theedge

T H U R S DAY, J U LY 7 , 2 0 2 2 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 406/2022

CEOMorningBrief

WALL STREET SAYS A RECESSION IS COMING,
CONSUMERS SAY IT IS ALREADY HERE p24

T H U R S DAY, J U LY 7 , 2 0 2 2 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 406/2022

CEOMorningBrief
HOME: Bestinet office raided by MACC — report p2
Furniture makers face margin pressures amid rising input costs, slowing demand p5
PetChem share price hits seven-month low, RM12.88 billion market cap lost since June p6

WORLD: White-hot metal market cools in warning for global economy p17
UK’s Boris Johnson on the brink as ministers quit p22

Barry Goh denies fraud allegations
on Kedah and Kelantan solar projects

Report on Page 4.

BNM SETTO RAISE
OPR FURTHER

but impact on economy
likely to be mild
— economists

Report on Page 3.

THURSDAY JULY 7, 2022 2 THEEDGE CEO MORNING BRIEF

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SHAHRIL BASRI/THE EDGE

Independent
review found no
systemic forced
labour practices,
saysVS Industry

Bestinet office The raid was first reported by Bangladeshi BY ADAM AZIZ
raided by MACC news portal The Business Post onTuesday, cit- theedgemarkets.com
ing a diplomatic source in Malaysia, however
— report it reported that MACC had arrested a num- KUALA LUMPUR (July 6): Elec-
ber of officials at Bestinet’s office for their tronics manufacturing services
BY CHESTER TAY alleged involvement in syndication of recruit- (EMS) player VS Industry Bhd said
theedgemarkets.com ing workers from Bangladesh to Malaysia. the independent review on its labour
practices by PwC Consulting and a
KUALA LUMPUR (July 6): Bestinet Sdn MACC officials also reportedly interrogat- labour rights consultant has found
Bhd’s office was raided by the Malaysian ed Datuk Seri Mohd Amin Abdul Nor during no evidence of systemic forced la-
Anti-Corruption Commission (MACC) the raid, about his involvement in selecting the bour practices.
onTuesday but none of its staff or manage- 25 agencies in Bangladesh.MACC reportedly
ment personnel were arrested, according went to the Bangladesh High Commission in However, PwC Consulting did
to local news portal freemalaysiatoday.com. Kuala Lumpur in its bid to find out the cri- identify areas for improvements relating
teria in selecting the 25 agencies in question. to recruitment fees, overtime, accom-
The portal reported that the firm de- modation and effective communica-
clined to comment on the raid as it was In April this year, Bestinet’s chief execu- tions,VS Industry said in a statement.
not in a position to do so amid the author- tive officer Ismail Mohd Noor told Malaysi-
ities’ probe into alleged corruption and akini that the company was not involved in The four-month review extend-
abuse of power involving the selection of selecting the agencies listed on its FWCMS, ed to VS Industry’s entire Malay-
25 Bangladeshi agencies for migrant work- and that the decision was made by the gov- sia operations, comprising both lo-
er recruitment. ernments of Malaysia and Bangladesh. cal and foreign workers, as well as
those hired through its recalibration
Bestinet is an IT system provider that sup- In a media statement dated June 19, programme, it said.
plies the ForeignWorkers Centralised Man- Minister of Human Resources Datuk Seri
agement System (FWCMS) in Malaysia. M Saravanan said the Manpower Ministry “PwC Consulting conducted site
of Bangladesh provided a list of 1,520 re- visits across 19VS factories and hos-
The news portal, citing an anonymous cruitment companies, and the Malaysian tels and held formal interviews and
source, reported that MACC raided sev- government selected 25 of them. focus group discussions (FGDs) with
eral firms owned by a businessman with a approximately 7% of VS Industry’s
“Datuk Seri” title, who is involved in the re- “Prior to this exercise, there were only foreign workforce in Malaysia, as well
cruitment of Bangladeshi migrant workers. 10 companies involved in the recruitment as a number of local workers,” it said.
of workers from Bangladesh. Moreover, the
It also reported that the anti-graft agency’s monopolistic nature of the 10 companies led Ad hoc discussions were also
investigation would focus on corruption and to many workers being lured by the promise held, VS Industry said. The inter-
abuse of power, and the two ministries in- of decent work and subsequently left strand- views and FGDs utilised independ-
volved in the recruitment of foreign workers. ed by agencies from both countries,” he said. ent translators not fromVS Industry,
and no company staff were present
Bestinet reportedly told the news portal Therefore, to safeguard the welfare during the sessions, it added.
that it would provide full cooperation to and livelihood of foreign workers, he
the authorities. said the government agreed to increase Click here for the full story
the recruitment agencies from 10 to 25
to ensure a checks-and-balances mech-
anism is implemented.

THURSDAY JULY 7, 2022 3 THEEDGE CEO MORNING BRIEF

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BNM set to raise OPR further but impact
on economy likely to be mild — economists

BY CHESTER TAY OPR Decision
theedgemarkets.com
OPR level (%)
KUALA LUMPUR (July 6): Malaysia’s
central bank is expected to effect addition- 3 3.00
al overnight policy rate (OPR) increases 2.75
in the remainder of the year, which may
result in slower economic growth as higher 2.50
borrowing costs weigh on corporate earn-
ings and consumer spending, but econo- 2.25
mists are of the view the impact is likely
to be bearable for borrowers. 2.00 2.00

Bank Negara Malaysia’s (BNM) Mon- 2 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1.75
etary Policy Committee (MPC) raised the
OPR by 25 basis points (bps) onWednes- 1
day, pushing the benchmark interest rate
to 2.25% from 2.0%.This is BNM’s first Nov 5 Jan 22 Mar 3 May 5 July 7 Sept 10 Nov 3 Jan 20 Mar 4 May 6 July 8 Sept 9 Nov 3 Jan 20 Mar 3 May 11 July 6
back-to-back OPR hike since mid-2010.
2019 2020 2021 2022
BNM’s two back-to-back rate hikes
have only partly reversed the 125 bps Source: Bank Negara Malaysia
cut during the pandemic, UOB senior
economist Julia Goh pointed out when BLOOMBERG the OPR back to the same level (3%) as
contacted. it was on the eve of the pandemic.
economic growth.
“Bank Negara cast a positive view of Bank Islam Malaysia chief economist “Inflation in Malaysia is much lower
the economy despite rising global head- than in the rest of the world, with gener-
winds. They sounded confident that the Mohd Afzanizam Abdul Rashid said ous subsidies — set to be worth US$11.5
economy can absorb the rate hikes, which while normalisation of monetary poli- billion (3% of gross domestic product) this
is to recalibrate monetary policy in line cy could post some challenges to highly year — helping keep the headline rate low.
with the economic recovery,” she told th- geared businesses, it is not likely to derail However, the central bank cannot afford
eedgemarkets.com on Wednesday. post-pandemic recovery. to be complacent amid signs that under-
lying price pressures are rising,” he said.
“In other words, the economy is out “There would be knee-jerk reactions
of a crisis and keeping rates at ultra-low among consumers as well, especially those The fact that BNM was not more ag-
levels is no longer necessary,” she added. who are looking to buy a house or vehicle,” gressive with a 50 bps hike on Wednes-
he said, adding that the central bank’s lat- day also showed the central bank’s heavy
The latest rate hike was in line with est move is not a surprise and he is expect- preference for a “gingerly approach” in
Goh’s expectations, and she anticipates ing another 25 bps rate hike in September. tightening, said OCBC Bank’s economist
the central bank to deliver another 25 bps Wellian Wiranto.
OPR increase in September. “By then, more monetary stimulus
would have been ended, and thereby “In gist, even as Bank Negara is keen to
CGS-CIMB’s head of economics Ah- would lead to a slower inflation rate es- continue normalising its policy rate away
mad Nazmi Idrus also said a 25 bps hike pecially when there is no major subsidy from the pandemic-era lows, partly be-
is not significant enough to hurt consumer removal during this year,” he said. cause of the domestic inflation pressure,
finances, as the policy rate is low compared it does not see the need to adopt a more
to pre-pandemic levels. Capital Economics senior Asia econ- ‘ballistic’ 50 bps move at this point, es-
omist Gareth Leather also said with the pecially given the increasingly uncertain
“I think consumers can take it. The economy recovering, further hikes are global growth outlook,” he said.
purpose of the rate hike is to move away likely, but provided inflation remains
from what Bank Negara has called the ‘cri- low, the tightening cycle is unlikely to “To us, the move strikes the right bal-
sis mode’. Because of this, they will con- be aggressive. ance between contending with the two
sider the impact on recovery and wheth- biggest bugbears of the global economy
er the OPR remains accommodative. If Leather pencilled in two more 25 bps at this point: inflation and recession risks.
Bank Negara assesses otherwise, [I] don’t rate hikes for the year, and expects one Going forward, we see at least one more
think they will hike,” said Ahmad, who is further 25 bps hike in early 2023, taking 25 bps hike this year, that will be seen as a
projecting another 25 bps of rate hike in further normalisation of policy rate rather
September as well. than outright tightening,” he added.
Read also:
The central bank said the latest hike is BNM raises OPR by 25 bps to 2.25%
consistent with the MPC’s view that the Click here
unprecedented conditions that necessi-
tate a historically low OPR have contin- Maybank, RHB to increase lending
ued to recede, and that at current OPR rates following OPR hike Click here
level, the stance of monetary policy re-
mains accommodative and supportive of

THURSDAY JULY 7, 2022 4 THEEDGE CEO MORNING BRIEF

HOME

Barry Goh denies defamation, as the allegations associating MessrsValen
fraud allegations me with fraudulent acts have already been & Oh allowed
widely spread in the media, including social to discharge
on Kedah and media, which I believe to be actions done
Kelantan solar in bad faith by certain parties,” he added, themselves
from
projects On Monday, The Edge reported Kazuomi
and DPI Solar 1 had through its solicitors representing
BY HAFIZ YATIM MessrsWong and Partners filed the suit on Jho Low and
theedgemarkets.com June 27, claiming fraud purportedly by Goh
and his nephew, BGMCIL CEO/Executive his father
KUALA LUMPUR (July 6): BGMC In- Director Datuk MichaelTeh Kok Lee, and
ternational Ltd (BGMCIL) group founder their companies BGMC Holdings Ltd, BG- BY HAFIZ YATIM
Tan Sri Barry Goh Ming Choon has denied MCIL and 21 other defendants. theedgemarkets.com
allegations of purported fraud claimed by
Japanese national Kazuomi Kaneto and his Kazuomi and his Singapore company KUALA LUMPUR (July 6): The
Singapore based company, DPI Solar 1 Pte also named Pimpinan Ehsan Bhd (PEB), High Court has allowed an ap-
Ltd in relation to the solar projects in Kua- a company listed on the Malaysian stock plication from Messrs Valen &
la Muda, Kedah and Machang, Kelantan. exchange, ReNikola Sdn Bhd, ReNikola Oh to discharge themselves from
Holdings Sdn Bhd, and one Lim Beng representing fugitive businessman
Goh in a statement last night (July 5) said Guan as among the 25 defendants. Low Taek Jho (Jho Low) and his
for this purpose he has appointed Messrs father Tan Sri Larry Low Hock
Hashim AmranTabian Ahmad as his solici- In the statement of claim, the Japanese Peng in the US$3.78 billion suit
tors to contest the RM180 million suit filed. national alleged that Goh is a shadow di- filed against them by 1Malaysia
rector in the BGMC group of companies, Development Bhd (1MDB) and
“I would like to place on record that while Teh is his nominee in the business its subsidiaries.
I have also lodged a police report in re- and said to control the business affairs of
sponse to these baseless and misleading BGMC and some of the other companies Justice Hayatul Akmal Abdul
allegations. I categorically refute all alle- which are named in the suit that owns Aziz allowed the law firm’s ap-
gations of fraud made against me by Ka- land for the project. BGMC, according plication following an affidavit
zuomi and DPI Solar”. to the statement of claim, is an acronym in support submitted by Messrs
for Barry Goh Ming Choon. Valen & Oh, which claimed that
“Through my solicitors Messrs Hashim it could not get instructions from
AmranTabian Ahmad, I will be filing a de- They further alleged that they were en- US-based Kobre & Kim LLP,
fence to properly dispute and address the gaged by Goh and Teh to participate in a which represents Jho Low there.
facts asserted against me and will proceed joint venture (JV) to bid with the Energy
to take all actions necessary, including but Commission for the two renewable energy It also claimed they could not
not limited to dismissing claims made by projects in Kuala Muda and Machang in obtain Jho Low’s address from Ko-
Kazuomi and DPI Solar 1 Pte Ltd and re- 2017, for which the JV won but claimed bre & Kim to serve the father-son
serves the right to claim for, among others, the Malaysians do not have the expertise. duo the court documents related
damages and losses suffered in consequence For this purpose land companies were also to the Mareva injunction or asset
of these allegations,” he added. formed and they pumped in additional freeze order that had been imposed
funds for the venture. on their assets by the court here.
Goh said he will potentially seek com-
pensation for the damages these unfounded However, Kazuomi and his company Click here for the full story
allegations caused to damage his reputation claimed that they were allegedly played
and stature, as well as that of his family and out when the operating companies for the
his businesses, which are directly or indi- solar project were said to be being offered
rectly affected. to third parties, namely ReNikola Sdn Bhd
and ReNikola Holdings, and hence the
“I further reserve all rights to file an ac- suit was filed.
tion in tort, including and not limited to Read also: BGMC Group, directors dis-
pute RM180 million suit, say fraud claims
are baseless Click here

THURSDAY JULY 7, 2022 5 THEEDGE CEO MORNING BRIEF

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Furniture makers face margin pressures
amid rising input costs, slowing demand

BY IZZUL IKRAM
theedgemarkets.com

KUALA LUMPUR (July 6): While the crease the minimum wage from RM1,200 Gan shared this sentiment and said that
Malaysian International Furniture Fair’s to RM1,500 also weighed down margins. CoreWorld’s orders during the Covid-19
(MIFF) return after a two-year pause can pandemic were “okay”, but began to slump
be seen as an avenue for players to source “With the rise in the minimum salary, following the reopening of borders earlier
new customers and bolster their order we have 500 to 600 workers [on minimum this year.
books, local furniture players are facing wage] and now we have to pay RM300
margin compression against a backdrop more per month [per worker] — this is 3 Day’s Furniture marketing executive
of inflationary pressures, rising input costs, going to be a 5% to 8% increase in [salary] Christy To concurred and noted that it is
and slower demand. costs. This is a huge impact for us, [as] it “not possible” for demand for furniture to
is just an added cost. recover this year, and added that it may take
Contrasting the rosy landscape painted more than a year for demand to recover.
by Malaysia ExternalTrade Development “The government wants us to go to-
Corp (MATRADE) deputy chief execu- wards more automation and for some fur- In view of the continued increase in
tive officer Abu Bakar Yusof in his open- niture makers [this can work], but honestly raw material prices and the low demand
ing speech at the event, furniture makers it [will not work] for all manufacturers. For for furniture in key export markets, local
said rising raw material costs, freight costs, us, we do upholstery, which requires work- furniture makers have a grim outlook on
sluggish demand from key export markets manship, so it has to be a skilled worker. the furniture industry in 2022, foreseeing
and the minimum wage hike have eaten It is not something where we can invest an extended challenging operating envi-
into their profit margins. RM500,000 in a new machine and save ronment going forward.
10% [in costs], it [does] not work that way
Several furniture makers have opted to for us,” Chong said. Abu Bakar — in his keynote address
raise prices to offset the rising input costs, during the opening ceremony of the trade
while others have maintained prices in a Similarly, Sweet Home Concepts, Core- show — said that from January to May
bid to remain competitive in the global World, and 3 Day’s Furniture Sdn Bhd also 2022, Malaysia’s export of furniture was
market. said that the rise in the minimum wage valued at RM6.14 billion, an increase of
has resulted in an increase in their oper- 3.2% compared with the RM5.96 billion
“With the current order book that we ating costs. in the same five-month period a year prior.
have, we are not able to raise [our prod-
ucts’] prices. If we increase them, the Besides margin pressures, the furniture “According to the Fortune Business In-
price will not be competitive. We are not manufacturers said customer demand in sight Report, the global furniture market
only competing within Malaysia, but also key export markets have declined recently, revenue is forecast to grow from US$493.6
globally. as consumers are seen to shift their spend- billion in 2021 to US$720.2 billion by
ing towards day-to-day necessities, as well 2028 at a compound annual growth rate
“We cannot simply raise our prices, so as travel and leisure. of 5.5%.
it kills our margin and we have to just keep
thinking of other innovations to improve “For example, we do a lot [of business- “With rising demand from key markets,
our margins,” Comfy Factor Sdn Bhd gen- es] with the US market.With the reopen- Malaysia’s wood furniture industry has the
eral manager Derrick Chong told The Edge ing after the pandemic, people’s spending potential to improve and penetrate new
at MIFF on Wednesday. has gone elsewhere — they are not buying global markets,” he said.
furniture anymore. [Consumer’s] spend- Read also: MIFF returns after a two-year
Johor-based furniture manufacturer ing has gone into other channels, so the hiatus as global economies reopen Click here
CoreWorld Sdn Bhd director Amy Gan demand [for furniture] is going down. It
said that in spite of the company’s price affects us a lot,” Chong said.
increases on its products deterring certain
overseas buyers, she noted that the price
hikes are not something the company can
compromise on.

Likewise, a spokesperson of Sweet
Home Concept Sdn Bhd said the elevat-
ed raw material costs have driven the com-
pany to increase its prices to cushion its
profit margin.

“[Freight and raw material costs] keep
increasing, the quotation we get every week
increases — it never goes down. I think it
will keep increasing, and our margin is
already quite low. So we just focus on our
volume of sales,” an Infurnex Resources
Sdn Bhd spokesperson said.

Additionally, local exhibitors at MIFF
said that the government’s move to in-

THURSDAY JULY 7, 2022 6 THEEDGE CEO MORNING BRIEF

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Rating for Petronas Chemicals Group Bhd

Stockbrokers Recommendation Target price (RM) Boustead teams
up with GEC to
Nomura Buy 11.9 establishTurkey’s
Hong Leong Investment Bank
RHB Research Buy 11.76 first Islamic
TA Securities Holdings Berhad digital bank
MIDF Amanah Investment Bank Buy 12.21
JP Morgan BY D ARUL RAJOO
Kenanga Investment Bank Buy 11.4 Bernama
KAF Equities Sdn Bhd
Macquarie Buy 11.93 ISTANBUL (July 6): Boustead
Affin Hwang Investment Bank Holdings Bhd and Turkey’s Great
CGS-CIMB Overweight 11.7 East Capital (GEC) have teamed
Maybank Investment Banking Group up to establish the republic’s first Is-
BIMB Securities Outperform 11 lamic digital banking to tap the huge
Citi potential of 85 million population.
Morgan Stanley Buy 12.8
AmInvestment Bank Boustead deputy group manag-
Outperform 9.8 ing director Izaddeen Daud said the
company is planning to take up stra-
Hold 10.5 tegic investment in the venture.

Hold 10.6 He said GEC is currently in the
process of applying for the digital
Buy 11.2 bank’s licence from the relevant
Turkish authorities.
Sell 8.7
“With Boustead’s experience and
Buy 14 expertise through Affin Islamic Bank,
Boustead hopes to be able to share
Overweight 10.1 Malaysia’s expertise and knowledge
to Europe, if not, the rest of the world.
Buy 10.9
“Our partnership with GEC will
Source: Bloomberg, as of July 6 be our stepping stone into the huge
Europe market,”he told reporters after
PetChem for a few years, is expected to start in the the exchange of the document of un-
share price hits second half of the year (2H22). derstanding between both companies
seven-month low, to take up the venture here onTuesday.
RM12.88 bil market Yap believes that the petrochemical su-
cap lost since June per-cycle already peaked in the second quar- The event was witnessed by
ter of the year in view of additional sup- Prime Minister Datuk Seri Ismail
BY SHAZNI ONG ply globally, the current short-term supply SabriYaakob, who is on a four-day
theedgemarkets.com shortage has been normalising, plus limit- official visit to Turkey.
ed demand growth amidst high commod-
KUALA LUMPUR (July 6): The share ity prices worldwide and stagflation risks. GEC’s UmutTekin said the com-
price of Petronas Chemicals Group Bhd panies are embarking on a new jour-
(PetChem), the company with the largest “However, we should still see strength ney to establish the first Islamic dig-
net cash pile on Bursa Malaysia, slipped to in earnings over the next quarter (2Q22) ital banking inTurkey and hoping to
a seven-month low of RM8.65, although it for PetChem as based on our findings, realise it by the first quarter of 2023.
is on the recommendation list of a majority average polymer prices were still slightly
of analysts tracking the stock. higher quarter-on-quarter (QoQ), ranging “With Malaysia being recognised
from 3% to 4%. as one of the most advanced Islamic
The petrochemical maker topped the finance ecosystems in the world and
turnover list onWednesday with 14.4 mil- “On the flipside, average urea and meth- Boustead’s experience and expertise,
lion shares worth RM124 million changing anol prices were slightly lower throughout we are going to get the best experience
hands. It was also among the big losers of 2Q22 at -7% and -3% respectively,” he said. in Malaysia and apply here,” he said.
the day in terms of value.
PetChem delivered a record high quar- He said their long-term plan is to
The counter opened at RM9.14, two terly net profit in the first quarter ended establish a sister digital bank in Ma-
sen higher from its previous day closing March 31, 2022 (1QFY22) at RM2.08 bil- laysia that shares technology, cus-
price of RM9.12. lion versus RM1.46 billion a year earlier on tomers, financial tools, and know-
higher product prices amid continued strong how across the two countries.
However, selling emerged and pulled it demand for the company’s petrochemicals.
down by as much as 79 sen or 9% to an in- According to media reports,
tra-day low of RM8.33.The stock recouped The group’s revenue grew to RM6.63 digital banks across the world have
some lost ground after the lunch break to billion from RM4.68 billion a year earlier. reached valuations of billions in less
close at RM8.65 — the lowest level since than seven years.
Nov 29, 2021. PetChem, in which Petroliam Nonetheless, HLIB’sYap forecasts that
Nasional Bhd (Petronas) holds a 64.35% PetChem’s annual net profit will shrink to
stake, has a market capitalisation (cap) of RM6.8 billion for the financial year ending
RM69.2 billion based on the closing price. Dec 31, 2022 (FY22) from RM7.3 billion
the year before, although he expects a high-
The stock has lost nearly 16% or RM1.61 er annual revenue of RM29 billion in FY22
since June from its peak at RM10.26. Mar- compared with RM23 billion previously.
ket cap of RM12.88 billion has evaporated
from the petrochemical group. That said,Yap maintained his buy call
on PetChem with an unchanged target
Hong Leong Investment Bank (HLIB) price (TP) of RM11.76 per share based
Research analyst Jeremie Yap wrote in a on a price-earnings (P/E) multiple of 14
note dated July 6 that the down-cycle of times of FY22F earnings, which is in line
the petrochemical sector, which will last with its five-year mean valuation.

Notably, 13 out of 16 analysts covering
the stock, according to Bloomberg, are rec-
ommending their clients to buy PetChem
shares, with TP ranging from RM9.80
(Macquarie) to RM14 (Citi).
Click here for the full story

THURSDAY JULY 7, 2022 7 THEEDGE CEO MORNING BRIEF

THURSDAY JULY 7, 2022 8 THEEDGE CEO MORNING BRIEF

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RAWANG (July 6): Perusahaan Otomobil Perodua On June 20, Finance Minister Tengku
Kedua Sdn Bhd (Perodua)’s outstanding confident of Datuk Seri Zafrul Tengku Abdul Aziz an-
order has piled up to more than 200,000 meeting backlog nounced that buyers who make reservations
units thus far. But, the national car maker orders of over for vehicles until June 30, 2022, will have
aims to fulfil the orders by the first quarter 200,000 units until March 31, 2023 to register the vehicles
of 2023 (1Q23), to make sure its customers and enjoy the SST exemption.
would be able to enjoy the sales and service by 1Q23
tax (SST) exemption. When asked if Perodua faced any booking
BY JUSTIN LIM cancellations from customers due to spec-
Perodua president and chief executive of- theedgemarkets.com ulative bookings, Zainal cited that the can-
ficer Datuk Zainal Abidin Ahmad said the cellation number was “very low”.
group could produce about 28,000 units of is confident it will achieve its 2022 car sales
cars a month; hence, based on that produc- target of 247,800 units,adding that the group Following the end of the SST exemp-
tion level it should be able to fulfil the back- has resolved the chip shortage issue which tion for the automotive industry, Zainal
log order by end-March next year. could smoothen car delivery. said the group is still monitoring the sales
momentum.
According to Zainal, bookings for Per-
odua cars shot through the roof after the “There are a lot of factors that need to be
Ministry of Finance announced that the sales considered, from price of raw materials, Ma-
tax exemption for passenger cars would ex- laysia’s economic conditions, to customers’
pire on June 30 this year. A total of 25,100 purchasing power,” he explained.
vehicles were booked on June 30 — the last
day for car buyers to get the SST exemption, Despite the rising cost of raw materials
marking it as the highest-ever car booking following the weakening of the ringgit, Zainal
number in a single day. said Perodua will try to absorb the additional
costs by maintaining the pricing for its cars.
“Customers who booked [cars] on and
before June 30, 2022, [can] rest assured that “[There will be] no price increase; we are
they will enjoy [the] SST exemption.We will still maintaining our price and hopefully we
try our best to meet the deadline (by March should be able to maintain our price until
31, 2023) as our [vehicle] production capaci- the end of this year.
ty now is 28,000 per month,” he told the me-
dia during a visit at Perodua’s headquarters. “So far, any cost increase that we face, we
should be able to absorb,” he stressed, adding
UMW Holdings Bhd owns a 38% stake in that the group has cost-reduction measures
Perodua while MBM Resources Bhd holds in place to cushion the impact.
a 22.58% stake. Read also: Perodua’s 1H orders spiked 30%
on sales tax exemption deadline Click here
In view of the backlog of orders, Zainal

KUALA LUMPUR (July 6): Automotive HLIB says auto He added that the global chip shortage
sales are projected to remain strong in the sector to remain situation, which has disrupted the auto sec-
second half of 2022 (2H22) from current tor’s supply chain since the earlier part of
high order backlogs, and the sector is also robust in 2H 2021, has gradually improved this year.
expected to see improving global chip sup- on high order
ply and ringgit appreciation by year end, He said OEMs are in continuous en-
according to Hong Leong Investment Bank backlogs gagement with principals and various sup-
(HLIB) Research. pliers to secure sufficient inventories to
BY HAILEY CHUNG fulfil the strong demand during the SST
In a note onWednesday (July 6), HLIB theedgemarkets.com exemption period.
Research analyst DanielWong said the firm
has maintained its total industry volume REUTERS Wong also anticipates the ringgit will
(TIV) forecast for 2022 at 600,000 units, a appreciate to 4.23 against the US dollar,
17.9% increase year-on-year (y-o-y), even and the ringgit will remain stable at 3.30
though new orders might significantly lag (per 100) against the Japanese yen by end
in 2H22. 2022. Currently, the ringgit is 4.42 against
the US dollar from 4.15 in early 2022;
“Despite the ending of sales and service against the yen, it is 3.27 from 3.65.
tax (SST) exemption for new orders on June
30, we expect 2H22 TIV to remain strong, “Strengthened ringgit will reduce the ef-
supported by the over 264,000 order back- fective input costs for imported completely
logs that are still entitled for SST exemptions built up (CBU) cars, completely knocked
for deliveries by March 31, 2023. down (CKD) packs and raw materials, and
subsequently improving OEMs’ margins.
“We maintain our forecast of 600,000
units for 2022. Original equipment man- “Major OEMs that have major expo-
ufacturers (OEM) with high order back- sure towards US dollar includeToyota and
logs include Proton (by DRB-Hicom Bhd), Nissan (Tan Chong Motor Holdings Bhd),
Perodua (MBM Resources Bhd & UMW while (towards the) yen include Honda
Holdings Bhd), Toyota (UMW), Honda and Mazda,”Wong said.
(DRB-Hicom) and Mazda (Bermaz Auto
Bhd),”Wong said. Click here for the full story

thursday juLY 7, 2022 9 TheEdge CEO morning brief

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KUALA LUMPUR (July 6): Malaysian CPO pares losses en-month high, growing by 10.5% month-
crude palm oil (CPO) price fell below after dipping on-month to 1.68 million tonnes at end-
RM4,000 a tonne on Wednesday (July 6) past RM4,000; June, due to higher output from seasonal
following a sharp overnight drop in crude factors and lower exports due to competition
oil prices and anticipation that Indonesia rising stockpiles, from Indonesia.
would be exporting more CPO after the na- demand concerns
tion removed its CPO export ban on May 23. In another note by MIDF Research on
cloud outlook Monday, it said the CPO price rally appeared
CPO futures in Malaysia for September to have gone into correction mode, given the
delivery, or FCPO, dropped over 10% to as by Chong Jin Hun & Hailey Chung weak numbers seen to date.“... but we believe
low as RM3,735 per tonne, on fears of rising theedgemarkets.com there are signs that this soft pace is short-lived,
stockpiles and concerns that demand may and price will stay elevated,” it said.
fall in a potential global recession. in export policy throughout the first half of
2022 (1H22) may have led Indonesia’s palm But for now, the contraction is justified
At press time, the benchmark CPO price oil stocks to rise to as high as eight million to because prices grew at too fast a pace com-
pared some losses to trade at RM4,056, down 8.5 million tonnes at forecast end-June (versus pared with in the previous year, and seems
RM118 from its previous close.According to 3.6 million tonnes as at end-December 2021 to have peaked as market assessed the Rus-
Bloomberg data,the last time CPO prices closed and 6.1 million tonnes at end-April 2022). sia-Ukraine war and inflation impact.
below RM4,000 was in June-July 2021.
See also story on Page 17 And besides the Indonesian factor, MIDF
The removal of Indonesia’s three-week also noted that the industry is entering a
CPO export ban, which was implemented “As such, we estimate Indonesia will need higher palm oil production cycle season.
to tame soaring prices of domestic cooking to speed up exports over the next few months
oil, has led to expectations of higher CPO to three million to 3.5 million tonnes per “We anticipate that the CPO price will
inventory in Malaysia. month to clear stocks ahead of the peak pro- remain elevated in 2H22 as the price level
duction season.The government has signalled will be supported by higher price of edible
Global CPO prices also track crude oil pric- that it will be facilitating this process to help oil on the back of supply concerns amid
es as cheaper crude oil leads to anticipation of raise domestic CPO prices,” they said. Russia–Ukraine prolonged war causing dis-
less demand for CPO to produce biodiesel. rupted sunflower supply.
CGS-CIMB also expects Malaysia’s palm
CGS-CIMB Securities Sdn Bhd, in a oil inventory to have likely risen to a sev- “It will also be supported by subdued
note on Tuesday, said Indonesia will likely production outlook for soybean in 2022/23
ship out higher-than-usual palm oil exports due [to] return in La-Nina in third year in a
to clear stocks in the coming weeks, which row in South America such as Brazil and Ar-
will likely put pressure on near-term prices. gentina compounded by lower planted area
in the United States, and improved demand
Its analysts Ivy Ng Lee Fang and Nagulan outlook on improved economic activities,”
Ravi added that concerns over slower global MIDF added.
economic growth could keep CPO prices in
the RM4,000 to RM5,000 per tonne range As such, it kept its CPO price forecast for
in the near term. 2022 at RM5,500 per tonne and reaffirmed
its positive stance on the sector.
“Our estimates suggest that the changes

(July 6): Airbus SE is leading a race against Airbus ahead cussions whether underway or not remain
Boeing Co over the potential sale of about of Boeing in confidential in any case”. Boeing said that
30 wide-body aircraft to Malaysia Airlines in general it doesn’t “comment on discus-
as the Southeast Asian carrier, seeking US$10 bil sions with customers”.
more fuel-efficient jets amid a travel re- Malaysia
bound, focuses on cost. order race Representatives for Malaysia Airlines
didn’t immediately respond to requests
Airbus is offering its A330neo range of by Siddharth Philip & Anurag Kotoky for comment.
aircraft while Boeing is pushing its 787 Bloomberg
Dreamliners, according to people familiar Malaysia Aviation Group, Malaysia Air-
with the matter, who asked not to be iden- bloomberg lines’ parent company, expects to be op-
tified because the discussions are private. A erating at 70% of pre-pandemic levels for
decision may be announced as soon as later local and international flights by later this
this month at the upcoming Farnborough year, according to a statement released in
International Airshow, the people said. April. The stronger-than-expected pick-
up in travel demand has also been a boon
A deal for 30 Boeing 787-10 Dreamlin- for planemakers, which are back to selling
ers would be valued at more than US$10 large numbers of jets after a more than
billion (about RM44.25 billion) at sticker two-year hiatus.
prices, although discounts are common in
such large purchases.The A330neo — built Malaysia Aviation is owned by sover-
on the same platform of an older model — eign wealth fund Khazanah Nasional Bhd.
is typically significantly cheaper, although
Airbus no longer publicly announces prices. Malaysian tycoon Tan Sri Tony Fer-
nandes’ AirAsia X was the world’s top
Talks are still ongoing and no final de- customer for A330neos before a restruc-
cision has been made, the people said. turing, when the low-cost long-haul carrier
cut its tally to 15 from 78. Some of those
Airbus said in a statement that it is “al- airplanes, already on the books of leasing
ways in contact with existing and poten- companies, could be offered to Malaysia
tial customers and the nature of any dis- Airlines, one of the people said.

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KUALA LUMPUR (July 6): Despite the recent Return to coal scale].The same is happening in many other
pick-up in global coal consumption for power temporary, RE places as well. This precipitates into real en-
generation to support returning demand, all fac- adoption intact, ergy security [issue],” Raj added.
tors point to the continued adoption of renewa- power sector
ble energy (RE) sources and net-zero commit- RE cure for rising prices
ments, said industry players. players say The pandemic had been an eventful period in
the energy sector as countries accelerated their
This includes sustained RE investment val- BY ADAM AZIZ net-zero carbon emission goals.
ue and development costs, sustained demand theedgemarkets.com
for carbon credits, as well as acceleration of Global investment in the energy transition
net-zero targets among economies, panellists Solar module supply security in focus rose to a record of US$755 billion (about
said at Maybank’s “Invest Asean 2022 ESG The recent energy crunch also highlighted the RM3.34 trillion) in 2021, up 21% from 2021,
Conversations: Renewables, Energy Security importance of ensuring security of RE supply with almost half of the investment occurring
& The Low Carbon Economy” webinar. chain, namely the supply of solar panel equip- in Asia, Bloomberg NEF data showed.
ment,said Raj Kumar Jain,head of business de-
While the backtracking of EU countries to velopment at India’s Adani Green Energy Ltd. However, a supply gap prompted govern-
burn coal highlighted how the power industry ments from Germany to Netherlands and
“needs to be agile”to supply-demand conditions, “The move in adopting alternative fuel,which Austria to have no choice but fill with fossil
the cost for carbon offset has risen due to this is coal, is only a knee-jerk reaction of having fuel like coal.Weather shocks that affected the
one-off event, said Sarawak Energy Bhd head something available in hand. volume of RE generation did not help, either.
of sustainability Mohd Irwan Aman.
“But it will transition into much better op- Concurrently,fuel and equipment prices rose
“By emitting more, you need to buy more tions for renewables, diversification of energy to multi-year or record highs, from fossil fuels
to offset [the excess carbon].That is the sce- sources out of traditional areas — whether it is like oil and gas or coal, and even solar modules
nario,” Mohd Irwan said. gas being replaced with hydrogen derivatives, or amid rising material costs as demand boomed.
solar modules being made outside of one specific
“Definitely net-zero will stay… each coun- country,” Raj said. Even the EU Emissions Trading System
try has their own targets and this will cascade (ETS) carbon futures have risen by 163%
down,” he said. “[This backtracking] is just a “You can’t have your country starving for since the start of 2021, trading at €90.15
one-off event that disturbed the market, but energy based on the whims and fancies of oth- (about RM408.72) per tonne at end-June,
the long-term objective will [remain].” er countries — that is highlighted very much. from €33.69/tonne.

While RE developments slowed during “There were no solar modules available. The options are limited in the short term to
the pandemic, the market is keeping up with The US was not able to even import them, address fossil fuel usage and rising fuel costs,
their net-zero targets, commented Thitipong forget about adopting [solar energy on a huge TNB Renewables Sdn Bhd managing director
Jurapornsiridee, chief financial officer of Thai- MohdYusrizalYusof said.
land’s Global Power Synergy Co Public Ltd.
“It goes back to the need to balance energy
“Based on what we have seen, the pace affordability, sustainability and reliability.” Mohd
of RE investments is still there — it is not Yusrizal said. “Renewable energy is one way to
lower; in terms of pricing, it is not cheaper,” mitigate rising prices… In the long run, there
Jurapornsiridee said. needs to be a change in the way we do things.”

KUALA LUMPUR (July 6): S&P Global Rat- TNB to get enough sated by the government as announced,” it said.
ings saidTenaga Nasional Bhd’s (TNB) finan- subsidies to cover S&P said that althoughTNB had yet to re-
cial profile will remain steady despite the gov-
ernment’s announcement to keep electricity uncontrollable ceive the subsidies, it expects the company to be
tariffs unchanged for the period of July-Decem- costs, says S&P able to manage its working capital requirements
ber 2022 in the face of significant increases in arising from higher fuel and generation costs.
fuel and generation costs. BY SURIN MURUGIAH
theedgemarkets.com “We assessTNB’s liquidity as adequate be-
In a statement onWednesday (July 6), S&P cause the company’s sources of liquidity are
said it expects the utility company to have ad- sen/kWh for domestic users, and RM3.5 billion likely to exceed use by at least 1.1 times over
equate liquidity to manage its working capital to cover the cost of maintaining the surcharge the next few months until March 31, 2023.
requirements. of 3.7 sen/kWh to be paid by non-domestic us-
ers (versus the full surcharge of 11.81 sen/kWh). “TNB had cash and short-term investments
The agency said this is because it expectsTNB of about RM9 billion as of March 31, 2022.
(BBB+/Stable/--) to receive sufficient subsidies “We continue to expect the regulatory en-
from the government in a timely manner to cover vironment to remain generally supportive for “We project funds from operations of about
actual uncontrollable fuel and generation costs. TNB because the company will still be able RM14.4 billion over the coming months until
to recover the higher-than-expected fuel and March 31, 2023,” it said.
S&P said the timing of the government’s generation costs under the regulated Imbalance
subsidy payments will be key to TNB’s credit Cost Pass-Through mechanism. S&P said these sources of liquidity are suf-
profile because the company is now dependent ficient for the company to meet its liquidity
on these payments to support its stand-alone “TNB will also be able to fully recover the needs during that time.
credit profile of “bbb-”. semi-annual tariff surcharge of 3.7 sen/kWh from
non-domestic users, while the remaining sur- “We estimateTNB will repay debt maturities
It said the timing and frequency of these charge of 8.11 sen/kWh will be directly compen- of about RM8.8 billion, meet working capital re-
subsidy payments are uncertain because there quirements of RM2.5 billion to RM3.5 billion,
is no precedent. capital expenditure (capex) of RM7.5 billion and
pay dividends of about RM2.2 billion.
It said the government of Malaysia will al-
locate subsidies of RM5.8 billion. “The company recently raised RM4 billion
in sukuk notes, with the proceeds to be used
Of that, it said RM2.3 billion will be used to for working capital needs and capex,” it said.
cover the cost of maintaining the rebate of two
At 11.46am,TNB had shed 1.12% or nine sen
to RM7.93, with 716,700 shares traded so far.

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Najib’s lawyers argue QC needed for
complex, novel issues in final SRC appeal

KUALA LUMPUR (July 6): The High BY TIMOTHY ACHARIAM He also said a foreign counsel would
Court will give its decision on July 21 on theedgemarkets.com lack local knowledge, and that since Laid-
whether it will allow UK lawyer Jonathan law did not handle the trial and appeal, he
Laidlaw’s bid to be admitted to the courts “We just have to show your lordship would be “disadvantaged” in handling the
so he can represent former premier Datuk that he has got expertise and experience Federal Court appeal.
Seri Najib Razak in his SRC International and that particular expertise and experi-
Sdn Bhd appeal at the nation’s apex court. ence is not available among lawyers here. Sithambaram further argued that the
We have to show that his niche expertise issues posed by Najib are not novel, but
Judge Datuk Ahmad Kamal Md Shahid is not available here,” he added. even if it was so, there was no reason a QC
set the date after hearing submissions from is needed. “He’s (Laidlaw) a brilliant man
both Najib’s lawyer Harvinderjit Singh and Prosecution: Allowing the QC now and while that may be so, that does not
lead prosecutor Datuk V Sithambaram. will open the floodgates to similar mean we need him here,” he said.
applications
Also present during the proceedings Sithambaram, however, argued that if Laid- Gurdial, representing the KL Bar,
were Datuk Dr Gurdial Singh Nijar, who law is allowed to represent Najib in the final agreed with Sithambaram and said that
represented the Kuala Lumpur Bar, and appeal, this will open the “floodgates” to allowing Najib’s application now would
Datuk BastianVendargon, who represent- similar applications in the future. “demean” the more than 20,000 advocates
ed the Malaysian Bar. Both organisations and solicitors in the country.
opposed Najib’s application. “Then every time there’s a novel issue
and they want to bring in a Queen’s Coun- Gurdial argued that Najib and his team
Earlier, Harvinderjit submitted to the sel, then we (the local courts) will have to could refer to and analyse international cas-
judge that the defence sought out Laidlaw allow it,” Sithambaram said. es and precedents to argue their case. “Are
because of his special qualifications in “nov- we so bereft of a modicum of intelligence
el and complex issues”, which might arise Sithambaram also said Harvinderjit’s to do that?To analyse the laws?” he asked.
during the appeal at the Federal Court. arguments indicated the defence was “run-
ning to England” for help because the trial Bastian concurred, adding that there was
He also claimed that Laidlaw was an was complex. “The moment it’s serious no valid reason to suggest that the legal as-
“expert in regulatory affairs and prosecu- and complex, we should all drop it and run sistance provided to Najib was insufficient
tion conduct”, and that Laidlaw would be to England to take statements.That’s how and that his appeal would be prejudiced if
dealing with the area of the prosecution’s they framed their argument,” Sithambaram Laidlaw did not represent him.
conduct, in particular whether constitu- told the judge.
tional rights were infringed on, during the After hearing submissions from both
SRC trial at the High Court. Sithambaram then cited a case in 2006, sides for almost four hours, the judge set
where UK lawyer Cherie Booth — the wife July 21 for his decision, which will be de-
The lawyer also said Laidlaw would only of former UK premier Tony Blair — had livered via Zoom.
deal with that specific area of the appeal. applied to appear for a party in a Malay-
sian court case, which the Federal Court In July 2020, Najib was found guilty
He also addressed the prosecution’s con- of abusing his power, committing crim-
tention that lead counselTan Sri Muham- ruled against. inal breach of trust and money launder-
mad Shafee Abdullah and himself are more Citing the Federal Court’s ing involving RM42 million of SRC funds
than capable and experienced in handling decision in that case, Sitham- and sentenced to 12 years in jail, and fined
the appeal, and that Laidlaw would baram questioned Laidlaw’s RM210 million by High Court Judge Da-
not know the conduct of Ma- involvement in the trial as tuk Mohd Nazlan Mohd Ghazali.
laysian courts. he was not involved in the
High Court and Court of The Court of Appeal on Dec 8 last year
“He doesn’t need to be Appeal stage of the SRC unanimously upheld the High Court’s ver-
an expert in every aspect trial. dict, which led to Najib making his final
of the case. He is there for “The appellant was appeal to the Federal Court. The Court
specific and special areas of not present at the High of Appeal has allowed a stay of sentenc-
the case.The local counsel Court and Court of Ap- ing pending this appeal, which is set to be
(Najib’s lawyers) will han- peal stage, so to what ex- heard in August.
dle other arguments taken. tent would the appellant
The Queen’s Counsel will be able to assist the Federal More court stories:
be complementary to the Court?” Sithambaram asked. Zahid’s corruption trial: Judge to visit
local counsel, and not apart two bungalows in Kajang Click here
from the local counsel,”
Harvinderjit said.

Harvinderjit Singh Syed Saddiq trial: Star witness
disposed of funds based on his own
interpretation Click here

AGC: No arguable case in Rosmah’s
PATRICK GOH/THE EDGE judicial review application Click here

T H U R S D A Y J U LY 7 , 2 0 2 2 12 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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KUALA LUMPUR (July 6): Kumpulan Kumpulan “We have been operating in the building
Kitacon Bhd is offering up to 138.59 mil- Kitacon seeks construction industry for approximately
lion shares in an initial public offering (IPO) 32 years since the commencement of op-
as it seeks to list on Bursa Malaysia’s Main listing on erations of our subsidiary, Kitacon Sdn
Market, according to its prospectus expo- Main Market, Bhd, in 1990, where we started with vari-
sure published on the Securities Commis- ous small-scale construction and subcon-
sion Malaysia’s website onTuesday (July 5). offers up to tracting works, including renovations and
138.59 mil shares construction of an industrial building.
The 138.59 million shares comprise
76.09 million new shares and an offer for BY SULHI KHALID “We have been registered with the
sale of 160 million existing shares. theedgemarkets.com CIDB (Construction Industry Develop-
ment Board) as a contractor since 1996,
The issue price as well as the opening and subsequently we received the certifi-
and closing dates of the IPO have yet to cate of registration from the CIDB in 1997
be fixed. as a G7 contractor.

Of the 138.59 million new shares, a to- “Since 1990, we have completed a range
tal of 62.5 million shares will be allocated of construction projects, including residen-
to bumiputera investors approved by the tial, commercial, industrial, purpose-built
Ministry of Industry and Trade (MITI), and institutional buildings,” it said.
Malaysian institutional and selected in-
vestors (other than bumiputera investors It also highlighted that it had established
approved by the MITI), and foreign insti- long-term business relationships with its
tutional and selected investors. customers, including Sime Darby Prop-
erty Group, S P Setia Group and World-
The offer shares of 8.59 million will be wide Group.
allocated to directors of Kitacon, eligible
employees of the group and its subsidiaries, For financial year 2021, the group report-
persons who have contributed to the suc- ed a net profit of RM41.83 million, up 6.71%
cess of the group and the Malaysian public. from the previous year, while annual reve-
nue declined by 6.97% to RM455.5 million.
Based on the prospectus exposure, Kitac-
on is an investment holding company, while RHB Investment Bank Bhd is the prin-
its proposed subsidiary is principally involved cipal adviser, managing underwriter and
in the provision of construction services. placement agent for the IPO.

KUALA LUMPUR (July 6): Ideal United Ideal United the lands to the North-South Expressway
Bintang International Bhd (Ideal) is pro- Bintang planning through the Bertam toll.Ultimately,the lands
posing to acquire 17 parcels of freehold in Bertam would be industrial lands.”
land in Penang for a total of RM475.36 to buy freehold
million cash. land in Penang The proposed acquisition is slated to
from NAZA Corp be completed by March 30, 2023.
In a Bursa Malaysia filing on Wednes- for RM475.36 mil
day (July 6), the group said its 70%-owned According to its website, the company
subsidiary Lestari Duta Sdn Bhd and Mu- BY SULHI KHALID started its business by principally engaging in
jur Sinarjaya Sdn Bhd had entered into a theedgemarkets.com trading of heavy machinery and equipment,
sales and purchase agreement with Aspen and spare parts in Malaysia, Indonesia,Aus-
Bell Avenue Sdn Bhd on Jan 27. tralia,Thailand, Japan, and the United States.

According to the group,the ultimate hold- In May 2014, the company changed its
ing company of Aspen Bell Avenue is Naza name to Ideal United Bintang Bhd and
Corporation Bhd, where the directors are thereafter, diversified the business into
Sheikh Mohd Nasarudin Sheikh Mohamed property development.
Nasimuddin Kamal and Sheikh Mohd Fal-
iq Sheikh Mohamad Nasimuddin Kamal. On the group’s earnings, in the first quar-
ter ended March 31, 2022 (1QFY22), its
“The purchase consideration will be fund- net profit declined by 36.89% to RM7.11
ed via a combination of bank borrowings and million from RM11.26 million a year ago
internally generated funds, the proportion while revenue fell by 1% to RM94.46 mil-
of which will be determined at a later date. lion compared to RM95.5 million.

“Ideal is currently in the midst of apply- The group’s net cash as of 1QFY22 cur-
ing financing facilities from financial insti- rently stands at RM50.6 million, a decline
tutions to fund the purchase consideration. of 14.76% from RM59.37 million regis-
Alternatively, Ideal would consider rights tered in the same period last year.
issues to fund the purchase,” the group said.
The top three largest shareholders of
On the rationale of the proposed ac- the group are ICT Innotech Sdn Bhd with
quisition, the group explained that it is a 55.60% stake, followed by its chairman
pursuing inorganic growth by expanding Tan Sri Ooi Kee Liang with 9.69% stake
its land banks. and its executive director Puan Sri Phor Li
Wei with similar 9.69% stake in the group.
“The lands are situated in Bertam, a stra-
tegic location with existing infrastructure that At the time of writing, shares in Ideal
includes dual carriageway roads that connect traded unchanged at RM1.35, giving it a
market capitalisation of RM675.01 million.

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NEWS IN BRIEF

Musa Abdul Malek appointed Bank Bhd. Affin said Musa also previously Khazanah will continue to explore
chairman of Affin Islamic Bank served as an independent non-executive new potential investments,
KUALA LUMPUR (July 6): Affin Bank director of Bank Pembangunan Malaysia collaborations in Turkiye
Bhd has appointed Musa Abdul Malek as Bhd in 2017 before retiring in February
the new chairman of Affin Islamic Bank 2019. — by Surin Murugiah KUALA LUMPUR (July 6): Khazanah
Bhd (AiBB), effective June 22, 2022. In a Nasional Bhd will continue to explore
bourse filing on Wednesday (July 6), the MGRC partners Rinani Genotec to potential new investments and collaboration
banking group said Musa had been serving develop sports-based genetic tests opportunities in Turkiye, in line with the
as an independent non-executive director KUALA LUMPUR (July 6): Malaysian company’s strategy to leverage its global
of AiBB since Aug 1, 2019. According to Genomics Resources Bhd (MGRC)’s presence and networks. Khazanah has
the filing, he has over 40 years of banking unit, MGRC Therapeutics Sdn Bhd a strong presence in the Turkiye, having
experience and held various senior (MGRCT), is collaborating with Rinani invested over US$2.7 billion (about RM11.95
leadership positions in HSBC Group, Bank Genotec Sdn Bhd (Genotec) to offer billion) in various industries through its
Muamalat Malaysia Bhd and CIMB Islamic sports-based genetic tests. The group investee companies since 2008. Among
said Genotec, a biomedical technology its significant investments are Acibadem
Heitech Padu wins RM43.8 mil firm focusing on stem cell treatment Healthcare Group, one of Turkiye’s largest
network contract from PNB, ASNB and genetic testing, now offers a private healthcare providers, through IHH
KUALA LUMPUR (July 6): Heitech Padu Bhd direct-to-consumer sports and fitness Healthcare Bhd, and Istanbul Sabiha Gökçen
has bagged a contract worth RM43.8 million DNA test which enables individuals to International Airport, one of Europe’s
to install wide area networks infrastructure better understand their genetic profile busiest international airports, through
services for Permodalan Nasional Bhd in sports and fitness-related areas. The Malaysia Airports Holdings Bhd. Khazanah
(PNB) and Amanah Saham Nasional Bhd test result includes categories such said its commitment to maintaining Turkiye
(ASNB). In a bourse filing on Wednesday as energy metabolism and utilisation, as a strategic investment destination was
(July 6), the company said it has received muscle performance, response to made during a meeting between senior
the letter of award from PNB and ASNB cardiovascular training, weight representatives of the Malaysian sovereign
for the contract which is over a period of management, nutrient metabolism, wealth fund and Turkey Wealth Fund (TWF)
five years. The contract is expected to be bone and joint health, and mental ability in Istanbul on Tuesday. — Bernama
positive for the company’s future earnings and performance, it said. — by Sulhi
and earnings per share. “Nevertheless, the Khalid HSBC Amanah provides new green
contract will have no material effect on the financing to Ikano Centres
dividend policy, share capital and substantial
shareholdings of the company for the KUALA LUMPUR (July 6): HSBC Amanah
financial year ending Dec 31, 2022,” said the has provided new green financing to help
company. — by Syafiqah Salim Ikano Centres sustainably develop its Johor
retail products, namely Toppen Shopping
Hengyuan Refining proposes RM5 bil Centre and IKEA Tebrau. As part of Ikano
unrated medium-term notes Retail, which operates IKEA stores in five
KUALA LUMPUR (July 6): Hengyuan countries as well as shopping centres that
Refining Company Bhd is planning to are anchored by IKEA, Ikano Centres is
establish a RM5 billion unrated medium- currently operating and managing 3.76
term notes programme, according to the million square feet in gross leasable area in
Securities Commission Malaysia’s list of its four Malaysian centres. — by Rachel Chew
corporate bonds and sukuk under the
lodge and launch framework. Notably, (From left) UMediC Group Bhd (UMC)
Aminvestment Bank Bhd and Maybank non-independent non-executive director
Investment Bank Bhd have been appointed Lau Chee Kheong and non-independent
as the principal advisers for the proposed non-executive chairman Datuk Ng Chai Eng,
corporate exercise. However, the group Affin Hwang Investment Bank Bhd chairman
did not comment further on the proposed and independent non-executive director
exercise when contacted by The Edge. Tunku Afwida Tunku A Malek, as well as UMC
— by Sulhi Khalid executive director and chief executive officer
Lim Taw Seong at the IPO prospectus launch in

Kuala Lumpur on Wednesday (July 6).

ACE-Market bound UMediC aims to raise RM31.1 mil from IPO
KUALA LUMPUR (July 6): Medical device manufacturer UMediC Group Bhd (UMC),
which is en route to list on Bursa Malaysia’s ACE Market on July 26, aims to raise
RM31.11 million from its initial public offering (IPO). The IPO comprises 97.22 million
new shares, of which 18.7 million will be made available to the Malaysian public, 13.09
million to eligible directors and employees, and 65.44 million to be made available via
private placement to selected investors. Based on an issue price of 32 sen per share and
an enlarged share capital of 373.91 million shares, UMC will have a market capitalisation
of RM119.65 million upon listing. — by Syafiqah Salim

T H U R S D A Y J U LY 7 , 2 0 2 2 14 T H E E D G E C E O M O R N I N G B R I E F

HOME

Mustapa: Special “Tomorrow we expect to receive an Kedah MB
task force to update on the situation, more impor- denies having
tantly the actions that have already been
present report on taken and if they are effective in ensur- personal
supplies of cooking ing there are supplies and prices [do not interest in
exceed the ceiling price],” he told the Musang King
oil, chicken, eggs media after opening the first Richiamo durian farm
onThursday Coffee kiosk on Wednesday.
Bernama
Bernama The cabinet meeting on June 29 agreed
to form a special task force on Jihad Against BALING (July 6): Kedah Menteri
PUTRAJAYA (July 6):The latest report on Inflation whose role is to gather all infor- Besar Datuk Seri Muhammad Sa-
the supplies of one kilogramme cooking oil mation from ministries, agencies, and the nusi Md Nor on Wednesday (July 6)
packets, chicken, and eggs in the market will public to resolve issues relating to inflation, stressed that he had no personal inter-
be presented at the Jihad Against Inflation especially in controlling price hikes more est in the Musang King durian farm
special task force meeting onThursday, said efficiently and effectively. project in Gunung Inas, here, which
Minister in the Prime Minister’s Department is claimed to be the cause of the mas-
(Economy) Datuk Seri Mustapa Mohamed. Chaired by Communications and Mul- sive floods here two days ago.
timedia MinisterTan Sri Annuar Musa, the
Mustapa, who is part of the team, said special task force has five other members, Muhammad Sanusi said the order
the report to be presented by the Min- namely Finance Minister Tengku Datuk to stop cultivation was issued in July
istry of Domestic Trade and Consumer Seri Zafrul Abdul Aziz, Minister of Agri- 2020, two months after he became
Affairs is important because the issues culture and Food Industries Datuk Seri the menteri besar, which also involved
have been raised by the people, especially Dr Ronald Kiandee, Minister of Domestic instructions for vegetation replanting
in relation to supplies. Trade and Consumer Affairs Datuk Seri to cover the ground.
Alexander Nanta Linggi, Mustapa, and
“When we made our rounds, some shops Chief Secretary to the Government Tan He said the project was originally
did not have any supply of cooking oil packets. Sri Mohd Zuki Ali. approved by the previous government
and the state government is now fo-
In its first meeting on June 30, among cused on finding comprehensive solu-
issues raised were the lack of supply of tions without pointing fingers.
the one kilogramme cooking oil packets,
the problem of middlemen and cartels in “What is the reason for me to cov-
determining the prices of essential goods er up [the] Musang King [project]? I
in the market. have no personal interest [in it]. The
project was before my time, when I
Meanwhile, Richiamo Coffee group joined the [state government], those
managing director Muhamad Zamry [durian] trees were already there.
Abu Samah said another 30 kioks will be
opened nationwide within the next two “I only want to talk facts and fig-
months, bringing the total number of Ri- ures. To be fair to everybody... we
chiamo Coffee outlets to 135 by August. will be safe when holding on to facts
and figures,” he told reporters after
Richiamo Coffee is a local brand that chairing the state executive council
started operations in 2015 and to date meeting at the district office here on
there are 105 outlets nationwide. Wednesday.

KUALA LUMPUR (July 6): The retail Price of RON97 The menteri besar was responding
price of RON97 petrol will drop by four down four sen, to claims that the state government
sen to RM4.80 per litre for the week be- RON95 and diesel had failed to act with regard to the du-
ginning Thursday (July 7) until July 13, rian farming activity in Gunung Inas
while the prices for RON95 petrol and unchanged which caused Monday’s flash floods
diesel remain unchanged. in 12 villages and claimed three lives.
Bernama
The Ministry of Finance in a state- On Tuesday, Baling MP Datuk Seri
ment on Wednesday said the retail prices Abdul Azeez Abdul Rahim was also
of RON95 petrol will remain at RM2.05 reported as saying that he hoped the
per litre, and diesel at RM2.15 per litre durian farm project would be halted.
throughout the week.
Muhammad Sanusi hoped the pub-
It said the prices were fixed based on the lic would stop speculating on the Bal-
weekly retail pricing of petroleum products ing incident, and allow the authori-
using the Automatic Pricing Mechanism ties to conduct their own assessments
(APM) formula to protect the consum- according to their expertise, adding
ers from the impact of the global oil price that he will make a full statement on
increase. the matter once he had gone through
their findings.
“The government will continue to mon-
itor the trends of global crude oil prices
and take appropriate measures to ensure
the continued welfare and well-being of
the people,” it said.

T H U R S D A Y J U LY 7 , 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

BERNAMA

499 flood victims
in Baling safely
evacuated to PPS

— minister

Bernama

KUALA LUMPUR (July 6): A total of his official Facebook page onWednesday. nouncement of immediate assistance for
499 flood victims from 109 families in Bal- Reezal Merican said he will ensure that them, despite being on an official working
ing, Kedah were rescued and evacuated visit to Turkey.
to three relief centres (PPS) by firefight- the post-flood operation carried out by
ers through an operation which officially agencies under his ministry will be done “On behalf of #KeluargaMalaysia, I
ended on Wednesday. in an integrated manner with the cooper- would like to thank the rescue personnel,
ation of the Social Welfare Department especially the firefighters as well as related
Housing and Local Government Min- and local authorities. agencies comprising PDRM (Royal Ma-
ister Datuk Seri Reezal Merican Naina laysia Police), RELA (People’s Volunteer
Merican said of the total, 164 victims were He also expressed his appreciation to Corps), SAPURA, PBS, APM (Malaysian
placed at Sekolah Menengah Kebangsaan Prime Minister Datuk Seri Ismail Sabri Civil Defence Force), and voluntary bodies
Jerai, 78 victims at Sekolah Menengah Ag- Yaakob for showing his concerns for the for their commitment,” he said.
amaYayasan Khairiah, and 257 victims at plight of the flood victims with the an-
Surau An Nur,Taman Mesra.

“To ensure that the victims can re-
turn to their homes immediately, I have
instructed the Fire and Rescue Depart-
ment together with PBS (theVolunteer Fire
Brigade) to start cleaning up the affected
roads and houses,” he said in a post on

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WORLD

Social unrest over
spiralling living
costs spreads to
France’s railways

BY CAROLINE PAILLIEZ & ANTONY PAONE
Reuters

PARIS (July 6): Railway workers in France workers at the country’s leading air hub, adjusted for inflation and a hike to the min-
went on strike on Wednesday, disrupting Roissy-Charles de Gaulle, as disgruntled imum wage, as well as higher bonuses to
travel across the rail network days before workers frustrated over high living costs compensate for price rises.
the summer holidays begin and at a time of vent their anger.
unrest in other areas of the economy as high “Railway workers are accepting a lot of sac-
inflation eats into salaries. The tense social climate is a challenge for rifices.They know, once they’re hired, that they
President Emmanuel Macron, whose centrist will have to work week-ends or at night.But the
With three of the four main unions at the alliance lost its absolute majority in Parlia- compensation for that is not enough,” Bruno
SNCF, France’s state-owned railway opera- ment last month after voters punished him Poncet, of the Sud-Rail union, told Reuters.
tor, taking part in the walkout, nearly a third for not listening to their daily grievances.
of intercity and regional train services were Wednesday’s strike is due to last one day.
cancelled. Commuter trains in and out of French inflation climbed to a record high The unions said they were discussing their
Paris were also impacted. of 6.5% in June, driven by a sharp rise in next move should their demands not be met.
food and energy prices. Read also:Taiwan’s June consumer inflation
“I’m sure there are demands, and I re- hits near 14-year high Click here
spect that. But at the same time, people’s Macron’s government will this week unveil
time and plans should be respected too,” legislation aimed at bringing inflation relief.
said RezaTerakshani, an American traveller
whose train had been cancelled. Rail unions are demanding salaries be

The rail strike follows industrial action
in the energy sector and walkouts by airport

MILAN (July 6):The euro tumbled to a new Euro falls to greenback against six counterparts — rose
two-decade low on Wednesday as fears over lowest since 2002 0.4% to 107.02 its highest since 2002.
rising energy prices and potential shortages on concerns over
cast a long shadow over the bloc’s economy, The euro dropped to its lowest level against
while demand for safe-haven assets drove the energy prices the Swiss franc since the Swiss National Bank
dollar to fresh 20-year highs. abandoned its currency cap in 2015.
BY STEFANO REBAUDO
All oil and gas fields that were affected by Reuters The single currency was down 0.4% to a
a strike in Norway’s petroleum sector are ex- fresh seven-year low at 0.9897.
pected to be back in full operation within a ing to estimates from the European Union sta-
couple of days, Equinor said onWednesday. tistics office Eurostat released onWednesday. “In the current circumstances,the tradition-
al safe haven currencies of the US dollar, Swiss
Meanwhile, Goldman Sachs raised its nat- The divergence between central banks’ franc and yen appear set to continue to outper-
ural gas price forecasts, saying that a complete tightening cycles across the Atlantic remained form in the near term,” MUFG analysts said.
restoration of Russian gas flows through Nord in investors’ focus.
Stream 1 was no longer the most likely scenario. Yen gained a little support from some
“The big question is whether this deterio- safety bids after Japanese households’ infla-
Analysts expect a quick resurgence in ration in growth prospects is enough to curtail tion expectations strengthened in the three
oil prices as supply tightness persists and as tightening cycles — especially that of the Fed months to June, with the ratio of homes ex-
front-month spreads have held up despite (Federal Reserve),” ING analysts said. pecting price rises over the coming year hit-
Tuesday’s price fall. ting the highest level in 14 years.
They reckon the forex market will consol-
“It is not only the threat of non-deliv- idate the current levels on Wednesday ahead The dollar dropped 0.3% to ¥135.36. It
ery [of gas] that is weighing on the euro,” of Federal Open Market Committee minutes hit at the end of June its highest since 1998
Moritz Paysen, forex and rates adviser at from its June meeting, due at 1800 GMT. at ¥137.
Berenberg, said.
“The general view that the Fed might ul- Bank of Japan has said it would not with-
“The already high energy costs are a bur- timately have more opportunity than many draw monetary stimulus because inflation is
den. Energy costs in Europe are many times other central banks to continue policy nor- due to soaring fuel and raw material costs
higher than in the US,” he added. malisation,” Unicredit analysts said. blamed on the Ukraine crisis and will likely
prove temporary.
The euro fell 0.7% against the dollar to The US Dollar Index — which tracks the
1.0186, the first time below 1.02 since De- Bitcoin fell 1.7% and was last trading at
cember 2002. US$20,088. Ether rose 0.5% to US$1,138.
Read also: South Korean shares fall on reces-
Eurozone consumers cut spending on food, sion worries; won hits 13-year low Click here
drinks, and tobacco for the second straight
month in May amid a spike in prices, accord-

T H U R S D A Y J U LY 7 , 2 0 2 2 17 T H E E D G E C E O M O R N I N G B R I E F

WORLD

(July 6): A white-hot corner of the alumi- White-hot metal good demand, was logistics,” says Mas-
num market that for months defied a broad- market cools simo Grifone, a commercial director at
er slide in metal prices is finally slumping, in warning for Genoa-based trader and distributor Cau-
flashing a warning that major industrial vin Metals Srl, part of 132-year-old Italian
economies are stumbling toward a recession. global economy commodities groupVittorio Cauvin SpA.

While commodity-grade aluminum in- BY ARCHIE HUNTER & MARK BURTON “There are not big inquiries current-
gots have been tumbling since March on Bloomberg ly because everyone has already bought;
the London Metal Exchange, until recently now you have billets on the ground and
the premiums paid for specialized products Premiums for billets, which aren’t trad- the majority of buyers have stocks more
like billets remained sky-high. ed on exchanges, hit record highs in March or less up to September,” Grifone said.
as soaring energy prices knocked smelters
Now those premiums for aluminum bil- offline and prohibitively expensive contain- The steepness of the slowdown in de-
lets — a cornerstone industrial product er freight obstructed imports. mand remains the big unknown.
used to make extruded parts in buildings,
cars and machinery — are slumping from With demand booming and the risk of Concerns over the recessionary impact
record highs in Europe. further disruptions looming large, industrial of high energy prices and even potential
buyers rushed to build inventories, adding to power shortages are making European
That’s one of the first signs that investor the unprecedented tightness in the region. metal consumers wary of buying stock.
fears about a broad-based industrial slow-
down are starting to line up with condi- That stockpiling helped inflate premiums Hammerer’sVan Gils is still betting that
tions on the ground in physical metal mar- and exchange prices for commodities all over demand for aluminum will grow marginal-
kets. It’s a sharp turnaround for the billets Europe as buyers shifted from just-in-time ly overall next year, as rising usage in light-
market, which became a microcosm for supply chain management to building up re- weight vehicles and solar panels offsets a
Europe’s pandemic supply chain travails. serves in case of sudden shortages. Now, the contraction in the construction sector. But
logistics snarl-ups are starting to ease and con- that forecast would go out the window if
“We’re seeing a slowdown in our or- sumers are sitting on considerable inventories. the worst fears over Europe’s energy crisis
der intake in the construction sector, and come to pass, he said.
those customers are typically the fastest to “One of the reasons billet premiums
react,” said Rob Van Gils, chief executive went so high, apart from there being “I don’t think anybody can say for sure
officer of Hammerer Aluminum Indus- that that’s how events will play out, but
tries, which uses billets to make special- there’s a reasonable worry that they could,”
ized extruded products. “Other areas like said Duncan Hobbs, head of research at
autos and electronics are still healthy, but London metal traders Concord Resources
it’s certainly not as hot as it was last year.” Ltd. “As a result people, don’t want to be
holding substantial inventories.”

(July 6): Worries over surging global food Food inflation oil from the Black Sea, worsening existing
costs are easing as prices of everything from fears abate as shortages caused by extreme weather and
cooking oils to wheat and corn tumble to cooking oils and supply-chain chaos.This sparked fears of a
the lowest levels in months on increasing grains plummet global food crisis, which would hit consum-
physical supplies and as investors reduce ers in poorer nations particularly hard. Prices
their bullish bets on futures markets. BY SING YEE ONG & JAMES POOLE are now back to levels before the invasion.
Bloomberg
Palm oil, the world’s most consumed Investors have been reducing net bullish
edible oil, has plunged about 45% from its positions in US markets as interest rates in-
record close in April to around the weakest crease and the threat of recession looms larg-
level in a year, while wheat has slumped er.Their net bullish bets on soybean oil have
over 35% from an all-time closing high in shrunk to the smallest in 23 months, those
March, and corn has dropped about 30% on wheat are the lowest in four months,
from its peak for the year. and on corn the smallest in eight months.

Russia’s invasion of Ukraine in Febru- Palm oil tumbled by as much as 11%
ary choked supplies of grains and sunflower to RM3,735 in Kuala Lumpur onWednes-
day, leading the losses in farm commodities,
before paring the plunge. Soybean oil, soy-
beans, corn and wheat extended or held the
sharp declines posted in Chicago onTuesday.

Click here for the full story

Read also:
Oil prices fall in volatile trade on
recession fears Click here

Russian court orders halt to Caspian oil
pipeline but exports still flow Click here

t h u r s d a y j u LY 7 , 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

world

(July 6): Russia has pocketed US$24 billion China and India — partly due to Covid-19 lockdowns — it
from selling energy to China and India in funnel US$24 bil spent far more on Russian energy due to
just three months following its invasion of higher prices and small increases in volumes.
Ukraine, showing how higher global prices to Putin in
are limiting efforts by the US and Europe energy spree India’s increase in spending after the war
to punish PresidentVladimir Putin. has been far more dramatic, as it doesn’t
by Dan Murtaugh & share a land border with Russia and its ports
China spent US$18.9 billion on Russian Debjit Chakraborty are normally too far away for cost-efficient
oil, gas and coal in the three months to the shipping.The country spent US$8.8 billion
end of May, almost double the amount a Bloomberg on petroleum and coal imports from Feb
year earlier, latest Customs data show. Mean- 24 to June 30, more than it doled out for all
while, India shelled out US$5.1 billion in the On a volume basis, China’s imports con- Russian goods for the entire year in 2021,
same period, more than five times the value tinued a slow uptick in June, while India according to a trade ministry official, who
of a year ago.That’s an extra US$13 billion may have incentive to boost purchases even requested anonymity as the data is not pub-
in revenue from both countries compared further in the coming months as a Europe- lic. India’s trade ministry spokesperson did
with the same months in 2021. an Union ban on Russian oil takes effect, not comment.
Myllyvirta said.
The higher spending is helping make up In addition to big jumps in oil and coal,
for decreased purchases from the US and China and India still trail Europe as a bloc India also imported three cargoes of Russian
some other nations that have halted or slowed in terms of overall sales this year, according liquefied natural gas since the war began,
buying to punish Russia for the war. The to Myllyvirta’s research. Europe’s purchases compared to one in the same period last year,
bans have sent prices for alternative sup- will continue to shrink, though, as import according to Bloomberg ship-tracking data.
plies soaring and spurred crippling inflation bans on coal and oil come into effect and
that threatens to send major economies into as Russia cuts off gas supplies to some Eu- “Historically, India has taken very lit-
recession. ropean buyers. tle Russian oil, but the war in Ukraine and
Russian-origin oil embargoes by the Europe
“China is already buying essentially Russia has long-standing trade and strate- Union have led to a rebalancing in oil trade
everything that Russia can export via pipe- gic relationships with China and India, and flows,” Wei Cheong Ho, a Rystad Energy
lines and Pacific ports,” said Lauri Myllyvir- along with offering steep price discounts is analyst, said in a research note last month.
ta, lead analyst at the Centre for Research on also accepting payments in local currency to Read also:
Energy and Clean Air, who has been tracking help keep trade flows to the countries strong China May oil imports from Russia soar
Russian energy flows since the war broke out. this year. to a record, surpass top supplier Saudi
“India has been the main buyer of the car- Click here
goes out of the Atlantic that Europe doesn’t China is the world’s biggest energy im-
want anymore.” porter and has dedicated pipelines for Sibe- China issues 5 million tonnes of fuel
rian oil and gas. Even as its energy consump- export quotas — sources Click here
That spree is unlikely to end anytime tion was curbed over the first half of 2022
soon, with energy prices much higher than
they were at this time last year, even account-
ing for the steep discounts to global bench-
marks Russia is offering to entice purchasers.

MANILA/SINGAPORE (July 6): Emerg- Funds are Heightened uncertainty
ing market currencies are tumbling as the furiously selling Asian currencies remain vulnerable even if
twin threats of rising US interest rates and regional central banks were to step up the
a global recession send traders scurrying risky EM pace of tightening, unless they are willing to
to the safety of the dollar. currencies contemplate positive real interest rates,Wee
Khoon Chong, senior market strategist at
The MSCI Emerging Markets Cur- by Karl Lester M Yap & Ruth Carson Bank of NewYork Mellon in Hong Kong,
rency Index dropped for a second day, Bloomberg wrote in a research note onWednesday.
extending this year’s slide to 4.5%, head-
ing for the steepest annual drop since riman & Co in New York, wrote in a re- Deteriorating consumer sentiment
2015. The Philippine peso led declines search note. “No matter how things turn and rising interest rates have increased
in Asian trade, sliding to the lowest lev- out, it’s bad for [emerging markets].” the odds of a US recession in the next
el in 17 years, while the South Korean year to 38%, according to the latest fore-
won tumbled to the weakest since 2009. All of the 23 major emerging market casts from Bloomberg Economics.
The Turkish lira led losses in emerging currencies tracked by Bloomberg have weak-
Europe, Middle East, and Africa. ened over the past month as the Feder- “The environment is not very forgiv-
al Reserve raised its benchmark rate by ing for [emerging markets],” said Eu-
The losses in Asia followed those in a combined 125 basis points at its latest genia Victorino, head of Asia strategy
other emerging market regions onTues- two meetings. Chair Jerome Powell has at Skandinaviska Enskilda Banken AB
day — when a surge in the greenback said the central bank may hike by either in Singapore. “An improvement in the
saw the Colombian peso slump as much 50 basis points or 75 basis points at its global growth outlook will be required to
as 2% to a record. July gathering. turn the sentiment on the dollar, which
may only come next year.”
“Emerging markets will suffer in the
current environment of either higher de- Read also: India relaxes rules to boost for-
veloped-market rates or weaker global eign inflows, stem rupee fall Click here
growth,”Win Thin, global head of cur-
rency strategy at Brown Brothers Har-

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WORLD

US wants Dutch supplier to stop selling
chipmaking gear to China

(July 6): The US is pushing the Nether- BY JILLIAN DEUTSCH, ERIC MARTIN, the types of chips that are currently ex-
lands to ban ASML Holding NV from IAN KING & DEBBY WU periencing acute shortages. Washington
selling to China mainstream technology Bloomberg is focused on banning sales of the most
essential in making a large chunk of the advanced type of DUV technology, immer-
world’s chips, expanding its campaign to extreme ultraviolet, or EUV, lithography sion lithography machines, the people said.
curb the country’s rise, according to peo- systems, which cost about 160 million eu-
ple familiar with the matter. ros (US$164 million) per unit, to China American officials are also trying to ex-
as it cannot obtain an export license from ert pressure on Japan to stop shipping the
Washington’s proposed restriction would the Dutch government. same technology to Chinese chipmakers,
expand an existing moratorium on the sale one of the people said. Japan’s Nikon com-
of the most advanced systems to China, in The US push on ASML comes as Pres- petes with ASML in this area.
an attempt to thwart China’s plans to be- ident Joe Biden separately considers easing
come a world leader in chip production. If some of theTrump-era tariffs on consum- Immersion lithography is also known as
the Netherlands agrees, it would broaden er goods from China. While China may argon fluoride immersion, or simply ArFi.
significantly the range and class of chip- welcome such a move at a time of tense According to China-based Founder Se-
making gear now forbidden from heading relations between the two powers, Biden’s curities, ASML sold 81 ArFi systems in
to China, potentially dealing a serious blow administration has continued his prede- 2021, compared with four from Nikon,
to Chinese chipmakers from Semiconductor cessor’s efforts to restrict China’s access giving the Dutch firm a 95% market share.
Manufacturing International Corp to Hua to US technology.
Hong Semiconductor Ltd. “We have no information regarding this
The US Department of Commerce and matter,” a Nikon spokeswoman said.
American officials are lobbying their the Dutch Ministry of Foreign Affairs de-
Dutch counterparts to bar ASML from clined to comment. Dutch Prime Minister Mark Rutte said
selling some of its older deep ultraviolet in June he is against reconsidering trade
lithography, or DUV, systems, the people “The discussion is not new. No deci- relations with China and called for the EU
said.These machines are a generation be- sions have been made and we do not want to develop its own policies toward Beijing.
hind cutting-edge but still the most com- to speculate or comment on rumors,” an China is the Netherlands’ third-biggest
mon method in making certain less-ad- ASML spokeswoman said. trade partner after Germany and Belgium.
vanced chips required by cars, phones,
computers and even robots. ASML is the world’s top maker of li- ASML opposes a ban on sales of DUV
thography systems, machines that perform lithography equipment to Chinese custom-
Shares of ASML gained as much as a crucial step in the process of creating ers because it is already a mature tech-
2.6% in Amsterdam on Wednesday. Its semiconductors.ASML’s dominance of the nology, Wennink said earlier this year.
American Depository Receipts closed market for that type of equipment means Chinese-based facilities, run by either do-
down 3.9% onTuesday following Bloomb- that further cutting China off from access mestic or foreign companies, account for
erg’s initial report. Nikon Corp., a smaller to its products would undermine the Asian 14.7% of ASML’s total revenue in 2021,
rival to the Dutch firm in that sphere of country’s ambitions to make itself more according to company disclosures and data
chipmaking gear technology, closed down self-sufficient in production of the crucial compiled by Bloomberg.
5.1% in Tokyo on Wednesday. electronic components.
ASML is also alleging potential IP in-
The issue arose during US Deputy “China’s share of the global chip-equip- fringement by a Chinese tech firm sup-
Commerce Secretary Don Graves’s visit ment market is negligible,” said Alex Capri, ported by the country’s government.
to the Netherlands and Belgium in late a research fellow at the Asia-based Hinrich
May and early June to discuss supply chain Foundation, characterizing chip produc- US efforts to block the export of chip-
issues, said the people, who asked not to tion as “a choke point” in China’s plans to making equipment began under theTrump
be identified because the discussions were bulk up its semiconductor muscle. administration.Washington pressured the
private. During that trip, Graves also visit- Dutch government to prevent sales of EUV
ed ASML’s headquarters inVeldhoven and The older generation of machinery, lithography systems, which are required
met chief executive officer PeterWennink. DUV, is less capable than more advanced to produce the most sophisticated sem-
EUV lithography equipment but remains iconductors and in which ASML has a
ASML’s sales could narrow by 5-10% indispensable in manufacturing many of monopoly.
if it’s banned from selling deep ultravio-
let tools in China. As the chip equipment Major US chip-equipment makers in-
maker’s revenue already reflects a ban on cluding Applied Materials Inc and Lam
extreme ultraviolet tool shipments to the Research Corp are already banned from
country, it may experience less impact ver- selling certain advanced products to SMIC
sus peers such as Applied Materials which due to national security concerns.The po-
derives 25-30% of its sales from China. tential DUV ban could further hit SMIC
and its Chinese peers.
The Dutch government has yet to
agree to any additional restrictions on “Lithography equipment is the most
ASML’s exports to Chinese chipmakers, difficult equipment for China to replace
which could hurt the country’s trade ties when it comes to semiconductor produc-
with China, the people said. ASML is al- tion,” said Johnson Wang, an analyst at
ready unable to ship its most advanced Taiwan Institute of Economic Research.
“Without access to foreign DUV lithog-
raphy equipment, the progress of China’s
chip industry could come to a halt.”

t h u r s d a y j u LY 7 , 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

HONOURING MALAYSIA’S
BEST PERFORMERS IN
ESG EXCELLENCE

INTRODUCING THE INAUGURAL

In Collaboration With

Main Partner Knowledge Partner Auditor
(Funds Category)

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world

(July 6): US crypto lenderVoyager Digital Crypto lender of credit. A filing with the US Bankrupt-
said on Wednesday it had filed for bank- Voyager Digital cy Court Southern District of New York
ruptcy, becoming another casualty of a files for bankruptcy showed that Alameda was Voyager’s larg-
dramatic fall in prices that has shaken the est single creditor, with unsecured loans
cryptocurrency sector. by Shivam Patel, Sinead Cruise of US$75 million.
& Tom Wilson
Crypto lenders such asVoyager boomed Reuters Alameda did not immediately respond
in the Covid-19 pandemic, drawing de- to a request for comment.
positors with high interest rates and easy months, and the default of Three Arrows
access to loans rarely offered by traditional Capital on a loan from the company’s sub- Chapter 11 bankruptcy procedures put
banks. However the recent slump in crypto sidiary,Voyager Digital, LLC, require us to a hold on all civil litigation matters and
markets — sparked by the downfall of two take deliberate and decisive action now,” allow companies to prepare turnaround
major tokens in May — has hurt lenders. Voyager Chief Executive Officer Stephen plans while remaining operational.
Ehrlich said in a statement.
New Jersey-based Celsius in June froze Chapter 11 In a message to customers on Twitter,
withdrawals and has hired advisers on a In its Chapter 11 bankruptcy filing onTues- Ehrlich said the process would protect as-
possible bankruptcy filing. Voyager froze day,Voyager — based in New Jersey but list- sets and “maximise value for all stakehold-
withdrawals this month, as did another ed inToronto — estimated that it had more ers, especially customers”.
lender, Singapore’s Vauld. than 100,000 creditors and somewhere be-
tween US$1 billion and US$10 billion in Voyager said onWednesday it had more
Last week,Voyager said it had issued a assets, and liabilities worth the same value. than US$110 million of cash and owned
notice of default to Singapore-based crypto crypto assets on hand. It intends to pay
hedge fund Three Arrows Capital (3AC) Voyager had last month signed an agree- employees in the usual manner and con-
for failing to make payments on a crypto ment with trading firm AlamedaVentures, tinue their primary benefits and certain
loan totalling over US$650 million. founded by Sam Bankman-Fried, CEO of customer programs without disruption.
major exchange FTX, for a revolving line
3AC later that week filed for chapter 15 Voyager has hired Moelis & Company
bankruptcy, which allows foreign debtors and The Consello Group as financial ad-
to shield US assets, becoming one of the visers, Kirkland & Ellis LLP as legal ad-
highest-profile investors hit by plummeting viser and Berkeley Research Group LLC
crypto prices. 3AC is now being liquidated, as restructuring adviser.
Reuters reported last week. Read also:Voyager account holders likely
won’t get all their crypto back Click here
“The prolonged volatility and contagion
in the crypto markets over the past few

Alibaba earnings
turnaround

hopes revived as
shares up 60%
from record low

by Jeanny Yu
Bloomberg

(July 6): Some ofWall Street’s biggest bro- March. The Hang Seng Tech Index has hai during Covid-19 lockdowns.
kerages have reiterated their bullish calls for gained nearly 38% during that time. The company’s revenue for the March
Alibaba Group Holding Ltd, suggesting
more gains may be in store after the e-com- “We expect Alibaba’s market share loss quarter beat analysts’ projections, thanks to
merce giant surged from a mid-March low. to gradually stabilise and remain construc- cost-control measures and growth in new
tive on the company’s ability to expand its business initiatives.The retailer has faced
The consensus estimate for the retailer’s total addressable market,” Goldman ana- fierce competition from rivals JD.com Inc
earnings per share for the next 12 months lysts including Ronald Keung wrote in a and Pinduoduo Inc, as well as the nega-
has climbed more than 7% from a three- note on Sunday (July 3). tive impact of slower demand due to the
year low in late May, according to data pandemic.
compiled by Bloomberg. More than 10 Alibaba outlined its business strategies
brokerages, including Citigroup Inc and to merchants and analysts in a meeting Still, investors remain cautious about
Goldman Sachs Group Inc, have rein- lastThursday, according to Goldman. Jef- the broader Chinese economy, which is
forced their “buy” calls over the past week. feries Financial Group Inc said in a note facing renewed risks following rising in-
the company had addressed some “pain fections in Shanghai and subsequent mass
Speculation that a crackdown on the points” for its merchants and highlighted testing given the nation’s strict adherence
tech sector may be drawing to a close is its efforts to support consumers in Shang- to its Covid zero policy.
buoying bets on Alibaba, which has seen
its shares in Hong Kong soar more than
60% from the record low reached in mid-

t h u r s d a y j u LY 7 , 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

LONDON (July 6): British Prime Minis- UK’s Boris departure from the European Union, won
ter Boris Johnson was clinging to power on Johnson on a landslide election victory in 2019 before
Wednesday, gravely wounded by the resig- the brink as taking a combative and often chaotic ap-
nation of ministers who said he was not fit ministers quit proach to governing.
to govern and with a growing number of
lawmakers calling for him to go. by Michael Holden & Elizabeth Piper His leadership has been mired in scan-
Reuters dals and missteps over the last few months,
Johnson’s finance and health secretaries with the prime minister fined by police for
quit onTuesday, along with several in more bloomberg breaking Covid-19 lockdown laws and a
junior roles, saying they could no longer damning report published about the behav-
stay in government after the latest in a se- iour of officials at his Downing Street office
ries of scandals blighted his administration. who breached their own lockdown rules.

With mounting calls for Johnson to go, There have also been policy U-turns, an
he showed his determination to stay in of- ill-fated defence of a lawmaker who broke
fice by appointing businessman and edu- lobbying rules, and criticism that he has
cation minister Nadhim Zahawi as his new not done enough to tackle a cost-of-living
finance minister, and filling some of the crisis, with many Britons struggling to cope
other vacancies. with rising fuel and food prices.

Zahawi told reporters he would look at The Times of London newspaper said
all options to rebuild and grow the strug- Johnson’s “serial dishonesty” was “utterly
gling economy and tame surging inflation, corrosive” of effective government.
when asked if he would cut taxes such as
corporation tax. “Every day that he remains deepens the
sense of chaos,” it said. “For the good of
The level of hostility Johnson faces the country, he should go.”
within his party will be laid bare later on
Wednesday when he appears in parliament The latest bout of drama at the heart of
for his weekly question session, and before British power comes as the economy de-
the chairs of select committees for a sched- teriorates rapidly, with some economists
uled two-hour grilling. warning that the country could tip into
recession.
“I suspect we will have to drag him kick-
ing and screaming from Downing Street,” Click here for the full story
one Conservative lawmaker told Reuters,
speaking on condition of anonymity. “But Boris Johnson Read also: New UK finance minister Zahawi
if we have to do it that way then we will.” pledges to grow economy Click here

Johnson, a former journalist and Lon-
don mayor who became the face of Britain’s

LONDON/BENGALURU (July 6): Brit- Amazon faces The investigation follows a current Euro-
ain’s antitrust watchdog is investigating Am- UK probe over pean Commission (EC) probe looking at sim-
azon.com Inc on concerns it was hurting ilar concerns but which does not cover issues
competition by giving its own sellers an un- suspected affecting Britain following Brexit, the CMA
fair advantage in its marketplace over third anti-competitive said, adding that it seek to liaise with the EC.
parties, adding to global regulatory scrutiny
of the US tech giant. practices EU antitrust regulators in November
2020 charged Amazon with distorting com-
Britain’s Competition and Markets Au- by Yadarisa Shabong & petition in online retail markets and opened
thority (CMA) said it opened an investi- Radhika Anilkumar a second investigation into the company’s
gation on Tuesday into whether Amazon’s Reuters business practices.
practices that affect sellers on its domestic
marketplace may be anti-competitive and reuters The FinancialTimes onWednesday report-
result in a worse deal for customers. ed that Amazon will share more data with
rivals and offer buyers a wider choice of prod-
“It’s right that we carefully investigate ucts as part of a deal with the EU.
whether Amazon is using third-party data
to give an unfair boost to its own retail busi- Amazon will give third-party sellers on its
ness and whether it favours sellers who use marketplace access to information that could
its logistics and delivery services — both of help sell more products online, the FT said.
which could weaken competition,” Sarah
Cardell, general counsel at the CMA, said The British regulator said its investi-
in a statement. gation would focus on three main areas,
including how the Seattle-based company
Millions of people across Britain use Ama- collects and uses third-party seller data and
zon’s services for fast delivery, the CMA said. how it sets the eligibility criteria for selling
under the Prime label.
A spokesperson for Amazon said the com-
pany would work closely with the CMA dur- Separately, Germany’s antitrust watchdog
ing its investigation, adding that sales from onWednesday subjected the e-commerce gi-
the company’s selling partners continued to ant to stricter supervision rules, saying Ama-
grow faster than Amazon’s retail sales. zon’s position is of outstanding, cross-market
importance for competition.

t h u r s d a y j u LY 7 , 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

news In brief

Beijing rolls out China’s first ever providers and conference attendees. Vietnam looks to attack inflation
Covid vaccine mandate They’ll need to have received a booster with fuel tax cuts
shot to continue as normal, Li said. There
(July 6): Beijing residents wanting will be exemptions for people who don’t July 6): Vietnam is battling rising inflation
to enter a raft of public places will qualify for vaccination. — Bloomberg by cutting taxes at the gas pump. The
need to show proof of vaccination National Assembly Standing Committee on
from Monday, the first time China Read also: Macau locks down landmark Wednesday approved its second cut to the
has deployed a vaccine mandate, Lisboa hotel after Covid-19 cases found environmental fuel tax on gasoline in three
as the city rushes to quash a new Click here months, a 50% reduction to 1,000 dong
outbreak caused by a more infectious (US$0.04) per liter that will go into effect
subvariant. The city will require live Indonesia mulls more frequent setting July 11 through Dec 31. The tax on diesel
performances, entertainment venues of crude palm oil reference price will be cut to 500 dong. The tax on jet fuel
such as movie theaters, museums and JAKARTA (July 6): Indonesia is considering will be reduced by 500 dong to 1,000 dong a
gyms, as well as training and tutoring setting its crude palm oil (CPO) export liter. The government lowered retail gasoline
locations, to restrict entry to people reference price every two weeks instead prices July 1 for the first time after seven
who are vaccinated, Li Ang, deputy of monthly, a senior Trade Ministry official consecutive hikes. The RON-95 gasoline price
director at the Beijing Municipal Health said on Wednesday (July 6), aiming to adjust announced early this month is about 40%
Commission, told reporters at a briefing quicker to fast-changing international higher from the beginning of the year, while
Wednesday. The requirement will also market prices. The government currently RON-92 gasoline price is up 37%. Vietnam’s
apply to medical staff, people working sets a monthly reference price based on June consumer prices rose 3.37% year-on-
in community service operations, home Indonesian, Malaysian and European CPO year, its fastest in almost two years, according
furnishing operators, express delivery prices. That price is used to determine the to data compiled by Bloomberg. — Bloomberg
palm oil export tax and levy each month.
Report: China’s BYD dethrones Tesla “Within a month, the [global] price can EU Parliament backs labelling gas
as world’s largest EV producer be volatile. We are considering to set the and nuclear investments as green
export reference price by every two weeks,”
KUALA LUMPUR (July 6): BYD, the Chinese senior official Veri Anggrijono told media on BRUSSELS (July 6): The European Parliament
auto group backed by Warren Buffett’s Wednesday. Veri did not give a time frame on Wednesday backed EU rules labelling
Berkshire Hathaway, has dethroned Elon for when a decision would be made, but investments in gas and nuclear power plants
Musk’s Tesla as the world’s biggest electric said authorities are hearing views from as climate-friendly, throwing out an attempt
vehicle (EV) producer by sales. Citing stakeholders, government bodies and to block the law that has exposed deep rifts
company filings, the Financial Times (FT) on industry participants about the proposal. between countries over how to fight climate
Tuesday (July 5) said that Shenzhen-based — Reuters change. The vote paves the way for the
BYD sold 641,000 vehicles in the first six European Union proposal to pass into law,
months of the year, a more than 300% unless 20 of the bloc’s 27 member states
jump from the same period a year earlier. It decide to oppose the move, which is seen as
said that compared with 564,000 vehicles very unlikely. The new rules will add gas and
sold by Tesla, which has blamed a tough nuclear power plants to the EU “taxonomy”
second quarter on supply chain and sales rulebook from 2023, enabling investors to
disruptions in China after its operations label and market investments in them as
were hit by coronavirus lockdowns and green. Out of 639 lawmakers present, 328
travel restrictions. The FT said BYD’s rise opposed a motion that sought to block the EU
underscores China’s strengthening position gas and nuclear proposals. The result will be
in renewable energy, boasting scale and cost a relief to the European Commission, which
advantages across much of the supply chain proposed the rules in February after more
for EVs, batteries and wind and solar energy. than a year of delay and intense lobbying from
The report added that BYD, which is part- governments and industries. — Reuters
owned by Buffett’s Berkshire Hathaway,
had also overtaken South Korea’s LG as Click here for the full story
the world’s second-biggest producer of EV
batteries, behind China’s Contemporary Thailand may get pricier for tourists to enjoy discounted rates, Traisuree
Amperex Technology, known as CATL. with dual hotel rates Taisaranakul, a government spokeswoman
— by Surin Murugiah said in a statement on Wednesday. “This
(July 6): Foreign tourists may soon find is to maintain our standards of rates
reuters Thailand a more expensive destination and services for foreign tourists, which
than in the past two years with the affects the perception of the country’s
country now planning to raise hotel tourism brand,” Traisuree said. “Rates
rates to pre-pandemic levels to support a that have been reduced during Covid-19
faster recovery of the industry. Thailand’s will be maintained for Thais to sustain
Tourism Ministry plans to ask hotel the momentum of domestic tourism.” —
operators to implement a dual-tariff Bloomberg
structure under which foreign visitors
may be charged rates similar to pre- Click here for the full story
pandemic days while locals may continue

t h u r s d a y j u LY 7 , 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

Wall Street says a recession is coming,
consumers say it is already here

bloomberg

by Philip Aldrick, Enda Curran
& Michae l Sasso
Bloomberg

LONDON/HONG KONG/ATLANTA For Palmer, Marshall, and many others, Board have dropped to the lowest in almost
(July 6):The recession calls are getting loud- the technical definitions of a recession — a decade. Sentiment across Organisation for
er onWall Street, but for many of the house- traditionally two quarters of contraction — Economic Co-operation and Development
holds and businesses who make up the world are irrelevant. (OECD) member countries has fallen for
economy, the downturn is already here. 11 straight months and has not been this
Goldman Sachs Group Inc economists low since 2009.
Take Gina Palmer, who runs She Salon put the risk of such a slump in the US in
on Atlanta’s busy Northside Drive west the next year at 30%.A Bloomberg Economics “People are getting poorer,” said Lu-
of downtown. She would ordinarily ex- model sees a 38% chance in the same peri- dovic Subran, chief economist at Allianz
pect her business to be alive with the din od, with the risks building beyond that time SE. “So this is not a recession, but it really
of customers on a Friday morning. But frame. But for many it already feels like it is feels and tastes like a recession.”
on that day late last month, it was largely here. More than one-third of Americans be-
empty and quiet, save for a few employ- lieve the economy is now in a recession, ac- The reason? Prices are soaring world-
ees.With summer break moving into full cording to a poll last month by CivicScience. wide, particularly for essential foods and
swing, her clientele is preoccupied with af- fuels, eroding the spending power of fam-
fording summer camps for their kids amid The worries among small business own- ilies. Central banks are responding to the
soaring food and gasoline costs. ers, consumers, and others are illustrated by inflation surge, but as they push up in-
so-called Misery Indexes, which blend un- terest rates that turns the screw on those
“When people look at their budgets, employment and inflation rates.The gauge with debts. Workers are complaining their
the first thing they cut is self-care,” Palmer for the US is already 12.2%, similar to levels wages are not keeping up with the cost of
said. “I’ve seen my clients go from having witnessed at the start of the pandemic and living, a frustration that has already led to
weekly appointments to bi-weekly, and my in the wake of the 2008 financial crisis, ac- strikes in some countries.
bi-weekly clients are now coming in every cording to Bloomberg Economics.
six weeks.” Quite simply, people’s money is disap-
The UK is similarly elevated, and other pearing fast, and they are worried it could
4,000 miles away, Abbie Marshall, the measures echo that grim view. US consumer get a lot worse.
landlady of The Buck Inn in the country- expectations as measured by the Conference
side of northern England, is also trying to And as 2022 hits the halfway mark,
cope with surging costs. When she took new worries are taking hold. Layered
over the pub last year, she ran the numbers on top of the inflation squeeze are the
on a 4% inflation rate — an assumption mounting concerns about the outlook
that would normally be seen as conserva- for economic growth, not just this year,
tive given it is twice the Bank of England but into 2023. That has sparked talk
(BOE) target. But now it is above 9% and of stagflation, a nasty cocktail of little
rapidly heading for double digits. to no growth — or worse — and fast-
er-than-usual price increases.
Marshall has changed the costs on her
menu four times and raised the price of a The situation is a far cry from what
pint of beer on three occasions. was once expected for 2022 and beyond,
which for a time included the idea of a new
“Roaring Twenties”. Instead, euphoria is
in short supply and the narrative is one
of downgrades.

Last month, the OECD cut its outlook
for 2022 global growth to 3% from 4.5%,
with even slower expansion seen next year.
The World Bank lowered its projections,
warning of “danger” for the economy.

continues on Page 25

t h u r s d a y j u LY 7 , 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 The tough times stretch to Asia too, terioration may prove similarly unequal.
where China’s Zero-Covid policy and In the UK, a report by the Resolution
There is also alarm in markets, where lockdowns sent the world’s second-big- Foundation think tank said that years of
the S&P 500 has plunged more than gest economy into a tailspin, compound- income stagnation have left the poorest
20% from its January high, and the ing the damage from a real estate slump. families “brutally exposed” to the cost-
Stoxx Europe 600 is down about 19%. of-living crunch.
The near-constant stream of warnings, In Beijing, 31-year-old Tian Lijun be-
along with gloomy headlines, mean there gan the year shutting the two florists she Phil Storey’s recent experience as chief
is a chance that a recession becomes a ran. After finding work as a sales repre- executive at Hammersmith & Fulham
self-fulfilling prophecy, where apprehen- sentative for a high-end medical clinic, she Foodbank in London is more evidence
sion forces consumers and businesses to lost that job in May.To make ends meet, of that. With food prices up almost 9%,
hunker down and cut back on spending. she has taken to selling flowers at stalls he has seen an increase in demand.
That would suck demand out of the econ- in community compounds and stopped
omy, exacerbating any downturn. shopping for anything beyond necessities. “We’re seeing people who were on ben-
efits but stable financially, people who re-
A 2021 paper co-authored by Danny “There’s no way to make money now- ally know how to budget, now coming to
Blanchflower, a Dartmouth College eco- adays. I can only manage to repay my us,” Storey said. “We’re even seeing work-
nomics professor and former BOE policy- loans, pay the rent, and feed myself,”Tian ing people, those on zero-hour contracts,
maker, said that declines in US consumer said. “Forget about entertainment or any needing help to tide them over.”
expectations gauges of 10 points or more, other spending.”
from either the University of Michigan or At The Buck Inn, Marshall raised a
Conference Board surveys, are predictors Many have to make even tougher de- similar concern as she tried to balance
of recessions going back to the 1980s.The cisions on simple day-to-day spending, protecting her income with not driving
Conference Board measure is down almost sometimes forced to choose between the away customers.
30 points this year. electricity bill or food. UK grocery chain
Tesco plc said shoppers are buying fewer “The cost of goods is moving so
For the US, the National Bureau of items and trading down to cheaper own- quickly, I have to pass that on,” she said.
Economic Research is the official arbiter brand versions of staples. “But at what point does my pricing be-
of recessions, which it defines as a “sig- come prohibitive? Does going out be-
nificant decline in economic activity that Just as the pandemic and its recovery come so expensive that it is only for the
is spread across the economy and lasts proved to be K-shaped, so the next de- better off?”
more than a few months.”

Any such declaration will usually only
come well into a slump, or even after it.
In the meantime, the debate rages on.
Deutsche Bank AG chief executive Chris-
tian Sewing sees a 50% chance of a global
recession, a prediction that Citigroup Inc
economists have also made. Federal Re-
serve chair Jerome Powell said a US re-
cession is a possibility, but not inevitable.
Morgan Stanley economists expect a mild
euro-area recession at the end of 2022.

Away from that back and forth, busi-
nesses and consumers are fretting about
their finances and trying to figure out how
to keep their heads above water as the
pressures intensify.

Inflation was already heading higher
coming into 2022 amid a post-Covid-19
demand bump. Then Russia invaded
Ukraine, energy and food costs jumped,
and the world found itself dealing with
soaring prices, a very unfamiliar situation
after years of low inflation. Gasoline in the
US topped an average of US$5 per gallon
for the first time last month.

Given the impact on basics, from filling
the gas tank to the supermarket run, few
have escaped the squeeze.

In New Mexico’s capital city, the cow-
boys at the annual Rodeo de Santa Fe last
month were sweating the price of fuel more
than mounting a 2,000-pound bull. The
number of entrants in the contest fell by a
third, which president Jim Butler blames
on the price of gasoline.While farmers and
truckers can pass along their fuel costs,“the
cowboys don’t have it”, he said.

t h u r s d a y j u LY 7 , 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 4,058.00-116.00 OIL US$ 104.121.35 RM/USD 4.4243 RM/SGD 3.1529 RM/AUD 3.0069 RM/GBP 5.2916 RM/EUR 4.5231

Top 20 active stocks

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

Velesto Energy Bhd 88.90 -0.010 0.090 -25 739.4

Hibiscus Petroleum Bhd 61.20 -0.075 0.925 13.50 1861.5

Sapura Energy Bhd 51.40 0.000 0.045 -10.00 719.1

Yong Tai Bhd 45.70 0.000 0.085 -34.62 120.6

Top Glove Corp Bhd 39.70 -0.005 0.940 -63.71 7,526.8

Ta Win Holdings BHD 34.30 -0.010 0.080 -36.00 273.8

Dagang NeXchange Bhd 34.20 -0.025 0.755 -0.66 2,383.0

Jade Marvel Group Bhd 31.80 0.010 0.915 38.64 300.1

My EG Services Bhd 29.70 -0.030 0.860 -19.63 6351.5 World equity indices

KNM Group Bhd 25.80 -0.005 0.120 -20.00 441.2

Ekovest BHD 22.90 -0.005 0.400 -3.61 1,078.3 CLOSE CHANGE CHANGE CLOSE CHANGE CHANGE
(%)
Widad Group Bhd 22.60 0.000 0.365 0.00 1004.7 DOW JONES 30,967.82 -129.44 -0.42 (%)
INDONESIA 6,646.41 -56.86 -0.85
Bumi Armada Bhd 20.10 -0.015 0.360 -23.40 2,130.5

Datasonic Group Bhd 19.60 -0.010 0.440 7.32 1,260.3 S&P 500 3,831.39 6.06 0.16 JAPAN 26,107.65 -315.82 -1.20

Metronic Global Bhd 19.10 0.000 0.090 -26.28 27.0 NASDAQ 100 11,779.90 194.22 1.68 KOREA 2,292.01 -49.77 -2.13

Serba Dinamik Holdings Bhd 19.00 0.000 0.080 -77.14 296.8 FTSE 100 7,134.13 108.66 1.55 PHILIPPINES 6,445.01 135.02 2.14

AHB Holdings Bhd 18.40 0.000 0.130 0.00 48.9 AUSTRALIA 6,594.48 -34.85 -0.53 SINGAPORE 3,103.66 -0.45 -0.01

Sentoria Group Bhd 17.60 -0.005 0.155 -11.43 86.4 CHINA 3,355.35 -48.68 -1.43 TAIWAN 13,985.51 -363.69 -2.53

Reach Energy Bhd 17.20 -0.005 0.045 -25.00 49.3 HONG KONG 21,586.66 -266.41 -1.22 THAILAND 1,541.79 0.49 0.03

Dynaciate Group Bhd 17.00 0.000 0.120 20.00 118.3 INDIA 53,804.92 670.57 1.26 VIETNAM 1,149.61 -31.68 -2.68

Data as compiled on Jul 6, 2022 Source: Bloomberg Data as compiled on Jul 6, 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)

Vsolar Group Bhd 0.010 100.00 236.1 -33.33 48.3 Green Ocean Corp Bhd 0.010 -33.33 75.5 -66.67 21.1

XOX Technology Bhd 0.030 20.00 33.0 -40.00 26.8 Anzo Holdings Bhd 0.010 -33.33 17.0 -66.67 11.2

Pan Malaysia Holdings Bhd 0.060 20.00 2075.1 -25.00 55.7 China Automobile Parts 0.010 -33.33 210.1 0.00 13.6

Annum Bhd 0.410 18.84 6543 -44.59 40.0 Pasukhas Group Bhd 0.015 -25.00 2,750.0 -40.00 28.6

TPC Plus Bhd 0.225 15.38 29.4 18.42 69.4 Impiana Hotels Bhd 0.020 -20.00 8,940.5 -73.33 28.9

Menang Corp M Bhd 0.530 15.22 1.2 -1.85 268.3 XOX Networks Bhd 0.025 -16.67 218.0 -16.67 28.4

PDZ Holdings Bhd 0.040 14.29 169.7 -11.11 23.3 Divfex Bhd 0.075 -16.67 1,166.0 -11.76 55.9

MQ Technology Bhd 0.040 14.29 5410.1 -20.00 50.0 Permaju Industries Bhd 0.055 -15.38 3,137.9 -8.33 106.3

PUC BHD 0.045 12.50 1047.8 -68.97 73.1 BTM Resources BHD 0.115 -14.81 247.1 -30.30 19.7

Key Asic Bhd 0.050 11.11 310.2 -28.57 68.2 Global Oriental Bhd 0.280 -13.85 5,146.6 24.44 127.3

Amlex Holdings Bhd 0.450 9.76 100.0 28.57 120.7 Petron Malaysia Refining 4.770 -12.96 1,992.1 8.90 1287.9

Khee San BHD 0.140 7.69 0.3 0.00 19.2 G3 Global Bhd 0.035 -12.50 690.0 -56.25 101.6

SMTrack Bhd 0.070 7.69 9871.5 -63.16 57.3 Luster Industries Bhd 0.075 -11.76 7,224.7 -34.78 226.7

Computer Forms Malaysia Bhd 1.130 7.62 5980.7 80.80 231.7 SIAB HOLDINGS BHD 0.150 -11.76 6,056.1 0.00 73.4

Eonmetall Group Bhd 0.570 7.55 742.3 18.75 157.6 Eurospan Holdings BHD 1.110 -11.20 0.7 0.91 49.3

Eversafe Rubber Bhd 0.225 7.14 64.8 -15.09 54.1 Bintai Kinden Corp Bhd 0.080 -11.11 3,320.3 -62.79 68.2

TFP Solutions Bhd 0.075 7.14 524 -28.57 43.8 Icon Offshore Bhd 0.080 -11.11 1083.4 -23.81 216.4

A-Rank Bhd 0.54 6.93 10.1 0 96.1 Ta Win Holdings BHD 0.080 -11.11 34339.4 -36 273.8

Tuju Setia Bhd 0.325 6.56 17 -34.34 103 Avillion BHD 0.08 -11.11 935 -23.81 90.7

DRB-Hicom Bhd 1.22 6.09 1039.7 -14.69 2358.5 Sarawak Oil Palms Bhd 3.63 -11.03 3451.21 4.01 2154.1

Data as compiled on Jul 6, 2022 Source: Bloomberg Data as compiled on Jul 6, 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)

BLD Plantation Bhd 9.00 0.420 16.8 -0.11 841.5 Nestle Malaysia Bhd 132.100 -2.000 44.5 -1.56 30977.5

Malaysian Pacific Industries 27.88 0.360 129.100 -43.52 5,545.2 Kuala Lumpur Kepong Bhd 20.020 -1.480 3312.6 -8.08 21584.7

British American Tobacco 10.68 0.160 143.3 -23.61 3049.5 Batu Kawan Bhd 21.980 -0.820 25.9 -3.17 8650.5

Carlsberg Brewery Malaysia 22.16 0.160 36.1 10.36 6775.4 Petron Malaysia Refining 4.770 -0.710 1992.1 8.90 1287.9

Negri Sembilan Oil Palms BHD 3.79 0.140 21.8 24.95 266.1 PPB Group Bhd 15.280 -0.540 491.3 -10.64 21737.3

AEON Credit Service M Bhd 13.92 0.120 42.3 2.20 3553.9 Petronas Chemicals Group 8.650 -0.470 14396.4 -3.03 69200.0

Cycle & Carriage Bintang Bhd 2.65 0.100 1.6 23.83 267.0 Sarawak Oil Palms Bhd 3.630 -0.450 3451.2 4.01 2154.1

Panasonic Manufacturing 26.60 0.100 0.5 -7.96 1615.8 Hengyuan Refining Co Bhd 4.170 -0.450 4014.7 7.75 1251.0

UMS Holdings BHD 2.05 0.100 1.1 2.50 83.4 Sime Darby Plantation Bhd 3.830 -0.430 7922.5 1.86 26487.2

Petronas Gas Bhd 16.40 0.080 445.6 -8.35 32451.2 Ta Ann Holdings Bhd 3.640 -0.360 1545.5 3.70 1603.3

Computer Forms Malaysia Bhd 1.13 0.080 5980.7 80.80 231.7 Petronas Dagangan Bhd 21.280 -0.360 80.6 3.30 21140.7

Menang Corp M Bhd 0.53 0.070 1.2 -1.85 268.3 Harrisons Holdings Malaysia 5.690 -0.310 19.9 18.54 389.6

Signature International Bhd 1.30 0.070 5215.8 -5.80 358.8 Hong Leong Bank Bhd 20.380 -0.240 882.5 9.45 44178.1

DRB-Hicom Bhd 1.22 0.070 1039.7 -14.69 2358.5 Oriental Holdings BHD 6.020 -0.230 424.8 14.67 3734.6

Frontken Corp Bhd 2.15 0.070 8667.1 -46.25 3380.7 Press Metal Aluminium 4.510 -0.200 10884.5 -21.97 37160.7

Annum Bhd 0.41 0.065 6543 -44.59 40.0 Genting Plantations Bhd 6.320 -0.190 204.8 -4.13 5670.3

Heineken Malaysia Bhd 22.76 0.060 100.8 9.21 6875.8 Malaysia Smelting Corp Bhd 2.000 -0.180 2216.9 -38.46 840.0

Khind Holdings Bhd 2.71 0.060 52.0 -28.87 108.6 Kumpulan Fima BHD 2.410 -0.180 676.5 17.56 665.4

Apex Healthcare Bhd 2.91 0.060 99.3 10.42 1388.6 Eurospan Holdings BHD 1.110 -0.140 0.7 0.91 49.3

Fraser & Neave Holdings Bhd 21.1 0.060 105.5 -14.71 7739 Riverview Rubber Estates BHD 3.700 -0.130 18.5 16.71 239.9

Data as compiled on Jul 6, 2022 Source: Bloomberg Data as compiled on Jul 6, 2022 Source: Bloomberg