The Edge - 03 Sept 2021

GOVT SAYS COVID-19 RTK ANTIGEN SELF-TEST KITS TO BE PRICED
AT NO MORE THAN RM19.90 PER UNIT FROM SEPT 5 p3

FRIDAY, SEPTEMBER 3, 2021 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 243/2021

CEOMorningBrief
HOME: Court of Appeal dismisses prosecution’s eight appeals for forfeiture
including RM192 million from central Umno p11

Pre-Budget statement a step forward but government must walk the walk p13
WORLD: Singapore Exchange targets SPAC hopefuls with relaxed rules p17

WhatsApp fined US$266 million over data transparency breaches p19

Eshxopretcfatelldin
govt revenue

calls for tax system
reforms, raising
statutory debt limit

Report on Page 4.

Friday september 3, 2021 2 TheEdge CEO morning brief

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Acute shortage Malaysia’s govt hospital bed capacity for Covid-19 treatment as of Sept 1
of ICU beds in
Sabah, Kedah
and Perak, other State ICU beds Utilisation rate (%) Non-ICU beds Utilisation rate (%)
States operating
Sabah 145 126 1,884 92
at near full
capacity, says Kedah 104 121 1,165 94
Noor Hisham
Perak 90 107 1,054 87
by Syafiqah Salim
theedgemarkets.com Perlis 11 100 185 102

KUALA LUMPUR (Sept 2):Three months Selangor 350 99 4,247 66
after the number of active Covid-19 cases
climbed above 100,000, Health director-gen- Kelantan 77 99 899 95
eral Tan Sri Dr Noor Hisham Abdullah to-
day acknowledged there is a severe shortage Penang 69 96 829 117
of beds in the intensive care units (ICU) at
public hospitals. Johor 108 95 2,461 101

The overall utilisation rate of 1,608 ICU Melaka 92 80 681 67
beds in public hospitals has hit 90%, accord-
ing to Noor Hisham. He highlighted that Sa- Pahang 61 79 734 68
bah, Kedah and Perak are currently operating
beyond their full capacity. KL 216 77 1,626 58

However, he did not explain the reason for Putrajaya 20 75 168 76
the acute ICU bed shortage despite the coun-
try having been able to ramp up the speed of Terengganu 39 69 477 77
vaccination. Furthermore, the statistics that
Noor Hisham reveals daily show that more Sarawak 120 58 1,072 72
than 90% of new infections are categories 1
and 2 with mild symptoms. Negeri Sembilan 88 43 1,084 29

The DG did not also reveal the measures Labuan 18 0 106 5
that the Ministry of Health will take to re-
solve the shortage. MALAYSIA 1608 90 18,672 78

Based on the latest data as of 5pm on Source: Ministry of Health
Sept 1, Sabah’s ICU bed occupancy rate hit
a dangerously high of 126% versus 145 beds Selangor currently has 350 ICU beds while had at least received their first dose including
provided; Kedah hit 121% (104 beds) and Kelantan has 77. 15.24 million individuals or 65.1% who were
Perak hit 107% (90 beds). fully inoculated.
Penang’s ICU usage was at 96% (out of
In Perlis, the State that has the lowest 69 beds), Johor had utilised 95% (out of 108 Labuan hit the highest vaccination rates,
number of infections, ICU bed occupancy beds).Among other States,Melaka (80% out of with 94.5% of its adult population fully
is already at full capacity, out of 11 beds pro- 92 beds); Pahang (79% out of 61 beds); Kua- inoculated, followed by the Klang Valley
vided. Operating close to full capacity with la Lumpur (77% out of 216 beds); Putrajaya (93.3%); Sarawak (87.2%), Negeri Sembi-
99% usage were Selangor and Kelantan. (75% out of 20 beds);Terengganu (69% out lan (79.9%); Perlis (68.5%); Melaka (59.2%);
of 39 beds); Sarawak (58% out of 120 beds); Penang (57.9%); Pahang (52.2%);Terengga-
and Negeri Sembilan (43% out of 88 beds). nu (50.8%); Johor (48.8%); Perak (48.4%);
Kedah (47.1%); Kelantan (46.7%) and Sa-
Labuan, where 94.5% of the population bah (40.8%).
has been fully inoculated, is the only State
that has no patient in ICU.There are 18 ICU Malaysia’s new Covid-19 cases rose to
beds available there. 20,988 today — after falling to a nine-day
low of 18,762 yesterday — bringing cumu-
Meanwhile, a total of 18,672 beds across lative cases to 1.79 million.
the country provided for Covid-19 patients
had a utilisation rate of 78%. However, active cases which carry high
transmission risks fell for two straight days to
Noor Hisham’s tweet came after the newly 262,540 as daily recoveries exceeded infec-
appointed Health Minister Khairy Jamalud- tions at 23,473. Among the latest cases, the
din said the Ministry of Health will be trans- asymptomatic or those with mild symptoms
parent in providing more detailed Covid-19 continued to make up the bulk of new cases,
data and information to the public — a move with 20,647 or 98.4% being in Categories 1
to to change the public’s perception of and (no symptoms) or 2 (mild symptoms).
accusations against the Ministry for being
secretive and selective with Covid-19 data. Those with more severe symptoms totalled
341 or 1.6%, spread across Categories 3 (pa-
As of yesterday, 35.15 million doses of tients with pneumonia), 4 (with pneumonia
Covid-19 vaccines had been administered in requiring oxygen therapy) and 5 (critical cases
Malaysia. A total of 19.93 million individu- needing assisted ventilation).
als or 85.1% of the nation’s adult population

Friday september 3, 2021 3 TheEdge CEO morning brief

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Govt says Covid-19 RTK antigen
self-test kits to be priced at no more than

RM19.90 per unit from Sept 5

KUALA LUMPUR (Sept 2):The govern- by syafiqah salim subject to penalties if they sell self-test kits
ment has set the maximum ceiling prices theedgemarkets.com that exceed the maximum price.
for Covid-19 self-test kits, with the whole-
sale price fixed at RM16 a unit and a retail Daily Covid-19 figures: Individuals may be fined up to
price of RM19.90 a unit, which will take RM100,000 or imprisoned not exceed-
effect from Sept 5. As at Sept 1, 2021: ing three years or both or compounded
up to RM50,000.
The pricing was made to ensure the Vaccine doses administered 398,134
self-test kits are affordable for businesses Companies, meanwhile, can be fined
as well as the public, according to a joint % of population fully vaccinated 46.7 up to RM500,000 or compounded up to
statement today by the Domestic Trade RM250,000.
and Consumer Affairs (KPDNHEP) Min- % of population with at least 61
ister Datuk Seri Alexander Nanta Linggi one dose If there are traders who do not com-
and Health Minister Khairy Jamaluddin. ply with all these regulations, consumers
As at Sept 2, 2021: can make their complaints through the
They said the demand for Covid-19 [email protected] portal,
antigen rapid test kits (self-testing) is ex- Number of new cases 20,988 call centre at 1800 886 800, email via
pected to increase as more of the public [email protected], smart-
will conduct self-testing to curb the spread Number of individuals tested 159,499 phone application such as Ez ADU, En-
of the virus. forcement Command Centre (ECC) at
Positivity rate (%) 13.16 03-8882 6245/6088 or via WhatsApp at
“KPDNHEP has engaged with all lo- 019-279 4317.
cal industry players and importers in de- Category 1 9,668 (47.7%
termining a reasonable control price for [no symptoms] Malaysia’s Covid-19 infection
all parties. KPDNHEP also expects the unvaccinated) curve rising again amid
effects of competition to further stabi- Category 2 ramped-up testing
lise the selling price at all levels as is the [mild symptoms] 10,979 (46.0%
case with the current face mask price,” 25000 Daily new cases 20,988
they said. Category 3 unvaccinated) 20000 7-day moving average 20,737
[with pneumonia] 15000
According to the statement, the Min- 171 (45.0%
istry of Domestic Trade and Consumer Category 4
Affairs will set the maximum wholesale [with pneumonia, requiring unvaccinated)
and retail prices for the test kits under the oxygen therapy]
Price Control and Anti-Profiteering Act 63 (60.4%
2011 and the Control of Supply Act 1961. Category 5
[critical & requiring assisted unvaccinated)
In a tweet today, Khairy also added: ventilation]
“We will also be exploring bulk purchase 107 (75.7%
options to drive the price down further
and also look at providing free kits for B40 unvaccinated)
families.”
10000
Furthermore, the ministers also re-
minded that stern action will be taken Number of patients in ICU 1,417 5000
against traders who fail to comply with
ICU capacity utilisation (%) 88.12 0 Sept 2, 2021
Jan 1, 2021
Number of deaths 249

Updated as at 7.30pm, Sept 2, 2021
Sources: CITF, MoH

all the regulations. Read also: Malaysia reports 20,988 new
Any trader who commits an offence will Covid cases on Sept 2, 29% of them fully
inoculated Click here
be prosecuted under the Price Control and
Anti-Profiteering Act 2011 and may be

Friday september 3, 2021 4 TheEdge CEO morning brief

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Expected shortfall in govt revenue calls for tax
system reforms, raising statutory debt limit

KUALA LUMPUR (Sept 3): The Min- by Emir Zainul would require information sharing be-
istry of Finance (MoF), in its inaugural theedgemarkets.com tween the Inland Revenue Board (IRB)
Pre-Budget Statement (PBS) for Budget and the Royal Malaysian Customs De-
2022 released on Aug 31, noted that the Malaysia Government Revenue partment (RMCD).
revenue collection for the first half of 2021
(1H21) was lower than expected. RM bil Tax revenue “At minimum, theTCC should provide
300 Non-tax revenue confirmation on tax filing and tax payment
The subsequent collection for the rest status. It is by no means a blanket clearance
of the year is likely to be even less as many 200 43.07 42.74 61.76 83.84 of the tax affairs of a taxpayer. Normal tax
economic activities were halted due to the 74.01 audit process would still prevail,” she said.
implementation of the various iterations of
the Movement Control Orders (MCOs) to 100 Besides that, Sim argued that the imple-
contain the resurgence of Covid-19 cases. 169.34 mentation ofTIN for businesses and indi-
177.65 vidual income earners aged 18 and above
The implications are clear, according 174.70 would help tackle the shadow economy.
to the Institute for Democracy and Eco- 180.56 “This should contribute towards more tax
nomic Affairs (IDEAS) chief executive 153.26 collection as it will increase the number
officer Tricia Yeoh. In order to maintain 0 2016 2017 2018 2019 2020* of registered taxpayers and reduce tax ar-
its spending levels to continue stimulat- bitrage activities.”
ing domestic economic growth, the federal *Govt estimated gures
government would have to either borrow Source: Ministry of Finance archives Furthermore, EY Asean and Malaysia
more or expand its tax base. tax leader Amarjeet Singh highlighted that
fication Number (TIN) system and review a comprehensive review of the tax incentive
Tax consultants concur that tax system of tax treatments which have resulted in framework should be done to ensure that
reforms, including the reintroduction of the revenue leakages or harmful practice, as the tax incentives offered to foreign and
Goods and Services Tax (GST), are neces- well as the support for the Organisation local investors remain relevant to the cur-
sary to help replenish the nation’s coffers and for Economic Cooperation and Develop- rent business landscape whilst continuing
reduce dependency on oil revenue. Howev- ment (OECD)’s Base Erosion and Profit to maintain the country’s competitiveness
er, the federal government will strike a fine Shifting (BEPS) 2.0 initiative, which is in attracting quality investments.
balance between raising tax collection while designed to address cross-border tax leak-
maintaining a business-friendly environment ages and aggressive tax planning. Most importantly, Amarjeet said the
that encourages domestic investments and focus should really be on how best to in-
attracts foreign direct investments. On top of that, Jagdev also advocated crease tax revenue whilst ensuring that the
for greater tax education. country is still business-friendly, and can
Malaysia in grave need of tax reforms continue to encourage and attract invest-
PwC Malaysia tax leader Jagdev Singh “With the changing landscape, the ments, both domestic and foreign, as well
highlighted that the government must in- sources of revenue for individuals and as can alleviate the challenges faced by the
itiate tax system reforms in order to broad- companies have changed. A lot of people rakyat, particularly the B40, and at the
en its tax base as it could not solely rely are now, for example, selling things online, same time, pave the way for sustainable
on burgeoning debt levels indefinitely to but are they aware that they need to pay and inclusive economic growth.
finance government spending. tax on it? So how does the government dis-
seminate this information and encourage “The answer requires comprehensive
“I believe that broadening the tax base people to voluntarily comply rather than and well-thought-out tax reforms that can
is something that the government perhaps going after everyone? help our nation boost its economy, while
needs to consider. Because they cannot growing the tax revenue in the long run.
continuously increase its debt ratios, debt “I think it’s also an opportunity for the If done right, we can increase tax revenue
limit, and they cannot continuously run a government to use a carrot and stick ap- and still grow the economy,” he added.
(budget) deficit on and on. So the revenue proach to drive certain behaviour out there
side of things needs to be looked at and by using the tax policy,” he added. Higher debts to steer economy on
there need to be avenues to see how they recovery path
increase the revenue,” he said. Deloitte Malaysia tax leader Sim Kwang In fact, in the PBS, the MoF already hinted
Gek pointed out that the introduction of that there is a need to increase the statuto-
As such, he commended that the MoF the TCC as a pre-condition for tenderers ry debt limit to “provide additional fiscal
has rightly come up with the right meas- to participate in government procurement space” in strengthening the economy and
ures to address the issue in the PBS. should improve the level of tax compliance sustaining recovery efforts.
among taxpayers.
For instance, the MoF has identified As at the end of June 2021, the federal
various measures which are being evaluat- She said this is not uncommon and has government’s debt level had risen to 61.2%
ed to increase tax revenue and enhance tax been practised in some countries such to gross domestic product (GDP) with the
compliance, such as the SpecialVoluntary as South Africa and Ireland. For this to statutory debt level at 56.8%, which is still
Disclosure Program (SVDP) for indirect work, she said the TCC will need to take below the statutory limit of 60%.
taxes, the introduction of a Tax Compli- into account direct and indirect taxes to
ance Certificate (TCC) as a pre-condition be as comprehensive as possible and this “In short, we should be ready to expect
for tenderers to bid for government con- higher debt to GDP ratios, which include
tracts, the implementation of aTax Identi- correspondingly a potential downward

continues on Page 5

Friday september 3, 2021 5 TheEdge CEO morning brief

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Bite the bullet and reintroduce GST, say tax experts

KUALA LUMPUR (Sept 3): As part of by Emir Zainul cause anxiety, he noted.
Malaysia’s medium-term fiscal strategy, theedgemarkets.com “Now is an especially difficult time for
tax experts have recommended that the
federal government reintroduce a broad the Movement Control Orders (MCO). major changes to our tax system. Con-
based consumption tax, i.e. the goods As such, tax experts and economists sumers will be concerned about price
and services tax (GST), in order to ad- hikes, whilst business owners want to
dress the shortfall in government revenue have called on the government to look focus their time and energy on re-build-
moving forward. into alternative avenues to see how they ing their businesses.
can increase the revenue. For instance,
Besides broadening the tax base, the Economic Cooperation and Develop- “As such, the government must en-
PwC Malaysia tax leader Jagdev Singh ment (OECD) last month recommended sure that businesses are given ample
explained that the GST provides a great- that the government may need to con- time to prepare for the re-introduction
er chance of increasing tax revenue with sider re-introducing the GST. of GST, and that taxpayers’ concerns
the least impact on consumption, while with the previous GST system are prop-
also ensuring greater tax transparency. The GST was introduced in 2015 but erly addressed,” he told The Edge.
was later scrapped by the Pakatan Hara-
“Of course the elephant in the room is pan government in 2018 as part of its Amarjeet pointed out one significant
consumption tax. I think at some point, manifesto, and followed by the reintro- concern about the implementation of the
we need to bite the bullet and reintro- duction of the sales and service tax (SST). GST that needs to be addressed by the
duce GST, which hopefully is not too government, which is the delay in GST
painful for the rakyat. To ensure the consumption tax does refunds that had happened previously.
not hit the B40 communities too hard,
“At the same time, we need to help the Institute for Democracy and Economic He said the Royal Malaysian Customs
people who really need help. So things Affairs’ (IDEAS) chief executive officer Department (RMCD) should ensure
like cash handouts, food vouchers and TriciaYeoh suggested that the GST may that a clear and comprehensive guid-
so on; those are needed if you introduce be reintroduced at a lower rate. ance is issued to businesses, while the
consumption tax that is broad based,” GST filing system should be efficient,
Jagdev told The Edge in a recent interview. “Zero-rating more items on the list and hotlines, online support channels
and targeting more expensive luxury and ruling procedures should be in place
The issue arose as the Ministry of Fi- products is another option,” she added. to handle large volumes of queries.
nance, in its inaugural Pre-Budget State-
ment (PBS) for Budget 2022 released on For GST to be successfully re-imple- “Further, price hikes should not be
Aug 31, noted that the revenue collec- mented in Malaysia, EY Asean and Ma- tolerated,” he said.
tion for the first half of 2021 was lower laysia tax leader Amarjeet Singh high-
than expected and that subsequent col- lighted that the support of the public and “It is important that the re-introduc-
lection is expected to decline due to the businesses is important, while the timing tion of the GST is not considered in iso-
ongoing Covid-19 pandemic and the im- of the re-introduction will be crucial. lation and that it is assessed as part of
plementation of the various iterations of a holistic assessment of Malaysia’s fis-
Whilst GST is an efficient tax collec- cal position and tax systems,” Amarjeet
tion mechanism, a “new” tax will always commented.

from Page 4 deep austerity measures being imposed. are dubious in nature, then even 70% is a
“So, hence the signalling about increas- problem,” he added.
grading of Malaysia’s rating. This should
not necessarily be received negatively, as ing the statutory debt limit. And correctly Similarly, EY’s Amarjeet said spending
a downgrade can be cushioned by other as well, they (the government) could create discipline must be inculcated and there
long-term economic policies introduced an even worse scenario if they cut back on should be strict accountability towards
by the government towards growth. spending as it would actually accentuate the usage of government funds, especially
the down cycle. So it’s probably correct borrowed funds. On this, careful planning
“If the government emerges with strong for the government to counter cyclical,” should be undertaken to only borrow what
policies that are aligned with both short- he told The Edge in an interview. is needed and to avoid wastage.
term and long-term economic growth, I
expect we can afford to increase debt lim- However,Tay stressed that the borrow- “If there is a need to increase the stat-
its. However, there must be a long-term ings must be channelled to “quality spend- utory debt limit, this should only be done
plan towards fiscal consolidation as well,” ing”, as he pointed out that the fear is that with a plan to rein in the debt limit as soon
Yeoh said when commenting on the pos- government spendings are being misused as possible, and with a continued focus on
sible increase of the statutory debt limit. for unintended purposes. adopting the necessary reforms to ensure
fiscal sustainability in the long term.
PwC Malaysia deals partner of econom- “In this particular environment, if the
ics and policy Patrick Tay concurred, say- government is trending up [its statutory “If this fiscal discipline can be inculcat-
ing that although the rise in the statutory debt limit] because they are doing the right ed, in the longer term, the savings can be
debt limit would make the credit agencies thing to keep the rakyat and the economy channelled towards reducing the budget
“nervous”, a ratings downgrade would not fiscally sound, then even if it trends up to deficit and continuing to grow the econ-
negatively affect that significantly as most 75%, I think they can defend it. But if they omy. Post-pandemic, there should also be
government debts are denominated locally. let it trend up, and let’s say the economy greater focus on shifting government ex-
is recovering and we are getting back to penditure from operating expenditure to
“I don’t think the government would pre-covid levels of revenues, and they are development expenditure which can spur
dare not to spend.This is definitely not a borrowing big to spend on projects that economic activity,” he added.
fiscal hawk government, there won’t be any

Friday september 3, 2021 6 TheEdge CEO morning brief

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KUALA LUMPUR (Sept 2): Bank Nega- BNM joins forces fast and frictionless cross-border pay-
ra Malaysia (BNM) said it will be joining with Australian, ments, combining both the benefits of
forces with the Bank for International Set- Singapore, South distributed ledger technology and the ef-
tlements (BIS) Innovation Hub, Reserve African central ficiency of a common platform,” he said.
Bank of Australia (RBA), Monetary Au-
thority of Singapore (MAS) and South banks to test Those in the project will be working
African Reserve Bank (SARB) to test the central bank with multiple partners to develop tech-
use of central bank digital currencies (CB- digital currencies nical prototypes of different distributed
DCs) for international settlements. ledger technology platforms.
by Ahmad Naqib Idris
In a statement, BNM said the project, theedgemarkets.com BNM said the project will also explore
dubbed Project Dunbar, aims to develop different governance and operating de-
prototype shared platforms for cross-border nectivity,” said BIS Innovation Hub Sin- signs that enable central banks to share
transactions using multiple CBDCs, which gapore centre head Andrew McCormack. CBDC infrastructure, benefiting from
will allow financial institutions to transact the collaboration between public- and
directly with each other in the digital cur- BNM assistant governor Fraziali Ismail, private-sector experts in different juris-
rencies issued by participating central banks. meanwhile, said the multi-CBDC plat- dictions and areas of operation.
form explored under the project has the
It said this will eliminate the need for potential to “leapfrog the legacy payment Project Dunbar will be exploring the
intermediaries and also reduce the time arrangements” and serve as the foundation international dimension of CBDC de-
and cost of transactions. for a more efficient international settle- sign, it said, and support the efforts of
ment platform. the Group of Twenty (G20) road map
“Project Dunbar brings together central for enhancing cross-border payments.
banks with years of experience and unique “We hope the project will spur greater
perspectives in CBDC projects and ecosys- public-private collaboration to enable The project expects to publish its re-
tem partners at advanced stages of technical sults in early 2022, which will inform
development of digital currencies. the development of future platforms for
global and regional settlements.
“With this group of capable and pas-
sionate partners, we are confident that our Technical prototypes of the shared
work on multi-CBDCs for international platforms, which will be developed in
settlements will break new ground in this collaboration with different technology
next stage of CBDC experimentation and partners, will be demonstrated at the
lay the foundation for global payment con- Singapore FinTech Festival in Novem-
ber 2021.

KUALA LUMPUR (Sept 2): Analysts Analysts maintain tum from September onwards with the
have maintained “overweight” calls on the ‘overweight’ calls announced easing of mobility restrictions
domestic banking sector as they see July to on banking sector for fully vaccinated individuals and the
be the inflection point where things should opening up of more economic sectors on
start improving gradually as the govern- as they foresee Aug 16.
ment slowly eases restrictions. improving outlook
with restrictions As for the uptick in impaired loans in
RHB Investment Bank Research’s ana- July, he expects the continued availability
lysts LiewWai Hoong and Fiona Leong said easing of repayment assistance (six-month mor-
in a note today that although the impact of atorium) for individual and small and me-
lockdowns further weighed on loan growth, by Tan Siew Mung dium enterprise borrowers to keep banks’
loan demand and asset quality in July, they theedgemarkets.com asset quality stable until end-2021.
foresee things to improve going forward.
quential improvements going forward, as While the percentages of most bank
“With the rapid vaccination rate, the fur- the government slowly loosen Covid-19-re- loans that were under payment relief as-
ther relaxation of restrictions should give the lated restrictions. sistance have increased in July and early
economy much-needed relief,” they said. August with the take-up of the Pemulih
The duo maintained an “overweight” call moratorium, applications for payment re-
They also noted that during the latest on the banking sector, with their top picks lief programmes have started to taper in
results briefings, banks’ management teams being Malayan Banking Bhd (Maybank) the later part of August, Ong said.
were generally positive on the recovery out- (TP [target price]: RM10.30), CIMB Group
look, but still expressed some caution. Holdings Bhd (TP: RM5.70) and AMMB “With the opening up of more econom-
Holdings Bhd (TP: RM3.50). ic sectors allowing businesses to operate
According to the duo, July system and tapering in applications for repayment
loans were flat (+0.12% month-on- Meanwhile, AmInvestment Bank Re- assistance, it is likely that there will not be
month/+3.1% year-on-year) as the im- search’s analyst Kelvin Ong said in a note a need for substantial increase in overlays
pact of the lockdown persisted. today that despite slower loan applications in the second half,” he said.
and approvals in July, he expects loan ap-
They expect the softer loan growth to plications and approvals to gain momen- He also maintained an “overweight”
persist until late 2021, as a result of the stance on the banking sector with his top
prolonged lockdown. buys on RHB Bank Bhd (TP: RM6.80),
Maybank (TP: RM9.90) and CIMB (TP:
“This is echoed by the general down- RM5.80).
ward revisions in loan growth targets by
banks’ management teams,” they said. “We favour banks with expected im-
provement in regional performance from
While the system loans demand on a the gradual economic recovery and banks
three-month moving average basis dropped with undemanding valuations,” he added.
by 14% month-on-month, they believe July
should mark the bottom and expect se-

Friday september 3, 2021 7 TheEdge CEO morning brief

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KUALA LUMPUR (Sept 2): Symphony Symphony Alongside Ng and Loi, Theron had
Life Bhd has announced a slew of board- Life announces earlier also proposed to remove non-in-
room changes today, overtaking an initial dependent executive director Teo Chiah
proposal by its largest shareholder Ther- boardroom Chyi. However, the latter is on a new list
on Holdings Sdn Bhd to hold an extraor- changes a week of boardroom members issued by Sym-
dinary general meeting (EGM) later this phony Life.
month to remove three directors. after EGM
request by It is unclear if Theron will continue to
In several filings today, the proper- shareholder to pursue Teo’s removal.
ty developer announced the resignation remove directors
of executive director Ng Ying Yiing and With the changes, other remaining
independent non-executive director Loi by Adam Aziz board members include chairman Datuk
Chee Fong. theedgemarkets.com Jasmy Ismail, group chief executive of-
ficer Chin Jit Pyng, as well as independent
Ng, 40, resigned for her personal rea- non-executive directors SoonWing Chong
sons. Meanwhile Loi, 38, resigned to fo- and Wong Ping Eng.
cus on his other private businesses, the
filings said. Theron, together with parent company
Muar Ban Lee Group Bhd (MBL), control
The company also announced the ap- a combined 17.918% in Symphony Life
pointments of three directors, namely after upping its stake in the company in
Teh Eng Aun (independent non-execu- early August.
tive), Datuk Chua Heok Wee (non-inde-
pendent executive) and Tan Sri Tan King It had proposed to remove the three
Tai @ Tan Khoon Hai (non-independent directors on grounds that it disagreed on
non-executive). the direction they were taking for Sym-
phony Life.
All the changes are effective on Sept 2,
the company said. Among the new appointments, Chua
and Tan are directors at MBL, while Teh
The five boardroom changes were is a director at Unimech Group Bhd.
among six proposed by Theron on Au-
gust 25 to be voted on in the upcoming Shares of Symphony Life fell 1.5 sen
EGM on Sept 23. or 2.63% to close at 55.5 sen, valuing the
property developer at RM374.32 million.

KUALA LUMPUR (Sept 2):YTL Hospi- YTL Hospitality while revenue per available room de-
tality REIT is currently on the lookout for REIT in creased by 58.3% year-on-year to A$75/
quality assets amid the industry downturn day as compared to A$179/day in FY20,”
led by the pandemic, and does not rule out acquisition mode the firm said.
potential acquisitions in the near-to-medium as yield-accretive
term with the emergence of yield-accretive In July 2021, YTL Hospitality REIT
assets, said a research house. assets emerge saw its net property income grow 5% to
— AmInvestment RM34.7 million, from RM33.2 million in
AmInvestment Bank in a company report the previous year, while cumulative revenue
today saidYTL Hospitality REIT highlighted Bank dropped 23% to RM326.3 million from
that its management will remain disciplined RM426.4 million, for the full-year period.
in evaluating prospective acquisitions, favour- by Shazni Ong
ing arrangements that provide guaranteed theedgemarkets.com Meanwhile, AmInvestment Bank reck-
income such as master leases to mitigate any ons the weak distributable income perfor-
potential short-term post-acquisition pain as AmInvestment Bank noted while Aus- mance as temporary forYTL Hospitality
the hospitality and travel industries struggle tralia, which accounts for 46% of YTL REIT given that the rental variations/defer-
with the damage inflicted by Covid-19 and Hospitality REIT’s FY21 gross revenue, ments offered to tenants will be recovered
subsequent movement restrictions. is currently still under lockdown amid the on a staggered basis commencing June 30,
battle against a third wave in the coun- 2023 (or earlier). It added this is opposed
Based onYTL Hospitality REIT’s analyst try, the REIT’s portfolio will continue to to other operators’ rental waivers, which
briefing yesterday, where the company shed benefit from participation in the govern- involve non-reversible discounts.
more light on its recently-announced FY21 ment’s isolation group business as well as
results, the research firm also saidYTL Hos- the JobKeeper programme, which subsi- The firm also said it continues to
pitality REIT is hopeful for a post-pandemic dises businesses that are significantly af- like YTL Hospitality REIT as a recov-
recovery, premised on accelerating vaccina- fected by the pandemic. ery-cum-yield play, with attractive divi-
tion rates in both Malaysia and Australia. dend yields of more than 5% for FY22F
“Hence, we continue to expect FY22F and beyond amid a low interest rate en-
“As the company is actively engaging with revenue to recover following the decline vironment that is likely to be prolonged.
its existing and new clients for forward corpo- in FY21 occupancy rate in the Australian
rate bookings,[YTL Hospitality REIT] man- portfolio to 53.3% (vs. 73.1% in FY20) AmInvestment Bank has maintained its
agement is confident that leisure travel will “buy” call with unchanged forecasts and
rebound quickly once the borders reopen. fair value of RM1.11 for YTL Hospital-
ity REIT, based on a target FY23F yield
“Typically, corporate bookings contrib- of 7.5%.
ute to more than 50% of its Australian and
Malaysian portfolio.The Australian portfolio As at 12.30pm,YTL Hospitality RE-
has a higher contribution of 60% and above IT’s unit price was unchanged at 91 sen,
from the local corporate travel,” the firm said. with the REIT’s market capitalisation at
RM1.55 billion.

Friday september 3, 2021 8 TheEdge CEO morning brief

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PPB banks on vaccination rollout progress
for better financial performance in 2H

by Cheryl Poo
theedgemarkets.com

KUALA LUMPUR (Sept 2): PPB Group The wheat flour mill has an estimated cost scripts in which to invest as co-producer
Bhd is anticipating a pickup in its business of US$19.7 million. of local content, the group said.
segments for the remaining quarters of
the year, as the nation’s mass vaccination PPB’s consumer products segment In 4QFY21, the group will launch the
rollout progresses. revenue fell 2% to RM320 million in GSC Rewards programme to drive more
the second half, from RM326 million in admissions and build customer loyalty,
The group’s net profit fell 44.86% in the same period last year, with a profit of as well as launch its first Happy Good
the second quarter ended June 30, 2021 RM351,000 due to a one-off gain of an Companies (GSC’s new food and bever-
(2QFY21) to RM183.47 million, from associate’s RM10 million step-acquisition. age brand café in Southkey, Johor Bahru).
RM332.73 million a year earlier, as the
grains and agribusiness segment slipped “Performance was significantly impact- Meanwhile, GSC’s acquisition of 18
into the red, while contribution from con- ed by the increased cost of goods sold on MBO Cinema assets has been extended
sumer products declined. the back of rising commodity prices,” the to mid-September.
group said.
In a virtual media briefing today, PPB “We believe that the movement restric-
managing director Lim Soon Huat said However, the consumer product seg- tions will be lifted as soon as a higher per-
the sharp rise in commodity prices in the ment is expected to perform satisfacto- centage of our population completes their
quarter led to a significant increase in raw rily moving forward, as it continues to vaccination. This will allow the cinemas
material costs of flour and feed products, expand its marketplace through the food to reopen, the timing of which will be key
with limited price-in mechanism, gross services channel and e-commerce plat- to its recovery during this challenging pe-
profit margin compression seen across the form, said Lim. riod,” Lim said.
group’s sub-segments.
Turning to the group’s film exhibition GSC group chief executive officer Koh
The group’s revenue contribution from and distribution segment, PPB expects it Mei Li, who is also PBB Group’s head
its grains and agribusiness segment for the to continue to be adversely impacted by of corporate affairs, said 98% of GSC’s
second half ended June 30 stood at 76%, the pandemic. However, wholly-owned staff will be fully-vaccinated by Septem-
followed by consumer products (14%), Golden Screen Cinemas Sdn Bhd (GSC) ber, while its cinemas will only be open
environmental engineering and utilities will expand online revenue initiatives such to fully-vaccinated patrons.
(4%), film exhibition and distribution as tapping its social media platforms and
(2%), property 2% and other operations ramping up Keepsakes or merchandise “We are ready for the re-opening,” she
(2%). on its online store. said.

“You can imagine how the big com- In May, the segment expanded its food PPB declared an interim dividend of 10
modities hike in 2QFY21 affected our delivery service via food delivery platform sen per share, payable on Sept 28.
agriculture business, as we couldn’t pass Food Panda, while GSC Movies — the
the additional costs on to our customers distribution and production arm of GSC Shares of PPB closed at RM18.40, fall-
and consumers. It is always a timing is- Group — accelerated its scouring of good ing from RM18.56 on Aug 26 after coming
sue when revising selling prices because off a low of RM18.10 in late July, to value
we also have to ensure to not kill demand the group at RM26.18 billion.
while doing so, because that is the time
where demand for food will start to de-
cline,” said Lim.

For the second half, he said the group
was confident of a better set of financial
results, as it sought ways to manage the
price hike of raw materials.

Meanwhile, he said the group expected
food commodities prices to remain vol-
atile, as the countries in which the main
producers of grains are based may expe-
rience lower production due to the poor
weather, amid market expectations of a
tight supply and demand situation con-
cerning the commodity.

Lim also said that the construction of
a new 500-tonne/day wheat flour mill by
VFM-Wilmar Flour Mills Co Ltd — in
which PPB has 51% equity interest — at
its existing factory in northern Vietnam
is expected to be completed in Q3FY21.

Friday september 3, 2021 9 TheEdge CEO morning brief

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PUTRAJAYA (Sept 2):The Civil Aviation CAAM lifts intending to conduct commercial flights
Authority of Malaysia (CAAM) has lifted suspension of with the Boeing 737 MAX aircraft into,
the suspension of Boeing 737 MAX oper- Boeing 737 MAX within or out of Malaysian airspace.
ations in Malaysia, CAAM chief executive operations in
officer (CEO) Captain Chester Voo Chee “All operators shall comply with the re-
Soon said today. Malaysia quirements as stated in the CAAM Safety
Directive 01/2021 before the first commer-
He said the CAAM had approved the Bernama cial flight performed by Boeing 737 MAX
operations of Boeing 737-8 and Boeing aircraft into, within or out of Malaysian
737-9 (commercially known as Boeing to Nairobi from Addis Ababa, killing all airspace,” he said.
737 MAX in Malaysia) following its sus- 157 people on board on March 10, 2019.
pension in March 2019 with the release Voo said the CAAM had been closely
of the CAAM Safety Directive 01/2021 Voo said the new directive applies to monitoring the approval process and the
— Operations of Boeing 737-8/-9 (MAX) both Malaysian and foreign air operators extensive work undertaken by all parties
dated Sept 2, 2021. involved, particularly by the Boeing Com-
pany and the US Federal Aviation Admin-
“The Safety Directive 01/2021 revokes istration (FAA).
the previous safety directive issued on
March 13, 2019 that prohibits the oper- “The CAAM recognised the work of the
ations of B737 MAX 8 in Malaysia,” he FAA as the state of design and accepted
said in a statement today. the comprehensive return-to-service re-
quirements set by the FAA for the Boeing
The CAAM in March 2019 announced 737 MAX,” he said.
the suspension of the operations of the
Boeing 737 MAX 8 aircraft flying into and Voo said the CAAM gave reassurance
out of, as well as transiting in, Malaysia that all aircraft operating in Malaysia com-
until further notice. ply with all regulatory, technical, and test-
ing requirements.
Malaysia joined countries such as Sin-
gapore, China, Indonesia and Australia in “The CAAM will continue to monitor
suspending the operations of the Boeing the situation and ensure strict compli-
737 MAX following the crash of the Ethi- ance with the regulations and directives.
opian Airlines 737 MAX plane en route Any violations will be dealt with serious-
ly,” he said.

KUALA LUMPUR (Sept 2): A subsidiary Bintai Kinden unit Scientillence is owned by ex-chief exec-
of Bintai Kinden Corp Bhd, Bintai Health- inks collaboration utive officer (CEO) and chairman of hos-
care Sdn Bhd is teaming up with hemodia- for hemodialysis pital group Pantai Holdings Bhd Tan Sri
lyzer manufacturer Scientillence Sdn Bhd Lim TongYong.
for hemodialysis business in Malaysia and business in
Southeast Asia. Malaysia, The company has obtained Quality
Southeast Asia Management System accreditation for its
In a statement, the group said the com- manufacturing business and various cer-
panies had signed a business collaboration by syafiqah salim tifications for its products. It is also in the
agreement to jointly develop and market theedgemarkets.com registration process for CE (Conformite
medical products in the hemodialysis mar- European) and the first “halal”-certified
ket, as well as to develop, invest, acquire dialyzer manufacturer in the world.
or own dialysis centres and other relat-
ed renal care businesses in Malaysia and Currently, Scientillence’s products are
Southeast Asia. exported mainly to China, India, Paki-
stan, Bangladesh, Saudi Arabia, Turkey,
Bintai Kinden executive director Azri Lebanon and most of the Southeast Asia
Azerai said the partnership will facilitate countries.
the group to tap into the hemodialysis
market as part of its business strategies Meanwhile, Bintai Healthcare is regis-
to widen its range of products and services, tered with the Medical Device Authority
including distribution of medical devices (MDA) as an authorised representative,
and healthcare solutions in Malaysia. distributor and importer of medical de-
vices in Malaysia.
“Pursuant to the agreement, both Bin-
tai Healthcare and Scientillence will work Moving forward, Bintai Kinden said,
together to explore and identify suitable the agreement is not expected to have any
new markets to expand and distribute material effect on the issued and paid-up
Scientillence’s products and other prod- share capital of the group, but is expected
ucts in the private and commercial sector, to contribute positively towards its future
such as non-governmental organisations earnings.
(NGOs),” he said.
Shares in Bintai Kinden jumped to
Meanwhile, Scientillence as the manufac- a seven-month high of 58 sen in morn-
turer of the hemodialyzer in Malaysia and ing trade today. At the 12.30pm break,
Southeast Asia will be providing all necessary the stock was down four sen or 7.08% at
technical support and services in relation to 52.5 sen, giving it a market capitalisation
the marketing and selling of the product. of RM200.49 million, with some 73.16
million shares traded.

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KUALA LUMPUR (Sept 2):Malaysia needs Malaysia’s 5G “Hence, Malaysia needs to think about oth-
to ensure enough 5G spectrum band to allow proposed spectrum er bands and hopefully,it will be enough to sup-
it to offer higher-speed services, according to port 5G in Malaysia,being a world-class service
experts in the telecommunications sector. band may not be offering,” he said, adding that advanced mar-
sufficient, say experts kets like South Korea,Taiwan, and the Middle
Independent consultancy firmWindsor East countries are still in a rollout phase of 5G.
Place Consulting Pty Ltd principal, ScottW Bernama
Minehane said the proposed 5G spectrum Economic consultancy firm DT Econom-
band in Malaysia may not be sufficient. munications (GSMA), which represents the ics associate partner Dr Lara Stoimenova said
interests of mobile operators worldwide. Malaysia needs to develop a flexible regulatory
The Malaysian Communications and framework on the 5G rollout spectrum.
Multimedia Commission (MCMC) had Minehane believes that Malaysia, like
identified the 700 megahertz (MHz), 3.5 many countries in the region, is expected to “The MCMC should continue to con-
gigahertz (GHz) and 26/28 GHz as the face challenges implementing the C-band duct detailed public consultations with all
pioneer spectrum bands for the 5G roll- frequency range for 5G. stakeholders to identify concerns and solu-
out in Malaysia. tions about the 5G development,” she said.
C-band refers to the portion of the elec-
“What we have in Malaysia is about 610 tromagnetic spectrum allotted for satellite Meanwhile, GSMA Asia Pacific policy
megahertz (MHz) of spectrum, whereas, in transmissions in the 4GHz to 8GHz fre- director Christiaan Segura said Malaysian
the Philippines, new carries have more than quency range. operators are already making significant in-
200 MHz including more 5G spectrum. vestments in 5G connectivity.
Satellite antennas are used to transmit
“I think there is a great opportunity to do C-band frequencies in areas of the world “Over the past few years, operators have
some partitioning of that spectrum, so that where signals can become degraded due invested in networks and have conducted
at least 700 MHz could come back in to be to heavy rain or other intense climate-re- field trials, selected vendors, established in-
used in the 5G networks to really improve lated conditions. novation centres, and raised capital expend-
the services,” he said at the Advancing Dig- iture to support future deployment.
ital Malaysia Forum today.
“The mobile industry is committed to
The forum was organised by non-profit working with governments to promote in-
organisation Global System for Mobile Com- novation and connectivity,’ he added.

news In brief

Southern Cable bags RM30m Paragon Globe inks MoU with Selgate MAA Group emerges as KNM’s
contract from TM to develop private specialist hospitals substantial shareholder

KUALA LUMPUR (Sept 2): Cable and wire KUALA LUMPUR (Sept 2): Property developer KUALA LUMPUR (Sept 2): MAA Group Bhd has
manufacturer Southern Cable Group Bhd Paragon Globe Bhd is exploring a potential emerged as a substantial shareholder of KNM
has received a RM30.38 million award collaboration with Selangor government-owned Group Bhd, after acquiring a 7.01% stake in
from Telekom Malaysia Bhd (TM) for the Selgate Corporation Sdn Bhd to develop private the latter yesterday. In a Bursa Malaysia filing
supply, delivery, installation, testing and specialist hospitals.The group said it signed a today, MAA said it bought the stake, comprising
commissioning of rectifier systems. In a memorandum of understanding (MoU) today 233 million shares, in an open market
bourse filing, Southern Cable said its wholly- with Selgate’s property arm, Selgate Properties transaction for RM52.89 million, or an average
owned subsidiary Southern Cable Sdn Bhd Sdn Bhd. The aim, it said in a bourse filing, is to of 22.7 sen per share. MAA said the purchase
had accepted the letter of award (LOA) develop several private specialist hospitals in was made with internally generated funds and
from TM today. The group said the rectifier the country and to make available healthcare represented a good opportunity to buy at a low
systems will cater for TM’s requirement services. “The MoU allows Paragon Globe to price relative to KNM’s net assets per share
in Peninsular Malaysia and East Malaysia build the capabilities in the healthcare and of 53 sen. “The Investment was also based on
from September 2021 until February 2024. wellness industry by leveraging Selgate’s good underlying prospects within the KNM
Also included in the contract is dismantling experience and technical expertise. “The parties Group subsidiaries, coupled with improved
works for rectifier replacement or upgrade are desirous to explore potential business oil prices recently that will spur the industry
programmes. The group expected the award opportunities in the healthcare industry to outlook for the sector KNM operates in. “Based
to contribute positively to its earnings over enhance potential earnings as well as to sustain on KNM’s audited consolidated financial
the duration of LOA from Sept 1, 2021 until business growth in the long-term perspective,” statements for the financial year ended Dec 31,
Feb 28, 2024. Share price of Southern Cable Paragon Globe added. Paragon Globe’s share 2020, the KNM group of companies recorded a
closed up 1.5 sen or 3.57% to 43.5 sen today, price closed five sen or 12.2% lower at 36 sen, profit after taxation of RM56.57 million and net
giving it a market capitalisation of RM348 valuing the group at RM268.78 million. assets of RM1.78 billion,” the filing said.
million. — by Justin Lim/theedgemarkets.com — by Izzul Ikram/theedgemarkets.com — by Sulhi Khalid/theedgemarkets.com

Ocean Vantage bags contract from Hibiscus Petroleum to develop H&M programme

KUALA LUMPUR (Sept 2): Ocean Vantage Holdings Bhd’s (OVH) wholly-owned subsidiary Ocean Vantage Engineering Sdn Bhd (OVE) has
bagged a contract for the development of Heart & Mind (H&M) programme for SEA Hibiscus in accordance with the guidelines of the Energy
Institute. OVH said OVE has received a Letter of Award (LOA) dated Aug 11, 2021 from Hibiscus Petroleum Bhd’s indirect wholly-owned
unit SEA Hibiscus Sdn Bhd. The duration for the contract is three years with an option to extend for one year and shall commence from the
date of the LOA. OVH noted the contract does not have any specified value as it is on a “call-out” basis whereby work orders will be issued
at the discretion of SEA Hibiscus based on their activities schedule and rates throughout the duration of the contract. OVH shares closed
unchanged at 30 sen today, valuing the oil and gas integrated services provider at RM121.31 million. — by Shazni Ong/theedgemarkets.com

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PUTRAJAYA (Sept 2):The Court of Ap- Court of Appeal The forfeiture action was initiated by
peal (COA) today dismissed the prosecu- dismisses the MACC in 2019 on the entities, which
tion’s appeal to forfeit RM192 million from were part of over 40 individuals and entities
central Umno, RM300,000 from Wanita prosecution’s named as recipients of monies from Najib.
MCA and RM1.05 million from Umno eight appeals
Kedah, which were all said to have received for forfeiture The commission sought to seize RM270
monies from former premier Datuk Seri including RM192 million from these parties following its in-
Najib Razak in relation to 1Malaysia De- million from vestigations over the illegal money trail that
velopment Bhd (1MDB). central Umno Najib used from 1MDB to pay them.

The three-member bench also dis- by Hafiz Yatim Of the RM270 million, a sum of RM212
missed the prosecution’s appeal to forfeit theedgemarkets.com million alone was from central Umno be-
from business entities such as Habib Jew- fore it was reduced to RM192 million.
els Sdn Bhd (RM100,000), K&Z Enter- the monies came from unlawful activity of
prise Sdn Bhd (RM138,359.60), Perano Najib. It is most unfair for the court to al- The High Court last year mostly dis-
Sdn Bhd (RM337,634.78), Binsabi Sdn low the appeal to the services or items sold. missed the prosecution’s forfeiture action
Bhd (RM827,25) and Hatatex Trading on these individuals and entities. Submis-
(RM111,590). “We find the High Court judge did not sions in the prosecution’s appeal were
commit any error in law.We affirm the or- heard in stages, most recently on July 28,
Justice Datuk Hadhariah Syed Ismail, der of the High Court,” she said. before arriving at today’s decision.
who was the second member of the bench
led by Justice Datuk Abdul Karim Abdul However, the appellate bench allowed The prosecution today was represented
Jalil, and third judge Justice Datuk Abu the appeal by Umno Pahang, which had by Deputy Public Prosecutors (DPPs) Mu-
Bakar Jais ruled that there were no errors RM2.48 million seized by the Malaysian hammad Saifuddin Hashim Musaimi, Ka-
in the Kuala Lumpur High Court decision Anti-Corruption Commission (MACC) mal Bahrin Omar and Nik Haslinie Hashim.
for the appellate court to disturb and in- following the High Court order.
tervene in the matter. Datuk Hariharan Tara Singh and Sya-
“We find that the High Court judge zwani Mohd Zawawi appeared for central
Justice Hadhariah ruled that the for- erred and disregarded the facts that the Umno, while Datuk Ben Chan appeared
feiture action on the political parties did money had been spent and no longer avail- forWanita MCA, G Nadaraja appeared for
not satisfy the requirements under Sec- able.The present amount in the account is Umno Kedah and four others, and Khoo
tion 56 of the Anti-Money Laundering, lawful.We allow the appellant’s (Umno Pa- Guan Huat appeared for Habib Jewels.
Anti-Terrorism Financing and Proceeds hang) appeal and set aside the High Court
of Unlawful Activities Act 2001 with re- order,” Justice Hadhariah said. The others wereThevini Nayagam, who
gard to forfeiture of property when there appeared for Perano and K&Z Enterprise;
is no prosecution. Mohd KhalilTajudin and Mohd Hasif Has-
san, who appeared for Binsabi; Mohd Shukri
She added that there were “no good rea- Ahmad Mansor, who appeared for Hata-
sons to disturb the finding of facts that the tex; and Datuk Syed Azmal Amir Syed Abu
present forfeiture the prosecution sought is Bakar, who appeared for Umno Pahang.
not from the proceeds of unlawful activity”. Read also: Umno claims SRC has no rea-
sonable action to recover RM16m ‘wrong-
“The money had all been used up and fully transferred’ to party Click here
the business entities had no knowledge that

the edge file photo

1MDB granted
leave to serve
notices to Coutts,

JPMorgan

by Hadi Azmi & Yantoultra Ngui
Bloomberg

KUALA LUMPUR (Sept 2): The Kuala their roles in the scandal surrounding the the next case management date.
Lumpur High Court on Thursday grant- state investment fund. The cases are part of a slew of civil
ed leave to 1Malaysia Development Bhd.
to serve summon notices for the civil In July, 1MDB served writs directly on suits against individuals and companies.
suits filed against Coutts & Co, JPMor- Deutsche Bank, and through substituted including Malaysian financier Low Taek
gan (Switzerland), Petrosaudi and its two service on the other defendants. It is seek- Jho or Jho Low, filed by 1MDB in the same
directors, according to court records. ing US$1.1 billion from Deutsche Bank, month to recover assets worth more than
US$800 million from JPMorgan, US$1 US$23 billion Malaysia says are linked to
This follows the suits 1MDB filed in billion from Coutts and US$1.83 billion the fund set up by former Prime Minister
May against Deutsche Bank AG and oth- from Petrosaudi.The court set Sept. 30 as Najib Razak in 2009.
er entities, citing negligence, conspiracy
to defraud and dishonest assistance over

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KUALA LUMPUR (Sept 2):The Malay- Why drop the prosecution withdrew the charges.
sian Anti-Corruption Commission (MACC) bribery charges He had faced 14 charges of accepting a
should explain to the public the decision to against ex-Felda
withdraw 29 bribery charges against a for- director after 24 bribe of RM23,540 in instalment payments
mer Felda board member, saidTransparency witnesses had for a BMW 3 Series car from a printing
International Malaysia (TI-M). company Karya Hidayah Sdn Bhd in 2014
testified, asks and 2015.
Yesterday’s acquittal and discharge of TI-Malaysia
Datuk Noor Ehsanuddin Mohd Harun The other charges against Noor Eh-
Narrashi has shocked citizens and civil so- BY Sulhi Khalid sanuddin included receiving a bribe of
ciety organisations, said TI-M president theedgemarkets.com RM50,000 and a piece of land from the
Muhammad Mohan. same company in 2013 and 2014.
as ‘advances’ are part of ‘gratification’ un-
“The former board member went der the MACC Act,” he stressed. He had also been charged with five
through the trial with 24 prosecution counts of accepting the maintenance of
witnesses being called, including bank Muhammad said MACC should clarify two vehicles and the legal fee payment
officers and Companies Commission of this matter to avoid any trust deficit on the of RM12,707 for the purchase of a piece
Malaysia officials. agency by the public. of land.

“However, from yesterday’s news, it was Noor Ehsanuddin, 58, is the former
reported that MACC, after studying the Umno MP for Kota Tinggi and had also
defence statement under Section 62 of the previously served as a director of Fel-
MACC Act, was satisfied that all transac- da Investment Corporation and Felda
tions made as stated in the charges were Global Ventures Holdings. He was yes-
advances that had been fully repaid,” he terday acquitted and discharged of the
noted in a statement. 29 charges by the Sessions Court after

Muhammad questioned why this was
not looked into when Noor Ehsanuddin
was charged in the first place with 29
bribery charges.

“On the face of it, the mere fact that
these were ‘advances’ or ‘advances that
have been repaid’ does not make a trans-
action any less corrupt as originally alleged

KUALA LUMPUR (Sept 2): The High SRC suit: Najib It alleges that, between December
Court here has ordered Datuk Seri Najib ordered to file 2014 and April 2015, SRC withdrew
Tun Razak to respond to the suit filed by defence by Oct 11 RM123 million in funds and deposit-
SRC International Sdn Bhd against the ed it into a bank account of IPSB for
former prime minster relating to alleged Bernama CSR purposes and a grant was given to
breach of trust and breach of statutory IPSB without the approval of the board
duty involving SRC funds totaling RM42 Suhaimi Yusuf/The Edge of directors of both SRC and GMSB.
million by Oct 11.
Datuk Seri Najib Tun Razak The plaintiff claimed that IPSB trans-
According to a lawyer from Rosli Dahl- ferred the funds received under the
an Saravana Partnership that is represent- alleged that through a letter of appoint- grant to various third parties for IPSB,
ing SRC, the court has also ordered the ment dated Sept 3, 2015, SRC appointed including RM42 million that was trans-
plaintiff (SRC) to file a response to the Ihsan Perdana Sdn Bhd (IPSB) (previ- ferred to two accounts owned by Najib
defence by Dec 13. ously known as Gem Horizon Sdn Bhd) allegedly for CSR purposes between De-
as a social corporate responsibility (CSR) cember 2014 and February 2015.
“The court has set further case man- programme partner.
agement on Dec 14 that will be conducted SRC also alleged that Najib in his ca-
online (e-Review),” he said when contact- pacity as prime minister, finance minis-
ed by reporters after the case management ter and SRC emeritus advisor had acted
proceedings today, that were conducted in a dishonest manner to help former
online in front of senior assistant registrar SRC and GMSB directors to violate
Noordura Mohamed Din. various statutory duties and commit
breach of trust, when failing to check
SRC, a subsidiary of 1Malaysia Devel- with AmIslamic Bank about the amount
opment Berhad (1MDB) and Gandin- of misappropriated funds that were de-
gan Mentari Sdn Bhd (GMSB), a whol- posited into Najib’s bank accounts.
ly-owned SRC subsidiary, filed a writ of
summons on May 7, alleging that Najib Therefore, the plaintiff is seeking a
conducted a breach of trust, misused his declaration that the plaintiff has a right
power and benefited personally from SRC to follow and trace the RM42 million
funds and misappropriated the funds. and to demand equity ownership to the
funds or any property obtained by Najib
Najib was SRC Emeritus Advisor from with the use of the money in addition
May 1, 2012 till March 4,2019. to general, exemplary and aggravated
damages.
SRC, which is now wholly owned by
the Minister of Finance (Incorporated),

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Pre-Budget statement a step forward but
government must walk the walk

On August 31, 2021, the Minis- REFSA pitality and entertainment would benefit
try of Finance (MoF) released from further support in the form of loan
a Pre-Budget Statement (PBS) Sam Fong/The Edge guarantees and credit extensions because
for the first time in the coun- tax exemptions alone will not address their
try’s history. REFSA welcomes the publi- Tax revenue strategy insolvency issues.
cation of the statement as a step forward We acknowledge the MoF’s proposed strat-
in promoting transparency and reducing egies to increase tax revenue through com- We appreciate the special consideration
uncertainty in the fiscal policy sphere.We pliance and management of leakages, which highlighted in the PBS for human capital
hope that the PBS reflects the MoF’s con- are important structural issues within public development through digital transforma-
certed effort to continue engaging with financial management. We are particular- tion and upskilling programmes. In Budget
civil society so as to promote inclusiveness ly supportive of the government’s recom- 2022 and the 12th Malaysia Plan (12MP)
in policymaking. mendation to implement a Tax Identifica- more broadly, emphasis should be placed
tion Number (TIN) system, which we hope on producing industry-ready graduates as
Here is REFSA’s take on the PBS by will provide an opportunity to formalise gig well as addressing graduate unemployment
section: workers in Malaysia’s labour market. Apart in order to boost labour productivity and
from promoting compliance, TIN would competitiveness.
Economic outlook and fiscal position help ensure that informal workers do not fall
The MoF has rightly adopted a cautiously off the radar and enjoy greater financial in- Finally, it is heartening to note that the
optimistic approach in its macroeconom- clusion through adequate social protection. PBS does not neglect to mention the sus-
ic outlook for 2021/22 in line with Bank Focus of Budget 2022 tainability agenda in Budget 2022.Though
Negara Malaysia’s downward revision of REFSA agrees with the three-pronged ap- the MoF’s acknowledgement of the Envi-
its GDP forecast to 3-4% for 2021. Nev- proach underlying the proposed Budget ronmental, Social and Governance concept
ertheless, at this juncture, it is important 2022, namely promoting short-term re- is crucial, we believe it can be accelerated
to reiterate that the country’s economic re- covery, medium-term resilience and long- further through the mainstreaming of the
covery for the 2021 and beyond is strongly term reforms. green economy. Covering programmes such
predicated on an improvement in the man- as retrofitting and energy audits, a short-
agement of the domestic pandemic situ- In line with the MoF’s recognition that term green economy framework within
ation. As REFSA has recently highlight- Budget 2022 should focus on strengthen- Budget 2022 can help create jobs and gen-
ed, Malaysia’s solid export performance ing the public healthcare system, we stress erate a strong multiplier effect to build mo-
alone cannot guarantee a comprehensive the importance of ensuring adequate health mentum for a potential long-term Green
recovery as long as consumption remains allocation for effective FTTIS+V infrastruc- New Deal in 12MP.
subdued due to the country’s long lock- ture.A comprehensive strategy covering es-
downs and the lack of a robust pandemic sential hotspot detection, testing, contact All in all, the PBS is a positive develop-
exit strategy beyond vaccinations alone. tracing will enable us to better handle any ment on the path towards higher budget
future outbreaks. An expansion in the ca- transparency. REFSA hopes that the sub-
In terms of the government’s fiscal tar- pacity of the healthcare system will reduce stantive policy recommendations mentioned
gets, we echo the MoF’s receptiveness to the justification for economically punitive in the PBS, including the MoF’s declara-
increasing the statutory debt to GDP ra- lockdowns, which have been demonstrated tion of its commitment towards strength-
tio from 60%. REFSA has previously to create uncertainty and dampen domestic ened civil society engagement, will translate
mentioned that the debt to GDP ratio is a demand among others. into implementable and actionable measures
moving target that can be raised temporar- within Budget 2022 to spearhead Malaysia’s
ily given the circumstances, and now is the As the global narrative around the pan- economic recovery and put us on the right
right time to do so.With expansionary fiscal demic shifts towards an endemic COV- trajectory to build back better.
policy supported through deficit-financed ID-19, it is important for Budget 2022 to
spending, there should also be greater toler- provide adequate scope for the pandemic Research for Social Advancement (REFSA)
ance for a higher fiscal deficit ratio for 2022 proofing of businesses. Malaysia’s SMEs is a progressive, not-for-profit think tank that
to accommodate economic recovery and should be given requisite support in this promotes social advancement in Malaysia.
growth.This should be part of a fiscal plan regard through grants, soft loans and/or tax Since its inception in 2004, REFSA has been
for the early 2020s that takes longer term fis- incentives where appropriate. Meanwhile, at the forefront of policy discussions and de-
cal consolidation into account once growth vulnerable sectors, such as tourism, hos- bates in the important political and socio-eco-
is back to pre-crisis levels. According to the nomic issues of the nation.Today, our aspira-
IMF, Malaysia’s projected deficit of 6-7.5% tion hasn’t changed — we want to power the
of GDP for 2021 is still well below the aver- movement for a just, inclusive, and multira-
age fiscal deficit of 9.8% among emerging cial society.
economies as of 2020, so there is room for We believe that us Malaysians, regardless of
targeted government spending to continue. race, religion or cultural background, have
common aspirations and are seeking the same
Ultimately, it is important that the gov- things in life. REFSA seeks to participate in
ernment not withdraw fiscal support for af- and shape discussions that aim to create bet-
fected businesses and households too soon terment for everyone.
as the road to recovery remains unpredict-
able and challenging.

F r i d a y s e p t e m b e r 3 , 2 0 2 1 14 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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Sam Fong/The Edge

Economic activities have gradually resumed since August

Provide better granular data and policy
guidance to boost public confidence in

opening up the economy

by Dr Ong Kian Ming and (ii) process certain COVID19 related the Ministry of Health, the Ministry of
information faster especially on the MyS- Finance and other Ministries for policy
Even though dining-in in the ejahtera App. guidance and for the opening up of the
Phase 1 states including the economy in a responsible manner.
Klang Valley since Aug 20, I have outlined FIVE areas where more
many restaurants still don’t al- granular data and faster data processing For example, showing the reduction
low dining in because (i) not all of their can lead to better policy guidance and fast- in the number and % of Category 3-5
workers have been vaccinated (ii) the er economic recover namely: Covid-19 positive patients as well as a
number of cases in the community is 1. Publishing the vaccination rate by dis- reduction in the number of ICU cases
still high so operators are concerned that in the Klang Valley would slowly give
they and their staff would face a higher trict over time consumers more confidence to come
chance of infection (iii) customers are 2. Publish the number of active Category out to dine-in and shop at retail outlets
still concerned about dining-in because (subject to SOPs).
of the high number of reported cases 1-5 COVID19 cases by state over time
(iv) SOPs on dining-in were not clear 3. Publish the ICU capacity and deaths For example, showing the number of
(v) it may take some time for restau- tests done and the positive rate by state
rant operators to rehire staff which they by state over time over time can be used to demonstrate
have let go during MCO 3.0. One way 4. Publish the # of COVID19 tests and that the government is doing enough
in which the government can build up testing, especially randomized testing, to
public confidence for the resumption of positivity rate by state over time identify Covid-19 positive patients in the
economic activity and also put in place 5. Process MySejahtera related informa- community and to isolate and support
better policies to manage COVID19 re- them so that community transmission
lated healthcare and economic policies is tion faster (on an individual level) is decreased. Although the number of
to (i) publish and use more granular data I want to thank the Ministry of Health PCR and Antigen testing has increased
for already publishing more granular data substantially over the past months, it is
on GitHub (https://github.com/MoH- still insufficient as the testing strategy
Malaysia/covid19-public) including is focused mostly on targeted areas of
the number of tests and the positive rate infection and not including randomized
by state (data from the August 11, 2021
is available) but more of such granular continues on Page 15
data needs to be published and used by

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from Page 14 can also participate in economic activities ernment including through the use of
as fully vaccinated adults (My mother’s various spokespersons (in addition to the
testing which is important to detect and vaccination certificate is in my phone be- Minister of Health and the Minister of
slow down community transmission. cause she is registered as my dependent Finance), the effective use of Infograph-
(The number of tests by state should and some places does not recognise the ics which can be shared via social media
increase until the positive rate is around physical vaccination card nor a screenshot and proper communication and expla-
5%, as recommended by the WHO). of the digital vaccination certificate). (iv) nation of SOPs which has been severely
Faster processing of the status of those lacking for the past 1 ½ years.
For example, the MySejahtera app who have fully recovered from Covid-19
needs to be made more responsive and so that they can return to work / partici- I trust that the newly appointed
“smarter” to allow for the following (i) pate in economic activities. Health Minister, Khairy Jamaluddin, can
Quicker issuance of the Digital Vacci- continue the good work which he did
nation Certificate (I still receive com- While the features of MySejahtera have as MOSTI Minister and work together
plaints that this has not been updated been greatly enhanced since it was first in- with his colleagues in the new cabinet
for some who have had two vaccine jabs troduced last year, the response rate needs to lead the charge in the recovery of our
administered) so that more people can to be faster, and the APP must be seen as healthcare system and of our economy.
participate in more economic activi- not ONLY a health and vaccination mon- Ong Kian Ming is a Member of Parliament
ties such as dining-in and later, even to itoring tool but a crucial part of the eco- for Bangi and Assistant Political Education
watch movies, for example (ii) Quicker nomic recovery process. Director for the Democratic Action Party
registration of vaccine certification for (DAP)
those who have been vaccinated overseas In addition to releasing and using and
(iii) Allowing vaccine certificates to be processing all of this data, there needs to
“transferred” to dependents so that they be effective communication from the gov-

Five areas where more granular data and faster data processing can lead to better policy guidance
and faster economic recovery

More granular data / faster data processing Better policy guidance Faster economic recovery

Vaccination rate by district over time More efficient allocation of vaccines Increase public confidence in districts with
WITHIN a state (beyond focusing only on higher vaccination rates.
vaccine allocation between states).
Allow for more opening up of economic
Targeted programs in districts with low activities in districts with higher vaccination
registration and vaccination rates in states rates (even within Phase 1 state, for
like Sabah and Kelantan. example).

Active category 1-5 Covid-19 cases by state To plan for the opening up of various To showcase the effectiveness of vaccines in
over time sectors of the economy and to keep reducing the number of Cat 3-5 cases over
these sectors open even if the number of time especially in the Klang Valley where the
cases remain relatively high (one or two number of absolute cases is still high.
thousand, let’s say, in the Klang Valley).
To encourage more people to get vaccinated
(especially the vaccine hesitant).

ICU and deaths by state over time To allow MOH to better plan for and To build public confidence that even if the #
allocate resources by state and also by of cases increase in states with high
district for some of the larger states. vaccination rates e.g. Sarawak, the number
of deaths among the vaccinated is much
reduced. Hence, economic activity can
continue subject to SOPs.

Testing and positive rate by state over time To adjust the number of tests according To build public confidence that there is a
to the positive rate and to increase the proper system to quarantine and support
number of randomised testing areas when those who are Covid-19 positive and that
the positive rate is above 5%. economic activity is safe to continue.

Faster processing for MySejahtera To have up to date information on the To allow those who have been fully vaccinated
Vaccination Certificates and for the vaccination rate in the country e.g. and / or who have fully recovered from
Covid-19 recovery status (for individuals) processing the vaccination status of those Covid-19 to resume work and participate in
who have been vaccinated overseas. economic activities e.g. dining in.
Source: Ong Kian Ming
Must be supplemented with (1) better public explanation of the granular data (2) effective
infographics which can easily be shared and (3) clear SOPs for businesses to follow.

F R I D A Y S E P T E M B E R 3 , 2 0 2 1 16 T H E E D G E C E O M O R N I N G B R I E F

IF YOU ARE
NOT PART OF
THE SOLUTION

YOU WILL BE
PART OF

THE PROBLEM

Vaccinations reduce infections and save lives*
Get yourself vaccinated

Get your family, friends and colleagues
to register for vaccination

Join the race to build herd immunity

*Covid-19 Vaccines Advice

– World Health Organization

*Benefits of Getting Covid-19 Vaccines

– US Centre For Disease Control & Prevention

THIS IS A COMMUNITY SERVICE MESSAGE ON FIGHTING COVID-19

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(Sept 2): China will set up a new stock ex- Xi plans new growth of the world economy.”
change in Beijing to provide financing for stock exchange to The collapse in international tourism,
innovative smaller companies, President Xi boost innovative
Jinping said, as Beijing tries to increase the small businesses which has plunged globally due to the pan-
role of equity-financing in its financial system. demic, has hit the global trade in services.
by Tom Hancock China’s imports and exports of services
Xi did not give a date for the establishment Bloomberg dropped 15.7% year-on-year to 4.6 trillion
of the new board or any further details, but yuan ($712 billion) in 2020 mainly due to
said it would “provide a platform for inno- in internet platform and education compa- the sharp decline in tourism, according to
vative small and medium-sized enterprises.” nies which have rocked financial markets in official figures.
recent months.
The National Equities Exchange And Because Chinese tourists spent much
Quotations Co, an existing Beijing-based During the speech to a government-run more abroad than overseas tourists spend
exchange which launched in 2013, would summit on trade in services, Xi emphasized within China, the country has run a persis-
be “reformed,” Xi said in a speechThursday China’s gradual opening to foreign invest- tent deficit in the services trade, exceeding
in China’s capital. ment in service sectors such as finance and 1.5 trillion yuan in 2019.
healthcare, where Beijing sees the introduc-
Beijing has said it wants to raise the share tion of foreign competition as a key part of That deficit has narrowed in recent years
of equity financing in its bank-dominated modernizing its economy. due to rapid growth in service exports, in
financial system as part of a campaign to re- part due to the overseas success of technol-
duce debt-levels in its economy.The country Xi said that China would continue open- ogy companies such as TikTok owner By-
launched a new exchange in Shanghai known ing services by “exploring” setting up a des- tedance Ltd.
as the “STAR Market” in 2019 to provide ignated innovation zone for trade in services
more financing for tech companies. and via a nationwide “negative list.” Such China tightly restricts access to foreign
lists have previously been issued by China companies in some sectors such as digital
“Deepening the reform of the NewThird to name proscribed sectors for investment, services, effectively banning overseas social
Board and establishing the Beijing Stock Ex- with investments in other areas being allowed. networking platforms such as Facebook from
change is an important measure to imple- serving consumers in the country.
ment our national innovation-driven devel- “China is willing to work with all par-
opment strategy and continue cultivating new ties to continue open cooperation,” Xi The country has more restrictive policies
drivers of development,” the China Securi- said, adding that China would “share the on services trade than the average seen in
ties Regulatory Commission said in a state- development opportunities of trade in ser- the Organisation for Economic Coopera-
ment after the speech.“It is also an important vices, so as to promote the recovery and tion and Development, according to an in-
measure to deepen structural reform of the dex compiled by the club of mostly wealthy
financial supply side.”The NewThird Board economies.
is another name for the NEEQ.
However, China has strategically opened
Xi did not comment on any of the gov- some sectors in recent years and its servic-
ernment’s recent regulatory moves, which es trade restrictiveness has seen one of the
are part of a broad campaign recently to rein largest declines of any country since 2014,
according to the OECD.

SINGAPORE (Sept 2): Singapore Ex- Singapore First mover
change unveiled new rules allowing special Exchange targets In other markets, Hong Kong and Indone-
purpose acquisition companies (SPACs) sia are taking tentative steps for potential
to list in the city-state, after easing some SPAC hopefuls SPAC listings, while Britain has eased rules.
measures viewed as too strict by partici- with relaxed rules But such investment vehicles are peaking
pants, as it seeks to tap a global trend in in popularity in the United States as reg-
such listings. by Anshuman Daga ulators there clamp down on SPACs after
Reuters a listing frenzy.
SGX’s rules, effective from Friday,
would make it the first Asian bourse to the SPAC,”Tan Boon Gin, CEO of Singa- A spokesperson from the Monetary Au-
allow blank check companies to list af- pore Exchange Regulation, told Reuters. thority of Singapore said the local rules
ter the frenzy seen in such investment position SGX “as a regional first-mover in
vehicles in the United States since last Citing sources, Reuters reported on serving Asia’s fast-growing new tech and
year, although the popularity seems to Wednesday that the SGX was set to issue new economy companies’ financing needs”,
be peaking. easier rules for SPAC listings. while providing safeguards for investors.

Following a market consultation, SGX’s SPACs are shell corporations that list SGX, which has struggled to capture
regulatory arm halved the minimum cap- on stock exchanges and then merge with large listings of high-growth firms and faces
italisation requirement for SPAC listings an existing company to take that public, prospects of losing out in courting South-
to S$150 million (US$112 million) from offering it shorter listing timeframes and east Asian startups looking to list in their
its proposal issued in March. strong valuations. home markets or in the United States, ex-
pects the rules to boost listings.
It also said it would now allow war- “We are likely to see significant inter-
rants to be detachable and all shareholders est from sponsors and institutional inves- “We are actively engaging with potential
would have redemption rights, making the tors in SPACs and that bodes well for the sponsors and are expecting a robust pipe-
overall rules mostly similar to US markets. Singapore market,” said Yin Mei Lock, a line of Asian-focused SPACs,” Mohamed
partner at Allen & Overy. Nasser Ismail, SGX’s head of equity capital
“We reduced the market cap in response markets said in a statement.
to market feedback that the biggest pool of
Asian targets is in the S$500 mln to S$1 In its consultation paper for SPAC list-
billion market cap range and the size of ings, SGX had outlined measures to rein
the target is usually 3-8 times the size of in risks seen in US SPACs.

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world

(Sept 2): OPEC and its allies agreed to OPEC+ sticks little reason to change the established
stick to their existing plan for gradual with planned schedule of gradual monthly supply hikes,
monthly oil-production increases after supply hike as despite a request from the White House
a brief video conference. oil demand to revive output faster.

Ministers ratified the 400,000 barrel- improves There had been some doubts about
a-day supply hike scheduled for October the plan when oil markets wobbled over
after less than an hour of talks, one of the BY Grant Smith, Salma El Wardany, the summer as the resurgent virus threat-
quickest meetings in recent memory and Dina Khrennikova & Javier Blas ened demand. But fuel use proved resil-
a stark contrast to the drawn-out nego- Bloomberg ient, with total oil products supplied in
tiations seen in July. the U.S. rising to a record in late August.
Ministers ratified the
“OPEC have proven once again that 400,000 barrel-a-day “While the effects of the Covid-19
they can meet and do things seamlessly,” supply hike scheduled pandemic continue to cast some un-
Christyan Malek, head of oil and gas and certainty, market fundamentals have
JPMorgan Chase & Co., said on Bloomb- for October after strengthened and OECD stocks contin-
erg TV. “It’s likely that harmony is going less than an hour ue to fall as the recovery accelerates,”
to be utilized” to respond flexibly to any of talks, one of the OPEC+ said in a statement. The group
further shifts in the market over the com- quickest meetings will meet again on Oct. 4.
ing year, he said. in recent memory.
Data presented to ministers reveal a
While conditions may appear favora- supply has already been revived, and in fresh challenge for Saudi Arabia and its
ble for cartel right now, there are un- July the group laid out a plan for gradu- partners in 2022. Markets were projected
certainties on the horizon. Even as de- ally returning the remainder through to to tip back into surplus next year, with an
mand recovers, it has been buffeted by September 2022. average oversupply of 1.6 million barrels a
the emergence of new coronavirus vari- day. However, the projections assume the
ants. The question of whether Iran and With crude prices mostly recovered group will restore all of the almost 6 million
the U.S. will do a deal to lift sanctions from their mid-August slump and the barrels a day of output that remains offline
on the Islamic Republic’s oil exports — supply outlook relatively tight for the rest — an unlikely feat as many countries may
currently looking less likely — also hangs of the year, the 23-nation coalition had struggle to reach their full targets.
over the market.
The amount of crude production
West Texas Intermediate pared earlier that OPEC+ theoretically holds offline
losses, trading 0.9% lower at $67.87 a is based on questionable figures. Russia
barrel at 11:53 a.m. in New York. has an inflated baseline that’s significantly
higher than pre-pandemic output. Some
The Organization of Petroleum Ex- other members have outdated capacity
porting Countries and allies including numbers, with countries including An-
Russia are in the process of rolling back gola and Nigeria already struggling to
the unprecedented output cuts imple- make the supply increases permitted un-
mented at the depths of the Covid-19 der the deal.
crisis last year. About 45% of the idle

SYDNEY (Sept 2): A Commonwealth Australia’s Commonwealth Bank representatives
Bank investor has sued the lender, de- Commonwealth in a statement acknowledged the court ac-
manding to see internal documents on tion by Abrahams — who in 2017 settled
its decisions to finance fossil fuel pro- Bank taken to a case with the bank that alleged it had
jects to ensure it has complied with its court over oil failed to disclose climate change risks in
own environmental framework. and gas financing its 2016 annual report — but declined to
comment further.
Lawyers for retail investor Guy Abra- policies
hams, who publicly shamed the coun- Abrahams’ case seeks documentation on
try’s largest lender in 2017 over its lack BY Paulina Duran projects including Santos’ acquisition of the
of climate-change risk disclosures, say Reuters Barossa Gas Field, the Premian Highway
the bank is not hewing closely to pledges natural gas pipeline in the United Estates,
of environmental friendliness. fuel projects raises concerns for our cli- and Euronav NV “very large crude carri-
ents about the management of the bank ers”, the documents say.
Lawyers for Abrahams filed the ac- and whether it had adequate internal
tion in Australia’s Federal court on Aug. systems in place to ensure compliance Last month some investor and environ-
27, seeking authorisation to inspect the with its own policies.” mental groups criticised Commonwealth
bank’s records on seven oil and gas pro- Bank for dropping its all-encompassing
jects, documents seen by show. The lawsuit is part of a rising number restrictions on lending to any new oil and
of climate-related cases being brought gas unless they were consistent with the
“The Commonwealth Bank of Aus- in Australia, one of the world’s worst Paris Agreement.
tralia, from August 2019, had a com- greenhouse gas emitters per capita.
mitment not to fund any new fossil fuel The bank’s rules now only apply to pro-
projects unless they were in line with the ject financing, meaning it can still issue
Paris Agreement, but there is evidence corporate loans to companies in the sectors
of the bank since participating in seven that don’t align with the Paris Agreement.
new oil and gas projects,” said David
Barnden, Abrahams’ lawyer. “The bank’s Abraham’s lawsuit also seeks internal
reported financing of seven new fossil documentation justifying that change in
policy.

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WhatsApp The Irish Data Protection Commission Alibaba pledges
fined US$266 — SiliconValley’s main privacy watchdog US$15.5 billion
million over data in Europe — said it found violations in the to Xi’s ‘common
transparency wayWhatsApp explained how it processed prosperity’ drive
users’ and non-users’ data, as well as how
breaches data was shared between WhatsApp and by coco liu
other Facebook companies. Bloomberg
by Stephanie Bodoni & Katharine Gemmell
Bloomberg The fine comes weeks after Amazon. (Sept 2):Alibaba Group Holding Ltd
com Inc was hit with a record 746 mil- pledged 100 billion yuan (US$15.5
(Sept 2): Facebook Inc’sWhatsApp was or- lion-euro penalty in Luxembourg, where it billion) over five years toward Xi Jin-
dered to pay a 225 million-euro (US$266 has its European base, for processing per- ping’s “common prosperity” vision,
million) penalty for failing to be transpar- sonal data in violation of the EU’s General becoming the latest tech giant to
ent about how it handled personal infor- Data Protection Regulation. bankroll China’s broad aim to share
mation, its first fine under beefed-up Eu- the wealth.
ropean Union data protection law. Under the three-year-old GDPR law,
authorities have powers to fine companies China’s second-largest company
as much as 4% of their annual sales. will spread the money between 10
initiatives encompassing technolo-
The rules put watchdogs based in a com- gy investment and support for small
pany’s chosen EU hub in charge of super- companies, the government-backed
vising them. But the Irish regulator, which Zhejiang Daily reportedThursday. An
has at least 28 privacy probes open targeting Alibaba spokesperson confirmed the
tech giants such as Apple Inc and Alphabet report, without elaborating.
Inc’s Google, has faced mounting criticism
for taking too long to wrap up its cases. Alibaba joins a growing number
of its largest peers in promising to
“We disagree with the decision today give back after accumulating vast
regarding the transparency we provided to wealth during a decade-long mo-
people in 2018 and the penalties are entire- bile internet boom. Pinduoduo Inc,
ly disproportionate,” aWhatsApp spokes- the fast-rising online commerce gi-
person said. “We will appeal this decision.” ant now challenging Alibaba in the
Click here to read the full story countryside, pledged its next US$1.5
billion in profit to farmers’ welfare.
HONG KONG (Sept 2): Chinese reg- China orders Tencent Holdings Ltd, China’s most
ulators ordered car-hailing services run Meituan, valuable company, said last month
by Didi Global Inc, Meituan and Alibaba it will double the amount of money
Group Holding Ltd to rectify instances of Didi to rectify it’s allocating for social responsibility
misconduct by December, amping up scru- misconduct by programs to about US$15 billion.
tiny over an industry that employs millions.
year-end They’re joined by a growing num-
Officials from the transportation min- ber of tech billionaires, from PDD’s
istry and other departments summoned by coco liu Colin Huang to ByteDance Ltd’s
executives from 11 companies — including Bloomberg Zhang Yiming and Xiaomi Corp’s
Didi, Meituan and Alibaba’s ride-sharing Lei Jun, in donating vast sums to a
and navigation unit Amap — and criticized wage workers they depend on to pow- plethora of causes.
them for disrupting fair competition and er growth. That stems from Xi Jinping’s
hurting the interests of drivers and passen- “common prosperity” campaign to get The largesse coincides with a
gers, according to a statement published the private sector to share the enormous period of intensified scrutiny over
on Thursday. wealth accumulated during a decade-long the growing power and influence of
internet boom. China’s largest corporations from
Regulators highlighted violations in- Tencent to Alibaba, which received
cluding recruiting unlicensed drivers and The sudden removal of Didi’s ride-hail- a US$2.8 billion fine for allegedly
the need to strengthen user data protec- ing apps in July — the result of an investi- abusing its market dominance.
tions, they said in the notice. Some com- gation into data privacy violations — has
panies used “vicious” competition and un- energized rivals who see a rare opportunity
dermined the safety and stability of the to chip away at a leader holding 90% of the
industry.The 11 companies were required market. Didi is now helping workers estab-
to carry out self-inspections, fix those is- lish their first union, a groundbreaking de-
sues and draft compliance plans before the cision its fellow tech giants may soon follow
end of the year, according to the statement. as China imposes rules to curb excessive
work and protect millions of blue-collar
Meituan shares pared their gains after workers from exploitation
the notice and were little changed in Hong
Kong. Alibaba’s Hong Kong shares rose
2.7%, while Didi’s stock trades in the US.

Beijing is moving swiftly to ensure the
country’s sharing-economy behemoths im-
prove the welfare of the millions of low-

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bloomberg

BitConnect Huarong puts
founder sued US$59 billion
as SEC alleges in bad assets on
US$2b crypto sale to raise cash

scheme by Jonas Bergman
Bloomberg
by Matt Robinson
Bloomberg (Sept 2): China Huarong Asset Manage-
ment Co is marketing 380 billion yuan
(Sept 2): Federal regulators sued the founder Arcaro and a company he controls received (US$58.8 billion) in bad assets for sale as
of BitConnect, a cryptocurrency exchange more than US$24 million in referral com- the firm moves to shore up its finances af-
platform, for fraudulently raising more than missions. ter record losses.
US$2 billion from investors in an offering
that wasn’t registered with the US Securities BitConnect closed its exchange in Jan- The assets involve more than 7,000
and Exchange Commission. uary 2018, after receiving two cease-and- borrowers, the Beijing-based firm said in
desist letters from state authorities for the a statement on its website. It’s the larg-
The SEC sued founder Satish Kumb- unauthorized sale of securities and suffering est size ever for a Huarong online market-
hani, 35, and Glenn Arcaro, a promoter, from denial-of-service attacks. ing of bad assets, according to a company
for improperly selling securities tied to the spokesperson.
company’s purported “lending programme” The SEC has been sounding the alarm
for about a year starting in January 2017, over initial coin offerings for years, arguing China’s biggest bad debt manager had
according to a Wednesday complaint filed that the sales are likely securities that must roiled markets since it delayed its earnings
in federal court in New York. BitConnect comply with federal rules.The regulator has report in March. Last month, it secured a
falsely told investors that it could generate warned individual investors of the risks in rescue package from some of the nation’s
monthly returns as high as 40% with its buying the tokens, cautioning that scam- biggest financial firms and, after a long de-
proprietary “volatility software trading bot” mers might be using them to lure investors lay, revealed a record loss of 102.9 billion
when no such strategy existed, according into frauds. yuan for 2020, slashing shareholder equity
to the SEC. Read also: Bitcoin breaks back above by nearly 85%.
US$50,000 in crypto rally Click here
The regulator sued five BitConnect pro- bloomberg
moters in May for their roles in promot-
ing the scheme by creating testimonials on While it returned to a small profit in
YouTube, sometimes multiple times a day. the first half this year, Chairman Wang
The promoters received commissions based Zhanfeng said the company will apply to
on their success in attracting investor cash. the regulator for temporary tolerance with
key capital measures below requirements
HELSINKI (Sept 2): The chief invest- ESG assets are as of June.
ment officer of Veritas Pension Insurance now too frothy for
says there’s now so much risk surround- US$5 bil manager Huarong has said it can continue to
ing environmental, social and govern- honour local and offshore debt obligations,
ance products that he’s more comfort- in Finland but its ability to do so over the longer term
able having parts of his portfolio avoid will depend on how much cash it can raise
that market. by Leo Laikola from asset disposals, people familiar have
Bloomberg said. Huarong aims to raise about 50 bil-
“There is a danger that it will be a very lion yuan from asset sales, one of the peo-
bumpy road if you want to be a pure and and we don’t know exactly what are the ple said.
strict ESG investor,” Veritas CIO Kari right measures, right things to do after
Vatanen said. “You have to be prepared 10 years,” Vatanen, who oversees about Selling bad assets online has been popu-
for wrong judgments all the time.” US$5 billion, said in an interview. lar among Huarong and its peers in the past
few years, though the size of the current
Europe’s asset managers are trying Given the ESG landscape, Vatanen offering indicates the bad-loan manager’s
to figure out how to navigate a world in says he still sees value in assets that aren’t need for funds.The loans are often sold at
which regulators are quickly catching up clean now, but can improve with the right a discount of as much as 40% on the dollar.
with the ballooning market for sustaina- ownership strategy. “I’m strictly against
ble investing. As rules get stricter, funds any kinds of blacklists,” he said. The firm said on Sunday that it plans
are having to strip ESG labels off prod- to dispose of subsidiaries with non-core
ucts that weren’t as clean as the acronym Veritas posted a 7.3% return in the business activities in the “near future” to
suggested. At the same time, some ESG first half of the year. increase internally-generated fund inflows
sectors are so pricey that asset manag- and to replenish capital. It cut its non-fi-
ers worry a correction might be coming. nancial local and offshore units to 13 from
27 through 2020.
“The problem is that the whole ESG
environment is changing all the time

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Indonesia’s trouble meeting due to a lack of expertise in US initial jobless
central bank giving such loans. claims decline
issues new to fresh
banking rules Under the new regulation, which takes pandemic low
on mandatory effect in June next year, banks must provide
MSME lending financing of at least 20% of their total port- by Jill R. Shah, Olivia Rockeman
folio for MSMEs, their supply chains or low & Kristy Scheu ble
by Gayatri Suroyo income earners in what Bank Indonesia (BI) Bloomberg
Reuters calls the macroprudential inclusive financing
ratio (RPIM) NEW YORK (Sept 2): Applications
JAKARTA (Sept 2): Indonesia’s central bank for US state unemployment benefits
has issued new rules making it easier for banks Channelling loans via other banks or non- fell last week to a fresh pandemic low
to meet requirements on supporting small and bank financial firms as well as buying secu- amid a recovering economy.
medium business, in a measure also aimed rities issued for inclusive financing will also
at bolstering an economic recovery from the count as meeting the RPIM. Initial unemployment claims in
COVID-19 pandemic, it said in a statement. regular state programs fell 14,000
The mandatory ratio will go up to 25% in to 340,000 in the week ended Aug
The new rules replaced a 2015 regulation June of 2023 and to 30% in June of 2024 and 28, Labor Department data showed
mandating banks to provide 20% of their to- banks that fail to meet the ratio must pay fines. Thursday. The median estimate in a
tal lending to micro, small and medium en- Bloomberg survey of economists called
terprises (MSMEs), which some banks had “The BI regulation was issued as part of for a slight decrease to 345,000 new
efforts by BI to increase economic inclusion applications.
and open up financial access, as well as to
strengthen MSMEs’ roles in the national eco- Continuing claims for state benefits
nomic recovery,” BI said in the statement late fell to 2.7 million in the week ended
on Wednesday. Aug 21.

The new rules will also provide more op- Initial claims have been drifting low-
tions for banks to meet minimum MSME er for months, thanks to the broader
credit requirements, it said. reopening of the economy and elevated
demand for workers. Even so, claims
Islamic banks must also comply with the remain elevated compared to pre-pan-
new rules. demic levels, and the fast-spreading
Delta variant has injected uncertainty
SEOUL (Sept 2): South Korea’s August con- South Korea’s into the economic outlook, posing a
sumer inflation stayed at a nine-year peak, inflation at risk of future layoffs.
raising the chances the central bank will hike
rates again this year as strong demand adds nine-year peak The recent surge in infections has
to price pressures. fuels rate hike already begun to impact consumer be-
expectations havior. High-frequency data point to
Consumer prices in August rose 2.6% softening demand for services such as
from a year earlier, Statistics Korea said on by Joori Roh air travel, restaurant dining and hotel
Thursday, matching the rate in July, driven Reuters occupancy. Looking ahead, the fall
by a spike in fresh food prices due to a heat season may bring labour disruptions
wave and high cost of oil products, housing and 21.6%, respectively, while that of housing as children across the country return
rental and other services. rentals and dining rose 1.6% and 2.8% each. to in-person schooling, especially in
places with lower vaccination rates.
The inflation rate beat the 2.3% incease CPI rose 0.6% month on month, the best
forecast by economists in a Reuters poll. reading since January and accelerating from The claims data come just before
0.2% in July. Economists had forecast a 0.3% the monthly jobs report out Friday,
The 2.6% rise was first seen in May, when increase. which is forecast to show 725,000 jobs
inflation marked the fastest pace since April were added in August.
2012, and continued to stay above the central Meanwhile, core CPI rose 1.3% from a
bank’s 2% target for a fifth straight month. year earlier, marking the fastest pace since Unadjusted initial claims in Cal-
June 2018 and up from a 1.2% rise in July. ifornia, Illinois and Virginia saw the
Thursday’s data comes a week after the biggest decreases last week. Missouri
Bank of Korea raised its policy rate for the The BOK pushed up its inflation pro- and Ohio posted the largest increases.
first time in almost three years, becoming jection for 2021 to 2.1% from 1.8% previ-
the first major Asian central bank to shift ously, and sees it standing at 1.5% for the Roughly half of states ended federal
away from pandemic-era monetary settings whole of 2022. pandemic unemployment programmes
as ballooning consumer debt created new — including an extra US$300 weekly
threats for the economy. In the Reuters poll published last week, payment — before their official Sept
all 18 analysts who gave end-2022 forecasts 6 expiration date, in hopes of spur-
“Our base case is for the next hike to ma- saw further rate increases next year, after the ring job creation. The White House
terialise in early 2022, but we acknowledge BOK raised its policy rate from record lows has said it will not extend jobless aid
that increasing demand-side price pressures to 0.75%. further, but states can use pandemic
and rising inflation expectations could trig- relief funds to provide additional as-
ger an earlier move in November this year, A slim majority of 10 analysts predicted sistance to unemployed workers.
if growth uncertainties ease by then,” ANZ the base rate would stand at 1.25% by the
Economist KrystalTan said in a note. end of next year.

The breakdown of data showed the con-
tinued price surge for agricultural and oil
products fuelled inflation.

The cost of agricultural, livestock and fish-
eries and petroleum products jumped 7.8%

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HONG KONG (Sept 2):There’s a seis- The world is players arbitrage the differences away,
mic shift underway in money markets, the awash in dollar but regulations introduced after the fi-
equivalent of going from famine to feast. liquidity that nancial crisis may have restricted their
no one wants ability to do so.
For years, the premium paid for dol-
lars over the euro, Japanese yen and so on by Tracy Alloway Much of the world’s excess dollars are
in the cross-currency markets has been Bloomberg now being parked at the Fed’s reverse
negative, indicating rampant demand repo facility, which accepted a record
for greenbacks. Now, these so-called did between 2015 and 2019,” says Pozsar US$1.19 trillion this week from banks,
cross-currency basis swaps are on the of the period. “So then you fast forward money market funds and other finan-
verge of turning positive in a major shift to today, we now have so much liquidity, cial counterparties. Meanwhile, a new
for money markets. and this is particularly the case for the standing repo facility introduced at the
US dollar that the Fed is doing QE faster end of July should add another way for
“Things that haven’t happened before than the BOJ or the ECB. So there’s just the central bank to absorb excess liquid-
are now happening,” says Credit Suisse an ample supply of US dollars. Regula- ity from the system, as it starts to wind
AG strategist Zoltan Pozsar, in an up- tions are not getting tighter. If anything, down its asset purchases.
coming episode of Odd Lots. He points they are getting easier. The Fed has be-
out that cross-currency basis swaps are come a dealer of last resort.” Liquidity measures from the Fed have
“something that we are used to as being combined to push a number of short-
very negative. There’s always an excess Even cross-currency basis swaps at term rates lower. In particular, the spread
demand for dollars, and that excess de- longer tenors — such as the 10-year between Libor and OIS (overnight index
mand for dollars is gone.” swap between the Japanese yen and the swaps) — a measure of dollar funding
US dollar — are on the verge of turning costs for banks — is close to going nega-
Extraordinary measures from central positive. That premium now sits at -34 tive.That would be a reversal of the dra-
banks, including the massive provision of basis points, the narrowest level in more matic spikes experienced during 2008,
liquidity from the Federal Reserve in the than a decade. when turmoil in the repo market and
form of dollar swap lines and new repo fears over counterparty contagion drove
facilities, mean the financial system is es- Such swaps are a way of gauging the the gauge to a record high.
sentially swimming in cash. It’s the rever- difference in the cost of borrowing dol-
sal of an earlier dollar crunch which saw lars in Japan versus borrowing dollars in “What this is a reflection of is it’s nat-
the US central bank withdrawing dollar the US, with a negative rate indicating urally just, you know, too much cash in
liquidity from the market in 2015, just that borrowing in yen is more expensive the system relative to demand for this
as the Bank of Japan and the European than doing the same in greenbacks. In money,” says Pozsar. “We are in a pe-
Central Bank were ramping up their own theory, that difference shouldn’t exist as riod where things are going to be very
quantitative easing programmes. different for quite some time relative to
how things were over the past five years.
“Some of the most experienced STIR I think over the past five years, we’ve had
(short-term-interest-rate) traders would sort of a golden era for STIR traders be-
tell you that they’ve never traded as much cause we’ve had so many, so many spread
front-end basis in their career — some moves in the money markets.”
of those careers span 30 years — as they

(Sept 2): Bill Gross is talking trash about Bill Gross sold off in the aftermath, but have since
the bond market — literally. says bonds are rallied as a resurgent coronavirus raises
concerns over economic growth.
In a meandering and sometimes ‘investment
off-kilter investment outlook posted on garbage’ amid In Monday’s note, Gross suggested
his website, the onetime bond king said supply and demand dynamics are stack-
longer-term Treasury yields are so low low yields ing up against Treasuries, saying that
that the funds that buy them belong in yields at current levels have “nowhere
the “investment garbage can.” by Ye Xie to go but up.”
Bloomberg
Ten-year yields traded at 1.29% as of The Federal Reserve, which has been
6.07am in New York. They are likely to The Bloomberg US Treasury index has absorbing about 60% of net Treasury is-
climb to 2% over the next 12 months, fallen 1.4% this year, and an extension of suances through its quantitative-easing
handing investors a loss of roughly 3%, that decline would make for its first an- program, may soon start scaling back as-
he wrote. nual loss in eight years. Investment-grade set purchases at a time when demand
debt in general has suffered similarly, with from foreign Central Banks and investors
Stocks could also fall into the catego- a Bloomberg gauge on track for the worst has already been waning, he wrote. Mean-
ry of “trash” should earnings growth fall yearly performance since 2015. while, fiscal deficits of at least US$1.5
short of lofty expectations. trillion going forward suggest Treasury
Gross, 77, has been bearish on bonds supply will remain high.
“Cash has been trash for a long time, for a while. In March, he told Bloomberg
but there are now new contenders,” said TV that he began betting against Treas- “How willing, therefore, will private
Gross, who co-founded Pacific Invest- uries at about the 1.25%. Rates initially markets be to absorb this future 60%
ment Management Co in the 1970s and in mid-2022 and beyond?” Gross wrote.
retired in 2019. “Perhaps if inflation comes back to the
2%+ target by then, a ‘tantrum’ can be
“Intermediate to long-term bond avoided, but how many more fiscal spend-
funds are in that trash receptacle for sure, ing programs can we afford without pay-
but will stocks follow? Earnings growth ing for it with higher interest rates?”
had better be double-digit-plus or else
they could join the garbage truck.”

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(Sept 2): One of China’s largest social me- China’sWeibo The move is aimed at cultivating a
dia companies closed stock-tipping ac- bans stock-tip “benign” online environment for public
counts with millions of followers as it heeds opinion that can facilitate “sustainable and
Beijing’s call to cleanse content deemed accounts healthy development” of China’s economy
harmful to the country’s economy. with millions and its society, according to last week’s
of followers announcement.
Weibo Corp, which operates the coun-
try’s Twitter-like website with about half Bloomberg State media in June said regulators were
a billion active users, shut down at least against the practice of analysts setting spe-
52 user accounts due to violations of new late Friday, enlisted commercial websites cific stock-index targets or predictions.
rules on economic and finance-related in- and platforms to remove content that “ma-
formation, according to a statement late liciously” bad-mouths China’s financial Media outlets in China often influ-
Wednesday.The largest account — called markets or misinterprets domestic policies ence the market by downplaying recent
GuSheQu or “Community of Stocks” — and economic data. turbulence or discouraging excess.When
had 3.25 million followers. the country’s stocks sank in March, aWei-
bo search for the Chinese equivalent of
The chat rooms typically charge follow- “stock market” generated no posts on its
ers to join in return for stocks tips. One web version. In 2019, posts about threats
provided instructions on how to trade from then-US President Donald Trump
the Shanghai Composite Index, recom- to impose more tariffs on Chinese exports
mending in May that users buy “boldly” were removed from social media.
at around 3,482 to 3,488 points.

Another account, whose name roughly
translates to “Stock Up to the Sky,” told
users on March 12 to buy shares of Henan
Mingtai Al Industrial Co, a Shanghai-list-
ed maker of aluminium foil that’s up 98%
since the post.Two of the account’s other
stock picks lost more than 10%.

Others commented on sensitive macro
policy issues, such as China’s population,
while several accounts uploaded screenshots
or quotes from foreign media articles, in-
cluding those published by Bloomberg News.

Weibo’s interpretation of the new rules
provides insight into what type of content
authorities may deem harmful to China’s
economy. The campaign, which was an-
nounced by the cyberspace administrator

WASHINGTON (Sept 1):The U.S. Federal U.S. aviation to address the airspace for future flights.”
Aviation Administration (FAA) saidWednes- agency probes Virgin Galactic said that “when the vehi-
day it is investigating a deviation in the de- Branson’sVirgin
scent of the flight of theVirgin Galactic rocket Galactic flight cle encountered high altitude winds which
plane that carried British billionaire Richard changed the trajectory, the pilots and sys-
Branson to the edge of space on July 11. deviation tems monitored the trajectory to ensure
it remained within mission parameters.”
The NewYorker magazine earlier reported by David Shepardson
that the regulator was investigating an off- Reuters The NewYorker reported that during the
course descent. An FAA spokesman told flight a red light flashed on the ship’s con-
Reuters the vehicle “deviated from its Air reuters sole, indicating an “entry glide-cone warn-
Traffic Control clearance as it returned to ing.” Virgin Galactic said that “at no time
Spaceport America.The FAA investigation were passengers and crew put in any dan-
is ongoing.” ger as a result of this change in trajectory.”

Virgin Galactic acknowledged in a state- Branson, one of sixVirgin Galactic em-
ment to Reuters that “the flight’s ultimate ployees who took part in the flight, soaring
trajectory deviated from our initial plan” more than 50 miles above the New Mexico
but added it “did not fly outside of the desert, in July touted the mission as a precur-
lateral confines of the protected airspace.” sor to a new era of space tourism and said
the company he founded in 2004 was poised
The company said “the flight did drop to begin commercial operations next year.
below the altitude of the airspace ... “for a
short distance and time (1 minute and 41 sec- Virgin Galactic acknowledged in a statement
onds) before re-entering restricted airspace.” to Reuters that "the flight’s ultimate trajectory
deviated from our initial plan" but added it "did
It added that “at no time did the ship
travel above any population centers or cause not fly outside of the lateral confines of the
a hazard to the public.”The company said protected airspace."
it is “working in partnership with the FAA

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Rich Americans already have a plan
to escape Biden’s tax hikes

NEWYORK (Sept 2):Wealthy Americans are by Ben Steverman life insurance advisory firm AskVest.“There’s a
scrambling for places to hide from plans by Dem- Bloomberg lot of opportunity for people to take advantage
ocrats to hike their taxes. Many on Wall Street of these new regulations.”
think they’ve found just the thing. inside a PPLI, they can’t be taken out without
a big tax bill — though they can be borrowed Even as PPLI’s popularity has spread, it’s
A niche strategy called private placement life against or rolled into another insurance product. primarily pitched to clients as a place to put in-
insurance, or PPLI, was already gaining popu- vestments, like hedge funds or credit products,
larity among the very rich for its ability to shield IRS rules also require policyholders give up that generate lots of income taxable at the top
fortunes from taxes. Now some advisers to the day-to-day control of their PPLI’s investment rate.These can surpass 50% when you include
top 0.1% say it’s dominating conversations with choices — a dealbreaker for some — and the the top federal ordinary rate of 37% and state
their clients. portfolio needs to be diversified in particular and local income taxes in California and New
ways. York City. If all investments are subject to the
The threat of higher taxes — what President ordinary rates — as Biden has proposed for those
Biden calls making billionaires and millionaires Despite the hassles, qualifying as life insur- earning more than US$1 million per year —
pay their “fair share” — isn’t the only factor ance comes with unique perks. Death benefits, then a broader array of investments make sense
sparking interest in PPLI.A little-noticed change paid when an insured person passes away, avoid in PPLI policies.
in US insurance law at the end of 2020 makes all taxes, and gains on investments held within
the tool more powerful, at the same time that an insurance policy build up tax-free. Democrats in Congress, who are beginning
competition among insurance carriers and advi- the process of turning Biden’s tax plan into leg-
sory firms is giving rich investors more flexibility, The tool can also be combined with other islation, disagree on how much to hike rates on
lower costs and a wider choice of products on loopholes: Family offices, for example, can buy capital gains. Because of the potential pitfalls and
PPLI platforms. PPLI policies inside dynasty trusts, which are complexity of PPLI, clients who are initially in-
vehicles that let multiple generations of wealthy terested sometimes end up thinking twice before
As long as assets are held in a PPLI policy, heirs avoid the estate tax. committing their money, advisers say.
they escape taxes.When a policyholder dies,heirs
inherit the PPLI’s contents tax-free.Those perks To exploit its advantage to the maximum, “This can get very complicated, and there is
strike at the heart of Biden’s plans to get the very advisers try to stuff as much money into a PPLI a percentage of our clients who value simplic-
wealthy to pay more taxes on their investments, while paying as little as possible in insurance ity above all things,” said Jon Ripchick, wealth
especially on capital gains that currently aren’t costs. “Really the point is to not pay a lot for strategist at Ayco, a firm owned by Goldman
levied if assets are held until death. the insurance piece,”Thompson Popernik said. Sachs Group Inc that offers financial planning
to corporate executives.
“Private placement life insurance poses a se- The bare minimum you’ll need to start a
rious obstacle to President Biden’s goal of guar- PPLI policy is about US$2 million, advisers say, Carriers providing PPLI policies have tried
anteeing that high-income individuals pay tax but it’s far more common for investors to devote to attract customers by making their platforms
on large gains at least once per lifetime,” said at least US$5 million to the strategy, enough to easier to use.“Fees are coming down,” Ripchick
Daniel Hemel, a law professor at University of make the administrative and legal startup costs said. “Investment options are becoming more
Chicago, who’s been talking with Democrats worthwhile. competitive.”
inWashington about ways to limit the strategy.
“PPLI is a massive loophole — entirely legal, Withdrawing money from a PPLI while Market leader
easy to exploit, and politically very hard to close.” you’re still alive is taxable, so you should only Lombard International, owned by Blackstone
deploy money that you’re sure you’ll never need. Inc, dominates the market, but several other
While more and more assets are flowing into In other words,you need to be extremely wealthy firms are now offering the product.To improve
the PPLI strategy, it remains a slim slice of the to even think about a tax shelter like PPLI.“Rich their pitch to the wealthy and their most-trusted
trillions of dollars held in portfolios of the richest people can do things other people can’t,” said advisers, some providers are now allowing those
Americans.TheAmerican Council of Life Insur- Edward Gordon, president of Preservation Cap- advisers to keep control of the PPLI investments.
ers,the industry’s trade group,doesn’t even track ital Partners. Gordon said he’s “so busy, it’s not To comply with the rules, PPLI assets need to
PPLI policies. If Biden and Democrats are suc- even funny” advising clients on PPLI policies. go in a separate account that clients technically
cessful in passing a reconciliation bill that hikes don’t have any input on. But clients often choose
taxes, the strategy may go more mainstream, at Relaxed requirements their own adviser to manage that fund, and set
least among those with the most capital gains A Covid-relief law signed by President Trump goals for how they want it invested.
to protect from the Internal Revenue Service. in December makes PPLI even more attractive.
The package contained a provision that changes Hemel,of the University of Chicago,said one
“Clients are very interested in this right now,” the interest rate assumptions on life insurance option to stop the wealthy from using PPLI to
said Tara Thompson Popernik, director of re- policies.The politically powerful life insurance escape taxes is to cap the size of life-insurance
search for Bernstein Private Wealth Manage- industry had argued the current rules were un- death benefits. Another is to write stricter IRS
ment’s wealth planning and analysis group. “It workable in a low-interest rate environment, so regulations, perhaps further limiting the control
takes some education to get them to wrap their Congress relaxed the requirement for policies to that policyholders are allowed to have over in-
heads around the concept, because it’s not just qualify for favourable tax treatment. vestment choices.
buying life insurance.”
Though lobbyists’primary goal was tweaking Otherwise, Hemel has warned other tax poli-
PPLI has its drawbacks. Strict and very com- the rules affecting ordinary life insurance prod- cy experts, PPLI is a “relatively easy workaround
plicated rules determine whether a PPLI pol- ucts, the upshot is that the wealthy can now put that will allow high-net-worth individuals to gen-
icy qualifies as life insurance — an important more money into a PPLI policy while paying less erate virtually unlimited amounts of investment
distinction because that’s what gives these ac- to an insurance carrier for life coverage. “You income, while avoiding capital gains taxes during
counts their tax benefits.The policies can fail if want to maximize every dollar you can put into life and at death.”
not funded properly over time. Once assets are the policy,” said David Kleinhandler, principal at

f r i d a y s e p t e m b e r 3 , 2 0 2 1 25 T h e E d g e C E O m o r n i n g b r i e f

MARKETS

CPO RM 4,358.0059.00 OIL US$ 71.980.39 RM/USD 4.1585 RM/SGD 3.0956 RM/AUD 3.0723 RM/GBP 5.7359 RM/EUR 4.9285

Top 20 active stocks

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

Ho Wah Genting BHD 105.8 0.030 0.330 -47.62 204.5

Bintai Kinden Corp Bhd 96.6 -0.035 0.53 -13.82 202

TFP Solutions Bhd 93.2 0.010 0.230 0.00 121.9

Ta Win Holdings BHD 91.1 -0.010 0.160 113.33 546.2

PA Resources Bhd 89.8 -0.045 0.415 18.57 515.4

KNM Group Bhd 71.0 -0.005 0.275 34.15 912.9

Destini Bhd 66.7 0.015 0.26 -3.7 396.6

Dagang NeXchange Bhd 64.9 0.005 0.730 224.44 2256.2

Kanger International Bhd 62.6 0 0.06 -58.62 167.8 World equity indices

GFM Services Bhd 58.6 0.035 0.26 44.44 143.1

UCrest Bhd 53.2 0.025 0.335 116.13 208.3 CLOSE CHANGE CHANGE CLOSE CHANGE CHANGE

BCM Alliance Bhd 48.5 -0.005 0.06 -74.91 43.7 (%) (%)
DOW JONES 35,312.53 -48.20 -0.14 INDONESIA 6,078.23 -12.70 -0.21
Sapura Energy Bhd 46.4 -0.010 0.120 -4.00 1,917.5

Karyon Industries Bhd 43.8 0.025 0.295 37.21 140.3 S&P 500 4,524.09 1.41 0.03 JAPAN 28,543.51 92.49 0.33

Hiap Teck Venture Bhd 43.5 -0.01 0.585 27.17 1009 NASDAQ 100 15,611.57 29.06 0.19 KOREA 3,175.85 -31.17 -0.97

Parkson Holdings Bhd 39.6 -0.005 0.24 20 262.4 FTSE 100 7,146.23 -3.61 -0.05 PHILIPPINES 6,834.66 48.72 0.72

Scope Industries Bhd 36.2 -0.015 0.305 2.58 351.9 AUSTRALIA 7,485.75 -41.39 -0.55 SINGAPORE 3,088.84 1.00 0.03

Yong Tai Bhd 35.4 0.005 0.245 -23.44 330.4 CHINA 3,597.04 29.94 0.84 TAIWAN 17,319.76 -154.23 -0.88

Focus Dynamics Group Bhd 33.7 0.005 0.055 -91.54 350.5 HONG KONG 26,090.43 62.14 0.24 THAILAND 1,647.75 13.27 0.81

Solution Group Bhd 33.6 0.03 0.83 -30.25 365.1 INDIA 57,852.54 514.33 0.90 VIETNAM 1,334.65 3.18 0.24

Data as compiled on Sep 2, 2021 Source: Bloomberg Data as compiled on Sep 2, 2021 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)

MQ Technology Bhd 0.065 30.000 5257.9 -51.85 47.5 Daya Materials Bhd 0.01 -33.33 30 -33.33 20.4

Paos Holdings BHD 0.505 24.690 28165.5 60.32 91.5 Eduspec Holdings Bhd 0.015 -25.00 2622.3 -25.00 37.5

Orion IXL Bhd 0.055 22.220 2777.1 -31.25 47.1 Scomi Group Bhd 0.035 -22.22 13315.6 16.67 38.3

Nexgram Holdings Bhd 0.030 20.000 309.9 -33.33 124.4 EA Holdings Bhd 0.020 -20.00 1445.0 -33.33 101.4

GFM Services Bhd 0.260 15.560 58638.2 44.44 143.1 Borneo Oil Bhd 0.030 -14.29 27844.7 -25.00 214.9

Idimension Consolidated Bhd 0.115 15 9897.1 43.75 31.3 Green Ocean Corp Bhd 0.03 -14.29 563.1 -66.67 63.3

Metronic Global Bhd 0.040 14.290 1064.3 -60.00 83.2 Sanichi Technology Bhd 0.030 -14.29 1690.9 -89.38 42.1

Key Asic Bhd 0.130 13.040 29743.6 62.50 165.0 Computer Forms Malaysia Bhd 0.670 -12.99 3007.2 48.23 137.4

DGB Asia Bhd 0.045 12.500 686.9 -80.00 60.8 Anzo Holdings Bhd 0.035 -12.50 690.0 -58.82 39.1

FSBM Holdings BHD 0.280 12.000 118.8 180.00 39.6 Paragon Globe Bhd 0.360 -12.20 2049.2 73.69 156.8

KYM Holdings BHD 0.525 11.7 8536.7 50 78.7 AE Multi Holdings Bhd 0.040 -11.11 6530.7 -67.25 86.5

Focus Dynamics Group Bhd 0.055 10.000 33667.2 -91.54 350.5 Dolphin International Bhd 0.080 -11.11 3612.2 -5.88 74.9

Trive Property Group BHD 0.055 10.000 6797.6 -59.45 57.9 PA Resources Bhd 0.415 -9.78 89834.0 18.57 515.4

Ho Wah Genting BHD 0.330 10.000 105787.7 -47.62 204.5 K Seng Seng Corp Bhd 0.930 -9.71 4024.3 58.97 107.1

Fiamma Holdings BHD 0.675 9.760 15140.6 20.54 332.9 Ge-Shen Corp Bhd 1.990 -8.72 9559.0 121.11 218.9

PJBUMI Bhd 0.395 9.720 1359.6 41.07 32.4 AT Systematization Bhd 0.055 -8.33 6506.8 -70.27 252.4

Karyon Industries Bhd 0.295 9.260 43842.8 37.21 140.3 China Ouhua Winery Holdings 0.055 -8.33 945.8 -8.33 36.7

Hong Seng Consolidated Bhd 1.900 8.570 5020.7 265.38 4668.3 Scanwolf Corp Bhd 0.4 -8.05 15460.2 169.66 52.8

Asdion Bhd 0.2 8.11 7067 -2.44 25.6 Paragon Union BHD 1.72 -8.02 272.6 156.72 111.3

UCrest Bhd 0.335 8.06 53230.6 116.13 208.3 BCM Alliance Bhd 0.06 -7.69 48519 -74.91 43.7

Data as compiled on Sep 2, 2021 Source: Bloomberg Data as compiled on Sep 2, 2021 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)

Nestle Malaysia Bhd 135.5 0.4 29.6 -2.45 31774.8 Genetec Technology Bhd 29.480 -0.940 381.7 1604.05 1514.0

Hong Leong Bank Bhd 19.16 0.24 1609 5.27 41533.5 Malaysian Pacific Industries 44.080 -0.920 405.9 69.80 8767.4

Fraser & Neave Holdings Bhd 27.86 0.2 84.2 -13.15 10218.4 Dutch Lady Milk Industries BHD 34.62 -0.38 1.2 -7.68 2215.7

Heineken Malaysia Bhd 22.9 0.2 65.5 -0.52 6918 Kobay Technology BHD 5.300 -0.270 3487.9 565.27 1591.5

Batu Kawan Bhd 20.88 0.18 6.2 16.65 8248 Sam Engineering & Equipment 14.540 -0.260 222.7 97.29 1968.0

HAP Seng Consolidated Bhd 8.67 0.17 297.4 0.81 21585.4 KLCCP Stapled Group 6.650 -0.210 228.3 -6.07 12005.5

Petronas Gas Bhd 16.7 0.16 671.8 -2.49 33044.8 Ge-Shen Corp Bhd 1.99 -0.19 9559 121.11 218.9

CI Holdings Bhd 4.04 0.16 336.1 112.63 654.5 Hong Leong Financial Group 18.020 -0.180 131.7 -0.22 20637.3

Hong Seng Consolidated Bhd 1.9 0.15 5020.7 265.38 4668.3 Southern Acids Malaysia BHD 3.670 -0.180 3.0 -3.42 502.5

AMMB Holdings Bhd 3.24 0.14 13353.6 -11.23 10737.4 Kesm Industries Bhd 12.200 -0.160 33.5 -10.16 524.8

Duopharma Biotech Bhd 2.61 0.12 2963 -22.78 1843.5 Kotra Industries Bhd 3.020 -0.160 1207.8 1.00 446.9

Khind Holdings Bhd 4.57 0.11 1571.3 55.97 183.1 Paragon Union BHD 1.720 -0.150 272.6 156.72 111.3

Lysaght Galvanized Steel Bhd 2.15 0.11 8 -8.12 89.4 Kuala Lumpur Kepong Bhd 21.160 -0.140 519.4 -10.64 22808.1

TIME dotCom Bhd 4.7 0.1 1417.3 7.95 8558.8 MISC Bhd 6.920 -0.130 2175.7 0.73 30889.1

Can-One Bhd 3.65 0.1 1400.5 30.82 701.4 BP Plastics Holding Bhd 2.160 -0.130 1688.4 49.93 405.3

Paos Holdings BHD 0.505 0.1 28165.5 60.32 91.5 AEON Credit Service M Bhd 12.300 -0.120 15.5 2.50 3140.3

Hong Leong Capital Bhd 6.34 0.1 763.8 2.42 1565.3 PMB Technology Bhd 5.980 -0.120 27.1 30.57 1254.4

Bursa Malaysia Bhd 7.64 0.09 1441.7 -7.13 6183 RHB Bank Bhd 5.410 -0.110 5194.3 -0.73 22009.8

Rapid Synergy Bhd 8.3 0.09 198.2 25.76 887.2 Sime Darby Plantation Bhd 4.000 -0.110 4998.9 -19.46 27662.9

Cheetah Holdings Bhd 2.21 0.09 11306.9 333.33 253.8 Frontken Corp Bhd 3.25 -0.110 2933.3 37.32 5110.3

Data as compiled on Sep 2, 2021 Source: Bloomberg Data as compiled on Sep 2, 2021 Source: Bloomberg