average, according to Congressional Budget Office (CBO) estimates. That will lower the health programme’s spending total by almost US$100 billion through 2031, when annual savings will approach US$25 billion. Read the full story Billion-dollar drugmakers brace for first US price negotiations (Aug 28): 3M Co has tentatively agreed to pay more than US$5.5 billion (RM25.59 billion) to resolve over 300,000 lawsuits claiming it sold the US military defective combat earplugs, people familiar with the deal said. The settlement would avert a potentially much larger liability that 3M sought to curb through a controversial bankruptcy case that ultimately collapsed. The sum is about half the roughly US$10 billion some financial analysts predicted 3M could end up paying over allegations that the earplugs didn’t adequately protect the hearing of service members. Traders welcomed the resolution. 3M shares were up 5.8% at US$104.66 at 9.45am in New York. “Sounds like 3M negotiated a pretty good deal for itself, given this litigation has been weighing on them for the better part of a decade,” said Carl Tobias, a University of Richmond law professor who teaches about product liability cases. A 3M representative said the company doesn’t comment on rumor or speculation. Analysts at Barclays had estimated that the company’s potential liability was about US$8 billion. Bloomberg Intelligence calculated it could be as much as US$9.5 billion. While the settlement was at the low end of BI’s estimates, “it may accelerate negative rating activity as S&P and Moody’s have not fully accounted for the legal overhangs,” BI analysts Joel Levington and Michael Doto wrote. They added that 3M’s pro-forma net leverage “could 3M agrees to pay more than US$5.5 bil over defective army earplugs ny even as it faces thousands of other lawsuits over PFAS “forever chemicals” likely to cost several times more than the earplug deal to resolve. 3M has lost 10 of 16 early trials over the earplugs so far, with over US$250 million awarded to more than a dozen service members. In the most recent trial, a Florida jury ordered the manufacturer in 2022 to pay US Army veteran James Beal US$77.5 million in damages over his hearing loss from the earplugs. Beal, who tested weapons over a four-year period starting in 2005, said he developed hearing loss and tinnitus, a buzzing or hissing sensation in the ears. The hundreds of thousands of lawsuits have been consolidated in a multi-district litigation before a federal judge in Florida for pretrial information exchanges and test trials, according to federal court records. In the suits, current and former service members allege 3M knew its earplugs were too short to work effectively and that it failed to warn the US government or users, or to take steps to fix the product. Under the terms of the settlement, the maker of popular consumer products such as Scotch tape and Post-it notes would pay out the money over five years, said the people, who requested anonymity because they weren’t authorized to speak publicly about the accord. They said 3M’s board still must sign off on the deal. Read the full story BY JEF FEELEY & RYAN BEENE Bloomberg BY JOHN TOZZI & NACHA CATTAN Bloomberg land between 3.3-4.2x — higher than raters’ targets.” Costly verdicts The accord would end a torrent of litigation facing the St Paul, Minnesota, compa3M Co has tentatively agreed to pay more than US$5.5 billion (RM25.54 billion) to resolve over 300,000 lawsuits claiming it sold the US military defective combat earplugs. BLOOMBERG BLOOMBERG

TUESDAY AUGUST 29, 2023 29 THEEDGE CEO MORNING BRIEF

TUESDAY AUGUST 29, 2023 30 THEEDGE CEO MORNING BRIEF WORLD Baltic Exchange shipping updates A weekly round-up of tanker and dry bulk market (Aug 25, 2023) CAPESIZE In the Pacific, the week began with promising involvements from all three majors, yet this enthusiasm did not translate into substantial market gains, yielding a relatively stagnant atmosphere. As the week unfolded, Pacific trading maintained a decent cargo volume, although the presence of surplus tonnage limited potential gains and led to a relatively stable market. In the Atlantic, a pattern emerged where increasing offers were noted, particularly from South Brazil and West Africa to the Far East, despite relatively thin enquiry in the North Atlantic. However, as the week progressed, activity in the Atlantic experienced fluctuations. The midweek saw an increase in Pacific activity, yet freight rates remained relatively flat. Simultaneously, the North Atlantic continued to exhibit minimal activity and scant enquiry, contributing to an overall subdued sentiment. The latter part of the week witnessed a persistently bearish outlook in the Pacific, marked by reduced activity despite the engagement of key market players. Contrary to initial hopes of stabilisation, further declines were evident, notably on the C5 route. Meanwhile, in the Atlantic, the activity saw a mild decrease following a series of fixtures concluded earlier in the week. Brokers noted an increase of vessels in ballasts, adding to the prevailing bearish sentiment in the market. Overall, the week encapsulated a mixed performance in the capesize market, with varying degrees of activities and sentiment shifts across the Pacific and Atlantic regions. PANAMAX The Panamax market returned with mixed results this week. With limited activity emerging the North Atlantic drifted over the course of the week, a few signs of better fronthaul rates midweek failed to materialise into much. By comparison, EC South America saw a healthy level of demand both for September and October arrivals and rates stabilised the latter part of the week, US$13,500 around the mean average for BPI82 types of delivery Southeast Asia/India region. In Asia, a smattering of NoPac fixtures emerged mid-week with rates in the US$11,000’s and whilst trips via Indonesia and Australia to India paid a small premium to standard Pacific rounds, rates overall were pegged down as demand ex Indonesia failed to materialise and pressure grew on an increasing tonnage count. Limited period talk this week however we end the week with a positive push from the FFA market, enabling some owners to remain cautiously optimistic. ULTRAMAX/SUPRAMAX It was a two-sided affair over the week. As sentiment remained positive in the Atlantic, a healthy demand from key areas such as the US Gulf and EC South America combined with better levels of cargo from the Continent-Mediterranean saw stronger numbers being achieved. A 58,000-dwt fixing delivery SW Pass for a trip Singapore-Japan at US$16,500. A 58,000-dwt was also fixed delivery West Africa trip via Morocco redelivery EC India at US$15,000. From Asia, a change in direction occurred with a buildup of prompt tonnage as less fresh enquiry entered the market from Indonesia. Further north, some described a finely balanced market but again less enquiry was seen. A 58,000-dwt fixed delivery Ko Sichang via Indonesia redelivery WC India at US$8,500. Sustained activity from the Indian Ocean, a 63,000-dwt fixing delivery Jebel Ali trip redelivery Bangladesh at US$14,000. Period enquiry remained active, a 63,000-dwt open South Africa fixing 10-12 months redelivery worldwide at US$14,000. HANDYSIZE Whilst there was minimal visible activity, bullish sentiment remained for owners across the handy sector. The summer season is drawing to a close across Europe and a 37,000-dwt was fixed basis delivery passing skaw via the Baltic to the USEC with an intended cargo of grains at US$8,500 whilst improved levels were also seen in the Mediterranean. Tonnage availability in the South Atlantic and US Gulf regions was also still evident and owners were said to be seeing improving levels. In Asia, it was more balanced but a 38,000-dwt opening in Indonesia was fixed via Western Australia to China with an intended cargo of concentrates in the US$13,000’s and a 37,000-dwt was fixed from Tarakan via Indonesia to China with coal at US$10,500. Period interest was also still evident from charterers with a 28,000- dwt being fixed basis delivery in China for 3 to 5 months at US$9,000 and rumours of a 35,000-dwt opening in Japan fixing at US$10,500 for a similar period. CLEAN LR2 LR2’s in the MEG have simmered along this week with just enough enquiry to prevent freight levels degrading. TC1 has hovered around the WS130-135 mark (a Baltic TCE of around US$27,000/day). Meanwhile a run to the UK-Continent on TC20 also bubbled up and down around the US$3.6-3.8m level, with the round trip TCE around the US$30,000/day mark. West of Suez, Mediterranean/East LR2’s saw a US$112,000 improvement on TC15 taking the index up over US$2.9m and the round trip TCE back to four figures (US$3,082/day). LR1 In the MEG, LR1’s were put under pressure this week after starting positively. The TC5 index was ultimately squashed to the tune of 7.82 points to WS144.06 and similarly for a trip to the UK-Continent on TC8, after peaking at US$3,339,000 sunk back down to US$3,200,000. On the UK-Continent, TC16 ticked 6.87 points firmly back over the WS130 mark to WS135.31. Read the full report

TUESDAY AUGUST 29, 2023 31 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) EKOVEST BHD 188.85 0.040 0.495 45.59 1334.4 RGB INTERNATIONAL BHD 139.45 -0.050 0.310 72.22 477.7 ISKANDAR WATERFRONT CITY BHD 114.76 0.065 0.660 144.44 607.9 UEM SUNRISE BHD 97.91 0.045 0.715 180.39 3616.8 MALAYSIAN RESOURCES CORP BHD 91.63 0.020 0.440 49.15 1965.7 VELESTO ENERGY BHD 89.82 0.010 0.250 66.67 2053.9 SARAWAK CONSOLIDATED 83.94 0.005 0.455 213.79 291.3 EASTERN & ORIENTAL BHD 82.56 0.115 0.595 45.12 923.8 PERDANA PETROLEUM BHD 77.54 0.020 0.250 100.00 554.7 KNM GROUP BHD 60.94 0.000 0.085 70.00 343.7 SP SETIA BHD GROUP 60.40 0.090 0.920 53.33 3753.8 YTL POWER INTERNATIONAL BHD 58.62 0.130 2.010 181.12 16285.3 TWL HOLDINGS BHD 45.93 -0.005 0.030 -14.29 138.4 WIDAD GROUP BHD 44.80 0.005 0.450 4.65 1393.4 YTL CORP BHD 42.00 0.080 1.480 155.17 16226.8 MY EG SERVICES BHD 40.70 -0.015 0.790 -8.32 5850.3 SIME DARBY PROPERTY BHD 40.48 0.045 0.690 53.33 4692.6 BOUSTEAD PLANTATIONS BHD 39.73 0.030 1.520 135.66 3404.8 AIMFLEX BHD 38.10 0.000 0.220 46.67 323.2 TANCO HOLDINGS BHD 37.58 0.005 0.560 67.16 1096.5 Data as compiled on Aug 28, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) LAMBO GROUP BHD 0.025 66.67 2,378.4 -54.55 38.5 AT SYSTEMATIZATION BHD 0.015 50.00 5,227.1 0.00 101.8 MMAG HOLDINGS BHD 0.015 50.00 2,968.3 -40.00 36.3 XOX BHD 0.020 33.33 8,223.0 33.33 101.0 FOCUS DYNAMICS GROUP BHD 0.020 33.33 31.7 0.00 127.4 MLABS SYSTEMS BHD 0.020 33.33 910.3 0.00 29.0 EASTERN & ORIENTAL BHD 0.595 23.96 82,558.8 45.12 923.8 VIZIONE HOLDINGS BHD 0.055 22.22 1,932.2 0.00 112.5 ALAM MARITIM RESOURCES BHD 0.030 20.00 1,102.1 20.00 46.0 MSM MALAYSIA HOLDINGS BHD 1.320 17.86 19,446.0 55.29 927.9 ZELAN BHD 0.035 16.67 26.0 -50.00 29.6 SYCAL VENTURES BHD 0.215 16.22 533.2 19.44 89.5 OCR GROUP BHD 0.080 14.29 564.1 -20.00 99.2 NAIM HOLDINGS BHD 0.885 14.19 26,196.2 68.57 443.2 REACH ENERGY BHD 0.045 12.50 10,905.8 0.00 95.8 EDUSPEC HOLDINGS BHD 0.045 12.50 3,640.5 -55.00 48.0 WMG HOLDINGS BHD 0.095 11.76 430.1 0.00 42.2 KAREX BHD 0.625 11.61 3,754.6 -14.38 658.4 ADVANCE SYNERGY BHD 0.150 11.11 35,178.4 -14.29 379.4 MARINE & GENERAL BHD 0.250 11.11 22,986.0 138.10 181.0 Data as compiled on Aug 28, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) FINTEC GLOBAL BHD 0.005 -50.00 1,300.2 -50.00 29.6 DGB ASIA BHD 0.005 -50.00 735 -66.67 9.4 GREEN OCEAN CORP BHD 0.010 -33.33 160.1 -50.00 21.1 BCM ALLIANCE BHD 0.010 -33.33 2,729.9 -60.00 20.3 SANICHI TECHNOLOGY BHD 0.015 -25.00 1916.4 -40.00 21 ZEN TECH INTERNATIONAL BHD 0.015 -25.00 2223.1 -25.00 39.4 TWL HOLDINGS BHD 0.030 -14.29 45,934.9 -14.29 138.4 RGB INTERNATIONAL BHD 0.310 -13.89 139,454.5 72.22 477.7 HHRG BHD 0.235 -12.96 8,469.0 -50.53 202.5 KANGER INTERNATIONAL BHD 0.035 -12.50 468.9 -12.50 22.7 GREEN PACKET BHD 0.035 -12.50 1,407.9 -36.36 69.8 FITTERS DIVERSIFIED BHD 0.035 -12.50 2,575.6 -50.00 81.9 SWS CAPITAL BHD 0.345 -11.54 3,503.0 16.95 94.9 HUBLINE BHD 0.040 -11.11 5,442.9 0.00 171.6 XOX TECHNOLOGY BHD 0.040 -11.11 275.2 -11.11 35.7 INDUSTRONICS BHD 0.040 -11.11 230.0 -46.67 28.3 DFCITY GROUP BHD 0.320 -11.11 29.4 -16.88 33.8 FSBM HOLDINGS BHD 0.175 -10.26 4,241.1 19.40 77.3 ONLY WORLD GROUP HOLDINGS 0.515 -9.65 4,331.3 -11.21 221.9 PARAGON GLOBE BHD 0.240 -9.43 7,732.2 33.33 179.2 Data as compiled on Aug 28, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) BATU KAWAN BHD 20.300 -0.540 25.7 -8.97 7,985.6 RAPID SYNERGY BHD 23.040 -0.460 117.5 44.36 2,462.9 MALAYSIAN PACIFIC INDUSTRIES 26.300 -0.420 118.3 -8.55 5,231.0 HARRISONS HOLDINGS MALAYSIA 8.020 -0.360 62.6 20.97 549.2 DKSH HOLDINGS MALAYSIA BHD 4.740 -0.250 227.9 10.19 747.3 KUALA LUMPUR KEPONG BHD 21.500 -0.240 1,792.2 -3.85 23,186.4 PETRONAS DAGANGAN BHD 21.600 -0.220 624.5 -5.46 21,458.6 ALLIANZ MALAYSIA BHD 15.800 -0.220 32.9 11.58 2,811.9 NESTLE MALAYSIA BHD 129.200 -0.200 102.9 -7.71 30,297.4 D&O GREEN TECHNOLOGIES BHD 3.530 -0.140 4,321.7 -17.52 4,370.8 EUROSPAN HOLDINGS BHD 1.360 -0.120 2.0 20.35 60.4 IGB BHD 2.010 -0.090 13.1 29.96 2,711.9 PPB GROUP BHD 15.760 -0.080 105.5 -9.63 22,420.2 CARLSBERG BREWERY MALAYSIA 20.220 -0.080 72.4 -11.63 6,182.2 VITROX CORP BHD 7.550 -0.080 225.7 -1.31 7,137.1 HEXTARTECHNOLOGIES SOLUTIONS 27.920 -0.080 22.2 63.66 3,591.9 TENAGA NASIONAL BHD 9.900 -0.070 10,037.2 2.80 57,294.6 TROPICANA CORP BHD 1.180 -0.070 666.9 -7.81 2674.3 BANK ISLAM MALAYSIA BHD 2.050 -0.070 4,919.7 -24.91 4,646.3 PENTAMASTER CORP BHD 5.240 -0.060 510.8 18.28 3,727.3 Data as compiled on Aug 28, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) DUTCH LADY MILK INDUSTRIES 22.02 0.520 23.000 -27.2 1409.30 AYER HOLDINGS BHD 7.39 0.390 2.800 12.0 553.20 HAP SENG CONSOLIDATED BHD 3.880 0.220 7093.0 -39.38 9,659.9 MSM MALAYSIA HOLDINGS BHD 1.320 0.200 19446.0 55.29 927.9 AJINOMOTO MALAYSIA BHD 16.3 0.200 21.2 24.62 991 IOI PROPERTIES GROUP BHD 1.570 0.150 15071.4 48.11 8,644.6 HONG LEONG FINANCIAL GROUP 18.340 0.140 9.3 -1.40 21,003.8 YTL POWER INTERNATIONAL BHD 2.010 0.130 58634.7 181.12 16285.3 KECK SENG MALAYSIA BHD 4.470 0.120 96.0 24.86 1606.1 EASTERN & ORIENTAL BHD 0.595 0.115 82558.8 45.12 923.8 SUNWAY BHD 2.010 0.110 19543.7 24.07 9,958.8 NAIM HOLDINGS BHD 0.885 0.110 26196.2 68.57 443.2 CRESCENDO CORP BHD 1.45 0.110 365.000 25.0 405.20 KSL HOLDINGS BHD 1.070 0.105 11978.5 38.06 1088.4 PETRONAS CHEMICALS GROUP 7.000 0.100 2282.1 -18.60 56000 DAYANG ENTERPRISE HOLDINGS 1.7 0.100 11652.000 29.8 1968.20 SP SETIA BHD GROUP 0.920 0.090 60399.8 53.33 3,753.8 YTL CORP BHD 1.480 0.080 42005.7 155.17 16226.8 HEINEKEN MALAYSIA BHD 25.000 0.080 58.0 -0.79 7,552.5 GENTING PLANTATIONS BHD 5.800 0.080 2806.4 -7.09 5203.7 Data as compiled on Aug 28, 2023 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DJIA * 34,610.37 263.47 0.77 S&P 500 * 4,431.51 25.80 0.59 NASDAQ 100 * 15,052.82 110.99 0.74 FTSE 100 * 7,333.63 4.95 0.07 AUSTRALIA 7,159.84 44.66 0.63 CHINA 3,098.64 34.56 1.13 HONG KONG 18,130.74 174.36 0.97 INDIA 64,996.60 110.09 0.17 INDONESIA 6,921.73 26.28 0.38 JAPAN 32,169.99 545.71 1.73 KOREA 2,543.41 24.27 0.96 PHILIPPINES 6,160.61 -65.17 -1.05 SINGAPORE 3,213.68 23.80 0.75 TAIWAN 16,509.26 27.68 0.17 THAILAND 1,562.97 2.77 0.18 VIETNAM 1,201.72 18.35 1.55 Data as compiled on Aug 28, 2023 * Based on previous day’s closing Source: Bloomberg CPO RM 3,936.0026.00 OIL US$ 84.760.28 RM/USD 4.6550 RM/SGD 3.4295 RM/AUD 2.9818 RM/GBP 5.8544 RM/EUR 5.0309