TheEdge 230622

POWELL SEES ONGOING RATE HIKES,
SAYS RECESSION A ‘POSSIBILITY’ p16

THURSDAY, JUNE 23, 2022 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 398/2022

CEOMorningBrief
HOME: Moody’s downgrades Forest City’s parent Country Garden to ‘junk’ status p2
Indonesian palm oil workers to arrive in Malaysia after bureaucratic hiccups p8

Husni said he would have been worried over diverted US$700 mil ‘if I were PM’ p14
WORLD: UK inflation hits 40-year record, highest in G7 p17

World’s bubbliest housing markets are flashing warning signs p24

PM: Additional cash assistance
for B40 group under BKM

Report on Page 6.

Growing pressure
on Bank Negara to

HIKE RATES
FASTER

Report on Page 4.

thursday june 23, 2022 2 TheEdge CEO morning brief

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KUALA LUMPUR (June 22): Moody’s In- Moody’s In a statement on Oct 21 last year, RAM
vestors Service has assigned a Ba1 corporate downgrades Ratings reaffirmed the AA3(s)/Stable rating
family rating (CFR) to China-based Country Forest City’s of CGRE’s RM1.5 billion IMTN programme
Garden Holdings Co Ltd and withdrawn its parent Country (2015/2035).
Baa3 issuer rating, as well as downgraded Garden to
the company’s senior unsecured rating to ‘junk’ status The rating agency had said the rating re-
Ba1 from Baa3. flected unconditional and irrevocable corpo-
by Shazni Ong rate guarantees extended by CGRE’s ulti-
In a statement on Wednesday (June 22), theedgemarkets.com mate parent — Country Garden — and the
Moody’s has also downgraded the rating out- latter’s subsidiaries, Bright Start Group Ltd
look on Country Garden to negative from sessors. S&P Global Ratings hasn’t deemed and Top Favour Holdings Ltd.
“ratings under review”, and noted further the developer investment grade since 2008,
that this concludes the review for downgrade according to data compiled by Bloomberg. “As the guarantees are provided on a joint
initiated on May 30 this year. and several basis, the rating mirrors the credit
Country Garden’s Malaysian unit Coun- strength of Country Garden (as the strongest
“The rating downgrade reflects Country try Garden Real Estate Sdn Bhd (CGRE) obligor),” said RAM Ratings then.
Garden’s declining property sales and dete- is the developer for Forest City in Johor,
riorating financial metrics amidst the chal- with the 50%-60% of the cost funded by The 30-year mega Forest City is a joint
lenging operating conditions of the China the parent, The Edge Weekly (Sept 27-Oct venture with Kumpulan Prasarana Rakyat Jo-
property sector, as well as its weakened access 3, 2021 edition) quoted a former CGRE hor Sdn Bhd and the Sultan of Johor Sultan
to long-term funding,” said Moody’s senior official as saying. Ibrahim Sultan Iskandar, through Esplanade
vice president Kaven Tsang in a statement. Danga 88 Sdn Bhd. It encompasses a total
Notably, CGRE has an outstanding sukuk planned development area of 30 sq km and has
He added that these negative develop- amounting to RM870 million from its RM1.5 the right for land reclamation development of
ments no longer support the company’s pre- billion Islamic Medium-Term Notes (IMTN) four islands with an area of about 20.05 sq km.
vious Baa3 issuer rating. programme, with the earliest maturity on July
26 this year, for a RM60 million tranche. Meanwhile, Moody’s statement on
“While Moody’s expects Country Garden Wednesday stated that an upgrade of the
to maintain a strong market position and good Country Garden’s ratings is unlikely in the
liquidity, the negative outlook reflects Country near term, given the negative outlook.
Garden’s reducing liquidity buffer and finan-
cial flexibility, driven by falling property sales However, it could revise Country Garden’s
and continued weak market sentiment in the rating outlook to stable if the company strength-
next six to 12 months,” saidTsang. ens its access to long-term funding and im-
proves sales, and maintains stable financial met-
It is Country Garden’s second junk-level rics and good liquidity through the downcycle.
rating from major international credit as-
Country Garden was previously in the
spotlight due to fears of a contagion effect
from the debt crisis at Evergrande Group
and the overall slowing of China’s property
development sector last year.

Earlier, Reuters reported onTuesday (June
21) that China Evergrande Group said it
expects to announce its preliminary restruc-
turing plan before the end of July, sticking
to its original deadline as the world’s most
indebted property developer struggles to
emerge from its financial crisis.

Reeling under more than US$300 billion in
liabilities, the firm’s offshore debt is deemed to
be in default after missing payment obligations
late last year, according to the Reuters report.
Read also: Impact from Evergrande conta-
gion fears on Country Garden expected to
be short term in nature Click here

THURSDAY JUNE 23, 2022 3 THEEDGE CEO MORNING BRIEF

Local leadership for Allianz Malaysia

P ioneer. Trailblazer. Grand- In fact, if you bring in a multi-
mother of eleven. Tan Sri national that is not fully exposed to
Dr Rafiah Salim has had the Malaysian culture, you can have
many accolades attached a problem. We have had — not in

to her name, including a position in Allianz — some other companies

the United Nations. But she herself have had multinationals coming

will tell you she is particularly proud in for a short while and then leave

of her nine-year tenure as Director because they are not able to fit in.

and Chairman of Allianz Malaysia So there is also that risk.

Berhad (Allianz Malaysia), where

she has always stressed to her board What are the main

the importance of integrity. initiatives that you

This seems like an important hope the new man-

lesson to hold on to as the Allianz agement team will

Malaysia management team under- hold close in their agenda?

goes a transition and she prepares to Education. Educating the public,

retire. We ask her about her hopes especially the bumiputera, because

for the team and the company mov- of the lack of knowledge in under-

ing forward. standing the importance of insur-

Rafiah with the all local leadership team – (from left) Charles Ong, CEO, Allianz Life Insurance ance. In Allianz Malaysia, we have

The Edge: For the first Malaysia Berhad; Sean Wang, CEO, Allianz Malaysia Berhad and Zakri Khir, new Chairman, always tried to drive this but efforts
Allianz Malaysia Berhad.
time in its history, must continue. We are hoping to be

Allianz Malaysia has an able to set up our foundation, and

all-Malaysian leadership team. What However, a company’s culture is also we hope that through the foundation and working

do you think of this milestone? of great importance, especially when with NGOs, we should be able to bring the knowl-

Rafiah Salim: I am very proud of that fact. However, it comes to MNCs. What is the advice edge of insurance to schools. Early intervention is

what we need to remember with Allianz Malaysia is you give to management if they have always good.

that the most important thing is performance. We to deal with orders from the mother ship that they It is so critical, because as it is now, we all realise

appoint the best person for the job. Fortunately, Al- know won’t work in a local setting? and we do know, a lot of Malaysians do not prepare

lianz also trains our people to be the best. It happens to us every now and then. But as I said, the for protection in their old age.

After a number of years, they have found that culture of respect is important. In Allianz Malaysia, I

the best people to do the job in Malaysia are the Ma- was able to get back to the regional office and explain The current leadership team will

laysians, who are also amazing performers. I don’t to them why some things cannot work. Something consist of Sean Wang and Charles

believe that the multinationals must, or should, that is brought from the headquarters. Ong at the helm. You have worked

appoint Malaysians, they should appoint the best. Fortunately, all this time because of the respect with both gentlemen in the past, so

We hope that the multinationals train Malaysians and trust, we were able to adapt and adopt. There what do you feel are their strengths?

to be the best. was a lot of adapting so that we can meet with the I believe the two of them are good for the organ-

The Malaysians that we have appointed, they local requirements, so that is important. That is what isation because they are so different. Sean is very

have a fantastic track record in terms of performance. I was saying, the respect for each other becomes outgoing, gung-ho and outspoken. He is a real ac-

They are trusted, they are respected. very important, otherwise you must be in a situation tion man. Whereas, Charles will think hard before

where you say ‘I beg to differ’, and explain why you he says anything. A very cautious guy. So they com-

For their part, what can multination- differ, and explain with good evidence. plement each other.

al companies (MNCs) do in order to They will listen, because they are professional peo- A good leader always looks for someone differ-

help train and elevate a local leader- ple. Especially with Allianz Malaysia, which delivers ent from them. You should not get someone who

ship team? to them a good performance, good dividends every mirrors you.

I was with Nestlé, the training there was also very year. Of course, they will not disrupt us and create They don’t always agree but they are respectful

good but, some of the MNCs, they do have a policy problems to the bottom line. It is all about perfor- of each other.

that their nationals should be leading the compa- mance, if you don’t perform, susah lah.

nies. What would happen is, the good multina- You also recently announced that you

tionals, they send out Malaysians into the world, Do you feel that a more effective intend to retire and your successor is

to work and lead in some of the other countries. leadership team is one that com- to be Zakri Mohd Khir. What is your

So it depends really on the policy. But with Allianz, prises entirely locals, or of different advice to him in stepping into your

it is just performance. nationalities? substantial shoes?

Also with Malaysia, there is the advantage of Of course, if one appoints a local who has not had He is highly respected within the organisation. When

putting in the locals because of cultural idiosyncra- international exposure, there would be that limita- he comes in, he is a known commodity where Allianz

sies. The Malaysian who is appointed must also be tion. However, as I said, the training in Allianz involves Malaysia staff is concerned. Never mind Munich and

sensitive with regards to the culture of the compa- that exposure. The fact is that a good relationship Singapore. He has run the business successfully so

ny, so that is why the training in Allianz, they train matters between the Malaysian entity with the head there is no learning curve. So he has got that advan-

them in Munich [Germany], so you can understand office. I see very little disadvantage, if the locals are tage, and because he was there in Sean’s position,

the corporate culture fully. So, by the time they are properly trained and you make sure when you look he will be able to see immediately if there is any

appointed as a leader, they are aware and fully ab- at their CV that they have had enough exposure. help needed. He will be very proactive.

sorbed into the culture of the company, but they are, Then you will not have that issue. I can’t see much I am excited to see the three of them lead Allianz

of course, masters of the local culture. disadvantage. Malaysia into its next chapter.

thursday june 23, 2022 4 TheEdge CEO morning brief

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Growing pressure on Bank Negara
to hike rates faster

bloomberg

by Izzul Ikram
theedgemarkets.com

KUALA LUMPUR (June 22): There is OnTuesday, the government announced Malaysia’s core inflation rose for the
growing pressure on Bank Negara Ma- the removal of subsidies for bottled cook- seventh straight month to 2.1% in April,
laysia to hike rates faster in the face of an ing oil and the ceiling prices for chicken which the trio noted is its highest level
aggressive US Federal Reserve, and wid- and eggs from July 1, to ensure adequate since January 2018, and above the long-
ening consensus that global food and en- food supply in the market and to stabilize term average of 1.4%.
ergy prices will continue to stay elevated prices in the longer term.
for longer, with any potential supply shocks It is also closer to the headline inflation
seen capable of driving prices and inflation Room for 50bps OPR hike before end of 2.3%, an upward trend the trio noted
even higher. of September is likely to continue into 2H22, given per-
Meanwhile improving domestic growth sistent global food supply shortages, high
In a note on Wednesday, UOB Glob- prospects following a full reopening of the commodity prices, lapse of favorable base
al Economics and Market Research cau- economy and country’s borders in April- effects, and currency weakness, they wrote.
tioned that the key takeaway is that “do- May are also pushing up underlying demand
ing nothing or acting too slow” could sow price pressures, the economists wrote. In view of the above, BNM has project-
seeds of more persistent and elevated in- ed underlying inflation or core inflation
flation in the future, with more negative “Given the ongoing domestic recovery to average higher at 2% to 3% in 2022,
effects on demand and the economy. and latest developments, there is room for which the economists noted is closer to its
BNM to follow-through with another 25 headline inflation target of 2.2% to 3.2%.
“Rate hikes would then also need to be basis point rate hike at both the July and UOB’s estimate is 3%.
sharper and more abrupt in that scenar- September meetings,” they added.
io. There may also be a need to act fast- “Noteworthy is that current inflation
er now in order to have sufficient policy BNM, which just raised the key rate by projections have not accounted for poten-
buffers in preparation for the next reces- 25bps to 2% in May — its first hike since tial upward revisions in other price-ad-
sion (when it happens). A lagged policy January 2018 — has previously sounded ministered items (such as flour, sugar, and
response by BNM relative to peers could that the removal of monetary accommo- cooking oil) or adjustments in electricity
also risk excessive ringgit volatility in 2H22 dation would be ‘measured and gradual’. and water tariffs as well as fuel subsidiaries
(the second half of 2022),” its economists that will further exacerbate upside risks to
Julia Goh, EnricoTanuwidjaja and Jasrine But it has also acknowledged that the the baseline inflation forecasts.
Loke wrote. negative output gap, a potential indicator
of rate adjustments, was closing faster than “Should these price revisions mate-
They also noted that more central banks projected, the economists said. rialise, it will further intensify the sec-
have already done back-to-back rate hikes ond-round effects of inflation,” the econ-
or larger-than-expected hikes since May “As we expect Malaysia’s growth mo- omists said.
2022, as a more persistent inflation out- mentum to remain robust this quarter and
look has forced the hand of more central next, we think that BNM may consider The economists are expecting the US
banks to front-load their rate hikes in order bringing forward rate hikes to keep a lid Fed to raise rates further to reach an upper
to tame long-term inflation expectations on inflation risks while growth remains end of 3.5% by end 2022, and further 4%
and shore up their credibility. decent. Our updated OPR projections are by end-1Q23. “Emerging markets’ central
2.5% by end-2022 and 3% by end-2023. banks will start to follow suit or risk falling
The aggressive tightening policy guid- Even after projected hikes of 75bps for behind in the rate gap with the US interest
ance, fallout from the Ukraine crisis, Cov- this year, monetary policy would still be rate,” they added.
id-19 measures in China, and tighter global accommodative as it only reverses part of Read also: Currencies tumble in Asia where
financial conditions are now fanning global the 125bps of rate cuts during the pan- rate hikes are slow to come Click here
recession fears. demic,” they said.

“As such, we think BNM would need
to weigh how these factors could affect
domestic economic conditions while the
fast narrowing rate gap with the US puts
more pressure on capital flows and the
ringgit,” they wrote.

Although BNM does not adopt an in-
flation targeting framework, and headline
inflation remains manageable — which
is largely due to government subsidies
in place — the economists noted that
the rising cost of the government’s sub-
sidy bill and supply distortions due to
the price controls have already pushed
the government to reevaluate the subsi-
dy mechanism.

thursday june 23, 2022 5 TheEdge CEO morning brief

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KUALA LUMPUR (June 22): Retail reuters hand, it is also a contributing factor to in-
sales might have grown an encouraging flation because we import a lot of things.
18.3% year-on-year in the first quarter of Retail sector [Hence,] we are urging BNM to recalibrate
2022, but Malaysia Retailers Association recovering but our Malaysian ringgit vis a vis all the inter-
(MRA) has cautioned that the industry national currencies to a level that doesn’t
is not out of the woods yet as more chal- faces many affect Malaysian consumers badly.
lenges lie ahead. challenges,
says MRA “MRA is at the ground level with the
Apart from rising global inflation, the rakyat (people). We are the ones working
association pointed out that local retailers by justin lim with all of you as consumers for your needs.
are also facing a perfect storm of weaken- theedgemarkets.com So the ringgit must be allowed to be float-
ing ringgit coupled with cost increases due ing upwards vis a vis the US dollar, back to
to the hike in minimum wage and labour “Weak ringgit is a double-edged sword. where it was, when we were comfortable,
shortages. On one hand, it makes our exports more at RM4 or RM4.1 against the US dollar.
competitive, and it also makes international
Its president Datuk Andrew Lim Tatt tourism more lucrative. But on the other “A lot of us are suffering economic dep-
Keong has called on Bank Negara Malaysia rivation due to rising costs and prices. So
(BNM) to “actively manage” the ringgit so that is why we hope for the government
that it trades at the 4 to 4.1 level against and BNM [to take action] because they are
the greenback to reduce imported inflation experts and can manage the exchange rate
because of the puny local unit. of the ringgit higher so that the imported
inflation is not an issue to Malaysians,”
Lim said at a press conference onWednes-
day (June 22) in conjunction with MRA’s
conference themed “Retail Forward”.

MRA urged the government to delay
re-implementing the goods and services
tax (GST) for two years until the econo-
my recovers to full strength.

“We need at least two years for the econo-
my to come back in [full] strength… [There-
fore] we have urged the government not to
reimpose GST for at least two years. [When]
our economy is robust and people are mak-
ing money, international tourism is back to
normal then only re-impose GST,” said Lim.

continues on Page 6

KUALA LUMPUR (June 22): Parties MyCC: Parties in the PK 1.6 circular to strengthen its en-
found implicated in bid rigging conduct caught in bid forcement efforts in combating bid rigging
in public procurement will be blacklisted rigging will face activities in government tenders.
by the Ministry of Finance (MoF) for five five-year blacklist
years, said enforcement agency Malaysia The Act applies to all commercial ac-
Competition Commission (MyCC). by MoF tivities undertaken within and outside of
Malaysia that affect competition in the
Under the MoF’s newly released cir- by hailey chung Malaysian market. It provides a regulato-
cular on Integrity in Public Procurement theedgemarkets.com ry framework including powers to inves-
(PK 1.6) which came into effect on June 1, tigate, adjudicate and impose penalties on
MyCC said government agencies are also the perpetrators of the competition laws.
required to pay attention to and report signs
and issues of bid rigging cartels to MyCC. “In the course of our work over the
years, we discovered that apart from cor-
“Following the implementation of this ruption and fraudulent actions, which are
circular, individuals or companies found to commonly associated with leakages, big
be involved in bid rigging conduct in pub- rigging is a major threat to public leakages.
lic procurement will be blacklisted by the
MoF for a period of five years,” MyCC said “This form of cartel occurs when two
in a statement on Wednesday (June 22). or more competitors conspire to manip-
ulate the procurement process, denying
“This has been met with mixed reac- the opportunity for genuine bidders and
tion amongst stakeholders, particularly in distorting the competition process alto-
relation to its effectiveness in combating gether,” Iskandar Ismail said.
such activities. It must be highlighted that
this is a step forward by the government MyCC noted that the PK 1.6 was made
in sending a strong message that bid rig- possible through its ongoing engagement
ging cartel activities will not be tolerated.” with relevant stakeholders, including the
MoF and the Malaysian Anti-Corruption
MyCC chief executive officer Iskandar Commission, as well as its advocacy ef-
Ismail said that MyCC is grateful for the forts on the Competition Act 2010 over
weight given to the Competition Act 2010 the last decade.

thursday june 23, 2022 6 TheEdge CEO morning brief

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PM: Additional PM: Govt may increase RM4 bil cooking oil
cash assistance subsidy allocation as palm oil prices rise
for B40 group
by syafiqah salim
under BKM theedgemarkets.com

by syafiqah salim KUALA LUMPUR (June 22):The gov- He explained that the subsidy granted
theedgemarkets.com ernment is still maintaining its subsidy for cooking oil in bottles of 1kg, 2kg, 3kg
for cooking oil with an allocation of RM4 and 5kg was only a temporary measure
KUALA LUMPUR (June 22):The govern- billion for 2022, and this amount may introduced in August 2021 to help Malay-
ment will provide additional Bantuan Kelu- increase if prices of palm oil increases sians cope with the effects of the Covid-19
arga Malaysia (BKM) cash assistance to the further, according to Prime Minister Da- pandemic.The programme was originally
bottom 40% (B40) with RM100 million set tuk Seri Ismail SabriYaakob. only meant to last for three months, at a
aside for households, and RM50 for singles cost of RM55 million per month.
after taking into account the cost of living “The government is maintaining the
challenges and the recent increase in food cooking oil subsidy allocation at a total However, he said the government
prices, prime minister Datuk Seri Ismail of RM4 billion for 2022, more than the found that the temporary subsidy had
Sabri Yaakob said in a special announce- RM2.2 billion in 2021 and RM500 mil- been widely abused by industrial and
ment on Wednesday (June 22). lion in 2020. commercial parties, and smugglers.

“I already announced on June 1 that “(But) It is likely that there will be “Hence, the government decided that
[additional] cash assistance would be pro- another increase [in this allocation], es- it won't continue with this bottled cooking
vided to Malaysian families affected by the pecially if the price of palm oil increases,” oil subsidy from July 1 because the original
cost of living challenge when the govern- Ismail Sabri said during a special live tel- objective of this programme was to help
ment would no longer subsidize the price evised address onWednesday (June 22). those affected by the pandemic,” he said.
of chicken, eggs and other food items,”
Ismail Sabri said. He assured Malaysians that the gov- On Tuesday (June 21), the govern-
ernment is still subsidising cooking oil ment announced it would abolish the
He said the announcement meant there for those in need, and that the subsidised subsidies for bottled cooking oil from
would be an additional RM630 million of cooking oil amounts to 60,000 tonnes per July 1, as well as to lift the ceiling price
cash assistance on top of the second phase month, which the government believes for chicken and chicken eggs, to ensure
of BKM payments.The payment will bene- will be sufficient for the use of Malaysians adequate food supplies to the market
fit nearly 8.6 million beneficiaries, including as the amount exceeds the actual monthly and to stabilise prices in the long term.
demand of 55,000 tonnes per month. view of the upcoming Hari Raya Aidiladha
festival. The government is always aware
The subsidy that the government will be of the current needs, especially in view of
bearing is only for cooking oil in 1kg poly- the rise in prices of essential commodities,
bag packages, which is sold at RM2.50 per and will continue to work for the welfare
packet, compared to its actual market price of Malaysian families, especially the target
of RM9 per kg, for the use of Malaysians group,” Ismail Sabri added.
under the B40 households, he said.This
subsidy has been in place since June 2007.
four million households, 1.2 million senior
citizens and 3.4 million single people.
“Eligible beneficiaries will receive
phased payments starting June 27, total-
ing RM1.74 billion.
“This payment is also to ease the finan-
cial burden of the B40 group, especially in

from Page 5 Over and above the compulsory minimum living throughout the country.
wage increase imposed across the board, Lim The association noted that as a result
MRA is also proposing that GST be said the retail industry has to also address
pegged at a lower rate of 3% as a starting point “compression wage adjustments for those of the minimum wage increase across the
or half of the 2015 implementation rate of earning at the borderline RM1,500 and above”. board, many Malaysian workers are better
6%, and that personal and corporate income off going back to their hometowns (where
taxes be correspondingly reduced by 3% in “All these are added costs to the in- the cost of living is lower) as they will enjoy
tandem with the reinstatement of GST to be dustry which will have to be reflected and the same wages due to the standardised
more acceptable to the public and companies. passed on to Malaysian consumers who are minimum wage rate hike.
already suffering severe inflation costs of
On the increase in minimum wage, Lim all sorts,” he stressed. To tide over the labour shortage, es-
said the hike of 25% effective May 1, 2022 pecially in the Klang Valley, MRA urged
has not helped address the labour shortage MRA advocated that the minimum the government to consider allowing the
in retail, as the sector continues to face an wage rate be assessed and determined industry to recruit foreign workers for
acute shortage. by “zones” given the different costs of frontline as well as for back office work.

THURSDAY JUNE 23, 2022 7 THEEDGE CEO MORNING BRIEF

HONOURING MALAYSIA’S
BEST PERFORMERS IN
ESG EXCELLENCE

INTRODUCING THE INAUGURAL

In Collaboration With

Main Partner Knowledge Partner Audit Partner
(Funds Category)

thursday june 23, 2022 8 TheEdge CEO morning brief

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Kulim seeks IPO tions are ongoing and details of the IPO such as Indonesian
to raise RM1 bil size and timing could change, its sources said. palm oil workers

— report According to its website, Kulim’s planta- to arrive in
tion assets are small compared with some of Malaysia after
by Sulhi Khalid the behemoths on Bursa. It has 63,158ha of bureaucratic
theedgemarkets.com plantation land, of which 88% (55,796ha) is
located in Malaysia and 12% (7,362ha) in hiccups
KUALA LUMPUR (June 22): Johor Corp South Sumatra, Indonesia.
(JCorp)’s plantation unit Kulim (M) Bhd by Rozanna Latiff & Mei Mei Chu
(Kulim) plans to raise approximately RM1 Apart from palm oil, Kulim has smaller Reuters
billion in an initial public offering (IPO) on pineapple, cucumber, coconut and durian
the local bourse as early as next year, accord- farms, among others, but these measure only KUALA LUMPUR (June 22): Ma-
ing to a report by Bloomberg. about 365ha in total.The company also has laysia will on Wednesday receive the
7,500 heads of cattle and 220 heads of sheep, first group of Indonesian migrant
The EdgeWeekly (May 16-22, 2022 edition) but the livestock farming business is still in its workers since reopening its borders,
reported that JCorp is mulling the IPO to ride infancy and not generating much profit yet. with the hopes of easing a major la-
on strong crude palm oil (CPO) prices, with bour shortage in palm oil plantations.
RHB Investment Bank Bhd roped in for the Based on a check from CTOS’ website,
listing, quoting sources. Kulim suffered an after tax loss of RM461.31 The world’s second-largest palm
million on the back of RM1.41 billion in rev- oil producer lacks at least 1.2 mil-
Bloomberg reported that JCorp, the invest- enue for the financial year ended December lion workers across its manufactur-
ment arm of the Johor State government, is 2020 (FY20). ing, plantation and construction sec-
asking bankers for pitches for the potential tors, a shortage worsening daily as
listing of Kulim, and is targeting a valuation of In FY19, it suffered an after tax loss of economic activity bounces back from
around US$1 billion (approximately RM4.41 RM98.2 million, from RM1.21 billion in rev- the pandemic.
billion) for the plantation unit. enue.The company was last profitable in FY18,
when it reported an after tax profit of RM32.87 The country has not seen a sig-
The newswire also mentioned that the IPO million on the back of RM1.39 billion in sales. nificant return of migrant workers
could take place as early as next year. Delibera- despite reopening borders in April
Kulim was previously listed on the Kuala due to slow government approvals
Lumpur stock exchange in 1975 and Jo- and protracted negotiations with In-
hor Corp became a major shareholder of donesia and Bangladesh over worker
Kulim a year later. The state-owned firm protections.
took Kulim private in 2016.
“As of today, we have approved
JB-Singapore RTS Link to achieve 70% requests for 4,699 workers for plan-
progress by December 2023 — exco tation (sector) only,” Indonesia’s am-
bassador to Malaysia, Hermono, told
Bernama of passengers using the RTS. Reuters.
“Among the systems that will be inte-
ISKANDAR PUTERI (June 22): The Jo- About 40 workers for a palm oil
hor government is targeting for the progress grated are the bus system, namely the Bus plantation are scheduled to arrive on
status of the Johor Baru-Singapore Rapid Muafakat Johor service and commercial Wednesday, said Hermono, who like
Transit System (RTS) Link to reach 70% buses, the Iskandar Rapid Transit system, many Indonesians goes by only one
by December next year. the Gemas-Johor Baru Electric Double name. He did not give details of when
Track Project and the proposed Johor Baru those workers are expected to arrive.
State Works,Transport and Infrastruc- Light Rail Transit (LRT) development.
ture Committee chairman Mohamad Fazli Indonesia last month barred a group
Mohamad Salleh said works on the Cus- “The Johor Baru City Council (MBJB) of about 150 plantation workers from
toms, Immigration, and Quarantine Com- is also planning to develop a centralised travelling to Malaysia because recruit-
plex are expected to reach 50% in the same car park at Plaza Seni and the Danga City ers did not follow proper emigration
period. Mall,” he said. procedures and most of the workers
did not have the right visa.
“As of May 30, the project has achieved The RTS line is a 4km cross-border
17% [completion].The RTS Link project is railway project connecting the terminal in The arrival of migrant workers will
scheduled to be fully completed by Decem- Singapore at theWoodlands North station help ease a shortage of more than
ber 2026 and will begin operation on Jan 1, to the Malaysian terminal in Bukit Chagar, 100,000 workers in palm oil plan-
2027,” he said during the Second Meeting Johor Baru. tations which have been forced to
of the First Session of the 15th Johor State leave thousands of tonnes of palm
Legislative Assembly at the Sultan Ismail Once completed, the RTS network will fruit rotting on trees due to a lack
Building here on Wednesday (June 22). be able to carry 10,000 passengers per hour of harvesters.
in each direction.
He was replying to a question from Chen Malaysia’s Ministry of Human Re-
Kah Eng (Pakatan Harapan-Stulang) on Meanwhile, when met outside the state sources did not immediately respond
the development status of RTS construc- assembly sitting, Mohamad Fazli said the to a request for comment.
tion in the state. state government had agreed to conduct a
feasibility study of LRT services in the city.
Mohamad Fazli said the state govern-
ment is now in the planning stage of estab- “The LRT services will involve the gov-
lishing a PublicTransport Integration Com- ernance of local authorities such as MBJB,
mittee in Johor Baru to plan the movement the Iskandar Puteri City Council, Pasir Gu-
dang City Council and Kulai Municipal
Council,” he said.

thursday june 23, 2022 9 TheEdge CEO morning brief

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KUALA LUMPUR (June 22): Malaysia Malaysia steel compared to international steel prices due
steel mills are likely to remain competi- mills likely to competition among industry players.
tive than their regional peers, even after to remain
the next electricity surcharge review by the competitive “Steel rebar was about RM3,400 per
end of this month, says Datuk Lim Hong metric ton (MT) around April, but if
Thye, president of the Malaysian Iron & after electricity we look across the causeway, I remem-
Steel Industry Federation (MISIF). surcharge review, ber at the time in Singapore, it was about
SG$1,800 per MT. Of course, there are
“We don’t want to speculate; we have MISIF says different conditions but generally, prices
to see what the government is going to an- in Malaysia are lagging (sic) international
nounce. But overall, among industry players, by chester tay prices,” he explained.
we have been talking about the need to push theedgemarkets.com
for our own efficiency, the electricity usage According to the Ministry of Interna-
needs to be minimized,” he told reporters reuters tional Trade and Industry’s weekly bulle-
after launching Misif’s 14th report on the tin dated June 21, steel rebar prices were
status and outlook of the Malaysian iron trading between RM3,130-RM3,280 per
and steel industry onWednesday (June 22). MT for the week ended June 17 — large-
ly unchanged from a year ago, although
Lim, who is also Ann Joo Resources higher than RM3,000-RM3,150 per MT
Bhd’s managing director, said energy and reported at end of last year.
raw material costs are two major compo-
nents for upstream steel players’ cost struc- The government is slated to undertake
ture; they collectively made up almost 90% its bi-annual review of the electricity tariff
of total costs. surcharge for 2H2022 by end of June, on
the back of rising coal and gas costs that
“We saw coal prices soften as compared has impacted the global electricity supply
to, say, two-and-a-half months ago, so as industry, including Malaysia.
long as the review is in line with the world
trend, Malaysia steel mills are not worse For the February to June 2022 period,
off compared to our peers in the region. I the government has imposed an electric-
believe most of us are competitive enough ity tariff surcharge of 3.7 sen per kilowatt
to be able to continue our production and hour (kWh) for non-domestic users, from
exports,” he said. a two sen rebate previously.

Misif vice presidentYeoh Choon Kwee, In 2018, Misif pointed out that a 1.2 sen
who is also Southern Steel Bhd’s managing increase in electricity tariff could raise the
director, also pointed out that Malaysian iron and steel industry’s costs by RM148
steel prices have been lagging behind as million, based on its annual electricity cost
in that year.

Local steel consumption should stay below pre-pandemic levels through 2023

KUALA LUMPUR (June 22): Malay- by chester tay last year, up from 47.1% in 2020.
sia’s domestic steel demand is expected theedgemarkets.com “Southeast Asia continues to be an
to continue its gradual recovery momen-
tum through 2023, but the consumption “Malaysia’s consumption averaged attractive region for steel trade and in-
level is likely to stay below pre-Covid-19 around 9.5 million MT pre-pandemic. As vestment.The region’s ASC per capital
pandemic levels, according to a forecast you can see with our forecasts, even until of around 110kg is still well below the
by the Malaysian Iron and Steel Industry 2023, we are still far away from where we global average of 227.5kg,” he said.
Federation (MISIF). were before Covid-19,” he said.
Nonetheless, he said the steel industry
The federation projects apparent Nonetheless, recovery in ASC should is expected to encounter many challeng-
steel consumption (ASC) for Malaysia still be supported by foreign direct invest- es, including the decarbonisation of steel.
to reach 7.03 million metric tons (MT) ment into sectors like semiconductor and
this year, up from 6.81 million MT in paper mills, which would spur construction “Globally, steel industries are now
2020. ASC is then forecast to grow by activities as well, he said. trending towards green steel.These are
11% to 7.8 million MT in 2022, and 9% complex issues and their solutions are
to 8.5 million MT in 2023. Lim also sees potential growth driver for straightforward. Steel players will have
ASC from the automotive sector, particu- to make tough decisions between short-
“We are still not bullish that things larly with new models by industry players term growth and long-term sustainability
would be back to where it was before like Proton and Perodua. in situations where nobody knows what
the pandemic,” MISIF president Datuk the right answers are,” he said.
Lim Hong Thye told reporters after the In terms of exports, Lim said shipments
launch of the federation’s 14th report of steel from Malaysia remain strong, which “For the first time, the domestic iron
on the status and outlook for the Malay- grew by 25% to 9.38 million MT last year and steel industry will have to deal with
sian iron and steel industry on Wednes- from 7.49 million MT in 2020, mainly driv- issues related to climate change, new
day (June 22). en by demand from China. raw or input material strategies, critical
investment decisions on steel-making
Lim said the federation was conserv- Lim, who is also the group man- technologies, and navigate a new so-
ative in its ASC forecasts, especially for aging director of Ann Joo Resources cio-economic landscape governed by
infrastructure expenditure in Malaysia. Bhd, said China constituted 54.9% of green policies such as carbon taxes and
Malaysia’s total iron and steel exports leakages,” he added.

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KUALA LUMPUR (June 22):Maybank In- Maybank IB are expected to fall drastically in July or
vestment Bank Bhd (Maybank IB) foresees foresees speculative the second half of 2022 (2H22),” he said.
unnecessary issues over the next nine months
in the automotive sector with a rise in specu- car bookings, Insensitive buyers may also place orders
lative bookings until end-June 2022 followed cancellations over by end-June 2022 but request for a 2023 de-
by cancellations until end-March 2023. livery in order to make a price gain because
the next a 2023 delivery would effectively mean that
In a research note on Wednesday, an- nine months it is a 2023 vehicle, instead of a 2022 one.
alyst Liaw Thong Jung said the bank also This would result in a weaker 2H22 for the
foresees the situation to give rise to issues Bernama sector and a strong first quarter for 2023,
involving salesmen and dealers over the the report said.
next nine months.
The research house’s 2022 total indus-
The decision to end the sales and ser- trial volume forecast remains unchanged
vices tax (SST) holiday as per scheduled at between 580,000 and 600,000 units.
until June 30, 2022 with earlier bookings
involving 264,000 units to continue to en- The report said the various tax holidays
joy the waiver until March 2023 is fair. — the current one being the third — have
But this will likely create unnecessary op- proven to be a popular policy to drive sales
erational issues, Liaw wrote in his report. with 868,422 units sold during this period.

He said the speculative bookings will rise While the revenue loss from the waiver
over the next 10 days. It is envisaged that totals RM4.7 billion, according to the Min-
many prospective and speculative buyers will istry of Finance, the research house reck-
take advantage of the situation and place oned the revenue gained from the excise and
token deposit bookings until June 30 just import duties collected during the period
to lock in orders. far outweighs the SST loss, the report said.

“That would skew bookings because Without the waiver, collections from
prospective buyers can cancel and/or trans- excise and import duties would likely be
fer their orders and secure deposit refunds lower due to lower car sales.
anytime, which poses a disservice to sales- Read also: Mercedes-Benz Malaysia lauds
men and dealers. SST exemption grace period, but calls for
more clarity Click here
“Based on that alone, vehicle bookings
will be at a supernormal rate in June but

KUALA LUMPUR (June 22):Top Glove Top Glove says eased due to vaccination progress.
Corp Bhd, the world’s largest rubber glove to align capacity Top Glove’s output capacity expansion
manufacturer by production capacity, has expansion with
said its capacity expansion will be aligned demand, supply chart showed that the company plans to
with global glove demand and supply at a defer its capacity expansion involving an
time when demand for the personal protec- by shazni ong additional 10 billion pieces of gloves in
tive equipment (PPE) is seen normalising theedgemarkets.com 2023, followed by another 19 billion and
after a surge due to the Covid-19 outbreak, 27 billion in 2024 and 2025, respectively.
which began in early 2020. “Deferred some expansion plans [in
2023, 2024 and 2025],”Top Glove said. Looking back, Top Glove was closely
“Nitrile [glove] sales volume continues to watched as a beneficiary of the Covid-19
show an increasing trend, driven by the sales According toTop Glove’s output capac- outbreak, which started in early 2020, as
to the USA from Malaysia,Western Europe, ity expansion chart in its corporate pres- demand for rubber gloves, seen as a cru-
Asia and Latin America,” Top Glove said. entation, the manufacturer’s annual glove cial piece of personal protective equipment,
output capacity stood at 90 billion pieces surged to curb the global spread of Covid-19.
According toTop Glove’s latest corpo- in December 2020 before growing to 100
rate presentation dated June 21, 2022, its billion pieces in December 2021. However, Covid-19-driven demand for
deferred glove output capacity expansion gloves is now seen normalising as global
and lesser production by rival glove makers The figure is expected to be maintained vaccination progress leads to anticipation
would help ease prices of nitrile or syn- at 100 billion pieces by end 2022, according that the Covid-19 outbreak can be curbed.
thetic rubber, a by-product of crude oil. to Top Glove, which had earlier planned
to expand its annual glove output capacity Such sentiment is reflected inTop Glove’s
Natural rubber latex prices are expected to 156 billion pieces by December 2025. share price, which has been adjusted for its
to “normalise after wintering season ends”, two-for-one bonus share issue under which
saidTop Glove, which has an annual glove Looking ahead, Top Glove’s proposed about 5.4 billion new shares were listed and
production capacity of about 100 billion glove output capacity expansion is unlikely quoted on Bursa Malaysia and the Singa-
pieces as at June 2022. to materialise based on current forecast as pore Exchange on Sept 7, 2020, according
the manufacturer aligns its capacity expan- to the company’s Bursa filing on that day.
Top Glove said it has 49 factories, com- sion with global glove demand and supply
prising 37 glove factories and 12 non-glove at a time when Covid-19 concerns have At Bursa onWednesday (June 22, 2022),
entities, across Malaysia,Thailand, China Top Glove’s share price closed down seven
and Vietnam. sen or 6.48% to RM1.01, which brings the
company’s market capitalisation to about
Top Glove’s 37 glove factories comprise RM8.09 billion.
32 entities in Malaysia, three in Thailand
and one each in China and Vietnam, ac- Top Glove has 8.01 billion outstanding
cording to the company. shares, according to its latest quarterly fi-
nancial report.

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Caely: Court company, which in itself tantamounts to TNB signs
rules incumbent contempt of court. agreement
on Laos-
board still in Caely added that the current board of Singapore
charge pending directors had also on June 16 lodged a po- electricity
Aug 3 hearing lice report against Leong, Kok andValhalla transmission
Capital who were suspected to have com-
by shazni ong mitted serious wrongdoings in the linge- by sulhi khalid
theedgemarkets.com rie manufacturer by calling for the EGM. theedgemarkets.com

KUALA LUMPUR (June 22): Caely This despite knowing there are ongo- KUALA LUMPUR (June 22):
Holdings Bhd said the Kuala Lumpur ing litigation cases, including one which Tenaga Nasional Bhd (TNB) an-
High Court has ruled on Tuesday (June had been filed by the plaintiffs themselves, nounced on Wednesday (June 22)
21) that the current composition of the Caely said. that it has signed an energy-wheel-
company’s board of directors shall be ing agreement (EWA) for electricity
maintained as that prior to the extraor- “Following the latest court ruling, the transmission from Laos to Singapore
dinary general meeting (EGM) convened current board shall remain in control of viaThailand and Malaysia using the
on June 15. Caely until the court hearing scheduled existing interconnection facilities
on Aug 3. For now, the board will con- owned by all countries involved.
In a statement, Caely said the court tinue to run the company,” said Caely’s
has directed that the status quo shall re- group executive chairman Datuk Loh The EWA will be effective for two
main until the hearing scheduled on Aug Ming Choon. years beginning June 22, the national
3, following a new lawsuit filed by plain- utility provider said.
tiffs Leong Seng Wui, Kok Kwang Lim The current eight members of Caely’s
and Valhalla Capital Sdn Bhd who had board of directors are: Loh, executive di- “The role of TNB under the
sought that the EGM to remove eight di- rector Datuk Seri Sin Hock Min, executive EWA is to transmit energy generated
rectors from the company’s existing board vice chair ladyWong Siaw Puie, executive from Lao PDR to Singapore.TNB
be declared valid. director Khoo ChenYeng, non-executive is under no obligation to top up any
director Datin Fong NyokYoon, as well as shortfall of energy transmitted from
Caely said the plaintiffs had earlier req- three other independent directors, namely Lao PDR by EDL (Electricite Du
uisitioned an EGM which was purportedly Datuk Mohamad Hanafiah Zakaria, Ng Laos). EDL will pay wheeling charg-
held on June 15, which the current board Mei Choo and Datuk Koh Mui Tee. es toTNB for the wheeling services.
of directors was advised by the company’s
legal advisers as invalid. Caely has been in the spotlight in the “The signing of the EWA will not
past two months after it announced on have any effect on the issued and
According to Caely, the company had in April 20 that the Malaysian Anti-Corrup- paid-up share capital and the sub-
fact on the same day of the EGM made an tion Commission had issued a freeze order stantial shareholders’ shareholdings
announcement stating that the said EGM on all of its bank accounts. of TNB and will have a neutral im-
was adjourned on various grounds, in- pact on the earnings of TNB over
cluding ongoing litigation cases — one of The requisitionists Leong, Kok andVal- the term of the EWA,” it said.
which had been filed by the requisitionists halla Capital — collectively holding at least
themselves. 10% of Caely — made their first attempt Shares in Tenaga ended one sen
to call for an EGM to remove the exist- or 0.12% lower to RM8.17 at the
Caely noted that this is in addition to ing board members in February this year. time of writing, giving it a market
being sub-judice as it interfered with the capitalisation of RM46.78 billion.
reliefs sought at the High Court by the On March 16, Caely commenced a
lawsuit at the Kuala Lumpur High Court Year to date, the stock has fallen
against the trio, as well as five others in a by 11.48%.
challenge against their voting rights and
the nomination of themselves or nominees
at an EGM.

On March 18, the trio filed a lawsuit
against Caely to declare that they were en-
titled to call and hold an EGM, subject to
any protocol or requirement as determined
by the court to ensure a fair and smooth
running of the EGM.

Two months later on May 19, the trio
requested for another EGM to discuss var-
ious issues, including the removal of newly
appointed executive chairmanWong Siaw
Puie and six other existing directors.

On April 7, the group said it had ap-
pointed Virdos Lima Consultancy (M)
Sdn Bhd as forensic auditor to carry out
an independent forensic audit on alleged-
ly suspicious and irregular transactions at
the group, following a tip-off received by
one of its directors.

Shares in Caely closed 8.96% or three
sen lower at 30.5 sen onWednesday (June
22), giving the group a market capitalisa-
tion of RM78.8 million.

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KUALA LUMPUR (June 22): Axiata Axiata completes the momentum of our participation in In-
Group Bhd and PT XL Axiata Tbk (XL 66% stake buy donesia’s rapidly advancing digital economy
Axiata) has completed the acquisition of in Link Net for is an exciting proposition we share with the
66.03% of PT Link Net Tbk (Link Net) RM2.63 bil Link NetTeam,” the duo said in a statement.
for 8.72 trillion Indonesian rupiah, or ap-
proximately RM2.63 billion. by sulhi khalid XL Axiata’s President Director and
theedgemarkets.com CEO, Dian Siswarini, said it has identi-
With the completion, Axiata’s whol- fied multiple areas of synergies that can
ly-owned subsidiaries, Axiata Investments merging its mobile operator Celcom Ax- be unlocked together with Link Net, lev-
(Indonesia) Sdn Bhd (AII) and XL Axiata iata Bhd with Digi.com Bhd. eraging its collective strength in mobile
now hold 46.03% and 20% respectively connectivity, fixed broadband and content.
in Link Net previously held by Asia Link Meanwhile, Axiata’s Joint Acting Group
Dewa Pte Ltd and PT First Media Tbk. CEOs Dr Hans Wijayasuriya and Vivek For the financial year ended December
Sood said the group welcomes Link Net 31, 2021, Link Net’s revenue rose 10.3%
AII also will be obligated to undertake a into the Axiata family as it strengthens its year-on-year to approximately 4.5 trillion
proposed mandatory tender offer (MTO) position in the region. rupiah (approximately RM1.3 billion).
as per the regulations of the Indonesian
Financial Services Authority, which is ex- “Link Net is among the leading provid- Axiata’s acquisition of the Link Net
pected to be completed by 3Q22, Axiata ers of high-speed broadband and cableTV stake, proposed in January, had been met
said in a statement. in Indonesia, reaching 2.9 million homes with resistance from Permodalan Nasion-
across 23 cities, serving approximately al Bhd (PNB) and the Employees Prov-
“With this acquisition, Link Net and 855,000 broadband and approximately ident Fund (EPF), which hold 14.67%
XL Axiata will be well-positioned to lev- 837,000 cableTV customers respectively. and 16.91% respectively in the company.
erage immediate synergies through their
combined positions in wireless communi- “The well experienced and accomplished Concerns raised included the impact on
cation services, sharing of backbone and team at Link Net will be accelerating the Axiata’s financial performance due to poten-
transmission networks and extensive re- company’s growth opportunities within exist- tial rise in debt levels “weighing on cash flow
lationships with customers in Indonesia. ing as well as under-served areas. Increasing and earnings”, to which Axiata chairmanTan
Sri Shahril Ridza Ridzuan responded that
“Coupled with XL Axiata’s enterprise “the balance sheet is manageable”.
offerings including mobile connections,
Link Net will be poised to capitalize on the Shares in Axiata closed two sen or
growing enterprise market in the country,” 0.72% lower to RM2.76, valuing the mul-
said Axiata, which is also in the midst of tinational telco at RM25.33 billion.Year to
date, the counter has retreated by 32.68%.

KUALA LUMPUR (June 22): CIMB CIMB confirms vate and investment banking, corporate
Group Holdings Bhd on Wednesday an- Chu KokWei, coverage, public sector and government
nounced the appointment of Chu KokWei group and group corporate banking.
and Novan Amirudin as co-chief executive Novan Amirudin
officers (co-CEOs) of its group wholesale are co-CEOs of CIMB said Novan is joining the group
banking business effective July 18. group wholesale from a global investment bank, where he
banking business was most recently head of equity capital
The appointments confirm The Edge markets for Southeast Asia and head of
report in May that the banking group is by shazni ong investment banking for Malaysia.
looking to split the CEO job at its group theedgemarkets.com
wholesale banking segment. The bank added Novan comes with 18
the Financial Institutions Group (FIG) years’ experience in investment banking
The May 5 report on theedgemarkets.com with his appointment as co-CEO of group and corporate finance across Kuala Lum-
quoted a source who named Novan as a wholesale banking. pur, Jakarta and Singapore, and that he
co-CEO to oversee the corporate and in- has extensive experience in client coverage,
vestment banking business, whereas Chu Chu has been with the group for al- mergers and acquisitions (M&As), public
will be overseeing the treasury and markets most 20 years, having served in various offerings, private placements, derivative
business as the other co-CEO. leadership roles since joining in 2003 as solutions and bank financing.
head, interest rate trading — debt market
Prior to this, the head of wholesale and derivatives. Abdul Rahman said CIMB looks
banking position had been left vacant at forward to working closely with Chu
CIMB after Omar Siddiq resigned from The bank noted further that Chu has and Novan as joint heads in driving the
the post in January to take on the position helmed the group treasury and markets growth of the group’s wholesale banking
of HSBC Bank Malaysia CEO. since 2015, and under his leadership the and ASEAN network businesses region-
business has grown into a market leading ally in line with the bank’s Forward23+
In Wednesday’s statement, CIMB franchise and significant profit contribu- strategic plan.
said Chu and Novan will head specific tor to the group.
business pillars within wholesale bank- “Chu’s appointment demonstrates the
ing but will be jointly responsible for Novan as the other co-CEO of group strength and expertise of our existing lead-
the overall wholesale banking business. wholesale banking will oversee group pri- ership bench, whilst Novan’s appointment
They will both report directly to CIMB will introduce new perspectives and com-
group chief executive officer Datuk Ab- plementary networks that will help us to
dul Rahman Ahmad. build on our leading wholesale banking
franchise,” he said.
Chu currently serves as group head,
treasury and markets of CIMB whereby CIMB’s share finished six sen or 1.21%
he will continue to lead group treasury lower at RM4.90, which translates into a
and markets with added responsibility over market capitalization of RM51.3 billion.

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KUALA LUMPUR (June 22): Former Husni said he The JV turned out to be a sham and
Finance Minister II Datuk Seri Dr Ah- would have been Good Star to be a company linked to fu-
mad Husni Hanadzlah said that he would gitive financier LowTaek Jho, or Jho Low,
have been shocked had he been the Prime worried over who made off with the US$700 million.
Minister and heard that US$700 million diverted
had been diverted out of 1 Malaysia De- Husni said that this would have wor-
velopment Berhad (1MDB). US$700 mil ried him as it would have also affected the
‘if I were PM financial position of the Malaysian govern-
Husni — the 20th prosecution witness ment as 1MDB was a Minister of Finance
in the 1MDB-Tanore trial where former by Timothy Achariam Incorporated company.
Prime Minster Datuk Seri Najib Abdul theedgemarkets.com
Razak is accused of misappropriating “If I were the top leader, I would defi-
more than RM2 billion of 1MDB funds Morgan bank account and US$700 million nitely get shocked and immediately de-
— said that when the US$700 million to an RBS Coutts bank account. mand for action to be taken, he was (Najib)
from 1MDB which was purportedly for ‘relax je’,” he said.
a 40% stake in a joint venture company Deutsche had remitted the money on
(JVCo) known as 1MDB PetroSaudi Ltd, Sept 30, 2009. On Oct 2, 2009, RBS Najib’s lawyerTan Sri Shafee Abdullah
was transferred to another entity instead, Coutts had contacted Deutsche Bank to who was cross-examining Husni then said
Najib seemed relaxed about it. ask for the name of the recipient of the that he was insulting Najib and that Najib
funds. Ho said she contacted 1MDB’s was only representing what the Board of
Husni testified that when he had raised former CEO Datuk Shahrol Azral Ibra- Directors and Shahrol had told him per-
concerns about the US$700 million going him Halmi who told her that the name taining to the money.
to an entity known as Good Star Limited was a certain Good Star Ltd and that the
Najib had assured him that Good Star was company was a wholly-owned subsidi- After these exchanges between Husni
a subsidiary of PetroSaudi. ary of PetroSaudi International Ltd and and Shafee, Husni was let go from the
that PetroSaudi International wanted the witness stand by Justice Datuk Collin
“If I were the Prime Minister, I would funds transferred there. Lawrence Sequerah, but he is subject to
be worried about this.The Prime Minister re-examination by lead prosecutor Datuk
had the power to replace the board of (di- Gopal Sri Ram next week.
rectors of) 1MDB. If he knew, he should
have replaced them. I would’ve done some- Prosecution contended that Najib ben-
thing about this,” Husni said of Najib’s efited from Good Star’s US$700 million
non-action against the 1MDB board over transaction.
the transfer of the funds to the wrong entity.
In the opening statement of the trial in
On Tuesday, former managing director 2019 by lead prosecutor Datuk Seri Gopal
at Deutsche Bank (M) Bhd Jacqueline Ho Sri Ram, he said the prosecution would show
Yek Wan, testified that 1MDB had sought that Najib had received US$20 million in
and obtained approval from Bank Negara two tranches into his personal accounts from
Malaysia for 1MDB to remit US$1 billion to the US$700 million transferred to Jho Low.
acquire a 40% stake in 1MDB PetroSaudi’s,
BritishVirgin Island’s account in BSI bank. Najib, who is also the Pekan MP, is on
trial for four counts of abuse of power and
However, 1MDB management had at 21 counts of money laundering involving
the last minute instructed Deutsche to RM2.28 billion of 1MDB’s funds.
transfer out the US$1 billion of 1MDB Read also: Judge calls for recess as
funds to two bank accounts in two tranch- Husni and Shafee get into heated
es. One was for US$300 million to a JP exchange Click here

KUALA LUMPUR (June 22): An Investi- IO suspected money belonged to him and his wife.
gating Officer (IO) had suspected that for- Syed Saddiq was In his witness statement, Ahmad
mer youth and sports minister Syed Sad- involved in theft
diq Syed Abdul Rahman was involved in of RM250k from Marzuqi said that after further conversa-
the missing monies from a safe kept in his tion with Syed Saddiq, the parliamentarian
house, the High Court heard on Wednes- his home had clarified that the missing amount was
day (June 22). actually RM210,000.
by Tarani Palani
Ahmad Marzuqi Ibrahim, Assistant Su- theedgemarkets.com In WhatsApp conversations revealed
perintendent with the Petaling Jaya District to the court on Tuesday (June 21), Syed
Police Headquarters, said this at the Muar Syed Saddiq had lodged a police report Saddiq had said that of the amount,
member of parliament’s trial on charg- on the missing monies on March 29, 2020. RM90,000 of the sum was his, RM70,000
es that include criminal breach of trust His father, Syed Abdul Rahman Alsagoff, his father’s and RM50,000 his mother’s.
(CBT) involving RM1 million belonging had also made a police report on March He also claimed that the money was for
to Parti Pribumi Bersatu Malaysia’sYouth 31, 2020, and stated that a portion of the home renovation purposes.
wing, Armada.
Ahmad Marzuqi said that the initial
Into its second day, the trial onWednesday investigations were made under Section
centred around the missing RM250,000 sto- 380 of the Penal Code concerning theft in
len from Syed Saddiq’s safe in March 2020. dwellings. He elaborated that Syed Sad-
Ahmad Marzuqi, the prosecution’s fifth wit- diq’s maid Novi Dwi Anggraeni was ini-
ness, was the IO on the case. tially arrested and detained for two weeks.

continues on Page 15

t h u r s d a y j u n e 2 3 , 2 0 2 2 15 T h e E d g e C E O m o r n i n g b r i e f

home

news In brief

Aug 5 verdict on govt’s appeal on watching brief, the media and not via online False claims on RM300 mil projects:
citizenship of children born overseas zoom application. Justice Datuk S Nantha Four suspects released on MACC bail
to Malaysian mothers Balan and Justice Datuk Azizah Nawawi made
PUTRAJAYA (June 22): The Court of up the rest of the three-member bench, which KUALA TERENGGANU (June 22):
Appeal on Wednesday deferred delivering had earlier fixed Wednesday (June 22) to Four individuals who were recently
its decision on the appeal by the Home deliver its decision after hearing submissions arrested on suspicion of making false
Ministry, National Registration Department on the appeal in March. — by Hafiz Yatim claims over development projects
(NRD) and the government over a landmark worth over RM300 million on the East
High Court decision last year that allowed reserves slipped below US$110 billion for Coast have been released on Malaysian
citizenship to be granted to children born the first time, possibly since March 2021 Anti-Corruption Commission (MACC)
overseas to Malaysian mothers with foreign when the figure stood at US$108.62 billion, bail. The lawyer representing the
spouses to Aug 5. The decision was deferred according to BNM data. — by Sulhi Khalid four suspects, Vivek Sukumaran, said
before a bench presided by Justice Datuk they were all released after the six-
Kamaludin Md Said, who requested the day remand order on them ended on
verdict be delivered in open court for the Wednesday (June 22). “The case is still
benefit of all parties including those on being investigated. The remand was not
extended as all of them, aged between
BNM international reserves slip 28 and 48, had given full cooperation to
below US$110 bil the MACC. “I hope all quarters will stop
KUALA LUMPUR (June 22): The making speculations. Just give room to
international reserves of Bank Negara the MACC to complete its investigation,”
Malaysia (BNM) amounted to US$109.2 he told reporters here on Wednesday.
billion as at June 15, 2022, the central bank Last Friday, Bernama reported that a
said on Wednesday (June 22, 2022). “The managing director of a government-
reserves position is sufficient to finance 5.5 linked company involved in real estate
months of imports of goods and services, was among the four individuals arrested
and is 1.1 times the total short-term on alleged involvement in making false
external debt,” BNM said. At US$109.2 claims involving development projects
billion, BNM’s latest-reported international worth over RM300 million on the East
Coast. The three others were a company
director, a project manager and an
architect. ­— Bernama

from Pag e 14 “I suspected that all three of them were dausWanYusof, an MACC Officer with the
forensic department who prepared the foren-
However, she was later released on May involved or abetted in the case of the loss sic report of WhatsApp conversations, also
14, 2020, as there was no evidence and of the money. I confirm that at that time, testified onWhatsApp conversations from the
proof linking her to the case. Moreover, he I had provided the letter to obtain infor- seized handphone of then Armada assistant
also confirmed that there were no traces mation (from) BNM. treasurer Rafiq Hakim Razali.
of forced entry into the house. “I can also confirm that I have not re-
His investigations then focused on Syed ceived any feedback from (BNM) so far,” The MACC officer testified that he used
Saddiq, Siti Nurul Hidayah and Lim Hooi read his witness statement. XRY software to extract and analyze the
Sean, as the trio were the only ones with OnTuesday, the prosecution tried to es- conversations. The officer who has served
the password for the safe. Ahmad Marzuqi tablish a link between the stolen monies and with MACC for eight years said he had an-
added that the safe only had traces of Syed the charges that the parliamentarian fac- alysed over 200 phones and for the particu-
Saddiq’s fingerprints. es in this trial. However, the defence had lar groupWhatsApp conversations —Value
He stated that he had applied to the At- continued to question the relevancy of the Add and Ocean 17 — he had conducted a
torney-General’s Chambers (AGC) in June missing monies to the actual four charges keyword search.
2020 for the matter to be investigated under that Syed Saddiq faces in the
Anti-Money Laundering,Anti-Terrorism Fi- trial, which relate to crimi- Lead defence counsel Gobind Singh
nancing and Proceeds of Unlawful Activities nal breach of trust (CBT), Deo maintained on Wednesday that the
Act 2001 and had received approval misappropriation of funds WhatsApp messages had nothing to do
from the chambers on the same day. and money-laundering. with the charges that Syed Saddiq faces, as
He subsequently wrote to Bank Ne- The charges carry jail time, it revolved around the RM250,000 stolen
gara Malaysia (BNM) for informa- fines and whipping if from Syed Saddiq’s home in March 2020.
tion but has yet to receive a reply. found guilty. Click here for the full story
Earlier on Read also: Syed Saddiq’s mum: Advise
We d n e s d ay, him to ‘support govt of the day’ to avoid
Syed Saddiq Syed Abdul Shahrin Yahya/The Edge the prosecu- probe, MACC officers told me Click here
Rahman seen at the KL tion’s fourth
Court Complex for his witnessWan
money laundering trial on
Wednesday, June 22, 2022.
Mohd Fir-

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Powell sees ongoing rate hikes,
says recession a ‘possibility’

(June 22): Federal Reserve Chair Jerome BY CRAIG TORRES & DIEGO AREAS MUNHOZ While a recession isn’t in the Fed’s fore-
Powell said the Central Bank will keep rais- Bloomberg cast, economists are increasingly flagging
ing interest rates to tame inflation and con- the likelihood of a downturn sometime in
ceded that a US recession was “certainly a BLOOMBERG the next two years.
possibility”.
priced in a string of rate increases and that’s Former New York Fed President Bill
“We anticipate that ongoing rate increases appropriate,” Powell said in response to a Dudley said in a Bloomberg Opinion col-
will be appropriate,” Powell saidWednesday question following his opening remarks.“We umn Wednesday that a recession is “inevi-
in his semiannual testimony to the Senate need to go ahead and have them.” table” within the next 12 to 18 months. An
Banking Committee. “Inflation has obvi- economist at the Fed, Michael Kiley, said
ously surprised to the upside over the past The Labor Department’s consumer price in a paper Tuesday that the risk of a large
year, and further surprises could be in store. index rose 8.6% last month from a year ear- increase in the unemployment rate is above
We therefore will need to be nimble in re- lier, a four-decade high. University of Mich- 50% over the next four quarters, based on
sponding to incoming data and the evolv- igan data showed US households expect in- a simulation incorporating inflation data,
ing outlook.” flation of 3.3% over the next five to 10 years, unemployment, corporate bond yields and
the most since 2008 and up from 3% in May. Treasury yields.
Powell’s remarks largely reiterated com-
ments at a press conference last week after The rising cost of living has angered “The American economy is very strong
he and his colleagues on the Federal Open Americans and hurt the standing of Pres- and well positioned to handle tighter mon-
Market Committee raised their benchmark ident Joe Biden’s Democrats with voters etary policy,” Powell said in his opening re-
lending rate 75 basis points — the biggest ahead of November congressional midterm marks. Asked about a recession, he said that
increase since 1994 — to a range of 1.5% elections. was “certainly a possibility. It is not our in-
to 1.75%. tended outcome at all,” noting that events in
Powell heard sharp criticism of his per- the last few months have made it harder for
While Powell told reporters last week that formance on inflation, especially from Re- the Fed to achieve the soft landing it seeks of
another 75 basis-point increase, or a 50 ba- publicans, with Alabama Senator Richard lower inflation and a healthy labour market.
sis-point move, was on the table for the next Shelby telling him sharply that “the Federal
meeting in late July,Wednesday’s text made Reserve failed the American people”. “We’re not trying to provoke and don’t
no reference to the size of future rate hikes. think we need to provoke a recession,” he
Fed Governor ChristopherWaller said Sat- Fed officials have admitted that they were said.
urday that he would support a 75-basis-point too slow to tighten and are now trying to
rate increase in July should economic data front-load rate increases in the most aggres- Concern over the outlook for global
come in as he expects. sive policy pivot in decades. growth has seen oil prices ease back some-
what in the last few days, potentially provid-
“We understand the hardship high infla- ing some relief to sky-high gasoline prices.At
tion is causing,” Powell saidWednesday.“We the same time, US hiring remains strong and
are strongly committed to bringing inflation consumption indicators suggest demand is
back down, and we are moving expeditious- holding up despite the blow to real dispos-
ly to do so.” able income from higher inflation.

Investors expect the US Central Bank to Powell called the labour market “extreme-
keep raising rates to a peak around 3.6% by ly tight”.
the middle of next year, according to inter-
est-rate futures. “The tightening in financial conditions
that we have seen in recent months should
“Financial conditions have tightened and continue to temper growth and help bring
demand into better balance with supply,”
Powell said.

Click here for the full story

Read also:
Deutsche Bank, Citi see 50% recession
chance as rates rise Click here

US futures fall with oil as recession fear
spreads: Markets Wrap Click here

Oil slumps over 6% as Biden set to cut fuel
costs for drivers Click here

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LONDON (June 22): Soaring food pric- BLOOMBERG Earlier on Wednesday (June 22), the
es pushed British consumer price infla- Resolution Foundation said the cost-of-
tion to a 40-year high of 9.1% last month, UK inflation hits living hit for households had been com-
the highest rate out of the Group of Seven 40-year record, pounded by Brexit, which had made
(G7) countries and underlining the severity highest in G7 Britain a more closed economy, with dam-
of the cost-of-living crunch. aging long-term implications for produc-
BY ANDY BRUCE & DAVID MILLIKEN tivity and wages.
The reading, up from 9% in April, Reuters
matched the consensus of a Reuters poll Britain’s headline inflation rate in May
of economists. Historical records from which could further hurt trade ties with was higher than in the US, France, Ger-
the Office for National Statistics (ONS) the European Union. many and Italy.While Japan and Canada
show May’s inflation was the highest since have yet to report consumer price data
March 1982, and worse is likely to come. “With the economic outlook so unclear, for May, neither are likely to come close.
no one knows how high inflation could go,
Sterling, one of the worst perform- and how long it will continue for, making The Bank of England said last week
ing currencies against the US dollar this fiscal and monetary policy judgements par- that inflation is likely to remain above 9%
year, fell below US$1.22, down 0.6% on ticularly tough,” said Jack Leslie, a senior over the coming months before peaking
the day. economist at the Resolution Foundation at slightly above 11% in October, when
think tank. regulated household energy bills are due
Some investors judge Britain to be at to rise again.
risk of both persistently high inflation and
a recession, reflecting its large imported The British government is doing all it
energy bill and continuous Brexit troubles could to combat a surge in prices, Finance
Minister Rishi Sunak said after the data.

Prices of food and non-alcoholic drinks
rose by 8.7% in annual terms in May, the
biggest jump since March 2009 and mak-
ing this category the biggest driver of an-
nual inflation last month.

Overall consumer prices rose by 0.7%
in monthly terms in May, the ONS said, a
little more than the 0.6% consensus.

British factory-gate prices, a key deter-
minant of prices later paid by consumers
in shops, were 22.1% higher in May than
a year earlier, the biggest increase since
these records began in 1985, the ONS said.
Read also: Swiss National Bank sees likely
need to tighten policy again to fight inflation
Click here

(June 22): Sri Lanka’s economy has “com- Sri Lanka’s sifying protests and may hamper political
pletely collapsed” and an agreement with the economy has stability further.
International Monetary Fund is the only path
to revival, Prime Minister Ranil Wickrem- ‘collapsed,’ On Tuesday, Hamilton Reserve Bank
esinghe told the Parliament onWednesday. says its PM Ltd, which holds more than US$250 mil-
lion of Sri Lanka’s 5.875% International
“We are now facing a far more serious BY ANUSHA ONDAATJIE Sovereign Bonds due July 25, filed a suit
situation beyond mere shortages of fuel, Bloomberg in a New York federal court seeking full
gas, electricity and food,”Wickremesinghe payment of principal and interest after the
said, adding that the South Asian nation remesinghe said. “We intend to enter into country defaulted last month.
is unable to purchase imported fuel, even an official level agreement with the IMF
for cash, due to heavy debts owed by its by the end of July,” he added.
petroleum corporation. “We are now see-
ing signs of a possible fall to rock bottom.” Authorities also plan to hold a credit
aid conference with friendly nations, in-
The gloomy analysis comes as authori- cluding India, Japan and China, for fur-
ties hold talks with theWashington-based ther assistance.
lender for an agreement for fresh funds
to the bankrupt nation. Sri Lanka needs Sri Lanka has failed to halt the worst
US$6 billion in coming months to prop economic crisis it faced in its inde-
up its reserves, pay for ballooning import pendent history. Lingering shortages
bills and stabilize its currency. of food, fuel and essentials risk inten-

Sri Lanka has concluded the initial dis-
cussions with the IMF, and exchanged ide-
as on public finance, debt sustainability,
banking sector and social security, Wick-

T H U R S D A Y J U N E 2 3 , 2 0 2 2 18 T H E E D G E C E O M O R N I N G B R I E F

Official Solar Partner Supported By

The Edge Malaysia Top Property Developers The Edge Malaysia The Edge Malaysia Affordable
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Property Excellence Awards, was established in Outstanding
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on their quantitative and qualitative attributes. Award is an exercise outstanding affordable housing
projects for the urban middle-
The Edge Malaysia-PEPS Value Creation Excellence to recognise
Award is an exercise to measure the capital impressive projects income group undertaken
undertaken wholly wholly by private sector property
appreciation of properties between the property by Malaysian private
developers’ selling price and the subsequent resale developers in Malaysia.
sector property
price in secondary transactions. developers in other The Edge Malaysia-PAM Green
Excellence Award is an exercise to
countries. recognise property developments that
demonstrate sustainable design that
is innovative and outstanding while

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>>>NSUOWBMOIPSESNIOFNORS • Entry forms can be downloaded for free from
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• For enquiries, please contact Corporate Communications at
The Edge at 603-7721 8244 or [email protected]

SUBMISSION DEADLINE

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5PM, FRIDAY, JUNE 24, 2022

T H U R S D A Y J U N E 2 3 , 2 0 2 2 19 T H E E D G E C E O M O R N I N G B R I E F

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(June 22): Chinese President Xi Jinping Xi slams look to ensure any joint statement from the
criticized sanctions for stoking global eco- sanctions for summit is neutral, they added.
nomic pain in a speech kicking off this year’s ‘weaponizing’
BRICS summit, as he seeks to bolster rela- world economy Modi’s government will also seek to delay
tions with emerging markets in the wake of at BRICS open China’s effort to expand BRICS by pushing
strainedWestern ties. the organization to decide on criteria for add-
Bloomberg ing members, the officials said. Last month,
Without explicitly naming the US, Xi China proposed that the grouping should
said that the international community is cautioned against confrontation, while again start a process to include more countries.
worried that the global economy will split suggesting that NATO was responsible for
into mutually exclusive zones, and called for antagonizing Russia. The Chinese leader is scheduled to host
the world to fight against the hegemony of a dialogue on Friday that will include lead-
any one country. “Those who obsess with a position of ers from BRICS countries and some from
strength, expand their military alliance, and other emerging markets.
“Politicizing, instrumentalizing and seek their own security at the expense of
weaponizing the world economy using a others will only fall into a security conun- China said last month that it wanted to
dominant position in the global financial drum,” Xi said. expand the BRICS grouping that was formed
system to wantonly impose sanctions would as a quad in 2009, with South Africa joining
only hurt others as well as hurting oneself, Xi offered an alternative toWestern-dom- the following year. Chinese Foreign Minister
leaving people around the world suffering,” inated global governance, including reducing WangYi told an online meeting of his BRICS
Xi told the BRICS Business Forum via vid- barriers for trade, investment and technology counterparts that Beijing would like to start
eo linkWednesday, according to the official with theWTO at the core, as well as giving the expansion process, without specifying
Xinhua News Agency. emerging economies and developing coun- which countries might be included.
tries a bigger say in economic governance.
The virtual event, which Beijing is host- China is also working to expand its in-
ing this week, is set to bring together Xi, He urged the BRICS to deepen coop- fluence in the Pacific Islands, where it has
Russian President Vladimir Putin, Indian eration in trade, investment and finance, as proposed a sweeping trade and security deal
Prime Minister Narendra Modi, South well as the digital economy, smart manu- with ten nations.That yet-to-be-signed deal,
Africa’s Cyril Ramaphosa and Brazil’s Jair facturing, clean energy and infrastructure. which was dealt a setback last month, has
Bolsonaro. been taken as a sign of Beijing’s intensifying
India is expected to counter an anticipat- competition with the US and Australia for
The summit beginningThursday offers ed effort by Xi to use the summit to high- influence those emerging markets.
Xi and Putin a vehicle to expand their vi- light his efforts to build an alternative to the Read also:
sion of a global order after they declared US-led global order, according to Indian Putin sees Russia oil flows to China, India
a “no-limits friendship” just before Russia officials with knowledge of the matter. Ne- ‘growing noticeably’ Click here
invaded Ukraine. China has since provided gotiators from the South Asian nation will
crucial diplomatic support for Russia, as US must find new tools to defend against
Beijing more broadly pushes back against China, trade chief says Click here
US sanctions and seeks to redefine terms
including democracy and human rights.

In his speech, Xi called for the lessons
of two world wars to be remembered as he

(June 23): JPMorgan Chase & Co. is laying JPMorgan lays biggest hike since 1994.Thirty-year mort-
off hundreds of home-lending employees off hundreds in gage rates have already more than doubled
and reassigning hundreds more this week home lending from their record low in January 2021.
as rapidly rising mortgage rates drive down after rate surge
demand in what had been a red-hot hous- The fast run-up in rates has started to
ing market. BY HANNAH LEVITT cool a housing market that reached a frenzy
Bloomberg during the pandemic. Sales of previously
The total affected will be more than owned US homes fell for a fourth month
1,000 US workers, with about half moved in May to the lowest level in nearly two
to different divisions within the bank, ac- years, according to data from the National
cording to people familiar with the matter Association of Realtors released this week.
who asked not to be identified discussing
personnel matters. Wells Fargo & Co., the biggest mortgage
lender among US banks, has also been
“Our staffing decision this week was a laying off and reassigning employees in its
result of cyclical changes in the mortgage home-lending division, according to people
market,” a JPMorgan spokesperson said familiar with that firm, who asked not to be
in a statement Wednesday. “We were able identified discussing private information.
to proactively move many impacted em-
ployees to new roles within the firm, and Earlier this month, companies includ-
are working to help the remaining affected ing Compass Inc. and Redfin Corp. an-
employees find new employment within nounced plans to trim their workforces
Chase and externally.” amid the cooling US housing market.
Compass said in a regulatory filing that
The cuts follow the Federal Reserve’s it will cut about 10% of its workforce, or
decision to boost interest rates to tame dec- about 450 employees, while Redfin plans
ades-high inflation. Last week, the Fed an- to layoff about 6%, amounting to roughly
nounced an increase of 75 basis points, the 470 workers.

T H U R S D A Y J U N E 2 3 , 2 0 2 2 20 T H E E D G E C E O M O R N I N G B R I E F

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(June 22): Jack Ma’s Ant Group Co. is Jack Ma’s Ant pre-market following Bloomberg’s report.
poised to apply for a key financial license to apply for key Under the official framework laid down
as soon as this month, according to peo- license as soon as
ple familiar with the matter, a sign that last year, Ant needs to fold all its finan-
its lengthy overhaul following a squashed this month cial units into a holding company and be
2020 listing is getting closer to satisfying regulated like a bank with more scrutiny
China’s financial regulators. Bloomberg on its shareholder structure and tougher
capital requirements. The PBOC has so
The People’s Bank of China intends to BLOOMBERG far accepted five applications for financial
accept Ant’s application to become a finan- holding firms and approved two of them
cial holding company once it’s submitted the country’s tech giants — would offer after at least six months of review.
and will then start a review process, which powerful evidence that policy makers are
could take months, said the people, asking following through on pledges to support The crushing of Ant’s $35 billion IPO
not to be identified discussing a private the industry. in November 2020 sent shock waves across
matter. Officials will examine Ant’s capital the financial world, burning investment
strength and business plans, as well as the “Ant has been steadily moving forward firms from Carlyle Group Inc. toTemasek
compliance of its shareholders and senior with its rectification work according to reg- Holdings Pte that had expected a windfall.
management before a final signoff. ulatory requirements, including prepar- It also marked the beginning of a broader
ing materials to apply to set up a financial crackdown that ensnared some of China’s
The moves would mark a crucial devel- holding company,” a spokesperson for the fastest-growing companies, erased more
opment in Ant’s revamp, affirming that the company said in an emailed response to than $1 trillion of market value and caused
company can maintain its financial oper- questions. “We do not have a timetable to a reckoning within the country’s billion-
ations under the supervision of the cen- submit this application.” aire class.
tral bank.While that clears a path for it to
eventually revive a public offering, Ma’s The PBOC didn’t immediately respond While investors are likely to welcome
fintech juggernaut will be a much dimin- to a request seeking comment. any signs that the tech crackdown is eas-
ished enterprise, with policy makers dra- ing, a return to the heady days of old ap-
matically curbing its growth in consumer Alibaba shares pared losses of as much pears unlikely. Myriad regulations imposed
finance and its ability to leverage its ubiq- as 3.1% to trade about 1% lower in US on Ant over the past two years mean the
uitous payments app. company is worth a fraction of its former
self, according to some early backers. Fi-
Shares of Alibaba Group Holding Ltd., delity Investments, for instance, slashed
which owns a third of Ant, have swung its valuation estimate for the firm to about
wildly in recent days as investors try to $78 billion last June from $235 billion just
gauge how close policy makers are to before the IPO was abruptly suspended.
concluding their examination of Ant’s
operations. The stock climbed Friday af- Regulators now have routine inspections
ter Reuters reported that Ant’s applica- to examine dealings between Ant and fi-
tion for a financial holding company had nancial institutions, and continue to curb
been accepted, before giving up most of how much they can jointly lend. Before
the gains when state-backed media refut- the crackdown, Ant had a thriving busi-
ed the report, citing people close to the ness doling out small unsecured loans in
central bank. partnership with banks via its Huabei and
Jiebei brands. Overall, its CreditTech busi-
Dialing down scrutiny of Ant — one ness was its single biggest revenue maker,
of most high-profile casualties of Presi- contributing 39% of the total in the first
dent Xi Jinping’s sweeping clampdown on half of 2020.

China approves plan for ‘healthy’ development of fintech sector

(June 22): Chinese President Xi Jinping Bloomberg A meaningful relaxation of curbs on
chaired a meeting Wednesday that ap- Ant — one of the most high-profile
proved promoting the “healthy” devel- nancial infrastructure, and work to prevent casualties of Xi’s sweeping clampdown
opment of the payment and fintech sec- and defuse systemic financial risks, CCTV — would send a powerful signal that
tors, a sign that a broad crackdown on said. The government will also enhance policy makers are following through on
tech companies like Ant Group Co may oversight of financial holding companies recent pledges to support the industry.
be easing. and financial institutions invested by plat- The Communist Party’s evolving stance
form firms, the report said, without add- toward the private sector has become
The meeting of the central commis- ing details. one of the most closely watched devel-
sion for deepening overall reform also opments in global markets in recent
backed enhancing regulation of major Beijing has promised to unwind crack- years, with some observers even call-
payment platforms, state broadcaster downs that torpedoed Ant’s record initial ing China’s sprawling internet sector
China CentralTelevision reported, adding public offering in 2020 and ensnared every uninvestable.
that companies would be encouraged to sector from online education to gaming.
return to their roots while the authorities Once Ant is able to set up the financial While Ant has said it has no plans to
will improve regulation. holding company, it can fold key opera- initiate an IPO, the company’s Chair-
tions into the entity, following a framework man Eric Jing said last year that it would
As part of the plans, China would laid down by the Central Bank last year. eventually go public.
ensure the security of payment and fi-

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MOSCOW (June 22): Alphabet’s Google Google faces in what Moscow calls a “special military
may face a fine of 5%-10% of its turno- second turnover operation”.
ver in Russia for what the state communi-
cations regulator said on Wednesday was fine in Russia Ukraine says it is fighting an illegal land
a repeated failure to delete banned con- over banned grab by Russia.
tent, including “misleading information” content —
onYouTube about events in Ukraine. Roskomnadzor also saidYouTube had
regulator permitted content promoting extremist
This is the second fine based on a per- views and calls for children to participate
centage of turnover that Google could Reuters in unauthorised protests.
face Russia. In May, Russian bailiffs seized
more than 7.7 billion roubles (US$143 It said the repeat offence could lead The regulator said Google has now been
million) from Google that it had been or- to a fine of 5%-10% of annual turnover fined a total of 68 million roubles, exclud-
dered to pay late last year, marking the first in Russia, with the amount to be deter- ing turnover fines, and that more than
time Moscow had exacted a percentage of mined in court. Reuters calculated that 7,000 banned items remain onYouTube.
the company’s annual Russian turnover. the previous fine equated to just over
8% of turnover. Russia has restricted access to Twitter
Google, whose Russian subsidiary last and Meta Platforms’ flagship social net-
week submitted a declaration of bankrupt- Russia sent tens of thousands of troops works Facebook and Instagram, but has
cy, did not immediately respond to a re- into Ukraine on Feb 24, saying it had to not blocked Google.
quest for comment. defuse a threat to its security and pro-
tect Russian speakers from persecution, A State Duma member last week
“The video hosting siteYouTube delib- said YouTube and Google had not yet
erately promotes the dissemination of mis- “crossed the line of reasonableness”,
leading information about the progress of but were involved in the information
the special military operation in Ukraine, war against Russia.
discrediting the armed forces of the Rus-
sian Federation,” regulator Roskomnad- Russia has issued numerous fines to for-
zor said. eign technology companies in recent years
for a range of infringements, in what critics
say is an attempt to exert greater control
over the internet.

Worst natural
disaster in eight
years kills 1,000 in

Afghanistan

BY ELTAF NAJAFIZADA
Bloomberg

(June 22): At least 1,000 people have been temblor hit at about 2.30amWednesday. report last month. More than 70% of Afghan
killed and hundreds more injured after a Afghanistan’s economy is already in cri- families do not have enough money to buy
powerful earthquake hit southeastern Af- food and other essentials, the study added.
ghanistan overnight, setting off a new hu- sis after international aid, which made up
manitarian crisis in a country already facing some 40% of its gross domestic product, The country, already in its worst
a crumbling economy and hunger. was lost since the Taliban took over the drought in three decades, has also been
country after the withdrawal of US troops hit hard by the recent surge in food prices,
The eastern Paktika province was the last August.The US also moved to block fueled by the war in Ukraine. The Unit-
worst hit, Sharafuddin Muslim, the deputy the Central Bank’s access to some US$9 ed Nations has warned more than half of
state minister for Disaster Management said. billion in overseas reserves. the country’s 40 million people are facing
The state-run Bakhtar News agency said acute hunger and a million children could
at least 1,000 people had died and another More than 24 million people are now in die of starvation.
1,500 injured and the death toll could rise. need of humanitarian assistance in the na- Click here for the full story
tion, up from about 18.4 million last year,
Helicopters and rescue teams have been the US Special Inspector General for Af-
sent to the affected areas, he added. ghanistan Reconstruction, or Sigar, said in a

Casualties and damage were also report-
ed in nearby Khost and Nangahar provinc-
es that border Pakistan,Taliban spokesman
Bilal Karimi said.The quake was the worst
calamity to hit the nation since a landslide
in 2014 killed 2,000 people in the north-
eastern Badakhshan province.

Karimi urged international aid agencies
to help rescue those still trapped in the rub-
ble of ruined homes after the 5.9 magnitude

T H U R S D A Y J U N E 2 3 , 2 0 2 2 22 T H E E D G E C E O M O R N I N G B R I E F

WORLD

REUTERS

Boeing expects NEWS IN BRIEF
supply chain
problems to Toyota cuts July global production
last through plan by 50,000 vehicles
most of 2023
TOKYO (June 22): Toyota Motor Corp on
BY JAMIE FREED, ALEXANDER CORNWELL He said Boeing had a big, complicat- Wednesday cut its July global production
& TIM HEPHER ed supply chain with lots of fragility in plan by 50,000 vehicles as semiconductor
Reuters it, leading to problems when there were shortages and Covid-19 parts supply
delays. disruptions continued to curb output.
DOHA (June 22): Boeing expects supply The world’s largest carmaker by volume
chain problems to persist almost until the “It’s been a real issue for both manu- expects to make 800,000 vehicles next
end of 2023, led by labour shortages at mid- facturers and will probably stay that way month, it said in a statement. “As it
tier and smaller suppliers, partly due to the in my view almost to the end of next year,” remains difficult to look ahead due to
faster-than-expected return of demand, its Calhoun said. the shortage of semiconductors and the
chief executive said on Wednesday. spread of Covid-19, there is a possibility
“And the biggest restraint of all for that that the production plan may be lower,”
Boeing said last month that production mid-tier set of suppliers and sub-tier set of the Japanese company said. Toyota and
of its 737 aircraft had been slowed by short- suppliers is labour availability: Do we have other carmakers continue to struggle with
ages of a single type of wiring connector, a workforce?” he said. supply-chain disruptions and component
while some of its airline customers had been shortages caused by the Covid-19
forced to cancel flights due to a lack of staff Reuters last month reported engine mak- pandemic including those resulting
in the post-pandemic recovery. er CFM International, a joint venture be- from the recent lockdowns in China.
tween GE and Safran, was facing industrial Automakers are also having to compete
“The shift from demand to now sup- delays of six to eight weeks in the wake of for limited semiconductor supplies with
ply issues... is remarkable, the speed with supply-chain problems. other manufacturers such as consumer
which it happened,” Boeing chief executive electronics device makers. Toyota stuck
David Calhoun said at Bloomberg’s Qatar Airbus last month said it saw growing with its annual global production target
Economic Forum in Doha. short-term risks in its supply chain but of 9.7 million vehicles, although the
voiced confidence that its global network company signalled in May that supply
of suppliers would ill be able to keep up. chain disruptions could eventually force
it to lower that number. The automaker
SoftBank Clavel takes charge of a hodgepodge of on Wednesday also expanded production
overseas business assets including chip designer Arm, which halts in Japan next month at plants that
SoftBank hopes to list, and stakes in satel- make vehicles, including its GR Yaris
chief exits in lite company OneWeb, telcoT-Mobile US subcompact and bZ4X electric sport utility
latest churn Inc and robotics firm Boston Dynamics. vehicle. — Reuters
The executive, who spent 19 years at
BY SAM NUSSEY Morgan Stanley before joining SoftBank in Twitter’s board advises
Reuters 2015, participated in the restructuring of shareholders to approve Musk’s
office space-sharing firmWeWork and the US$44 bil bid
TOKYO (June 22): Japan’s SoftBank integration of Latin American funds into
Group Corp said on Wednesday (June the Vision Fund following the departure ISTANBUL (June 22): Twitter’s board
22) it had appointed Alex Clavel as of chief operating officer Marcelo Claure. of directors unanimously advised
the chief executive of its SoftBank The recent exits underscore the domi- shareholders Tuesday to approve Tesla
Group International unit, replacing nance by chief executive Masayoshi Son of CEO Elon Musk’s bid to purchase the social
Michel Combes (pic) who leaves the Japanese conglomerate and its board media giant for US$44 billion. “The merger
after just six months in the role. at a time of strategic drift. Son will agreement is advisable and the merger and
address shareholders on Friday. the other transactions contemplated by
SoftBank transformed the tech Son “needs people to provide the merger agreement are fair to, advisable
industry with big bets on late- safeguards, give him advice and and in the best interests of Twitter and its
stage start-ups but the con- make him even more success- stockholders,” the board said in a filing to
glomerate had turned over ful”, outgoing SoftBank board the Securities and Exchange Commission
much of its executive team member Lip-Bu Tan (SEC), reported Anadolu Agency. Musk, who
and been forced to radi- wrote in a statement previously bought a 9.2% stake in Twitter,
cally scale back investing earlier this month, made an offer of US$54.20 per share for
activity through its Vi- adding that “poor the company in his notification to the SEC
sion Fund as its port- choices made too on April 14. Twitter announced on April 25
folio slumps. quickly can have that a deal had been reached for the sale
negative conse- of the company to Musk, but Musk said
quences for the on May 13 that it had been temporarily
BLOOMBERG suspended. In a post on his Twitter
account, he said the deal was on hold
company”. pending “details supporting calculation
that spam/ fake accounts do indeed
represent less than 5% of users. — Bernama

T H U R S D A Y J U N E 2 3 , 2 0 2 2 23 T H E E D G E C E O M O R N I N G B R I E F

WORLD

(June 22): Singapore will issue in-principle Crypto.com, Wary about the public getting burned
approvals to three more firms to provide two other firms from trading cryptocurrencies, the MAS
digital payment token services in the city has been tightening regulations including
state even as it maintains a stringent licens- win coveted clamping down on crypto marketing and
ing regime for cryptocurrencies. Singapore token requiring the virtual asset providers to
be licensed locally even if they only do
Crypto.com was among the companies permits business overseas. The rules have made
that got the nod from the Monetary Au- it more challenging for firms hoping to
thority of Singapore (MAS), according to BY SUVASHREE GHOSH expand their business in the Southeast
a statement from the firm on Wednesday Bloomberg Asian nation where four out of 10 own
(June 22).The other two firms are Genesis a digital asset.
and Sparrow Tech, according to a person where he announced that the central bank
with knowledge of the matter, confirming will issue the three new permits. Some frustration with Singapore’s
a Straits Times report earlier. tentative approach appears to be brew-
Genesis and Sparrow Tech didn’t im- ing. Firms have moved to rival crypto hub
The three new approvals take the num- mediately comment in response to queries Dubai which is developing into a regional
ber of crypto firms that have received the about the approvals. base. Bybit for example has announced
regulatory nod to 14, a fraction of almost switching its headquarters to Dubai from
200 applicants. Singapore has been turning Singapore, while Singapore-based Crypto.
more cautious towards cryptocurrencies as com has set up a regional base in Dubai.
policymakers seek to ring-fence the nation
from money laundering and cyber crime. Heng reiterated the stance that highly
Authorities have also repeatedly warned volatile prices in the crypto market make
retail investors against putting their money them unsuitable for the public. Still, he
in the market. also stressed the benefits of the blockchain
technology underlying cryptocurrencies
“We must continue to build trust that could improve the efficiency and cost
through regulatory guardrails, while en- of cross-border transactions.
couraging innovation and realising gains,”
Heng Swee Keat, Singapore’s deputy “We are at an inflection point of a new
prime minister, said in a video message wave of tech, even as we have yet to fully
at a conference in Zurich on Wednesday, ride the existing wave,” he said.

Bitcoin is leading
indicator of
stock-market
bottom,
Mobius says

BY ISHIKA MOOKERJEE
Bloomberg

(June 22): If you’re a stock trader, you time to start buying stocks.” As long as Bitcoin investors “are still
should probably be turning your atten- Moves in Bitcoin and global stocks have talking about buying on dips that means
tion to cryptocurrencies right about now. there is a feeling of hope,” he said. “That
become more positively correlated this year also means that we have not reached the
That’s according to Mark Mobius, who Worries about global recessionary bottom of a bear market.”
co-founded Mobius Capital Partners af-
ter spending more than three decades at risks have wiped out billions in Bitcoin’s The veteran emerging-markets investor
Franklin Templeton Investments. market value, with the token crashing said he prefers to hold “some cash” at the
about 70% from its peak to trade near moment, and may deploy it into Indian
“Cryptocurrencies are a measure of in- US$20,000. That tumble has coincid- stocks in the building-materials, software
vestor sentiment,” he said in an interview ed with a plunge into a bear market by and medical-testing sectors.
Wednesday. “Bitcoin goes down, the next a closely watched MSCI world equity Read also:Bitcoin lingers around US$20,000
day the Dow Jones goes down.That’s the index, with investors fretting over the again as risk-off mood returns Click here
pattern you get. That shows that Bitcoin impact of rising interest rates in most
is a leading indicator.” countries as well as supply-chain dis-
ruptions in China and Europe.
Only when institutional and retail in-
vestors truly “throw in the towel” and
stop putting more money into the mar-
ket because of losses is when sentiment
has hit rock bottom, he said. “That’s the

T H U R S D A Y J U N E 2 3 , 2 0 2 2 24 T H E E D G E C E O M O R N I N G B R I E F

WORLD

BLOOMBERG

World’s bubbliest housing markets
are flashing warning signs

HONG KONG (June 22): A world econ- BY ENDA CURRAN & JEREMY DIAMOND have raised interest rates by at least 50 ba-
omy already contending with raging infla- Bloomberg sis points in one go this year, with more
tion, stock-market turmoil and a grueling hikes expected. In the US, the Federal Re-
war is facing yet another threat: the unrav- “The danger is business and financial serve last week boosted its main interest
eling of a massive housing boom. cycles turning down simultaneously, which rate by 75 basis points, its biggest increase
can lead to longer-lasting recessions,” said since 1994.
As central banks around the globe rapid- Rob Subbaraman, head of global markets
ly increase interest rates, soaring borrowing research at Nomura Holdings Inc.“A decade Housing markets in New Zealand, the
costs mean people who were already stretch- of QE has fueled frothy housing markets and Czech Republic, Australia and Canada
ing to buy property are finally reaching their we could be entering the other side of this rank among the world’s bubbliest and are
limits.The effects are being seen in countries soon, as housing affordability is stretched particularly vulnerable to falling prices, ac-
such as Canada, the US and New Zealand, and debt-service ratios could rise sharply.” cording to Bloomberg Economics. Portugal
where once-hot residential real estate mar- is especially at risk in the euro area, while
kets have suddenly turned cold. Such a scenario would gum up bank Austria, Germany and the Netherlands
lending as the risk of bad loans increases, also are looking frothy.
It’s a sharp reversal from years of surg- choking the flow of credit that economies
ing prices fueled by rock-bottom mortgage thrive on. In the US andWestern Europe, In Asia, South Korea house prices also
rates and government stimulus, along with the housing crash that precipitated the fi- look vulnerable, according to an analysis
a pandemic that popularized remote work nancial crisis hobbled banking systems, by S&P Global Ratings.That report not-
and sent homebuyers on the hunt for big- governments and consumers for years. ed risks from household credit relative to
ger spaces. An analysis by Bloomberg Eco- nominal GDP, the growth rate of house-
nomics shows that 19 OECD countries have To be sure, a 2008-style collapse is un- hold debt and the speed of house-price
combined price-to-rent and home price- likely. Lenders have tightened standards, gains. Elsewhere in Europe, Sweden has
to-income ratios that are higher today than household savings are still robust and many seen a dramatic turnaround in housing de-
they were ahead of the 2008 financial crisis countries still have housing shortages. La- mand, sparking concern in a country where
— an indication that prices have moved bor markets are also strong, providing an debt runs at 200% of household income.
out of line with fundamentals. important buffer.
Goldman Sachs Group Inc economists
Taming frothy home prices are a key “Lower prices will have a direct effect wrote in a report last week that the signals
part of many policy makers’ goals as they on consumer spending and the whole from home sales typically precede prices
seek to quell the fastest inflation in dec- economy, as typically real estate makes up by about six months, indicating that sever-
ades. But as markets shudder from the a significant part of households’ wealth,” al countries are likely to see further declines
prospects of a global recession, a slowdown said Tuuli McCully, head of Asia-Pacific in values.A substantial cooldown in housing
in housing could create a ripple effect that economics at Scotiabank. markets is an important reason why devel-
would deepen an economic slump. oped economies will likely slow, according
“Nevertheless, as household balance to the economists led by Jan Hatzius.
Falling home prices would erode house- sheets in many major markets remain
hold wealth, dent consumer confidence healthy, I am not particularly worried “The very rapid deterioration in af-
and potentially curb future development. about risks related to house prices and fordability and large drops in home sales
Animal spirits are typically tamed when the world economy.” suggest that a hard landing is a meaning-
people are faced with higher repayment ful risk, especially in New Zealand, Cana-
costs on an asset that’s losing value. And Still, the risk of a sharp drop in prices da and Australia, although that is not our
property construction and sales are huge is clearly greater when there’s a synchro- baseline given current tightness,” the Gold-
multipliers of economic activity around nized global tightening of monetary poli- man economists wrote.
the world. cy, said Niraj Shah of Bloomberg Economics
in London. More than 50 central banks CONTINUES ON PAGE 25

T H U R S D A Y J U N E 2 3 , 2 0 2 2 25 T H E E D G E C E O M O R N I N G B R I E F

WORLD

FROM PAGE 24 spending due to a mixture of people feel- Mabel Melendi could tell the housing
ing poorer because of falling house prices, market in Cape Coral, Florida, was slowing
Central banks are issuing warnings of the impact of higher rates on cash flow, after a week went by and she still hadn’t
their own. The Bank of Canada said this as well as higher food and energy prices, received any inquiries or offers on a newly
month in its annual review of the financial according to Sharon Zollner, the bank’s constructed home she listed in mid-April.
system that high levels of mortgage debt New Zealand chief economist. Just three months ago, she received a bid
are of particular concern as interest rates on a similar property within three days of
rise and more borrowers are strained to “There are going to be house buyers putting it on the market.
pay bills.The Reserve Bank of New Zea- who have just entered the market in the
land’s semi-annual Financial Stability Re- last year or so who started off with a mort- But after three price cuts — knocking
port said that the overall threat to the fi- gage rate of 2.5% and all of a sudden they the asking price down to US$425,000
nancial system is limited, but a “sharp” are rolling off on to a mortgage rate closer from US$510,000 — and more than two
decline in house prices is possible, which to 6%,” said Jarrod Kerr, chief economist months after the initial listing, she was still
could significantly reduce wealth and lead at Kiwibank in Auckland. “There is go- looking for buyers in mid-June.
to a contraction in consumer spending. ing to be some pain for sure.” — Ainsley
Thomson. One offer that came in over Memorial
“As borrowing costs rise, real estate Day weekend fell through after the buyer
markets face a critical test,” Bloomberg’s Canada couldn’t qualify for a large enough mortgage.
Shah said. “If central bankers act too ag- The housing market in Canada has turned
gressively, they could sow the seeds of the so fast some buyers are losing money on “Most of the people don’t qualify for what
next crisis.” their properties before the sales even close. they used to qualify for before,” Melendi said.

Here is what’s unfolding in bubbly “People are actively trying to get out of Mortgage rates have increased this year
housing markets around the world. deals,” said Mark Morris, aToronto-based at the fastest pace in records dating back
real estate lawyer who cited one example a half century, according to Freddie Mac.
New Zealand where a property’s assessed value came in The average rate for a 30-year loan reached
If 2021 was the year New Zealand’s house- C$200,000 (US$155,000) less than the 5.78% last week, the highest since 2008.
price growth reached dizzying heights, with purchase price agreed to only a couple That’s led to price cuts for both builders
an annual increase of close to 30%, 2022 is months before. That left the buyer will- and existing-home sellers as demand rap-
shaping up to be the year the music stops ing to give up their C$100,000 deposit to idly cools.
— and the abrupt change has left people avoid closing, he said. “I’m called several
scrambling. times a day by various people who feel that Almost 20% of US home sellers cut
they’ve paid too much.” prices in the four-week period ended May
In March, Jonathan Milne decided it was 22, the most since October 2019, accord-
time to sell a family home in the Auckland Such cases are cropping up after Can- ing to the brokerage Redfin Corp. The
suburb of Onehunga and purchase a larg- ada posted its first national home-price share was higher in some markets that be-
er house nearby for NZ$2 million (US$1.3 decline in two years in April, followed by came hot destinations during the pandemic
million). He and his wife, Georgie, were op- another drop in May. Though so far the for people seeking more affordably-priced
timistic of a speedy sale and a good price for pain has been concentrated around the homes. In Boise, Idaho, for example, 41%
their old home, which was valued by the local markets which saw the biggest pandem- of sellers dropped prices in April. In Cape
government at NZ$1.8 million. ic runups — Toronto and its surrounding Coral, it was about one in three.
regions — the strains are already starting
All that changed in April when the to spread to formerly hot markets around Sellers are realizing that prices may not
RBNZ took aggressive action to tackle Vancouver too. keep rising at the same pace they previous-
inflation, hiking the official rate by 50 ba- ly did as buyers are increasingly squeezed,
sis points to 1.5% — its biggest increase Like in other countries, the turmoil in said Daryl Fairweather, Redfin’s chief
in 22 years. It quickly followed with an- Canada’s housing market is being caused economist.
other 50-basis-point jump in May and a by an aggressive campaign to raise interest
projection for the rate to peak at close to rates by the central bank.The benchmark “Prices are going to have to come down
4% next year. has already gone from 0.25% at the begin- to match demand,” she said.
ning of the year to 1.5% today.With even
Milne’s house was meant to be sold higher rates expected, some economists say After rising by an estimated 18% in
in May via auction, a popular method of home prices could fall as much as 20% in 2021, US single-family home prices are
home sales in New Zealand, but not a sin- the hottest markets. forecast to grow by a more moderate pace
gle bidder showed up for the event. of 10% in 2022 and 5% in 2023, according
It’s a drastic change in a country that to Freddie Mac. “It’s a pretty significant
“What we didn’t anticipate was that it saw prices rise by more than 50% over slowdown, but coming from scorching-hot
would be so hard to market and sell our the two years since the pandemic started. house-price growth,” said Len Kiefer, the
house,” said Milne, the 47-year-old man- company’s deputy chief economist.
aging editor of a news website. “We knew With prices rapidly outpacing wage
that every week that passed would knock growth, some buyers’ hope of entering A shortage of homes for sale and pent-
another NZ$100,000 off the price.” the market came from low rates that are up demand from people seeking more
now jumping. space — along with millennial buyers get-
At the end of last month, they accepted ting older and starting families — means
an offer that Milne described as “dramat- “It’s the marginal buyer who’s sup- prices nationally should still trend high-
ically” below the government valuation. porting current valuations, so that could er, he said.
Economists expect New Zealand house mean significant impact on the housing
prices will fall about 10% this year and market,” said Matthieu Arseneau, deputy Still, the effects of slowing demand are
may eventually drop as much as 20% from chief economist at National Bank of Cana- reverberating through the real estate in-
their late 2021 peak.While for many home- da, who says home prices nationally could dustry: Redfin and Compass Inc said last
owners that’s a small decline compared fall as much as 10%. “Will new buyers be week that they will lay off employees after
with the massive equity gains in recent able to afford those prices at these rates?” the sudden cooldown in the market. —
years, there likely will be broader effects. — Ari Altstedter US. Jonnelle Marte.
ANZ Bank forecasts subdued consumer Click here for the full story

T H U R S D A Y J U N E 2 3 , 2 0 2 2 26 T H E E D G E C E O M O R N I N G B R I E F

MARKETS

CPO RM 4,498.00-482.00 OIL US$ 110-4.65 RM/USD 4.4058 RM/SGD 3.1695 RM/AUD 3.0384 RM/GBP 5.3818 RM/EUR 4.6355

Top 20 active stocks

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

TWL HOLDINGS BHD 140.50 -0.010 0.065 30.00 230.8

MNC WIRELESS BHD 97.70 0.000 0.015 0.00 34.3

LAY HONG BHD 87.20 0.015 0.285 18.75 211

CYPARK RESOURCES BHD 82.90 0.010 0.425 -53.30 250.3

TOP GLOVE CORP BHD 71.30 -0.070 1.010 -61.00 8087.3

DAGANG NEXCHANGE BHD 69.90 -0.030 0.770 1.32 2,430.3

HIBISCUS PETROLEUM BHD 59.70 -0.050 0.990 21.47 1992.3

SFP TECH HOLDINGS BHD 47.20 -0.035 0.660 0.00 528

SAPURA ENERGY BHD 45.80 -0.005 0.040 -20.00 639.2 World equity indices

SINARAN ADVANCE GROUP BHD 35.70 0.010 0.100 66.67 91.5

FITTERS DIVERSIFIED BHD 31.60 0.005 0.070 -77.78 42.6 CLOSE CHANGE CHANGE CLOSE CHANGE CHANGE

JADE MARVEL GROUP BHD 27.40 0.015 0.910 37.88 298.5 (%) (%)
DOW JONES 30,530.25 641.47 2.15 INDONESIA 6,984.31 -59.76 -0.85
MY EG SERVICES BHD 24.40 0.000 0.865 -19.16 6,388.5

WIDAD GROUP BHD 24.00 -0.005 0.360 -1.37 990.9 S&P 500 3,764.79 89.95 2.45 JAPAN 26,149.55 -96.76 -0.37

METRONIC GLOBAL BHD 21.30 0.005 0.095 -22.18 28.1 NASDAQ 100 11,546.76 280.77 2.49 KOREA 2,342.81 -66.12 -2.74

SERBA DINAMIK HOLDINGS BHD 21.00 -0.010 0.090 -74.29 333.9 FTSE 100 7,053.78 -98.27 -1.38 PHILIPPINES 6,168.00 -117.19 -1.86

TECHNA-X BHD 19.90 0 0.045 -40 99.7 AUSTRALIA 6,508.54 -15.26 -0.23 SINGAPORE 3,093.31 -24.17 -0.78

BUMI ARMADA BHD 19.20 -0.020 0.380 -19.15 2,248.9 CHINA 3,267.20 -39.52 -1.20 TAIWAN 15,347.75 -380.89 -2.42

YEW LEE PACIFIC GROUP BHD 18.40 -0.005 0.265 0.00 141.1 HONG KONG 21,008.34 -551.25 -2.56 THAILAND 1,560.02 -14.50 -0.92

PERTAMA DIGITAL BHD 18.20 -0.005 0.865 49.14 374.9 INDIA 51,822.53 -709.54 -1.35 VIETNAM 1,169.27 -3.20 -0.27

Data as compiled on Jun 22, 2022 Source: Bloomberg Data as compiled on Jun 22, 2022 Source: Bloomberg

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

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

CHINA AUTOMOBILE PARTS 0.015 50.00 1195.6 0.00 20.4 EA HOLDINGS BHD 0.005 -50.00 2,634.7 -75.00 32.3

PASUKHAS GROUP BHD 0.020 33.33 2.5 -20.00 38.1 FAST ENERGY HOLDINGS BHD 0.030 -25.00 6,816.0 -68.42 22.1

IMPIANA HOTELS BHD 0.025 25.00 152.6 -66.67 36.1 IQZAN HOLDING BHD 0.035 -22.22 50.0 -30.00 7.8

JERASIA CAPITAL BHD 0.030 20.00 95 -81.25 2.5 BARAKAH OFFSHORE PETROLEUM 0.025 -16.67 40.0 -68.75 25.1

SINMAH CAPITAL BHD 0.120 20.00 942.5 -17.24 40.5 XOX TECHNOLOGY BHD 0.030 -14.29 201.1 -40.00 26.8

ALAM MARITIM RESOURCES BHD 0.035 16.67 500.2 40.00 53.6 TWL HOLDINGS BHD 0.065 -13.33 140,539.4 30.00 230.8

VERTICE BHD 0.120 14.29 943.5 -45.45 38.3 MINDA GLOBAL BHD 0.065 -13.33 5,202.1 18.18 85.9

SINARAN ADVANCE GROUP BHD 0.100 11.11 35652.6 66.67 91.5 Y&G CORP BHD 0.755 -13.22 19.6 -41.02 165.0

TAFI INDUSTRIES BHD 0.375 10.29 5984.3 -48.86 142.3 EASTLAND EQUITY BHD 0.070 -12.50 6,130.0 -1.68 109.6

WONG ENGINEERING CORP BHD 0.380 10.14 5408.2 -48.99 95.8 HLT GLOBAL BHD 0.215 -12.24 838.6 -57.84 158.3

PAN MALAYSIA HOLDINGS BHD 0.055 10.00 350.0 -31.25 51.1 SAPURA ENERGY BHD 0.040 -11.11 45,796.8 -20.00 639.2

TPC PLUS BHD 0.220 10.00 165.0 15.79 67.8 DESTINI BHD 0.120 -11.11 12,275.0 -33.33 199.6

MALAYAN UNITED INDUSTRIES BHD 0.060 9.09 6519.3 -14.29 189.0 G3 GLOBAL BHD 0.040 -11.11 990.9 -50.00 116.1

PASDEC HOLDINGS BHD 0.270 8.00 8 -22.86 108.1 MERIDIAN BHD 0.040 -11.11 100.0 -38.46 36.2

EVERSENDAI CORP BHD 0.135 8.00 2.5 -22.86 105.4 MENANG CORP M BHD 0.455 -10.78 2.4 -15.74 228.1

RHONG KHEN INTERNATIONAL BHD 1.520 7.80 86.0 -7.88 295.4 ATA IMS BHD 0.305 -10.29 15,749.4 -50.00 366.9

FITTERS DIVERSIFIED BHD 0.070 7.69 31628.7 -77.78 42.6 OCR GROUP BHD 0.090 -10.00 2,167.4 -37.93 79.9

CITRA NUSA HOLDINGS BHD 0.075 7.14 1183.4 0.00 54.0 TA WIN HOLDINGS BHD 0.090 -10.00 14,684.3 -28.00 308.0

CABNET HOLDINGS BHD 0.235 6.82 44.0 -9.62 42.0 SERBA DINAMIK HOLDINGS BHD 0.090 -10.00 20992.22 -74.29 333.9

ECOBUILT HOLDINGS BHD 0.085 6.25 75.4 -45.16 32.5 KRONOLOGI ASIA BHD 0.455 -9.9 5080.8 -26.61 326.8

Data as compiled on Jun 22, 2022 Source: Bloomberg Data as compiled on Jun 22, 2022 Source: Bloomberg

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

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

DUTCH LADY MILK INDUSTRIES BHD 33.10 0.420 5.2 -1.25 2118.4 NESTLE MALAYSIA BHD 132.500 -2.000 60.7 -1.27 31071.3

HEINEKEN MALAYSIA BHD 23.70 0.280 176.300 13.72 7,159.7 MALAYSIAN PACIFIC INDUSTRIES 26.860 -1.920 418.1 -45.58 5342.4

CARLSBERG BREWERY MALAYSIA 22.02 0.220 75 9.66 6732.6 KUALA LUMPUR KEPONG BHD 22.140 -1.300 1491.7 1.65 23870.4

KLCCP STAPLED GROUP 6.60 0.160 115.3 0.76 11915.2 PETRONAS DAGANGAN BHD 20.500 -0.560 208.4 -0.49 20365.8

SOUTHERN ACIDS MALAYSIA BHD 3.71 0.160 7.5 -3.89 508.0 SIME DARBY PLANTATION BHD 4.040 -0.380 10679.2 7.45 27939.5

APM AUTOMOTIVE HOLDINGS BHD 2.09 0.110 0.3 7.18 408.6 HONG LEONG FINANCIAL GROUP 18.220 -0.360 145.7 5.07 20866.3

RHONG KHEN INTERNATIONAL BHD 1.52 0.110 86.0 -7.88 295.4 PETRON MALAYSIA REFINING 5.500 -0.330 1063.3 25.57 1485.0

ALLIANZ MALAYSIA BHD 12.80 0.100 3.3 -0.47 2277.9 HONG LEONG BANK BHD 20.600 -0.300 1144.5 10.63 44655.0

FRASER & NEAVE HOLDINGS BHD 19.82 0.080 161.3 -19.89 7269.5 RIVERVIEW RUBBER ESTATES BHD 3.320 -0.280 1.6 4.73 215.3

COMPLETE LOGISTIC SERVICES BHD 3.95 0.070 4 57.37 508.2 TEXCHEM RESOURCES BHD 3.090 -0.240 1609.6 166.38 365.6

LTKM BHD 1.21 0.060 49.8 -11.03 173.2 HARTALEGA HOLDINGS BHD 2.710 -0.230 7654.4 -52.71 9261.3

FCW HOLDINGS BHD 1.09 0.050 21.0 4.81 272.5 PETRONAS GAS BHD 16.280 -0.220 530.2 -9.02 32213.8

TAN CHONG MOTOR HOLDINGS 1.14 0.050 3 2.70 743.4 UNITED MALACCA BHD 5.270 -0.210 2.0 2.13 1105.5

KUMPULAN FIMA BHD 2.53 0.050 144.9 23.41 698.5 IOI CORP BHD 3.730 -0.200 5737.1 0.00 23174.4

PINTARAS JAYA BHD 2.39 0.050 5.6 -14.64 396.4 PETRONAS CHEMICALS GROUP BHD 9.300 -0.200 10079.2 4.26 74400.0

TEO SENG CAPITAL BHD 0.81 0.040 1129.5 9.46 238.0 HAP SENG CONSOLIDATED BHD 7.250 -0.190 99.4 -5.84 18050.1

PLENITUDE BHD 1.03 0.040 3.0 -1.90 393.0 BRITISH AMERICAN TOBACCO 11.160 -0.180 217.1 -20.17 3186.5

VITROX CORP BHD 7.07 0.040 237.9 -29.02 6678.5 PMB TECHNOLOGY BHD 2.680 -0.160 371.3 9.12 3208.3

AME ELITE CONSORTIUM BHD 1.63 0.040 325.5 -13.76 1044.3 KOBAY TECHNOLOGY BHD 2.800 -0.150 1669.6 -53.57 907.7

BURSA MALAYSIA BHD 6.41 0.040 366.5 -2.14 5187.6 GAMUDA BHD 3.350 -0.15 2021.7 15.52 8555.7

Data as compiled on Jun 22, 2022 Source: Bloomberg Data as compiled on Jun 22, 2022 Source: Bloomberg