The Edge - 05 Oktober 2022

WEDNESDAY, OCTOBER 5, 2022 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 455/2022

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TRUSS HINTS AT UK BENEFITS CUTS,
COURTING NEW TORY REBELLION p16

WEDNESDAY, OCTOBER 5, 2022 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 455/2022

CEOMorningBrief
HOME: No choice but to take ownership of MySejahtera to ensure personal data p8
Hibiscus proposes capital reduction to erase RM690.6 mil losses from balance sheet p12
Former AmBank MD: I told Zeti about Najib’s account set up to receive US$100 mil from Saudi p14

WORLD: Aramco says global oil spare buffers to slump when China reopens p17
Foreign outflows from EM Asian equities exceed 2008 outgo p23

Malaysia on a tightrope to avert Britain’s
painful lesson on currency crunch

Report on Page 5.

ANTI-PARTY
HOPPING

LAW TAKES
EFFECT
TODAY

Report on Page 4.

WEDNESDAY OCTOBER 5, 2022 2 THEEDGE CEO MORNING BRIEF

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ZAHID IZZANI MOHD SAID/THE EDGE

Dissolution of EC extends
Parliament: PM polling time

says parties’ for GE15
views, cues
cannot influence Bernama
his power to
advise Agong KUALA LUMPUR (Oct 4): The
Election Commission (EC) has ex-
Bernama Ismail Sabri: Some say it (Parliament) should be tended the voting time for the 15th
dissolved before the tabling of Budget 2023, general election (GE15) by one hour.
SHAH ALAM (Oct 4): Views and cues of some say it should be on Monday after the
political parties regarding the dissolution of tabling, some say next month, some say next Minister in the Prime Minister’s
Parliament cannot change and influence the Department (Parliament and Law)
power of the prime minister to advise theYang year...there’s so many speculations. Let’s just wait. Datuk Seri DrWan JunaidiTuanku
di-Pertuan Agong on the matter. Jaafar said that the voting time for
speculations. Let’s just wait,” he said. Peninsular Malaysia will be from
Prime Minister Datuk Seri Ismail Sabri On the Memorandum of Understanding 8am to 6pm, and 7.30am to 5.30pm
Yaakob said the call from several parties for Sabah and Sarawak.
for the dissolution of Parliament not to be (MOU) onTransformation and Political Sta-
announced soon, although taken into con- bility and the Opposition’s support for the “The extension of the period will
sideration, will also not influence him in prime minister, Ismail Sabri reiterated that give voters enough time to cast their
making his decision. there is no expiry date for it but the MOU ballots,” he said in a written answer
will stand until Parliament is dissolved. posted on the Parliament website on
He said the decision to dissolve Parlia- Tuesday (Oct 4).
ment should not involve open discussions, “When Parliament is dissolved, the
including involving the Government and MOU will be nullified,” he said. He was responding to a question
opposition parties, but instead should be from Datuk Seri Mukhriz Mahathir
done only if the prime minister feels that On alleged failed negotiations on Um- (Pejuang-Jerlun) on improvement
Parliament should be dissolved. no-PAS collaboration, Ismail Sabri said measures taken by the EC to ensure
Umno president Datuk Seri Dr Ahmad a higher turnout and transparency
“The decision to dissolve Parliament has Zahid Hamidi and Tan Sri Abdul Hadi in the voting process in the GE15
nothing to do with other political parties. It Awang of PAS had held a meeting, but the and beyond.
was never discussed openly before. Parlia- negotiations will not be completed with just
ment is dissolved when the prime minister one meeting. According to Wan Junaidi, the
announces the dissolution. EC has also increased the number
“It involves discussions of major issues, of voting centres and channels in an-
“No political parties ever gave their opin- such as cooperation during the election. ticipation of a larger turnout, follow-
ions or interfered in the matter. Never. It One meeting will not resolve it all. There ing the implementation of Undi18
was never discussed within the [ruling] par- may be other things that need to be dis- (lowering of the voting age to 18) as
ty, let alone with others,” he told reporters cussed, so the discussions continue. well as automatic voter registration.
after launching the Idea Bina Negara digital
platform here on Tuesday (Oct 4). “It is not a failed negotiation until it is He said the improvement meas-
declared so,” he added. ures were to ensure that elections
Ismail Sabri said as the prime minister, Read also: would be conducted in a more ef-
he has the power to advise theYang di-Per- MOF assures Budget 2023 to be tabled ficient, fair and transparent manner.
tuan Agong to dissolve Parliament, but it on Oct 7 amid Parliament dissolution
is the King who has the absolute power to rumours SHAHRIN YAHYA/THE EDGE
make it happen. Umno’s GE15 candidate selection
process begins next Monday, says Zahid
“Some say it should be dissolved before the
tabling of Budget 2023, some say it should be
on Monday after the tabling, some say next
month, some say next year...there’s so many

WEDNESDAY OCTOBER 5, 2022 3 THEEDGE CEO MORNING BRIEF

WEDNESDAY OCTOBER 5, 2022 4 THEEDGE CEO MORNING BRIEF

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KUALA LUMPUR (Oct 4):The Constitu- SUHAIMI YUSUF/THE EDGE Wan Junaidi added that the
tion (Amendment) (No. 3) Act 2022 (Act Government remains committed to
A1663), also known as the anti-party-hop- Anti-party ensuring that the law banning members
ping law, is to be enforced on Wednesday hopping law of the Dewan Rakyat from changing
(Oct 5), said Minister in the Prime Min- takes effect parties is enacted to protect the rights
ister’s Department (Parliament and Law) of the people — who have placed high
Datuk Seri DrWan JunaidiTuanku Jaafar. today trust in the representatives who were
elected during the election process.
In a statement, the minister explained that BY SHAZNI ONG
the Act was approved by theYang di-Pertuan theedgemarkets.com cussed with the Cabinet (about the dissolu-
Agong on Aug 31 and gazetted on Sept 6. tion),but two weeks ago,the Cabinet discussed
the law banning members of the Dewan the need for Prime Minister [Datuk Seri Is-
“His Majesty the Yang di-Pertuan Rakyat from changing parties is enacted to mail SabriYaakob] to meet theYang di-Per-
Agong has also approved the effective date protect the rights of the people — who have tuan Agong for the dissolution of the council.
of the Act of Oct 5 in accordance with placed high trust in the representatives who
Section 1(2) and Section 1(3) of the Act. were elected during the election process. “Even if there is no agreement, the
prime minister can use his discretion,
“With the setting of a new effective date Act A1663 was approved with the sup- without saying when the date is. At least
for the Act from Oct 5, the amendments to port of a two-thirds majority of 209 mem- the Cabinet already knows that the idea
Section 7A of the Eighth Schedule, Clause bers of the Dewan Rakyat on July 28, and has been discussed,” he said.
6 Article 48, Article 160 and new Clause the support of a majority of 52 senators in
3A Article 10 as well as new Article 49A the Dewan Negara on Aug 9. Wan Junaidi said this when asked about
can be enforced immediately. PM has discretion to decide when the dissolution of Parliament and the need
Parliament should be dissolved for the prime minister to get a decision
“This further allows the application of Meanwhile, speaking to reporters at from the Cabinet first before facing the
Act A1663 at the state level, subject to the a press conference in Parliament af- Yang di-Pertuan Agong.
approval of the Sultan/His Excellency/King terwards, Wan Junaidi said the prime
of the state concerned,” he said. minister has the discretion to decide Commenting further,Wan Junaidi said
when Parliament should be dissolved. that based on Article 39 of the Constitu-
Wan Junaidi added that the Govern- tion, the Government is administered by
ment remains committed to ensuring that However, the dissolution of Parliament the Yang di-Pertuan Agong through the
ultimately depends on the approval of the Cabinet of Ministers.
Yang di-Pertuan Agong, he added.
Before the Cabinet of Ministers is
“This is because the Constitution says formed, theYang di-Pertuan Agong must
that theYang di-Pertuan Agong can accept or first appoint the prime minister.
delay an application from the prime minister.
“That is why we have seen the practice
“Only since the country became independ- since independence until 1963, the prime
ent in 1957, the prime minister has never dis- minister never discussed with anyone [re-
garding the issue of dissolution] except
maybe with certain leaders.

“So now there is a desire that the prime
minister first discuss with the Cabinet so that
it is decided by the Cabinet, but that [is] the
discretion of the prime minister as the chair-
man of the Council of Ministers,” he said.

KUALA LUMPUR (Oct 4): A group of Home Ministry it was signed off by one “Badrul Hisham
military veterans said they are deeply dis- rejects military Alias” from the ministry. “No reasons were
appointed with the Home Ministry over veterans’ appeal given for the decision, and the veterans are at
its decision to reject their appeal with re- on application a loss as to why such a decision was made.”
gards to their application to register Parti
Kemakmuran Negara as a political party. to register Brigadier General (Rtd) Datuk Abdullah
political party Mohamed, the pro-tem president of Par-
On Sept 20, the High Court had or- ti Kemakmuran Negara, said the decision
dered the home minister to make a deci- BY HAFIZ YATIM was a great disservice to the veterans when
sion on the veterans’ appeal within 14 days. theedgemarkets.com no reasons were given for the rejection.

“The decision to reject the appeal is a “This leaves us no choice but to go back
great form of disrespect towards military to the courts for justice. This will further
veterans which form the core base of the impede our plans to be involved in the fu-
party, who have sacrificed their lives and ture of the country which is being destroyed
careers for the security of this nation.They by corrupted people currently,” he said.
merely want to exercise their constitution-
al rights to form a party in order to leave The founders of the party will be filing a
a better country for the next generation,” judicial review on Wednesday to challenge
the veterans said in a statement. the minister’s decision and seek the earliest
available hearing date, in light of the real
They noted that the minister, Datuk Seri possibility of dissolution of Parliament soon.
Hamzah Zainuddin,did not even sign the let-
ter informing them of the rejection. Instead They were represented by lawyer Lim
Wei Jiet.

WEDNESDAY OCTOBER 5, 2022 5 THEEDGE CEO MORNING BRIEF

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Malaysia on a tightrope to avert Britain’s
painful lesson on currency crunch

KUALA LUMPUR (Oct 5):The sterling’s BY CHESTER TAY & PRIYATHARISINY VASU to further consolidate its fiscal position,”
crunch, invoked by Britain’s mini budget, theedgemarkets.com said UOB’s Goh.
which initially proposed a tax break for the
rich, might have raised concerns among Ma- rate premium to buy those bonds”. Goh believes that a budget deficit of
laysians, whose government will be tabling Nonetheless, he does not expect the 4.5% to GDP is achievable in 2023, con-
the National Budget 2023 on Friday (Oct 7), sidering expected higher revenue collection
amid the backdrop of a weakening ringgit. Malaysian government to introduce any and smaller allocation for containing Cov-
tax cut in Budget 2023, as real interest id-19 pandemic, coupled with the contin-
The British pound depreciated to an all- rates remain relatively low. ued GDP growth of 4.5%-5.5%.
time low of US$1.0350 against the US dollar
on Sept 26, after British Chancellor of the “It will require a hefty hike by Bank BIMB Research economist Imran
Exchequer Kwasi Kwarteng unveiled the Negara Malaysia to make Malaysian Gov- Nurginias concurred with Goh. He ex-
budget on Sept 23. Faced with mounting ernment Securities (MGS) attractive to pects the government’s subsidy bill to drop
dissent, Kwarteng reversed a planned tax fund that increase in external debt; so, a to about RM50 billion next year, from an
cut for the highest rate of income tax. tax cut might do more damage than good,” estimated RM80 billion this year.
Innes said.
Economists contacted by The Edge hold Having said that, SERC’s Lee said the
the view that the Malaysian government If the government’s commitment to fis- government needs to provide more com-
should take note of this episode in the UK, cal discipline is clearly conveyed via Budget mitment than just savings from the sub-
as an irrational or over-populist national 2023, UOB senior economist Julia Goh siding pandemic.
budget may lead to further downside risk believes that the ringgit weakness is likely
to the local currency, not to mention the to be contained under a supportive growth “In the absence of that [Covid-19 fund],
political implication that may come with it. dynamic next year. the fiscal deficit will be lower. But that
doesn’t mean reforms; so, you need to do
“If there is no reform element [in Ma- “The fact that the ringgit continues to more than that, in terms of subsidies and
laysia’s Budget 2023], then there will be move alongside other currencies relative leakages in allocations.You may not opt
downside risk to the ringgit,” Socio-Eco- to the US dollar, and hovers somewhere for the GST [Goods and Services Tax],
nomic Research Centre (SERC) executive in the middle, suggests that domestic fun- but subsidy is a low hanging fruit to tack-
director Lee Heng Guie told The Edge. damentals, such as robust growth drivers, le,” Lee said.
export resilience, current account surplus,
“This [2023] budget has to be respon- FDI inflows, and adequate international While the policymakers can be creative
sible: It must carry a lot of reform, rather reserves, have helped to contain the ringgit in looking for ways to stimulate unfettered
than a very election-type of budget — such weakness,” she said. growth of the economy, the government
as populist measures and maintaining a should focus on crafting prudent budgets
high deficit — which I think investors may Goh forecasts that Malaysia’s GDP that have sustainable impact on the finan-
be concerned about,” Lee said. growth will be at 6.5% this year, surpass- cial market, says Sunway University Busi-
ing the official projection of 5.3%-6.3%, ness School’s Professor of Economics, Dr
SPI Asset Management managing before tapering to 4.8% growth in 2023. Yeah Kim Leng.
partner Stephen Innes said that the big-
gest lesson Malaysia could learn from the Expectation of fiscal consolidation in This is particularly so, given the depre-
UK currency crunch is not to rely on un- 2023 ciation of the ringgit, which has declined
funded tax cuts or enormous fiscal expan- “Despite an expected election-friendly 11.48% year-to-date to RM4.6450.
sion beyond energy and good subsidies, budget for 2023, we think that the govern-
“as the market requires a hefty interest ment will continue to fulfil its commitment Yeah is hopeful that the government, via
the Ministry of Finance, will look for ways to
Would the ringgit mimic pound sterling’s sharp depreciation support the local unit, in spite of all the exog-
against the US dollar post-Budget 2023? enous factors that are beating the currency.

(%) MYR/USD (%) GBP/USD (%) Measures to support ringgit
5 Sunway University’sYeah highlighted that
the government should encourage short-
0 term measures to increase foreign ex-
change earnings via the robust export of
-5 -10.15 goods and services.
-10
-15 -16.57 “The government could look into ways
to strengthen the domestic currency by en-
-20 couraging exporters to convert their earn-
ings into the ringgit.This would eventually
-25 Oct 4, 2022 raise the demand for the local unit.
Oct 4, 2021
“This has to be done in a measured
Source: Bloomberg manner, so as not to destabilise or disrupt
the operations of the exporters. In short,
this would encourage more exports so that
it would generate higher earnings in for-
eign currency,” saidYeah.

CONTINUES ON PAGE 6

WEDNESDAY OCTOBER 5, 2022 6 THEEDGE CEO MORNING BRIEF

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KUALA LUMPUR (Oct 4):Two contrac- Two LCS THE EDGE FILE PHOTO
tors of the controversial littoral combat ship contractors sue
(LCS) project whose contracts were termi- fully interfered with the actions of the plain-
nated have sued Boustead Naval Shipyard BNS, BHIC tiffs’ OEMs in relation to their contracts.
Sdn Bhd for outstanding payments and a over outstanding
declaration that the contracts are not void. BHIC, however, has denied the allega-
payments, tions made by CAD and CED, adding the
The lawsuits were filed by Contraves Ad- contract allegations are baseless, frivolous, vexatious
vanced Devices Sdn Bhd (CAD) and Con- termination and unjustifiable.
traves Electrodynamics Sdn Bhd (CED),
both of which are 51:49 joint ventures be- BY SYAFIQAH SALIM “The boards of BHIC, BHICDT and
tween Boustead Heavy Industries Corp Bhd theedgemarkets.com BNS believe that the plaintiffs’ claims are
(BHIC) and Germany’s Rheinmetall Group. untenable and are therefore positive that
Osman as defendants. Salihin is a nominee the companies will prevail in this litiga-
CAD and CED are both the recipi- director in CAD and CED, while Syed tion,” said BHIC.
ents of 12 letters of awards (LOAs) from Zahiruddin is a nominee director in CAD.
BNS for the procurement, engineering, BHIC said it is currently assessing any
integration and supply of equipment and Among the 17 items under the claim is financial and operational impact of the
weaponry for the six LCS.The LOAs were a declaration that the 12 LOAs from BNS claim to the group.
terminated in August 2022. are not void and remain valid and subsisting.
The case management for the claim has
The suit is seeking an order for Further, the suit alleged that Salihin been fixed for Oct 11.
BNS to pay CAD alleged outstanding and Syed Zahiruddin had breached their
amounts of RM880,068.21, €39.87 mil- fiduciary duties, common law or statutory BHIC shares closed up 1.5 sen to 38
lion (RM182.96 million), £3.78 million duties under the provisions of the Com- sen onTuesday, giving the group a market
(RM19.95 million) and 55.94 million panies Act 2016. capitalisation of RM94.41 million.
Swedish krona (RM23.8 million). Read also:
It alleged the duo had conspired to injure No further delay in LCS project despite
Furthermore, BNS also has to pay an or defraud CAD and CED, as well as wrong- termination of contractors — BNS
alleged outstanding amount of RM216.65 RM9 bil LCS fiasco simplified
million to CED. Visit to LCS site hints at a long sail
towards completion
This amounted to RM444.24 million
worth of claims by the companies combined,
back of the envelope calculations showed.

The Edge reported last month that BNS
had terminated CAD and CED as inter-
mediaries of the project, as this termination
allowed BNS to negotiate directly with the
relevant original equipment manufactur-
er (OEMs).

The terminations came amid allegations
of misconduct, illegality and fraudulent
dealings in relation to the LOAs issued to
the contractors, in the wake of the Pub-
lic Accounts Committee (PAC) report on
the LCS project delays and cost overrun.

According to BHIC’s filing with Bursa
Malaysia, other defendants named in the
suit by CAD and CED are BHIC and its
wholly owned subsidiary BHIC Defence
Technologies Sdn Bhd (BHICDT).

The suit further named two BHICDT
directors Dr Salihin Abang and Vice Ad-
miral Datuk Syed Zahiruddin Putra Syed

FROM PAGE 5 “One of the things Malaysia could do dermined confidence in the currency.
is attract FDI in a very aggressive manner Standard Chartered Plc and Royal Bank
However, he added, to increase the value — competing against its peers such as Vi-
of the currency in the long term, policy- etnam and Singapore. Promotion activi- of Canada both expect the sterling to weak-
makers will have to pay heed to the underly- ties of trade and commerce will have to be en by almost 10% from current levels by
ing macroeconomic fundamentals, such as intensified, particularly in sectors where year-end, according to Bloomberg.
formulating supply-side policies that would Malaysia already has an advantage, such as
ensure growth, productivity, and product semiconductors, that fall under the [elec- As Malaysians count down to the ta-
competitiveness. trical] and electronics sector,” said Shan. bling of Budget 2023, the government
might be seen to be walking a tightrope:
Juwai IQI global chief economist Shan Over in the UK, the British pound recov- It is not just the livelihood of all Malay-
Saeed said the interdependence between ered against the greenback at US$1.1372 sians that will be affected by a weak ring-
strong foreign direct investment (FDI) and at press time. Nonetheless, economists see git — the popularity of the incumbent
currency plays a pivotal role in the strength that government policy missteps have un- government is at stake as well, as the 15th
of a currency. general election looms.

WEDNESDAY OCTOBER 5, 2022 7 THEEDGE CEO MORNING BRIEF

WEDNESDAY OCTOBER 5, 2022 8 THEEDGE CEO MORNING BRIEF

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KUALA LUMPUR (Oct 4):The appoint- MySejahtera the Government to be unclear about the
ment of KPISoft (Entomo) as the MySe- development true direction of the acquisition of the My-
jahtera application developer in March 2020 overpriced, Sejahtera application.
was found to be irregular and not based on inconsistent with
government procurement procedures, said govt procurement He added that the Government was
the Public Accounts Committee (PAC). rules — PAC confused in terms of the appointment of
KPISoft, the concept of CSR and its du-
There are no minutes or supporting BY SHAZNI ONG ration, and the ownership of the MySe-
documents that exist regarding the ap- theedgemarkets.com jahtera application.
pointment, with the only document be-
ing the non-disclosure agreement signed ZAHID IZZANI MOHD SAID/THE EDGE “The concept of CSR is seen to have
between the National Security Council on been used as a mechanism to secure gov-
behalf of the Government and KPISoft. The PAC chairman said the Government, however, ernment projects without going through
had given a guarantee that data in the MySejahtera proper procurement procedures.There is
The parliamentary committee also not- no document that states this CSR [project]
ed that the Ministry of Finance (MOF) application is safe and will not be misused. is for one year.
had set a ceiling price of RM196 million
for the acquisition of MySejahtera for a pe- “The Government seemed to have no
riod of two years (RM98 million per year). choice (stuck) and had to make a decision
to appoint MySJ Sdn Bhd by direct nego-
“This amount was high and contradicted tiation. The continued development and
the concept of corporate social responsibility use of the MySejahtera application should
(CSR),” said PAC chairmanWong KahWoh remain CSR in nature,” he said.
in a statement on Tuesday (Oct 4).
Wong revealed further that the MySe-
These are among the eight conclusions jahtera application developer once suggest-
as a result of two proceedings dated April ed that the application be commercialised.
14 and 21 made by the PAC. This shows its potential as a very valuable
national application.
Earlier, the PAC released a report on
MySejahtera application development and He said the Government’s decision to re-
procurement under the Ministry of Health, ject the proposal is justified in order to pro-
the MOF and the Prime Minister’s De- tect personal data of users of the application.
partment on the same day. Read the full story

Wong said that the CSR concept pro-
posed by KPISoft (Entomo) had caused

No choice but to take ownership of MySejahtera to ensure personal data safety

KUALA LUMPUR (Oct 4):The Govern- BY SHAZNI ONG for ownership by the developer.
ment has been urged to review the propri- theedgemarkets.com Meanwhile, other recommenda-
ety of awarding the MySejahtera applica-
tion contract via direct negotiations made tion development and procurement under tions noted further by the parliamen-
through a Cabinet decision dated Nov 27, the Ministry of Health (MOH), the Min- tary committee include that the Gov-
2021, while the Government should take istry of Finance (MOF), and the Prime ernment should ensure full ownership
over the entire application through the Ma- Minister’s Department. of the MySejahtera application, besides
laysian Administrative Modernisation and the needs to guarantee the security of
Management Planning Unit (MAMPU). According to the report, the appointment users’ personal data in the application
of KPISoft (Entomo) as the MySejahtera and ensure that the data is not misused
The Public Accounts Committee application developer in March 2020 was by any party.
(PAC) opined that the Government also found to be irregular and not based on gov-
needs to take a more prudent approach ernment procurement procedures. “The Government needs to continue
in all procurement processes, said PAC efforts to make the MySejahtera appli-
chairmanWong KahWoh in a statement It said there are no minutes or support- cation a national public health manage-
on Tuesday (Oct 4). ing documents that exist regarding the ap- ment tool in line with the digitalisation
pointment,with the only document being the plan for health services,” added Wong.
“All offers through corporate social re- non-disclosure agreement signed between Read the full story
sponsibility (CSR) are welcome. However, the National Security Council (NSC) on Read also:
the terms related to the CSR offer should behalf of the Government and KPISoft. Khairy: MySejahtera to be used as
be clearly stated, and should not be used as digital platform for public health
an alternative way for direct negotiations. The parliamentary committee also noted PAC chairman: Govt ‘confused’ over
Guidelines should be established for the that the MOF had set a ceiling price of RM196 who appointed MySejahtera vendor;
governance of CSR offerings,” he said. million for the acquisition of MySejahtera for no formal agreement ‘since day one’
a period of two years (RM98 million per year),
These are among the four recommen- whereby this amount was deemed high and
dations made by the PAC to the Govern- contradicted the concept of CSR.
ment to implement as improvement meas-
ures, as a result of two sets of proceedings As of April this year, the committee had
by the parliamentary committee. divulged that the Government had yet to
register the intellectual property for the
Earlier in the same day, the PAC re- MySejahtera application on MyIPO, which
leased a report on MySejahtera applica- may cause the application to be claimed

WEDNESDAY OCTOBER 5, 2022 9 THEEDGE CEO MORNING BRIEF

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Maria Chin questions company’s
relentless pursuit of RM922 mil PJD Link

KUALA LUMPUR (Oct 4): Member of Par- BY KANG SIEW LI will be carried out.That was more than three
liament for Petaling Jaya Maria Chin Ab- theedgemarkets.com years ago,” said Maria.
dullah on Tuesday (Oct 4) voiced concern
over plans by PJD Link (M) Sdn Bhd, the On Monday, PJD Link (M) said the com- “It is not an issue for any company to
concessionaire of the proposed Petaling Jaya pany and its shareholders, namely PJD Link be publicly listed. However, as reported by
Dispersal Link (PJD Link), to continue with Holdings Sdn Bhd and Noblemax Resources The Edge on April 3, 2017, Bursa had sus-
the development of the elevated highway, de- Sdn Bhd, had entered into a framework agree- pended Premier Nalfin Bhd due to its failure
spite protests from residents of PJ. ment with Scomi Energy for the proposed ac- to restructure its operations after it termi-
quisition of PJD Link (M) for RM922 million. nated its share sale agreements with Emrail
She was commenting on PJD Link (M)’s The proposed deal is still subject to approval Sdn Bhd, Mangniplan Sdn Bhd, Noblemax
announcement on Monday that it is seeking of relevant parties and government agencies. Resources and Lingkaran Hartaniaga Sdn
a listing on Bursa Malaysia via the reverse Bhd,” she added.
takeover of Practice Note 17 (PN17) com- PJD Link (M) signed a concession agree-
pany Scomi Energy Services Bhd. ment with the Government on April 5 this year. She pointed out that Emrail was one of the
companies that attempted to take over Pre-
“For PJD Link (M) to take on an enormous It added that an environmental impact mier Nalfin to implement the Kinrara-Da-
project, estimated at RM922 million, it is wor- assessment, social impact assessment and mansara Expressway (Kidex) but failed due
rying how definitively PJD Link (M) stated its traffic impact assessment with external pro- to the withdrawal of the then Selangor gov-
intention to build the elevated highway. One fessional consultants will also be conducted ernment in 2015.
wonders if Bursa can approve such listings in to assess and mitigate any issues that may
such circumstances, which is made more diffi- arise from the project. Maria deemed the revised PJD Link as
cult because there is no proposal submitted to “impractical” as the proposed route still “cuts
the state or local government, no real approval “To date, PJD Link (M) has not carried into massive residential and commercial ar-
made by either the state or local government, out any environment, social and transport eas, uprooting many residents and compa-
and it does not seem to have any real foreseea- impact assessment studies, and every state- nies, and may need to make massive property
ble sources of income,” she said in a statement. ment that it had issued were filled with prom- acquisition to make way for a highway that
ises to the public that eventually the studies may not serve its purpose”.

“We need to demand that our developers
think, plan and build with green and sustain-
able ideas to counter present challenges of
not just traffic congestion but also recreate
liveable housing areas, recreational amenities
for the young, old, less-abled students, pro-
fessionals and businesses,” she said.

In July, a group of PJ residents and sup-
porters staged a peaceful protest at Lebuh
Bandar Utama to oppose the development
of the PJD Link. It also sent a petition to the
Sultan of Selangor to put off the highway
project, and submitted a memorandum of
appeal to state and federal authorities.

The proposed PJD Link is a 25.4km, two-
lane dual carriageway (four-lane) expressway
that will commence after the New KlangVal-
ley Expressway (NKVE) Toll Plaza on the
SPRINT Highway, Damansara, and end at the
Bukit Jalil Highway Interchange.The express-
way will serve a link for Petaling Jaya North,
Bandar Utama,TamanTun Dr Ismail, Petaling
Jaya City Centre,Taman Dato’ Harun,Taman
Medan Baru,Taman Sri Manja, Bandar Kinr-
ara and Bukit JalilTechnology Park.

Read also:

Scomi Energy shares surge after
agreement for PJD Link

PJD Link Expressway concessionaire
plans listing via reverse takeover of
Scomi Energy

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FMBA urges SHAHRIL BASRI/THE EDGE
govt to extend
enforcement
of businesses’
Covid-19 special

protections

BY IZZUL IKRAM
theedgemarkets.com

KUALA LUMPUR (Oct 4): The Feder- excellence in line with the government’s started pressuring businesses to recover
ation of Malaysian Business Associations efforts,” he added in a statement onTues- loans owed without considering the eco-
(FMBA) has called on the government day (Oct 4). nomic situation of the businesses.
to extend the enforcement of the Tempo-
rary Measures for Reducing the Impact Abdul Malik noted that the Tempo- “The matter has affected the score of
of Coronavirus Diseases (Covid-19) Act rary Measures For Reducing the Impact the financial position of those business-
2020, and introduce a special moratori- of Coronavirus Diseases (Covid-19) Act es when they have been listed in credit
um to give businesses space to financially 2020, which provides businesses special reporting agencies and financial infor-
recover. protection against their creditors, is slated mation systems as well as listed with the
to cease to be effective on Oct 22. Malaysian Insolvency Department and it
FMBA chairman Datuk Abdul Malik will take time to settle the debt and could
Abdullah said FMBA’s affiliate members “We are of the opinion that when the [also restrict their involvement] in any fu-
at its annual general meeting held on Sept Act has been stopped, the businesses that ture business.
27 agreed with an emergency resolution, have been affected by the Covid-19 pan-
urging the government to introduce the demic will no longer receive special pro- “This will also affect the economy when
special moratorium “to give space to their tection against their creditors,” he said. businesses that can recover and return to
respective businesses to re-strengthen the competitiveness have to close,” said Ab-
financial flow of their respective businesses According to him, when the Act was dul Malik.
that still cannot recover due to the current due to expire last year, financial institutions
economic situation”.

“Business entrepreneurs need support
and not pressure in jointly driving their re-
spective businesses towards recovery and

KUALA LUMPUR (Oct 4):Dairy producer Farm Fresh the of writing onTuesday — 118% higher than
Farm Fresh Bhd was the most bought new most bought its IPO price of 50 sen per share. Its market
listing by local institutional investors in the new listing by capitalisation stood at RM501.6 million.
third quarter of 2022 (3Q22) up to Sept 29,
according to Bursa Malaysia. local institutional Bursa said 11 companies and one real
investors in 3Q22, estate investment trust (REIT) made their
“They added RM40.4 million of Farm debut on the capital market in 3Q22, with
Fresh shares to their portfolios, thus nar- says Bursa a combined market cap of RM2.32 billion
rowing local institutional net fund outflow and RM769.43 million being raised via
to RM36.5 million (for Main and ACE BY SYAFIQAH SALIM new issues, offers for sale and pre-listing
Market listings) year to date (YTD),” said theedgemarkets.com funds.
Bursa in its initial public offering (IPO)
performance report for 3Q22. RM24.4 million of foreign inflow, mak- These brought the total number of new
ing the cybersecurity services provider the listings to 27 companies and one REIT
Khazanah Nasional Bhd-backed Farm most net bought IPO counter by foreign as of end-September. Market cap from
Fresh was listed on the Main Market on investors YTD. new listings totalled RM7.05 billion, with
March 22 at RM1.35 a share. Farm Fresh, RM2.88 billion in funds raised.
which raised RM1.1 billion from its IPO, The ACE Market-listed LGMS, which
is Malaysia’s largest IPO since June 2021. raised RM45.7 million from its listing on The 23 new listings on the Main and
June 8, was trading at RM1.09 at the time ACE Markets closed at an average of 54%
Farm Fresh’s stock is up 19% from its premium over their list prices YTD. The
IPO price of RM1.35, trading at RM1.60 six technology companies commanded the
as of the time of writing on Tuesday (Oct highest average price increase of 159%.
4). At the current share price, the company Price gain of the healthcare IPO grew from
is valued at RM2.97 billion. 21% as of end-June 2022 to 90% as of
Sept 29, lifted mainly by the new listing of
In the quarter under review, Bursa also UmediC Group Bhd, added Bursa.
pointed out that LGMS Bhd attracted

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KUALA LUMPUR (Oct 4): Hibiscus Pe- Hibiscus proposes In a Bursa Malaysia filing on Tues-
troleum Bhd has proposed to undertake capital reduction day (Oct 4), Hibiscus said the proposed
an RM800 million capital reduction to to erase RM690.6 capital reduction will eliminate the ac-
eliminate RM690.6 million in accumu- mil losses from cumulated losses thereby allowing the
lated losses as of June 30, 2022. company to further enhance its ability
balance sheet to declare dividends and be better posi-
The proposed exercise entails a re- tioned to undertake the proposed share
duction of the issued share capital of BY SYAFIQAH SALIM buy-back out of its retained earnings in
Hibiscus via the cancellation of the com- theedgemarkets.com the future.
pany’s paid-up capital of RM966.01
million. The credit arising from the The company is proposing to purchase
cancellation will be used to offset the its own shares of up to 10% of its total
accumulated losses. Less the estimated issued shares to capitalise on any under-
expenses for the exercise of RM880,000, valuation, including inter alia, the reali-
the remaining RM108.53 million will be sation of potential capital gains if it later
credited to the retained earnings of the resells at higher prices.
company, which will be used to facilitate
a proposed share buy-back. Both the proposed capital reduction
and share buy-back are still subject to
shareholders’ nod at an extraordinary
general meeting to be convened. Barring
any unforeseen circumstances, it expects
the proposed capital reduction to be com-
pleted by the first quarter of 2023.

CIMB Investment Bank Bhd has been
appointed as the principal adviser for the
proposals.

Hibiscus’ net profit jumped 530%
to RM652.94 million for the financial
year ended June 30, 2022 (FY22) from
RM103.68 million in the previous year,
while revenue more than doubled to
RM1.7 billion from RM804.78 million.

Meanwhile, Hibiscus has proposed
a final dividend of one sen per share
for FY22, subject to shareholders’ ap-
proval at the forthcoming annual gen-
eral meeting.

Hibiscus’ shares have risen 6.1% year
to date to close at 87 sen on Tuesday, giv-
ing it a market value of RM1.75 billion.

Hibiscus pays RM85.7 mil sales tax to Sabah govt

KUALA LUMPUR (Oct 4): Hibiscus BY SYAFIQAH SALIM were providing crude petroleum oils
Petroleum Bhd, which had previously theedgemarkets.com and natural gas from Sabah, which were
questioned the imposition of state sales deeemed as “taxable goods”.
tax (SST) on its two units operating in respective rights as applicable, to pay
Sabah, has proceeded to pay the tax the claims imposed by the Sabah state The two companies were also in-
amounting to RM85.7 million. government,” said Hibiscus. formed that all relevant work passes
of the individuals employed by them
The SST was imposed on revenues The Sabah government accepted the and their respective contractors would
from petroleum products sold by SEA proposal on Sept 27, the group added be cancelled by Oct 1 if the SST was
Hibiscus Sdn Bhd under the North Sa- in a Bursa Malaysia filing on Tuesday not paid by then.
bah production sharing contract (PSC) (Oct 4).
and Hibiscus Oil & Gas Malaysia Ltd SEA Hibiscus and Hibiscus Oil &
(previously known as Repsol Oil & Gas “The group has made the appropri- Gas, however, insisted that under the
Malaysia Ltd) under the 2012 Kinaba- ate accruals for all liabilities related to Petroleum Development Act 1974,
lu Oil PSC. this matter in [financial year 2022] they “cannot and do not provide such
amounting to RM85.7 million,” said taxable goods from Sabah”, and were
“In order to create a stable environ- Hibiscus. therefore not legally liable for the tax.
ment for continuing investment and
smooth operations in Sabah, SEA Hi- SEA Hibiscus and Hibiscus Oil & Hibiscus’ shares rose 2.35% or two
biscus and Hibiscus Oil & Gas on Sept Gas were previously informed by the sen to close at 87 sen on Tuesday, val-
21 proposed, without prejudice to their state government that they were both uing the oil and gas group at RM1.75
liable for the SST on the basis that they billion.

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Equitiestracker’s ing appointing a licensed director, two Majuperak inks
unit gets fund licensed representatives, one compliance MOU to develop
management officer and increase its paid-up capital 857.75 acres of
licence and shareholders’ funds to a minimum land in Perak into
of RM2 million within six months. strategic assets
BY KANG SIEW LI
theedgemarkets.com “The CMSL would enable the com- BY PRIYATHARISINY VASU
pany to further expand its business to theedgemarkets.com
KUALA LUMPUR (Oct 4): ET Smart include the complementary fund man-
Wealth Sdn Bhd, a wholly-owned sub- agement business, which would create KUALA LUMPUR (Oct 4) : Majuperak
sidiary of Equitiestracker Holdings Bhd, an additional income stream for the Holdings Bhd (MHB) proposed to collab-
has been granted a capital markets ser- group and thus, is expected to contrib- orate with its 55%-shareholder Perbadanan
vices licence (CMSL) by the Securities ute positively to the future earnings of Kemajuan Negeri Perak (PKNPk) to jointly
Commission Malaysia, which allows the the group,” said Equitiestracker in a develop assets on several land banks meas-
company to undertake fund manage- bourse filing on Tuesday (Oct 4). uring 857.75 acres in Perak.
ment activities.
Equitiestracker is an equity invest- In a filing to Bursa Malaysia, MHB said
However, ET Smart Wealth must ment research platform and investment that it has entered into a Memorandum of
still satisfy several conditions includ- training provider. Its revenue is derived Understanding (MoU) with PKNPk to joint-
mainly from Malaysia and its customer ly develop the latter’s lands in Seri Iskandar,
base includes retail investors and in- Bidor and Tronoh for residential property
stitutional clients. The bulk of its sales projects.
comes from financial institutions such
as securities/investment firms, as well Nexusbase Developments Sdn Bhd, a sub-
as Bursa Malaysia. sidiary company of MHB, has been identi-
fied as the master developer for the mixed
KUALA LUMPUR (Oct 4): Dolomite High Court property development projects.
Corp Bhd, which is involved in proper- orders
ty development, construction and sand MHB, which is involved in property de-
mining activities, has been ordered by winding-up of velopment and facilities management, will
the High Court here to wind up due to Dolomite Corp also explore potential opportunities in PKN-
its failure to repay US$38.19 million Pk’s lands in Bazar Ipoh and Teluk Batik,
(RM177.38 million) of debt. It is also BY KANG SIEW LI MHB said.
to appoint Datuk Adam Primus as its theedgemarkets.com
liquidator. Meanwhile, MHB intends to develop a
made to Bursa Securities in due course,” floating solar farm in Perak, citing approx-
This follows a lawsuit filed by it added. imately 1,300 acres of water bodies to be
Maybank International Labuan Branch explored.
as far back as September 2020, which Dolomite slipped into Practice Note
then saw the court giving Dolomite until 17 status in May last year after its exter- MHB said the collaboration is aimed to
Oct 4 to settle the outstanding amount nal auditor Baker Tilly Monteiro Heng spur direct domestic investment in Perak, cre-
as well as the costs awarded by the court PLT expressed a disclaimer of opinion ate employment opportunities and economic
due to Maybank, or be wound up.The on the group’s financial statements for the activities for the state.
outstanding amount is in relation to a year ended Dec 31, 2020 as it was una-
term loan facility granted by Maybank ble to obtain sufficient appropriate audit “Through its participation in the collab-
to Dolomite Power-Shandong (HK) evidence to provide a basis for an audit oration, MHB will be in a better position to
Ltd, a wholly owned subsidiary of Do- opinion. Dolomite’s current liabilities ex- strengthen its asset holding and core business,
lomite Technology (HK) Ltd which in ceeded its current assets by RM141.14 raise fundings for its operations and projects,
turn is a wholly owned unit of Dolomite. million as of Dec 31, 2020, with a capital improve and strengthen its financial sustain-
deficiency of RM59.57 million. ability, and return to profitability, “ it said.
“The directors of Dolomite are cur-
rently seeking the necessary legal advice Dolomite shares closed down 0.5 sen Both parties expect to complete negotia-
as to whether an appeal can be lodged or 33.33% to one sen on Tuesday (Oct tions, and secure relevant approvals within
against the winding-up order to the 4), bringing it a market capitalisation 12 months from the date of the MoU.
Court of Appeal and the possibility of of RM4.43 million.
seeking a stay of the winding-up order,” Shares of Majuperak closed 2.04% lower
said Dolomite in a Bursa Malaysia filing. to 24 sen, giving it a market capitalisation of
RM68.26 million.
“Further announcement on the de-
velopment of the above matter will be

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THE EDGE

Cheah Tek Kuang Najib’s cheque
deposited into
Former AmBank The former MD added that the “Am- Shahrir’s account
MD: I told Zeti Private Banking-MR” code name was despite misspelled
about Najib’s used for Najib’s current account and it name, court told
account set up to was managed by AmBank customer rela-
tionship manager JoannaYu.The name was BY HAFIZ YATIM
receive US$100 mil assigned for the account “to avoid private theedgemarkets.com
from Saudi information from being misused”.
KUALA LUMPUR (Oct 4): The
BY TIMOTHY ACHARIAM & TARANI PALANI “They (Joanna Yu and AmBank’s op- High Court here was told onTuesday
theedgemarkets.com erations director Ross Foden) suggested (Oct 4) that a RM1 million cheque ad-
that the codename be attached to the ac- dressed to former Johor Bahru mem-
KUALA LUMPUR (Oct 4): Former Am- count, seeing the account was sensitive ber of ParliamentTan Sri Shahrir Ab-
Bank managing director CheahTek Kuang and to avoid leakages like what happened dul Samad was accepted by a bank and
told the High Court here onTuesday (Oct with Public Bank and the National Feed- the fund was transferred into Shahrir’s
4) that he had informed former Bank Ne- lot Corporation case,” he said. bank account even though it did not
gara Malaysia governor Tan Sri Dr Zeti match the name of the account.
Akhtar Aziz that former prime minister He said that subsequently, he was giv-
Datuk Seri Najib Razak had intended to en a letter which also included this code Public Bank customer relationship
open a personal account at the bank for name. The letter was passed to Zeti. manager Mohd Farid M Alnafiah said
the purpose of receiving US$100 million in when Shahrir opened the Public Bank
donation from Saudi Arabia in early 2011. Cheah said he isn’t sure if Najib was Islamic account ending with final three
informed of the code name, but that it fell digits “101”, the registered name was
Cheah was testifying as the 39th prose- within the purview of the bank’s operation Sharil @ Shahrir Ab Samad.
cution witness in the 1Malaysia Develop- to choose the code name.
ment Bhd (1MDB)-Tanore trial. The account, Mohd Farid said, is
He added that the purpose of the letter a joint one that Shahrir shares with
He said he had met Zeti to inform her was to make it easier for BNM to monitor his wife Puan Sri Shahrizan Abdullah.
about it shortly after facilitating the opening the Ringgit Operations Monitoring Sys-
of Najib’s account. Cheah was explaining tem (ROMS).The letter was sent on Feb Mohd Farid, 40, who is the pros-
how he facilitated the opening of Najib’s 9, 2011. ecution’s 20th witness, said AmBank
current account 211-202-200969-4 on Jan cheque 000089 bearing the name
13, 2011 (known as the “9694” account). Earlier, Cheah said he had first gone Shahril Abdul Samad was deposited
to Najib’s house in Jalan Langgak Duta, on Nov 27, 2013.
“The purpose of the meeting was to in- Kuala Lumpur in 2011 to facilitate the
form her that Najib had opened an account opening of the bank account, after being Subsequent to the deposit, 10
and there were incoming funds of US$100 given the green light by AmBank chairman other payments and withdrawals
million from Saudi Arabia,” he said. Tan Sri Azman Hashim. were made from the Public Bank
Islamic account with final three dig-
He said it was important to inform the “I then met Najib at his home and its “101” between Dec 2, 2013 and
governor of this as Najib was a politically introduced myself.There were only two March 31, 2014, he added.
exposed person who was linked to the na- of us during the meeting. I had informed
tion’s interest. Zeti did not object, he added. Najib that I brought along a cheque Among them,RM200,000 was with-
book for the said account, credit card drawn from the joint account to Shahri-
“[However,] she reminded that the documents among other documents,” zan’s fixed deposit account and a sum of
opening of the said accounts [was] to be he told Justice Datuk Collin Lawrence RM118,485 was transferred to Sutera
made following the banking rules and reg- Sequerah. Auto Sdn Bhd for the purchase of a
ulations,” said Cheah. Read the full story Honda Civic Hybrid on Dec 21, 2013.
Read also: Najib allowed to attend pro-
ceedings in civil suit against former AG SUHAIMI YUSUF/THE EDGE
Tommy Thomas
Read the full story

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Truss hints at UK benefits cuts,
courting newTory rebellion

reuters

by Joe Mayes
Bloomberg

LONDON (Oct 4): Prime Minister Liz When people are on is prepared to do things differently, if that
Truss said she has yet to decide whether a fixed income, when is what is required,” Truss told the BBC
welfare payments in the UK should rise in they are pensioners, separately.
line with inflation, an issue that threatens
to spark another bitter dispute with dis- it is quite hard to But there are growing signs that Truss
gruntled Conservative members of Parlia- adjust. It’s a different is already boxed in, without the authori-
ment (MPs). situation for people ty to secure the compromises she needs
who are in the position among different party factions to see her
In interviews broadcast on Tuesday, to be able to work.” ideas through. In that context, the row over
Truss again refused to commit to a pledge welfare payments may be simply one of
made by the government under her prede- — UK Prime Minister many.
cessor, Boris Johnson. She also drew a dis- Liz Truss
tinction between state pension recipients, As well as Mordaunt, Cabinet minister
who she said will get an inflation-matching rule out reversing course on other parts of Robert Buckland also hinted in an inter-
boost, and those on welfare benefits, who her programme, including her plans to end view on Times Radio that he would push
she said could adapt more easily to cost- a cap on bankers’ bonuses.When asked if for welfare increases in line with inflation.
of-living pressures. austerity measures were on the way to curb
public spending, she said there would be a “I’ve always supported — whether it’s
“When people are on a fixed income, focus on fiscal responsibility. pensions, whether it’s our welfare system
when they are pensioners, it is quite hard — keeping pace with inflation,” Mordaunt
to adjust,”Truss told LBC Radio onTues- Michael Gove, the former minister said, a comment that will pile pressure on
day. “It’s a different situation for people who has become an unofficial recruiting Truss.“It makes sense to do so.That’s what
who are in the position to be able to work.” sergeant for unhappy Conservatives, told I voted for before.”
Times Radio he would “need a lot of per-
The decision has the potential to ex- suading” to back the government on wel- Read also:
plode into another major political headache fare benefits if they are not raised in line Kwarteng gave BOE permission for
forTruss, with many senior MPs — includ- with inflation. Gove was one of the most £100 bil of bond buying
ing members of her own Cabinet — say- high-profile critics of the plan to shelve the “The chancellor of the exchequer signed off
ing it would be unfair to effectively reduce top rate of income tax, which Truss even- on £100 billion (US$113 billion) of bond
welfare payments when people are already tually had to scrap. buying by the Bank of England (BOE), as
facing a major squeeze on living standards. the market fell into turmoil last week, higher
“We have to be a government that is than the size of the plan announced by the
“We’re not about trying to help people a compassionate Conservative govern- central bank and an indication of the level
with one hand and take it away with an- ment, and that isn’t just about growing of concern among officials about volatility in
other,” Leader of the House of Commons the economy, it’s about growing society the gilt markets.The BOE took emergency
Penny Mordaunt told Times Radio. too,” Conservative MP Robert Halfon told action to prevent a problem in pension
Bloomberg. “I believe in trickle-up econom- funds turning into a broader market crash,
Tory strife ics as much as some of them might be- implying it was prepared to buy £65 billion
The issue feeds directly into the internal lieve in trickle-down economics, because of long-dated bonds to quell the turmoil.”
Tory politics that forcedTruss into a U-turn I believe you have to invest in those who
on Monday on a signature part of her eco- have the least.”
nomic plan: to abolish the top rate of in-
come tax for Britain’s highest earners. As Truss acknowledged she needs to “win
support for the Conservatives slumped in over hearts and minds” among her MPs, in
opinion polls, MPs complained the policy the face of mounting criticism. She is due
prioritised the wealthiest over people on to give her main address to the party’s an-
lower incomes. nual conference onWednesday.When asked
about her tax-cut package,Truss suggest-
That has emboldened her critics, and ed reversing directions plays in her favour.
even members of her Cabinet privately said Course reversal
she will now struggle to push through con- “What the last 24 hours has shown is that
tentious parts of her economic revolution I’m somebody who has a clear plan, has a
for Britain — deregulation aimed at boost- clear direction, but is prepared to listen and
ing economic growth, alongside a swathe
of tax cuts — because she is already too
weakened.

It is a remarkable turnaround for a pre-
mier still in her first month in office.

Rebel moves
In the LBC Radio interview,Truss did not

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world

Aramco says cited this year’s surge in oil and natural gas Germany firm to
global oil spare prices as evidence that more exploration extend life of lignite
buffers to slump projects are needed.
power plants to
when China Brent crude climbed above US$125 ease energy crisis
reopens (RM581) a barrel after Russia’s invasion of
Ukraine in February. It has since dropped by Petra Sorge & Vanessa Dezem
by William Mathis below US$90, in part because China’s strict Bloomberg
Bloomberg coronavirus restrictions have suppressed
demand in the second-biggest economy. BERLIN/FRANKFURT (Oct 4):
LONDON (Oct 4):The world’s biggest oil RWE AG will bring forward its coal
company reiterated its warning that pro- Asia market share exit by eight years to 2030, after it
ducers’ spare capacity is running low and Analysts said there is only about two mil- extends operations at two German
said there would not be any left once China lion barrels a day of capacity that could be lignite-fired power units until the end
ends its Covid Zero strategy. brought online quickly should there be a of next winter to help ease Europe’s
supply shutdowns. That is the equivalent worst energy crisis for decades.
“The world should be worried,” Sau- of 2% of the market.
di Aramco’s chief executive officer Amin The company will not receive any
Nasser said at a conference in London. Saudi Arabia and neighbouring United government compensation for accel-
“This is where we are heading. If China Arab Emirates are among the few major erating the coal exit unlike in previous
opens up a little bit you will find out that oil producers raising their maximum pro- negotiations, it said in a joint press
spare capacity will be eroded completely.” duction levels. Nasser said Aramco was on conference with the Economy Min-
track to increase its capacity to 13 million istry. In the short term, operations at
Aramco and Saudi Arabian officials barrels a day from 12 million by 2027, a Neurath D and E will be extended
have frequently criticisedWestern govern- project that will cost billions of dollars. until at least March 2024 to help ease
ments and firms for shunning investment Germany’s reliance on gas supplies.
in fossil fuels and trying to transition to Aramco is confident it can maintain its
renewable energy too quickly. They have market share in Asia, where it sends about “In the current crisis,we are contrib-
60% of its crude shipments, and does not uting to security of supply in Germany
see more competition from Russia, accord- by temporarily increasing the use of our
ing to Nasser. European refiners are in- lignite-fired power plants and are thus
creasingly shunning flows from Russia, also helping to displace gas from elec-
forcing Moscow to tap markets such as tricity generation,” said chief executive
China and India more aggressively. officer Markus Krebber. “At the same
time, we are investing billions of euros
LONDON (Oct 4): Governments need to Shell CEO says to accelerate the energy transition and
tax energy producers to help the poorest governments need are ready to phase out lignite by 2030.”
people deal with the soaring cost of fuel, to tax energy firms
said the boss of Shell plc. Russia has gradually tightened its
to help poor grip on Europe’s gas supply curbing
“One way or another there needs to be flows in retaliation for sanctions over
government intervention,” Shell chief ex- by William Mathis its war on Ukraine. Germany has been
ecutive officer Ben van Beurden said at the Bloomberg forced to rely more on polluting sourc-
Energy Intelligence Forum, a major con- es of energy, including coal, calling into
ference for oil and gas producers in Lon- “We will do our best to bring gas to Eu- question the nation’s climate goal to
don on Tuesday. “Protecting the poorest, rope where it’s needed, but if the market become carbon neutral by 2045, and
that probably may then mean that govern- signal is not there it’s going to be really to generate all electricity from renewa-
ments need to tax people in this room to challenging,” van Beurden said. ble sources by 2035.The government
pay for it.” has the opportunity to decide on a fur-
reuters ther extension of coal until the end of
Europe Union ministers reached an March 2025, at the latest.That would
agreement last week on an initial energy need to be finalised next year.
package, setting a goal to reduce power
consumption and agreeing to tap windfall The announcement comes just after
profits of companies and redirect them to the company was criticised by an activist
customers and businesses. The bloc has investor, Benedikt Kormaier, for boost-
also discussed capping the price of nat- ing investments in the US while Ger-
ural gas and power in a bid to protect many is facing one of the worst energy
consumers. crises in history. On Monday, Krebber
said a US$6.8 billion (RM31.59 bil-
Van Beurden criticised the latter ap- lion) deal to buy Consolidated Edison
proach, saying that companies like Shell Inc’s renewable assets in the US will
would struggle to bring extra supplies of not mean investing at home in Europe.
natural gas to Europe if a price incentive Read the full story
was not there.

Shell plc chief
executive officer
Ben van Beurden.

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world

Micron plans ally increase American-made leading-edge Samsung
investment of up DRAM production to 40% of the company’s woos US chip
to US$100 bil in global output over the next decade”, Micron buyers with
said in a statement. tech advances,
NewYork chip Texas focus
factory Micron’s commitment comes after the US
government passed the CHIPS and ScienceAct by Sohee Kim & Ian King
by Molly Schuetz in August, providing US$52 billion to boost Bloomberg
Bloomberg domestic semiconductor research and devel-
opment.The bill is at the centre of the Biden SEOUL/SAN FRANCISCO (Oct 4): Sam-
NEWYORK (Oct 4): MicronTechnology Inc administration’s effort to reduce dependence sung Electronics Co announced an aggressive
said it plans to invest as much as US$100 bil- on Asian suppliers likeTaiwan and South Ko- five-year plan to lure US chip buyers with more
lion over the next 20 years to build a factory rea, whose homegrown companies are leading advanced technology,aiming to produce transis-
in upstate NewYork to boost US production the market, and to address supply-chain dis- tors that are just 1.4 nanometres wide by 2027.
of memory chips. ruptions and resulting price hikes for certain
goods containing semiconductors. The company’s chip contract-manufacturing
The announcement onTuesday represents unit — known as a foundry — is looking to tri-
the largest private investment in NewYork state The bill’s signing spurred US chip compa- ple its revenue by that year from the 2021 level,
history, according to a statement from Boise, nies to plan billions of dollars in new invest- executive vice president Moonsoo Kang said at
Idaho-based Micron. The company said the ments. For example, Qualcomm Inc is part- a briefing Monday in San Jose, California.To
first phase investment of US$20 billion,in Clay, nering with GlobalFoundries Inc, which also get there, the business will need to make several
NewYork, is planned by the end of this decade. has a facility in NewYork state, in a US$4.2 technological leaps and further inroads in the
billion agreement to manufacture chips. US market for outsourced chips.
The New York site, which will generate
about 50,000 jobs in the state, including “I am grateful to President Biden and his Samsung recently lost out to TSMC on
about 9,000 high-paying Micron positions, administration for making the CHIPS and an Nvidia Corp order to produce the RTX
adds to the company’s previously announced Science Act a priority,” said Micron chief 40 series of graphics cards, which moved to
manufacturing facility in Boise.The compa- executive officer Sanjay Mehrotra. a four-nanometre process.
ny said it expects to get US$5.5 billion in
incentives from the state of New York over Site preparation work will start next year Originally a latecomer to the foundry busi-
the course of the project. and construction will begin in 2024. Produc- ness, Samsung’s been in a hurry to advance its
tion output will increase in the latter half of technology ahead of expanding capacity.The
The so-called megafab chip factory com- the decade, gradually increasing in line with Korean chipmaker now sees its 3nm chip pro-
plex is part of Micron’s strategy to “gradu- industry demand, according to the statement cess as its “game changer”, Kang said, and first
from Micron. started production at that node ahead ofTSMC.
It’s pouring three times more resources into
The site, near Syracuse, NewYork, could 3nm production than it did with previous tech
eventually include four 600,000 square foot generations in an effort to meet client demand.
cleanrooms, accounting for a total of 2.4 mil-
lion square feet of cleanroom space — the The company aims to take the lead in ad-
size of about 40 US football fields. vanced chipmaking by starting mass produc-
tion of second-generation 3nm chips in 2024
TAIPEI (Oct 4):Taiwan’s Foxconn, the world’s Apple supplier and then 2nm parts in 2025.That will set the
largest contract electronics maker, said on Foxconn stage for the 1.4nm products two years later.
Tuesday it was “cautiously optimistic” about ‘cautiously
its fourth-quarter (4Q) revenue outlook after Part of Samsung’s pitch to US customers
reporting record-breaking September sales. optimistic’ about is its decision to manufacture in America.
4Q outlook Samsung has an existing plant in Austin,Tex-
Like other global manufacturers, theTai- as, and is building one in the nearby city of
wanese company, a major Apple Inc suppli- by Yimou Lee & Ben Blanchard Taylor.That new plant, which is set to begin
er, could be vulnerable to slowing consumer Reuters operations in 2024, is likely to use the latest
tech demand as the global economy faces the production methods, such as 3nm technology.
possibility of recession and inflation soars, 3Q, thanks to new product launches and
especially in Europe and the United States. “smooth mass production”, it added. Samsung also aims to triple its capacity of
leading-edge manufacturing by 2027. It has
But the company said in a statement it was Apple’s new iPhone 14 went on sale last no plans to add to its limited availability of
“cautiously optimistic” about the outlook for month. older types of production.
the final three months of 2022, and maintained
its full-year guidance of growth given in Au- The company, which has grappled with But TSMC is also beefing up its US pres-
gust,from previous guidance of flattish revenue. Covid-19 lockdowns and electricity rationing ence. And Intel Corp, which Samsung over-
in China disrupting its supply chain, had pre- took to become the world’s biggest chipmaker,
“However, the dynamics of inflation, the viously forecast flat revenue growth for 3Q for is adding capacity in both the US and Europe
pandemic, and the supply chain still need to consumer electronics, including smartphones. — part of an effort to balance the industry’s
be closely monitored,” it said. heavy reliance on Asian manufacturing.
Read the full story
Formally known as Hon Hai Precision Read the full story
Industry Co Ltd, the company said revenue
for September grew 40.39% and that for 3Q
grew 24.4% year-on-year, both hitting re-
cord highs and beating its own expectations.

Revenue from smart consumer electron-
ics, which includes its key smartphone busi-
ness, showed strong double-digit growth in

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world

LONDON (Oct 4): HSBC Holdings Plc is HSBC exploring bloomberg
exploring a sale of its operations in Cana- sale of Canadian
da, the latest move to streamline the lend- cording to accounts filed by the business.
er that is seeking to head off a call by its unit for latest HSBC Bank Canada provides the full suite
largest shareholder to split up. disposal of the bank’s services, including retail and
commercial banking, as well as wealth
A potential sale of HSBC’s 100% equi- by Harry Wilson & Tom Metcalf management and investment banking.
ty stake in HSBC Bank Canada is among Bloomberg
the options being explored, the lender said The news comes as HSBC tries to fight
in a statement. The review is at an early Canada was the third off calls from shareholder Ping An Insur-
stage and no decisions have been made, largest contributor to the ance Group Co, which has argued for a
the bank said. company’s commercial break-up of the bank. HSBC has fought
back against the Chinese insurer and has
“We are currently reviewing our stra- banking profits in said that there is little merit in spinning
tegic options with respect to our wholly 2021 behind the UK out its Asian operations.
owned subsidiary in Canada,” HSBC said
in a statement. “HSBC regularly reviews and Hong Kong. HSBC is in the midst of its own turn-
its businesses in all its markets.” around that is focused on building up its
was from commercial banking. position in Asia, particularly in wealth
The lender has instructed investment While Canada is a relatively small part management, while culling operations
bankers at JPMorgan Chase & Co to sound no longer deemed relevant.The bank has
out buyers, according to a person familiar of HSBC’s overall business, it was the third already sold off units in the US, France
with the matter. Sky News reported the largest contributor to the company’s com- and Greece.
news earlier. mercial banking profits in 2021 behind the
UK and Hong Kong and ahead of markets
A disposal of the Canadian unit could like mainland China, the US and India.
reap nearly US$10 billion, according to
Bloomberg Intelligence. HSBC’s shares The bank employed 5,348 staff in its
rose on the news and were up 3.4% as of Canadian unit at the end of last year, ac-
10:50 a.m. in London.

Canadian operations
The British lender has had operations in
Canada since 1981, according to its web-
site. HSBC Bank Canada is the seventh
largest bank overall in the country and op-
erates more than 130 branches across the
country.

Canada accounted for about 4% of HS-
BC’s pretax profit and 3% of its global cus-
tomer accounts at the end of last year, the
bank said in its annual report.The firm’s
Canadian operations produced US$768
million of pretax profit, the bulk of which

BANGKOK (Oct 4): Betagro Pcl, a Thai Thai meat weeks, with overseas funds pulling out a net
meat producer, plans to raise about 17.4 producer Betagro US$655 million from domestic equities in
billion baht (US$462 million) to fund its to raise US$462 mil September, the first monthly withdrawal in
business expansion, in what would be the in Bangkok IPO three months, data compiled by Bloomberg
country’s second-largest initial public offer- show.
ing this year. by Anuchit Nguyen
Bloomberg Betagro is offering as much as 25% of
The company is offering 435 million its enlarged capital to expand its farms and
shares in the Bangkok IPO at 40 baht apiece, bloomberg animal feed production in Thailand and
it said in a regulatory filing on Tuesday. An neighbouring countries, according to its
over-allotment or greenshoe option will allow regulatory filing.
Betagro to sell an additional 65 million shares
if there’s strong investor demand, it said. About 182 million shares, or 42% of the
total offering, were already subscribed by
Betagro is pressing ahead with its IPO, local and overseas cornerstone investors in-
even as the nation’s stock market reels from cluding Caas Capital Master Fund, Magna
the ripples of a global equity selloff amid un- Umbrella Fund and Ghisallo Master Fund,
precedented monetary policy tightening by the filing showed.
major central banks to tame inflation.The
share sale will beThailand’s second-biggest The issue is open for subscription from
IPO in 2022, afterThai Life Insurance Pcl’s Oct 10 to Oct 25.While Kiatnakin Phatra
US$1 billion listing in July, according to data Securities Pcl and Bualuang Securities Pcl
compiled by Bloomberg. are the lead arrangers for local investors,
Bank of America Corp is the lead manager
Thailand’s benchmark stock index has for the international offering, according
dropped more than 5% in the past three to the filing.

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Main Sponsor Official Car Supporting Sponsor

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honouring
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world

reuters

US job openings UK property funds
post biggest drop limit withdrawals
as pension funds
in nearly 2-1/2
years in August pull cash

by Lucia Mutikani August’s decline was the largest since by Loukia Gyftopoulou
Reuters April 2020, when the economy was reeling Bloomberg
from the first wave of the Covid-19 pan-
WASHINGTON (Oct 4): US job open- demic. Data for July was revised lower to LONDON (Oct 4):Asset managers in-
ings fell by the most in nearly 2-1/2 years show 11.17 million job openings instead cluding Blackrock Inc and Schroders plc
in August, though staying at high levels as of 11.239 million as previously reported. are limiting institutional investors’ with-
demand for labour remains fairly strong, drawals from some UK property funds
which could keep the Federal Reserve on its Economists polled by Reuters had fore- after a wave of requests to move money.
aggressive monetary policy tightening path. cast 10.775 million vacancies.
Schroders’ UK Real Estate fund has
Job openings, a measure of labour de- The Fed is trying to cool demand for la- deferred redemptions due at the start of
mand, dropped 1.1 million to 10.1 million bour and the overall economy to bring infla- October to as late as July 2023, which
on the last day of August, the Labor De- tion down to its 2% target.The US central will give the £2.8 billion (RM14.8 bil-
partment said in its monthly Job Openings bank has since March hiked its policy rate lion) fund more time to ensure it has
and LaborTurnover Survey, or JOLTS re- from near zero to the current range of 3.00% enough cash to cover the payments, ac-
port, on Tuesday. to 3.25%, and last month signalled more cording to a statement on its website.
large increases were on the way this year.
BlackRock has followed similar steps
BERLIN/PARIS/ROME (Oct 4):Two top EU eyes joint debt for its UK property fund, while Co-
European Union officials called for the use as German fiscal lumbiaThreadneedle has halted daily
of common spending to tackle the energy force worries allies dealing in its TPEN Property Fund.
crisis as member states ratcheted up criti- The real estate website React News re-
cism of German plans for a giant borrow- by Kamil Kowalcze, William Horobin ported the measures earlier.
ing programme to cap power prices. & Alessandra Migl iaccio
Bloomberg The moves come as pension funds
EU internal market chiefThierry Breton and other investors rebalance their
and Paolo Gentiloni, the bloc’s economy Tuesday before a meeting with his EU coun- portfolios into liquid assets such as
czar, said the current situation requires sol- terparts in Luxembourg.“We aren’t dealing cash after months of market volatility
idarity among member states, including the with a demand shock where public funds left them overexposed to real estate.
issuance of joint-guaranteed debt similar to have to be used to stabilise demand or stim- The market sell-off in gilts following
what was done during the Covid pandemic. ulate the economy, we are dealing with a the UK’s fiscal policies announced
supply-side shock, and we have to react to last month is set to worsen the issue.
“The energy crisis and rising social an- it by expanding the supply and by showing
ger in a context of record inflation and as- a joint front on the international markets.” Pensions hold long-dated bonds that
tronomical gas and electricity prices has they match with expected payments to
brought us to another crossroads,” the two The search for a common European the pensioners of the future, prompting
officials said in op-eds published in Eu- solution to the crisis comes as concern collateral calls when gilt yields spiked.
ropean newspapers including Germany’s mounts over Germany’s €200 billion plan, This too will require more liquid assets.
Frankfurter Allgemeine Zeitung. announced last week, to keep power prices
in check. German Chancellor Olaf Scholz Schroders said in an emailed state-
“We must think about mutualised tools said the measures would put a “large pro- ment the redemptions were requested
at the European level,” they said. “Only a tective umbrella” over Europe’s biggest before last week’s gilt meltdown, but
European budgetary response will allow economy. But it wouldn’t shield other na- the trend is likely to intensify in light
us, by supporting the action of the ECB, tions struggling with higher power prices. of pension funds’ liquidity issues.
to respond effectively to this crisis and to
calm volatile financial markets.” French Finance Minister Bruno Le A spokesperson said the decision
Maire suggested the “possibility at the will help “ensure sufficient liquidity is
The push for joint debt issuance faces national level to raise debt but with the maintained in order to progress im-
strong opposition from more hawkish EU support and the guarantee of all Europe- portant asset management initiatives
members, including Germany.While the bloc an member states, which means that you in line with performance enhancing
launched a €1.8 trillion (US$1.8 trillion) could borrow money at the lowest price”. business plans”. About £60 million
emergency package backed by joint debt to has been deferred and an £8 million
finance member states’efforts to deal with the Read the full story payment will be made to investors to-
pandemic, such a move was unprecedented. ward the end of the month.

German fiscal force ColumbiaThreadneedle said it had
“We are open to discussing other instru- deferred redemptions due to liquidity
ments, but this crisis is very different from constraints resulting from the recent
the corona pandemic,” German Finance market volatility and that it will go back
Minister Christian Lindner told reporters to daily dealing as soon as possible.

BlackRock declined to comment.

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world

Foreign outflows
from EM Asian
equities exceed

2008 outgo

by Gaurav Dogra WorstThai the harvest period and high fertiliser prices.
Reuters flooding in years Thailand received about 24% above average
damages crops, rainfall between Jan 1 and Sept 25, Kasikorn
(Oct 4): Foreigners resumed selling in said, citing weather department data.
Asian equities ex-China stocks in Sep- risks tourism
tember as investors were deterred by US revival “The current flood impact will hit house-
interest rate hikes, a firmer greenback and holds that are already vulnerable due to low
a weaker regional growth outlook. by Patpicha Tanakasempipat purchasing power,high costs of living,and high
Bloomberg household debt,” Kasikorn said in a report.
Data from stock exchanges in South
Korea, India, Taiwan, the Philippines,Vi- BANGKOK (Oct 4):Thailand is battling Tourism impact
etnam, Indonesia, and Thailand showed the worst flooding in years with a large A lower rice output and damage to vegetable
that foreigners sold equities worth a net swathe of its crop land inundated by sea- and fruit harvests may also spell bad news for
US$8.83 billion last month — their first sonal storms and swollen rivers, threaten- a country that is battling the highest food in-
monthly selling since June. ing to fuel food prices and hinder a nas- flation in over a decade.The hit to agriculture
cent tourism recovery. adds to headwinds to growth such as high fuel
The regional equities have so far faced and electricity prices and a weak baht, accord-
total outflows of US$69.7 billion in the first Popular tourism destinations such as ing toTim Leelahaphan,Bangkok-based econ-
three quarters of the year, a massive jump in Bangkok and Chiang Mai in the country’s omist at Standard Chartered Bank.
outflows of US$47.63 billion faced in 2008, northeast have reported flooding of streets
when the global financial crisis occurred. this week after heavy rains triggered by ty- “Flood impact could be a tail risk that
phoon Noru saw water level in the Chao could emerge in the next quarter or two
Last month, the US Federal Reserve Phraya and Ping rivers rising.An estimated for Thailand,”Tim said. “We need to mon-
raised its benchmark interest rate by 75 1.2 million rai (160,000 hectares) of agri- itor whether it will impact manufacturing
basis points, marking the third such hike cultural land was hit by flooding with almost or result in rate cuts. Any potential impact
in a row. Analysts expect the US central 82,000 houses damaged across 510 districts on tourism, which we hope would recover
bank to keep hiking rates to tame rising in 72 provinces, according to official data. in the next quarter or two, will be a new les-
inflationary pressures. son forThailand this time, especially as it is
With more storms forecast over the the hope for next year’s economic recovery.”
The region grapples with mounting in- next few weeks, Thai officials are taking
flationary pressures, interest rate hikes, and steps to minimise further damage to crops TheTourism Authority ofThailand is mon-
slowing economic growth,said Mark Haefele, and houses with Prime Minister Prayuth itoring the impact of floods in some key tourist
chief investment officer, UBS GlobalWealth Chan-Ocha making a trip to flood-hit destinations and it has seen no major disrup-
Management, and added that aggressive US northeastern provinces on Tuesday to tions yet, said governorYuthasak Supasorn.
rate hikes have also hurt the region’s curren- oversee relief efforts.The premier vowed
cies and its export markets. to shield the economy and low-income “Expected arrivals from Europe and the
households hit by the floods. US in the winter season shouldn’t be affected,”
Goldman Sachs cut the region’s 2022 Yuthasak said.“There hasn’t been any report
and 2023 EPS growth by two percentage The biggest damage is to rice crop and about booking cancellations due to the floods.”
points (pps) and 3 pps respectively at the it comes amid forecasts for smaller har-
end of last month, citing the negative im- vests from major producers such as India Thailand, also a major producer of rub-
pact of rising rates, a stronger dollar, and and Pakistan, which was hit by a devas- ber and sugar, is often ranked among the
slower growth on earnings. tating flood this year. Kasikorn Research world’s most vulnerable to climate change.
Center estimated Thailand’s main rice While the country was battered by flood-
Outflows from tech-reliant South Korea harvest may drop about 9% because of ing in 2019, 2017, and 2011, some regions
andTaiwan last month jumped to a three- the flooding, damage to the crop close to suffered severe droughts in the past decade.
month high of US$1.8 billion and US$5.3
billion respectively. On Tuesday, Bank of Thailand governor
Sethaput Suthiwartnaruep said the revival
India and Thailand witnessed outflows in tourism will ensure Southeast Asia’s sec-
worth US$903 million and US$653 mil- ond-largest economy will continue to expand
lion respectively, after each seeing inflows next year. The central bank has previously
in the previous two months. said the impact of floods needs close mon-
itoring.
Foreigners were also net sellers of equities
in the Philippines andVietnam markets last
month. On the other hand, Indonesian equi-
ties gained small inflows of US$209 million.

“The cloudy outlook on economic con-
ditions and firm policy stance from the Fed,
risk sentiments may still lean towards some
caution,which may lead to a lukewarm inflow
for Asian equities in the near term at best,”
saidYeap Jun Rong, a market strategist at IG.

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world

Tesla could face its toughest challenge
yet as economy cools

SAN FRANCISCO (Oct 4):As recently as July,Tesla by Hyunjoo Jin na, that lag, one indicator of the supply-demand
chief executive Elon Musk said the electric-car maker Reuters balance, has been cut four times since August to
did not have a problem with customer demand, sim- a minimum of a week for delivery.
ply a problem making and shipping all the ModelYs reuters
and Model 3s consumers were ready to buy. AndTesla, which has resisted marketing and in-
Tesla made over centives, offered Chinese buyers a rebate of 8,000
That may no longer be true. 22,000 more EVs yuan (US$1,100) if they took delivery before the
Analysts see early signs of caution for the than it delivered end of September.
world’s most valuable car maker, including for
its increasingly premium pricing, at a time when to customers Musk himself in July said Tesla prices were
the global economy is slowing and expectations in the third hitting “embarrassing levels” and that “demand
for global auto sales are being dialled back. quarter — the falls off a cliff” when prices are rising to “some
Tesla has navigated supply-chain challenges first time it has arbitrarily high level”.
better than most of its rivals and analysts expect had to finance
it to post strong growth through next year as it that many cars AsTesla pushes its own capacity expansion, it is
expands output, but there are also indications it in inventory. running into a wave of new EV competition,especial-
is being forced to respond to a tougher market. ly in China from the likes of BYD, Nio and Xpeng.
The most immediate concern:Tesla made over
22,000 more EVs than it delivered to customers in ATesla output plan reported last week by Reu-
the third quarter, data released this week showed. ters, before the third quarter delivery announce-
That is the first time it has had to finance that ment, showed the automaker’s detailed plan to
many cars in inventory. run and source its factories to hit output growth
For most of the past three years,Tesla has been of 50% this year and next, a target just beyond
selling more EVs in a quarter than it can produce. the most bullish outside forecasts.
The one notable exception was in early 2020 when
Covid disrupted deliveries. The question of whether and how Tesla sees
While Tesla’s numbers remain low, building the supply-demand balance shifting will be central
inventory has historically been a down-cycle indi- for investors when the company reports quarterly
cator for automakers, forcing markdowns in past results on Oct 19.
recessions of the kind Tesla has not yet faced.
Tesla blamed transport issues for a delivery Musk has offered an evolving view on eco-
total that fell short of Wall Street expectations. nomic risks. In June, he told Tesla staff he had a
If Tesla needs to hold more inventory in com- “super bad feeling” about the economy, a reason
ing quarters to smooth deliveries and avoid the he cited to pause hiring at the time. In August,
end-of-quarter rush that has been its norm, that he told investors he expected a “mild recession”
would add to the US$1.2-billion in undelivered that could last up to 18 months.
cars it held at the end of the second quarter.
Analysts believe Tesla still has more demand Guidehouse Insights analyst Sam Abuelsamid
than it can supply, the bedrock assumption behind said Tesla needed to get higher production from
its aggressive expansion plan over the next year as its newer factories in Austin and Berlin. Musk had
it ramps up production at factories in Shanghai, earlier compared the start of production in those
Berlin and Austin,Texas. plants to “gigantic money furnaces”.
Morgan Stanley analyst Adam Jonas said he
believedTesla did not face an immediate demand “Tesla could end up running into some finan-
problem, but added a caution on pricing and Te- cial challenges in the third and fourth quarters (of
sla’s ability to buck the economic cycle. 2023), if those factories continue to be underuti-
“It would be unreasonable to assume that there lised,” Abuelsamid said.
is: (a) a limit to how much Tesla can continue to
increase prices without demand suffering and (b) Fitch Solutions, which provides research on
that the company was not exposed to decelerating country risk and industries, said on Tuesday it
macroeconomic growth,” he said in a research note. expected global auto sales to drop 5.4% in 2022,
Tesla’s average vehicle transaction price jumped before bouncing back only partly in 2023.
31% to US$69,831 in August, compared with
US$53,132 at the start of 2021, according to Kel- Read also:
ly Blue Book.That outpaced industry-wide price EV demand sparks revival of US manganese
hikes on new cars of 18% to US$48,301 during mining after decades
the same period. “South32 Ltd aims to accelerate development of
The waiting timeTesla customers face between the first new US manganese mine for decades as
order and delivery has also been dropping in both carmakers rush to secure supply of the metal needed
the US and China,Tesla’s largest markets. In Chi- in electric vehicle batteries.Automakers are “super
keen” to secure supply from the company’s Clark
Deposit in Arizona, which would become the only
local source of the metal, chief executive officer
Graham Kerr said in an interview.“Probably
the bigger challenge is can we get it to them quick
enough?”

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world

Credit Suisse’s options worsen as
markets mayhem takes toll

ZURICH (Oct 4): Dixit Joshi will not by Marion Halftermeyer & been doubly unlucky because it is skewed
forget his first day as Credit Suisse Group Myriam Balezou toward investment bank activities that are
AG’s chief financial officer in a hurry. And Bloomberg struggling right now, including its lever-
yet the experience will not have been en- aged-loan unit.
tirely unfamiliar for the former Deutsche With its shares on the
Bank AG high flier. floor after dropping more According to Venditti, the problem
than 95% from their peak, for chief executive officer Ulrich Koern-
Shares in the Swiss banking giant the lender hopes to raise er and chairman Axel Lehmann — the
plummeted 12% to an all-time low on Swiss duo charged with designing a work-
Monday after a weekend of fevered Twit- cash through disposals able restructuring plan — is that fractious
ter speculation about its financial health, rather than a highly shareholders will react badly if the pair
before they regained almost all of the loss- dilutive rights issue. do not take radical action to shrink the
es later in the day. investment bank, after previous regimes
bloomberg ducked the hard choices.That may leave
The wild gyrations showed the diffi- them little alternative other than to em-
culty for Credit Suisse in managing the after dropping more than 95% from bark on an expensive restructuring.
febrile confidence of investors as it rushes their peak, the lender hopes to raise cash
to devise a repair plan for its investment through disposals rather than a highly di- A sale of the asset-management unit
bank, which has been on the ropes since lutive rights issue of the type Deutsche — which suffered its own reputational hit
suffering massive losses last year from Bank ended up doing. from the implosion of Greensill Capital
backing Archegos Capital Management. — is another potential money-spinner. Or
The price investors have to pay to insure “If one of the options includes a cap- Koerner and Lehmann could dust off the
the bank’s debt hit record levels, leading ital raise, it’s always going to be tough idea of former CEO Tidjane Thiam and
some to harken back to the fear-driven for a stock to steady when the amount pursue an initial public offering (IPO) of
days of 2008. of potential issuance and dilution is un- the domestic Swiss bank, which has held
known,” said Alison Williams, a banking up relatively well as other parts of Credit
In reality, several analysts say the better analyst at Bloomberg Intelligence. “Tough Suisse have been engulfed by scandal and
comparison is to Deutsche Bank in 2016 markets increase the impatience.” markets mayhem. That would, however,
and 2017 — a time when Joshi helped de- be tricky in a rough moment for IPOs.
vise its own crisis response to a surge in A sale of Credit Suisse’s struc-
the German bank’s credit-default swaps. tured-products group, which trades se- One option would be bringing for-
Morgan Stanley went through similar in curitised debt, has attracted interest from ward the publication of the strategy re-
2011. Both survived the ordeal. potential buyers including BNP Paribas view, rather than enduring another three
SA and Apollo Global Management Inc, weeks of stock-market turmoil, although
“This is not 2008,” Citigroup Inc’s but there is scepticism about how easy it the management team will be wary of yet
Andrew Coombs said. will be to sell such assets — or secure good another botched C-suite attempt to cau-
prices — when rising interest rates have terise the wounds. JPMorgan analyst Kian
Indeed, the shares climbed more than put them under pressure. The broader Abouhossein suggested the bank could
4% on Tuesday, taking them above where backdrop for investment banking is hardly bring forward an announcement on its
they closed on Friday, when chief exec- any rosier: Bloomberg Intelligence estimated third-quarter capital position, to back up
utive officer Ulrich Koerner published that fees in the US may have dropped by the weekend message to investors that its
a memo that helped set off the turmoil. 50% or more in the third quarter. balance sheet remains solid.
Costs to insure the bank’s debt against
default also declined. “Had they started to restructure a year The experience of Deutsche Bank and
or two ago then they would have an easier Morgan Stanley might be instructive.The
Nevertheless, the initially panicked time selling as there was more demand German lender’s 2016 crisis was sparked
stock-market reaction on Monday to ris- for risky assets,” said Andreas Venditti, a in part by the US Justice Department re-
ing credit default swap costs — and the banks analyst at Vontobel. The firm has questing US$14 billion to settle an inves-
sell-off over the past couple of months tigation into residential mortgage-backed
— points to a worsening set of options securities. Even after the bank ultimately
available to the Swiss firm ahead of its reached a deal for about half that amount,
emergency strategy review on Oct 27, the concerns were not allayed until it
which is expected to include a large-scale raised €8 billion euros (RM36.75 billion)
investment banking retreat. The shares of fresh capital the next year.
have lost about a quarter of their value
since Credit Suisse announced the stra- Morgan Stanley faced its own surge
tegic review. in credit spreads from market rumours
in 2011, when persistent chatter that it
Investors are worried about how the was heavily exposed to shaky European
bank will cover such a plan’s cost — which debt weighed on its stock and bonds.The
many analysts have pegged at US$4 bil- firm’s biggest shareholder gave it public
lion (RM18.58 billion) — and what that backing, but it took months for the price
would mean for its core capital ratio of of the default swaps to fall as the feared
13.5%, especially during a period when losses never materialised.
the investment bank has been suffering
heavy losses. With its shares on the floor

w e d n e s d a y o c t o B E R 5 , 2 0 2 2 26 T h e E d g e C E O m o r n i n g b r i e f

MARKETS

CPO RM 3,615.00189.00 OIL US$ 89.560.7 RM/USD 4.6435 RM/SGD 3.2479 RM/AUD 3.0111 RM/GBP 5.2894 RM/EUR 4.5871

Top 20 active stocks

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

Citaglobal Bhd 85.91 0.025 0.265 12.77 289.5

Cypark Resources Bhd 60.88 0.030 0.460 -49.45 270.9

Top Glove Corp Bhd 60.26 0.025 0.620 -76.06 4,964.6

PT Resources Holdings Bhd 48.82 0.000 0.455 0.00 243.4

Hiap Huat Holdings Bhd 43.67 0.020 0.160 10.34 63.2

Tanco Holdings Bhd 38.02 0.000 0.310 29.17 547.6

Ta Win Holdings BHD 35.09 0.000 0.045 -64.00 154.1

Dagang NeXchange Bhd 31.17 0.020 0.785 3.29 2,477.7

NWP Holdings Bhd 28.74 0.005 0.240 -2.04 132.7 World equity indices

Hextar Industries Bhd 27.16 0.010 0.480 200.00 550.7

My EG Services Bhd 25.82 0.000 0.860 -19.63 6,401.0 CLOSE CHANGE CHANGE CLOSE CHANGE CHANGE
(%)
Kejuruteraan Asastera Bhd 24.99 0.020 0.470 84.31 849.7 DOW JONES 29,490.89 765.38 2.66 (%)
INDONESIA 7,072.26 62.54 0.89
Velesto Energy Bhd 23.23 0.005 0.120 0.00 985.9

Hong Seng Consolidated Bhd 22.71 -0.055 0.260 -80.67 1328.2 S&P 500 3,678.43 92.81 2.59 JAPAN 26,992.21 776.42 2.96

Public Bank Bhd 22.49 0.020 4.270 2.64 82,883.7 NASDAQ 100 11,229.73 258.51 2.36 KOREA 2,209.38 53.89 2.50

SNS Network Technology Bhd 22.09 0.000 0.270 0.00 435.5 FTSE 100 7,051.61 142.85 2.07 PHILIPPINES 5,987.72 204.57 3.54

Hibiscus Petroleum Bhd 20.31 0.020 0.870 6.75 1,750.8 AUSTRALIA 6,699.29 242.42 3.75 SINGAPORE 3,138.90 31.81 1.02

Berjaya Corp Bhd 19.77 0.000 0.235 -6.00 1302.4 CHINA 3,024.39 -16.82 -0.55 TAIWAN 13,576.52 276.04 2.08

Scomi Energy Services Bhd 17.99 0.015 0.060 9.09 28.1 HONG KONG 17,079.51 -143.32 -0.83 THAILAND 1,578.00 19.95 1.28

ATA IMS Bhd 17.74 0.005 0.310 -49.18 372.9 INDIA 58,065.47 1,276.66 2.25 VIETNAM 1,078.14 -8.30 -0.76

Data as compiled on Oct 4, 2022 Source: Bloomberg Data as compiled on Oct 4, 2022 Source: Bloomberg

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

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

MNC Wireless Bhd 0.010 100.00 546.9 -33.33 22.9 EA Holdings Bhd 0.005 -50.00 40.0 -75.00 32.3

China Automobile Parts 0.010 100.00 209.3 0.00 13.6 Green Ocean Corp Bhd 0.010 -33.33 9.0 -66.67 21.1

Compugates Holdings BHd 0.015 50.00 3,818.0 0.00 68.8 Anzo Holdings Bhd 0.010 -33.33 1,350.0 -66.67 11.2

JOE HOLDING BHD 0.015 50.00 6,850.3 -57.14 45.9 Dolomite Corp Bhd 0.010 -33.33 100.0 -66.67 5.9

Mlabs Systems Bhd 0.015 50.00 407.1 -50.00 21.7 Sarawak Cable Bhd 0.045 -25.00 4,606.8 -78.57 18.0

Eduspec Holdings Bhd 0.020 33.33 377.6 33.33 60.9 Pasukhas Group Bhd 0.015 -25.00 557.2 -40.00 28.6

Scomi Energy Services Bhd 0.060 33.33 17,989.6 9.09 28.1 Serba Dinamik Holdings Bhd 0.020 -20.00 2,683.4 -94.29 74.2

Impiana Hotels Bhd 0.020 33.33 18.0 -73.33 28.9 Borneo Oil Bhd 0.020 -20.00 1,078.9 -33.33 169.8

XOX Networks Bhd 0.025 25.00 132.7 -16.67 28.4 Hong Seng Consolidated Bhd 0.260 -17.46 22,708.9 -80.67 1328.2

LKL International Bhd 0.030 20.00 660.3 -57.14 29.1 Key Asic Bhd 0.025 -16.67 200.1 -64.29 34.1

SWS Capital Bhd 0.240 17.07 5,331.2 -40.00 66.0 Barakah Offshore Petroleum 0.025 -16.67 230.0 -68.75 25.1

Top Builders Capital Bhd 0.035 16.67 116.6 0.00 24.7 Minetech Resources Bhd 0.030 -14.29 201.1 -70.00 35.7

EA Technique M Bhd 0.070 16.67 3,504.0 -12.50 37.1 mTouche Technology Bhd 0.035 -12.50 3.0 -61.11 32.4

MQ Technology Bhd 0.035 16.67 615.4 -30.00 43.8 Trive Property Group BHD 0.040 -11.11 216.6 33.33 50.5

Bina Puri Holdings BHD 0.035 16.67 262.7 -22.22 55.9 TWL Holdings Bhd 0.045 -10.00 13,341.2 -10.00 165.9

Alam Maritim Resources Bhd 0.035 16.67 743.6 40 53.6 Gopeng BHD 0.405 -8.99 3.0 -1.22 163.4

Pinehill Pacific Bhd 0.390 14.71 50.1 -25.00 58.4 Country View Bhd 0.805 -8.52 3.2 -19.50 80.5

Quality Concrete Holdings 1.100 14.58 8.1 -17.91 63.8 GDEX Bhd 0.110 -8.33 526.9 -61.40 613.8

Hiap Huat Holdings Bhd 0.160 14.29 43,673.3 10.34 63.2 Superlon Holdings Bhd 0.585 -7.87 17.1 -24.52 92.9

FSBM Holdings BHD 0.240 14.29 61.9 29.73 42.7 Annum Bhd 0.295 -7.81 2547.30 -60.14 28.8

Data as compiled on Oct 4, 2022 Source: Bloomberg Data as compiled on Oct 4, 2022 Source: Bloomberg

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

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

Petronas Dagangan Bhd 21.720 1.020 372.3 5.44 21,577.8 Nestle Malaysia Bhd 130.700 -1.000 81.2 -2.61 30,649.2

Carlsberg Brewery Malaysia 22.740 0.320 41.2 13.25 6,952.7 Kuala Lumpur Kepong Bhd 20.500 -0.300 1,930.6 -5.88 22,102.2

Fraser & Neave Holdings Bhd 21.840 0.280 11.3 -11.72 8,010.4 Panasonic Manufacturing 22.200 -0.300 14.5 -23.18 1,348.6

Maxis Bhd 3.690 0.180 1,334.1 -23.73 28,893.2 Negri Sembilan Oil Palms BHD 3.600 -0.190 2.0 18.69 252.7

PMB Technology Bhd 4.000 0.180 1,005.0 62.87 5,011.2 United Plantations BHD 14.160 -0.180 252.4 3.31 5,852.3

Hengyuan Refining Co Bhd 4.270 0.170 1,402.1 10.34 1,281.0 Sime Darby Plantation Bhd 4.040 -0.120 926.2 7.45 27,939.5

MISC Bhd 7.020 0.160 485.6 -0.43 31,335.5 Scientex Packaging Ayer Keroh 2.070 -0.110 20.6 -13.75 725.8

Petron Malaysia Refining 4.630 0.150 245.6 5.71 1,250.1 Country View Bhd 0.805 -0.075 3.2 -19.50 80.5

Quality Concrete Holdings 1.100 0.140 8.1 -17.91 63.8 Genting Plantations Bhd 5.620 -0.070 125.0 -14.74 5,042.3

HAP Seng Consolidated Bhd 6.140 0.140 93.5 -20.26 15,286.6 DKSH Holdings Malaysia Bhd 4.600 -0.070 33.2 -4.17 725.2

Pentamaster Corp Bhd 4.100 0.130 815.7 -26.13 2,916.4 Heineken Malaysia Bhd 23.780 -0.060 75.0 14.11 7,183.9

Advanced Packaging 2.670 0.120 1.5 2.69 53.1 Hong Seng Consolidated Bhd 0.260 -0.055 22,708.9 -80.67 1,328.2

Malaysia Airports Holdings 5.620 0.120 860.2 -6.02 9,324.7 Kotra Industries Bhd 4.100 -0.050 22.6 29.75 606.8

Westports Holdings Bhd 3.180 0.110 527.0 -21.48 10843.8 Riverview Rubber Estates BHD 3.450 -0.050 2.0 14.11 223.7

CIMB Group Holdings Bhd 5.230 0.110 8,282.0 -4.04 54,780.3 Chin Hin Group Bhd 2.800 -0.050 616.8 114.56 4954.4

Power Root Bhd 1.960 0.100 2,360.3 48.55 815.9 Superlon Holdings Bhd 0.585 -0.050 17.1 -24.52 92.9

Signature International Bhd 1.750 0.100 465.6 26.81 507.2 One Glove Group Bhd 0.550 -0.045 12.5 -56.35 156.2

Tenaga Nasional Bhd 8.280 0.100 1620.4 -11.35 47635.5 IHH Healthcare Bhd 5.850 -0.040 5,034.7 -20.30 51,515.4

Hong Leong Financial Group 18.600 0.100 58.4 7.27 21301.5 Gopeng BHD 0.405 -0.040 3 -1.22 163.4

Hong Leong Bank Bhd 20.620 0.100 798.8 10.74 44698.3 Ajinomoto Malaysia Bhd 11.280 -0.040 17.4 -26.75 685.8

Data as compiled on Oct 4, 2022 Source: Bloomberg Data as compiled on Oct 4, 2022 Source: Bloomberg