The Edge 291222

THURSDAY, DECEMBER 29, 2022 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 500/2022

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CREDIT MARKET CRACKS WIDEN AS DISTRESSED
DEBT NEARS US$650 BIL p16

THURSDAY, DECEMBER 29, 2022 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 500/2022

CEOMorningBrief

HOME: Inflation bite seen less painful in 2023; 50 bps OPR hike still likely p4
Targeted electricity tariff surcharge in 1H2023 expanded to Kulim Hi-Tech Park, Sabah, Labuan p6

MAHB gets relief for Istanbul airport utilisation fees during pandemic p9
WORLD: Singapore tech stock rout intensifies with US$110 bil wipeout p17

China Covid-19 surge leads nations to adopt entry restrictions p18

PHOTO BY ALBERT CHUA & SAMUEL ISAAC CHUA/THE EDGE SINGAPORE

Penny stock crash
mastermind John Soh
sentenced to 36 years’ jail in
Singapore, co-conspirator

gets 20 years

Report on Page 2.

John Soh Quah Su-Ling

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Penny stock crash mastermind John Soh
sentenced to 36 years’ jail in Singapore,

co-conspirator gets 20 years

SINGAPORE (Dec 28):John Soh CheeWen, by Khairani Afifi Noordin Group before it was delisted while LionGold
who has been found guilty of masterminding theedgesingapore.com has been renamed ShenYao Holdings.
the 2013 penny stock crash, has been sen-
tenced to 36 years in jail while his co-conspir- guilty for 169 of the 178 charges she faced. The episode has been described as Sin-
ator Quah Su-Ling is given 20 years. Both were convicted of share manipula- gapore’s largest-ever case of share manip-
tion and cheating charges but were each ulation and involved 189 securities trading
Both Soh and Quah are appealing acquitted of eight charges of deception. accounts held with 20 financial institutions
against their sentences. and 60 individuals and companies.
The two “long-term partners in both
The prosecution had previously sought business and personal affairs” had been on Investigations into the case started in
40 years’ jail for Soh and 19-and-a-half trial since March 2019 for orchestrating the 2014. Some 140 individuals were hauled
years inprisonment for Quah. manipulation of three penny stocks, Blu- up for questioning before investigators nar-
mont Group, Asiasons Capital and Lion- rowed their focus to Soh and Quah.
In issuing the sentences, judge Hoo Gold Corp — collectively known as BAL —
Sheau Peng adjusted Soh’s sentence down- between 2012 and 2013.The stocks crashed The Edge Singapore first reported in Sep-
wards to ensure that the sentence is not in October 2013 and destroyed some S$8 tember 2014 — a year after the crash —
“crushing” for the 62-year-old. The 36 billion (RM26.2 billion) in market value. that Soh might have been involved.
years’ imprisonment includes his time of
remand since Nov 25, 2016. Now under new shareholders and manage- The duo were formally charged on Nov
ment, Blumont has been renamed Southern 25, 2016 and Soh has been held in remand
Meanwhile, Quah’s sentencing is two- Archipelago,Asiasons was first named Attilan since. Quah, meanwhile, is out on bail for
thirds of Soh, given that she is less culpable S$4 million.
and less involved in the scheme. Quah was
the former CEO of IPCO International, On Sept 1, 2014, The Edge Singapore pub-
renamed Renaissance United in 2018. lished the article “Hunting for the truth”,
which marked the first anniversary of the
In her oral judgement, Hoo highlights crash. Following this, the companies and in-
the necessity of the substantial sentencing dividuals mentioned in the article had threat-
to capture the gravity of the duo’s wrong- ened legal action — with Blumont and Li-
doing. She emphasises that Soh and Quah onGold subsequently filing defamation suits
have perpetrated a scheme of substantial against The Edge Singapore and then editor Ben
scale, complexity and sophistication,“bold- Paul — although neither suit went to court.
ly” exploiting the system armed with a good
understanding of the securities and finan- Another company that threatened The
cial markets, as well as tapping on their ex- Edge Singapore with legal action after the sto-
tensive connections and networks. ry was published is ISR Capital (renamed
to Reenova Investment Holding), which
“They personally minded and tended to claimed that the article made false statements
the intricate scheme they devised on an al- about Soh’s association with the company.
most daily basis for a prolonged period of 14
months, taking steps to evade detection by During a court hearing on Dec 20,
the authorities.They did so for financial gains. 2016, prosecutors said the authorities had
By the crash, immense harm was caused.” found links between ISR and Soh while
investigating the sudden fall in ISR’s share
Legal action threat price after Soh was arrested.
Soh and Quah were on May 5 found guilty
of a whole litany of the charges they were Crushing sentence
facing under three groups of criminal con- On Nov 4, Soh’s defence counsel N
spiracy including for forced trading, price Sreenivasan of K&L Gates Straits Law argued
manipulation and deception. against deputy public prosecutors’ (DPP)
push for a 40-year jail term which he described
Soh was convicted of 180 of the 188 as a “crushing sentence” for Soh given his age.
charges he faced while Quah was found
continues on Page 3

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SINGAPORE (Dec 28): The stiff prison Stiff sentences manipulate the shares of Blumont Group
sentences handed down to the master- on manipulators Ltd, Asiasons Capital Ltd, and LionGold
minds behind Singapore’s biggest stock show Singapore’s Corp Ltd between August 2012 and Oc-
market manipulation is a clear testament tober 2013, and cheated two financial in-
to the authorities’ resolve in acting against resolve in stitutions.
such misconduct, and safeguarding the is- safeguarding its
land nation’s reputation as an international capital markets “We will not tolerate any attempts to
financial centre. subvert our criminal justice system,” said
by Massita Ahmad Chief Prosecutor Tan Kiat Pheng.
This was stated in a joint statement is- Bernama
sued by the Attorney-General’s Chambers “We will continue to work closely with
(AGC), the Singapore Police Force (SPF), our law enforcement agencies and regu-
and the Monetary Authority of Singapore lator to safeguard Singapore’s reputation
(MAS) in relation to the sentencing of Ma- as an international financial centre,” he
laysian businessman Soh Chee Wen to 36 added.
years’ imprisonment and co-conspirator
Quah Su-Ling to 20 years’ imprisonment On May 5, Soh was convicted of 180
by the republic’s High Court onWednesday. charges while Quah was convicted of 169
charges after trial.
Both were found to have, among other Read the full story
things, orchestrated an elaborate scheme to

from Page 2 Timeline of the saga

Sreenivasan drew comparisons to 1985’s August 2012 to October 2013 January 2016
Pan-Electric crash, which resulted in the
temporary closure of the Singapore and The share prices of Asiasons Capital (since Soh seeks court permission to return to Malaysia
Kuala Lumpur stock exchanges.Tan Koon renamed Attilan Group), Blumont Group to attend to family affairs. Authorities had
Swan, who played a significant role in the and LionGold Corp climb, with the surge already stated publicly that Soh was probably
demise of the company, was sentenced in Blumont especially pronounced at more behind the penny stock saga. He is deemed a
to two years’ imprisonment and a fine of than 100 times. flight risk and denied leave.
S$500,000 for one criminal breach of trust.
Oct 2 to 4, 2013 Nov 24, 2016
He also drew comparison to the collapse The three stocks crash. Asiasons falls from Soh, Quah Su-Ling and Goh Hin Calm are
of Barings — in 1995,rogue trader Nick Lee- a peak of $2.83 to $1.04 by Oct 4; Blumont arrested. They are charged in court the
son, who was the bank’s head of derivatives declines from $2.04 to $0.73; and LionGold following day. Soh and Quah are named as
in Singapore, lost billions of the bank’s mon- from $1.56 to $0.875. Some $8 billion in the two masterminds behind the crash, and
ey via unhedged, unauthorised speculative market value is vaporised. Goh the “treasurer” of their enterprise. In
trades. Leeson was sentenced to six and a a joint statement, the Monetary Authority
half years in jail after pleading guilty to two April 2014 of Singapore and CAD call this the “largest
counts of “deceiving the bank’s auditors and The Commercial Affairs Department begins market manipulation case” in Singapore
cheating the Singapore Exchange (SGX)”. what has been called Singapore’s biggest-ever history. Following Soh’s arrest, shares in ISR
securities fraud investigation. Blumont and Capital, whose CEO, Su-Yin, is the sister of
DPP Nicholas Tan, however, argued LionGold as well as six other companies — Quah Su-Ling, crash by more than 50% after
that the penny stock saga is “no Pan-Elec- IPCO International, ITE Electric (now known gaining 4,000% in the previous half year.
tric”, as the loss in market capitalisation of as Sunrise Shares Holdings), Annica Holdings,
the crash is equivalent to 33 Pan-Electric, Magnus Energy Group, Innopac Holdings and 2017
which had a market capitalisation of about ISR Capital — make various announcements Soh is repeatedly denied bail in a series of
S$230 million. He further pointed out that about the CAD investigation. hearings.
two of the largest companies listed on the
SGX — ComfortDelGro and Sembcorp September 2014 May 30, 2018
Industries, have market capitalisations of Committal hearing starts.
S$2.8 billion and S$5.5 billion respectively. Our story “What was this man’s role in
Asiasons, Blumont and LionGold?” in The May 5, 2022
“Indeed, this is no Pan-Electric. This Edge Singapore (Issue 641, Sept 1, 2014) Guilty verdict
case is far, far worse,” said Tan. details John Soh’s involvement in the saga.

The sentencing of Soh and Quah draws and kept track of the shareholding sched- Chee Heong, Gabriel Gan Tze Wee and
the court case closer to closure — having ules of those accounts. HenryTjoa Sang Hi.The brokers claimed
spanned over 200 days of trial in nearly to have received instructions on trades to
four years. Goh also gave Quah and Soh control of be made from either Soh or Quah.
trading accounts held in his and his wife’s
Originally, another co-conspirator — name, which were then used to manipu- Gan and Lau were, at different points in
Goh Hin Calm, the “treasurer” for Soh late the shares. time,brokers with DMG Securities,whileTai
and Quah was charged together with the was running Algo Capital at the time when
duo in 2016. However, Goh chose to plead Other key witnesses included Soh’s old the alleged offences took place.Tjoa, mean-
guilty and has testified against them. colleague Dick Gwee Yow Pin as well as while, was a remisier with Phillip Securities.
brokers Ken Tai Chee Ming, Leroy Lau
Goh, who was interim CEO of IPCO
International, pleaded guilty to two charges
pertaining to his involvement in the scheme.

He managed payments for the numer-
ous trading accounts controlled by the duo

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Inflation bite seen less painful in 2023;
50 bps OPR hike still likely

by chester tay Bank Negara Malaysia OPR
theedgemarkets.com
OPR level (%)
KUALA LUMPUR (Dec 29): Econo-
mists, in general, are keeping their view 3.5
that Bank Negara Malaysia (BNM) will
raise the overnight policy rate (OPR) by 3.0 2.75
another 50 basis points (bps) to 3.25% in 2.5 2.7
2023, amid expectation that inflationary 2.0
pressure will ease.
1.5
They believe the government is unlike-
ly to slash subsidies abruptly in Malaysia, 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
especially those regarding electricity and
petrol.This, combined with easing supply Source: Bloomberg
chain disruptions, ceteris paribus, will cool
down the inflation, they said. two 25 bps hikes in OPR to 3.25% in the changed for the rest of 2023,” it said.
first quarter of 2023 (1Q2023). It is worth noting that Malaysia’s CPI
At 3.25%, the OPR will be back to
pre-pandemic levels. The benchmark in- “This would bring rates to pre-pandem- still lags behind regional peers due mainly
terest rate now stands at 2.75%, after four ic levels which are not over restrictive [on to the blanket subsidies on fuel, utilities
consecutive hikes of 25 bps from 1.75% at economic growth]. Thereafter, we expect as well as price control for necessary con-
the start of 2022, amid global monetary au- rates to stay on hold for the rest of the sumer foods like chicken and eggs.
thorities’ efforts to tighten liquidity to tame year,” she said.
inflation driven by post-pandemic pent- Malaysia’s core inflation rose to a new
up demand and supply chain disruptions. Kenanga Economic Research expects high of 4.2% in November, driven by ro-
BNM to slow down rate hikes in 2023, bust consumer demand and an improving
Assuming no changes in domestic poli- although it pointed out that core inflation job market. Headline CPI growth rose as
cy particularly fuel and electricity subsidies remains persistently high currently on the much as 4.7% in August, before tapering
as well as price cap for staple food, UOB back of strong domestic demand. off to 4% in November.
Global Economics & Markets Research sen-
ior economist Julia Goh said the consum- BNM may raise the OPR by another According to Bloomberg data, the con-
er price index (CPI) should continue on 25 bps in January 2023, to further realign sensus estimate for Malaysian CPI is 3% in
its downtrend going into 2023 and is pro- with global monetary tightening trends and 2023, based on estimates of 31 economists.
jected to average 2.8% from an estimated to curb persistently elevated core inflation,
3.5% in 2022. the research house said. “Core CPI would need to moderate in
the coming months before we can safely
This compares to the Ministry of Fi- “However, due to growing global eco- say that price pressures have subsided and
nance’s forecast in October of 2.8%-3.3% nomic uncertainty and a potential domes- before headline inflation can return to be-
inflation for 2023. tic slowdown later in the year, we currently low 3%,” Kenanga said.
assign only a 50% probability of another
“As core inflation remains elevated, similarly sized rate hike in March. It expects headline inflation to ease to
this signals the persistence of demand-pull 2.5% in 2023 as the new government pri-
price pressures along with higher wages. “As such, we reckon the terminal rate oritises tackling the rising cost of living and
Hence, we reiterate our view for another would be between 3% and 3.25%, in continues to provide blanket subsidies in the
line with the long-term OPR average, af- near term, before implementing target sub-
ter which we expect BNM to keep it un- sidies in the second half of 2023 (2H2023).

Bloomberg “Our core CPI forecast for 2023 is 2.3%,
as we expect core inflation to subside to be-
low 3% by 2Q2023 due to a drop in prices
for imported inputs due to the strengthening
ringgit, slowing global demand, and supply
chain normalisation,” it said.

However, there is a handful of econo-
mists forecasting OPR to surpass pre-pan-
demic levels of 3%-3.25%.

RHB Research expects OPR to peak at
3.5% and that it would materialise sooner
rather than later, possibly by 1H2023, im-
plying three more 25 bps hikes by BNM.

“Our view is anchored on the decent
economic performance so far as well as
still elevated inflationary pressures,” said
the firm’s economist Chin Yee Sian and
analyst Wong XianYong when contacted.

continues on Page 5

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IRB, Customs told agencies monitor the black economy for
to find ‘creative’ more tax collection as the sector is esti-
ways to tax black mated to comprise 30% of the country’s
economy gross domestic product (GDP).

Bernama “The black economy comprises peo-
ple who evade tax or do not pay the ap-
KUALATERENGGANU (Dec 28):The propriate amount of taxes
government has asked the Inland Reve-
nue Board (IRB) and the Royal Malay- “If through these creative efforts, the
sian Customs Department to find more black economy can be brought down to
creative ways to increase their tax col- 10% of GDP, the government would get
lection without imposing new taxes on tens of billions [of ringgit] in taxes, with-
the people. out having to impose new taxes,” he told
reporters after making an official visit to
Deputy Finance Minister Datuk Seri the IRB office here.
Ahmad Maslan has suggested that the two
However, Ahmad said the two agen-
cies have not been given any targets
to achieve this although the govern-
ment is formulating policies to reduce
black economy activities that have been
spreading since the abolishment of the
Goods and Services Tax (GST).

Malaysia monthly CPI vs regional peers Ringgit against US dollar

y-o-y (%) Philippines 8.0 4.0 4.4235
8 Singapore 6.7 4.1807
6 5.6
4 Thailand 5.4 4.2
2 Indonesia 4.0
0 Malaysia 4.4
-2
-4 Jan 31, 2020 4.6

Source: Bloomberg Nov 30, 2022 4.8 Dec 28, 2022
Dec 28, 2021

Source: Bloomberg

from Page 4 the renminbi against the US dollar from 2023, primarily due to expectation of the
April till about mid-November. Fed trimming interest rates coupled with
“Moving forward, we expect the trajec- a potential rebound in commodity prices.
tory of the inflation to be continued driven “At this juncture, it remains to be seen if
by a few factors, i.e. the momentum of eco- returning confidence in Malaysia’s markets However, Kenanga cautioned that an es-
nomic growth, the strength of ringgit, [and] will be enough to overcome the drag of a calation in the Russia-Ukraine war, a U-turn
the movement of commodity prices,” they weakening renminbi.For now,we maintain an in China’s Covid-19 policy, a persistently
said, forecasting a 3% headline inflation for upward trajectory for [US dollar/ringgit], sim- hawkish Fed resulting in no rate cuts in 2023
2023 and a strengthening of the ringgit to ilar to that of [US dollar/renminbi],” she said. and deepening China-Taiwan tensions may
4.20-4.30 range against the US dollar by the shift the ringgit’s bullish narrative.
end of 2023. Goh expects the ringgit to weaken
against the greenback in 2023. Her US dol- “In the first few months of 2023, the
‘Ringgit highly correlated with lar/ringgit forecasts are at 4.55 for 1Q2023, ringgit is expected to reverse the gains made
renminbi movements’ 4.60 for 2Q2023 and 4.65 for 2H2023. in 4Q2022 and depreciate against the US
Commenting on the ringgit, UOB’s Goh dollar to around 4.48 (end-1Q2023), main-
said potential domestic catalysts for the However, Kenanga’s forecast is the re- ly due to the increasing monetary policy
local currency include political resolution verse of Goh’s. divergence between the BNM and the Fed,
that paves the way for pro-growth policies, as the [Fed] may continue to hike above 5%
domestic reforms, and further OPR hikes. Kenanga expects the ringgit to start the while the [BNM] could stop short of 3%.
year of 2023 on a soft note as the US Fed-
“[Another] key external factor that eral Reserve (Fed) is seen likely to tighten “However, moving into 2Q2023, the
could impact the ringgit is the trend of liquidity, and to regain strength towards eventual reopening of China and Malay-
the China renminbi.We note that the ring- the later part of the year as China recovers sian government’s increasingly pro-investor
git highly correlated with movements of from the Covid-19 impact. policies may help boost the ringgit back to
around the 4.35 level,” the research firm said.
Kenanga foresees the local note to
strengthen further to 4.11 by the end of

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KUALA LUMPUR (Dec 28): A new Targeted electricity consist of commercial and industrial will
surcharge on electricity tariff will be im- tariff surcharge in be subject to ICPT surcharge in full at
posed on non-domestic electricity users at 1H2023 expanded the rate of 10.04 sen/kWj,” the EC said.
Kulim Hi-Tech Park (KHTP) and selected to Kulim Hi-Tech
non-domestic users in Sabah and Labuan It pointed out that the government will
for the first half of 2023 (1H2023), the Park, Sabah, allocate RM212.2 million subsidy for six
Energy Commission (EC) said. Labuan months for the electricity tariff exemption
in Sabah and Labuan.
However, domestic users across the by intan Farhana Zainul
three locations are exempt from the sur- theedgemarkets.com “It is estimated that 99% of all electric-
charge, and similarly for micro, small and ity users in Sabah and Labuan, more than
medium enterprises (MSMEs) in Sabah Bloomberg 656,000 users, will not be involved with
and Labuan, the EC said. the tariff increase,” it added.

In a statement, the EC said the full Recall that in mid-December, the gov-
surcharge of 8.19 sen/kWh in the period ernment announced that it would imple-
under the imbalance cost pass-through ment a targeted electricity subsidy which
(ICPT) mechanism will be imposed on would see all domestic users continue to
the non-domestic segment of the KHTP, enjoy the two sen/kWh rebate on their pow-
as opposed to a surcharge of 4.95 sen/ er tariff for the period between Jan 1 and
kWh in 2H2022. June 30, 2023.

This follows an increase in generation The government will also not increase
and fuel costs on-site in 2H2022 amount- the 3.7 sen per kWh surcharge on farmers
ing to RM76.02 million, as piped gas price and animal breeders as well as lower volt-
rose to RM32/mmbtu, compared to the age non-domestic users such as micro busi-
projected RM26/mmbtu. nesses, and small and medium enterprises
(including restaurants, groceries, bakeries
In a separate statement, the EC said and small workshops).
tariff surcharge exemption in Sabah and
Labuan is given to domestic users and In contrast, medium voltage and high
MSMEs within the low voltage commer- voltage users will be charged a surcharge
cial and industrial category. of 20 sen per kWh from Jan 1, as a result
of the high electricity generating cost due
“All other non-domestic users which to an increase in coal prices globally. In
include categories of low voltage, medi- 2022, the non-domestic sector was charged
um voltage and high voltage tariffs which 3.7 sen/kWh surcharge.

JOHOR BAHRU (Dec 28): All availa- Comprehensive Salahuddin said this when asked to
ble databases will be integrated to iden- database to identify comment on economists’ views that grant-
tify those eligible for targeted petrol sub- ing targeted petrol subsidies based on the
sidies, said Domestic Trade and Cost of targeted petrol cubic capacity of vehicle engines is not
Living Minister Datuk Seri Salahuddin subsidy recipients, very appropriate.
Ayub.
says minister It was recently reported that the JPJ da-
He said the comprehensive database tabase can be used for the RON95 petrol
to be used would consist of data from Bernama subsidy scheme, as the Government can
not only the Road Transport Depart- identify those eligible based on the engine
ment (JPJ), but also the Inland Revenue capacity of vehicles.
Board  (IRB), Bank Negara Malaysia
(BNM), Khazanah Nasional Bhd, the De- Meanwhile, Salahuddin said the minis-
partment of Statistics Malaysia (DOSM) try is looking into the “nano retailers” initi-
and university studies. ative as a measure to help housewives earn
some income.
He said having a comprehensive data
centre is important and necessary to He said the initiative could be imple-
make the targeted subsidy mechanism mented in collaboration with the DPIM
a success. to enable housewives to sell 11 basic items,
such as sugar, flour, eggs, rice, cooking
“I have already clearly stated that oil and dry goods.
JPJ data is among the data needed, and
we will also have data from the IRB, “We will help these people to source
Khazanah, DOSM, BNM and univer- their goods directly from manufacturers,
sity studies. so that they need not have to go through
three or four layers of middlemen.
“We need to gather all the data. The
ministry or the National Action Council on “Besides being able to earn a small in-
Cost of Living should look at all the data come, the bottom 40% household income
before we make a final decision,” he said target group can also gain from getting
at a press conference after attending the goods at lower prices compared to buying
Malaysian Islamic Chamber of Commerce from shops,” he said.
meeting (DPIM) here on Tuesday night
(Dec 27). He said the pilot project could be imple-
mented in every state by involving several
areas before it is expanded.

THURSDAY DECEMBER 29, 2022 7 THEEDGE CEO MORNING BRIEF

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ATA IMS flags ATA IMS Bhd sen Berjaya Corp buys
impairment risk, RMXxx RM408 mil
capacity cut on 80 Yokohama
Dyson contract 60.5 sen land for Four

termination 60 Seasons project
development
by Intan Farhana Zainul 40 24.5 sen
theedgemarkets.com Dec 28, 2022 by Chester Tay
20 theedgemarkets.com
KUALA LUMPUR (Dec 28):ATA IMS Bhd Jan 3, 2022
is looking to undertake an impairment exer- KUALA LUMPUR (Dec 28): A
cise and slash its operating capacity, following Source: Bloomberg unit of Berjaya Corp Bhd (BCorp)
the termination of contracts by British home is acquiring six parcels of freehold
appliance maker Dyson announced last week. tem Sdn Bhd andWinsheng Plastic Industry land collectively measuring about
Sdn Bhd (WSP) had received the notices of 20,977.15 square metres in Yoko-
In a filing with Bursa Malaysia,ATA IMS termination in relation to the referred supplier hama, Japan, for ¥12.66 billion
said it will provide the estimate “as soon as contract for components/materials supply, a (RM408.82 million) cash.
possible”,which will include early termination framework agreement for goods/services sup-
of certain tenancy agreements for leasing of ply, and equipment loan contracts. BCorp said its wholly owned
its production plant, warehouse and hostel. subsidiar y Berjaya Yokohama
The effective date of the termination is Hospitality Asset TMK is con-
“The company is in the process of assess- March 31, 2023, “or such dates as agreed templating the development of a
ing which of the leased facilities that may by the parties”. Four SeasonsYokohama Harbour
need to be terminated, and also estimating Edge project on these lands, com-
the write down of right-of-use of assets as ATA IMS said product sales represent- prising a luxury hotel and upscale
a result of the early termination of tenancy ed 100% of JABCO’s revenue and 82% of residences, aquarium and retail
agreements,” it said. WSP’s. Collectively, Dyson product sales outlets.
made up about 42% of the group’s revenue
The electronics manufacturing service for the six months ended Sept 30, 2022. The estimated gross devel-
(EMS) provider also pointed to potential im- opment cost, including land ac-
pairment from the acquisition of IMS Group It will discuss with Dyson to purchase back quisition cost, amounts to about
it made in 2018, which includes a RM76.4 stocks amounting to RM60 million as of Sept ¥101.54 billion (RM3.28 billion),
million goodwill it recognised earlier. 30 to ensure that they can be cleared before while the estimated gross devel-
March 31, and identify purchase orders for opment value is ¥138.17 billion
“Arising from this acquisition, the group materials and components that are non-can- (RM4.46 billion).
recognised goodwill of RM76.4 million. cellable for a delivery date beyond that.
Goodwill is not amortised, but tested for BCorp said the project is ex-
impairment annually based on projected Shares in ATA IMS closed unchanged at pected to be developed over a
revenues, profit and loss accounts, and the 24.5 sen apiece. On a year-to-date basis, its period of four years and funded
discounted cash flows of the various cash gen- share prices had dropped 60% from 61 sen by bank borrowings and internal
erating units within the group. on Jan 3. At its last close, the group had a funds.
market capitalisation of RM289.17 million.
“The company is in the process of dis- These lands are the last water-
cussions with customers and working out ATA IMS posted a net loss of RM18.31 front undeveloped area inYokoha-
the new projections to assess the impact on million in the first half ended Sept 30, 2022 ma City situated in the vicinity of
goodwill on consolidation, and will provide (1HFY23), from a net profit of RM12.21 key city landmarks of Yokohama
an estimate of the impairment, if any, as soon million in the same period a year ago due such asYokohama LandmarkTower
as possible,” ATA IMS said. to the termination of contracts by its major andYokohama Museum of Art, the
customer in one of the subsidiaries, resulting group said in a Bursa Malaysia fil-
Last Friday, ATA IMS had received ter- in under-utilisation of production capacity. ing on Wednesday (Dec 28).
mination notices for various contracts from
Dyson Manufacturing Sdn Bhd and Dyson Its revenue for the period fell more than The proposed acquisition is not
Operations Pte Ltd. half to RM607.79 million compared with subject to BCorp shareholders’ ap-
RM1.49 billion previously. proval.
ATA IMS said its units JABCO Filter Sys-
Shares of BCorp closed half a
sen or 1.7% lower at 29 sen, giv-
ing it a market capitalisation of
RM1.73 billion.

Read also: Berjaya Corp sells Four
Seasons Hotel Kyoto for RM1.87
bil cash, to realise RM600 mil gain

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KUALA LUMPUR (Dec 28): Malaysia MAHB gets “As part of the force majeure relief,
Airports Holdings Bhd (MAHB) said it has relief for Istanbul SSB has granted a reduction on the uti-
received the nod for a reduction of fees for airport utilisation lisation fees taking into consideration the
the utilisation of Istanbul Sabiha Gökçen Covid-19 impact, to be applied on the de-
International Airport (SGIA) during the fees during ferred amount.
Covid-19 pandemic. pandemic
“The remaining balance of the deferred
MAHB’s subsidiary operating the air- by Adam Aziz amount shall be paid not later than Dec
port had previously secured a deferment theedgemarkets.com 31, 2025, subject to interest of 6.524%
from the Presidency of Defence Industries per annum,” MAHB said.
ofTürkiye (SSB) for the payment, amount- the edge file photo
ing to €114.8 million (RM539.37 million), “The force majeure relief is expected to
which was initially scheduled to be paid in contribute positively to the earnings and
January 2021 and January 2022. net assets of the group,” it added.

This followed the execution of an im- Passenger count in SGIA fell sharply
plementation agreement between SSB during the pandemic. In 2020, it recorded
and MAHB’s subsidiary ISG pertaining 17.2 million passengers, down 52% from
to force majeure relief for the Covid-19 35.95 million recorded in 2019. In 2021,
period. it saw 25.36 million passengers, represent-
ing 70% of pre-pandemic levels.
MAHB, however, did not state the
quantum of the reduction or the balance From January to November 2022, pas-
of the deferred payment that is yet to be senger count in the airport totalled 30.68
paid by the airport operator. million, representing 94% of 32.63 million
passengers recorded in the same 11-month
“The force majeure relief was formal- period in 2019.
ised on Dec 28, 2022 through the amend-
ment of the implementation agreement Shares of MAHB settled up eight sen
between ISG and SSB,” MAHB said in a or 1.24% at RM6.55, giving it a market
filing on Wednesday (Dec 28). capitalisation of RM10.87 billion.Year-to-
date, the counter is up 9.53%.

KUALA LUMPUR (Dec 28): Toyo Ven- SunCon-led works at the project site can commence
tures Holdings Bhd’s units have entered consortium without further delay,” said Toyo Ventures
into an interim agreement with a consor- in negotiation in a stock exchange filing on Wednesday
tium led by Sunway Construction Group to buildToyo (Dec 28).
Bhd (SunCon) to negotiate details for the Ventures’Vietnam
consortium to undertake a US$2.2 billion power plant for Toyo Ventures announced back in De-
(RM9.73 billion) job for the development US$2.2 bil cember 2020 that it had executed the BOT
of a 2,120 MW coal-fired power plant in contract with the Ministry of Industry and
Vietnam. by Chester Tay Trade (MOIT) of the Socialist Republic
theedgemarkets.com of Vietnam.
The agreement sets out the framework
for negotiations and discussions between The BOT contract involves 25 years of
the parties to establish the detailed terms concession before the facility is transferred
and conditions about the contractor’s per- to an entity nominated by MOIT.
formance in design, engineering, procure-
ment, manufacture, supply, construction, In its Dec 29, 2020 stock exchange fil-
erection, testing and commissioning of the ing, Toyo Ventures said the project would
electric generation facility. have a total land area of 117.39 hectares
and the estimated cost was approximately
ToyoVentures owns the project through US$3.23 billion.
two wholly owned subsidiaries, namelyToyo
Ink Group Bhd and Song Hau 2 Power Subsequent to the announcement, shares
Co Ltd. ofToyoVentures went on a steep rally, rising
nearly four times from 99.5 sen on Dec 29,
The other member of the consortium 2020 to RM3.87 less than a month later on
with SunCon is Power Engineering Con- Jan 19, 2021, before trending downwards
sulting Joint Stock Co 2, a subsidiary of to as low as 41.5 sen in May this year.
Vietnam state-owned Vietnam Electricity.
The counter has been regaining some
ToyoVentures said the interim engineer- ground in the past few months, before it
ing, procurement and construction (EPC) spiked 23% to RM1.19 on Tuesday (Dec
agreement will be terminated if the EPC 27), marking its biggest single-day gain in
contract is not executed by the parties with- over seven months.
in six months.
Shares ofToyoVentures, which have fall-
“The interim EPC agreement demon- en 32% year-to-date, dropped 23 sen or
strates the commitment of the owner (Toyo 19.33% to settle at 96 sen on Wednesday,
Ink and Song Hau 2) to fulfil the require- giving it a market capitalisation of RM102.7
ments of the BOT (build-operate-transfer) million.
contract and sourcing project financing
for the power plant project so that ground SunCon, on the other hand, closed one
sen or 0.65% higher at RM1.55 onWednes-
day, valuing the group at RM2 billion.

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Cypark sets
private placement

price at 38 sen
per share to raise

RM68 mil

by Intan Farhana Zainul
theedgemarkets.com

KUALA LUMPUR (Dec 28): Cypark Re- between RM72.43 million and RM73.36 floating solar plant project was in Decem-
sources Bhd has fixed the issue price of its million from the placement. ber 2021. It was then delayed to May, sub-
private placement exercise at 38 sen per sequently to September, and is now slated
share to raise about RM68 million, which The bulk of proceeds from the cash call for May 2023.
is lower than what it had planned earlier. has been earmarked for working capital
for the development of the Large Scale Meanwhile, the waste to energy project
In a filing with Bursa Malaysia on Solar 2 (LSS2) floating solar photovoltaic had also missed its latest targeted COD
Wednesday (Dec 28), the company said projects at Danau Tok Uban in Kelantan. three months back in September.
the issue price represents a discount of
almost 8% to the volume-weighted aver- It also plans to allocate about RM22 The proposed placement is expected to
age price of the units for the five market million of the proceeds of about RM22.87 be completed in the first quarter of 2023.
days up to and including Dec 27 of 41.27 million as a working capital for the sol-
sen apiece. id waste modular advanced recovery and The last private placement exercise
treatment waste-to-energy (SMART undertaken by Cypark was in December
Shares in Cypark settled at 46.5 sen WTE) plant at Ladang Tanah Merah in 2021, from which the company raised
at the market break on Wednesday. On a Negeri Sembilan. RM97 million gross proceeds, involving
year-to-date basis, its share price has de- the issuance of 20% of the total number
clined almost 49%. The two projects have been behind of issued shares, for the development cost
schedule for a while. The initial targeted of the solar power plant facility and partial
Cypark’s private placement comprises commercial operation date (COD) for the repayment of bank borrowings.
up to 178.94 million new shares, repre-
senting 30% of its issued shares.

In a filing on Nov 8, Cypark had indi-
cated that the group was aiming to raise

KUALA LUMPUR (Dec 28):Tiong Nam Tiong Nam enters from JV shareholders, while TNLS will
Logistics Holdings has entered into a joint JV agreement be involved in funding the working capi-
venture (JV) agreement with Johor Corp to with JLand to tal through internally generated funds.
develop a high-tech logistics industrial park
on a 300-acre land at SedenakTechnology develop high-tech Additionally, JTN is expected to prepare
Valley, Johor. logistics park and submit the development layout plans to
the Johor state authorities within the next
In a statement onWednesday (Dec 28), by Sufi Muhamad 12 months, with construction expected to
Tiong Nam said its wholly owned subsid- theedgemarkets.com begin in 2025.
iary Tiong Nam Logistics Solutions Sdn
Bhd (TNLS) inked the agreement with commercial buildings, along with integrated Tiong Nam’s managing director Ong
Johor Corp’s wholly owned subsidiary logistics infrastructure for global businesses. Yoong Nyock said the JV is a recognition
JLand Group Sdn Bhd (JLG) following of the group’s capabilities and a milestone
a preliminary collaboration agreement in JTN will also acquire the development in its track record in transforming Johor’s
August 2022. land from JLG for a purchase considera- logistics landscape over the past four dec-
tion of RM52.3 million, or RM4 per square ades.
The JV company — known as JTN foot.
Logistics Park Sdn Bhd — will undertake “We will bring tremendous value to the
the acquisition of the 300-acre land, plus The land has a leasehold of 99 years and project which caters to Johor’s strategic
the development and management of the is currently under the ownership of Johor goals, by leveraging on our experience as
industrial park. Corp. It will be procured by JLG before a leading integrated logistics and warehous-
its sale to JTN. ing services provider to multinational cus-
“Under the JV agreement, TNLS will tomers across Southeast Asia,” said Ong.
hold 51,000 ordinary shares, represent- JTN will pay the land purchase con-
ing 51% equity stake, while JLG will hold sideration to JLG through the advances “The technology-enabled development
the remaining 49,000 ordinary shares or will also enhance the state’s logistics infra-
49% equity stake in the JV company,” said structure to support greater international
Tiong Nam. connectivity and trade.”

The development consists of ready-built Tiong Nam’s share price closed lower
and customised warehouses, factories and by two sen or 2.47% to 79 sen for a market
capitalisation of RM416.98 million.

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KUALA LUMPUR (Dec 28): Kenanga Kenanga Research RPK level of 63 billion in 2019,” Kenanga
Research is projecting tourist arrivals in the “neutral” on Research said in its Sector Update note to-
country to jump four-fold to 9.6 million in day, where it reiterated its ‘neutral’ call on
2023 from an estimated 2.5 million a year aviation sector, the aviation sector,
ago on the back of the reopening of interna- projects 9.6
tional borders. Meanwhile, it noted that MAHB’s
million tourist much-needed tariff hike does not appear
It said the increase would be driven by the arrivals in 2023 to be forthcoming, while a regularisation
return of both business and leisure air travel plan is underway to lift Capital A out of its
globally, the revocation of all on-arrival quar- Bernama Practice Note 17 (PN17) status.
antine and testing requirements in Malaysia
and the eventual gradual reopening of China from matching the pre-pandemic level of “Despite the rising demand, we expect
which historically accounts for an estimated 141 million recorded in 2019. Capital A to remain in the red over the short
12% of the total tourist arrivals in Malaysia. term as economies of scale are still lacking in
“Similarly, we project Capital A’s sys- its airline operations while its digital business
These factors would support growth in tem-wide revenue passenger kilometres has a long gestation period.
the passenger throughput of Malaysia Air- (RPK) to grow by 52% to 35 billion in 2023,
ports Holdings Bhd (MAHB) and the pas- but this still falls short of the pre-pandemic “The group plans to divest its aviation
senger demand of Capital A Bhd (Capital group to AirAsia X in exchange for shares
A), it said. which will subsequently be distributed back
to its shareholders,” it said, adding that the
“We project MAHB’s system-wide pas- details of the regularisation plan are expect-
senger throughput to rise 29% and 15% to ed to be announced by end-January or ear-
101 million and 116 million in 2023 and ly February 2023, with completion by July
2024, respectively, but it is still a long way 2023.

bloomberg

RHB projects
automotive
TIV to soften to
600,000 units

in 2023

by Hailey Chung
theedgemarkets.com

KUALA LUMPUR (Dec 28):Total industry ders have been gradually recovering month- RHB’s top auto stock picks are Bermaz
volume (TIV) for the automotive sector is ex- on-month after the SST exemption period and Sime Darby Bhd as these companies have
pected to soften to 600,000 units in 2023 from ended on June 30, 2022 as consumers adapt the widest EV selections, which put them in
the forecast of 700,000 units in 2022 due to to the SST-inclusive prices. a good position to capture the growing EV
slower economic growth, according to RHB adoption locally and regionally.
Investment Bank Bhd. “We see this as an encouraging sign and ex-
pect new model launches and facelifts in 2023 Lim has a target price of RM2.55 for Ber-
The firm said the 600,000-unit forecast to continue fuelling new orders. However, we maz and RM2.80 for Sime Darby.
takes into account the anticipated strong vol- continue to anticipate slower economic growth
ume in the first quarter of 2023 (1Q2023) as and possible excise duty reforms as potential But he cautioned that both Bermaz and
automotive companies rush to deliver orders dampeners to auto demand,” Lim said. Sime Darby are experiencing some form of
exempted from the sales and service tax (SST) supply shortages while most domestic players
before the end of March 2023. Lim is of the view that the electric vehicle are able to secure the semiconductors and
(EV) segment will continue to be a bright components needed.
The Malaysian Automotive Association’s and exciting space as more EV offerings are
(MAA) forecast for 2023 TIV is more bull- expected locally in 2023. He said any remaining supply chain bot-
ish at 636,000 units, which is slightly more tlenecks should gradually lessen with China’s
than its projection of 630,000 units for 2022. These included BMW’s all-electric i7 and continued easing of Covid-19 restrictions. He
Based on the first 11 months of 2022, TIV i5 EVs and XM plug-in hybrid, Bermaz Auto has maintained a “neutral” call on the sector
has hit 642,000 units, exceeding the MAA’s Bhd’s Peugeot e-2008 and Kia’s PBV1 EVs, over concerns of a slower 2023 beyond the
projection but yet to exceed RHB’s 700,000- UMWToyota Motor Sdn Bhd’s first battery strong deliveries in the near term.
unit projection. EV bZ4X and GreatWall Motors’ Ora Good
Cat. AtWednesday’s noon break,Bermaz shares
“The estimated 14% year-on-year decline settled at RM2.10, which translates to a mar-
is premised on slower economic growth in He said BYD by Sime Darby Motors has ket capitalisation of RM2.44 billion.At a share
2023 and the absence of a SST exemption,” raked in thousands of orders for its Atto 3 price of RM2.20, Sime Darby’s market capi-
RHB’s analyst Jim Lim Khai Xhiang said in launched on Dec 8, 2022. talisation was RM14.99 billion.
a note onWednesday (Dec 28).

Nonetheless, he also said automotive or-

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Main Market- operations,” Kitacon said in its prospec- Fitch Ratings
bound Kitacon tus, which was launched on Wednesday expects crude
sets IPO price (Dec 28).
at 68 sen to raise palm oil to
“We intend to acquire a piece of land average US$850
RM51.7 mil with an approximate area of three acres a tonne in 2023
to construct a storage and refurbishment
by izzul ikram facility with an approximate built-up area by surin murugiah
theedgemarkets.com of 65,000 sq ft which will be used as a theedgemarkets.com
centralised storage facility to house all our
KUALA LUMPUR (Dec 28): Kumpulan aluminium formwork systems, scaffold- reuters
Kitacon Bhd has set its initial public offer- ings and cabins that are not in use at our
ing (IPO) price at 68 sen per share, rais- construction sites,” the company added. KUALA LUMPUR (Dec 28):
ing RM51.74 million to fund the purchase Malaysian benchmark crude palm
of construction equipment and construc- Based on its enlarged issued share cap- oil (CPO) spot prices will average
tion of a storage and refurbishment facility. ital of 500 million shares and the issue US$850 (RM3,763.80) per tonne
price of 68 sen apiece, Kitacon will have in 2023, significantly lower than
Slated to list on the Main Market of a market capitalisation of RM340 million US$1,175 per tonne in 2022, ac-
Bursa Malaysia on Jan 17, 2023, the IPO upon listing. cording to Fitch Ratings.
entails a public issue of 76.09 million new
shares, as well as an offer for sale of 62.5 “Looking ahead, our goal is to broaden In a statement on Tuesday (Dec
million shares valued at RM42.5 million by our reach and expertise in township con- 27), the rating agency said bench-
way of private placement to bumiputera struction as we aim to secure more con- mark prices have rebounded to
investors approved by the Ministry of In- tracts from new clients while conditioning above US$850 per tonne in the
ternational Trade and Industry. to foster our business relationships with fourth quarter of 2022 (4Q2022),
existing clients. from the end-September level of
Breaking down the share allocation for around US$700 per tonne.
the public issue, 10 million shares will be “Additionally, we will continuously ex-
made available for application by the Malay- plore and adopt progressive construction “We expect prices to strength-
sian public, 8.59 million shares for eligible techniques such as the use of aluminium en further in 1H2023 (the first half
directors employees and persons who have framework system to improve our produc- of 2023) to above the US$900 per
contributed to the success of the group, and tivity and deliver projects within the stipu- tonne level.
57.5 million shares by way of private place- lated time, cost and highest quality stand-
ment to institutional and selected investors. ards,” Kitacon managing director Tan Ah “The outlook for palm oil de-
Kee said. mand growth has been boosted by
Of the proceeds of RM51.74 million Indonesia’s decision in December
expected to be raised from the public is- For the six-month period ended June 2022 to increase the share of palm-
sue, Kitacon has earmarked RM20 million 30, 2022 (6MFY2022), Kitacon posted oil based fuel in diesel.
(38.7%) for the purchase of land and con- a profit after tax (PAT) of RM26.13 mil-
struction of a storage and refurbishment facil- lion, higher than the RM21.34 million in “However, we expect supply to
ity, RM18 million (34.8%) for the purchase the same period a year earlier. This was increase from 2Q2023 and cause
of aluminium formwork systems, and RM6 carried by a higher PAT margin of 11.1% prices to drop in 2H,” it said.
million (11.6%) for scaffolding and cabins. for 6MFY2022 as compared to 8.9%, as
revenue clocked in lower at RM234.73 Fitch said foreign worker avail-
Another RM3.28 million (6.3%) has million versus RM238.64 million. ability in Malaysia is gradually im-
been allocated for working capital, while the proving and that it expects the sit-
remaining RM4.46 million (8.6%) has been Going forward, Tan said the company uation to normalise by mid-2023.
ring-fenced for estimated listing expenses. has an outstanding orderbook of RM853.6
million. “We also expect healthy soil mois-
“We have earmarked RM24 million, ture conditions and lower flood-
representing 46.4% of the gross proceeds Touching on Kitacon’s dividend policy, ing-related disruptions to support
raised from the public issue, for the pur- the company said it intends to distribute output,” it said.
chase of construction equipment, compris- dividends of at least 25% of its annual au-
ing aluminium formwork systems, scaf- dited PAT attributable to its shareholders.
foldings and cabins to cater to our current
construction projects and to facilitate the “This will allow our share-
anticipated growth in our construction holders to participate in
the profits of our group
while leaving adequate
reserves for the future
of our group,” it added.

Kitacon managing director Tan Ah Shahril Basri/The Edge
Kee: Looking ahead, our goal is to
broaden our reach and expertise
in township construction as we
aim to secure more contracts from
new clients while conditioning to
foster our business relationships
with existing clients.

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KUALA LUMPUR (Dec 28):The Min- MOH expands “In addition, customers can also easi-
istry of Health (MOH) has expanded appointment ly change the appointment date through
the appointment system via the MySe- system at primary the MySejahtera application, without
jahtera application at all primary health health facilities having to call the health facility,” she
facilities, as a measure to improve ser- via MySejahtera said.
vice efficiency and client access at the
health facilities. Bernama Dr Zaliha said the appointment sys-
tem also has an automated reminder
Health Minister Dr Zaliha Mustafa KBM, and will be expanded to other ser- function so that customers attend their
said the appointment system aims to as- vices in stages,” she said in a statement appointments according to the time and
sist primary health facilities to arrange on Wednesday (Dec 28). date which has been booked.
service schedules based on their respec-
tive capacities, and to avoid congestion She added that one of the advantag- She added that the MySejahtera ap-
at registration and waiting points due es of this online appointment system is plication appointment system for 2023
to long waiting times. has started, and bookings can be made
that customers can plan their visits to starting on Wednesday.
She added that eight services will be primary health facilities according
included in the appointment system, to their suitability. For emergency, fever or infectious
namely outpatient treatment, Nation- disease cases, people can go straight to
al Health Screening Initiative (NHSI), the primary health facility without hav-
PeKa B40 health screening, pre-employ- ing to make an appointment first.
ment/pre-study health screening,
pre-marital screening, smok- “With the digitalisation of the health
ing cessation services (KBM), service system provided by the MOH, I
and family planning servic- hope it can promote health programmes
es, as well as procedures under primary health facilities to the
such as wound treatment, community more effectively, and make
tube replacement and the national healthcare service system
others. more efficient.

“This service has “MOH is always committed to efforts
commenced at 673 towards the digitalisation of the health
health clinics in system to be in line with the 2021-025
phases, starting
with NHSI screen- MoH Digitalisation Strategic Plan
ing, PeKa B40 and (PSP), under Strategic Core
2 which is Strengthening
New Technologies,”
she said.

KUALA LUMPUR (Dec 28): Plantation Kim Loong from 11.22 sen in 9MFY2022.
group Kim Loong Resources Bhd’s net delivers lower Kim Loong attributed the improve-
profit for the third quarter ended Oct 31, profit in 3Q as
2022 (3QFY2023) dropped by 10.6% revenue softens ments to higher average selling prices
year-on-year as revenue for the quarter of fresh fruit bunches and crude palm
under review softened. by Chester Tay oil (CPO).
theedgemarkets.com
Net profit for 3QFY2023 fell to The group said although the current
RM36.74 million from RM41.09 million high production season may cause pressure
a year ago, while revenue declined 18% to on CPO prices, the commodity should still
RM402.41 million from RM492.8 million, be able to average at around RM4,000 per
the group said in a Bursa Malaysia filing tonne for FY2023.
on Wednesday (Dec 28).
Kim Loong believes that it will still be
Earnings per share (EPS) fell to 3.8 able to benefit from the current CPO price
sen in 3QFY2023 from 4.3 sen last year. level and is poised to achieve a record high
revenue and profit for FY2023.
Nonetheless, Kim Loong declared a
special dividend of five sen per share, high- “Having said that, the group has also
er than the four sen per share it declared faced challenges such as significant surge
in 3QFY2022. Its ex-date is Jan 19, 2023. in cost of fertiliser likely caused by high in-
ternational shipping costs as well as the bel-
For the cumulative nine-month peri- ligerence between Russia and Ukraine, and
od (9MFY2023), Kim Loong’s net prof- higher labour costs as a result of shortage of
it grew 19% to RM125.64 million from foreign workers and the revised minimum
RM105.62 million in the previous corre- wages effective from May 2022,” it said.
sponding period, while revenue rose 22.4%
to RM1.48 billion from RM1.21 billion. Kim Loong shares closed six sen or
3.4% higher at RM1.84, giving it a mar-
EPS grew to 13 sen in 9MFY2023 ket capitalisation of RM1.78 billion.

Ranhill_ESG Award 2T0H22U(RCMS DYKA)_Y27D5mE CmEHMxB1E90Rm2m9W, 2 0 2 2 15 T H E E D G E C E O M O R N I N G B R I E F

EXPANDING
POSSIBILITIES,
OPTIMISING
VALUES

Towards A Net Zero
Carbon World by 2050

Doing our part in addressing climate
change, Ranhill aspires to be at the forefront
towards a net zero carbon world by 2050.
To realise this aspiration, Ranhill has formed
interim milestone goals and supporting
strategies for this journey.

Ranhill Utilities Berhad 201401014973 (1091059-K) www.ranhill.com.my
Bangunan Ranhill SAJ, Jalan Garuda, Larkin, 80350 Johor Bahru, Johor, Malaysia.
Tel: 07 225 5300 | Fax: 07 225 5310 | Email: [email protected]

Ranhill_ESG02 Award2022_190x275_1512.indd 1 15/12/2022 5:19 PM

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Credit market cracks widen as
distressed debt nears US$650 bil

by Neil Callanan, Tasos Vossos bloomberg
& Olivia Raimonde
Bloomberg

LONDON/NEWYORK (Dec 28): Mul- A Legoland hotel next to the Legoland Korea theme park in Chuncheon, South Korea. The default by
tiple stress points are emerging in credit Legoland’s developer was the first major sign of trouble in the local debt market and the shock sent
markets after years of excess, from banks
stuck with piles of buyout debt, a pension short-term credit yields soaring.
blow-up in the UK and real-estate troubles
in China and South Korea. important banks surged 75% in the third GLG, said that “markets seem to be ex-
quarter compared with a year earlier, a pecting a soft landing in the US that may
With cheap money becoming a thing clear indication that they are bracing for not happen.The leveraged loan market is
of the past, those may just be the start. payment issues and defaults. something that we’re monitoring as well.”
Distressed debt in the US alone jumped
more than 300% in 12 months, high-yield Most economists forecast a moderate That market has ballooned in recent
issuance is much more challenging in Eu- slump over the next year. A deep recession, years. There was US$834 million of lev-
rope and leverage ratios have reached a however, could cause significant credit is- eraged loan issuance in the US last year,
record by some measures. sues because the global financial system more than double the rate in 2007 before
is “vastly over-leveraged”, according to the financial crisis hit.
The strains are largely linked to aggres- Paul Singer’s Elliott Management Corp.
sive rate increases by the Federal Reserve As demand grew, so did the risk. In
and central banks around the world, which Right now, the outlook for economic new US loan deals this year, total lever-
have dramatically changed the landscape growth is a concern. Rolling recessions age levels are at a record versus earnings,
for lending, upended credit markets and are likely across the globe next year, with data compiled by Pitchbook LCD show.
pushed economies toward recessions, a the US likely to slip into one in the mid- There’s also a looming earnings recession
scenario that markets have yet to price in. dle of next year, Citigroup Inc economists there, Morgan Stanley strategist Michael
wrote in a note. Wilson has warned.
Globally, almost US$650 billion of
bonds and loans are in distressed territo- The first half of 2023 will be “bumpy” Leveraged loans have seen the “great-
ry, according to data compiled by Bloomb- and “characterised by higher for longer est buildup of excesses or lower-quality
erg. It’s all adding up to the biggest test of volatility”, Sue Trinh, co-head of global credit”, according to UBS strategist Matt
the robustness of corporate credit since macro strategy at Manulife Investment, Mish. Default rates could rise to 9% next
the financial crisis and may be the spark said on Bloomberg Television. “There is a year if the Fed stays on its aggressive mon-
for a wave of defaults. little ways to go in terms of fully pricing etary-policy path, he said. It hasn’t been
in the global recession risk,” she said, add- that high since the financial crisis.
“Many are likely to be slightly more com- ing that financial conditions are likely to Read the full story
placent than they should be,” saidWill Nicoll, improve in the second half of the year.
chief investment officer of Private & Alterna-
tive Assets at M&G.“It is very difficult to see Mike Scott, a portfolio manager at Man
how the default cycle will not run its course,
given the level of interest rates.”

Banks say their wider credit models are
proving robust so far, but they’ve begun
setting aside more money for missed pay-
ments, data compiled by Bloomberg show.

Loan-loss provisions at systematically

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Singapore
tech stock rout
intensifies with

US$110 bil
wipeout

by Ishika Mookerjee
Bloomberg

(Dec 28): Investors betting on Singapore’s count Grab and Sea as its members — by ures to rein in expenses across the tech
two largest internet companies are staring about 20 percentage points this year.The industry. Still, the “recent cost cutting
down hefty losses as rising interest rates underperformance was largely due to Sea’s measures should help both companies
and recession risks extended a tech rout slide and the stock could continue to be weather any storms better”, Freitas said.
that wiped out US$110 billion from their a major driver of the dispersion between
market capitalisation. the indices next year, according to Brian Last week, Sea founder Forrest Li an-
Freitas, an analyst who publishes on in- nounced in an internal memo the com-
E-commerce platform operator Sea Ltd dependent research website Smartkarma. pany was freezing salaries for most staff
plunged 78% this year while ride-hailing and paying out lower bonuses this year,
firm Grab Holdings Ltd has more than The MSCI Singapore Index is down bracing for a worsening global economic
halved. The two companies, both listed 14% this year, with Sea holding the environment in 2023. Grab will also im-
in NewYork, are the largest tech firms in fourth-largest weighting at 8.4% and Grab plement measures including hiring and
Singapore by market value. at about 2%. In contrast, the StraitsTimes salary freeze, Reuters reported this month,
Index — dominated by old-economy sec- citing a staff memo.
They were added to the MSCI Singa- tors such as banks and property — is up
pore Index with much fanfare the past two about 5%. Investors have also punished other
years when there was still appetite for tech loss-making tech stocks in the region with
stocks in the region. But higher interest The outlook for the Singapore-based Indonesia’s GoTo Group hitting record
rates and a slowing economy could spell tech companies remains dim as worries lows over the past month. Meanwhile,
another challenging year ahead as inves- about a recession have triggered layoffs, startups in India have slumped amid val-
tors question their ability to turn a profit. closures of business units and other meas- uation concerns.

The MSCI Singapore gauge has lagged
the Straits Times Index — which doesn’t

LONDON (Dec 28): Ship insurers said Ship insurers The moves by the insurers will make
they are cancelling war risk cover across to cancel war it harder for ship-owners or charterers to
Russia, Ukraine and Belarus, following an cover for Russia, find insurance, increase prices and may
exit from the region by reinsurers in the Ukraine from mean some ships sail uninsured, industry
face of steep losses. sources say.
Jan 1
Reinsurers, who insure the insurers, typ- Providers of reinsurance and retroces-
ically renew their 12-month contracts with by Carolyn Cohn & Jonathan Saul sion include global players Hannover Re,
insurance clients on Jan 1, giving them the Reuters Munich Re and Swiss Re, as well as syn-
first opportunity to scale back exposure dicates in the Lloyd’s of London market.
since the war in Ukraine started, after being able to secure reinsurance for war risk ex- The firms did not immediately respond to
hit this year by losses related to the conflict posure to Russian, Ukrainian or Belarus requests for comment.
and from Hurricane Ian in Florida. territorial risks,” it said.
Reuters reported earlier this month that
See also story on page 22 American P&I said on Dec 23 that it a proposed contract clause being circu-
P&I (protection and indemnity) clubs had received a “notice of cancellation” for lated by reinsurers excluded war-relat-
American,North,UK andWest are no longer the region from its war risk reinsurers and ed claims for both planes and ships in
able to offer war risk cover for liabilities in the was cancelling its own insurance as a result. Ukraine, Russia and Belarus.
region from Jan 1, they said in recent notices
on their websites.The clubs are among the Ships typically have P&I insurance, The Japanese government has urged in-
biggest P&I insurers who cover around 90% which covers third party liability claims surers to take on additional risks to con-
of the world’s ocean going ships. including environmental damage and in- tinue providing marine war insurance for
UK P&I Club said on Dec 23 that the jury. Separate hull and machinery policies liquefied natural gas (LNG) shippers in
issue had arisen because of a lack of avail- cover vessels against physical damage. Russian waters, a senior official at the in-
ability of reinsurance for reinsurers, also dustry ministry said this week.
known as retrocession. Read also: Japan asks its insurers to re-
“The Club’s reinsurers are no longer tain marine war cover for LNG shippers
in Russian waters

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China Covid-19 surge leads nations
to adopt entry restrictions

Bloomberg bloomberg

(Dec 28): Nations across the globe are imple- China is experiencing the travellers from China. “We should be very
menting or considering measures to test or re- world’s largest Covid-19 cautious because if they have a lot of Cov-
strict travellers from China as the country of outbreak, raising concerns id cases, we should be careful about Chi-
1.4 billion abandons its Covid Zero policy and nese visitors coming into the Philippines,”
prepares to reopen borders in early January. among public-health he told reporters.
officials worldwide.
The US is considering new coronavirus Almost 37 million The new US travel precautions are based
precautions for people travelling from China people may have been on consultations with public health experts
amid questions about the transparency of infected with the virus and international partners, officials said.
data China is reporting about the spread of on a single day last week, They said the talks have been prompted in
the virus, according to American officials, according to estimates part by concerns over the lack of genomic
who asked not to be identified discussing from the government’s sequencing data that could help identify the
internal thinking. Japan moved quickly on top health authority. emergence of a new variant.
Tuesday to announce steps requiring a neg-
ative Covid-19 test upon arrival soon after China will start issuing new passports and Health experts have said they’re worried
Beijing said it no longer subject inbound Hong Kong travel permits to mainland res- that the virus’s unabated spread could spawn
travellers to quarantine from Jan 8. idents, the National Immigration Adminis- a dangerous new variant for the first time
tration said in an announcement onWeChat since the Omicron strain caused infections
China is rapidly dismantling its stringent late on Monday. Express checkpoints on the to surge more than a year ago.
pandemic measures in the face of discon- borders with Hong Kong and Macau will re-
tent with Covid Zero rules, triggering out- sume, while applications by foreigners to ex- GISAID, the global consortium that main-
breaks across the country. Uncertainty over tend or renew visas will also re-commence as tains a database for scientists around the world
the true scale of infections without reliable part of the relaxation of measures on Jan 8. to share coronavirus sequences to monitor
official figures is fuelling concern that the mutations, said on Tuesday that China has
rapid spread of the virus could lead to the Taiwan will start testing those arriving ramped up its surveillance amid the ongo-
emergence of new variants. from the Chinese mainland as it anticipates ing outbreak.All the sequences shared by the
tens of thousands of people visiting for the Chinese health authorities suggest the virus-
China is experiencing the world’s largest Chinese New Year later in January. Hong es fuelling the massive nationwide outbreak
Covid-19 outbreak, raising concerns among Kong, which plans to reopen its borders closely resemble the circulating variants found
public-health officials worldwide.Almost 37 with China before mid-January, is relaxing in the rest of the world since July, they added.
million people may have been infected with its entry rules, announcing onWednesday Read also:
the virus on a single day last week, accord- a sweeping set of changes that will scrap Hong Kong ends last Covid-19 curbs in
ing to estimates from the government’s top limits on public gatherings as well as proof bid to revive finance hub
health authority. of vaccination for entry to some venues, Chinese hospitals, funeral homes ‘extremely
and no longer require inbound travellers busy’ as Covid spreads unchecked
Earlier this week, Japanese Prime Min- to take two PCR tests after their arrival. China’s nursing homes bear deadly brunt
ister Fumio Kishida said there are “great of abrupt Covid-19 pivot
discrepancies” in information coming out Philippine Transport Secretary Jaime
of the country, fuelling growing concern. Bautista called for Covid measures on
Japan will require negative Covid-19 test Wednesday, including testing on inbound
results upon arrival for visitors who have
been in mainland China within a seven-day
period, while those who test positive will
have to quarantine for a week.

The US is weighing similar steps, the offi-
cials said, as a way to prevent further spread.
Malaysia has also imposed new tracking and
surveillance measures. India began random
testing of about 2% of passengers arriving
from other countries at all international air-
ports a week ago to minimise the risk of any
new variant entering the country.

Holiday bookings for outbound flights
from mainland China jumped 254% Tues-
day morning from the day before, according
to Trip.com Group Ltd data, underscoring
how the country’s vast population is ready
and hungry for travel. The top five destina-
tions were Singapore, with a 600% increase in
bookings, followed by about 400% for South
Korea, Hong Kong, Japan andThailand.

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bloomberg

The world just doesn’t have enough planes
as travel roars back

(Dec 28): As travel springs back and even by Anurag Kotoky “As a last resort, we can see airlines ex-
China dismantles the last remaining Cov- Bloomberg tending ownership cycles,” said Sunny Xi,
id curbs, one stark truth is beginning to a Singapore-based principal at consultancy
emerge — the world is running desperate- All that means the sky- OliverWyman. Airlines in Asia historically
ly short of planes. high airfares that people plan fleets around 12-year cycles, which is
have complained bitterly lower than in most other regions. But during
With carriers from United Airlines Hold- about over the past few the restructurings that carriers have gone
ings Inc. to Air India Ltd. placing, or looking months are here to stay, through over the past few years, “several
to place, jet orders that number in the hun- and things could get worse airlines have extended existing fleets and
dreds, Boeing Co. and Airbus SE are crowing before they get better. could do so again in the future,” he said.
variously about blockbuster deals. But supply
chain constraints mean those planes won’t According to the founder of Air Lease For Boeing and Airbus, delivering the
be delivered until possibly years down the Corp. and a legendary name in aviation, planes they’ve sold on time is now problem
track — Jefferies LLC estimates there’s an Steve Udvar-Hazy, every jet delivered to number one.
order backlog of 12,720 aircraft currently. one of the world’s largest lessors over the
past two years has been late. Airbus is already seeing airlines reluctant
All that means the sky-high airfares that to place new orders for jets, considering it
people have complained bitterly about over “We haven’t gotten one airplane on time, has a backlog of more than 6,100 planes for
the past few months are here to stay, and whether it’s a 737 Max or a 787 or an A330, the A320neo family that would take eight
things could get worse before they get better. A350,” he said. “And the worst has been years to fill.While it’s long touted its plan
the A321neo.We’ve had delays of as much to ramp up production to as many as 75
“People got used to lower fares during as six or seven months comparing contract A320 jets a month, it’s now pushed back
the pandemic and China’s reopening will delivery month to actual delivery. It’s a com- that goal to the middle of the decade.
make it worse,” Ajay Awtaney, the founder bination of supply chain issues, ramping up
of frequent flier website LiveFromALounge. too quickly and shortage of labor. Production Investors in Boeing,which has announced
com, said. “It’s not just a shortage of planes workers can’t work from home. So it’s been around 850 gross orders this year, including
but also other factors like oil prices.” a real problem.” the mid-December United Airlines deal, are
meanwhile concerned on the slow progress
While one cashed-up airline in a par- The thousands of planes that carriers the US planemaker has made in resolving
ticular jurisdiction may have the financial stored in deserts around the world, unsure its supply chain snarls and speeding work in
wherewithal to bring prices down, that of when demand would return as travel col- its factories, RBC analyst Ken Herbert said.
would likely cause other carriers to stum- lapsed in the wake of Covid and countries
ble,“leading to even higher fares in the long shut borders, are also contributing to the The one bright spot? Employees work-
run,” Awtaney said. shortage. Hundreds haven’t been brought ing in the sector probably won’t be laid-off
back into fleets, either because they now any time soon.
Boeing and Airbus, the planemaking gi- need heavy duty maintenance after so long
ants that largely enjoy a duopoly supplying not being used or because airlines plan on “The order backlogs are big enough
passenger jets, are sold out for their most phasing them out and haven’t bothered slot- that a recession wouldn’t really matter right
popular single-aisle models through until ting them into their schedules again. now,” said George Ferguson, an analyst with
at least 2029. Bloomberg Intelligence.” Manufacturers and
The end result for the flying public is airlines will “hold on to people even if there
Compounding the demand from airlines eye-watering fares, which could rise even are small hiccups.”
as people once again take to the skies with further as business travel returns and more Read also:
a vengeance and carriers look to refresh people are willing to treat themselves as they Chinese demand for travel jumps as
aging fleets are supply chain challenges — holiday abroad for the first time in years. Beijing opens the floodgates
everything from getting the necessary com-
ponents to labor shortages. It could also mean flying in older planes. China to gradually resume applications
for international passenger charter flights
Airbus earlier this month dropped its deliv-
ery goal of 700 jetliners this year citing supply
chain issues and has previously warned that
a jump in energy costs will weigh particularly
hard on smaller, power intensive producers,
such as those making castings and forgings.

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US probes how billion from investors and used FTX funds news In brief
US$372 mil to wage high-risk bets at hedge fund Alame-
vanished in da Research and to cover personal expenses. Solana tumbles again, bringing
crypto token’s 2022 plunge to 94%
hack after FTX Spokespersons for the Department of (Dec 28): Solana, the cryptocurrency
bankruptcy Justice and Manhattan US attorney’s of- backed by fallen crypto mogul
fice declined to comment. Sam Bankman-Fried, tumbled on
by Ava Benny-Morrison Wednesday amid concerns that large
Bloomberg FTX’s new chief executive, John J Ray holders may be about to offload the
III, revealed on Nov. 12 that there had token. Solana dropped as much as
(Dec 28): Federal prosecutors are investi- been “unauthorized access” to FTX assets 12% on Wednesday and was trading
gating an alleged cybercrime that drained a day earlier, the same day the estate had 8.8% lower as of 8.40am in London.
more than US$370 million out of FTX just filed for bankruptcy. Other tokens saw modest declines,
hours after the cryptocurrency exchange with ether slipping 1.3% and bitcoin
filed for bankruptcy last month. The investigation is being led by the DOJ’s down 0.3%. While other so-called
National Cryptocurrency EnforcementTeam, altcoins have suffered steep declines
The Department of Justice has launched a network of prosecutors focused on digital this year, solana has been pummelled
a criminal probe into the stolen assets that asset investigations, a person familiar with by the bankruptcies of Bankman-
is separate from the fraud case against FTX the case said.The team is working with Man- Fried’s crypto exchange FTX and his
co-founder Sam Bankman-Fried, according hattan federal prosecutors in charge of the hedge fund Alameda Research, which
to a person familiar with the case who asked sweeping criminal investigation that led to the had backed the token. The coin has
not to be identified as the investigations are arrest of Bankman-Fried this month. lost 94% of its value in 2022. “General
still ongoing. US authorities have managed confidence in solana’s future has
to freeze some of the stolen funds, the per- The amount siphoned from FTX by taken a hit given its close connection
son confirmed. However the frozen assets the unknown actor was about US$372 with SBF (Sam Bankman-Fried),”
only represent a fraction of the entire loot. million, according to bankruptcy filings. said Martin Lee, data journalist at
Authorities managed to freeze funds on blockchain research firm Nansen.
It is unclear whether the infiltration was certain platforms because those outlets co- DeGods and Y00ts, two of the top
an inside job, as Bankman-Fried suggested operated with law enforcement, the person non-fungible token projects on the
in interviews before his arrest, or the work of confirmed.That is not always the case, es- solana blockchain, were leaving
an opportunistic hacker keen to exploit the pecially with offshore exchanges. the ecosystem and migrating to
vulnerabilities of a crumbling company.The the polygon ecosystem, CoinDesk
conduct could amount to a charge in con- In an analysis of the stolen funds’ path reported on Monday. — Bloomberg
nection with computers fraud, which carries last month, blockchain analytics firm El-
a maximum sentence of 10 years in prison. liptic stated the tokens drained from FTX Crypto exchange Kraken will
wallets were swapped for ETH, another close in Japan after global cuts
The amount stolen is considerably less cryptocurrency, through decentralized ex- (Dec 28): Kraken is closing its
than the billions of dollars Bankman-Fried changes.That was “a tactic commonly seen cryptocurrency exchange services in
is accused of misusing while he was at the in large hacks,” the firm said at the time. Japan as the company restructures
helm of FTX. Authorities say the 30-year- to navigate the fallout from this
old founder, who is currently on bail and liv- On Nov. 20, Chainalysis, another firm, year’s meltdown in digital assets.
ing in California, fraudulently raised US$1.8 tweeted that the stolen funds were on “the Payward Asia Inc., which operates
move” and had been bridged from ETH to Kraken services in Tokyo, will shutter
Bitcoin.The group warned exchanges to be the exchange business on Jan. 31,
on the look out in case the hacker tried to according to an announcement
cash out. Some of the funds had also been Wednesday from the firm in a Japanese
deposited into a mixer, which jumbles dif- government publication. The company
ferent types of cryptocurrencies together to plans to ask clients to transfer their
obfuscate the origins, according to ZachX- crypto token holdings into different
BT, aTwitter user who tracks crypto hacks. wallets or exchange them into fiat
currencies. The implosion last month
FTX customers sue Sam Bankman-Fried of Sam Bankman-Fried’s digital asset
as part of Chapter 11 case empire FTX has added to uncertainty
in crypto after a global slump in coin
by Jef Feeley filing.The group is also asking to have the prices and declining trading activity.
Bloomberg suit certified as a class-action case. Just weeks ago, Kraken said it will cut
30% of its global workforce, or about
(Dec 28): Customers of failed cryptocur- Authorities accuse Bankman-Fried – 1,100 people. That followed similar
rency exchange FTX sued in bankruptcy the exchange’s 30-year-old founder – of moves by rivals including Coinbase
court in hopes of being first in line to recover fraudulently raising US$1.8 billion from Global Inc. and Gemini. — Bloomberg
some of the billions lost in the meltdown of investors and using FTX funds to make
Sam Bankman-Fried’s digital-asset empire. high-risk bets at his hedge fund,Alameda Read also: Japan moves to ease crypto
Research, and cover personal expenses. token listings after FTX collapse
A group of four FTX customers asked He’s facing federal criminal charges of
a bankruptcy judgeTuesday to rule their wire fraud, securities fraud and money
holdings in the Bahamas-based exchange laundering. He’s currently free on bond
belong to them, rather than FTX. They and living with his parents in California.
want the judge to give customers repay- Read the full story
ment priority over other FTX creditors,
according to a Delaware bankruptcy court

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Ukraine fighting intensifies as Russia
seeks to recapture lost cities

KYIV/BAKHMUT, Ukraine (Dec 28): by Dan Peleschuk & Herbert Villarraga retain access toWestern financing for such
Russian forces fired 33 rockets at civil- Reuters crucial aspects of global shipping as insur-
ian targets in the Ukrainian city of Kher- ance must promise not to pay more than
son in the 24 hours to early Wednesday, reuters US$60 per barrel for Russian seaborne oil.
Ukraine’s military said, as fighting intensi-
fied with Russia deploying more tanks and Putin retaliated on That is close to the current price for
armoured vehicles on front lines. Tuesday against Russian oil, but far below the prices at
a price cap on its which Russia was able to sell it for much
The General Staff of Ukraine’s Armed oil imposed by of the past year, when windfall energy prof-
Forces said in its morning report that Rus- its helped it offset the impact of financial
sia forces were attacking populated areas Western countries, sanctions.
on the right bank of the Dnipro River near saying Russia
Kherson with mortars and artillery. The oil ban decree from Putin was pre-
would ban oil sales sented as a direct response to “actions that
Russia denies targeting civilians. Reu- to countries that are unfriendly and contradictory to inter-
ters was unable to immediately verify the abide by the cap national law by the United States and for-
reports. eign states and international organisations
imposed on Dec 5. joining them”.
Russian forces abandoned Kherson last
month in one of Ukraine’s most significant Putin responded by summoning hun- The ban would halt crude oil sales to
gains in the 11-month war, but fighting dreds of thousands of reservists for the countries participating in the price cap
has entered a slow, grinding phase as bit- first time since World War Two. from Feb 1-July 1, 2023. A separate ban
ter winter weather has set in. Russian retaliates over price cap on refined oil products such as gasoline
Putin retaliated onTuesday against a price and diesel would take effect on a date to
“There has been very little change in cap on its oil imposed by Western coun- be set by the government. Putin would
terms of the front line but pressure from tries, saying Russia would ban oil sales to have authority to overrule the measures
the enemy has intensified, both in terms countries that abide by the cap imposed in special cases.
of the numbers of men and the type and on Dec 5.
quantity of equipment,” said Ukrainian Russia is the world’s second largest
military analyst Oleh Zhdanov. The cap, unseen even in the times of oil exporter after Saudi Arabia, and any
the Cold War between the West and the actual disruption to its sales would have
Zhdanov said that fighting had intensi- Soviet Union, is aimed at crippling Rus- far-reaching consequences for global en-
fied with Russia deploying armoured ve- sia’s military efforts in Ukraine — without ergy supplies.
hicles and tanks. upsetting markets by actually blocking its Promoting peace plan
supply of oil. Putin has repeatedly spoken of a desire for
The heaviest fighting has been around peace talks in comments in recent days.
the eastern city of Bakhmut, a bombed-out Under the cap, oil traders who want to
ghost town, which Russia has been trying But his foreign minister Sergei Lav-
for months to storm at huge cost in lives, rov made clear Russia has precondi-
and further north in the cities of Svatove tions, including that Ukraine recognise
and Kreminna, where Ukraine is trying to the conquest by force of around a fifth of
break Russian defensive lines. Ukrainian territory, which Russia says it
has annexed.
In Bakhmut, home to 70,000 people
before the war and now in ruins, Reuters Ukraine says it would never agree to
reporters saw fires burning in a large resi- relinquish land.
dential building. Debris littered the streets
and the windows of most buildings were Zelenskiy has been promoting a
blown out. 10-point peace plan, discussing it with
US President Joe Biden among others,
“Our building is destroyed.There was and urging world leaders to hold a Glob-
a shop in our building, now it’s not there al Peace Summit.
anymore,” said Oleksandr, 85, adding he
was the only remaining resident there. In a late night address on Tuesday,
Zelenskiy said a meeting of the military
Nearby, 73-year-old Pilaheia said she command had “established the steps to
had long got used to the “constant ex- be taken in the near future”.
plosions”.
“We will continue preparing the armed
Russian President Vladimir Putin forces and Ukraine’s security for next year.
launched his invasion of Ukraine on Feb This will be a decisive year.We understand
24, calling it a “special military operation” the risks of winter. We understand what
to “denazify” his neighbour, which he said needs to be done in the spring,” he said.
was a threat to Russia.
Read also: Japan set to import first crude
Russia set out to subdue Ukraine within shipment from Russia since May
days, but its forces were defeated on the
outskirts of the capital, Kyiv, in the spring
and forced to withdraw from other areas
in the autumn.

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Tesla fans
keep buying,
unbowed by stock’s
US$720 bil wipeout

by Esha Dey & Farah Elbahrawy
Bloomberg

(Dec 28): Even the worst year ever forTe- The latest jump will only slightly trim highest fliers during the pandemic.
sla Inc shares has not shaken individual those steep losses.The drubbing has been “Retail investors have bought more Te-
investors’ faith in the electric-vehicle (EV) fuelled by rising interest rates that battered
maker and its billionaire chief executive growth stocks, worries that demand will sla stock over the last six months than they
officer, Elon Musk. erode if there is a recession, and concerns have done overall in the 60 months prior
that Musk’s acquisition ofTwitter will divert to this,”Vanda’s senior strategistViraj Patel
Such retail traders have continued piling his attention and increase his sales of Tes- said. “For institutional investors, it’s a sell-
into the shares, data fromVanda Research la stock to keep the social-media company er’s paradise when you have a buyer that is
showed. In fact, they have been strong buy- afloat.The drop had made it the third-worst clearly not reading the fundamental signals.”
ers every day this month, driving their net performer in the S&P 500 Index this year. Read the full story
purchases to record highs in both Decem- Read also: Tesla lures US$2.8 bil from
ber and the fourth quarter. Yet, for Tesla’s diehard fans among South Korean day traders amid stock drop
retail investors, the risks to EV demand
OnWednesday, they got a small reward or Musk’s preocccupation with Twitter
for their loyalty: Tesla shares jumped as have not been enough to sour them on
much as 6.6% soon after the US stock mar- a stock that became one of Wall Street’s
ket’s open, promising to end a seven-day
losing streak that drove the shares down
30%. That capped a nearly 70% slide in
Tesla shares this year that erased almost
US$720 billion (RM3.18 trillion) from its
stock market capitalisation.

(Dec 28): The asset management arm of BNP defends guidance on Article 9 to mean that all but
BNP Paribas SA said using a different inter- US$20 bil ESG one of its passive, index-tracking funds can
pretation of “sustainable investment” than call as downgrades no longer carry the designation, representing
some of its peers has allowed it to keep the feed controversy about US$16 billion in total. But for rough-
European Union’s top ESG tag attached to ly US$20 billion of actively managed funds,
about US$20 billion worth of funds. by Natasha White the classification won’t be removed, BNP
& Frances Schwartzkopff told Bloomberg.
Firms including BlackRock Inc, Amun-
di SA and Axa Investment Managers have Bloomberg BNP’s asset management unit said it is
reclassified more than US$140 billion of so- aware that its “approach differs” from other
called Article 9 funds — the EU’s highest reuters investment firms operating under EU rules.
environmental, social and governance fund It continues to apply the Article 9 designation
designation — to a less stringent category to funds that hold publicly traded equities,
known as Article 8.The downgrades follow which some fund managers say is incompat-
stricter EU guidance stipulating that Article 9 ible with EU guidance. BNP said its Article
must be reserved for 100% sustainable invest- 9 equity funds are “mostly thematic”.
ments, save for liquidity and hedging needs.
It’s the latest sign that the EU’s Sustain-
But reaching the 100% threshold depends able Finance Disclosure Regulation is feed-
on how asset managers define a sustainable ing industry fragmentation, despite efforts to
investment. And under current EU rules, encourage a more consistent interpretation
that’s “a judgment call left for each market of the bloc’s ESG investing rules by setting
participant to make”, the asset management minimum thresholds.
unit of BNP told Bloomberg in an emailed
response to questions. Europe’s markets watchdog, ESMA, has
asked the EU Commission to provide clear-
Calling an investment sustainable is er guidance on how financial professionals
“much more akin to security valuation than should define a sustainable investment, and
to objective company-level data”, BNP said. the bloc’s executive arm has said it’s now
That paves the way for “possible and natural looking into the matter.
disagreements in the outcome of the analy- Read the full story
sis between financial market participants”.

BNP has interpreted the EU’s stricter

t h u r s d a y d e c e m B ER 2 9 , 2 0 2 2 24 T h e E d g e C E O m o r n i n g b r i e f

world

news In brief

China’s electric car exports surge Link REIT buys Singapore shopping Bloomberg
to record on European demand malls for S$2.16 bil
Link Real Estate Investment Trust chief
(Dec 28): Exports of electric vehicles from SINGAPORE (Dec 28): Link Real Estate executive officer George Hongchoy
China more than doubled in November, Investment Trust (REIT) is buying a portfolio
creating a monthly record, mostly fuelled of Singapore shopping malls for S$2.16 billion the frontrunner to buy the assets from
by European carmakers that farmed (RM7.09 billion) from Mercatus Co-operative Mercatus, a unit of Singapore shopping mall
out the production to the country. in its first foray into the city-state, it said on owner NTUC Enterprise Co-operative, in
Car manufacturers in China exported Wednesday. The deal is for the acquisition what would be Southeast Asia’s biggest
US$3.2 billion worth of electric vehicles of suburban retail assets Jurong Point and real estate transaction of 2022. The assets,
in November, up 165% from a year ago Swing By @ Thomson Plaza, along with a described by analysts as a prized retail
to reach the highest-ever monthly total, 10-year asset and property management portfolio, were first offered about seven
data from the nation’s customs authority service agreement for a third suburban months ago. On completion of the deal, Link
showed. European countries like Belgium mall, AMK Hub, which will remain under the REIT will be among the top 10 retail asset
and England were the biggest importers, ownership of Mercatus, Link REIT said in a owners in Singapore, it said, adding that
taking up nearly 70% of the shipments. stock exchange filing. “This transaction allows the transaction is expected to complete on
Exports of electric passenger vehicles us to build a dedicated team in Singapore and March 31. — Reuters
accounted for more than half of the total provides a base for Link to expand further
car shipments for two months in a row, into other asset classes and strategies in Asia
with November registering a record high Pacific,” Link chief executive officer George
of US$6 billion in exports. The numbers Hongchoy said in a statement. Link said it
come at a time when European carmakers, will fully fund the purchase through cash and
including Volkswagen AG and BMW AG debt, adding that it is in active discussions
aim to make parts and cars inside China with investors and open to bringing in capital
due to limited production capacity at their partners. The announcement by Asia’s biggest
home markets. — Bloomberg REIT confirms a Reuters report in November
that cited sources saying Link REIT was
reuters

Hong Kong November home prices Japan resumes offshore wind power auctions with revised rules
ease to more than five-year low TOKYO (Dec 28): Japan has resumed public auctions for offshore wind power projects
under revised rules aimed at encouraging a wider range of operators and accelerating the
HONG KONG (Dec 28): Hong Kong private development of infrastructure, the industry and land ministries said on Wednesday. The
home prices dropped 3.3% in November government has launched the second major round of auctions to select operators for four new
to the lowest since August 2017, official areas capable of generating 1.8 gigawatts (GW) of offshore wind power. The areas include the
data showed on Wednesday, as its housing 356 megawatt (MW) offshore wind farm in Happo-Noshiro, off Akita prefecture in northern
market — one of the most unaffordable in Japan, which initially was put for auction last December, but the process was suspended in
the world — is set to post the first annual March after complaints from businesses about the lack of clarity around first-round bidding.
drop since 2008. Prices in the Asian Other areas are off Oga-Katagami-Akita (336 MW) and Murakami-Tainai (700 MW) in northern
financial hub were weighed down by a weak Japan and off Saikai (424 MW) in southwestern Japan. The auction runs from Wednesday until
economic outlook and rising mortgage June 30, with the result expected in March 2024, although it could come next December if there
costs, following a serious Covid outbreak at is no scheduling clash between the two projects in Akita using the same port. — Reuters
the beginning of the year. November’s fall
in home prices came after a revised 2.7% Chipmaker Infineon ready to spend billions on acquisitions — CEO
drop in October. Home prices in Hong Kong MUNICH (Dec 28): Infineon is ready to spend several billion euros on the right
have fallen 13.8% in the first 110 months takeover target as it searches for acquisitions to boost growth, chief executive
of the year. Transaction volume for the year officer Jochen Hanebeck said in an interview published on Wednesday. The German
is expected to fall to a decade low but it chipmaker is constantly “on the lookout” for suitable companies, Hanebeck told
could have a small bounce next year after Frankfurter Allgemeine Zeitung (FAZ). “I see it in the range of up to a few billion
authorities lift travelling restrictions with [euros].” The plans come at a time when demand for chips used in everything from
mainland China, property agents said. — smartphones to cars soars and supply chain bottlenecks lasting almost two years
Reuters have plagued global industries from autos to healthcare and telecoms. Infineon, which
reported a 63% jump in segment profit to €3.4 billion (RM16 billion) in the fiscal year
Read the full story that ended Sept 30, has said it sees growth in particular in electromobility, autonomous
driving, renewable energy, data centres, and the so-called Internet of Things. The CEO
would not comment on individual takeover candidates, according to the newspaper.
He said the company could expand its portfolio in several fields, including power
semiconductors, sensors, software, and artificial intelligence. — Reuters

Read the full story

T H U R S D A Y D E C E M B E R 2 9 , 2 0 2 2 25 T H E E D G E C E O M O R N I N G B R I E F

MARKETS

CPO RM 4,130.0052.00 OIL US$ 88.781.81 RM/USD 4.4065 RM/SGD 3.2443 RM/AUD 2.9988 RM/GBP 5.3528 RM/EUR 4.6011

Top 20 active stocks

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

TOP GLOVE CORP BHD 103.90 -0.030 0.895 -65.44 7,166.6

CYPARK RESOURCES BHD 65.60 -0.015 0.425 -53.30 250.3

GLOBAL ORIENTAL BHD 54.10 -0.005 0.260 15.56 118.2

VINVEST CAPITAL HOLDINGS BHD 46.20 0.005 0.195 -57.61 189.0

BERJAYA CORP BHD 45.90 -0.005 0.290 16.00 1,619.2

YEW LEE PACIFIC GROUP BHD 33.80 0.020 0.385 0.00 205.0

VELESTO ENERGY BHD 33.30 0.000 0.155 29.17 1,273.4

CAREPLUS GROUP BHD 30.70 -0.020 0.485 -53.37 277.7

RENEUCO BHD 30.00 0.030 0.335 -20.24 181.8 World equity indices

PUBLIC BANK BHD 28.30 0.000 4.300 3.37 83,466.0

G3 GLOBAL BHD 26.20 -0.005 0.025 -68.75 72.6 CLOSE CHANGE CHANGE CLOSE CHANGE CHANGE

ADVANCE SYNERGY BHD 25.10 0.000 0.175 59.09 442.6 (%) (%)
DOW JONES 33,241.56 37.63 0.11 INDONESIA 6,850.52 -72.51 -1.05
DATAPREP HOLDINGS BHD 24.94 -0.005 0.240 -70.37 161.9

MQ TECHNOLOGY BHD 24.80 0.000 0.050 0.00 62.6 S&P 500 3,829.25 -15.57 -0.40 JAPAN 26,340.50 -107.37 -0.41

HUBLINE BHD 24.30 0.000 0.040 0.00 171.6 NASDAQ 100 10,822.51 -162.94 -1.48 KOREA 2,280.45 -52.34 -2.24

ARTRONIQ BHD 23.80 0.025 0.685 11.38 217.7 FTSE 100 7,533.99 60.98 0.82 PHILIPPINES 6,566.54 1.64 0.02

BORNEO OIL BHD 23.00 0.000 0.025 -16.67 241.9 AUSTRALIA 7,086.41 -21.28 -0.30 SINGAPORE 3,266.97 0.59 0.02

GFM SERVICES BHD 20.14 -0.020 0.220 12.82 151.9 CHINA 3,087.40 -8.17 -0.26 TAIWAN 14,173.10 -155.33 -1.08

WIDAD GROUP BHD 19.4 0.01 0.43 17.81 1207.9 HONG KONG 19,898.91 305.85 1.56 THAILAND 1,647.28 4.12 0.25

LEFORM BHD 19.3 0.005 0.22 0 325.8 INDIA 60,910.28 -17.15 -0.03 VIETNAM 1,015.66 11.09 1.10

Data as compiled on Dec 28, 2022 Source: Bloomberg Data as compiled on Dec 28, 2022 Source: Bloomberg

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

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

PEGASUS HEIGHTS BHD 0.010 100.00 394.0 0.00 108.2 VSOLAR GROUP BHD 0.005 -50.00 1,634.6 -66.67 24.2

PASUKHAS GROUP BHD 0.020 33.33 2,050.5 -20.00 38.1 XOX BHD 0.015 -25.00 1,167.3 -50.00 75.8

QUALITY CONCRETE HOLDINGS 1.320 25.71 14.3 -1.49 76.5 SUNMOW HOLDINGS BHD 0.640 -22.89 10.1 -36.00 149.7

TECHNA-X BHD 0.025 25.00 18,448.4 -66.67 55.4 MLABS SYSTEMS BHD 0.020 -20.00 430.0 -33.33 29.0

GREEN OCEAN CORP BHD 0.025 25.00 5,611.7 -16.67 52.8 AE MULTI HOLDINGS BHD 0.020 -20.00 45.4 -33.33 43.3

IBRACO BHD 0.610 24.49 56.3 3.39 333.1 MMAG HOLDINGS BHD 0.020 -20.00 3,430.9 -73.33 48.4

MARINE & GENERAL BHD 0.100 17.65 14,392.7 81.82 72.4 FOCUS DYNAMICS GROUP BHD 0.020 -20.00 2,316.5 -50.00 127.4

AIRASIA X BHD 0.570 16.33 5,590.3 -12.31 236.4 ALAM MARITIM RESOURCES BHD 0.020 -20.00 2,480.0 -20.00 30.6

BOUSTEAD HEAVY INDUSTRIES 0.415 15.28 3.9 -13.54 103.1 TOYO VENTURES HOLDINGS BHD 0.960 -19.33 4,586.9 -31.91 102.7

BINA PURI HOLDINGS BHD 0.040 14.29 5,171.0 -11.11 83.1 G3 GLOBAL BHD 0.025 -16.67 26,220.1 -68.75 72.6

PROPEL GLOBAL BHD 0.215 13.16 3,923.5 2050.00 129.9 BARAKAH OFFSHORE PETROLEUM 0.025 -16.67 140.5 -68.75 25.1

SAUDEE GROUP BHD 0.045 12.50 570.0 -18.18 51.3 PUC BHD 0.030 -14.29 635.7 -79.31 51.6

SC ESTATE BUILDER BHD 0.050 11.11 341.2 -33.33 53.7 KANGER INTERNATIONAL BHD 0.035 -12.50 14,744.3 -82.50 22.6

SCOMI ENERGY SERVICES BHD 0.050 11.11 116.2 -9.09 23.4 IVORY PROPERTIES GROUP BHD 0.075 -11.76 20.0 -40.00 36.8

ENRA GROUP BHD 0.630 10.53 10.5 -25.88 85.0 S&F CAPITAL BHD 0.075 -11.76 0.8 -16.67 41.3

SEDANIA INNOVATOR BHD 0.270 10.20 6,074.9 -47.57 93.8 JADI IMAGING HOLDINGS BHD 0.080 -11.11 172.3 -23.81 86.1

BERJAYA ASSETS BHD 0.330 10.00 18.1 26.92 844.2 INDUSTRONICS BHD 0.080 -11.11 3687.2 -16.08 39.4

RENEUCO BHD 0.335 9.84 30,007.7 -20.24 181.8 CSH ALLIANCE BHD 0.040 -11.11 4,480.7 -57.89 55.3

MN HOLDINGS BHD 0.280 9.80 15,629.4 0.00 114.5 PINEHILL PACIFIC BHD 0.38 -10.59 85 -26.92 56.9

CABNET HOLDINGS BHD 0.225 9.76 19.8 -13.46 40.2 BSL CORP BHD 0.130 -10.34 11665.9 -87.25 36

Data as compiled on Dec 28, 2022 Source: Bloomberg Data as compiled on Dec 28, 2022 Source: Bloomberg

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

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

FRASER & NEAVE HOLDINGS BHD 21.720 0.320 67.9 -12.21 7,966.4 NESTLE MALAYSIA BHD 138.100 -0.900 17.90 2.91 32,384.5

PETRONAS GAS BHD 17.120 0.320 716.8 -4.33 33,875.9 MALAYSIAN PACIFIC INDUSTRIES 28.920 -0.740 42.30 -41.41 5,752.1

ALLIANZ MALAYSIA BHD 14.200 0.280 19.9 10.42 2,527.2 HEXTARTECHNOLOGIES SOLUTIONS 16.120 -0.580 51.70 542.23 2,073.8

QUALITY CONCRETE HOLDINGS 1.320 0.270 14.3 -1.49 76.5 TOYO VENTURES HOLDINGS BHD 0.960 -0.230 4,586.90 -31.91 102.7

BATU KAWAN BHD 21.900 0.260 2.9 -3.52 8,615.0 GENETEC TECHNOLOGY BHD 2.410 -0.200 8,252.10 -20.60 1,641.9

TELEKOM MALAYSIA BHD 5.400 0.190 4,677.5 -1.82 20,633.5 SUNMOW HOLDINGS BHD 0.640 -0.190 10.10 -36.00 149.7

COMPUTER FORMS MALAYSIA BHD 2.640 0.120 5,884.5 322.40 689.0 PANASONIC MANUFACTURING 22.800 -0.180 2.30 -21.11 1,385.0

IBRACO BHD 0.610 0.120 56.3 3.39 333.1 PETRONAS DAGANGAN BHD 22.000 -0.160 308.00 6.80 21,856.0

K SENG SENG CORP BHD 1.430 0.120 1,013.3 114.50 185.3 HONG LEONG FINANCIAL GROUP 18.460 -0.160 111.60 6.46 21,141.2

BANK ISLAM MALAYSIA BHD 2.730 0.100 2,418.2 -9.00 5,883.9 FAR EAST HOLDINGS BHD 3.700 -0.150 12.70 26.46 2,197.2

CHIN TECK PLANTATIONS BHD 8.560 0.090 1.2 24.28 782.1 KOTRA INDUSTRIES BHD 6.350 -0.140 24.90 100.95 939.7

PMB TECHNOLOGY BHD 4.240 0.090 888.7 72.64 5,349.8 HARTALEGA HOLDINGS BHD 1.700 -0.120 18,688.60 -70.33 5,809.7

AXIATA GROUP BHD 3.100 0.090 4,463.8 -25.48 28,449.4 PPB GROUP BHD 17.480 -0.100 178.50 2.22 24,867.0

CLASSIC SCENIC BHD 1.100 0.080 1,318.8 59.42 272.2 PERUSAHAAN SADUR TIMAH 4.460 -0.090 25.90 13.2 575.8

LYSAGHT GALVANIZED STEEL BHD 1.900 0.080 6.7 2.15 79.0 7-ELEVEN MALAYSIA HOLDINGS 1.850 -0.090 231.30 23.33 2,053.6

MALAYSIA AIRPORTS HOLDINGS 6.550 0.080 1,238.4 9.53 10,867.7 HONG LEONG BANK BHD 20.380 -0.080 1,321.90 9.45 44,178.1

APOLLO FOOD HOLDINGS 3.940 0.080 181.8 8.84 315.2 SAM ENGINEERING & EQUIPMENT 4.720 -0.080 165.60 -15.71 2,556.3

AIRASIA X BHD 0.570 0.080 5,589.8 -12.31 236.4 FRONTKEN CORP BHD 3.020 -0.080 1,138.40 -24.50 4,748.7

HAP SENG CONSOLIDATED BHD 6.430 0.080 94.8 -16.49 16,008.6 KEIN HING INTERNATIONAL BHD 2.050 -0.080 1,124.40 99.03 223.2

NEGRI SEMBILAN OIL PALMS BHD 3.500 0.080 1.2 16.39 245.7 FIAMMA HOLDINGS BHD 1.08 -0.07 2292 80 527.6

Data as compiled on Dec 28, 2022 Source: Bloomberg Data as compiled on Dec 28, 2022 Source: Bloomberg