The Edge 18012023

ceoMorningBrief wednesday, january 18, 2023 Issue 510/2023 www. theedgemarke ts. com

CEOMorningBrief WEDNESDAY, JANUARY 18, 2023 ISSUE 510/2023 www. theedgemarke ts. com US-CHINA TRADE IS CLOSE TO A RECORD, DEFYING TALK OF DECOUPLING p16 HOME: PM: Ministers’ asset declarations must be made in responsible manner unlike ‘the farce in the past’ p2 High Court judges in 1MDB cases elevated to Court of Appeal p12 Azalina: RCI probe into Tommy Thomas’ memoir not for fault finding or to take revenge p13 WORLD: China’s better-than-expected GDP fuels hopes for rebound p17 Fight to regulate crypto at crossroads as Ripple ruling looms p24 Report on Page 2. Anwar: Budget 2023 to consider country’s rising debt, which has hit RM1.5 tril HR Ministry: Applications for foreign worker hiring for 5 critical sectors to be approved in 3 working days Report on Page 3. REUTERS

WEDNESDAY JANUARY 18, 2023 2 THEEDGE CEO MORNING BRIEF published by ( 2 6 6 9 8 0 - X ) tel . 603-77218000 Level 3, Menara KLK, 1 Jalan PJU 7/6, Mutiara Damansara, 47810, Petaling Jaya, Selangor, Malaysia publisher + ceo . Ho Kay Tat editor-in-chief . Kathy Fong chief commercial officer . Sharon Teh chief operating officer . Lim Shiew Yuin editors . Jenny Ng . Tan Choe Choe Lam Jian Wyn to contact editors: [email protected] to advertise: [email protected] the edge ceo morning brief Read from desktop or mobile device. You can print in A4 to read. Set print mode to fit or shrink oversize page. to get on emailing list [email protected] Anwar: Budget 2023 to consider country’s rising debt, which has hit RM1.5 tril (Jan 17): Malaysia seeks to expedite priority projects while plugging leakages in its review of Budget 2023 amid rising sovereign debt levels, according to Prime Minister Datuk Seri Anwar Ibrahim. The government will prioritise ramping up the nation’s participation in technology and green economy and also focus on boosting small and medium enterprises even as it maintains fiscal discipline, Anwar said at a budget dialogue held in the administrative capital of Putrajaya on Tuesday (Jan 17). Debt and liabilities are at about RM1.5 trillion currently, Anwar said, adding that the budget deficit is about 5.8% of gross domestic product in 2022. This year’s fiscal position won’t be comfortable, he said. “The government must accept this fact. It cannot be businesses as usual. We cannot be content,” he said, adding that the maximum debt service is already approaching a level that’s more than what the country can manage. Anwar, who doubles as the finance minister, is set to table the revised Budget 2023 to Parliament on Feb 24 against the backdrop of lingering price pressures at home and increasing risks to the global economy. A reformist who heads a multiracial coalition, Anwar has made protecting low- and middle-income groups from rising prices the top priority of his administration. The previous government presented a tighter budget for 2023 in October, seeking to narrow the fiscal deficit. Parliament was dissolved before lawmakers could approve that spending plan, requiring Anwar to present a fresh budget that supports his coalition government’s aspirations. Bernama BY ANISAH SHUKRY Bloomberg HOME PM: Ministers’ asset declarations must be made in responsible manner unlike ‘the farce in the past’ PUTRAJAYA (Jan 17): Prime Minister Datuk Seri Anwar Ibrahim said the ministers’ asset declarations must be made in a responsible and transparent manner, rather than just a political gimmick. Anwar, who is also the finance minister, said he is in discussions with various agencies, including the Malaysian Anti-Corruption Commission, to make the asset declaration process more transparent. “Declaration of assets was a farce in the past as far as I’m concerned. You can find people having hundreds of millions of ringgit and still declaring RM11 million or RM12 million. So, I think what we need to do is to make sure the parameters are clear.” He said this when asked whether his Cabinet ministers had declared their assets to him, and when it could be made public during the press conference after the 2023 Budget Dialogue Council themed “Developing a Madani Nation” here on Tuesday (Jan 17). Saying it was shocking, Anwar said that some of the declarations did not represent the real wealth of the particular persons after looking at the figures and files. On the status of targeted subsidies, Anwar said follow-up actions had been taken, such as for targeted electricity tariffs for the low- and medium-income groups, as well as for those in the agricultural sector and small and medium industries. “There have been actions [on targeted subsidies]. Even though the previous government had announced an increase [in tariffs], we have cancelled the plan and taken a new approach. “We view seriously the Auditor General’s Report on leakages, and we have identified the problems in order to find the solutions,” he added. The government saw about RM4 billion in leakages from a flood project alone and can save about RM10 billion in the procurement system, Anwar said while ordering agencies to speed up public works approvals. Anwar said his government will retain the ideal items in the budget but will make necessary changes to some to reflect the voters’ wishes. Malaysia is expediting the distribution this quarter of RM1.67 billion in cash aid to the poor, he said on Monday. The government is unlikely to make “drastic revisions” to this year’s growth forecast as it finalises data ahead of the budget presentation, Economy Minister Rafizi Ramli said last week. Malaysia’s economic growth is projected to slow to 4%-5% in 2023, from a more than 7% estimate for last year, the central bank had said. Read also: Govt to focus on service sector in Budget 2023, says PM ‘Budget 2023 not bound to previous bill’ ‘RM10 bil can be saved from leakages in govt procurement system’ Anwar says no new landmarks under his administration

wednesday january 18, 2023 3 The E dge C E O m o rning brief home PUTRAJAYA (Jan 17): Employers who obtain conditional approval from the Ministry of Human Resources to employ foreign workers under the foreign worker employment relaxation plan need to settle the levy payment at the Immigration Department before identifying foreign workers in the source country. Home Minister Datuk Seri Saifuddin Nasution Ismail said it is one of the procedures set to employ foreign workers under the plan, which is effective from January to March 31. “With the conditional approval document, the employer can make a levy payment at the Malaysian Immigration Department. Employers can then identify foreign workers in the source country to undergo health screening as a pre-condition before departure to Malaysia,” he said in a statement on Tuesday (Jan 17). Through the plan, employers are allowed to employ foreign workers from 15 source countries based on the employer’s actual ability and needs and are exempted from going through employment eligibility pre-conditions and quota eligibility. The foreign worker management special meeting chaired by Prime Minister Datuk Seri Anwar Ibrahim on Jan 10, agreed to create a relaxation of employment of foreign workers plan as a measure to meet the needs of foreign workers, in addition to re-implementing the labour recalibration programme. Human Resources Minister V Sivakumar on Tuesday said the government will implement the foreign worker employment relaxation plan for five critical sectors and sub-sectors, namely manufacturing, construction, plantations, agriculture and services (restaurants only). Saifuddin said after the levy payment process, employers need to complete visa with reference applications, single entry visa applications abroad, the immigration process at the international entrance, health screening of foreign workers in the country, and the issuance of temporary employment visit passes. “After the issuance of the temporary employment visit passes, employers will be given a maximum period of six months to comply with pre-conditions that were exempted at the initial stage, such as compliance with labour laws and quota eligibility criteria under the human resources ministry, as well as minimum employment requirements under the regulatory agency,” he said. To ensure compliance with the pre-conditions within the stipulated period, Saifuddin said the Ministry of Home Affairs, in collaboration with the human resources ministry, will strengthen the enforcement of inspectorate in the management of foreign workers. “If the employer violates any of the rules and laws in force, the employer may be subject to action, in accordance with the relevant acts. “This integrated element of inspectorate enforcement is to balance the security element in our interest to increase the national economic growth rate,” he said. Regarding the labour recalibration programme which was reintroduced for a year, Saifuddin said applications for the programme can be made through the website of the Immigration Department at the link https://www.imi.gov.my/. Saifuddin said a visit to the three main source countries, namely Indonesia, Bangladesh and Nepal, will be held in the near future to discuss the safety of foreign workers, as well as to consult the relaxation plan for the employment of foreign workers and the labour recalibration programme. Employers must pay levy before identifying foreign workers, says Saifuddin PUTRAJAYA (Jan 17): The Government is implementing a plan to make it easier and faster to hire foreign workers in five critical sectors and sub-sectors, said Human Resources Minister V Sivakumar. In a statement on Tuesday (Jan 17), he said the relaxation of conditions for migrant worker recruitment covers the manufacturing, construction, plantation, agriculture and services (restaurants only) sectors and sub-sectors. He said employers in these five industries could submit applications for hiring foreign workers through the Foreign Worker Centralised Management System (FWCMS) platform under the FWe Approval Module with immediate effect. “The Ministry of Human Resources will process and approve applications for hiring foreign workers within three working days from the date the applications are received,” he said. Sivakumar said advertisements of vacancies on the MyFutureJobs portal would be exempted with immediate effect. He said employers who had applied via the FWe Approval Module or the eQuota Module before Jan 17 should submit new applications through the FWe Approval HR Ministry: Applications for foreign worker hiring for 5 critical sectors to be approved in 3 working days Module to enable their applications to be considered under the plan. Any further inquiries can be directed to the Migrant Worker Management Division of the Ministry of Human Resources at (03) 8885 2939/2940. The Foreign Worker Management Special Meeting chaired by Prime Minister Datuk Seri Anwar Ibrahim on Jan 10 agreed to create a Relaxation of Employment of Foreign Workers Plan, in addition to reimplementing the Labour Recalibration Programme, as a measure to meet demand for migrant workers. Under the plan, employers will be allowed to hire foreign workers from 15 source countries, without going through the preconditions of employment and quota eligibility. Bernama Bernama The Ministry of Human Resources will process and approve applications for hiring foreign workers within three working days from the date the applications are received.” — HR Minister V Sivakumar

wednesday january 18, 2023 4 The E dge C E O m o rning brief home KUALA LUMPUR (Jan 17): All eyes are on China’s economic recovery in 2023 as the regional countries, including Japan and South Korea, are expected to benefit from improvement in the world’s second-largest economy. According to the Asean+3 Macroeconomic Research Office (Amro) chief economist Hoe Ee Khor, although the potency of China’s economic recovery in 2023 remains uncertain, growing optimism over China’s reopening since last December is expected to provide a counterbalance. “This year, growth in the Asean+3 region is projected to strengthen to 4.3%, as China’s economy is expected to rebound, strongly reflecting the removal of containment measures and the reopening of its economy. Inflation is anticipated to come down to 4.5% in 2023, from the projected 6.3% last year,” Hoe said at Amro’s January update report briefing on Asean+3 economies on Tuesday (Jan 17). According to the National Bureau of Statistics, China’s economy expanded 3% in 2022, a sharp deceleration from the 8.1% recorded in 2021. With recession risks still haunting the US and Europe, China’s economic reopening cannot come at a better time for the region, said Hoe. “China’s stronger economy will provide support for regional activity, while the border reopening will boost intra-regional tourism,” he said. However, he cautioned that if China’s economy slows down due to risk of virulent Covid-19, it could drag economic activities down. Amro forecast Malaysia’s economic growth to slow down to 4% in normalised growth this year, compared to 8.4% predicted for last year. “Oil prices have reverted to almost pre-pandemic levels, reflecting weaker global demand. Prices of key agricultural commodities — although remaining relatively high due to the prolonged war in Ukraine — have fallen from their peaks in 2022,” Hoe said. More virulent Covid-19 variants could emerge Amro’s January update on Asean-3 economies stated that the total Covid-19 caseload in the region had surged four times from 65,000 in mid-October to about 260,000 in late December, driven by new cases in Japan and South Korea. New infections in Hong Kong also rose fourfold over the same period. Although pandemic containment measures were not tightened, the spike in cases could dampen consumer sentiment and consequently, private sector spending in China, Japan and South Korea, the report noted. “There is no uncertainty about going forward. We have taken quite an optimistic view that China will rebound strongly from 2Q onwards. But some people think it may take longer, depending on how infectious the virus is on increasing recurrent infections. This is what happened in Korea and Japan,” said Hoe. He cautioned that more virulent Covid-19 variants could emerge. “If new variants of concern emerge, regional economies will likely reinstate some containment measures, which will inevitably set back the region’s economic recovery,” he added. At the same time, Amro’s report stated that a rapidly deteriorating Covid-19 epidemiological situation in China could see the authorities retightening containment measures to avoid overwhelming the healthcare system. “The return to strict containment measures could potentially cause another wave of production stoppages and port handling delays in China, as happened in Ningbo and Shanghai last year,” the report noted, adding that the recurrence of such supply chain disruptions would constrict intra-regional trade flows and undermine regional growth. The US economy on the other hand is likely to experience a hard landing, it opined. “With inflation in the US still well above the 2% target, the US Federal Reserve may continue to hike interest rates subChina’s economic recovery to buttress Asean+3 region’s growth in 2023 stantially, in an effort to bring it down,” the report stated. Also, sustained high borrowing costs and tighter financial conditions could trigger a sharper-than-expected slowdown in the US economy, said Amro. “The Asean+3 region would be impacted through weaker external demand and tighter financial conditions. A materialisation of this risk, together with a slower-than-anticipated recovery in China, would be a double whammy for the region’s growth outlook.” Asean+3 exports lost momentum in 2H2022 The export value from Asean+3 fell for three consecutive months from July last year— mostly on the back of weakening global demand. In China, stringent policies to eliminate virus outbreaks weighed on factory activity, especially in 4Q 2022. Lower demand from China translated into lower outbound shipments from Japan and Korea. “The global tech downcycle, reflected in lukewarm demand for electronics and electronic products, also weighed on Asean’s trade performance — a trend that is expected to continue in the coming months, given anemic growth in the global economy,” the report noted. Tourism activity in the region to rise further According to the January update report, monthly tourist arrivals picked up further in September 2022, with the number of visitors to Asean reaching almost half of pre-pandemic levels. “Travel and tourism growth in the region has accelerated, thanks to the removal of travel restrictions and the resumption of international flights from 2Q 2022. By 4Q 2022, most economies — including Brunei, Cambodia, Korea, Malaysia, Thailand, and Vietnam — had removed all pandemic-related border measures,” the report highlighted. The expected large influx of Chinese tourists amid the ongoing surge of Covid-19 infections in China has prompted the reintroduction of Covid-19 testing and temperature screening in some regional economies. “As these restrictions are relatively mild, tourism activity in the region is on track to increase further,” the report said. Hoe believes that many Asean countries can expect their tourism industry to possibly bounce back to pre-pandemic levels. by Priyatharisiny Vasu theedgemarkets.com sam fong/the edge

WEDNESDAY JANUARY 18, 2023 5 THEEDGE CEO MORNING BRIEF V arious industry commentators have hailed 5G as a true game changer, one that will transform the way we live and do business. Cloud robotics and autonomous vehicles aside, much of the hype around 5G has centred on mobile connectivity for consumers, with the promise of lightning-fast network speeds at ultra-low latency. Across the world, wireless carriers are racing to roll out 5G, pitching it as the technology that will change lives. Certainly, the 5G hype machine has gone into overdrive. But is the excitement warranted? How will 5G change our world? Powering through the hype What is 5G, really, and what’s so special about it? Simply put, it is a new global standard for cellular technology that is significantly faster, more reliable and more energy-efficient than its 4G iteration. It means users can receive and send information quicker and support multiple devices connected to the network simultaneously. 5G is an accelerator and enabler of transformation at speed. This revolutionary advancement goes beyond just allowing mobile users to enjoy uninterrupted live-streaming services. 5G’s greater potential lies in industrial use cases, with applications in various industry verticals such as manufacturing, oil and gas, healthcare, education, utilities, media and broadcast, and the public sector. Beyond just speed, 5G’s hyperconnectivity delivers massive connectivity power at virtually no lag. This can spell greater efficiencies in how industrial solutions are delivered, by powering data-hungry applications such as the Internet of Things (IoT) and enabling innovations using augmented reality and virtual reality (AR/VR), artificial intelligence (AI), machine learning, machine vision, remote applications and the metaverse. Meanwhile, 5G continues to evolve. Of the three core 5G service areas, it is the enhanced mobile broadband (eMBB) that the general public is most familiar with. The remaining two are mMTC (massive machine-type communications), which is used to connect large numbers of devices, and URLLC (ultra-reliable low latency communications), which supports mission-critical applications that require network reliability and low latency. Slice products for these remaining areas are expected to be ready next year, with live testing of these key technologies already underway. Success stories in the making The main advantage of 4G’s successor is the transformation and competitive edge it can offer businesses. In the field of healthcare, 5G gives service providers the potential to perform tasks that, until now, may seem like a scene out of a sci-fi film. For instance, physicians can provide remote physical therapy via AR/VR, while paramedics in an ambulance who are rushing a patient to the hospital can relay real-time information to waiting medical staff. In 2019, a doctor in the Chinese city of Sanya used 5G-enabled camera systems and remotely operated equipment to perform remote brain surgery on a Parkinson’s patient some 3,050km away in Beijing. This would have been impossible previously because of the video lag and remote-control delay under the 4G network. Meanwhile, in the retail industry, 5G can be used for consumer predictive analytics, enabling retailers to analyse information gathered from consumers and make personalised recommendations. The technology can also be used to potentially generate higher sales by enabling shoppers — and casual browsers — to determine the correct size and fit by trying on products in virtual dressing rooms. can confidently anticipate a clear and positive benefit-cost ratio in a longterm business arrangement. Studies have suggested that 5G could provide benefits that add up to more than four times the initial cost of implementing the technology. Advancing Digital Malaysia As always, the power to differentiate and deliver a better customer experience will depend on the innovative approach taken by each operator when building its 5G connectivity platform and solutions. As a prime enabler of a digital Malaysia, Telekom Malaysia (TM) has taken up the flag to become a human-centred TechCo, providing digital solutions aimed at enhancing the quality of life for communities, businesses and the government. This also applies to 5G initiatives by TM One, TM’s enterprise and government sector business solutions arm. TM One has a unique part to play in unlocking opportunities for its customers, leveraging its experience in next-gen digital services and smart solutions and enabling 5G connectivity for various industry verticals. Boasting an extensive portfolio comprising data centres and cloud services, cybersecurity, connectivity, business services and smart solutions, it has a clear edge over other telecommunications providers. TM One is already working with several organisations to deploy smart solutions powered by 5G. In Putrajaya, Ipoh and Kulai, it has collaborated with Many retailers are already utilising IoT and AI technologies to provide more immersive and engaging experiences to their customers. Adidas embeds near-field communication (NFC) chips in some of its products, enabling shoppers with an NFC-enabled phone to tap it for detailed product information and to see reviews. The next level of iteration, the company said, could be a shoe that sends information to a consumer without the need for an NFC reader or a cable by utilising 5G technology. Power of private 5G Leaders will realise that not all organisations can choose to rely on public 5G networks. Companies with distinct parameters and operating in specific locations that require dedicated 5G connectivity will gravitate towards private networks, which also provide heightened security and addresses privacy concerns. These include, but are not limited to, companies in operation- and production-critical industries such as oil and gas, manufacturing and logistics. Petco Park, a baseball stadium in downtown San Diego, California, recently installed private 5G infrastructure to provide a touchless and more convenient experience for fans. The implementation of the network enables staff to effortlessly process contactless concessions, ticketing, and food, beverage and merchandise transactions via their iPads and point-of-sales (POS) devices. While private 5G does require a high initial investment, organisations local authorities to set up smart surveillance systems that monitor public areas and automatically analyse live footage to detect and alert users of untoward incidents in real time. Such initiatives have also helped to reduce traffic congestion and enhance the overall traffic management and analytics with its smart traffic lights system in Cyberjaya, Ipoh and Kuala Selangor, leading to reduced carbon emissions in these locations. In Kuala Lumpur, it offers its smart parking solution, which allows drivers to check the availability of parking space and book it in real time. It also promotes the use of public transport by informing motorists of park-and-ride facilities. TM One is actively encouraging industry to tap the potential of 5G by collaborating with leading technology and smart solutions partners in an innovation ecosystem. The TM One's 5G Sphere was recently launched to propel enterprise innovation and transformation. 5G’s advance is inevitable, and leaders are stepping up to consider how they will embrace this latest growth catalyst. With TM One’s extensive track record as a leading and trusted digital solutions partner of Malaysia’s enterprise and government sectors, these leaders can rest assured that they are ready for a 5G future. When launching TM One’s 5G Sphere, TM One Executive Vice-President Shazurawati Abd Karim explained that TM One is ready to partner with organisations to boost growth and innovation across verticals such as smart cities, healthcare, education, manufacturing, logistics and transport, oil and gas, and banking, financial services and insurance (BFSI). “Beyond just speed, 5G’s hyperconnectivity means massive connection power at virtually no lag, that can help transform how industrial solutions are delivered. Organisations can use 5G to harness data at the edge and transform their operation and business agility, leaping forward to the next level.” Scan the QR code to explore TM One 5G Solution Beyond the hype, here’s how 5G will herald a new era of innovative growth for Malaysia • Why is 5G critical and timely for Malaysia? • What are the factors that will help leaders plot the right course to fully benefit from 5G as a key growth catalyst? For more information, visit TM One’s dedicated 5G website at www.tmone.com.my/5G. For more insights into TM One's private 5G, visit blog.tm.com.my/private-5g-accelerating-towards-fourth-industrial-revolution

wednesday january 18, 2023 6 The E dge C E O m o rning brief home KUALA LUMPUR (Jan 17): AmBank Research expects the ringgit to close 2023 in the range of 4.20-4.30, given the view that the US dollar has reached its peak. In a 2023 Economic Outlook report, the research firm said the fundamentals of the ringgit are still strong, given the recovery in the tourism sector, which supports its strength. As the tourism sector gains some steam, Malaysia may see a narrower deficit in its services account, which could bode well for the ringgit. “There is much more upside room, as the number of tourists arrived in Malaysia was at 1.24 million during September 2022, while the average number of tourists during the last 10 years into Malaysia was 2.15 million persons,” AmBank Research said. It said the fundamental aspect of the ringgit is also supported by the country’s economic growth, with domestic economic growth in 2023 anticipated to be around 4.5%, meaning the firm does not see any recession in Malaysia, as compared to recessions expected in other major economies. Additionally, inflation in the country is at a manageable level vis-à-vis major economies, while early pre-emptive moves made by Bank Negara Malaysia have ensured that inflations are well contained without jeopardising economic growth. “The final 25-basis-point rate hike expected is unlikely to become a pronounced obstacle for the labour market to continue improving, such as policy normalisation rather than policy tightening here in Malaysia,” it said. In conclusion, while US dollar weakness remains as the baseline view, the research firm does not think the greenback should trade at around or below the 4.0 level, as that would imply an overvaluation of the ringgit. Meanwhile, on ringgit sovereign bond issuance, the firm said against the backdrop of RM99.1 billion in fiscal deficit expected in 2023, and incoming maturity of RM80.9 billion, it sees issuance of Malaysian Government Securities and Government Investment Issues at RM175 billion to RM185 billion in 2023. On the demand side, local institutional funds, which comprise pension, insurance and other institutions, have the capacity to absorb, given a combined fund size exceeding RM1.5 trillion as per estimate. “Support from domestic investors is adequate in our view should interest from foreign funds remain subdued. However, we foresee interest from foreign funds to be restored, given our view that the US dollar has already peaked, and the US Federal Reserve is at the tail end of its rate hike cycle,” it said. Moreover, the firm does not expect any unfavourable outcome as far as Malaysia’s sovereign credit ratings are concerned. “We also noticed that from foreign investors’ perspective, there is no ongoing concern with respect to Malaysia’s sovereign credit quality, as implied by the five-year USD CDS (US dollar credit default swap) spread hovering below its long run average,” it said. For ringgit corporate bond issuance, it is expected to be around RM100 billion to RM110 billion, slightly below the five-year average of RM114 billion. This expectation comes on the back of slower economic momentum anticipated in 2023, but at the same time, financing among corporates in the debt capital market will continue to persist. “Infrastructure financing and regulatory-related funding will continue to support the primary bond market,” it added. More from brokers: MIDF maintains ‘positive’ on consumer sector after cash aid announcement CGS-CIMB sees KLCI at 1,633 points at end-2023 AmBank Research expects ringgit to close 2023 at 4.20-4.30 versus US dollar KUALA LUMPUR (Jan 17): Standard Chartered (StanChart) expects Bank Negara Malaysia (BNM) to increase the overnight policy rate (OPR) by 25 basis points to 3.0% during its monetary policy meeting this coming Thursday, reversing the Covid-induced rate cuts. “Following a likely January hike, we expect a pause in March, before another 25bps hike in May, assuming the government announces some form of subsidy adjustments for the second half of 2023,” said the research house. StanChart said if subsidies are removed for only 20% of RON95 users, headline inflation is estimated to increase by only 0.9% on an annual basis. “We will watch for BNM’s assessment of its monetary policy stance, which may shed light on how close the central bank is to the end of the tightening cycle,” said analysts Edward Lee and Jonathan Koh. They said that Malaysia’s GDP growth for 2022 is expected to come in at 8.8% as inflation was elevated and broad-based, which reflected robust demand inflation despite rising manufacturing and services wages. “Upside inflation risks remain, with broad-based inflationary pressure, rising services costs and still-high import prices,” said Lee and Koh. Bank Negara likely to hike OPR to 3% this Thursday, says Standard Chartered by Sufi Muhamad theedgemarkets.com Bernama Zahid Izzani/The Edge bloomberg

wednesday january 18, 2023 7 The E dge C E O m o rning brief home KUALA LUMPUR (Jan 17): Kumpulan Kitacon Bhd, which gained 10.3% on its maiden trading day, said the group is unlikely to be affected by the challenging property market outlook, where demand could be further depressed by a possible hike in the overnight policy rate in 2023. “We are not really impacted by the property overhang issue. I think the challenge is primarily [those that develop] urban condo serviced apartments,” Kitacon managing director Tan Ah Kee told a press conference on Tuesday (Jan 17), following the group’s listing on the Main Market. The group’s executive director and chief financial officer Lawrence Goh Yin Huat said Kitacon, as a township contractor, would only focus on the construction of low-rise buildings. JF Apex Securities Research wrote in a Jan 4 note that unfavourable market conditions due to the rise in the residential and commercial properties overhang could be among the main risks Kitacon faces, even though the Home Price Index has begun to soften in 2022. It also noted that any further deterioration of property market conditions could negatively impact the group’s revenues. Kitacon, a G7 building construction contractor that build both residential and non-residential buildings, jumped to as high as 99 sen after the opening bell, 31 Top active stock Kitacon gains 10.3% on Main Market debut KUALA LUMPUR (Jan 17): Dialog Group Bhd’s unit signed the Baram Junior Cluster Small Field Asset production sharing contract (PSC) on Tuesday (Jan 17), with Petroliam Nasional Bhd (Petronas) and a unit of Sarawak state-owned Petroleum Sarawak Bhd (Petros). Dialog’s wholly-owned unit Dialog Resources Sdn Bhd will take up a 70% participating interest in the PSC, including the operatorship of the contract, while Petros’s wholly-owned subsidiary Petroleum Sarawak Exploration and Production will take up the remaining 30% stake. The PSC spans 14 years, including a two-year pre-development phase and twoyear development phase. The production phase will continue for the remaining 10 years or up to the expiry of the contract, whichever is earlier, said Dialog in a stock exchange filing. Dialog said the PSC also includes feasibility studies during the pre-development phase, whose scope will encompass 3D seismic data reprocessing, specialised studies, and resource assessment. “Based on the outcome of the studies, a field development and abandonment plan will be developed to determine the feasibility and commerciality of the asset,” it said. Dialog said it will make subsequent announcements once a field development and abandonment plan has achieved a final investment decision. The group said its participation in the PSC is in line with its strategy to continue to expand and diversify across the upstream, midstream, downstream and renewable businesses of the energy sector, thereby increasing opportunities for synergies within the group. “Dialog will remain focused and steadfast in the pursuit of diversification across the energy sector to strategically position the group to weather different economic Dialog Group inks 70:30 PSC with Petros to develop Baram Junior Cluster Small Field Asset and oil price cycles, which is in line with the group’s strategy of generating longterm recurring income,” it said. The group said its strategy is to grow upstream assets and to continue to develop upstream capabilities in oil and gas activities, which include new field development, rejuvenation, and redevelopment of mature oil and gas fields. “This is expected to create a robust platform for generating long-term sustainable revenue from oil and gas production,” it said. “The increased upstream activities will provide further opportunities for Dialog to participate in the provision of services in the value chain of the field development cycle. “The strengthening of the upstream capabilities will lead to an increase in Dialog’s sources of sustainable and recurring income in future, and reinforces Dialog’s position as a leading integrated technical services provider,” it added. Shares of Dialog closed five sen or 2.0% higher at RM2.58 on Tuesday, giving the group a market capitalisation of RM14.57 billion. Read also: DNeX’s Ping inks production sharing deals with Petronas for O&G resources in Terengganu, Sarawak by Chester Tay theedgemarkets.com by Syafiqah Salim theedgemarkets.com continues on Page 8 sen higher than its initial public offering (IPO) price of 68 sen. At 5pm, the stock pared some gains to close at 75 sen — still up 10.3% from its IPO price — giving it a market capitalisation of RM375 million. Being the most actively-traded stock of the day, it saw 156.7 million shares traded. According to the group’s fact sheet, residential building construction services (for landed properties) contributed about RM381.34 million or 84% of the group’s revenue for the financial year ended Dec 31, 2021 (FY2021). This is followed by non-residential building construction services (for commercial buildings) at 15.9%, and other related services such as earthworks, roadworks, hoarding works, rectification works, piling works and infrastructure works (0.1%). The group’s client base includes Sime Darby Bhd, S P Setia Bhd, Tropicana Corp Bhd, and Eco World Development Group Bhd. Kitacon has RM853.6 million worth of unbilled contracts on hand, which it expects to realise within the next two years. It is on track to complete most of its 35 ongoing projects within FY2023, and looks forward to replenishing its order book by securing part of its ongoing tender book worth RM3.5 billion. Kitacon share price on first trading day Source: Bloomberg 8:59am 4:59pm Jan 17, 2023 0 5 10 15 20 59 79 99 Vol (mil) Sen IPO price of 68 sen 75 sen 99 sen

WEDNESDAY JANUARY 18, 2023 8 THEEDGE CEO MORNING BRIEF HOME About 95% of the group’s township developments are located in Klang Valley, with the balance in Johor and Negeri Sembilan. Resilient margins Kitacon’s revenue has declined from RM581.5 million in FY2019 to RM489.6 million in FY2020 and RM455.5 million in FY2021, amid headwinds caused by the Covid-19 pandemic, supply chain disruptions, hike in raw material costs and labour shortage. Profit after tax (PAT) was RM54.8 million in FY2019, before falling to RM39.2 million in FY2020. In FY2021, PAT rose to RM41.8 million, as PAT margin recovered to 9.2% from 8% in 2020; it was 9.4% in 2019. Asked about other challenges facing Kitacon, Tan said, “We are seeing an increase in raw material costs. But we have already adjusted our tenders accordingly. In addition, the problem of labour shortage has not been fully resolved yet”. The group has secured approval for 500 foreign workers to date, comprising workers from Indonesia, Bangladesh, Myanmar and Nepal, Goh said. “As of today, 173 workers have arrived, and the rest are expected to arrive in the second quarter [of this year],” Goh said. Kitacon’s IPO, whose public portion was oversubscribed by 11.46 times, successfully raised a total of 57.1 million for the group, with the issuance of 76.09 million shares at 68 sen each. Of the total proceeds raised, RM24 million will be used to buy construction equipment, while RM20 million will be used to buy land and to build a storage and refurbishment facility. RHB Investment Bank Bhd is the principal adviser, as well as sole underwriter and placement agent for its IPO exercise. KUALA LUMPUR (Jan 17): The brothers and suspended directors of Revenue Group Bhd, Brian Ng Shih Chiow and Dino Ng Shih Fang, claimed they were unaware as to why they were suspended, since they have asked the company’s board to explain the situation, but there has been no response. At a press conference on Tuesday (Jan 17), the siblings, who hold a combined stake of 23.077% in the e-payment solution company, complained about the company’s lack of due process before suspending their executive director functions. Noting that no details were announced to Bursa Malaysia to specify the allegations, they attempted to seek explanations from the company but to no avail. “Until today, we still have not received formal suspension letters from the company on removing our executive director functions; we were informed verbally [instead],” said Brian. “We are getting opinions from our legal adviser at this moment. We will let our legal adviser advise us on the next actions to take,” Dino said. Both also denied any alleged wrongdoings. When asked why they carted away some 30 boxes of documents and items without board clearance, they stressed that they had filed a police report before the action and claimed they were their personal belongings. “In my opinion, as a director, we still have the right to access our stuff. There are no important or jeopardised documents or material to the company. We are very much compliant with the law. “I would like to emphasise that most critical data and documents are already in the cloud. We do not hold anything on that,” Dino said. In a joint statement on Tuesday, they refuted the allegations against them concerning the non-delivery of thermal paper rolls and refusal to transfer the ownership of a vehicle (Toyota Vellfire — BPR 3108) to the company. Meanwhile, the group’s bourse filing on Monday (Jan 16) showed that Brian served a notice of requisition to the group last Friday (Jan 13) to call for an extraordinary general meeting to remove its current board of directors, save for him and Dino. He said the reason to remove nine directors from the board is that the current size of board members is bloated and needs to galvanise the company’s underlying inherent and strong fundamentals. The nine current directors he wants to be removed are: chairman Nor Azzam Abdul Jalil, managing director-cum-alternative chairman Eddie Ng Chee Siong, Ng Chee Keong, Lai Wei Keat, Loo Jo Anne, Jade Lee Gaik Suan, Alwizah Al-Yafii Ahmad Kamal, Ooi Guan Hoe and Tham Sai Cheong. Eddie is also a co-founder of Revenue Group. He has no familial relationship with Brian and Dino.Besides removing the nine, Brian wants to appoint three others in their stead. The three are: Datuk Ammar Shaikh Ng brothers question handling of suspension by Revenue Group’s board, claim it lacked due process Mahmood Naim, Chong Yu Cheang and Adinor Mohamed Yunus as directors of Revenue Group. The resolutions also consist of the cancellation of shares buyback, private placement and diversification to property development. On a separate note, UOB KayHian said in a report that the ongoing tussle between the major shareholders might continue serving as an overhang on the share price as it creates uncertainty towards the group’s strategic focus in the future. The research outfit rated a ‘sell’ call with a target price of 45 sen for Revenue Group, as it reckoned that the company’s share price might continue to underperform in the short term given the uncertainty. It viewed that potential diversification into property investment may further drag the company’s performance given the company’s core business has always been in e-payment since its commencement. Revenue Group’s share price closed nine sen or 12% lower at 66 sen, giving the company a market capitalisation of RM318 million. Read also: Revenue Group initiates legal action against founding Ng brothers Duo refute allegations about nondelivery of goods, vehicle ownership Revenue Group appoints Leong Seng Wui as executive director BY JUSTIN LIM theedgemarkets.com FROM PAGE 7 LOW YEN YEING/THE EDGE Revenue Group Bhd’s founding brothers Brian Ng Shih Chiow (left) and Dino Ng Shih Fang.

wednesday january 18, 2023 9 The E dge C E O m o rning brief home KUALA LUMPUR (Jan 17): MCT Bhd is eyeing a higher sales target of RM848 million for 2023 and aims to return to the black this year with more product launches. In the press statement issued on Tuesday (Jan 17), MCT announced that the group has successfully launched four projects in 2022. “Though 2022 was a challenging year, we managed to launch four projects with a GDV (gross development value) of RM784 million. We managed to secure sales with a GDV of RM540 million, while delivering 1,364 units of properties to our purchasers,” said MCT CEO Teh Heng Chong. Teh is confident that the positive momentum last year will continue in 2023, as the group has planned three launches with a total GDV of RM954 million across the Klang Valley. “We are targeting to achieve RM848 million worth of sales for 2023, a 57% increase from what we achieved in 2022. In addition, we are looking to get back into the black in 2023, underpinned by our robust unbilled sales of RM720 million as at Dec 31, 2022 and contributions from our pipeline property launches,” Teh said. The first launch of 2023 was Casa Embun — the first high-rise residential project in Cybersouth, which is an integrated township development launched by MCT in 2015. Sitting on a 11.2-acre parcel right next to Cybersouth’s clubhouse, Casa Embun offers two blocks of high-rise serviced apartments totalling 987 units and 16 units of commercial units. The development carries a GDV of RM406 million, and unit selling prices start from RM286,800. The serviced apartments come with three unit layouts ranging from 550 sq ft to 1,541 sq ft, all supported by family-friendly facilities such as a multipurpose pavilion for family gatherings with BBQ facilities and outdoor dining, a themed playground, a 25-metre swimming pool and children’s wading pool, a gymnasium overlooking the pool, sports facilities such as a futsal and badminton court, a 0.9km jogging path and EV charging facilities at the carpark. Phase 1 of Casa Embun was opened for sale last weekend (Jan 14). Some 40% of the 482 serviced apartments units in the first phase have been taken-up and all 16 units of the commercial units are sold. Phase 2 is expected to be launched in 4Q2023. Read the full story MCT sets higher sales target of RM848 mil for 2023; aims to return to the black this year KUALA LUMPUR (Jan 17): The Employees Provident Fund ceased to be Astro Malaysia Holdings’ substantial shareholder last Thursday (Jan 12) with only a 4.98% stake or 259.67 million shares after a series of disKUALA LUMPUR (Jan 17): Fraser & Neave Holdings Bhd (F&N) is likely to face another challenging year in 2023 with increasing prices for raw materials on the horizon, potential instability in global supply chains, and the risk of recession is expected to have repercussions across the entire commodity landscape. Although 2023 is expected to be as challenging as last year, chief executive officer Lim Yew Hoe said the group will continue strengthening the company’s cost management measures amidst expected inflation for both commodity goods and raw materials, as well as lingering effects from the Covid-19 pandemic, such as supply chain disruptions and heightened freight costs. “Our overall performance in FY22 (fiscal year ended Sept 30, 2022), especially in the last quarter, has given us ample reasons for optimism,” said Lim in a statement on Tuesday after the group’s annual general meeting (AGM). “In 4QFY22, we began to see improved margins, attributable to the effective strategies we have put in place in response to the challenging marketplace. “We are also beginning to see the results of the unwavering focus on our longterm strategies for growth and efficiency. We have been able to follow through with completing our acquisition and capex plans in 2022. The investments we had made in recent years are bearing fruit today,” he added. F&N’s AGM also saw the retirement of non-independent non-executive director Datuk Jorgen Bornhoft from the board after over nine years of service, who was succeeded by Michael Chye Hin Fah, who is also chief of beer product group at Thai Beverage Pcl (ThaiBev). ThaiBev owns a 28.4% stake in Singapore-listed Fraser and Neave Ltd, which in turn owns 55.5% in F&N. Shares of F&N were trading 1.9% lower at RM24.04 as at 4.17pm, giving it a market capitalisation of RM8.82 billion. EPF ceases to be Astro Malaysia’s substantial shareholder after trimming its stake in past three months F&N sees challenging 2023 amid rising prices, supply chain disruptions, recession risks posals made since early October 2022. The previous relatively significant purchase made by EPF can be traced back to Sept 30 last year, when it bought 10.5 million shares in the pay-TV service provider, raising its shareholdings to 6.33% or 329.89 million shares. Since Sept 30, 2022, EPF has been paring its shareholdings in Astro Malaysia, except for a minor purchase made for three million shares on Dec 30 last year, according to the group’s stock exchange disclosures. Astro Malaysia is undergoing a leadership transition — it announced on Sept 26 last year that chief executive officer Henry Tan Poh Hock will be retiring at the end of this month and will be succeeded by Euan Daryl Smith on Feb 1. Astro Malaysia’s share price has been declining, losing 27% in 2022 to end the year at 65 sen. The counter closed unchanged at 62 sen on Tuesday (Jan 17), giving it a market capitalisation of RM3.23 billion. by Chester Tay theedgemarkets.com by Chester Tay theedgemarkets.com by Rachel Chew theedgemarkets.com

wednesday january 18, 2023 10 The E dge C E O m o rning brief home KUALA LUMPUR (Jan 17): The government needs to provide clear guidelines or system for civil servants to provide information on misconduct in the government administration. Cuepacs president Datuk Adnan Mat said this is to protect civil servants who report the misconduct from facing backlash if it was known to the highest officials or ministers involved. “That’s why it’s important to have clear guidelines or system by the government to enable civil servants to be involved in combating misconduct, especially involving the highest government officials and ministers. “The government needs to ensure the confidentiality of the complainants, as well as the authenticity of the complaints,” he said in a statement on Tuesday (Jan 17). On Monday (Jan 16), Prime Minister Datuk Seri Anwar Ibrahim said that civil servants should criticise actions by the unity government which are found to be in violation of the law. Adnan said it would not be well received by civil servants if there were no clear guidelines on the complaint system, especially regarding the confidentiality of the complainant, the period of investigation, the type of complaint, and transparency of the investigation. He said that under the existing circulars and policies, it is very difficult for civil servants to give constructive criticism to their respective departments or agencies. “If you want to report a minister, it is certainly more difficult because the civil servant himself may receive certain pressure, not only from department heads but also the ministers’ officers,” he said. There are cases whereby civil servants were not promoted, transferred, or had their work schedules disrupted after reporting wrongdoings in government departments and agencies, resulting in many present-day civil servants being afraid to make a report, Adnan added. Call for govt to provide clear guidelines for civil servants to report misconduct KUALA LUMPUR (Jan 17): Malaysian employees can expect to see 3% to 20% salary adjustments, with high-growth industries like technology and manufacturing making more significant changes to their internal salary structures in 2023. In its 2023 Job Market and Salary Trends Report released on Tuesday (Jan 17), human resources solutions agency Randstad Malaysia said recruitment activities are at an all-time high in 2022, as companies double down to expand their workforce with the best talent that Malaysia has to offer. The firm said it expects this trend to continue in 2023, albeit at a slightly slower pace and with a greater focus on specialised roles. It said companies will see success in their hiring strategies only if steps are taken to manage new talent expectations and upskill the local workforce. Randstad said this comes in the backdrop of the slowing global economy, with many global companies cutting back on recruitment activities in light of the recession and record-high inflation to focus on budgetary controls. However, it said the recession could benefit Malaysia’s labour market as companies are likely to move their business units and headcount from Europe to Southeast Asian countries. It said this would drive the creation of new jobs for the local workforce and will also attract more top-tier global talent to relocate to Malaysia. Technology Randstad said technology will be the focal point of growth in Malaysia in the coming years. It said the digital technology industry is projected to contribute 22.6% GDP by 2025. The firm said that correspondingly, digital job vacancies have tripled from 19,000 to 56,000 within a year and 5G technology developments will create 750,000 jobs by 2023 in Malaysia alone. It said these ambitious growth targets will drive demand for talent for both IT development and enterprise. With more jobs than the supply of talent in the market, companies are fiercely competitive in their talent attraction strategies, it said. Randstad said the technology sector records some of the highest pay increments in Malaysia, which is unsustainable in the long run, especially for early-stage start-ups that are in dire need of talent. It said supply chain congestion has slowed manufacturing activities in Malaysia, adding that as it happens, manufacturers are already actively expanding their workforce to fulfil backlogs and new orders. “As more manufacturers build more facilities in Malaysia to meet global demands, we will see more hiring at the senior level for plant managers and heads of production,” it said. Randstad Malaysia country director Fahad Naeem said many global companies are cutting back on recruitment activities because of record-high inflation to focus on budgetary controls. However, some may be shifting their sights to Malaysia as part of their business transformation and restructuring, which will create new job opportunities for the local talent. “Change is crucial to thriving in Asia’s rapidly evolving business landscape. With people serving as the backbone of any organisation’s success, business leaders learn to address employee expectations for more effective talent attraction and management efforts.” Meanwhile, Randstad’s Workmonitor survey revealed that 85% of Malaysians said that it is important for employers to offer learning and development training programmes, but only 36% of respondents said that they received new training in the past year. The same survey highlighted that 61% of employees in Malaysia want to develop their technical skills so that they can be more capable and productive. Read also: Robert Walters: 60% of Malaysian employers may struggle to meet top talents’ salary expectations Malaysian employees can expect 3%-20% salary adjustments in 2023 depending on industry, says Randstad by Surin Murugiah theedgemarkets.com Bernama the edge file photo

WEDNESDAY JANUARY 18, 2023 11 THEEDGE CEO MORNING BRIEF HOME NEWS IN BRIEF Sunway Construction secures RM218.7 mil PV plant construction project in Perak KUALA LUMPUR (Jan 17): Sunway Construction Group Bhd (SunCon) has won a RM218.76 million contract to build a 50 MW photovoltaic plant in Kampar district in Perak. The group’s whollyowned unit, Sunway Construction Sdn Bhd, received the letter of award from Gopeng Bhd’s subsidiary GBS Suria Sdn Bhd, said SunCon in a bourse filing. The contract is considered a related party transaction as Sunway Bhd’s indirect subsidiary Fortuna Gembira Enterpris Sdn Bhd, is the major shareholder of Gopeng. The director and major shareholder of SunCon, Evan Cheah Yean Shin, is also a major shareholder of Sunway. In addition, SunCon director Tan Sri Dr Chew Chee Kin is also a director of Sunway and Gopeng. SunCon said the project is expected to start on Jan 17 and be completed within 20 months. — by Syafiqah Salim SC adds seven entities to Investor Alert List, one a potential clone KUALA LUMPUR (Jan 17): The Securities Commission Malaysia (SC) has updated its Investor Alert List. In an alert on Tuesday, the commission said the following persons/entities were added to the list: Lati Famanah; MBBO; Validus Trader Team; Potential clone entity — Sanyu Sdn Bhd; SPDB; Tabung Ajaib Syariah; and Smart Forex. TThe Investor Alert List contains a list of unauthorised websites, investment products, companies and individuals, including those carrying on or holding themselves as carrying on regulated activities such as managing funds, giving investment advice, conducting financial planning, or dealing in securities, derivatives or private retirement schemes, without a licence from the SC. — by Surin Murugiah KIP REIT 2Q net property income up 5%, proposes 1.45 sen income distribution KUALA LUMPUR (Jan 17): KIP Real Estate Investment Trust’s (KIP REIT) net property income rose 5.35% to RM15.15 million for the second quarter ended Dec 31, 2022 (2QFY2023), from RM14.38 million a year earlier, contributed by 18 days of lease income from its three newly acquired industrial properties in Pulau Indah. Revenue improved 9.1% to RM20.19 million from RM18.51 million, mainly attributed to an increase in occupancy rate supported by mini anchor Jalan Jalan Japan commencing operations in Tampoi and Melaka. The southern region remained as the highest revenue contributor to KIP REIT, with the three malls located in the region reporting a gross revenue of RM9.9 million or 49.2% of the total revenue. KIP REIT has proposed a second income distribution of 1.45 sen per unit for FY2023, to be paid on Feb 21. The overall income available for distribution for the quarter remained steady at RM8.4 million, the REIT said in a statement. Meanwhile, net property income for the first six months of FY2023 rose 5% to RM29.5 million from RM28.05 million for the previous corresponding period. Six-month revenue rose 10.9% to RM39.53 million from RM35.64 million due to the lower base revenue from July to September 2022, on the back of the restriction on activities from the full movement control order. — by Sufi Muhamad Merdeka Award Grant for International Attachment now open for application KUALA LUMPUR (Jan 17): The biennial Merdeka Award Grant for International Attachment, which offers Malaysians between 22 and 35 years old a short-term attachment at any globally top-ranked university, institution or organisation, is open for application until May 1. In a statement, the Merdeka Award Trust said the selected recipients will stand to benefit from full tuition fee, accommodation and travel during the attachment period of up to three months, upon acceptance at the recipient’s institution of choice. The trust, which was established by Petronas and Shell in 2007, is eyeing those currently working on or extending their work in fields such as environmental conservation and biodiversity, education and community work, health science and technology, art and culture, visual and performing arts, heritage and social work, sports, economics and finance. Since its launch in 2012, a total of 24 individuals from public and private universities, as well as organisation leaders have received the grant. — by Hailey Chung Comintel MD Lim Chee Hock steps down, succeeded by new major shareholder Jackson Tan KUALA LUMPUR (Jan 17): Comintel Corp Bhd managing director (MD) Lim Chee Hock has resigned to pursue other interests following his recent divestment of shareholdings in the group to his successor Datuk Jackson Tan Kak Seng (pictured). Lim was made MD of Comintel in January 2021, taking over the post from his elder brother Leng Keng Hok @ Lim Keng Hock, who founded the group and retired from the board in August that year after taking indefinite medical leave since December 2020. Tan, through his private investment vehicle JT Conglomerate Sdn Bhd, emerged as a substantial shareholder of Comintel in December last year with a 37.91% stake after subscribing to 145 million new shares at eight sen apiece via private placement. Tan subsequently acquired another 18.58% stake from the Lim brothers for RM10.66 million or 15 sen each, raising his shareholdings in Comintel to 56.5% as at Dec 6 last year, which triggered a mandatory takeover offer that closed on Jan 6 with no change to his shareholding. Comintel also announced a series of other boardroom changes, including resignations of independent nonexecutive directors Wong Mun Wai and Lee Chai Bee, both “to pursue other interest”; and the appointments of Lee Seng Yong as executive director, and Tan Mai Yean and Teh Soon Hin as independent non-executive director. All boardroom changes are effective immediately. — by Chester Tay THE EDGE FILE PHOTO

WEDNESDAY JANUARY 18, 2023 12 THEEDGE CEO MORNING BRIEF HOME PUTRAJAYA (Jan 17): High Court judges presiding over 1Malaysia Development Bhd (1MDB)-related cases have been elevated to the appellate court on Tuesday. Both judges Datuk Collin Lawrence Sequerah and Mohamed Zaini Mazlan of the Kuala Lumpur High Court (Criminal) division took their oaths before newly-elevated Court of Appeal President Tan Sri Abang Iskandar Abang Hashim, at a ceremony in Putrajaya. Judge Sequerah, 63, is presiding over the ongoing 1Malaysia Development Bhd (1MDB)-Tanore trial where former premier former premier Datuk Seri Najib Razak is facing 25 graft charges — four abuse of power charges and 21 money laundering. The case is set to resume on Jan 27. Another high-profile graft case the judge is presiding over is one involving Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi. Ahmad Zahid is facing 47 charges — 12 criminal breach of trust, 27 money laundering and eight graft charges — in the case involving Yayasan Akalbudi, a charitable foundation he set up. Zahid who is also Bagan Datuk MP was ordered to enter his defence in January last year. The trial is set to continue in April. As for Mohamad Zaini, 56, he found former first lady Datin Seri Rosmah Mansor guilty of all three corruption charges pertaining to a solar hybrid project for 369 rural schools in Sarawak. Last September, the judge sentenced her to 10 years’ jail, with a fine of RM970 million. She could get another 30 years’ jail if she fails to pay the fine. A stay on the sentencing has been granted pending the disposal of her appeal. In his judgement, Mohamad Zaini warned that corruption must be stamped out before becoming a widespread pandemic. He is now presiding over the 1MDB audit report tampering trial involving Najib and former 1MDB president Arul Kanda Kandasamy. The prosecution wrapped up its case in early September and Mohamed Zaini is slated to deliver his decision on Jan 30 on whether to acquit Najib of the abuse of power charge or call for his defence. He will also decide on whether Arul Kanda, who is accused of abetting Najib, is entitled to an indemnity. Four other High Court judges also elevated to COA Four other High Court judges were elevated to the appellate court on Tuesday. High Court judges in 1MDB cases elevated to Court of Appeal PUTRAJAYA (Jan 17): Tan Sri Abang Iskandar Abang Hashim has been appointed to the No 2 top judiciary post in Malaysia — the Court of Appeal (COA) president. Federal Court judge Datuk Mohamad Zabidin Mohd Diah has also been named as the Chief Judge of Malaya, and Federal Court judge Datuk Abdul Rahman Sebli as the Chief Judge of Sabah and Sarawak. The CJ of Malaya and the CJSS are the third and fourth top judiciary posts in the country. Abang Iskandar, 63, was previously the CJSS. In his new post, he replaces Tan Sri Rohana Yusuf, who retired last November. He has been the acting COA president since Rohana’s retirement. He took his oath on Tuesday morning (Jan 17) before the most senior Court of Appeal judge, Datuk Yaacob Md Sam. Zabidin, 65, meanwhile, took his oath before the most senior High Court judge, Datuk Seri Abdul Halim Aman, while Abdul Rahman took his oath before Kuching High Court judge Datuk Azhahari Kamal Ramli. Abang Iskandar and Zabidin were on the five-member bench led by Chief Justice Tun Tengku Maimun Tuan Mat that found former prime minister Datuk Seri Najib Razak guilty of criminal breach of trust, money laundering, and abuse of power over SRC International Sdn Bhd funds. Prior to his new appointment, Abang Iskandar started off as a magistrate in Miri, and acted as a senior federal counsel at the Fisheries Department of the Ministry of Agriculture. He also previously headed the commercial crime unit of the Attorney General’s Chambers. Abang Iskandar is known for allowing news portal Malaysiakini to have a publication licence when he was a High Court judge, after the Home Ministry declined to give the publication a permit. Meanwhile, Zabidin started as a magistrate in Butterworth, and later became a Sessions Court judge in Kuala Lumpur, and an acting Federal Court registrar. During his High Court tenure, he acquitted Datuk Seri Anwar Ibrahim in the Abang Iskandar appointed as COA president, Zabidin made CJ of Malaya, Abdul Rahman CJ of Sabah and Sarawak sodomy II case in 2012. The decision was overturned by the COA, which found the politician guilty, and this was upheld by the Federal Court on Feb 15, 2015. Anwar, who received a royal pardon in May 2018, went on to lead the Pakatan Harapan coalition to form the Unity Government with Barisan Nasional, Gabungan Parti Sarawak, Gabungan Rakyat Sabah and Parti Warisan, following the country’s 15th general election in November 2022, and became the 10th PM of Malaysia. Abdul Rahman, 64, is known as the judge who wrote and ruled that the state or federal government could sue politicians for defamation in the Federal Court. Newly appointed Federal Court judge Datuk Nordin Hassan, on the other hand, was once a deputy public prosecutor and one of those who prosecuted Anwar in his sodomy II trial. He was also previously the prosecution deputy director of the Malaysian Anti-Corruption Commission. Made a High Court judge in 2017, he became a COA judge in 2020. During his time with the High Court, Nordin was known as the judge who dismissed Grab Holdings Inc’s legal challenge — filed with GrabCar Sdn Bhd and MyTeksi Sdn Bhd — against the Malaysia Competition Commission’s (MyCC) proposed RM86.77 million fine against Grab for allegedly abusing its dominant position by imposing restrictive clauses on its drivers relating to third-party advertising. BY HAFIZ YATIM & TARANI PALANI theedgemarkets.com BY TARANI PALANI & HAFIZ YATIM theedgemarkets.com CONTINUES ON PAGE 13

WEDNESDAY JANUARY 18, 2023 13 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Jan 17): The Royal Commission of Inquiry (RCI) into former Attorney General Tan Sri Tommy Thomas’ controversial memoir is not a revenge or fault-finding mission, but rather seen as a better avenue to look into his book, My Story: Justice in the Wilderness, according to Minister in the Prime Minister’s Department Datuk Seri Azalina Othman Said. “This isn’t the royal commission of blaming or punishing, or imprisonment. In my statement [on the RCI] I have mentioned that no one is looking for anyone’s fault,” she said at a press conference after an Institutional Reform Workshop here. When asked if this was an act of revenge from the government: “How can it be revenge if you don’t know what you want to revenge on?” The government decided on forming the RCI after the cabinet received the independent task force’s report on the book. The task force that was chaired by former Sarawak AG Datuk Seri Fong Joo Chung was set up to investigate allegations raised in Thomas’ book, which chronicled the former public prosecutor’s life, including his time in office between June 2018 and Feb 2020. Thomas had previously said he refused to cooperate with the special task force as he wanted to protect the office of the AG, according to news reports in October. “[The special task force’s] establishment and existence was without any legal basis and would set a dangerous precedent, putting at risk the independence of the office of the AG, to the prejudice of [the] incumbent and future AGs of Malaysia,” he reportedly said in a letter to the task force dated Jan 5, 2022. Azalina said the RCI is to look at the bigger picture of the book, as compared to the task force. BY TIMOTHY ACHARIAM theedgemarkets.com “I think the RCI is a much better structure and it gives people a better avenue to defend themselves… The RCI has an ability to enquire and it should enquire. “Let the RCI stand for itself and present the terms of reference to the Yang di-Pertuan Agong,” added Azalina. The previous government under Datuk Seri Ismail Sabri Yaakob said Thomas was believed to have committed four offences, based on investigations into the contents of Thomas’ book. Ismail Sabri said last October that the offences Thomas allegedly committed relate to the Penal Code, the Malaysian Anti-Corruption Commission (MACC) Act and the Official Secrets Act (OSA). “We will leave this to the relevant authorities: if it is [an] MACC case, the MACC will investigate, if it is under the Penal Code, the police will investigate,” he told the press then. He also said the report by the special task force that looked into Thomas’ memoir had been declassified and made available on the website of the legal affairs division of the Prime Minister’s Department. Thomas, meanwhile, is suing the task force. The government has indicated that it would file an application to strike out the suit. Read also: Govt mulls proposed establishment of Ombudsman Malaysia — Azalina They were Datuk Azman Abdullah, 62; Judge Datuk Azimah Omar, 61; Judge Datuk Lim Chong Fong, 61; and Datuk Wong Kian Kheong, 59. In May last year, Azimah dismissed former Attorney General Tan Sri Mohamed Apandi Ali’s RM10 million suit against veteran politician Lim Kit Siang for allegedly defaming Apandi in an 2019 article on the 1MDB scandal. In her ruling, Azimah highlighted that the public absolutely had the interest to know of Mohamed Apandi’s “actions or inactions” which “directly and indirectly” lent a hand in covering up the 1MDB scandal. Lim, who was then Iskandar Puteri MP, merely highlighted this in his article, she said. As for Wong, he was the lawyer who represented political analyst Abdul Razak Baginda in Mongolian Altantuya Shaariibuu’s murder trial. In Oct 2008, The High Court acquitted Razak of abetment charges in her murder. Wong also represented former transport minister Tun Dr Ling Liong Sik in a cheating case over the Port Klang Free Zone (PKFZ) project. FROM PAGE 12 Judge Azman is known for presiding over the High Court case in the former Deputy Public Prosecutor Anthony Kevin Morais murder trial, and the murder of the 23 tahfiz students at Keramat in 2017. Meanwhile, Judge Lim mainly presides in construction cases and is known as one of the judges who sat in the Dhaya Maju LTAT suit against the Transport Minister Datuk Seri Wee Ka Siong, Keretapi Tanah Melayu Bhd and Opus Consultants (M) Sdn Bhd. 11 Judicial Commissioners made High Court judges During the elevation ceremony on Tuesday, 11 Judicial Commissioners (JC) were also confirmed as High Court judges. There were: Datuk Norsharidah Awang, Tee Geok Hock, Datuk Zaleha Rose Pandin, Alice Loke, Datuk Azhar Abdul Hamid, Dr Arik Sanusi Yeop Johari, Bhupindar Singh Gurcharan Singh, Mahazan Mat Taib, Ahmad Murad Abdul Aziz, Liza Chan Sow Keng, and Wan Muhammad Amin Wan Yahya. Five also received their letters of appointment as High Court JCs. They were: Zaharah Hussain, M Sumathi, Dr Suzana Muhamad Said, Evawani Farisyta Mohammad and Dr Wendy Ooi Su Ghee. The newly confirmed High Court judges and JCs took their oaths before newly-elevated Chief Judge of Malaya Datuk Mohamad Zabidin Mohd Diah. Earlier during the ceremony, Tan Sri Abang Iskandar Abang Hashim was elevated as the CoA President. Other notable appointments were Federal Court judge Datuk Mohamad Zabidin Mohd Diah, who was elevated to Chief Judge of Malaya; and Federal Court judge Datuk Abdul Rahman Sebli, who will now assume the role of the Chief Judge of Sabah and Sarawak. Present at the ceremony were Chief Justice Tun Tengku Maimun Tuan Mat, other Federal Court and CoA judges, AG Tan Sri Idrus Harun, and Deputy Minister in the Prime Minister’s Department Ramkarpal Singh. Read also: Fed Court fixes March 13 to hear Najib, Nazifuddin’s income tax appeals Azalina: RCI probe into Tommy Thomas’ memoir not for fault finding or to take revenge

WEDNESDAY JANUARY 18, 2023 14 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Jan 17): Lim Guan Eng’s undersea tunnel graft trial on Tuesday got heated after defence lawyer Gobind Singh Deo became visibly incensed while attempting to obtain a forensic reportfrom the prosecution, and claimed that three of their witnesses had faked their testimonies. Gobind told the Sessions Court here that prosecution witnesses, comprising Consortium Zenith Construction Sdn Bhd (CZBUCG) director Datuk Zarul Ahmad Mohd Zulkifli, former senior vice-president of finance and corporate services Azli Adam, and former senior executive Ibrahim Sahari, had fabricated their testimonies in regard to cash bribes given to Lim. He indicated this while he cross-examined the eighth prosecution witness, Malaysian Anti-Corruption Commission (MACC) forensic officer Wan Mohd Firdaus Wan Yusof. The defence lawyer claimed that the forensic report contains a “complete” transcript of WhatsApp messages between Zarul and businessman G Gnanaraja — two individuals who had allegedly collaborated delivering RM2 million cash bribes to Lim, according to Zarul. Gobind claimed that Whatsapp messages on Aug 17, 2017, which were not provided to the defence but are contained in the report, will show that Zarul’s testimony that the “Chocolate” or RM2 million in cash bribes given to Lim was made up. “The witness (Zarul), who said in this court that the ‘Chocolate’ meant the RM2 million cash for Guan Eng, gave a false testimony,” Gobind said before asking the prosecution to produce the forensic report. However, deputy public prosecution (DPP) Datuk Wan Shaharuddin Wan Ladin objected to Gobind’s request and asked the defence how the report relates to the trial. In response, Gobind alleged that Azli and Ibrahim had also lied in their testimonies, and asked the judge for permission to play two videos in court — purportedly of the pair’s testimony in GnanaraBY IZZUL IKRAM theedgemarkets.com Lim Guan Eng trial: In feud for forensic report, defence claims three prosecution witnesses fabricated testimonies Azli and Ibrahim’s past testimony in Shah Alam with that of Firdaus’, current witness on the stand. Judge Azura concurred and did not allow the defence to play the videos in court. However, Azura did relent and ordered Firdaus to bring a copy of the forensic report for him to refer to while he is cross-examined by the defence. The trial is set to continue on Wednesday with the continued cross-examination of Firdaus. Previously, Zarul had testified that with Gnanaraja’s help, he delivered RM2 million in cash to Lim. Zarul also testified that the pair used terms such as “Chocolate” and “Bigboss” to refer to the sum and Lim respectively when they communicated via WhatsApp. Meanwhile, Azli and Ibrahim had testified that they aided in facilitating the withdrawal of CZBUCG funds for Zarul to make bribe payments to Lim. The pair said Zarul had informed them that the money was being paid to Lim. Lim, who is the MP for Bagan, is accused of using his position as the then Penang chief minister to solicit a 10% cut in the RM6.3 billion undersea tunnel project’s profit from Zarul, in return for aiding the businessman’s company secure the project. He is accused of accepting RM3.3 million in kickbacks from Zarul. The DAP chairman also faces two counts of dishonest misappropriation of property in releasing two plots of state-owned land cumulatively worth RM208.75 million to Ewein Zenith Sdn Bhd and Zenith Urban Development Sdn Bhd — two property companies linked to the controversial undersea tunnel project. Gnanaraja was charged in the Shah Alam Sessions Court in 2019 with deceiving a managing director of Consortium Zenith for RM19 million in relation to the Penang undersea tunnel project. He is alleged to have deceived the managing director sometime between July and August 2017. In October last year, it was revealed that Gnanaraja’s case in Shah Alam had been classified as no further action, despite having 11 witnesses already testified. Gobind claimed that Whatsapp messages on Aug 17, 2017, which were not provided to the defence but are contained in the report, will show that Zarul's testimony that the “Chocolate” or RM2 million in cash bribes given to Lim was made up. ja’s trial in the Shah Alam Sessions Court. Gobind claimed that the pair had testified in Shah Alam that the money was for “someone else”, which purportedly contradicted their testimony in the undersea tunnel graft trial in which they said that Zarul had told them that the money was for Lim. The prosecution also objected to this, questioning the relevance of videos of ZAHID IZZANI/THE EDGE

WEDNESDAY JANUARY 18, 2023 15 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (Jan 17): Three prominent Malaysian women have made the nation proud by being named by Forbes Asia as among 50 women over age 50 from Asia-Pacific who are reaching new heights in their industries and inspiring the region’s next generation. In its Jan 11 edition, the magazine said the list, produced in partnership with Mika Brzezinski and Know Your Value, included the women working across technology, pharmaceuticals, art and politics and beyond, who are proving that success comes at any age. The Malaysians who made the list are: Akademi Sains Malaysia president Professor Datuk Dr Asma Ismail, 64 In March 2022, at the age of 63, Asma was awarded the country’s National Academic Laureate Award. Before that, she served as Universiti Sains Malaysia’s first female vice-chancellor from 2016 to 2019, and she has held a number of prestigious academic positions over her career, including as the chair of educational regulator Malaysian Qualifications Agency, and a scientific adviser to COP15. One of Asma’s most prominent innovations is the typhoid rapid diagnostic Three Malaysian women make it to Forbes’ 50 Over 50: Asia 2023 list KUALA LUMPUR (Jan 17): The decision that four former Bersatu members need not vacate the seats they won on Gabungan Rakyat Sabah (GRS) tickets in the 15th General Election (GE15) is final, said Dewan Rakyat Speaker Datuk Johari Abdul. Johari said he had given all the justifications and reasoning for his decision in a letter dated Jan 16 which he sent to Bersatu. “As I have replied (in letter to Bersatu)... that’s it (the decision), final. It’s up to Bersatu (to refer to the courts). They have the right to do so,” he said in a short reply to Bernama when contacted on Tuesday. Earlier, Bersatu president Tan Sri Muhyiddin Yassin said the party would refer the matter to court as Johari had erred in ruling that the four MPs did not breach the anti-party hopping law and thus did not have to vacate the Papar, Batu Sapi, Ranau and Sipitang seats in Sabah. Muhyiddin, in a statement, said Johari’s decision was based on his interpretation of Clause 10.2.3 of the Bersatu Constitution although, according to Muhyiddin, the Dewan Rakyat Speaker was not empowered to do so and had made a mistake in his interpretation. Muhyiddin said that in the Jan 16 letter, Johari had reasoned that going by this clause the four MPs had become direct members of GRS on Oct 27, 2022 and thus had been automatically stripped of their Bersatu membership then before contesting in GE15 on Nov 19, 2022. However, the Bersatu president said this clause did not apply to the four MPs because they were Bersatu members and the party was a founding component member of GRS at that time. Therefore, GRS could not be classified as “another political party” based on the spirit and essence of that clause, Decision on four Sabah MPs keeping seats is final — Speaker said Muhyiddin, the Pagoh MP. The issue on the status of the four MPs arose after former Sabah Bersatu chief Datuk Seri Hajiji Noor announced on Dec 10 that Sabah Bersatu leaders had unanimously decided to leave the party but would remain under GRS. Following that, Bersatu vice-president Datuk Seri Dr Ronald Kiandee said in a statement on Dec 29 that the party had sent a notice to Johari confirming that “casual vacancies” had occurred for the four seats in accordance with Article 49A (3) of the Federal Constitution. The notice named the four MPs as Datuk Armizan Mohd Ali (Papar), Khairul Firdaus Akbar Khan (Batu Sapi), Datuk Jonathan Yasin (Ranau) and Datuk Matbali Musah (Sipitang). Read also: Speaker erred on four Sabah MPs, Bersatu to refer case to court, says Muhyiddin MB, CM of six states need to discuss dates for state polls — Aminuddin Bernama BY SURIN MURUGIAH theedgemarkets.com test known as Typhidot, which is used worldwide. Author Karina Robles Bahrin, 52 Karina published her first novel in 2022 at age 52. The Accidental Malay won the Epigram Books Fiction Prize 2022, with her becoming the second Malaysian and first female Malaysian to win the award for writers from Southeast Asia. She was awarded RM78,000 and a publishing contract with Epigram Books. She was born and raised in Kuala Lumpur, moving to Langkawi to open a hotel and restaurant, after a 20-year-long career in public relations. The Accidental Malay explores race, religion and womanhood in a satirical tale. Lawyer and human rights advocate Datuk Ambiga Sreenevasan, 66 Born to a prominent Malaysian urologist, Sreenevasan first began her work as a lawyer in England in 1980, and was admitted to the Malaysian Bar two years later. Over the next three decades, her work focused more on commercial and corporate litigation. She rose to prominence in 2007 when, as the president of the Malaysian Bar, she led a march of 2,000 lawyers calling for judicial reform. Her work as an advocate has continued apace. In 2011, she chaired a movement calling for election reform, and she’s been a staunch advocate for Malaysian women’s rights, successfully fighting to amend the country’s constitution to ensure that women’s testimonies in the court hold equal weight to those of men’s. In 2009, Sreenevasan received the US International Women of Courage Award. LOW YEN YEING/THE EDGE

WEDNESDAY JANUARY 18, 2023 16 THEEDGE CEO MORNING BRIEF WORLD (Jan 17): Trade between the US and China is on track to break records, a signal of resilient links between the world’s top economies amid the heated national security rhetoric in Washington and fears of “decoupling.” US government data through November suggest that imports and exports in 2022 will add up to an all-time high, or at least come very close, when the final report comes out Feb 7. Beijing just published its own full-year figures that show record trade of around US$760 billion. There are some caveats. Trade slowed toward the end of the year, as US import demand cooled and China struggled to manage its Covid restrictions. And the trade data isn’t adjusted for inflation, which means higher dollar figures may not translate to more goods shipped. Still, they’re striking numbers in an era when tough-on-China is the closest thing there is to bipartisan consensus in Washington. They illustrate how deeply entwined the two economies remain — even as the US aims to hold back China’s advance and Beijing seeks to counter Washington’s global influence. There have been positive signs recently, including the first face-to-face meeting in November between presidents Joe Biden and Xi Jinping, and plans for more high-level connections, including a visit to China this year by Secretary of State Antony Blinken. But it’s unlikely the two will easily resolve their differences, including Beijing’s stance on Taiwan and the South China Sea, as well as Washington’s aggressive drive to restrict Beijing’s access to key semiconductor technology. A similar calculus likely applies in China too, where export-led economic growth still holds the key to rising living standards and stability. That’s why so much trade has survived the tariffs imposed under President Donald Trump, and their continuation during the Biden administration, which has introduced a raft of its own measures aimed at slowing China’s ability to develop advanced semiconductors. Congress also passed legislation to target what lawmakers say are Chinese human rights abuses, and to bolster US chip manufacturing. ‘Existential threat’ “This is a battle for technology supremacy,” said Mike Burns, a partner at Murray Hill Group, a private-equity and venture-capital firm that focuses on semiconductors. It doesn’t necessarily entail a wider trade rift, he said, because the two countries have different goals — tech leadership for the US, tech autonomy for China — and they’re not mutually exclusive. But there is a risk that they end up on collision course, Burns said: “The US has to be careful that in protecting its leadership, it does not create an existential threat to China by eliminating their ability to move toward semiconductor independence.” The increasing political tension over recent years may have had more impact on fixed-capital flows than on trade. BY DANIEL FLATLEY Bloomberg US companies have slowed new investments in China. For many, “the risk/ reward calculation has tilted against continuing to operate in China,” said Thilo Hanemann, who tracks US-China direct investment for the Rhodium Group. Businesses are concerned about the growth outlook for China itself, as well as the rising geopolitical tensions, he said. “We are definitely seeing evidence that investors are withdrawing.” Rhetoric and reality Some are relocating to places like Vietnam and Mexico, which could help those countries grab a bigger share of the US import pie at China’s expense — although Chinese firms may also find ways to operate in those economies, and keep selling to the US. Meanwhile, Chinese investment in the US has slowed dramatically since a surge in the mid-2010s. Hanemann attributes that peak to a tweak in Chinese law around 2014, which gave domestic firms more freedom to pursue projects abroad, and resulted in a glut of purchases of US companies and real estate. Still, there are plenty of large companies with big capital investments in China that are showing signs of staying for the long haul — and plenty of global firms willing to keep plowing money in. “The rhetoric around decoupling continues to outpace the reality,” said Ali Wyne, a senior analyst at Eurasia Group and author of a recent book on the US-China relationship. The US and China “will find it difficult, if not impossible, to sever their economic linkages entirely.” US-China trade is close to a record, defying talk of decoupling

WEDNESDAY JANUARY 18, 2023 17 THEEDGE CEO MORNING BRIEF WORLD BEIJING/HONG KONG (Jan 17): China’s population fell last year for the first time in six decades, a historic turn that is expected to mark the start of a long period of decline in its citizen numbers with profound implications for its economy and the world. The drop, the worst since 1961, the last year of China’s Great Famine, also lends weight to predictions that India will become the world’s most populous nation this year. China’s population declined by roughly 850,000 to 1.41175 billion at the end of 2022, the country’s National Bureau of Statistics said. Long-term, UN experts see China’s population shrinking by 109 million by 2050, more than triple the decline of their previous forecast in 2019. That’s caused domestic demographers to lament that China will get old before it gets rich, slowing the economy as revenues drop and government debt increases due to soaring health and welfare costs. “China’s demographic and economic outlook is much bleaker than expected. China will have to adjust its social, economic, defense and foreign policies,” said demographer Yi Fuxian. He added that the country’s shrinking labour force and downturn in manufacturing heft would further exacerbate high prices and high inflation in the United States and Europe. The national statistics bureau said in a statement that people should not worry about the decline in population as “overall labour supply still exceeds demand”. China’s birth rate last year was just 6.77 births per 1,000 people, down from a rate of 7.52 births in 2021 and marking the lowest birth rate on record. The death rate, the highest since 1974 during the Cultural Revolution, was 7.37 deaths per 1,000 people, which compares with rate of 7.18 deaths in 2021. Read the full story China’s population falls for first time since 1961, highlights demographic crisis (Jan 17): China’s economy grew at the second slowest pace since the 1970s last year as Covid restrictions hammered activity, though better-than-forecast fourth quarter and December data add to optimism it may be primed for a recovery. Gross domestic product in the world’s second-largest economy grew 3% in 2022, the National Bureau of Statistics said on Tuesday, higher than the median estimate of 2.7% in a Bloomberg survey of economists. For the final quarter, the economy expanded 2.9% from a year earlier, topping economists’ forecasts for 1.6% growth. The CSI 300 gauge of onshore stocks edged lower after initially erasing declines following the data release. Hong Kong’s Hang Seng Index dropped as much as 1.1%. Both the onshore and offshore yuan extended drops to 0.4%. The government had initially set a growth target of “around 5.5%,” although Covid lockdowns and the sudden abandoning of restrictions in December put that GDP goal out of reach. Activity was weak in December, though not as bad as economists had feared. “This is a positive GDP report, and lays a solid ground for the economy to recover in the coming year,” said Zhou Hao, chief economist at Guotai Junan International Holdings. “We believe both consumption and investment will see further improvement in the next few quarters, as the reopening has been gaining momenChina’s betterthan-expected GDP fuels hopes for rebound Bloomberg BY ALBEE ZHANG & FARAH MASTER Reuters tum and the government will add more impetus on infrastructure investment.” China stuck to its Covid zero policy for most of 2022, scarring output across the nation — from financial centre Shanghai and technology hub Shenzhen to iPhone city Zhengzhou and car manufacturing base Jilin. The policy’s rapid dismantling in December caused more economic strain as infections surged, but activity has rebounded in recent weeks where cases have peaked, such as in the capital of Beijing. China’s fourth-quarter GDP should be viewed with both concern and a degree of relief. The overshoot relative to expectations will assuage worries about a crash. The data were still very weak — there’s no hiding the fact that the economy took a very heavy blow from the messy exit from Covid zero and outbreaks that swept across the country in December. Even so, high-frequency indicators suggest that the economy may have have bottomed. We see a solid rebound taking hold in 2Q2023. Economists are now betting on a stronger recovery in coming months as consumer spending picks up and the housing slump eases. The median estimate in a Bloomberg survey of economists is for growth to accelerate to 4.8% this year, although some major banks like Morgan Stanley, Bank of America and Citigroup Inc expect growth to be closer to 5.5% or higher. Read the full story Read also: China stirs hope for global growth in 2023 even as Davos worries Two-thirds of chief economists surveyed by WEF forecast global recession in 2023 REUTERS

WEDNESDAY JANUARY 18, 2023 18 THEEDGE CEO MORNING BRIEF WORLD (Jan 17): Meta Platforms Inc’s market-beating rally of the past few months is failing to convince some skeptics, given how much money the owner of Facebook and Instagram continues to pour into building its version of the metaverse. Meta is the best performer in the S&P 500 Index since the stock’s recent low in November, gaining 54%. The bounce was partially driven by the social-media firm’s announcement that it would slash more than 11,000 jobs, the first major round of layoffs in the company’s history. Yet signs of skepticism abound: Even after the surge, Meta sells for less than half its average price-earnings multiple of the past decade and is one of the cheapest stocks in the Nasdaq 100 Index. Its shares are still 64% below their 2021 record and analysts on average expect the stock to gain a mere 7.7% over the next 12 months. The problem, from the bears’ perspective, is that Meta’s expensive bet on the metaverse — an immersive virtual world — isn’t going away any time soon and will account this year for a fifth of all costs. And its once-lucrative ad business is stagnating because of changes in Apple Inc’s privacy policy that makes it more difficult to target consumers with ads on its devices. The metaverse will keep the company’s expenses “relatively high”, said Louise Dudley, global equities portfolio manager at Federated Hermes. “There’s a lot of execution risk at Meta, making it a less of a bull case compared to the other mega-caps.” For the rally to go further, Meta might need to offer investors more clarity on some things, including its strategy to tackle competition from social media rivals such as Tiktok. Perhaps more crucially, investors will want to see how much of a squeeze Apple’s privacy policy change is continuing to put on ad revenue. In February, Meta estimated Apple’s move would cause a US$10 billion revenue hit for the year. And some Meta bulls hold out hope that chief executive officer Mark Zuckerberg will pare further or give up entirely on his ambitions and spending for the metaverse. His hand may be forced by the looming economic slowdown, which is curbing sales at tech companies. “This pressure on revenue growth may cause some of the tech companies we invest in to stop behaving as though money is free and halt some of the less-promising projects outside their core business,” Terry Smith, manager of the US$28 billion Fundsmith Equity Fund, wrote in a letter to investors this month, specifically citing Meta’s spending. “Without that spend we would own a leading communications and digital advertising business on a single-figure price-earnings ratio,” he wrote. A test will come Feb 1, when Meta reports fourth-quarter earnings. Analysts have slashed their average expectations for adjusted earnings per share by 27% and for revenue by 15% over the last six months, according to Bloomberg data. Still, there are plenty of bulls. JPMorgan Chase & Co’s Doug Anmuth last month upgraded his recommendation on Meta to overweight from neutral, noting cheap valuations. And among investors polled by JPMorgan this month, 41% said they expect Meta to be the top-performing megacap internet stock of 2023. Sylvia Jablonski, chief investment officer of Defiance ETFs, said Meta appeared to have recognised that shifting focus back to its ad business would be strategically better than throwing all of its eggs into the metaverse basket. This is “a welcome balance for investors,” she said. Meta’s 54% stock comeback is still on shaky ground (Jan 17): Asia ex-China bonds recorded net foreign outflows for the first time in six years in 2022, as major central banks hiked their interest rates aggressively to tame inflationary pressures. Overseas investors sold a net US$4.89 billion worth of bonds in India, Indonesia, Malaysia, South Korea and Thailand, marking their first-year net outflow since 2016, data from regulatory and bond market associations showed. Indonesian bonds witnessed outflows of US$8.86 billion last year, the most since at least 2014, while Malaysian and Indian bonds had net sales worth US$2.1 billion and US$2.02 billion. However, the December outflows of US$856 million from the regional bonds were much lesser than prior months, as the US bond yields dropped sharply. Foreigners purchased Indonesian and Thai bonds worth about US$1.7 billion and US$1.04 billion last month, respectively. “Indonesian bonds would be expected to benefit most from the lower US rates-lower US dollar environment, while foreign investors are likely piling into Thailand bonds to pre-position for the full recovery in Chinese tourist arrivals,” said Duncan Tan, a strategist at DBS Bank. However, South Korea faced its biggest monthly foreign capital outflows in almost four years because of an increase in the amount of bonds that matured at the end of the year. Analysts were more hopeful about inflows into the regional bonds in 2023, as concerns about inflation have fallen slightly. US consumer prices fell for the first time in more than 2 -1/2 years in December, which has lifted hopes that the Federal Reserve would likely slow the rate hikes this year. “Conditions look favourable for a return of inflows in 2023,” said Khoon Goh, head of Asia Research at ANZ, in a note. “Fed is close to the end of their hiking cycle, the US dollar has peaked, and importantly, China’s re-opening has fuelled investor optimism towards the region.” Asian bonds in 2022 saw first foreign outflows in six years BY PATTURAJA MURUGABOOPATHY & GAURAV DOGRA Reuters BY SUBRAT PATNAIK Bloomberg BLOOMBERG

WEDNESDAY JANUARY 18, 2023 19 THEEDGE CEO MORNING BRIEF WORLD (Jan 17): Tsinghua Unigroup Co’s new owners are exploring ways to stave off creditors after completing a US$9 billion takeover, including industrial property sales and floating fast-growing business units such as a local rival to Qualcomm Inc. Executives at Unigroup have discussed initial public offerings for three subsidiaries including Unisoc, which develops 5G chips for smartphones and drones, a person familiar with the matter said. That could lead to one of the more prominent debuts in China’s semiconductor industry, where advanced homegrown chips are scarce. Other candidates include cloud arm Unicloud, the person said, asking to remain anonymous discussing private deliberations. Unigroup, until recently affiliated with the prestigious university linked to Xi Jinping, once helped lead China’s efforts to build a world-class semiconductor sector but is now struggling after years of massive spending, including on building domestic giant Yangtze Memory Technologies Co. In 2022, Unigroup endured a contentious restructuring — which former Chairman Zhao Weiguo fought against — before JAC Capital led a consortium that acquired the embattled firm and sold off Yangtze, the nation’s biggest maker of memory chips for servers, PCs and mobile devices. The discussions are in their early stages and there’s no guarantee Unigroup will eventually go ahead with public market floats. But the company needs to raise cash to bring its debt-to-equity ratio below a target of 50% within two years, the person said. While still preliminary, executives haven’t ruled out an overseas listing eventually, the person added. Unigroup may also decide to milk more profit from insurers, after-school tutoring services and real estate companies that it controls, the person said. Unigroup representatives didn’t respond to an email seeking comment. Unigroup, like a broader Chinese chip sector now grappling with escalating US technology export sanctions, is at a cross-roads. Having hived off Yangtze Memory — once the crown jewel of its operations — the company and its new owners haven’t divulged their longer-term plans to regain its footing in the chip industry. An arm of Taiwan’s Foxconn Technology Group — the world’s biggest assembler of iPhones — took a small stake only to be forced by the island’s government to unwind it because of national security concerns. Adding to the uncertainty, Zhao was implicated last year in a wide-ranging probe into corruption in the Chinese chip industry and the fund that spearheads many of the government’s highest-profile investments into its players. At that point, China’s top leadership had grown increasingly frustrated with a years-long failure to develop semiconductors that can replace US circuitry — an embarrassment capped by the US$9 billion rescue of Unigroup. Read the full story Chinese chip giant weighs IPOs, land sales to slash debt burden (Jan 17): Key Apple Inc manufacturing partner Foxconn Technology Group has appointed a new boss for its iPhone assembly business after a tumultuous year in China, highlighting the company’s efforts to ready a new generation of leaders to help it navigate a post-Covid world. Michael Chiang was first identified in his new role at Taiwan-based Foxconn’s annual year-end party on Sunday, succeeding longtime leader Wang Charng-yang as head of the division responsible for iPhone assembly. Chiang was recently promoted to chief of the A business group as Wang steps back to focus on a role on the board, according to people familiar with the matter. The appointment is part of efforts by chairman Young Liu of Foxconn’s flagship unit Hon Hai Precision Industry Co to elevate younger executives to maintain the company’s supply chain leadership in the face of growing competition from Chinese contenders. Foxconn may also face new rivals in India as Apple seeks to further diversify its production footprint following pandemic-related supply snarls and draconian restrictions that wrought havoc on device output in China. Chiang is a longtime Foxconn manager who has helped the company meet the high standards Apple requires, according to one of the people, who asked not to be named discussing internal matters. Wang, who was appointed to Hon Hai’s board in the summer of 2022, remains a director and his departure from the iPhone operations role isn’t connected to the Covid-related output disruptions Foxconn suffered last year, the people said. Chiang has a master’s degree in human resources development from California’s Claremont Graduate University and he joined Foxconn in 1999, according to a wide-ranging interview he did with an insurance broker company that was posted online in June 2021. When Foxconn encountered unprecedented worker unrest at its main iPhone campus in the central Chinese city of ZhengFoxconn replaces iPhone business chief after tumultuous year zhou late last year, Chiang played a pivotal role in communicating with the local government and making sure Apple’s demands would be satisfied, one of the people said. The appointment highlights Foxconn’s efforts in recent years to foster a younger cohort of executives to help the company navigate prolonged tensions between Washington and Beijing, diversify its manufacturing bases outside of China, and fend off Chinese challengers including Luxshare Precision Industry Co. In the 2021 interview, Chiang said he had gone to India three times to help Foxconn build its manufacturing presence in the country. “The biggest challenge we face in India is cultural shock including its caste system. It’s brand new to us,” Chiang said. Chiang also divulged some details of the iPhone assembly process in the interview. “For Chinese Android phones, we only have to assign 100 workers per production line, but we need 1,200 for the iPhone,” Chiang said, underlining Apple’s exacting demands. Liu took over from Foxconn founder Terry Gou and became Hon Hai chairman in 2019. Since then, he has been filling key positions with younger employees by both recruiting seasoned hands externally and promoting staff internally, with Chiang being the most high-profile appointment he has made so far. Read also: Apple introduces faster MacBook Pros and Mac Minis BY DEBBY WU Bloomberg Bloomberg

WEDNESDAY JANUARY 18, 2023 20 THEEDGE CEO MORNING BRIEF WORLD (Jan 17): Morgan Stanley’s revenue narrowly beat analysts’ expectations on a wealth-management record even as the firm’s traders fell short of estimates. Wealth management, where Morgan Stanley benefited from higher net interest income as a result of rising rates, reported revenue of US$6.62 billion, up 5.9% from a year earlier. The New York-based firm’s trading operation posted US$3.6 billion in fourth-quarter revenue, worse than the US$4.07 billion analysts had forecast. The bank, which now leans on its wealth- and asset-management business for more than half its revenue, saw assets in the unit rise from the third quarter to US$4.19 trillion. Morgan Stanley has a longterm goal of US$10 trillion in client assets. “We have seen a healthy start to the year,” Chief Financial Officer Sharon Yeshaya said in an interview. “A lot of it hinges on the economic outlook and whether we have seen a peak in inflation and a policy pivot.” Morgan Stanley executives have been preaching confidence heading into 2023 in the hopes that their business model will avoid getting caught up in any consumer-market strain, while a rebound in asset prices and capital-markets activity would prove a boon for the firm. Morgan Stanley shares rose 1.6% to US$93.14 at 8.27am in early New York trading. They had dropped 7.3% in the 12 months through Friday. Morgan Stanley’s trading results were hurt by equity trading, with a 24% drop in revenue to US$2.18 billion. The trading disappointment added to the troubles suffered by Morgan Stanley’s dealmakers, who struggled throughout the year to recapture their 2021 performance. Revenue from equity underwriting slumped 73% to US$227 million, while debt underwriting declined 38% to US$314 million. Merger bankers also fell behind, with advisory revenue dropping 34%. The bank’s investment-management arm posted US$1.46 billion in revenue, down 17%. The bank has been mindful of cost pressures. In December, it started a fresh round of job cuts that affected about 1,600 employees, or roughly 2% of its total workforce. While the move represents a much smaller action than the firings at rival Goldman Sachs Group Inc, it serves as another indicator of Wall Street’s cautious outlook as a possible US recession looms. Read the full story Read also: Goldman expenses surge on pay, add to pain of shrinking revenue Morgan Stanley beats as wealth management hits record (Jan 17): Britain was in the grip of its worst industrial strife for more than 30 years even before the rail network and postal service ground to a halt over the festive period. Some 467,000 working days were lost to strikes in November, a 10-year high, after a wave of walkouts caused by the most severe cost-of-living crisis in a generation. Days lost over a six-month period reached the highest level since 1989-90. The Office for National Statistics said the transport, communications and education sectors drove the industrial unrest with pay disputes intensifying in December and January. Health service, postal and rail staff have walked out over pay in recent months with more strikes planned — including teachers, bus drivers and civil servants — for the coming weeks. “The period since June has now seen more days lost than in any six months for over 30 years,” said Darren Morgan, the ONS’s director of economic statistics. Over 1.6 million working days have been lost since June. The number of hours worked fell by 1% on the quarter, partially caused by industrial action as the UK government and some other employers struggle to agree pay deals with unions. It came as pay – both including and excluding bonuses – fell by 2.6% year-on-year in real terms after wages failed UK suffers worst strikes in 30 years with more action ahead not currently include the wave of strikes seen across the public sector in December and January.” Prime Minister Rishi Sunak’s government has put forward new legislation to crack down on the strikes as industrial action causes widespread disruption to public services in the UK. The bill plans to introduce minimum service levels in certain sectors to limit the disruption, including rail and ambulances. More train driver strikes were announced by the union Aslef for early February on Tuesday despite growing optimism of a deal with rail workers being neared in recent weeks. “We want constructive dialog with the unions, and the public have had enough of the constant, most unwelcome, and frankly dangerous, disruptions to their lives,” Business Secretary Grant Shapps said Monday. However, that ambition faced fierce criticism from the opposition in Parliament. Angela Rayner, deputy leader of the Labour Party, called the bill, “one of the most indefensible and foolish pieces of legislation to come before this House in modern times.” “They are burning the freedoms for which we fought for centuries and are handing to ministers unprecedented power over the individuals who are targeted,” she said. BY TOM REES Bloomberg BY SRIDHAR NATARAJAN Bloomberg to keep pace with double-digit inflation. “In the context of ongoing cuts to the standard of living, industrial unrest is likely to continue for some time to come,” said Helen Gray, chief economist at the Learning and Work Institute. “The figures do REUTERS

WEDNESDAY JANUARY 18, 2023 21 THEEDGE CEO MORNING BRIEF WORLD (Jan 17): Singapore expects tourist numbers to double from last year to reach 12-14 million visitors in 2023, helped by China’s decision to drop Covid travel restrictions, along with an increase in flight connectivity and capacity. Those tourists could bring in as much as S$21 billion (US$16 billion), compared with about S$14 billion last year, when 6.3 million people visited, Singapore Tourism Board said on Tuesday. The city-state received only 330,000 international visitors in 2021, when curbs on global travel were most intense. “We’re in a very good place to continue to have Chinese arrivals come back strongly,” STB assistant chief executive Juliana Kua said at a briefing. Singapore exceeded its target for visitors last year, driven by arrivals from Indonesia, India and Malaysia. But with its vast population, China is key to a sustained recovery. There are 38 weekly flights from Singapore to China, which is still less than 10% of pre-Covid levels, Kua said, adding that China’s entry rules remain relatively tight. Visitors are also spending more time in Singapore than before the pandemic. The average stay for people who came in April-December — after the government stopped requiring quarantine — was 4.81 days, compared with 3.36 days over the same period in 2019, the tourism board said. “To sustain our growth in 2023 and beyond, we will expand our partnerships, build up a rich year-round calendar of events, ramp up investment in new and refreshed products and experiences, and continue to support industry efforts to build the capabilities they need to meet consumer demands,” said Keith Tan, STB’s chief executive officer. Tourism accounted for about 10% of the Asia Pacific region’s gross domestic product in 2019 and 10% of jobs, according to the World Travel and Tourism Council. “With recession risks still haunting the United States and Europe, China’s economic reopening cannot come at a better time for the region,” said Hoe Ee Khor, chief economist of the Asean+3 Macroeconomic Research Office, or AMRO. “China’s stronger economy will provide support for regional activity, while the border reopening will boost intra-regional tourism.” Read also: Singapore jails ex-Agritrade CFO for 20 years for defrauding over dozen banks Soaring Singapore rents set to climb another 10-15% this year Singapore expects billions more tourism dollars with China boost (Jan 17): Some of the biggest global banks are going short the Singapore dollar, saying the improving regional outlook is damping demand for its haven qualities. Goldman Sachs Group Inc recommends betting that the island’s currency will weaken against the ringgit after the Monetary Authority of Singapore (MAS) signalled it had finished its tightening cycle. Societe Generale SA advocates going short versus the offshore yuan, as China reopens its economy. The bearish tilt for the Singapore dollar is a complete turnaround from last year, when the currency was the only one among its regional peers to strengthen against the greenback. While it has gained another 1.3% versus the dollar in January, it is trailing behind almost all of its other Asian counterparts over the period. “On a relative-value play basis, with the US dollar on a more moderate-to-soft profile and risk aversion taking a back seat, we see room for selected Asian foreign exchange, including the Aussie, baht and yen that were oversold, to play catch-up with the Singapore dollar,” said Christopher Wong, a foreign-exchange strategist at OCBC Bank Singapore. Overbought signals Momentum indicators show the Singapore dollar’s gains have taken it into overbought territory, according to slow stochastics, suggesting that some sort of pullback is likely in the near term. Goldman Sachs initiated its short SinSingapore dollar is new short as Asian haven falls from favour gapore dollar-long ringgit trade last week, saying the most recent MAS statement indicated that policymakers are done tightening, and their outlook already incorporates the increase in the goods and services tax this year, strategists including Danny Suwanapruti in Singapore wrote in a note last Friday (Jan 13). Investors should bet that the Singapore dollar will weaken versus the yuan, as the risk-on optimism surrounding China’s reopening will weigh on Southeast Asia’s haven currency, according to a note last Friday from Societe Generale strategist Vijay Kannan. BY MARCUS WONG Bloomberg BY MICHELLE JAMRISKO & ANURAG KOTOKY Bloomberg BLOOMBERG

WEDNESDAY JANUARY 18, 2023 22 THEEDGE CEO MORNING BRIEF WORLD (Jan 17): China Evergrande Group, the developer at the heart of the nation’s property crisis, has been discussing a restructuring proposal with creditors that includes two options for extending payment deadlines on unsecured offshore debt, people familiar with the matter said. One of the options would entail installment payments on principal of such debt with the time for total repayment reaching as much as 12 years, according to the people, who asked not to be identified as the matter is private. The extension would be done by issuing new notes to replace the old, and the coupons for the new securities would be set in a range with a lower end of about 2%, the people said. The other option asks creditors to swap a part of the debt into shares in the Hong Kong-listed company and its auto and property-management units via the issue of new hybrid securities such as convertible bonds, according to the people. Maturities would also be extended through installment plans, but for a shorter period of time and the coupons would be set at around 6% to 7%. Terms of the proposals could change as the firm seeks feedback from major creditors. Still, the proposals offer the most detailed glimpse yet of Evergrande’s plan for most indebted developer, which first defaulted on dollar bonds more than a year ago and has some US$16.6 billion of outstanding dollar notes. It faces a Mar 20 hearing in Hong Kong courts on a winding-up petition that could result in asset liquidation. A media representative for Evergrande didn’t offer comment when reached by Bloomberg News. The builder held its first in-person meeting with members of an ad hoc group of bondholders in Hong Kong last week. That came after Evergrande recently missed another self-imposed deadline to publicly deliver a preliminary restructuring blueprint by the end of 2022. The company expected to receive support from offshore creditors by the end of February or early March, the company’s legal representative said during a winding-up hearing in late November. The ad-hoc group of creditors also presented a “counteroffer” to Evergrande’s management last week, involving key revisions aimed at sweetening Evergrande’s proposals, according to the people. Creditors had also previously requested that Chairman Hui Ka Yan inject at least US$2 billion of his personal wealth into the builder. Evergrande is said to propose two offshore restructuring options (Jan 17): Chinese financial regulators and the nation’s biggest bad-debt management companies plan to offer as much as 160 billion yuan (US$24 billion) of refinancing support to high-quality developers in the first quarter, according to people familiar with the matter. Under the plan first announced on Friday with little details, the People’s Bank of China will channel 80 billion yuan of loans through China Huarong Asset Management Co and its peers to selected developers at an annual rate of 1.75%, the people said, asking not to be identified because the matter is private. The distressed debt firms are encouraged to match the amount from their own coffers, the people added. The PBOC, China Huarong and China Cinda Asset Management Co didn’t immediately reply to requests for comment. The loans add to a clutch of measures issued since November to arrest the slump in China’s property market. Regulators are ramping up financial support to systemically important developers, while lowering mortgage rates and down payment requirements to boost demand. Yet those measures are being stifled by large-scale coronavirus outbreaks after the government suddenly abandoned its Covid zero policy. Confidence among businesses and consumers has yet to recover to pre-pandemic levels. Newhome prices in 70 Chinese cities fell for a 16th month in December, official figures showed Monday. Instead of issuing a full-on bailout, the government is now offering support to the stronger companies in the real estate market. The Financial Stability and Development Committee told banking and securities regulators to shore up the balance sheets of systemically important developers that have no auditing issues and no records of major violations, people familiar with the matter said earlier this month. Industrial & Commercial Bank of China Ltd, the nation’s largest lender, on Monday agreed to offer 240 billion yuan of financing to 16 developers including CIFI Holdings Group, according to China baddebt firms plan property aid of up to US$24 bil a statement from the lender’s Shanghai branch. China Construction Bank Corp, the second largest, also said on Monday it plans to set up a 10 billion yuan fund with China Vanke Co to focus on rental housing projects. For the AMCs, by taking on the savior role with state funding they could ease woes of a sector they have heavy exposure to. Aggressive lending to embattled developers during the industry’s boom years has beset the US$730 billion bad-debt managers with significant credit losses, sending their bonds tumbling and forcing Beijing to weigh a preliminary plan to restructure the sector, people familiar said in August. The four big managers — Huarong, Cinda, China Great Wall Asset Management Co, and China Orient Asset Management Co — have lent money to the majority of the country’s top 50 developers over the years. Cinda and Huarong alone had more than 200 billion yuan in exposure, and property accounted for nearly 50% of their acquisition and restructuring businesses as of the end of June, according to their filings. Read also: China aims to stabilise housing prices, strictly curb speculation Bloomberg BY JACKIE CAI Bloomberg its restructuring, which would be one of China’s biggest ever with implications for banks, trust firms and millions of home owners. The clock is ticking for the world’s

wednesday january 18, 2023 23 The E dge C E O m o rning brief world news In brie f Nomura cuts 18 Asia banking jobs as dealmaking slows, say sources SYDNEY (Jan 17): Nomura Holdings Inc has cut 18 Asian banking jobs, most of them China-focused investment roles, after a sharp slowdown in dealmaking activity, according to two sources with direct knowledge of the matter. Japan’s top brokerage and investment bank last week laid off bankers in Hong Kong, Singapore, Malaysia and Taiwan, said the sources, declining to be identified as they were not authorised to speak to media. A separate source with knowledge of the matter said the cuts were not limited Asia, but would also affect Nomura’s international investment banking operations across the United States, Europe, the Middle East and Africa. The source gave no further details. Nomura in a statement acknowledged headcount reductions but did not comment on locations or the number of individuals affected. The bank, which has long struggled to expand its business outside Japan, advised on US$3.42 billion in equity capital market deals last year across Asia Pacific, including its home base in Japan, a sharp drop from US$9.4 billion in 2021, according to Refinitiv data. — Reuters UK pay growth speeds up again as BOE frets about inflation LONDON (Jan 17): The pace of pay growth in Britain — which is being closely watched by the Bank of England as it gauges how much higher to raise interest rates — picked up more pace in the three months to November, official data showed on Tuesday. Pay excluding bonuses rose by an annual 6.4% in the September-to-November period, the biggest increase since records began in 2001 excluding jumps during the Covid-19 period which were distorted by lockdowns and government support measures. Pay including bonuses also rose by 6.4%, the Office for National Statistics said. The ONS said Britain’s unemployment rate held at 3.7%, as expected by most of the economists polled by Reuters, close to its lowest level in almost 50 years. The Bank of England is worried that the acceleration in pay growth will make Britain’s high inflation rate — currently running above 10% — harder to bring down. The BOE is expected to raise interest rates for a tenth time in a row early next month and the main question for investors is the scale of the increase as the British central bank weighs up the risk of a recession with the need to fight inflation. — Reuters Vietnam president quits as Communist Party intensifies graft crackdown HANOI (Jan 17): Vietnam President Nguyen Xuan Phuc has resigned after the ruling Communist Party blamed him for “violations and wrongdoing” by officials under his control, the government said on Tuesday, in a major escalation of the country’s anti-graft campaign. Phuc, a former prime minister widely credited with accelerating pro-business reforms, held the largely ceremonial post of president since 2021 and is the highest-ranking official targeted by the party’s sweeping corruption crackdown. Vietnam has no paramount ruler and is officially led by four “pillars”: the party’s secretary, the president, prime minister and speaker of the house. Phuc, 68, was ultimately responsible for offences committed by many officials, including two deputy prime ministers and three ministers, the government said. — Reuters London office deals hit 20-year low after Truss budget turmoil (Jan 17): Almost nobody was buying offices in London in the final quarter of 2022 as the market turmoil from now-abandoned government spending plans sent borrowing costs soaring. Less than £400 million (US$488 million) of offices in the UK capital were bought and sold in the final three months of the year, an 88% drop from the prior quarter, according to CoStar Group Inc. The dealmaking freeze — worse than the decline during the financial crisis or Covid-19 lockdowns — came as former prime minister Liz Truss’s proposals for unfunded tax cuts spooked markets. About £6.4 billion of deals were recorded in the first quarter, when investors were pricing in a gentle increase in rates — an outlook that drastically changed during the year as central bankers tried to get a grip of inflation and markets struggled to digest Truss’s plans. Over the past 20 years, about £3.5 billion of offices have been bought and sold each quarter on average, CoStar’s data show. — Bloomberg Indonesia close to EV deals with BYD Group and Tesla — minister JAKARTA (Jan 17): Indonesia is finalising agreements with China’s automaker BYD Group and US carmaker Tesla to invest in electric vehicle (EV) production facilities in the Southeast Asian country, a senior Cabinet minister said on Tuesday. Indonesia is aggressively promoting investment into batteries and EVs at home to take advantage of its rich nickel resources. Once a major nickel ore exporter, it has banned exports to ensure enough raw materials for investors. “All the biggest [electric] car makers in the world will invest here. BYD Group, the number one in the world, Tesla, the number two, Hyundai and so on, they are all finalising deals with Indonesia,” coordinating minister Luhut Pandjaitan said in a meeting with provincial governments. South Korean carmaker Hyundai launched its plant in Indonesia in March last year to produce the country’s first locally assembled EV. SGMW Motor Indonesia, part of a joint venture of SAIC Motor Corp Ltd, General Motors Co and Wuling Motors Holdings, has built assembly facilities in Indonesia. — Reuters reuters Nguyen Xuan Phuc Reuters filepix by Lillian Suwanrumpha

WEDNESDAY JANUARY 18, 2023 24 THEEDGE CEO MORNING BRIEF WORLD (Jan 17): In the wake of the implosion of cryptocurrency exchange FTX, one urgent question keeps resurfacing: Who should regulate the industry? An upcoming ruling in New York federal court could help determine the answer, along with the fates of numerous crypto investors and companies. The case hinges on whether a prominent digital token should be treated as a security, which would fall under the Securities & Exchange Commission’s jurisdiction. The dispute dates back to 2020, when the SEC accused San Francisco-based Ripple Labs Inc of selling unregistered digital tokens without adequate disclosure. SEC chairman Gary Gensler has been working to position his agency as the force that would rein in the crypto industry, and should the regulator prevail, it would strengthen its grip at a crucial moment. A decision could come in the first half of 2023. Among a handful of closely-watched fintech lawsuits, the Ripple decision is the most high profile: its digital token, XRP, is the sixth-largest crypto token with a market value of almost US$20 billion, according to CoinMarketCap. The recent turmoil in crypto markets could taint the court’s view, said Joseph Hall, a partner at Davis Polk & Wardwell who worked at the SEC from 2003 to 2005. “You just have to imagine that the judges will be influenced by the investor losses they’ve seen,” Hall said. “And the SEC will make clear to them that if you rule the other way, we will not have the tools that we need to fight this kind of activity.” FTX’s bankruptcy in November left customers and investors facing billions of dollars of potential losses, and several of the company’s executives have been charged with various types of financial fraud. Before his arrest, FTX’s founder Sam Bankman-Fried, was a prominent voice in the policy debate around regulation. He formed close ties with US legislators and advocated for a bill to give the Commodity Futures Trading Commission (CFTC) oversight of certain tokens — a move some saw as an attempt to wrest jurisdiction away from the SEC. The fallout from FTX’s implosion was swift and devastating, pounding an industry that had already had a rough year. Token prices plummeted, deepening a rout that began last April, several crypto firms filed for bankruptcy and high profile backers of FTX were forced to write investments down to zero. “The potential contagion effects of crypto collapses are now more apparent,” said Howard Fischer, a partner at Moses & Singer and former senior trial counsel at the SEC. “The FTX disaster will be more of a touchstone in inspiring government regulation.” For an asset to be classed as a security, it must meet a legal standard from a 1946 US Supreme Court ruling about the sale of tracts of Florida citrus groves to investors. The test is met if investors kick in money with the expectation of profiting from the efforts of an organisation’s leadership. Ripple has contended that XRP doesn’t meet that test because sales took place in the secondary market and there was no pooling of profits. “Selling an asset on a secondary market is most akin to a commodity, and should be regulated as such,” the company’s general counsel Stuart Alderoty said in an interview. “You don’t lose consumer protection and you keep bad actors out. Regulation BY MALATHI NAYAK, CHRIS DOLMETSCH & ALLYSON VERSPRILLE Bloomberg Fight to regulate crypto at crossroads as Ripple ruling looms needs to be done in a way that respects the reality of what an asset is.” An SEC spokesperson declined to comment on the Ripple suit. Trading in digital asset commodities, which US regulators have largely agreed includes Bitcoin, is subject to a patchwork of state regulation but not federal oversight. Some policymakers have sought to rectify that through legislation to give the CFTC authority over those types of tokens. But if the Ripple ruling determines that XRP is a security, it would give the SEC ammunition to claim jurisdiction over the majority of digital assets, said Carol Goforth, a professor at the University of Arkansas School of Law who specialises in fintech regulation. Gensler has slapped multi million-dollar fines on crypto companies and those who promote digital assets. The SEC, however, hasn’t produced specific guidance for when a digital token amounts to a security — and Gensler has said existing rules are clear. He’s faced criticism from crypto industry insiders over the approach, which they say relies on enforcement instead of clarifying rules. In its latest salvo, the SEC on Jan 12 sued crypto firms Genesis Global Capital and Gemini Trust Co for raising billions of dollars worth of crypto assets from investors through a programme that it said amounted to an offering of unregistered securities. “Instead of engaging in transparent and public rulemaking, with industry comments, the SEC has chosen to mark its digital asset territory via the federal court system,” said Arthur Jakoby, a former SEC attorney and partner at Herrick Feinstein. Read the full story Sam Bankman-Fried, co-founder of FTX. The potential contagion effects of crypto collapses are now more apparent. The FTX disaster will be more of a touchstone in inspiring government regulation.” BLOOMBERG

WEDNESDAY JANUARY 18, 2023 25 THEEDGE CEO MORNING BRIEF MARKETS Top 20 active stocks World equity indices Top gainers (ranked by %) Top losers (ranked by %) Top gainers (ranked by RM) Top losers (ranked by RM) NAME VOLUME CHANGE CLOSE YTD MARKET (MIL) (RM) CHANGE CAP (%) (RM MIL) KUMPULAN KITACON BHD 156.70 0.070 0.750 10.29 375.0 SERBA DINAMIK HOLDINGS BHD 112.90 0.005 0.020 100.00 74.2 DAGANG NEXCHANGE BHD 112.80 0.025 0.585 14.71 1,846.5 NATIONGATE HOLDINGS BHD 94.30 0.040 1.090 0.00 2,260.6 SAPURA ENERGY BHD 75.60 0.000 0.050 42.86 799.0 YEW LEE PACIFIC GROUP BHD 65.30 0.050 0.460 16.46 244.9 REVENUE GROUP BHD 48.70 -0.090 0.660 -2.22 318.2 RGB INTERNATIONAL BHD 48.30 0.020 0.230 27.78 354.4 BSL CORP BHD 44.90 0.020 0.185 42.31 51.3 CITAGLOBAL BHD 44.90 0.010 0.325 12.07 615.8 CSH ALLIANCE BHD 41.10 0.010 0.075 87.50 103.6 PROGRESSIVE IMPACT CORP BHD 32.90 0.000 0.280 7.69 183.5 L&P GLOBAL BHD 30.90 0.015 0.535 0.00 299.6 MY EG SERVICES BHD 30.40 0.020 0.915 5.17 6,805.7 TOP GLOVE CORP BHD 28.6 -0.005 0.885 -2.21 7086.5 NWP HOLDINGS BHD 26.9 0.01 0.265 10.42 150.3 ARTRONIQ BHD 26.4 0 0.75 5.63 246.2 VINVEST CAPITAL HOLDINGS BHD 23.20 -0.010 0.195 2.63 189.0 SOLARVEST HOLDINGS BHD 23 0.075 0.965 12.87 644.2 WIDAD GROUP BHD 22.7 -0.01 0.42 -2.33 1179.8 Data as compiled on Jan 17, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) JERASIA CAPITAL BHD 0.040 60.00 164.1 14.29 3.3 EA HOLDINGS BHD 0.015 50.00 650.0 0.00 96.8 DOLPHIN INTERNATIONAL BHD 0.015 50.00 3,352.9 -40.00 20.1 SERBA DINAMIK HOLDINGS BHD 0.020 33.33 112,919.3 100.00 74.2 PASUKHAS GROUP BHD 0.020 33.33 634.5 33.33 38.1 MLABS SYSTEMS BHD 0.025 25.00 2.0 25.00 36.2 ALDRICH RESOURCES BHD 0.030 20.00 546.1 0.00 33.4 PUC BHD 0.035 16.67 1,380.3 0.00 60.2 BARAKAH OFFSHORE PETROLEUM 0.035 16.67 1,088.1 40.00 35.1 CSH ALLIANCE BHD 0.075 15.38 41,059.5 87.50 103.6 HUBLINE BHD 0.045 12.50 32.9 12.50 193.0 YEW LEE PACIFIC GROUP BHD 0.460 12.20 65,253.2 16.46 244.9 BSL CORP BHD 0.185 12.12 44,929.3 42.31 51.3 SC ESTATE BUILDER BHD 0.050 11.11 78.5 11.11 53.7 REACH ENERGY BHD 0.050 11.11 332.4 11.11 54.8 FIBON BHD 0.465 10.71 1,268.3 29.17 45.4 RGB INTERNATIONAL BHD 0.230 9.52 48307 27.78 354.4 UCREST BHD 0.115 9.52 2,511.0 -8.00 71.5 ECONFRAME BHD 1.040 9.47 7,390.6 14.92 338.1 PAOS HOLDINGS BHD 0.290 9.43 3.2 11.54 52.5 Data as compiled on Jan 17, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) EDUSPEC HOLDINGS BHD 0.010 -33.33 1,661.3 -50.00 30.5 FOCUS DYNAMICS GROUP BHD 0.020 -20.00 1,691.6 0.00 127.4 XOX BHD 0.020 -20.00 5,987.3 33.33 101.0 AE MULTI HOLDINGS BHD 0.020 -20.00 177.5 -20.00 43.3 BCM ALLIANCE BHD 0.020 -20.00 901.8 -20.00 40.7 G3 GLOBAL BHD 0.025 -16.67 3,368.2 -16.67 72.6 RED IDEAS HOLDINGS BHD 0.050 -16.67 50.0 -86.11 5.0 XIDELANG HOLDINGS LTD 0.025 -16.67 258.4 0.00 52.9 INDUSTRONICS BHD 0.070 -12.50 1,136.7 -6.67 35.0 IQZAN HOLDING BHD 0.035 -12.50 30.3 0.00 7.8 REVENUE GROUP BHD 0.660 -12.00 48,676.8 -2.22 318.2 EA TECHNIQUE (M) BHD 0.175 -10.26 13,365.3 2.94 92.8 MQ TECHNOLOGY BHD 0.045 -10.00 860.3 -10.00 56.3 LIEN HOE CORP BHD 0.325 -9.72 0.8 -5.80 108.0 LAMBO GROUP BHD 0.050 -9.09 706.0 -9.09 77.0 TRIVE PROPERTY GROUP BHD 0.055 -8.33 13.1 -21.43 69.5 EUROSPAN HOLDINGS BHD 1.100 -8.33 5.0 -2.65 48.9 WELLSPIRE HOLDINGS BHD 0.395 -8.14 14.8 71.74 281.3 TFP SOLUTIONS BHD 0.06 -7.69 100 -7.69 35.1 ASIA POLY HOLDINGS BHD 0.125 -7.41 2,154.3 13.64 119.8 Data as compiled on Jan 17, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) MALAYSIAN PACIFIC INDUSTRIES 32.500 -1.480 49.50 13.00 6,464.1 FRASER & NEAVE HOLDINGS BHD 23.800 -0.700 73.80 10.29 8,729.3 HEXTARTECHNOLOGIES SOLUTIONS 24.520 -0.580 49.90 43.73 3,154.5 AJINOMOTO MALAYSIA BHD 14.040 -0.180 20.00 7.34 853.6 PETRONAS DAGANGAN BHD 22.260 -0.180 313.90 -3.22 22,114.3 MALAYSIA SMELTING CORP BHD 2.070 -0.110 2,871.10 35.29 869.4 NESTLE MALAYSIA BHD 135.400 -0.100 82.60 -3.29 31,751.3 ORIENTAL HOLDINGS BHD 6.840 -0.100 41.40 0.74 4,243.3 EUROSPAN HOLDINGS BHD 1.100 -0.100 5.00 -2.65 48.9 VITROX CORP BHD 7.800 -0.100 57.50 1.96 7,368.6 HONG LEONG BANK BHD 20.620 -0.100 906.10 0.29 44,698.3 KOTRA INDUSTRIES BHD 5.900 -0.100 18.70 -10.61 873.2 REVENUE GROUP BHD 0.660 -0.090 48,676.80 -2.22 318.2 HENGYUAN REFINING CO BHD 3.610 -0.080 663.70 2.56 1,083.0 FORMOSA PROSONIC INDUSTRIES 3.320 -0.080 638.40 2.79 850.8 BURSA MALAYSIA BHD 6.670 -0.080 905.90 0.3 5,398.0 MULPHA INTERNATIONAL BHD 2.120 -0.070 1.20 -1.40 659.7 UNISEM M BHD 2.960 -0.070 959.00 7.25 4,774.7 COMPUTER FORMS MALAYSIA BHD 2.790 -0.070 5,334.90 10.71 728.2 PETRON MALAYSIA REFINING 4.48 -0.06 42.5 3.46 1209.6 Data as compiled on Jan 17, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) PETRONAS GAS BHD 17.380 0.320 439.6 1.52 34,390.4 RAPID SYNERGY BHD 16.260 0.280 25.6 1.88 1,738.1 HEINEKEN MALAYSIA BHD 26.780 0.280 202.7 6.27 8,090.2 CARLSBERG BREWERY MALAYSIA 23.660 0.180 98.6 3.41 7,234.0 DUTCH LADY MILK INDUSTRIES BHD 29.920 0.160 15.5 -1.06 1,914.9 KLUANG RUBBER CO MALAYA BHD 4.050 0.150 5.2 2.27 251.9 PANASONIC MANUFACTURING 23.140 0.140 9.6 1.05 1,405.7 DIGI.COM BHD 4.280 0.130 3,080.7 7.00 50,210.9 PETRONAS CHEMICALS GROUP BHD 8.620 0.120 4,989.8 0.23 68,960.0 MASTER-PACK GROUP BHD 2.480 0.120 148.5 5.53 135.5 PRESS METAL ALUMINIUM 5.300 0.100 13,265.3 8.61 43,670.0 DKSH HOLDINGS MALAYSIA BHD 4.520 0.100 35.3 1.57 712.6 BONIA CORP BHD 2.620 0.090 892.1 15.42 525.1 RIVERVIEW RUBBER ESTATES BHD 3.440 0.090 10.0 -5.05 223.1 AXIATA GROUP BHD 3.050 0.090 4,021.1 -1.29 27,990.6 PADINI HOLDINGS BHD 3.760 0.090 1,357.4 12.24 2,473.7 ECONFRAME BHD 1.040 0.090 7,390.6 14.92 338.1 PTT SYNERGY GROUP BHD 1.090 0.080 0.2 0.00 98.1 ALLIANZ MALAYSIA BHD 14.700 0.080 68.8 3.81 2,616.1 SOLARVEST HOLDINGS BHD 0.965 0.075 22950.8 12.87 644.2 Data as compiled on Jan 17, 2023 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DOW JONES 34,302.61 112.64 0.33 S&P 500 3,999.09 15.92 0.40 NASDAQ 100 11,541.48 81.87 0.71 FTSE 100 7,832.52 -27.55 -0.35 AUSTRALIA 7,386.29 -1.88 -0.03 CHINA 3,224.25 -3.35 -0.10 HONG KONG 21,577.64 -169.08 -0.78 INDIA 60,655.72 562.75 0.94 INDONESIA 6,767.34 79.28 1.19 JAPAN 26,138.68 316.36 1.23 KOREA 2,379.39 -20.47 -0.85 PHILIPPINES 7,014.04 -31.44 -0.45 SINGAPORE 3,280.51 -3.09 -0.09 TAIWAN 14,932.93 5.92 0.04 THAILAND 1,681.04 -3.82 -0.23 VIETNAM 1,088.29 21.61 2.03 Data as compiled on Jan 17, 2023 Source: Bloomberg CPO RM 3,795.00-57.00 OIL US$ 85.681.22 RM/USD 4.3265 RM/SGD 3.269 RM/AUD 3.0067 RM/GBP 5.2814 RM/EUR 4.6793