CEOMorningBrief THURSDAY, MARCH 2, 2023 ISSUE 531/2023 www. theedgemarke ts. com CHINA’S ECONOMY SHOWS STRONG RECOVERY AS COVID ZERO ERA ENDS p16 HOME: Large scale structural changes needed to weather difficult economic times, or worse to come, Rafizi warns p4 Miti approves Tesla’s application to import battery EVs into Malaysia p6 Ex-PM, Arul Kanda to know fate on Friday in 1MDB audit case p15 WORLD: Sizzling heat wave puts India’s farm sector and economy at risk p17 UK house prices slide at sharpest annual pace since 2012 p20 Report on Page 3. BCorp sets up all-female board; Vincent Tan and son step down PUTRAJAYA SHOULD BREAK UP MONOPOLIES, open market to promote competition, says govt backbencher Report on Page 2.
thursday M A rch 2, 2023 2 The E dge C E O m o rning brief published by ( 2 6 6 9 8 0 - X ) tel . 603-77218000 Level 3, Menara KLK, 1 Jalan PJU 7/6, Mutiara Damansara, 47810, Petaling Jaya, Selangor, Malaysia publisher + ceo . Ho Kay Tat editor-in-chief . Kathy Fong chief commercial officer . Sharon Teh chief operating officer . Lim Shiew Yuin editors . Jenny Ng . Tan Choe Choe Lam Jian Wyn to contact editors: [email protected] to advertise: [email protected] the edge ceo morning brief Read from desktop or mobile device. You can print in A4 to read. Set print mode to fit or shrink oversize page. to get on emailing list [email protected] Putrajaya should break up monopolies, open market to promote competition, says govt backbencher KUALA LUMPUR (March 1): The government should work towards eliminating monopolies and cartels to promote competition as the elite class who benefits from the current market structure “are feeding on the poor masses”, government backbencher William Leong Jee Keen (PKR-Selayang) said on Wednesday (March 1), noting that businesses are discouraged from entering the fray as they are at a disadvantage. Leong is of the view that the existence of cartels and monopolies is one of the causes of Malaysia’s high cost of living and food prices, which appear to be rising uncontrollably. “Abuse of dominant or monopoly market power needs to be addressed to ensure sustainable economic growth. Consumers also lose due to lack of choice, [and they are] faced with high prices and poor-quality goods,” he told the Dewan Rakyat in his debate on the revised Budget 2023 on Wednesday. “The economy will not grow because new enterprises cannot penetrate the market and businesses are not incentivised to be innovative and efficient,” he added. Leong urged the government to open the market up and allow more companies to import goods to solve the issue of monopolies. He opined that the recently mooted RM60 million profit sharing by Padiberas Nasional Bhd (Bernas) to rice farmers will not solve the fundamental issue created by the existing market structure. “The existence of cartels in the rice home by chester tay theedgemarkets.com cultivation industry is structural, from the supply of seeds, fertilisers, poisons, machines to marketing, manufacturing and handling of assistance schemes. If this whole system is not improved, the fate of the rice farmers will not change,” he stressed. In addition, he said Putrajaya should also stay away from setting the market price when there is a shortage — such as the chicken and egg shortage. “The control or planning of the price of goods by a human or an institution is not effective because no human or institution is capable of reviewing all the facts. As there are too many factors that need to be taken into account in setting prices and they are too complex, no single centre can examine them all. “The constant changing of supply and demand conditions in different commodities cannot be understood thoroughly and at a fast enough pace by a single centre. Through competition, the price system automatically records all relevant data,” he explained. Leong cautioned that when the elite class, cartels, and monopolies pressure the government to maintain their dominant and monopolistic power, their huge profits are paid by every Malaysian, for every item they buy on a daily basis are priced unreasonably high. “They are feeding on the poor masses. The government has a responsibility to protect the consumers,” he said, adding that cartels are an enemy not only to consumers, but also to the country and society. Selayang MP William Leong Jee Keen
thursday M A rch 2, 2023 3 The E dge C E O m o rning brief home Maybank IB, CGSCIMB rate 7-Eleven ‘hold’ after 4Q net profit shrinks 91% KUALA LUMPUR (March 1): Two research houses have a “hold” call on 7-Eleven Malaysia Holdings Bhd after its net profit shrank 91% to RM2.65 million in the fourth quarter ended Dec 31, 2022 (4QFY2022). Its net profit declined from RM29.4 million in 4QFY2021 due to higher operating expenses amid higher store operation-related expenses, longer operating hours, the minimum wage effect, and increased in-store maintenance activities, despite revenue improving to RM992.42 million from RM795.06 million. In a research note, Maybank Investment Bank (MIB) downgraded the counter to “hold” with a new target price (TP) of RM1.90, from RM2.35 previously. The new TP was based on unchanged 28 times FY2023 estimates (FY2023E) price-earnings (P/E) ratio, about 0.55 standard deviations to the mean. “4Q2022 results fell below our/ consensus expectations due to higher-than-expected operating expenses,” said analyst Jade Tam. “With heightened internal cost pressures and expectations for ongoing subdued consumer sentiment, we reduce our FY2023EFY2024E earnings by 20%-21%” she added, after imputing lower gross profit margins and higher other expenses. Meanwhile, CGS-CIMB maintained a “hold” with an unchanged TP of RM1.72, based on 22 times calendar year 2024 forecast (CY2024F) P/E, one standard deviation below its five-year mean P/E of 31.1 times. This takes into account its low liquidity and higher gearing ratio amid rising interest rates, as current valuations have accounted for near-term weak earnings prospects. “We keep our FY2023-FY2024F earnings estimates unchanged, pending further details from its briefing on March 7, 2023, and introduce our FY2025F estimates.” said analyst Khoo Zhen Ye. BCorp sets up all-female board; Vincent Tan and son step down by justin lim theedgemarkets.com by sufi muhamad theedgemarkets.com Read the full story Tan Sri Vincent Tan has stepped down as non-independent and non-executive chairman of Berjaya Corp Bhd. KUALA LUMPUR (March 1): Prominent tycoon Tan Sri Vincent Tan Chee Yioun has stepped down as non-executive chairman while his son Datuk Seri Robin Tan Yeong Ching has resigned as non-executive deputy chairman of Berjaya Corp Bhd (BCorp) in the latest boardroom shuffle at the conglomerate, which has led to the formation of an all-women board of directors for the group. Vincent, who is BCorp’s founder and major shareholder, will stay on to serve as adviser of the group, while Robin’s resignation was “due to other work commitments and responsibilities”, according to filings on Bursa Malaysia. Notably, Chryseis Tan Sheik Ling — daughter of Vincent Tan — was redesignated as the group’s executive director. Prior to that, the 34-year-old was the group’s non-executive director. The changes take effect immediately on Wednesday (March 1). In a separate filing, BCorp said several members who sat on the board have resigned from their posts, including the group’s joint chief executive officer Syed Ali Shahul Hameed, who also said he was resigning “due to other work commitments and responsibilities”. To replace Syed Ali, BCorp has appointed Nerine Tan Sheik Ping as the group’s joint CEO. Prior to that, Sheik Ping was BCorp’s executive director. BCorp also named Her Highness Tunku Tun Aminah Sultan Ibrahim Ismail as the group’s non-independent and non-executive chairman, succeeding Vincent. Tunku Tun Aminah, the daughter of Johor ruler Sultan Ibrahim Ibni Almarhum Sultan Iskandar, was a non-executive director in the company previously. Additionally, BCorp also saw Norlela Baharudin redesignated as its executive director, from an independent director previously. Meanwhile, another two board members, namely Tan Peng Lam and Datuk Robert Yong Kuen Loke, have resigned from their position as independent and non-executive director. Both also said they resigned “due to other work commitments and responsibilities”. Commenting on the new board lineup, Vincent said the latest changes in the BCorp boardroom reflect the group’s commitment to promote women’s empowerment in the workplace. “I have every confidence in the leadership abilities of all the women on the board to effectively lead the group to greater heights,” he said in a separate statement. “In my adviser role, I will still be very much involved with the group and its business activities, but now I shall be able to devote more of my time to promote my charitable foundation, Yayasan MyFirst Home, which is almost one year old now,” said Vincent. Boardroom reshuffle at BLand Over at Berjaya Land Bhd (BLand) — property developer and hotel operator that is ultimately-controlled by Vincent via BCorp — the group has appointed Robin as its non-executive deputy chairman, with immediate effect. Apart from BLand, the 48-year-old Robin is also an executive chairman of Sports Toto Bhd and director of Atlan Holdings Bhd. In separate filings, BLand also announced it has appointed Peng Lam as the group’s independent non-executive director, after he resigned as BCorp’s independent and non-executive director. In addition, BLand announced that Syed Ali has been redesignated as group chief executive officer, succeeding Datuk Abdul Rahim Mohd Zin, who has been redesignated as an executive director for the company. Previously, Syed Ali was the company’s executive deputy chairman. BCorp’s share price closed up 0.5 sen or 1.6% to 31.5 sen, giving the diversified group a market capitalisation of RM1.88 billion. Meanwhile, shares in BLand finished one sen or 3.5% lower at 27 sen, giving it a market capitalisation of RM1.35 billion.
thursday M A rch 2, 2023 4 The E dge C E O m o rning brief home KUALA LUMPUR (March 1): HSBC Bank Malaysia Bhd has urged Malaysian businesses to strengthen their international connectivity in order to gain competitive edge and attract new investment, which will lead to access to growth and development prospects. Its chief executive officer Datuk Omar Siddiq in a statement on Wednesday (March 1) said that due to current global market conditions, the world’s economic centre had shifted to Asia, with the Asean region playing a critical role in fuelling this development. “Located strategically in the heart of Asean, Malaysia continues to offer great potential for investors,” he added. “Among the challenges of 2022, the country was a clear regional outperformer fuelled by its resilient external engine and flourishing domestic demand.” He highlighted several key areas for businesses in 2023, which include embracing the economic pivot to Asia and Asean, the benefits of China’s reopening, supply chain diversification as a boost for Malaysia, and investing in the digital economy. “Significant opportunities exist for businesses in Malaysia to thrive in a new era. This includes growing investments in areas that will facilitate greater international connectivity while enabling them to gain a competitive advantage.” “Businesses need to seize them and effectively capitalise on them for growth.” Omar spoke during the launching of the HSBC Asian Business Forum 2023, with Economy Minister Mohd Rafizi Ramli officiating at the event in Kuala Lumpur on Wednesday. HSBC: Malaysian businesses need to boost international connectivity KUALA LUMPUR (March 1): Large scale structural changes are needed to weather difficult economic times, failing which Malaysia risks greater economic consequences in the future, said Economy Minister Rafizi Ramli. “If we choose to return to business-as-usual and avoid the politically difficult choice of economic reforms, then we risk a larger economic consequence,” Rafizi cautioned at the HSBC Asian Business Forum 2023. He pointed out that a tight cash flow would make Malaysia vulnerable to another economic shock wave, noting the billions of ringgit now spent on servicing debt could be better used for building schools, roads, hospitals, and technology. “Our fiscal space has now become highly limited from a high Covid-19 expenditure and decades of high subsidy and import bills,” he stressed. Malaysia’s quarter-on-quarter gross domestic product (GDP) growth from the fourth quarter of 2021 has slowed down in five consecutive quarters, with private consumption decreasing and the national debt currently standing at RM1.5 trillion or 80% of Malaysia’s GDP. “For a long time, reforms have been regarded as politically costly. “We see reforms and popularity as compatible, and we shall commit to the structural reforms with the decisiveness and creativity necessary to renew our economy,” Rafizi emphasised. He highlighted several initiatives under the Economy Ministry including the People’s Income Initiative, Academy in Factory (AiF) programme and the reactivation of Pemudah or the Special Task Force to Facilitate Business. “Although the government can lead the charge, we cannot do this alone. We will make decisions on key reforms and move swiftly into implementation in the first year, so that the reform momentum and sense of urgency could carry us through, and the effects would be closely felt on the ground.” Large scale structural changes needed to weather difficult economic times, or worse to come, Rafizi warns Two new immigration complexes planned along SabahKalimantan border by Sufi Muhamad theedgemarkets.com by Chester Tay theedgemarkets.com by Sufi Muhamad theedgemarkets.com Zahid Izzani Mohd Said/The Edge KUALA LUMPUR (March 1): The government plans to build two new Immigration, Customs, Quarantine and Security (ICQS) complexes in Sabah to strengthen border control in view of the impending relocation of Indonesia’s capital city to Nusantara in East Kalimantan. One of the ICQS complexes will be built in Serudong, Kalabakan at an estimated cost of RM819 million, which include living quarters and upgrading works for roads leading to the complex itself, said Economy Minister Rafizi Ramli. The other ICQS complex will be set up in Bantul, Pagalungan at an estimated cost of RM367 million, Rafizi said in the Dewan Rakyat on Wednesday (March 1). “Negotiation and studies are still in progress between the Ministry of Economy and Ministry of Home Affairs, for us to determine the appropriate infrastructure, whether we need a full fledge ICQS or just a border control post,” he said. Rafizi said the ICQS complexes were among the planned developments slated to be implemented under Rolling Plan 4 (2024) of the 12th Malaysia Plan (2021- 2025), to enhance the Sabah-Kalimantan border control. Other projects along the border include the construction of an immigration post at Long Pasia, at an estimated cost of RM25 million, he said. “Security posts that will be upgraded are the Pagalungan Immigration Control Post at Nabawan, costing RM4 million, followed by a security post at Aji Kuning on Sebatik Island...at an estimated cost of RM5 million. “We hope that these infrastructures will allow us to tap into the spillover effect of the economic development along the Sabah border when Indonesia’s capital Nusantara starts functioning,” he added. Read the full story
thursday M A rch 2, 2023 5 The E dge C E O m o rning brief home MANILA (March 1): Malaysia’s Prime Minister Anwar Ibrahim said on Wednesday the ongoing crisis in Myanmar was affecting the region’s security and welfare and new ways must be found to persuade its military rulers to work with ASEAN to achieve peace. After meeting Philippine President Ferdinand Marcos Jr in Manila, Anwar said he appreciated his counterpart’s reiteration that a five-point peace plan agreed between the Association of Southeast Asian Nations and Myanmar’s junta must be implemented. “...but I would certainly suggest to explore new areas how the Myanmar junta can be persuaded to work within ASEAN and resolve the outstanding issue which cannot be considered as purely internal because it is affecting the security and welfare of the region,” Anwar said. Myanmar has been beset by social, political and economic chaos since its military overthrew an elected government in 2021. Human rights groups and the United Nations have accused the military of carrying out atrocities as part of a crackdown on its opponents, which it says are “terrorists” seeking to destroy the country. ASEAN, which has a long-held principle of staying out of its members’ sovereign affairs, has grown frustrated at the junta’s lack of progress on a peace plan agreed with the generals shortly after the coup. While the 10-member bloc has barred Myanmar’s generals from attending its high-level meetings, Malaysia, a vocal critic of the junta, has called for more stringent action. The generals have reacted angrily to what it calls interference by ASEAN members. Read also: Anwar given official welcome in Philippines Anwar says Myanmar crisis affecting region’s security MANILA (March 1): Efforts to attain peace in Mindanao, southern Philippines, have to succeed because failure could affect not only the Philippines and Malaysia but also the whole region, Prime Minister Datuk Seri Anwar Ibrahim said on Wednesday. He applauded Philippine President Ferdinand Marcos Jr for making great strides to ensure the peace process in Mindanao would be successful. “It is our (Malaysia) duty as a good neighbour to support this effort (peace process). We will have to utilise all bilateral and multilateral means to achieve this. “The peace process has to succeed, because it not only affects the Philippines and Malaysia but also the region,” he said at a joint press briefing after holding a bilateral meeting with Marcos at Malacanang Palace here. Anwar arrived in Manila on Wednesday to begin a two-day official visit, his fifth to ASEAN countries after becoming prime minister late last year. Earlier, Anwar attended an official welcoming ceremony at the Malacanang Palace and inspected a guard of honour mounted by 165 soldiers of the Philippine Armed Forces. Anwar is accompanied by his wife Datuk Seri Dr Wan Azizah Wan Ismail and several Cabinet members on the visit. The prime minister said Malaysia remained committed to playing a constructive role in the peace process in Mindanao. “Malaysia will also continue to offer assistance to the Bangsamoro people, to various capacity-building programmes, including through our Malaysia Technical Cooperation Programme (MTCP),” he said. According to Anwar, there are immense opportunities to be reaped by both countries should efforts to attain peace in Mindanao succeed. Peace effort in Mindanao has to succeed — Anwar Bernama Reuters KUALA LUMPUR (March 1): Half of the total loan accounts in the household sector are fixed-rate loans that are not affected by the 100 basis point increase in the overnight policy rate (OPR) last year, said Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim. As of December 2022, he said 50.3% of the total loan accounts in the household sector are fixed-rate type loans. At the same time, an estimated 54.8% of low-income borrowers, with an income of less than RM5,000 per month, are on fixed-rate loans. “The government certainly does not deny that the cumulative increase in the OPR by 100 basis points from 1.75% to 2.75% last year, to some extent, has had an impact on borrowers and traders who have floating-rate loans due to the increase in monthly instalments faced by them,” Anwar said in a parliamentary written reply on Tuesday (Feb 28). “However, not all borrowers are affected by the OPR increase because only borrowers with floating-rate type loans are affected by the OPR increase,” he said. Anwar was responding to Arau Member of Parliament Datuk Seri Dr Shahidan Kassim, who asked the minister to state the government’s immediate action to help reduce the burden of those affected by the sudden increase in the OPR. Half of household loans are fixed-rate loans, unaffected by OPR hike, says Anwar by Hailey Chung theedgemarkets.com Not all borrowers are affected by the OPR increase because only borrowers with floatingrate type loans are affected by the OPR increase.”
thursday M A rch 2, 2023 6 The E dge C E O m o rning brief home MEXICO CITY (March 1): Tesla Inc will build a new assembly plant in northern Mexico, the country’s president announced on Tuesday, marking a push by the electric vehicle maker to broaden operations outside the US in a deal an official said was worth over US$5 billion. President Andres Manuel Lopez Obrador said “the whole Tesla company” was coming to Mexico to build a “very big” automotive plant, noting that potential investment in batteries was still pending. He did not reveal what models it would produce. One Mexican official said the plant would be a Tesla “gigafactory” that could produce the Semi truck, Roadster sports car, and potentially other vehicles. Another official said the plant could produce a kind of sport utility vehicle (SUV). The Model Y is Tesla’s best-selling SUV. Tesla will likely give details of its plans on Wednesday, Mexico’s government said. Tesla to build US$5 bil new plant in Mexico, government says Petronas clean energy arm sees India, Australia as key markets KUALA LUMPUR (March 1): Putrajaya has approved electric car maker Tesla’s application to import battery electric vehicles (BEVs) into Malaysia, establish a head office, a Supercharger network, as well as experience and service centres. Tesla’s presence in Malaysia is expected to create skilled and better paying job opportunities for workers in the BEV segment, while increasing the participation of local companies in the company’s ecosystem both domestically and globally, said the Ministry of International Trade and Industry (Miti) in a statement on Wednesday (March 1). The ministry said it is facilitating Tesla’s entry through the introduction of the BEV Global Leaders initiative, which aims to help boost BEV demand in the local market, and further promote the development of the entire ecosystem to support BEV adoption. Miti said Tesla is the first applicant of this initiative, which also seeks to secure investments from leading global BEV manufacturing companies in Malaysia. “We are pleased by Tesla’s decision to establish its presence in the electric vehicle ecosystem in Malaysia. This demonstrates Tesla’s confidence in our economic fundamentals and conducive business environment,” said Minister Tengku Datuk Seri Zafrul Abdul Aziz. “Even as major global brands decide to invest and reinvest in Malaysia, Miti and its agencies will continue to enhance efforts to improve the ease of doing business, while continuously profiling Malaysia as pro-trade, pro-industry and pro-investment. “We will also strategically leverage our established electrical and electronics ecosystem to make Malaysia the preferred investment destination for technology related to electric mobility,” he added. Read also: Strong local E&E ecosystem attracts Tesla to Malaysia — Tengku Zafrul Miti approves Tesla’s application to import battery EVs into Malaysia by chester tay theedgemarkets.com by Dave Graham & Daina Beth Solomon Reuters by A Ananthalakshmi & Mei Mei Chu Reuters Lopez Obrador’s announcement of the plant in the Monterrey metropolitan area dispelled recent concerns that he could upend the investment by imposing conditions on the company due to problems over a lack of water in the arid border region. “This will represent a considerable investment and many, many jobs,” Lopez Obrador told reporters, saying chief executive officer Elon Musk had been receptive to Mexico’s concerns and made commitments on how to address the shortage of water. That would in part involve Tesla recycling water used in the assembly process, the president said. Martha Delgado, a Mexican deputy foreign minister, told Milenio Television the investment was worth “in excess of US$5 billion”, and that Tesla would produce about one million vehicles a year there for domestic and international markets. Tesla has a combined annual production capacity of more than 1.9 million cars at other factories. Separately, a Mexican source with knowledge of the matter said the initial investment will be worth around US$1 billion and further phases could bring total spending to US$10 billion. Tesla did not respond to a request for comment. The company has car factories in the US states of California and Texas as well as in Berlin and Shanghai. Read the full story KUALA LUMPUR (March 1): Gentari, the clean energy arm of Malaysia’s state oil firm Petronas, sees India and Australia as its key markets for growth and expects to tap more financing to meet its ambitious targets, its chief executive told Reuters. Petronas launched Gentari as a separate entity in June, aiming to build renewable energy capacity of 30-40 gigawatts and produce up to 1.2 million tonnes per year of hydrogen by 2030 in Asia Pacific. It also plans to establish 25,000 public charging points for electric vehicles. In an interview on Wednesday, Chief Executive Officer Sushil Purohit said India and Australia will be primary markets for growth in the near term in all fields of operation. Both countries have provided the right policies to facilitate projects, while Malaysia also has a lot of potential, he said, adding growth could come from acquisitions and organically. “In terms of expansion, we will seek to collaborate with companies in different markets. If there is a good strategic fit for us, we would look at that as an opportunity for us to buy into the company or acquire the company in totality,” Purohit said. Petronas, like other oil majors, is ramping up investments in clean energy as part of its net zero carbon emissions goals. The state-owned company has said it would allocate 20% of its overall capital expenditure for decarbonisation projects and cleaner energy solutions from 2023 to 2026. Petronas planned capital expenditure of RM60 billion last year. Read the full story
THURSDAY MARCH 2, 2023 7 THEEDGE CEO MORNING BRIEF J&T Express celebrates Hari Raya Aidilfitri with ‘Most Awesome Raya’ campaign As one of Asia’s most prominent and established logistics providers, J&T Express has consistently provided its customers with impeccable service. Guided by its “customer-oriented and effi ciency-based” mission, the company remains committed to delivering integrated logistics solutions via intelligent infrastructure and a vast and ever-expanding digital logistics network. Since it was founded in 2015, J&T Express has demonstrated tremendous growth across the world. Currently, its impressive network spans multiple countries and territories, including Southeast Asia, China, the Middle East, South America. In Malaysia, J&T Express has grown by leaps and bounds since its launch in 2018. Fuelled by its successful formula of adapting its service off erings according to the demands of the local market, J&T Express has expanded from being just a standard delivery service provider to offering a suite of logistics services. These include J&T VIP, J&T International Shipping, J&T Next Day Delivery and J&T Express Document. EXPANDING ITS FOOTPRINT As a leading express delivery business in Southeast Asia and China, J&T Express has repeatedly gone above and beyond bringing effi cient and logistical benefi ts to its customers. As a company that puts its customers fi rst, J&T Express is also a brand that gives back to its respective markets through innovative value-added service off erings and engaging interactive campaigns. J&T Express’ latest campaign, “Most Awesome Raya”, is focused on celebrating the spirit of togetherness in Malaysia. “Through this campaign, we focus on delivering the passion and determination to never stop improving,” says Liu Wen Feng, J&T Express Malaysia marketing and network management director. “Through our Next Day Delivery service, a dedicated team has been formed to prioritise the delivery process and real-time monitoring through the offi cial website and J&T Malaysia app. This is aligned with J&T Express’ eff orts to bring the best technology-enabled solutions to customers in all its global markets through collaboration with local network partners.” FUN AND INTERACTIVE, WITH ATTRACTIVE PRIZES J&T Express Malaysia’s “Most Awesome Raya” certainly embodies this promise. Running from March 2 to April 22, 2023, the campaign consists of an engaging app mini-game, with exclusive prizes up for grabs. It is yet another demonstration of J&T Express’ customer-fi rst values and respect for local traditions and festivities. Elaborating on “Most Awesome Raya”, Roy Zeng, CEO of J&T Express Malaysia, says: “Hari Raya Aidilfi tri is a multiracial occasion that brings people together, regardless of background or and culture. The spirit of togetherness and forgiveness aligns with the values that we instil at J&T Express. This resonates deeply with our values of building a caring, responsible and sustainable business.” Introduced on the J&T Malaysia app in conjunction with the upcoming Hari Raya Aidilfi tri festive season, the mini-game consists of fi ve levels. According to J&T Express Malaysia, the company will leverage the mini-game, collaborate with business partners and connect with consumers to further enhance its brand values. Opened to those who register on the J&T Malaysia app, the “Most Awesome Raya” campaign rewards members with vouchers on completion of each level. Upon completing all fi ve levels, they will be awarded a golden voucher and be put in the running for enticing prizes, which include a Xiaomi Mi TV, Henna Jewel Bracelets as well as J&T Mystery Gifts. With the “Most Awesome Raya” campaign, J&T Express wants to bring communities and people together in one of the most important festive celebrations in Malaysia, one that underscores the importance of love, family, friendship and the spirit of Muhibbah. For more information and updates, visit J&T Express Malaysia on Facebook, Instagram or the company’s offi cial website (www.jtexpress.my). st a any lion ntendar acre ned port, ated osiider aciland ugh PHOTO FROM 123RF
thursday M A rch 2, 2023 8 The E dge C E O m o rning brief home KUALA LUMPUR (March 1): Despite facing higher operating costs amid cost-inflation pressure, UEM Edgenta Bhd is anticipating a better bottom line performance for the financial year ending Dec 31, 2023 (FY2023). There has been concern about the group’s profit growth due to cost escalation related to higher repair and maintenance costs for some hospitals and incinerator plants, as well as the increase in the minimum wage for the hospital division. In addition, the group also faces margin compression for projects in its property and building solutions segment due to the global supply chain disruption. UEM Edgenta chief financial officer Hillary Chua said the group was determined to take cost optimisation measures and deploy technology-enabled solutions to weather the headwinds. “We will also discuss and work closely with our suppliers on how they can reduce their working capital costs. In this way, we will be able to reduce our procurement costs. Procurement is the starting point of all costs,” she said at a press conference Wednesday (March 1). The asset management and infrastructure solutions-based group’s net profit increased 9.23% to RM45.88 million for FY2022, from RM42 million a year earlier. Revenue improved 10.09% to RM2.52 billion from RM2.29 billion. As at Dec 31, 2022, the group had an outstanding order book of RM9.6 billion, with the infra services being the largest component at 68% or RM6.58 billion, followed by healthcare support (RM2.51 billion), property and facility solutions (RM334 million) and asset consultancy (RM178 million) The group’s gross gearing as at that date stood at 0.29 times with a net cash of RM247.9 million. UEM Edgenta plans to expand its business into international markets, focusing on integrated facilities management and the deployment of software-as-a-service (SaaS) platform solutions. This will be reinforced by reinvesting in new growth markets, products and technologies in the Gulf Cooperation Council countries, particularly Saudi Arabia. “We are cautiously optimistic for this year. But we expect the higher revenue for FY2022 to carry through in FY2023. And we are hoping that this will translate into a higher profit margin for this year,” said Chua. On capital expenditure for FY2023, Chua said it will be similar to the RM80 million to RM90 million capex level in the past two years. “About 40% of that, we plan to invest in digital and technology developments as that is the target to grow and optimise our business,” she added. Read also: Pharmaniaga’s PN17 classification a wake up call for pharma sector, says Galen Centre Manufacturing sector shows signs of momentum building in February Foreign workers: Quota approval for employers who fire locals will be revoked, says Sivakumar UEM Edgenta sees better earnings for FY2023 KUALA LUMPUR (March 1): On the back of achieving record sales of RM1.1 billion in the financial year ended Dec 31, 2022 (FY2022), Paramount Corp Bhd has set out to launch RM1.5 billion worth of projects in FY2023. Speaking at the property developer’s financial results briefing on Wednesday (March 1), Paramount chief executive officer Jeffrey Chew Sun Teong shared his optimism on the group’s outlook for the current year, citing signs of the property market’s recovery last year. Chew highlighted that the total number of property transactions grew 12.56% to 105,204 in 3QFY2022, from 93,466 in 2QFY2022, saying it illustrates a recovery in sentiment. Meanwhile, he also underlined a yearon-year decrease in the sector’s unsold units under construction as well as overhand units in 3QFY2022. Amid the property sector’s recovery, Paramount has targeted to launch seven projects worth RM1.5 billion in FY2023 — namely Savana Utropolis Batu Kawan, Bukit Banyan, Sejati Lakeside 2, Paramount Palmera, Jalan Ampang Hilir, Bukit Banyan 2 and Greenwoods Amaria Salak Perdana. Notably, Chew said the group will move into the industrial property sector on the back of received demand with Paramount Palmera in Bukit Minyak, Penang, which will account for RM157 million or 11% of the RM1.5 billion launch target. 22% slump in 4Q net profit, full-year net profit doubles For 4QFY2022, Paramount’s net profit fell 22.4% to RM18.89 million from RM24.35 million a year prior, as quarterly revenue dropped 22.72% to RM245.24 million from RM317.34 million. However, for FY2022 as a whole, Paramount’s net profit surged over two folds to RM60.2 million from RM28.53 million in FY2021, on the back of revenue improvements across the group’s three segments Paramount to launch RM1.5 bil worth of projects in 2023 — property, investment and others, and coworking. Full-year revenue improved 24.38% to RM847.46 million from RM681.35 million, mainly due the property division’s stronger showing. Paramount proposed a final dividend of 3.5 sen per share and a special dividend of 12 sen per share for FY2022. The special dividend has an ex-date of March 17 and is payable on March 29. Paramount’s property division’s revenue improved by 23% year-on-year to RM823.4 million from RM672.1 million, due to FY2021’s low base. Notably, the group ended FY2022 with RM1.1 billion in sales, eclipsing its fullyear sales target of RM1 billion. Unbilled sales stood at RM1.4 billion. Meanwhile, Paramount’s coworking division posted a 62% rise in revenue to RM9.4 million from RM5.8 million in FTY2021, carried by higher contributions across all Co-labs coworking outlets and Scalable Malaysia. The coworking division currently operates five outlets around the Klang Valley with an average occupancy rate of 70%. The coworking division’s loss before tax also contracted 93% to RM600,000 in FY2022, versus RM4.1 million in FY2021. by Izzul Ikram theedgemarkets.com by Syafiqah Salim theedgemarkets.com
thursday M A rch 2, 2023 9 The E dge C E O m o rning brief home GEORGE TOWN (March 1): The expansion of the Penang International Airport (PIA) announced in Budget 2023 will be funded by Malaysia Airports Holdings Bhd (MAHB), and the tender for the project will be called in two months’ time. Transport Minister Anthony Loke Siew Fook said his visit to the airport found an urgent need for the project to be completed immediately. “The tender for the first phase of the expansion project will be called in two months’ time by MAHB so that work can commence this year. We expect the project Tender for Penang International Airport expansion project to be called in two months — Loke TM consolidates business into TM Tech to boost convergence leadership, improve operation efficiency JAKARTA (March 1): Indonesia’s President Joko Widodo on Wednesday launched the construction of a US$2.6 billion hydropower plant that would be linked to a planned industrial park in North Kalimantan. The power plant, called Mentarang Induk, is being developed by PT Kayan Hydropower Nusantara, a joint venture between Indonesian companies PT Adaro Energy Indonesia and PT Kayan Patria Pratama Group, and Malaysia’s Sarawak Energy Bhd. The 1.375 gigawatt plant will be linked to an industrial area the president said will house electric vehicle and battery plants, as well as aluminium and petrochemical facilities. He said the hydropower project is expected to finish construction in seven years to power the planned park. “Our hope is that Indonesia’s economic transformation would really take place toward a green economy,” Jokowi, as the president is known, said at a ground-breaking ceremony that was streamed online. Indonesia is a major thermal coal producer and relies on coal as its main source of power but has pledged to move away from the dirty fuel and reach net-zero emissions before 2060. The country, which is one of the world’s biggest emitters of greenhouse gases, aims to increase the proportion of renewables in its energy mix to 23% by 2025, up from around 12% currently. While less emissions-intensive than coal, environmentalists agree that dams can also cause issues like disruption of water flow, sediment flow and ecosystems. Jokowi breaks ground on Sarawak Energy-linked US$2.6 bil hydropower plant by Fransiska Nangoy Reuters Bernama by Justin Lim theedgemarkets.com to be completed within three to four years. “Once completed, the airport capacity will be increased to 12 million passengers per annum from the current 6.5 million passengers per annum,” he told reporters after a one-day visit to Penang on Wednesday. Loke said the government believes that MAHB is capable of financing the project as it is a profitable airport. “The cost will be borne using a mechanism that will be agreed upon by both MAHB and Finance Ministry. That is why I don’t announce the cost of the project, as it will be done through an open tender,” he explained. Loke said PIA is the third busiest airport in Malaysia, and the last time it was upgraded was in 2013. “This expansion project will not involve any land reclamation and the entire cost will be borne by MAHB,” he said. Meanwhile, when asked about the Kulim International Airport, Loke said the ministry has not received any application for an aerodrome licence. Earlier, the minister also visited the Penang ferry terminal, Penang Sentral and paid a courtesy call to Chief Minister Chow Kon Yeow. KUALA LUMPUR (March 1): Telekom Malaysia Bhd (TM) has announced the internal reorganisation of its business in Malaysia into a single operating entity named TM Technology Services Sdn Bhd (TM Tech) following the approval of various bodies, including the High Court and the Malaysian Communications and Multimedia Commission. TM said that effective Wednesday (March 1), it will serve as an investment holding company for TM Tech, along with other wholly owned subsidiaries, covering TM’s international, digital, education, support business and other non-wholly owned subsidiaries. The group in totality will continue to be governed by the current TM’s board of directors and managed by the same senior management team, said TM in a statement. It said the reorganisation into TM Tech — which includes Unifi, TM One and TM Global — marks the next phase of TM’s transformation that will reinforce its fixed-mobile convergence (FMC) position, further improve operational efficiencies, and deliver a more seamless customer experience. Resource-wise, the reorganisation brings together diverse talents, facilitating greater cross-functional collaboration and agility through more streamlined and simplified processes. “As customer demand, increasing competition and stakeholder expectations reshape the industry, it is timely to consolidate our telco business in Malaysia into a single operating entity that will allow us to serve our diverse customer segments better and quicker, as well as drive operational efficiency,” said TM group chief executive officer Datuk Imri Mokhtar in the statement. “We have recently notified all of our valued customers on this internal reorganisation via email and digital letters. At this point, for all payment transactions — the beneficiary name will now be ‘TM Technology Services Sdn Bhd’ instead of ‘Telekom Malaysia Bhd’. All other payment details remain the same, such as the bank account and JomPAY code,” he added.
thursday M A rch 2, 2023 10 The E dge C E O m o rning brief home news In brie f Sime Darby Property lowers sales target to RM2.3 bil in FY2023 KUALA LUMPUR (March 1): Sime Darby Property Bhd (SDP) has set a lower sales target of RM2.3 billion for FY2023 due to absence of normalisation in the labour situation, rising raw material prices, looming state elections and higher interest rates. SDP group managing director Datuk Azmir Merican said the property developer will closely monitor the market and be ready to take advantage as soon as there is recovery in headwinds. “If you look at our sales numbers of RM3.7 billion in FY(20)22, (they) are 100% from the domestic market. This is the largest you will see in any property company. So I think we have to take that into account. “To execute well, we need contractors and labourers. We have to watch that space. Our view is that we are already seeing labour supply normalising. “We have to give it another three- to four months, which we will then see the situation get better. When the situation gets better, our ability to launch products at decent prices also gets better,” said Azmir at the SDP’s virtual media briefing on its 4QFY2022 financial results on Wednesday (March 1). — by Priyatharisiny Vasu Read the full story KPJ sells Indonesian hospital operations KUALA LUMPUR (March 1): KPJ Healthcare Bhd has entered into a share sale agreement with PT Nusautama Medicalindo via three subsidiaries for the proposed disposal of its Indonesian hospital operations and facilities involving KPJ Medica for a total consideration based on an enterprise value of RM150.2 million. The subsidiaries are Kumpulan Perubatan (Johor) Sdn Bhd (KPJSB), Crossborder Aim (M) Sdn Bhd (CAMSB) and Crossborder Hall (M) Sdn Bhd (CHMSB). In a filing with Bursa Malaysia on Wednesday, KPJ said the proposed disposal involves a 75% stake in KPJ Medica by KPJSB, and a 100% stake in Al-Aqar Bumi Serpong Damai by CAMSB and CHMSB to PT Nusautama Medicalindo at a provisional purchase price of Indonesian Rupiah equivalent to RM13.66 million, subject to adjustment based on closing cash, closing debt and closing working capital. — Bernama Ex-Petronas veteran Rahim Ismail joins T7 Global’s board KUALA LUMPUR (March 1): Datuk Seri Rahim Ismail, who was with Petroliam Nasional Bhd (Petronas) for 27 years, has been appointed as an independent non-executive director of T7 Global Bhd, effective Wednesday (March 1). The energy solutions provider said Rahim, 64, has more than 39 years of experience in the oil and gas (O&G) industry. During his time with Petronas, Rahim held various managerial and leadership roles in corporate, upstream and downstream sectors, budgeting, planning, supply chain management, entrepreneur management and development, education, human resource, downstream commercial, as well as sales and marketing. In 2007, Rahim left Petronas and joined Talisman Energy — now known as Repsol Oil and Gas Malaysia Ltd — as senior adviser until 2020. — by Hailey Chung Read the full story Dufu’s CEO to retire KUALA LUMPUR (March 1): Dufu Technology Corp Bhd said its chief executive officer, Yeoh Beng Hooi, is retiring on March 31. Yeoh, 59, was appointed as the CEO in August 2016, after serving as acting CEO since August 2015. Prior to that, he was the chief operating officer in Dufu Industries Sdn Bhd (DISB) since May 2004, according to the company’s bourse filing. Meanwhile, Dufu has promoted its chief operating officer (COO) Teoh Chiew Hong to the position of deputy CEO from March 31. Teoh, 47, started his career with DISB in 2000 and went on to assume the group COO post in March 2019. — by Justin Lim Catcha Digital names Patrick Grove as chairman KUALA LUMPUR (March 1): Catcha Digital Bhd has appointed major shareholder and co-founder Patrick Ykin Grove as its new chairman, effective from Thursday (March 2). In a statement on Wednesday, Catcha Digital said Grove, who currently sits on its board as a non-independent non-executive director, is a seasoned entrepreneur and investor with extensive experience in the digital media and technology industry, adding that over the last 15 years, he has founded and taken six companies from start-ups to initial public offerings. “Patrick also has extensive experience as a listed company director, and was previously the chairman of ASX (Australian Securities Exchange)-listed iProperty Group, which was acquired by News Corp’s REA Group for approximately RM2.5 billion, and ASX-listed iCar Asia, which was acquired by Carsome for approximately RM850 million,” the company added. — by Izzul Ikram Cape EMS’ IPO shares oversubscribed by 17.8 times KUALA LUMPUR (March 1): Cape EMS Bhd said its initial public offering (IPO) was oversubscribed by 17.82 times by the Malaysian public, ahead of its listing on the Main Market of Bursa Malaysia on March 10. A total of 18,526 applications for 869.64 million issue shares worth RM782.68 million were received from the Malaysian public, according to a statement from Cape EMS. “For the Bumiputera public portion, a total of 6,340 applications for 220.36 million issue shares were received, representing an oversubscription rate of 8.54 times. For the remaining Malaysian public portion, a total of 12,186 applications for 649.29 million shares were received, representing an oversubscription rate of 27.11 times,” Cape EMS said. — by Priyatharisiny Vasu MCT buys land in Taman Desa for RM65 mil KUALA LUMPUR (March 1): MCT Bhd has acquired a 3.9-acre plot of freehold land in Taman Desa here for RM64.65 million to undertake a condominium project with an estimated gross development value of RM500 million. The acquisition of the freehold land from Sisi Tasik Sdn Bhd is the group’s second land buy in Kuala Lumpur following the purchase of another parcel of land in Seputeh that was announced on Feb 20, the group said. “The land is strategically situated at the fringe of Kuala Lumpur’s central business district in a matured and affluent neighbourhood with readily available public amenities and infrastructure with excellent connectivity within the vicinity,” added MCT in a Bursa Malaysia filing. — by Priyatharisiny Vasu Read also: YNH gets shareholders' nod to sell retail assets for RM423 mil ATA IMS units sued by motor supplier over RM20 mil claim Genetec proposes transfer to Main Market Top Builders fails to submit 2Q report Sedania Innovator enters Islamic mortgage market
THURSDAY MARCH 2, 2023 11 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (March 1): Shares in Capital A Bhd were actively traded on Wednesday (March 1), rising as much as 4.5 sen or 6.52% to 73.5 sen, after analysts upgraded their calls and target prices (TPs) following its return to profitability in the fourth quarter ended Dec 31, 2022 (4QFY2022). Even so, the company is projected to only return to full-year profitability in 2024 given its financial issues, which have pushed it into Practice Note 17 (PN17) classification. The aviation stock closed Wednesday 2.9% higher at 71 sen, which translates to a market capitalisation stood of RM2.96 billion. Some 28.58 million shares were traded. MIDF Research said Capital A reported core loss after tax and minority interest of RM2.42 billion for the financial year ended Dec 31, 2022 (FY2022), which was ahead of the research house’s expectations. It anticipates the operator of AirAsia will return to the black in FY2024, having bled red ink since FY2019. Capital A up as much as 6.5% on analysts’ upgrades MIDF maintains ‘buy’ on Deleum after 4Q earnings jump 31% KUALA LUMPUR (March 1): Icon Offshore Bhd dropped 25% in active trade on Wednesday (March 1) despite posting record quarterly and full-year net profits for the financial year ended Dec 31, 2022 (FY2022), boosted by a RM196.35 million net gain from the disposal of a sole jack-up rig. The counter was Bursa Malaysia’s most actively traded stock of the day, with 284.71 million shares traded, while its share price had fallen by three sen to close at nine sen. At nine sen, the group was valued at RM243.59 million. Year to date, the stock has fallen 5.26%. Carried by the net gain from the disposal of the jack-up rig, Icon Offshore’s net profit for 4QFY2022 leapt 32-fold to a record RM153.63 million, from RM4.8 million a year earlier, translating into higher earnings per share of 5.68 sen, versus 0.18 sen previously. Meanwhile, quarterly revenue fell 28.67% to RM57.5 million, from RM80.61 million a year prior, due to lower revenue from its offshore supply vessel and drilling segments, as a result of lower utilisation. Excluding the RM196.35 million net gain from the disposal of the jack-up rig, the group was in the red, with a net loss of RM42.93 million, for 4QFY2022. For the full year, net profit jumped over seven times to RM171.56 million, from RM22.7 million the year prior. However, cumulative revenue slipped 6% to RM282.57 million, from RM300.6 million previously. On Dec 28, 2022, Icon Offshore paid a special dividend of 6.7 sen per share, after completing the disposal of the jackup oil rig to Saudi Arabia-based ADES Arabia Holding. It was the first-ever dividend the group paid out since its listing in June 2014. KUALA LUMPUR (March 1): MIDF Research has maintained its ‘buy’ call on Deleum Bhd and increased its target price (TP) after the group’s net profit improved 30.52% to RM13.77 million in the fourth quarter ended Dec 31, 2022 (4QFY2022) from RM10.55 million in the same period a year ago. Deleum’s TP was revised to RM1.22 per share from 98 sen previously, pegging it at a price-earnings ratio (PER) of 8.5 times to the revised earnings per share of 14.4 sen. The PER is based on the five-year average of the upstream energy services and equipment company, said MIDF in a reIcon Offshore falls 25% in active trade despite record profits BY IZZUL IKRAM theedgemarkets.com BY JUSTIN LIM theedgemarkets.com BY SUFI MUHAMAD theedgemarkets.com search note on Tuesday. “Given that Deleum’s 4QFY2022 performance is above our expectation, and considering that stabilised crude oil will continue to support the upstream subsector, we revise our FY2023 and FY2024 earnings estimates upward by 45% and 47% respectively.” MIDF said Deleum is expected to remain vigilant in the current market environment while continuing to offer the best of its services. It observed that Deleum is investing in technologies, systems and processes to integrate all of its services into one solid and seamless foundation, with the aim to expand its operations in the near future to meet demand for its three major segments of power and machinery, oilfield services and integrated corrosion solutions. Deleum’s higher net profit for the fourth quarter was due to improved results from its power and machinery segment, as well as reversal of impairment made on trade receivables under its oilfield services segment, a company filing to Bursa Malaysia on Tuesday showed. Read the full story The research house upgraded the stock to ‘buy’ from ‘neutral’, with a revised TP of 91 sen from 70 sen previously, as it revised upwards its earnings projection for the aviation company. “As the results were above our expectations, we have adjusted our FY2023/ FY2024 losses/earnings upwards by +49%/+39% to account mainly for higher contribution from associates, adjustments to capacity recovery to be in tandem with the group’s fleet plan and higher load factor for the airlines,” it said. MIDF Research projected that Capital A would generate an annual loss after tax of RM454 million in FY2023, followed by an annual profit after tax of RM491.9 million in FY2024. Kenanga Research analyst Raymond Choo Ping Khoon had also upgraded Capital A’s TP to 67 sen, from 60 sen previously, but maintained his ‘market perform’ recommendation, as Capital A’s FY2022 result came in within its forecast. “We continue to like Capital A for it being a beneficiary to the recovery in air travel as the pandemic comes to an end, its growing digital business, leveraging on its strong AirAsia brand and AirAsia’s existing client base, and its dynamic and visionary leadership that should help to steer it out of the current financial difficulty,” said Choo. Read the full story
THURSDAY MARCH 2, 2023 12 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (March 1): The total value of misappropriated controlled goods seized between Jan 2019 to Jan 2023 stood at RM184.47 million, said the Domestic Trade and Cost of Living Ministry secretary general Datuk Azman Mohd Yusof. According to him, the ministry’s enforcement division handled a total of 3,085 cases involving various offences under the Control of Supplies Act 1961, seizing controlled goods with a combined value of RM82.56 million. Meanwhile, Azman Yusof said there were 1,243 cases under the same Act with a confiscation value of RM101.91 million received from external agencies during the same period. “A total of 1,411 cases involved [the seizure of] diesel and petrol controlled goods with a total value of RM27.9 million in the same period,” he said in a statement on Wednesday (March 1). He added that compounds worth a total of RM11.07 million were issued in 2,719 cases, while another 21 cases involved fines by the courts worth a total of RM523,800, while the remaining cases are still under investigation. The ministry has established a task force with various agencies to handle the leakage of subsidised diesel oil. The first meeting was held on Wednesday, chaired by Azman Yusof. Among the agencies involved are the Ministry of Finance, the Ministry of Home Affairs, the Ministry of Defence, the Ministry of Agriculture and Food Security, the Royal Malaysian Customs Department, the Inland Revenue Board, the Malaysian Armed Forces, the Royal Malaysian Police, General Operations Force, Marine Police Force, Malaysian Maritime Enforcement Agency and the Malaysian Fisheries Development Board. Azman Yusof said the ministry has launched a six-month operation named ‘Ops Tiris’ starting from March 1 until Aug 31. The operation will ensure that the implementation of the diesel subsidy does not experience leakage. Azman Yusof said two committees were also established,namely a steering committee to focus on policy setting chaired by him and a technical committee in charge of Ops Tiris chaired by the ministry’s enforcement director-general Datuk Azman Adam. During the presentation of the re-tabled Budget 2023, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim raised the issue of leakages from diesel subsidies estimated to be worth almost RM10 billion in 2022. “The ministry has taken immediate action through the whole government approach by establishing a task force to identify the cause of leakage and find a concrete solution from policy and implementation mechanisms to overcome the diesel subsidy leakage issue,” Azman Yusof said. Subsidised diesel is sold at gas stations at RM2.15 per litre. Azman Yusof said the low price and easy supply are the main factors in the increase in demand from the industry either for domestic use or for export. “Geographical position with neighbouring countries also affects subsidised diesel misappropriation activities,” he said. “Strict action will be taken including prosecuting them (offenders) in court based on the provisions of the law under the Control of Supplies Act 1961 and the Anti-Money Laundering, Anti-Terrorist Financing and Proceeds From Illegal Activities Act 2001 (AMLATFPUAA 2001).” If convicted of an offence under AMLATFPUAA 2001, offenders shall be imprisoned for a period not exceeding 15 years and may also be fined not less than five times the amount or value of the proceeds of the illegal activity or the equipment of the offence at the time the offence was committed or RM5 million, whichever is higher. Seizure of misappropriated controlled goods since 2019 valued at RM184 mil, says domestic trade sec-gen KUALA LUMPUR (March 1): The company proposing to build the Petaling Jaya Dispersal Link (PJD Link) project is currently in the process of fulfilling the conditions precedent contained in the concession agreement (CA) to enable the agreement to take effect. According to the Ministry of Works, the project’s environmental impact study, traffic impact and social impact as well as documentation preparation are being actively carried out by the company, albeit without involving any physical activity on site. “Regarding the essence of the CA, as fellow Honorable Members of Parliament already know, the CA for the PJD Link is classified as an official secret under the Official Secrets Act 1972 (OSA). “The CA needs to be reclassified before the essence contained in it can be reviewed by the public. The government is also subject to the confidentiality clause contained in the CA,” the ministry told the Dewan Rakyat in a written reply dated Tuesday (Feb 28). PJD Link in the midst of fulfilling conditions precedent, concession agreement still under OSA, says Putrajaya The ministry was responding to Lee Chean Chung (PKR-Petaling Jaya), who asked the ministry to state the government’s stance on the PJD Link and the progress of the plan as well as the content of the CA. The ministry said the project had received approval in principle from the federal government and policy approval from the Selangor government in September 2020 before the CA was signed in April 2022. “The PJD Link project proposal is a national infrastructure requirement based on the Highway Network Development Plan, which is used as a basis and reference for the purpose of planning and developing the road/highway network in this country,” said the ministry. “The proposed PJD Link also aims to disperse traffic congestion starting from Bandar Utama to Kinrara through the Petaling Jaya area. The proposed PJD Link has the potential to act as an alternative to the Damansara-Puchong Expressway, whose traffic currently exceeds its capacity,” it said. BY CHESTER TAY theedgemarkets.com BY HAILEY CHUNG theedgemarkets.com
THURSDAY MARCH 2, 2023 13 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (March 1): The approval to import eggs from India was granted to only one company so far, according to the Ministry of Agriculture and Food Security, in its bid to alleviate shortages in the domestic market. “The company was given permission to import eggs from India based on their track record in bringing eggs from India to Qatar to meet the needs of the 2022 FIFA World Cup in Qatar. “With the company’s ability to deliver eggs in a short time, the ministry has agreed to grant special import approval for a period of six months commencing December 2022,” the ministry told Dewan Rakyat in a written reply dated Tuesday (Feb 28). Nonetheless, the ministry did not reveal the name of the company that was granted this import approval. The ministry was responding to Datuk Wan Saifulruddin bin Wan Jan [Bersatu-Tasek Gelugor ], who asked for the export volume of chicken eggs and the total production volume by local companies from 2018 until the end of February 2023. Wan Saiful also asked the government to state the reason to import eggs from India, which are more expensive and the egg size is smaller; the list of the AP holders for egg imports, the way they were chosen, and the duration that this AP is in effect. As a short-term intervention measure to ensure sufficient supply of eggs in the country, the ministry said it has allowed the importation of Fresh White Shell Egg type from India, weighing between 50-55 grams, which can be graded as grade D in Malaysia or medium in India. “The issue of lack of eggs supply in the local market occurs when there is a decrease in production detected from October to December 2022, where the production cannot cover the needs in the country. “So far, only one company has been given permission based on the application and proposal received from the company,” it said. The ministry also said Malaysians on average consume 11.6 billion eggs a year, which translates to 968 million eggs every month, while production between 2018- 2022 ranges from 10.9 billion to 13.6 billion eggs. “Therefore, this production record clearly shows that egg production is sufficient for domestic needs every year, and there is a surplus that allows Malaysia to export eggs abroad. “Malaysia is the fifth largest egg exporting country in the world, where(in) Malaysia’s main export destinations are Singapore and Hong Kong,” the ministry said. Read also: Ministry sees stable chicken and eggs supply in 1Q2023, says Mat Sabu Aid for disaster victims such as Bantuan Wang Ihsan, Basic Necessity Assistance continue Govt grants sixmonth approval for eggs import from India to only one company KUALA LUMPUR (March 1): The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is not expected to negatively affect local farmers as the government is still allowed to provide subsidies and implement temporary export bans under the free trade agreement, said Deputy International Trade and Industry Minister Liew Chin Tong. “The CPTPP agreement will not affect government assistance programmes including subsidies to farmers for export purposes. Until now, Malaysia has never implemented any export subsidy programme for farmers,” Liew told the Dewan Rakyat on Wednesday (March 1). “Existing subsidies are in the form of fuel subsidies, fertiliser and ship repair and upgrading, for small and artisanal fishermen, all of which are not classified as export subsidies under the CPTPP. “Accordingly, the government can still continue to provide such subsidies and assistance to local farmers and fishermen,” he added. Liew was responding to Che Alias Hamid [PAS-Kemaman], who asked the government to state its stance on the issue pertaining to CPTPP “which clearly has an impact on the country’s agriculture sector”. Liew, however, disagreed that the CPTPP would negatively affect the country’s agriculture, saying it guarantees the rights and interests of local farmers, and it is the only free trade agreement ever signed by Malaysia that acknowledges food security. “The government has the right to implement a temporary ban on the export of CPTPP will not compromise local farmers’ interest, says deputy Miti minister food products so that the food products are sufficient for consumption by the people in this country. [This] contradicted claims that the CPTPP agreement does not allow the government to implement a ban on the export of basic food products such as chicken,” he said. Additionally, Liew said CPTPP will not result in the abrupt elimination of import duties for agricultural goods. “Malaysia depends on the import of agricultural goods where more than 50% of local demand such as mutton and beef are met through imported sources,” he said. Liew said the average import duty for agricultural goods was around 13.8% for 2020, and it fell to 7.9% for 2021. “At the same time, Malaysia has been given a longer staging period of 16 years for the purpose of reducing and eliminating import duties, including for agricultural goods. “Furthermore, Malaysia does not need to completely eliminate import duties for chicken and eggs under the CPTPP, and can still maintain the tariff rate quota system,” he explained. BY CHESTER TAY theedgemarkets.com BY CHESTER TAY theedgemarkets.com TUESDAY MAY 18, 2021 4 THEEDGE CEO MORNING BRIEF TABLE SAMPLE FONT/COLOUR Malaysia eggs production & exports, 2018-Feb 2023 Billion Year Production Exports 2018 13.40 1.90 2019 10.90 1.70 2020 12.90 0.96 2021 13.60 2.00 2022 13.30 1.27 2M2023 2.40 0.18 Source: Ministry of Agriculture & Food Security
THURSDAY MARCH 2, 2023 14 THEEDGE CEO MORNING BRIEF HOME KUALA LUMPUR (March 1): Former BSI Singapore banker Kevin Swampillai has testified in the 1Malaysia Development Bhd-Tanore (1MDB-Tanore) trial that fugitive financier Low Taek Jho, or Jho Low, had used fiduciary funds to create an “optical illusion” that monies belonging to SRC International Sdn Bhd, 1MDB and Aabar Investments PJS were invested in real investment instruments. At the High Court here on Wednesday (March 1), he also testified that he had the impression that these transactions had been done with former prime minister Datuk Seri Najib Razak’s approval Kevin, 58, is the former head of wealth management services at BSI Singapore. The 44th prosecution witness testified to how Jho Low chose fiduciary fund structures in 2011 to layer money flows and obscure client identities when dealing with funds from SRC, 1MDB and Aabar. While reading from his witness statement before judge Datuk Collin Lawrence Sequerah, Kevin testified that at the beginning of the client relationship with Jho Low, SRC, 1MDB and Aabar in 2011, he was not aware of Jho Low’s motives for selecting fiduciary funds over other solutions like insurance structures and trusts. “However with the benefit of hindsight based on the information that has come out in the public domain since 2015, it is evident to me that Jho Low intended that the fiduciary funds would be better at giving the optical illusion to various stakeholders in Malaysia and elsewhere that the funds belonging to SRC, 1MDB and Aabar were invested in bona fide investment instruments, such as investment funds,” he said. Kevin detailed how Jho Low came to use the fiduciary funds by companies such 1MDB Global Investments Ltd (1MDBGIL), SRC, Brazen Sky Ltd and Aabar, which can be traced back to a meeting he had with Jho Low in 2011. “I understand Jho Low had come to know about fiduciary funds and how they are used from his relationship manager Yak Yew Chee. “Yak then asked me to conduct a presentation to Jho Low in order to explain to him the entire range of fiduciary solutions available through BSI Bank. “This range of solutions included trusts, insurance structures as well as fiduciary funds,” he said. BY TIMOTHY ACHARIAM & TARANI PALANI theedgemarkets.com Ex-BSI banker: Jho Low used fiduciary funds to create ‘optical illusion’ that 1MDB monies were in real investments Read the full story More 1MDB stories: Jho Low suspected ex-BSI banker of leaking info on 1MDB transactions to media, court told Jho Low put ‘tremendous pressure’ on BSI Bank to expedite billions of US$ cash transfers Former BSI banker said 1MDB’s Geh told him not to reveal true nature of assets to KPMG He testified that he can’t recall the exact date of the presentation but it took place sometime in the second quarter of 2011 at St Regis Hotel, Singapore. Kevin said besides himself, Jho Low, Yak and ex-BSI banker Yeo Jiawei were present during the presentation. “During that presentation, Jho Low asked a number of questions regarding the inner workings of fiduciary funds. “There were follow-up questions from Jho Low after the St Regis meeting, which were communicated through Yak, which were duly answered by either myself or Yeo,” he said. Kevin added that clients using fiduciary funds have virtually limitless flexibility to decide on the structure of transactions placed through fiduciary funds. For example, they choose the target destinations where the monies will eventually end up. They will decide on the instruments (such as equity shares or loans in the form of lending agreements such as promissory notes) used to optically legalise the flow of money from the fund to target companies or assets intended to be acquired. The clients are also in control of the timing and amounts channelled through such fiduciary structures. He testified that not long after this meeting, the SRC account was opened, followed by Aabar Investment PJS Ltd and Brazen Sky in 2012, and 1MDBGIL in 2013. “The use of fiduciary funds was prevalent in all of these accounts without exception. The common denominator prevalent in all these accounts or companies was the presence of Jho Low and the fact that all these companies came under the auspices of the Ministry of Finance Malaysia (MOF),” he said. Kevin then testified that after using this modus operandi, Jho Low had also used the fiduciary funds method for his other shell companies such as Cistenique Investment Fund, Enterprise Emerging Market Fund (EEMF), Devonshire Capital Growth Fund, Bridge Absolute Return Fund and others. “Each of these funds were domiciled in offshore fund jurisdictions which are widely considered to be ‘light’ in terms of regulatory oversight and control,” he said. He added that Cistenique and EEMF are domiciled in Curacao in the Caribbean region while Devonshire and Bridge were domiciled in the British Virgin Islands (BVI) and Cayman Islands. “Each of these funds were managed and administered by third-party fund managers, but in all transactions undertaken by Aabar BVI, 1MDB, SRC in these funds, the investments and structure thereof was determined by the client,” he said. He said in the case of the fiduciary funds used by Aabar, SRC and 1MDB, the monies transferred to these funds were not placed on fiduciary deposit. “... rather they were conduits to channel monies to various beneficiaries known only to the clients themselves whilst at the same time obscuring the intentions of the client from scrutiny by various stakeholders in Malaysia,” he said. Former BSI Singapore banker Kevin Swampillai PATRICK GOH/THE EDGE
THURSDAY MARCH 2, 2023 15 THEEDGE CEO MORNING BRIEF HOME Ex-PM, Arul Kanda to know fate on Friday in 1MDB audit case Irwan applies to amend defence in 1MDB suit, following IPIC settlement earlier this week KUALA LUMPUR (March 1): Former prime minister Datuk Seri Najib Razak and former 1Malaysia Development Bhd (1MDB) president Arul Kanda Kandasamy will know on Friday (March 3) whether the High Court here will order them to enter their defence or acquit them in the 1MDB audit report tampering trial. Judge Mohamed Zaini Mazlan, now elevated to the Court of Appeal, is expected to deliver his verdict on the duo and also decide whether Arul Kanda’s testimony in the trial against Najib was sufficient for him to be given a certificate of indemnity, as he faces a charge of abetting the ex-PM in abuse of power with regard to 1MDB’s audit report. Arul Kanda had taken the witness stand for two days on Aug 25, where he was questioned by the late Datuk Seri Gopal Sri Ram. Arul Kanda had testified under Section 63 of the Malaysian Anti-Corruption Commission Act 2009 (MACC Act), which allows an accused person to testify as a witness for the prosecution. Najib, 69, is facing an abuse of power charge as a public officer in his capacity as then prime minister and finance minister in altering the 1MDB audit report which was to be tabled to the Public Accounts Committee in 2016. This was so that no action could be taken against him by Parliament. Among items removed included fugitive financier Low Taek Jho’s presence at 1MDB board meetings, and portions of 1MDB’s 2014 financial statements. The former premier’s charge is framed under Section 23(1) of the MACC Act. If convicted, Najib stands to face a maximum of 20 years’ jail, and a minimum fine of RM10,000 or five times the amount of such gratification, whichever is higher. Arul Kanda is charged with abetting the former premier. Arul Kanda had testified last August after Zaini ruled that the former president and 1MDB managing director could testify, following objections by Najib’s defence team. Besides Arul Kanda, other prominent 17 prosecution witnesses who had testified included former chief secretary to the government, the late Tan Sri Ali Hamsa; former auditors general Tan Sri Ambrin Buang and Tan Sri Madinah Mohamad, and former 1MDB chairman Tan Sri Mohd Bakke Salleh. Currently, Najib is serving his 12-year jail term and a RM210 million fine sentence with regard to 1MDB’s former subsidiary SRC International Sdn Bhd, after the Federal Court had upheld the decision of the High Court and Court of Appeal to convict him. Should Najib be asked to enter his defence, this would be the second case after SRC wherein he has been ordered to do so. Besides this, Najib is currently on trial for the 1MDB-Tanore case, wherein he faces four charges of abuse of power and 21 money laundering charges of RM2.28 billion, as well as the second SRC case involving money laundering of another RM27 million and six counts of US$6.6 billion criminal breach of trust of 1MDB funds to International Petroleum Investment Corporation (IPIC). Earlier this week, however, the government announced that Abu Dhabi had agreed to pay Malaysia US$1.8 billion as part of 1MDB’s, and IPIC’s and its subsidiary Aabar Investments PJS (Aabar PJS)’s settlement. BY HAFIZ YATIM theedgemarkets.com BY HAFIZ YATIM theedgemarkets.com PATRICK GOH/THE EDGE Former prime minister Datuk Seri Najib Razak KUALA LUMPUR (March 1): Lawyers for former Treasury secretary general Tan Sri Mohd Irwan Serigar told the High Court on Wednesday (March 1) that they are applying to amend his statement of defence following Abu Dhabi’s US$1.8 billion payment to settle the disputes between 1Malaysia Development Bhd (1MDB) and International Petroleum Investment Company (IPIC). In addition, the court was also informed that Messrs Brendan Siva is the new solicitor for 1MDB, since Feb 16, taking over from Messrs Rosli Dahlan Saravana Partnership. This was highlighted to Judicial Commissioner Datuk Raja Ahmad Mohzanuddin Shah Raja Mohzan following case management on Wednesday. Mavinthra Thillainathan appeared for Irwan while Brendan Siva appeared for 1MDB. Following that, Raja Ahmad Mohzanuddin directed Irwan’s lawyers to submit the application by March 22, and fixed April 5 as case management for 1MDB to inform the court whether it would object to the amendment. Should there be objection to the amendment, the court has fixed May 18 for hearing of the amendment. 1MDB had named Irwan and former 1MDB president and managing director Arul Kanda Kandasamy in the US$6.6 billion suit that the firm filed in May 2021 for alleged breach of fiduciary duty, breach of trust and conspiracy. Among others, the strategic development company is seeking US$6.59 billion from the duo as a result of the purported breach. Separately, 1MDB is also seeking an additional RM2.9 million against Irwan and Arul Kanda for fraudulent breach of duties and knowing receipt respectively over an alleged extension of the employment agreement dated Feb 23, 2018. The RM2.9 million was the sum paid to Arul Kanda for the purported employment extension agreement. In its statement of claim, 1MDB claimed that both Arul Kanda and Mohd Irwan are liable for breach of duties and breach of trust, which resulted in the strategic development company paying a sum of US$1.83 billion to 1MDB-PetroSaudi Ltd, which was converted into stakes in Brazen Sky, and subsequently converted into an investment in Bridge Global Fund. 1MDB also alleged that the duo committed fraudulent breach of duties and breach of trust, resulting in a payment of US$1.265 billion to IPIC as part of a consent award dated May 9, 2017, and US$3.5 billion being misappropriated from the company to Aabar BVI. Earlier this week, Malaysia and Abu Dhabi reached a settlement regarding the disputes between 1MDB and IPIC, with IPIC and its subsidiary Aabar Investments PJS (Aabar PJS) agreeing to pay the Malaysian government US$1.8 billion.
THURSDAY MARCH 2, 2023 16 THEEDGE CEO MORNING BRIEF WORLD BEIJING (March 1): Premier Li Keqiang told the head of the International Monetary Fund that China is open to participating in multilateral efforts to help heavily indebted nations “in a constructive manner”, China Central Television (CCTV) reported. “China is willing to take part in resolving relevant countries’ debt issues,” Li said in a phone call on Wednesday with IMF Managing Director Kristalina Georgieva, according to CCTV. “China maintains that all sides should take joint action and share equitable burden,” he said. China, a major lender to debt-laden countries such as Sri Lanka and Pakistan, China tells IMF willing to take constructive part in debt talks BEIJING (March 1): China’s economy is showing signs of a stronger rebound after Covid restrictions were abandoned, with manufacturing posting its biggest improvement in more than a decade, services activity climbing and the housing market stabilising. The manufacturing purchasing managers’ index rose to 52.6 last month, the National Bureau of Statistics said on Wednesday, the highest reading since April 2012. A non-manufacturing gauge measuring activity in both the services and construction sectors improved to 56.3. Both indexes beat economists’ expectations. The PMIs provide the first comprehensive data of the economy’s recovery after Covid restrictions were dropped late last year, infection waves began easing and businesses returned to normal after the Lunar New Year holidays. The figures add to other signs of a rebound in the economy and put policymakers in a good position ahead of next week’s National People’s Congress, where a new growth target will be disclosed. Although there were “significant seasonal and event factors” influencing the PMI figures, the “overall trend still points to a solid recovery at the beginning of 2023”, said Zhou Hao, chief economist at Guotai Junan International. “The decent PMI readings provide a positive note for the upcoming National People’s Congress,” with the government expected to roll out further supportive policies to cement the recovery, he said. The data buoyed stocks and fuelled a rally in commodities. The Hang Seng China Enterprises Index, which tracks Chinese companies listed in Hong Kong, rose 5.1% and the offshore yuan gained as much as 1%. West Texas Intermediate oil swung from an earlier decline and was up 0.7% as of 8.56am in London. Copper rose 1% on the London Metal Exchange and aluminium, iron ore and zinc also climbed. While investors have focused Wednesday on the signs of recovery, the NPC next week is proving to be a source of uncertainty. President Xi Jinping is moving to consolidate the Communist Party’s hold over the world’s second-largest economy, with plans for sweeping changes to China’s bureaucracy and more influence within private companies, including reforms for the financial sector. Economists have also cautioned that even as the improving factory data suggests the recovery is becoming more balanced, there are still headwinds, as global demand remains weak and exports will likely contract this year. “Taking into account January’s strong PMI readings, the data show the recovery is outpacing the rebound at a comparable stage in early 2020 after the national lockdown was lifted. Looking ahead, it will be hard to keep up this brisk pace, with global growth slowing and pent-up demand after Covid reopening likely to fade. Still, with policy swinging toward growth support, the recovery should sustain momentum into the second quarter,” said Chang Shu and Eric Zhu, economists at Bloomberg Economics. Other data has signalled a pickup in domestic demand. China’s home sales rose in February from a year earlier, the first such increase since June 2021 as policymakers expanded support for the sector. Road congestion in major cities has increased, subway ridership has returned to pre-pandemic levels and restaurant and mall spending has risen. The initial Covid wave following the ending of pandemic restrictions has now subsided, boosting February’s PMI numChina’s economy shows strong recovery as Covid Zero era ends Bloomberg Bloomberg bers, according to Zhao Qinghe, a senior statistician at the NBS. Measures to stabilise growth in the country have also started to take effect, Zhao added. A separate, private PMI survey focused on smaller companies also showed improvement in February, rising to 51.6 from January’s 49.2. That increase in the Caixin Manufacturing Purchasing Managers’ Index was driven by pickups in both supply and demand as production gradually returned to normal, Caixin and S&P Global said in a statement on Wednesday. China’s rebound is also giving a boost to manufacturing in other parts in Asia. PMIs in Thailand, Vietnam and other Southeast Asian producers climbed last month. In North Asia, the picture was more mixed, with Japan’s factory activity falling, while Taiwan’s PMI rebounding, but remaining below 50. Top leaders in China have pledged to prioritise growth this year, placing an emphasis on the role that domestic demand will play in driving the recovery. The People’s Bank of China said in its latest monetary report that it would provide “sustainable” support for the real economy and refrain from using “flood-style” stimulus. A recovery in economic growth this year will lead to an improvement in local governments’ fiscal conditions, Finance Minister Liu Kun said during a briefing on Wednesday. China will moderately expand fiscal spending in 2023 to ensure the overall level of government investment won’t decline, he said. “The latest economic data suggests China’s reopening has been working well,” said Nicolas Wang, senior equity adviser at Union Bancaire Privée. Still, “with regard to the NPC outcome, the market seems to be lowering expectations on the stimulus plan, which has been priced in by the equity market to some degree”. Read also: Eurozone factory output returned to growth in February — PMI is mired in disputes with multilateral banks over which parties should take the lead in restructuring sovereign debt. The IMF is considering approving a Sri Lanka bailout without the formal assurance of debt-restructuring support from Beijing, Bloomberg News reported last month. The Chinese government, which accounts for about 52% of the bankrupt nation’s bilateral debt, has offered term extensions via stateowned policy lender Export-Import Bank. Georgieva told Li that the IMF wants to strengthen coordination and cooperation with China to handle the debt crisis in developing countries, CCTV reported.
THURSDAY MARCH 2, 2023 17 THEEDGE CEO MORNING BRIEF WORLD LARISSA, Greece (March 1): A passenger train and a cargo train collided headon in Greece on Tuesday night, killing at least 36 people and injuring dozens as the country’s deadliest rail crash in living memory threw entire carriages off the tracks. The death toll was expected to rise further, a fire brigade official said. Sixty-six of those injured were hospitalised, six of whom are in intensive care, the official said. The crash occurred as the passenger train emerged from a tunnel. Derailed carriages, badly damaged with broken windows and thick plumes of smoke, could be seen on the site. One passenger carriage stood on its side at almost 90 degrees from the rest of the wrecked train, with other derailed carriages tilting precariously. The passenger train was carrying 342 MUMBAI (March 1): India’s thriving farm sector — the only bright spot in its slowing economy — has become a hostage to warnings of a heat wave, muddling the outlook for policy makers already grappling with sticky inflation. The nation’s economic growth unexpectedly slowed to a three-quarter low of 4.4% in three months to December, data showed on Tuesday. The weather office’s prediction of a hotter summer compounded the concerns, throwing a fresh challenge before the central bank that’s already struggling to keep a lid on prices. “If these weather forecasts do play out then I would think the farm sector output will certainly get affected,” Radhika Rao, senior economist at DBS Bank Ltd, said in an interview to Bloomberg TV on Wednesday. Above-normal temperatures along with heat wave conditions are expected in most parts of India during three months ending May 31, threatening to lower crop production and hurting the efforts to control food costs. That’s also bad news for about twothirds of India’s population dependent on agriculture, which contributes about 14% to the gross domestic product. With a 3.7% growth, India’s farm sector powered the economy in the last quarter when manufacturing output faltered and services growth softened. As the chances of a crop-damaging heat wave rise, this growth driver may take a hit. The government’s forecast for a record wheat and rice production this year is also at risk as deficient rains could keep domestic food costs elevated, complicating the job of the Reserve Bank of India that is seen hiking rates in April amid slowing demand. Fiscal situation “A drought this year is likely to lead to worse price fluctuations, given the already tight supply situation and entrenched price pressures,” said Madhavi Arora, an economist with Emkay Global Financial Services. This will tighten the fiscal situation further Sizzling heat wave puts India’s farm sector and economy at risk BY ADRIJA CHATTERJEE & ANUP ROY Bloomberg as the government would need to provide higher price guarantee to farmers, she said. This also implies a potential impact on fertiliser prices, with usage likely to increase during a poor monsoon year to maintain crop yields, according to Arora, who sees fertiliser subsidies staying at an elevated level after a record payout in the current year, further reducing the government’s fiscal wiggle room. India’s finance ministry has already acknowledged risks to growth and prices if El Nino conditions return. Chief Economic Adviser V Anantha Nageswaran on Tuesday flagged the need to be ready with both supply side and monetary policy measures in the wake of a deficient monsoon season. The central bank, which has raised borrowing costs by 250 basis points since May to bring inflation within its 2%-6% target band, is also aware that the risks from adverse weather events remain. The meteorological department’s predictions are “drawing a worrisome backdrop for harvest of the winter crop as well as sowing in the summer period”, said Rao. “Unfortunately irrigation covers only 50% of the crop land and there’s significant reliance on these rains.” Read also: India’s December quarter GDP growth stronger than data suggests, say economists “The apparent slowdown in India’s gross domestic product (GDP) growth in the October-December quarter has been driven to a large extent by revisions to past data, economists said, adding that the growth is evolving on expected lines and may not sway the central bank to pause rate hikes. India’s GDP grew 4.4% in October-December, down from 6.3% in July-September.” Bad news for about two-thirds of India’s population dependent on agriculture, which contributes about 14% to the gross domestic product. travellers and 10 crew, while two crew were on the cargo train, according to Hellenic Train data. The government declared three days of national mourning, from Wednesday to Friday, with flags flying at half-mast in a tribute to the victims of the crash. Police temporarily detained the station master in Larissa and at least three witnesses have been questioned, including a representative for Hellenic Train, a police official said. Trains collide in Greece, at least 36 killed, dozens injured BY STAMOS PROUSSALIS & ANGELIKI KOUTANTOU Reuters REUTERS BLOOMBERG
THURSDAY MARCH 2, 2023 18 THEEDGE CEO MORNING BRIEF WORLD HONG KONG/DUBAI (March 1): China Vanke Co, China’s second-largest developer by sales last year, is seeking to raise up to US$504 million through a share placement in Hong Kong, its first in the Asian financial hub since 2020. The company is offering 300 million shares at HK$12.93-HK$13.20 apiece, according to terms of the deal obtained by Bloomberg News. That represents a discount of 5-7% to the closing price of the H-shares on Wednesday. The company aims to use the Hong Kong share sale to repay debt and replenish working capital. In February, it amassed the equivalent of US$2.2 billion through a placement in mainland China, the largest onshore additional share sale by a Chinese developer since authorities reopened the equity market for the beleaguered sector last year. As part of a sweeping sector rescue late last year, China ended a ban on onshore equity fundraising for property developers and widened a programme to facilitate local bond sales with government guarantees. China Vanke seeks US$504 mil in first HK placement since 2020 Country Garden Holdings chairman steps down, names successor (March 1): A gauge of manufacturing improved for the first time in six months, though activity remained in contraction territory amid fragile demand and growing inflationary pressures. The Institute for Supply Management’s gauge of factory activity ticked up to 47.7 in February from the weakest print since May 2020. The median estimate in a Bloomberg survey of economists was for 48. Readings less than 50 indicate contraction. The latest data, released Wednesday, highlight a manufacturing sector that’s struggling for a foothold. While household demand rebounded at the start of the year, rising interest rates, higher input costs and looming concerns of an economic downturn remain persistent headwinds. Fourteen industries reported contraction in February, led by the printing, paper and wood products industries. Four sectors expanded. “New order rates remain sluggish due to buyer and supplier disagreements regarding price levels and delivery lead times; the index increase suggests progress in February,” Timothy Fiore, chair of ISM’s Manufacturing Business Survey Committee, said in a statement. “Panelists’ companies continue to attempt to maintain headcount levels through the projected slow first half of the year in preparation for a stronger performance in the second half.” ISM’s new orders index rose in February by the most since 2020, while the production gauge slipped to 47.3. Even with the improvement, the gauge of bookings remained below 50, indicating orders continued to shrink in the month. Inventories were little changed. The group’s measure of prices paid for materials rose for a second month. At 51.3, it was the first time since September that the figure indicated rising costs. The step-up in input prices comes on the heels of data last week that showed the Federal Reserve’s key inflation gauges accelerated at the start of the year. Stubborn price pressures are expected to lead policy makers to pursue several more interest-rate hikes in the coming months. KUALA LUMPUR (March 1): Country Garden Holdings Ltd chairman and executive director Yang Kwok Keung has tendered his resignation from his position with effect from Wednesday (March 1), citing his age as the reason, according to a press statement. The statement added that the company’s chairman position will be passed to co-chairman Yang Huiyan, his 41-year-old daughter, with effect from the same day. Kwok Keung, 68, will however continue to participate in corporate operations of the group as a special adviser post resignation. Huiyan, meanwhile, will continue to act as an executive director of the company. “She is well versed in the company and business operations, with years of business management experience in managing the day-today work of the group together with [Kwok Keung]. “On top of that, she is also responsible for the strategic planning of the group. This succession reflects [Kwok Keung]’s full trust and recognition of [Huiyan], with hope that the company will soar to greater heights under the leadership of the board and the management,” according to the statement. US factory gauge rises slightly while still showing contraction BY READE PICKERT Bloomberg BY FILIPE PACHECO & JULIA FIORETTI Bloomberg BY RACHEL CHEW theedgemarkets.com SCMP Read also: Goldman Sachs expects ECB to raise rates by 50 bps in May meeting
THURSDAY MARCH 2, 2023 19 THEEDGE CEO MORNING BRIEF WORLD (March 1): The founders of Singapore-based crypto lender Hodlnaut Pte Ltd proposed selling the business as a better option for creditors than liquidating the embattled firm. Simon Lee said in an affidavit seen by Bloomberg News that he and Hodlnaut’s other co-founder Zhu Juntao had reached out to a number of “potential white-knight investors”. Lee said the co-founders believe the “Hodlnaut user base can be acquired and on-boarded on digital-asset platforms owned or affiliated to such investors”. He argued this would “maximise” value for creditors. Singapore crypto lender Hodlnaut’s founders propose selling business rather than liquidating firm LOS ANGELES (March 1): TikTok will automatically impose a 60-minute time limit for users under age 18, an attempt to mitigate the app’s addictive nature and address concerns about its impact on teens. The new approach will require younger users to enter a password if they want to binge more than an hour of videos at one time, the company said in a blog post on Wednesday. Parents and other adults can also monitor the amount of time teens spend on the app — with a breakdown of daytime versus nighttime use — and see the number of times it was opened. The 60-minute limit will be the default for users under 18, though it can be removed. It’s a critical time for TikTok, owned by ByteDance Ltd, to demonstrate that it’s doing all it can to be a safe space for users. The company is facing intense global scrutiny that could lead to the app being banned in some of its largest markets. Legislators and regulators have two chief lines of concern: whether TikTok’s ownership by a Chinese tech company presents national security risks and how users — especially young ones — could be influenced by the videos they see on the app. Similar curbs are already in place for TikTok’s Chinese cousin Douyin. ByteDance’s local service currently has a setting that limits users under the age of 14 to 40 minutes a day and keeps them out entirely from 10pm to 6am daily — restrictions that are easier to enforce in China where there are strict rules around real-name registration. It’s unclear whether TikTok’s measures will be as effective in the US where children may be able to opt out of the restrictions or set their own passwords to unlock accounts. As part of the latest changes, adults can also mute notifications for teens if their accounts are connected through the Family Pairing tool and apply a custom time limit. If there is no time restriction for a teen account, the young user will receive a notification when they spend more than 100 minutes on the app in a day, with a prompt to set up a limit. For TikTok, the time people spend on the app is equal parts badge of honour and point of contention. It leads the social media industry by this measure, with users spending an average of 95 minutes a day on the app globally, according to a report last year from Sensor Tower. YouTube came in second with 74 minutes, while Instagram had 51. TikTok’s personalised feed keeps users hooked and helps sell ads — the company’s main source of revenue. But it’s also what has policymakers concerned. A bipartisan group of US state attorneys general are probing whether TikTok’s marketing to young users can lead to physical TikTok is imposing time limits on teens to prevent binges BY ALEX BARINKA Bloomberg BY SUVASHREE GHOSH Bloomberg and mental harms. And the state of Indiana has gone so far as to sue the company over risks to adolescent users. In Congress, meanwhile, lawmakers have introduced a number of bills that aim to ban the app over the national security risks posed by its Chinese ownership. The Biden administration is conducting its own review through the Committee on Foreign Investment in the US. Last week, the European Commission barred staff from using TikTok, just one month after Internal Market Commissioner Thierry Breton said the EU would ban the platform if it didn’t follow content moderation and data rules. Read also: US House Democrat opposes giving Biden power to ban TikTok “The top Democrat on the House Foreign Affairs Committee said on Tuesday that he opposed a Republican bill that would give President Joe Biden the power to ban Chinese-owned social media app TikTok and other apps.” The company didn’t immediately respond to an email seeking comment on the co-founders’ proposal. Hodlnaut, which also has operations in Hong Kong, halted withdrawals in August, and was granted protection from creditors. It was one of a number of crypto lenders worldwide that hit trouble in last year’s digital-asset rout. Key Hodlnaut creditors in January said their interests are best served by winding the firm up. Hodlnaut had downplayed its exposure to crypto fugitive Do Kwon’s collapsed Terra digital-token ecosystem, but in reality suffered a near-US$190 million (RM849.39 million) loss.
thursday M A rch 2, 2023 20 The E dge C E O m o rning brief world LONDON (March 1): Zara founder Amancio Ortega, Spain’s richest person, expanded his global portfolio of commercial real estate last year, acquiring at least 10 properties across North America and the UK for more than US$2 billion. Other ultra-wealthy individuals and their investment firms remained focused on the asset class, which was among the hardest-hit by the pandemic and the lasting consequences of remote work, according to Knight Frank’s 2023 Wealth Report. That’s a stark contrast from institutional investors, who pared their share of the US$1.1 trillion market for offices, logistics sites and rental housing as defaults start to mount from higher interest rates in an end of the easy-money era. Wealthy individuals, family offices and closely held companies took advantage of their smaller debt profiles and lengthier investment horizons to spend a combined US$455 billion last year on commercial real estate. They were the most active buyers in the sector annually for the first time, the London-based broker said in the report, released on Wednesday. The total invested on behalf of the world’s rich marked an 8% decline from the previous 12 months, when pent-up demand following Covid-19 lockdowns pushed their property spending to record highs, according to the report. Institutional firms’ volumes fell 28% in the same period. “Private buyers are taking advantage of the ongoing repricing of assets and stronger currency positions,” Alex James, Knight Frank’s head of private client advisory, said in a statement. “This trend is set to continue with private investors seeking liquid wealth preservation options.” The figures underscore the long-term investment outlooks of the world’s ultra-rich and how they often seek to diversify their wealth through real estate, where sales of commercial mortgage bonds are now slumping as rising interest rates cut into lending volumes. Ortega, 86, acquired five US logistics sites for more than US$700 million in September. He picked up a Seattle luxury residential skyscraper in December for about US$300 million after previously buying an Amazon.com Inc office building in the city. World’s rich take advantage as US$1 tril property market drops (March 1): UK house prices fell at their sharpest annual pace since 2012 last month, steepening a downturn sparked by a jump in mortgage rates. The average cost of a home fell 1.1% from a year ago last month after a gain of the same size in January, Nationwide Building Society said on Wednesday. It marked the sixth consecutive monthly drop in prices and the first annual decline since June 2020. “It will be hard for the market to regain much momentum,” Robert Gardner, Nationwide’s chief economist, said in a statement on Wednesday. “Headwinds look set to remain relatively strong, with the labour market widely expected to weaken as the economy shrinks in the quarters ahead, while mortgage rates remain well above the lows prevailing in 2021.” The report points to a tightening squeeze on consumer spending power after inflation jumped to its highest in 41 years, prompting an unprecedented series of interest rate hikes from the Bank of England. That pushed up the cost of borrowing to levels not seen since the global financial crisis more than a decade ago. A separate report from the British Retail Consortium showed prices in UK stores rose at their strongest pace since at least 2005, forcing consumers to pay more for a smaller basket of goods. “Retail prices across the board continued to react to the impact of soaring energy bills, higher running costs and tougher trading conditions brought about by the war in Ukraine,” said Helen Dickinson, chief executive officer at the BRC. “Prices will remain high over the coming months.” After soaring through the pandemic when the BOE’s key rate was near zero, house prices started sliding late last year and now have clocked up their longest run of monthly declines since 2008 to 2009. Despite the fall in house prices, homes are still becoming more unaffordable for firsttime buyers due to higher mortgage rates and UK house prices slide at sharpest annual pace since 2012 by Lucy White Bloomberg by Benjamin Stupples Bloomberg shrinking real wages. The average value of a home was £257,406 (US$310,380), 3.7% lower than the August 2022 peak. Nationwide said mortgage payments on average consumed 39.4% of take-home pay, the most since the financial crisis and well above the long-run average of 29.4% “For a prospective first-time buyer earning the average income looking to buy the typical home, mortgage payments remain well above the long run average as a share of takehome pay,” Gardner said. Deposit requirements were also “prohibitively high” for many. Nationwide’s report agrees with other surveys pointing to a weakening in the market. Homebuyers are getting the edge in the UK property market as sellers cut their asking prices to get deals done. The average discount to asking price to achieve a sale was 4.5% this month, according to a report from property portal Zoopla. That’s the most in more than five years and up from 0.4% in 2022 and 0.6% the year before. But Nationwide diverged from data published by property portal Rightmove last month, which suggested asking prices were unchanged. This could suggest a growing divide between what sellers want, and what buyers are willing to pay. A representative for Ortega’s family office, Pontegadea, declined to comment. He has a net worth of US$63.5 billion, according to the Bloomberg Billionaires Index, derived largely from his majority stake in Zara owner Inditex SA. Joe Tsai, Alibaba Group Holding Ltd’s co-founder, also emerged last year with an indirect stake in more than a half-dozen five-star hotels across Spain through his family office, Blue Pool Capital. “You often find there’s a sort of skinin-the-game element if you’ve got private investors buying,” Liam Bailey, Knight Frank’s global head of research, said about the differences between the world’s rich and institutional firms. “For an office building in London, the majority of that will be an investment play, but it may also be driven by the fact that actually the family office needs an office of its own.” Private investors mostly focused on rental housing in the commercial real estate sector during 2022. They allocated the most capital in the US, where New York remains a hub as well for residential real estate deals of US$25 million or more, according to Knight Frank’s report. New York also led the global ranks of cities for sums spent on commercial property from local private investors in 2022, while London received the highest amount from foreign investors.
thursday M A rch 2, 2023 21 The E dge C E O m o rning brief world NEW YORK (March 1): In telling their stories about how the future is bright for stocks, bulls point to solid earnings to justify the optimism. But cracks are forming in that narrative — in the trajectory of profits, and just as worryingly in the makeup of the profits themselves. In a potentially ominous development, earnings across US industries have started to expand noticeably faster than cash is coming in the door. Income at S&P 500 companies, adjusted for amortization and depreciation, topped cash flows from operations by 14% in the year through September, according to data compiled by UBS Group AG that excludes the index’s financial and energy firms. In other words, for every dollar of profits, only 88 cents was matched by cash inflows, the largest discrepancy since at least 1990. One way this happens is when money owed to companies is booked as sales before payment actually arrives, a perfectly acceptable accounting treatment that nevertheless stirs anxiety when it’s trending in this manner. Another way is when the cost of producing goods understates the cash being consumed as inventory builds. Rather than an indication of bad management behaviour, the widening gap likely highlights a harsh business environment, raising questions over the reliability of the corporate resilience stock bulls like to highlight. While financial results largely came in better than expected last quarter, the number of loss-making firms is hovering near a record high. With the Federal Reserve aiming to slow demand in its inflation-fighting campaign, companies are increasingly in a position where earnings may not present the whole picture of their financial state. “Managers are under so much pressure to deliver earnings that they’re using a lot more accounting than they have in the past to make their earnings look good,” said Sanjeev Bhojraj, alumni professor in asset management at Cornell University. “If my dollar of earnings has no cash or negative cash, that’s poor quality because all the earnings that I have are just accounting.” The concept of earnings quality is an abstract one, subject to a panoply of moving parts. Broadly speaking, it measures how reliable current earnings are and how able they are to predict future cash flows. An increase in income without a commensurate rise in cash flow, for instance, is typically viewed as inauspicious. Right now, the issue is widespread. by lu wanG Bloomberg Worst earnings quality since 1990 erodes bull case for US stocks Measured against assets, the median company in the S&P 500 saw this type of cashless earnings — items that in accounting parlance fall into a category known as accruals, where a dash of management judgment is part of the calculus — rise to the highest on record last year, according to data compiled by UBS. At the centre of the worsening situation is a surge in inventory where cash is tied up on a warehouse shelf or an unsold development. A jump in the amount of money owed by customers can have a similar impact. As a way of illustration, consider Deere & Co, a machinery maker. For the year though January, the company reported net income of US$8.2 billion, compared with US$6 billion in operating cash flows. Contributing to the gap was an increase in accounts receivable of US$3.4 billion — payments that had yet to hit the coffers despite providing a lift to the bottom line. Homebuilder PulteGroup Inc offers another example. It booked US$2.6 billion in profits last year on the back of almost US$670 million of cash flows. Hindering cash generation was a US$2.3 billion buildup in inventory where money was spent on manufacturing houses that had not produced revenues. The firm blames supply-chain disruptions for extending its construction cycle to more than 160 days, up from about 90 days pre-Covid. “The longer build cycle was a big driver of the increase in inventories,” Jim Zeumer, a spokesman for PulteGroup, wrote in an email. “With improving availability of material and labour, cycle times are beginning to decrease which will allow inventories to improve.” A spokesperson for Deere declined to comment. The worsening earnings quality is prompting concern especially since corporate earnings were often cited as one big driver behind the latest rally that lifted the index as much as 17% from its October low. If the trend in accruals is any guide, all the positive surprises in profits perhaps weren’t as much to cheer about. Keith Parker, head of US equity strategy at UBS, views the expansion in accruals as a sign that the cycle of earnings downgrades is far from over and the new-year equity rally will likely fizzle out. “It’s just another marker that points to earnings power being less than what we’re seeing on the headline level,” Parker said. “When you do the math on what’s the difference between earnings and operating cash flow, that wedge points to considerable risk to earnings if they were to catch down to cash flow, something on the order of 15% downside.” Gauging earnings quality has become a pastime for Wall Street of late as investors search for a reliable anchor for a stock market that’s been nothing but turbulent. While the S&P 500 doesn’t necessarily mirror its profit trajectory quarter by quarter, the index does track it closely over time. “Accruals anomaly,” documented in 1996 by Richard Sloan, a professor of accounting and finance now with the University of Southern California, refers to a pattern that firms with high accruals tend to perform worse than those with low accruals. Whether the relationship has persisted since its discovery has become a topic of debate in academics. Researchers like Parker and Bhojraj hold the view that accruals provide a unique lens into the state of corporate America’s profit machine. The latest rise in accruals likely reflected an urgency among business leaders to sustain profits after an abrupt end to the post-pandemic boom that was sparked by unprecedented government stimulus. Now, as the Fed continues its aggressive tightening campaign, many companies face the challenge of generating profits in a slowing demand environment. As of the 12 months through January, roughly 32% of firms in the Russell 3000 Index were losing money, according to data compiled by Kailash Concepts Research and Bloomberg. Before the pandemic, only twice since 1978 had profitless firms been so widespread — in the dot-com era during the early 2000s and the aftermath of 2008 global financial crisis. “The pressure on these leadership teams is intense,” said Gregg Fisher, founder of Quent Capital LLC. “If you’re getting ready to release your earnings and you can move a penny around somewhere from left to right, it just might tell a better story that as long as it’s legal, they do it.” For every dollar of profits, only 88 cents was matched by cash inflows, the largest discrepancy since at least 1990.
THURSDAY MARCH 2, 2023 22 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) ICON OFFSHORE BHD 284.70 -0.030 0.090 -5.26 243.60 VELESTO ENERGY BHD 129.00 0.005 0.195 30.00 1602.00 MY EG SERVICES BHD 97.60 0.015 0.735 -14.71 5455.20 VINVEST CAPITAL HOLDINGS BHD 67.70 0.010 0.230 21.05 222.90 REACH ENERGY BHD 60.80 -0.015 0.050 11.11 54.80 CITAGLOBAL BHD 43.80 0.040 0.295 1.72 559.70 TOP GLOVE CORP BHD 42.40 -0.040 0.715 -20.99 5725.20 PRG HOLDINGS BHD 42.10 0.040 0.220 41.94 94.60 PHARMANIAGA BHD 39.60 -0.015 0.255 -53.21 334.10 HARTALEGA HOLDINGS BHD 32.30 -0.020 1.450 -14.71 4955.30 ZEN TECH INTERNATIONAL BHD 31.10 0.000 0.020 0.00 16.20 WIDAD GROUP BHD 29.10 0.005 0.415 -3.49 1171.5 DATAPREP HOLDINGS BHD 28.80 -0.005 0.205 -8.89 138.3 CAPITAL A BHD 28.60 0.020 0.710 13.6 2954.9 TANCO HOLDINGS BHD 27.10 0.015 0.465 38.81 862.6 CSH ALLIANCE BHD 24.60 0.000 0.045 12.50 62.2 REVENUE GROUP BHD 24.40 -0.035 0.365 -45.93 176 BINA PURI HOLDINGS BHD 22.80 -0.005 0.035 -12.5 72.7 MESTRON HOLDINGS BHD 21.60 -0.005 0.420 -6.67 403.1 PROGRESSIVE IMPACT CORP BHD 20.40 -0.020 0.315 21.15 206.4 Data as compiled on Mar 1, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) PEGASUS HEIGHTS BHD 0.010 100.00 641.4 0.00 108.2 VSOLAR GROUP BHD 0.010 100.00 523.1 0.00 48.3 MMAG HOLDINGS BHD 0.020 33.33 3,518.5 -20.00 48.4 PASUKHAS GROUP BHD 0.020 33.33 890.0 33.33 38.1 XOX BHD 0.020 33.33 120.1 33.33 101.0 LAMBO GROUP BHD 0.025 25.00 361.4 -54.55 38.5 SANICHI TECHNOLOGY BHD 0.025 25.00 380.1 0.00 35.1 PRG HOLDINGS BHD 0.220 22.22 42,060.6 41.94 94.6 ALDRICH RESOURCES BHD 0.030 20.00 1.0 0.00 33.4 XOX NETWORKS BHD 0.030 20.00 331.2 0.00 34.1 IQZAN HOLDING BHD 0.035 16.67 450.0 0.00 7.8 CITAGLOBAL BHD 0.295 15.69 43,826.6 1.72 559.7 JADI IMAGING HOLDINGS BHD 0.080 14.29 1,654.6 -5.88 86.1 EVD BHD 0.210 13.51 2,501.3 5.00 85.4 GOLDEN PHAROS BHD 0.260 13.04 1524.8 15.56 36.5 EUROSPAN HOLDINGS BHD 1.130 11.88 5.0 0.00 50.2 KNM GROUP BHD 0.055 10.00 7,013.6 10.00 202.2 KOMARKCORP BHD 0.055 10.00 228.2 0.00 31.8 SC ESTATE BUILDER BHD 0.055 10.00 0.5 22.22 59.1 TWL HOLDINGS BHD 0.055 10.00 17,847.8 57.14 219.1 Data as compiled on Mar 1, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (%) (‘000) CHANGE CAP (%) (RM MIL) EA HOLDINGS BHD 0.010 -33.330 1,320.10 -33.33 64.5 BORNEO OIL BHD 0.015 -25.000 11,296.70 -40.00 145.5 ICON OFFSHORE BHD 0.090 -25.000 284,712.60 -5.26 243.6 REACH ENERGY BHD 0.050 -23.080 60,816.50 11.11 54.8 AE MULTI HOLDINGS BHD 0.020 -20.000 14,022.10 -20.00 43.3 SEALINK INTERNATIONAL BHD 0.100 -20.000 8,962.30 0.00 50.0 EVERSENDAI CORP BHD 0.105 -19.230 541.30 -32.26 82.0 G3 GLOBAL BHD 0.025 -16.670 1,266.30 -16.67 72.6 FAST ENERGY HOLDINGS BHD 0.130 -16.130 14,435.01 0.00 26.9 SMIS CORP BHD 0.745 -14.860 225.90 -6.29 31.4 ZELAN BHD 0.060 -14.290 6,692.00 -14.29 50.7 BINA PURI HOLDINGS BHD 0.035 -12.500 22,797.70 -12.50 72.7 OCEAN VANTAGE HOLDINGS BHD 0.175 -12.500 4,929.10 6.06 73.5 MQ TECHNOLOGY BHD 0.040 -11.110 6,113.80 -20 50.0 SCIENTEX PACKAGING AYER KEROH 2.450 -10.580 18.1 2.08 859 SEREMBAN ENGINEERING BHD 0.975 -9.720 129.80 -12.95 77.7 CYL CORP BHD 0.670 -9.460 687.1 -36.79 67 HEXTAR GLOBAL BHD 2.020 -9.420 4,103.50 -11.4 2597.2 FITTERS DIVERSIFIED BHD 0.100 -9.090 13,869.10 17.65 60.8 MTOUCHE TECHNOLOGY BHD 0.050 -9.090 1.60 0.00 46.3 Data as compiled on Mar 1, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) HEXTARTECHNOLOGIES SOLUTIONS 25.940 -1.060 54.1 52.05 3,337.2 BRITISH AMERICAN TOBACCO 11.340 -0.440 767.4 1.07 3,237.9 AEON CREDIT SERVICE M BHD 11.600 -0.400 350.3 -7.79 2,961.6 CARLSBERG BREWERY MALAYSIA 22.580 -0.380 153.8 -1.31 6,903.8 PETRONAS DAGANGAN BHD 20.640 -0.380 386.3 -10.26 20,504.9 SCIENTEX PACKAGING AYER KEROH 2.450 -0.290 18.1 2.08 859 ORIENTAL HOLDINGS BHD 6.620 -0.230 210.6 -2.50 4,106.8 HEXTAR GLOBAL BHD 2.020 -0.210 4,103.5 -11.40 2,597.2 PMB TECHNOLOGY BHD 4.200 -0.200 713.8 0.00 5,309.5 PENTAMASTER CORP BHD 4.900 -0.160 445.5 10.61 3,485.5 PANASONIC MANUFACTURING 23.360 -0.140 5.6 2.01 1,419.0 CHIN WELL HOLDINGS BHD 1.560 -0.130 811.8 -2.5 446.9 MISC BHD 7.430 -0.130 961.9 -0.93 33,165.6 SMIS CORP BHD 0.745 -0.130 225.9 -6.29 31.4 BATU KAWAN BHD 21.120 -0.120 7.5 -5.29 8308.2 GUAN CHONG BHD 2.280 -0.120 1855.2 -5 2677.9 PADINI HOLDINGS BHD 3.780 -0.120 2122.7 12.84 2486.9 PETRONAS GAS BHD 16.540 -0.120 269.9 -3.39 32728.2 HENGYUAN REFINING CO BHD 3.300 -0.110 1310.8 -6.25 990 SEREMBAN ENGINEERING BHD 0.975 -0.105 129.8 -12.95 77.7 Data as compiled on Mar 1, 2023 Source: Bloomberg NAME CLOSE CHANGE VOLUME YTD MARKET (RM) (‘000) CHANGE CAP (%) (RM MIL) BLD PLANTATION BHD 10.900 0.990 0.7 6.24 1,019.2 AJINOMOTO MALAYSIA BHD 13.800 0.200 55.7 5.50 839.0 SAM ENGINEERING & EQUIPMENT 4.880 0.200 527.1 -1.01 2,643.0 APEX HEALTHCARE BHD 3.910 0.170 412.0 11.08 1,867.5 D&O GREEN TECHNOLOGIES BHD 4.690 0.170 1,491.8 9.58 5,804.6 KHIND HOLDINGS BHD 2.960 0.160 16.1 -4.52 124.4 KESM INDUSTRIES BHD 8.140 0.140 4.6 15.95 350.1 UNISEM M BHD 3.090 0.130 940.1 11.96 4,984.4 EUROSPAN HOLDINGS BHD 1.130 0.120 5.0 0.00 50.2 7-ELEVEN MALAYSIA HOLDINGS 1.980 0.120 159.7 2.59 2,197.9 MALAYSIA AIRPORTS HOLDINGS 6.900 0.110 3,410.8 5.18 11,448.4 GREATECH TECHNOLOGY BHD 5.100 0.100 1,159.8 5.37 6,389.5 HEINEKEN MALAYSIA BHD 28.720 0.100 193.5 13.97 8,676.3 NEGRI SEMBILAN OIL PALMS BHD 3.500 0.100 0.1 0.00 245.7 TA ANN HOLDINGS BHD 3.440 0.100 523.9 -8.99 1,515.2 AURELIUS TECHNOLOGIES BHD 3.220 0.080 1182.5 75.96 1268.7 COASTAL CONTRACTS BHD 2.340 0.080 1,316.5 -1.27 1,246.3 GENTING BHD 4.740 0.080 4172.3 5.8 18251.7 KEIN HING INTERNATIONAL BHD 1.780 0.070 670.8 -16.04 193.8 CORAZA INTEGRATED TECHNOLOGY 0.980 0.065 15254.6 28.10 420.7 Data as compiled on Mar 1, 2023 Source: Bloomberg CLOSE CHANGE CHANGE (%) CLOSE CHANGE CHANGE (%) DOW JONES 32,656.70 -232.39 -0.71 S&P 500 3,970.15 -12.09 -0.30 NASDAQ 100 12,042.12 -15.67 -0.13 FTSE 100 7,910.94 34.66 0.44 AUSTRALIA 7,251.60 -6.80 -0.09 CHINA 3,312.35 32.74 1.00 HONG KONG 20,619.71 833.77 4.21 INDIA 59,411.08 448.96 0.76 INDONESIA 6,844.94 1.70 0.02 JAPAN 27,516.53 70.97 0.26 KOREA 2,412.85 10.21 0.42 PHILIPPINES 6,607.13 50.93 0.78 SINGAPORE 3,255.08 -7.55 -0.23 TAIWAN 15,598.49 94.70 0.61 THAILAND 1,619.98 -2.37 -0.15 VIETNAM 1,040.55 15.87 1.55 Data as compiled on Mar 1, 2023 Source: Bloomberg CPO RM 4,235.0089.00 OIL US$ 81.070.47 RM/USD 4.4340 RM/SGD 3.3008 RM/AUD 3.0229 RM/GBP 5.3349 RM/EUR 4.6963