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ISSUE 390/2022

CEOMorningBrief
HOME: MOF: No new taxes until Malaysian economic recovery firmly on track p3
Litrak to distribute RM5.08 per share from highway sale; does not intend to maintain listing status p3

Top Glove’s paper loss from share buyback jumps to RM1.2 bil p6
WORLD: OECD slashes growth outlook, but sees limited stagflation risk p16

Trucker strike in South Korea poses new risk to global trade p19

ZAHID IZZANI/THE EDGE

Malaysia to table
Fiscal Responsibility Bill
at next Parliament session

Report on Page 2.

THURSDAY JUNE 9, 2022 2 THEEDGE CEO MORNING BRIEF

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Malaysia to of their current suppliers as they transition Tengku
table Fiscal away from carbon,” he said. Zafrul denies
Responsibility Bill rumours of
at next Parliament In short, if Malaysian companies are part his political
of the MNC ecosystem, they risk being ex-
session cluded from future business opportunities if ambition
they do not start to adapt their businesses to
BY JUSTIN LIM ESG practices,Tengku Zafrul said. Bernama
theedgemarkets.com
The small and medium enterprise (SME) PUTRAJAYA (June 8): Finance Min-
KUALA LUMPUR (June 8):The Ministry segment is deemed one of the key building isterTengku Datuk Seri ZafrulTeng-
of Finance (MoF) is looking at introducing blocks to achieve Malaysia’s ESG aspirations ku Abdul Aziz has brushed aside talk
the Fiscal Responsibility Act by tabling the and net zero-carbon goal by 2050, according on his political ambition including the
bill at the Malaysian Parliament’s next ses- to Tengku Zafrul. rumour that he will be contesting the
sion — scheduled to start on July 18 — to Kuala Selangor Parliamentary seat.
boost tax collection, which will be crucial to Tengku Zafrul said the MoF is committed
replenish the nation’s coffers to finance the to developing the capacity of SMEs because “My focus now is on the country’s
nation’s developmental and longer-term re- the sector is a key contributor to the Malay- economic recovery efforts.
form plans, according to Fi- sian economy as it employs almost 50% of
nance MinisterTengku Datuk the country’s workforce. “Right now I am still working at
Seri ZafrulTengku Abdul Aziz the MOF (Ministry of Finance) and
onWednesday (June 8). Initiatives to enable SMEs to embrace not thinking about politics. We have
ESG principles include the Principles of been facing very difficult challenges
Tengku Zafrul, who offici- Good Governance for Government-Linked managing the economic recovery, so
ated at the Malaysian Institute Investment Companies and Bank Negara I am focusing on my work,” he said.
of Accountants (MIA) Inter- Malaysia’s RM1 billion Low Carbon Tran-
national Accountants Con- sition Facility, according to him. He said this to reporters after a
ference 2022, which is held Hari Raya event here on Wednesday
virtually on Wednesday and Looking back,Tengku Za- in response to queries if he was tar-
Thursday, said the proposed frul said ESG risks have been geting the Kuala Selangor Parliamen-
Fiscal Responsibility Act aims further exacerbated by Cov- tary seat for his electoral debut in the
to “broaden our tax base — id-19, which in the last two 15th General Election (GE15) on an
including taxing the shadow years had set back many de- UMNO ticket.
economy — and improve tax compliance veloping countries’ progress by
and administration towards helping boost at least a decade. It was reported that the MOF’s
tax collection”. adoption of Kuala Selangor district
“And what about Malaysia? and his frequent visits to the area were
Meanwhile, Corporate Malaysia needs to In the last two years, the MoF clear signs thatTengku Zafrul would
make the transition to environmental, social, has been responsive to the na- be contesting the Parliamentary seat
and governance (ESG)-focused operations tion’s pressing needs, particu- in GE15.
quickly or risk being excluded from future larly through the eight stimu-
business opportunities, according to Teng- lus packages valued at RM530 The Kuala Selangor parliamentary
ku Zafrul. billion and two expansionary seat is currently held by Datuk Seri
budgets in 2021 and 2022. Dr Dzulkefly Ahmad of Amanah, who
“A study by a global bank in 2021 revealed “To future-proof ourselves and the na- was earlier reported to have said he
that by 2025, 70% of multinational corpo- tion, today I would like to focus on MoF’s would not contest in GE15 because
rations (MNCs) will remove suppliers that responsible and reformist stand, and how he wanted to give way to the party’s
endanger their carbon transition plan. And the accounting profession can support this young leaders.
these MNCs are expected to exclude 35% national aspiration to help the government
re-set the nation on the right [fiscal] track to When asked further on his inten-
chart Malaysia’s sustainability journey and tion to contest,Tengku Zafrul firmly
build our people and businesses’ resilience. said: “Not at this point in time.”
“To achieve this, we must become more
agile and competent, as well as embrace and
incorporate ESG considerations into our pol-
icy formulation and business operations,”
Tengku Zafrul said.

THURSDAY JUNE 9, 2022 3 THEEDGE CEO MORNING BRIEF

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KUALA LUMPUR (June 8): There will MOF: No new cal consolidation. It is not just about
be no new taxes including the reintroduc- taxes until strengthening revenue but also about
tion of the goods and services tax (GST) Malaysian moving efficiency of our expenditure.
in Malaysia until the country’s economic
recovery is firmly on track following the economic recovery “When you talk about revenue, it is
impact of movement restrictions due to firmly on track not necessarily new taxes, but improving
the Covid-19 outbreak which began in our existing taxes. It is now more about
early 2020, according to the Ministry of BY IZZUL IKRAM & HAILEY CHUNG how we can be more targeted,” he said.
Finance’s (MOF) deputy secretary gen- theedgemarkets.com
eral of treasury Datuk Johan Mahmood In line with Malaysia’s fiscal consol-
Merican on Wednesday (June 8). ing at,” he said. idation, Johan said the country’s pro-
Looking back, Malaysia announced a posed Fiscal Responsibility Act — slated
“For clarity, I want to make sure for the end of 2022 — aims to broad-
I start off by saying that no decision GST of 6% beginning April 1, 2015 be- en the nation’s tax base, improve tax
has been made on the reintroduction fore the sales tax and service tax scheme compliance and administration towards
of GST. No new taxes are envisioned was reimplemented in the country on boosting tax collection.
until [Malaysia’s economic] recovery is Sept 1, 2018 to replace the GST.
firmly on track,” he said at the two-day “We plan to introduce the Fiscal Re-
Invest ASEAN 2022 conference, which On Wednesday, Johan said the MOF’s sponsibility Act. This is something tar-
began on Wednesday. commitment to fiscal consolidation is geted by the end of this year,” he said.
not centred around the introduction of
Although no decision has been made new taxes, but more of a consolidation Earlier onWednesday, Finance Minister
on GST reintroduction, Johan said that and improvement of existing taxes. Tengku Datuk Seri Zafrul Tengku Abdul
in line with the MOF’s mission of con- Aziz said the MOF is looking at introduc-
solidating the nation’s fiscal position, the “We are committed to a gradual fis- ing the Fiscal Responsibility Act by tabling
reintroduction of GST is on the cards. the bill at the Malaysian Parliament’s next
session — scheduled to start on July 18
“As you know, we are obviously look- — to boost tax collection, which will be
ing to consolidate our fiscal position. crucial to replenish the nation’s coffers to
Certainly GST is something we are look- finance the nation’s developmental and
longer-term reform plans.

Gamuda cludes approvals from shareholders of Litrak to distribute
finalises four the respective concession holding com- RM5.08 per share from
highway disposal panies.
draft agreement highway sale; does
for proceeds of The four KlangValley highway con- not intend to maintain
cession holding companies are Kesas
RM4.5 bil Holdings Bhd, Sistem PenyuraianTrafik listing status
KL Barat Holdings Sdn Bhd (Sprint),
BY CHESTER TAY Lingkaran Trans Kota Holdings Bhd BY SULHI KHALID
theedgemarkets.com and Projek Smart Holdings Sdn Bhd theedgemarkets.com
(SMART).
KUALA LUMPUR (June 8): Gamuda KUALA LUMPUR (June 8): There will be
Bhd’s four Klang Valley highway con- Gamuda said it plans to utilise bumper dividends for the shareholders of Ling-
cession holding companies have agreed 42.6% of these proceeds for capital karanTrans Kota Holdings Bhd (Litrak) and
and finalised the terms and conditions management acitivites, including dis- its parent Gamuda Bhd, following the divest-
of a draft share sale and purchase agree- tribution of a special dividend; 38.3% ment of their toll concessionaires for RM4.48
ment with Amanat Lebuhraya Rakyat for repayment of borrowings, 18.7% billion to Amanat Lebuhraya Rakyat Bhd.
Bhd, recently established as a private, for working capital, and the remaining
not-for-profit entity. for expenses related to the proposed Litrak — in which Gamuda holds 42.8%
disposal. stake — announced that it will distribute
Under the finalised draft agreement, RM2.71 billion proceeds it is expected to re-
the four highways will be disposed to Gamuda owns 70% of Kesas, while ceive from the asset sale.
Amanat Lebuhraya Rakyat for an aggre- Perbadanan Kemajuan Negeri Selangor
gate RM4.477 billion, with Gamuda’s (PKNS) holds the remaining 30% stake. The amount is equivalent to RM5.08 per
portion amounting to RM2.347 billion. share, its Bursa Malaysia filing showed on
Gamuda also owns 42.8% of Litrak Wednesday (June 8).
In a filing with Bursa Malaysia, and 50% of SMART (Gamuda’s 50:50
Gamuda said the finalised agreement joint venture with MMC Corp Bhd). Upon completion of the sale, Litrak’s board
will only be executed upon the fulfil- In Sprint, Gamuda directly holds 30%, does not intend to maintain its listing status.
ment of all conditions set out in the re- while Litrak has 50% and Kumpulan
spective conditional letter of offer from Perangsang Selangor Bhd (KPS) owns Gamuda, on the other hand, said it in-
Amanat Lebuhraya Rakyat, which in- 20%. This gives Gamuda an effective tends to distribute RM1 billion of the total
stake of 51.4% in Sprint. of RM2.35 billion it will be getting from the
divestment, to its shareholders.
Shares of Gamuda gained eight sen
to RM3.60 onWednesday (June 8), val- Based on the issued share capital of 2.55
uing it at RM9.19 billion. Litrak closed billion shares, the amount distributed is equiv-
19 sen higher at RM4.87, giving it a alent to 39.16 sen per share.
market capitalisation of RM2.62 billion.

KPS, meanwhile, climbed half sen to
76.5 sen, valuing it at RM411.1 million.

THURSDAY JUNE 9, 2022 4 THEEDGE CEO MORNING BRIEF

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KUALA LUMPUR (June 8): Inflation in Malaysia’s to have asset allocation when everything
the country is expected to remain high for inflation to stay is going down. And this happens at the
at least until the third or fourth quarter start of the year with bonds and equities
of the year before tapering off, says UOB high before apart from residential properties in a lot
Asset Management Malaysia chief exec- tapering off by of developed markets.
utive officer Lim Suet Ling.
year’s end “We keep a neutral weight between eq-
“The scenario has changed now in the — UOB uities, bonds but slightly overweight on
sense that inflation becomes stickier. Pre- real estate,” he said.
viously, we were thinking that it is just a BY SHAZNI ONG
short term kind of supply shock and you theedgemarkets.com Ambrose also opined that Malaysia
can get it over once the productions start does not have a serious problem with in-
again,” she said during a panel session at over to wages and rental. Once it flows into flation as there is a recovery in demand
the Maybank Invest Asean 2022 confer- wages, it’s going to be there and it’s very despite the higher prices.
ence on Wednesday (June 8). unlikely that wages would be cut,” she said.
“I think we can edge up interest rates in
Lim said the situation was more pos- “In this case, when we relook at the a gradual way and retain economic health.
itive at the beginning of this year as Ma- market, and set going through the slow- I’m not saying domestic demand is great,
laysia and other countries were coming ing down in terms of raising interest rates, but it seems to be recovering now that we
out of the lockdown. what we are advising our investors is to be have opened up.
defensive and stay cautious for the time
“We saw the supply chain bottleneck being,” Lim added. “We’ve also benefited from higher com-
but at the same time, we could see demand modity prices. The key thing is to make
rising back and production coming back. Gerald Ambrose, the CEO of abrdn sure the ordinary Malaysians do well and
Hence, our thinking at that time was it Islamic Malaysia Sdn Bhd, concurred that would be done perhaps by a gradual
could be a mid-cycle expansion and eco- with Lim and added that investors have increase in interest rates,” he said.
nomic growth can continue to move for to look at a different way in terms of as-
a couple of years more,” she said. set allocation given that inflation is set to Malaysia’s inflation, as measured by the
be “sticky”. consumer price index (CPI), increased
However, the Ukraine war resulted in 2.3% in April 2022 from a year earlier,
commodity prices shooting up, along with “We still believe that it’s very difficult led by higher food prices, according to
oil and food prices. China, meanwhile, the Department of Statistics Malaysia
continued to see a lockdown for a couple last month.
of months, and again the supply chain got
affected, said Lim. The increase in food inflation, which
contributed the highest weightage to the
“Because of various reasons globally like overall weight of the CPI, remained to be
the China-US tension, the stickiness of in- a major contributor to inflation. Inflation
flation is there and we can see it flowing for this group increased 4.1% year-on-
year in April.

KUALA LUMPUR (June 8): Malaysia’s BNM says not support sustainable growth, moving for-
monetary policy will remain unaggressive to be aggressive ward,” he highlighted.
in future, with adjustments based on the
economic growth and inflation, according with OPR BNM’s Monetary Policy Committee
to Bank Negara Malaysia (BNM) deputy on May 11 raised the OPR by 25 basis
governor Datuk Abdul Rasheed Ghaffour. BY IZZUL IKRAM & HAILEY CHUNG points to 2% from a record low of 1.75%
theedgemarkets.com due to increased global inflationary pres-
“In terms of timeline and the level of sures, as well as the sustained reopening
extent of [the] adjustments itself, what of global economy and improvement in
is important is [that] we will not need to labour markets.
be aggressive.
With the normalisation of economic
“We are not in the same situation as we activity, economists foresee further rate
see in the advanced economies in terms hikes throughout 2022 and 2023.
of inflation rate and strength of demand,” Read also:
he said during Invest ASEAN 2022 host- Asean benefits from China’s
ed by Malayan Banking Bhd (Maybank) transition, but risks dependence Click
on Wednesday (June 8). here
ESG transition an opportunity for old
Abdul Rasheed noted that the central economy-heavy Asean, says Maybank
bank has to gauge Malaysia’s economic Click here
“realities” — growth and inflation — and Shariah investing provides more
move to adjust the overnight policy rate resilience to investment solutions
(OPR) as appropriate. Click here

“What we are doing is to appropriate-
ly calibrate our monetary policy accom-
modation based on the outlook of both
growth and inflation.

“The terminal rate, I think we should
not be fixated on a particular number;
what is important is that we need to cal-
ibrate the monetary policy that would

THURSDAY JUNE 9, 2022 5 THEEDGE CEO MORNING BRIEF

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KUALA LUMPUR (June 8): Potential REUTERS laysia’s services consumption is close to
headwinds could moderate Malaysia’s pri- pre-pandemic levels and likely to converge
vate consumption growth, says UOB Re- Malaysia’s private with consumption of goods.
search, citing higher global uncertainties and consumption
expiring pandemic policy measures, along faces potential “The convergence accelerated with a full re-
with higher cost of living and interest rates. headwinds opening of the economy and country’s borders
amid global in April-May, release of pent-up demand, and
In a research note onWednesday (June 8), improving labour market conditions,” it said.
UOB said these headwinds could be countered uncertainties, says
through wider job opportunities, higher in- UOB Research Meanwhile, UOB opined that the easier
comes and direct cash subsidies to consumers. interest-free financing option (such as Buy
BY SULHI KHALID Now, Pay Later or BNPL) can provide more
The research house has maintained its theedgemarkets.com room for consumption growth, albeit at the
projection for private consumption growth expense of potentially higher consumer debt,
at 6.5% which is unsustainable in the medium-term.

UOB said private consumption still It noted that BNPL payment adoption
has room to grow with the reopening and in Malaysia grew significantly during the
normalisation of activity. pandemic and is expected to rise 49% per
annum to bring BNPL gross merchandise
“This is partly driven by an ongoing value to US$6.6 billion by 2028.
shift in consumer preferences, as spend-
ers rotate their spending from goods to BNPL growth is largely underpinned by the
services as the economy reopens,” it said. underbanked and unbanked population,which
is estimated at 55% of population, it said.
The research house noted that Ma-
“Though considered more inclusive,
there is risk of excessive build-up of con-
sumer debt.This lends to credit risks and
financial vulnerabilities, especially for lower
income households, and borrowers that are
highly leveraged with low financial buffers.

“As such, debt driven growth is consid-
ered unsustainable in the medium-term.

“Sustainable consumption trends must
be supported by higher incomes, lower un-
employment, and increased productivity,”
UOB stressed.

KUALA LUMPUR (June 8): Maybank In- Malaysia has ket (DCM) has also remained stable with
vestment Bank (Maybank IB) sees the Ma- RM3 bil IPO a full-year outlook of RM110 billion, Fad’l
laysian initial public offering (IPO) pipe- pipeline in 2H22, said. This compares with RM114 billion
line to value at around RM3 billion in the says Maybank IB recorded in 2021, according to Securities
second half of 2022 (2H22), said its chief Commission Malaysia’s data.
executive officer Datuk Fad’l Mohamed. BY ADAM AZIZ
theedgemarkets.com “On DCM, we have a potential of RM6.8
Across the wider equity capital market billion coming up in 2H22, and potential
(ECM), the investment bank is also see- SHAHRIL BASRI/THE EDGE ESG[-linked] alone is over RM6 billion.
ing some traction in the merger and ac-
quisition (M&A) and private equity (PE) Datuk Fad'l Mohamed “We have completed 33 issuances total-
space, Fad’l said at a press conference in ling RM6.3 billion… of which sustainability
conjunction with Maybank Invest Asean issuance alone is RM2.1 billion,” he added.
2022 conference.
Touching on sustainability-linked in-
“There are still a lot of deal activities struments, Fad’l said the investment bank
happening in the market,” he said. “There is seeing opportunities for key projects that
is a strong ECM pipeline coming through, fall within the category, coupled with am-
year to date we have seen around nine IPOs. ple liquidity looking for such green assets.

“Going forward in 2H22, we are seeing “The other aspect is for some compa-
a total deal value of about RM3 billion on nies looking at transitioning, sustainabili-
ECM coming through in sectors like con- ty-tied instruments. Attractive proposition
sumer, retail, general industrial,TMT (tech- for a lot of clients to raise capital with clear
nology, media and telecommunications) and targets in terms of the pathway of ESG.
transport and logistics,” he added.
“And on the demand side, a lot of in-
“On the M&A side, we see a lot of re- vestors are looking at this asset class, and
structuring activities particularly among continue to have a strong appetite to take
some of the GLCs and GLICs… We are up ESG-related papers, sustainability-tied
seeing a lot of traction on the PE space, instruments,” he said.
[with] buy-sell opportunities coming in,
and also in-country consolidation,” he said. “With economic recovery, with refinanc-
ing of large maturities coming through this
Meanwhile, the local debt capital mar- year and next, the environment is definite-
ly conducive for capital raising,” he added.

THURSDAY JUNE 9, 2022 6 THEEDGE CEO MORNING BRIEF

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Top Glove quarterly net profit and revenue Anti party-
hopping bill
Net pro t (RM mil) Revenue (RM mil) draft finalised,
saysWan Junaidi
6000 5,365
4000 4,759 Bernama
2000
4,163 KUALA LUMPUR (June 8): The Bill
0 Prohibiting Members of Parliament from
3,109 2,868.98 Switching Parties (Amendment) (No. 3)
2022 draft has been finalised and recom-
1,688 2,357.79 2,036.17 2,116 mended to Prime Minister Datuk Seri
1,230 1,584 1,449 Ismail Sabri Yaakob to be tabled in the
1,262 1,160 1,190 1,190 1,209 1,292 special parliamentary sitting in the first
week of July.
110.06 105.8 74.67 80.05 111.43 115.68 347.9 607.95
1Q 2Q 3Q 185.72 87.55 Minister in the Prime Minister’s De-
partment (Parliament and Law) Datuk
FY19 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Seri Dr Wan Junaidi Tuanku Jaafar said
the matter was unanimously agreed in the
FY20 FY21 FY22 special select committee meeting on the
Constitution (Amendment) Bill (No.3)
Data compiled on June 8, 2022 10pm 2022 and the provision involving Prohibi-
Financial year ends Aug 31 tion of Members of Dewan Rakyat from
Source: Bursa Malaysia Changing Parties Number 6Year 2022,
onTuesday (June 7).
Top Glove’s paper sued share capital was enlarged to 8.13
loss from share billion shares from 2.71 billion shares after According toWan Junaidi, who is also
buyback jumps the bonus issue. the committee chairman, the meeting had
to RM1.2 bil finalised the bill draft to be tabled and
The shares were bought at between debated in the Dewan Rakyat.
BY JUSTIN LIM RM5.78 and RM8.01, with the bulk of
theedgemarkets.com the shares purchased between Nov 10 and He said in that regard, five fundamen-
Nov 27, 2020. tal issues raised by the Cabinet during
KUALA LUMPUR (June 8): Top Glove the June 1 meeting were answered by the
Corporation Bhd had spent RM1.42 billion Meanwhile,Top Glove is set to release Parliamentary Special Select Committee
on buying back its shares over a five-month its financial results for the third quarter inTuesday’s meeting.
period until February 2021, but currently ended May 31, 2022 (3QFY22) onThurs-
these shares are valued at only RM236.2 day (June 9). “The Parliamentary Special Select
million. Committee’s feedback on the matter will
According to Bloomberg data, the earn- be brought to the next Cabinet meeting
This comes as the stock was badly bat- ings consensus for Top Glove for the full as a Cabinet Note,” he said in a statement
tered and dived to its lowest since Decem- financial year (FY22) is RM526.4 million, here onWednesday (June 8).
ber 2017. sharply lower than the RM7.87 billion re-
corded by the group for FY21 and RM1.75 Wan Junaidi informed that the final
The world’s largest glove manufactur- billion for FY20 — when the glove de- meeting on the matter wouldd be held
er spent the RM1.42 billion repurchasing mand was at its peak and propelled the soon to confirm the Parliamentary Special
200.17 million of its shares. Based on the glove average selling price upwards due Select Committee Statement.
closing price of RM1.18 on Wednesday to the Covid-19 pandemic.
(June 8), the shares are worth RM236.2 He said in general, the Parliamentary
million, a difference of RM1.19 billion. Top Glove would need to achieve an Special Select Committee had success-
average of RM126.57 million in earnings fully implemented the terms of reference
It should be noted that Top Glove has per quarter in 3QFY22 and 4QFY22 to as per the motion approved on April 11.
said previously that it did not have to book meet market expectations.This translates
any paper loss from the buyback activity, as into an average earnings growth of 45% “This is the result of a joint commit-
the exercise is not deemed as an investment. from 2QFY22. ment by all committee members and the
strong support of the Malaysian Parlia-
The group has also referred to para- Top Glove’s net profit for 2QFY22 ment, the Legal Affairs Division of the
graphs 33 and 34 of MFRS (Malaysian dropped 52.86% to RM87.55 million Prime Minister’s Department and the
Financial Reporting Standards) which state from RM185.72 million in 1QFY22, while Attorney-General’s Chambers,” he said.
that treasury shares are not an investment, revenue decreased 8.51% to RM1.45 bil-
but rather an equity which is captured at lion from RM1.58 billion as average selling It was previously reported that the
acquisition costs. prices normalised closer to pre-pandem- bill is expected to be tabled as early as
ic levels, which offset an uptick in sales mid-July, when the Second Meeting of
“No subsequent remeasurement is re- volume. the Fifth Session of the 14th Parliament
quired as these are equity instruments, begins on July 18.
hence they would not be impaired at any On a year-on-year basis, the 2QFY22
point in time and the question of ‘paper net profit was down 96.95% compared with If the bill is tabled and passed at the
loss’ does not arise,” it stressed. RM2.87 billion in 2QFY21. Revenue also July sitting, it could be gazetted as early
tumbled 72.99% from RM5.37 billion. as January next year.
Top Glove started buying back its shares
shortly after its share price was adjusted to Among the analysts covering the stock
RM8.37 on Sept 3, 2020 from RM26.08 tracked by Bloomberg, 13 brokers have is-
on the previous day to reflect the group’s sued “sell” calls for the stock, nine are rec-
two-for-one bonus issue. The group’s is- ommending “hold”, while one is maintain-
ing a “buy” call.

The consensus target price is RM1.47,
representing an upside of 24.58% against
Wednesday’s closing price of RM1.18.

Year to date,Top Glove shares have de-
clined 51% from RM2.39 on Jan 3.

THURSDAY JUNE 9, 2022 7 THEEDGE CEO MORNING BRIEF

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KUALA LUMPUR (June 8): MSM Ma- MSM committed port, but I can’t speak for the govern-
laysia Holdings Bhd said it is committed to addressing ment.We might get some feedback from
to its plan to overcome cost pressures, cost pressures, the government soon,” said Syed Feizal.
in view of higher raw sugar, natural gas focused on
and freight costs, coupled with the weak Asked if an increase in the sugar ceil-
ringgit. turnaround plan ing price would affect households amid
the rising costs of living, he pointed out
During a media briefing following the BY AHMAD NAQIB IDRIS that the frequency of sugar consump-
group’s 11th annual general meeting on theedgemarkets.com tion is not as high, compared to chick-
Wednesday (June 8), MSM group chief en or eggs.
executive officer Syed Feizal Syed Mo- ers, including food and beverage players
hammad said the group has taken meas- ranging from small SMEs to the majors, For example, he said that a household
ures to mitigate the impact of the increase to get their feedback. would use up one kilogramme of sugar
in production costs. over a period of one to two months.
“So far, there has been positive sup-
These include securing most of its “If we assume a 50 sen increase per
wholesale requirement for the financial kilogramme, the impact would be spread
year ending Dec 31, 2022 (FY22), as well over one to two months. In our view, it
as its third party agreement access (TPA) is not as impactful as other commodities
with Petroliam Nasional Bhd (Petronas) or foods,” he said.
for pay-per-use and Brent hedging.
MSM posted a net loss of RM27.68
“We may see bumps every now and million for 1QFY22, compared to a net
then throughout the quarters, but we are profit of RM31.19 million a year pri-
not deterred by that.We are working to- or, despite a 16% year-on-year (y-o-y)
wards overcoming those cost pressures, quarterly revenue increase to RM595.92
with some help from the government,” million.
he said.
It expects the rising production costs
He added that the group, together with to remain a challenge for the remainder
Central Sugars Refinery Sdn Bhd, has of FY22.
engaged with the Ministry of Domes-
tic Trade and Consumer Affairs, Minis- For FY21, the group posted a pre-
try of International Trade and Industry, tax profit of RM81 million, on the back
Ministry of Finance and the Economic of RM2.3 billion in revenue. It resumed
Planning Unit to revise the ceiling price dividend payments with a distribution of
of sugar. three sen per share for the financial year.

The group has also engaged with oth- On Wednesday, MSM fell half a sen
or 0.6% to 80.5 sen, giving it a market
capitalisation of RM565.9 million.

KUALA LUMPUR (June 8): MARC MARC affirms come first, rather than fiscal consolidation,
Ratings has affirmed its local currency Malaysia’s especially given the economic damage.
sovereign rating of AAA/stable on Ma-
laysia, based on its national sovereign sovereign rating “In any case, we think the country’s
rating scale. at AAA fiscal and debt metrics will not materi-
ally improve any time soon given the ap-
In a statement onWednesday (June 8), BY SURIN MURUGIAH parently weakening momentum of fiscal
MARC said under this rating scale, the theedgemarkets.com consolidation efforts,” it said.
sovereign state of Malaysia carries the low-
est relative risk for reasons that include policy, have helped keep spillovers from MARC said the stable outlook reflects
its authority to tax and set interest rates. external financial market volatility min- its expectation of ongoing policy continu-
imal,” it said. ity and continued stable economic man-
It said the rating reflects the country’s agement.
credit strengths including a competitive MARC said key credit challenges in-
and well-diversified economy that has kept clude economic scarring from Covid-19, “It also reflects our expectation that
growth relatively resilient and stable. which has pushed macro-financial risks Malaysia’s external position will remain
significantly higher. healthy.
“For 2022, we expect real GDP growth
to rebound further to 5.7%. It said while the government seems “Going forward, credit positive devel-
committed to fiscal consolidation, its ef- opments would include a) sustained fiscal
“Meanwhile, Malaysia’s position in the forts appear to be losing momentum. consolidation efforts — including revenue
2021 edition of the Institute for Manage- broadening measures — that can improve
ment Development (IMD) World Com- “We think consolidation plans could be both fiscal and debt metrics, and b) a so-
petitiveness Rankings improved to num- put on hold in the near to medium term lidified reform agenda, which can lead
ber 25 from number 27 previously. to avoid jeopardising economic recovery. to stronger institutions and governance.

“A reflection of its trade competitive- “The country has started treating Cov- “On the other hand, credit negative
ness, Malaysia’s current account balance id-19 as an endemic disease and we think developments would include a) further
remains in surplus,” it said. policies to support steady growth should deterioration of fiscal and debt metrics
amid efforts to repair the economic dam-
MARC said Malaysia enjoys a healthy age, and b) further weakening of the gov-
external position and adequate official for- ernment’s appetite for reform and con-
eign reserves. sequently growth potential due to rising
political noise,” it said.
“These, together with the central
bank’s credible and prudent monetary

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KUALA LUMPUR (June 8): Prosecution Sidek: Najib put Sidek said he only found out about
witness Tan Sri Mohd Sidek Hassan tes- me on board of 1MDB’s troubles through media reports
tified that he received a monthly salary of advisers because in newspapers and on the internet, adding
RM29,125 as then chief secretary of Ma- of inadequate that he understands the issues were related
laysia, which was not adequate compensa- salary as chief to allegations of misuse of funds.
tion for his duties and that former prime secretary of the
minister Datuk Seri Najib Razak gave him He said he was made aware of the in-
a place on 1Malaysia Development Bhd’s country vestigations by local authorities such as the
(1MDB) board of advisers with an addi- Malaysian Anti-Corruption Commission
tional RM30,000 salary out of the “good- BY TIMOTHY ACHARIAM & TARANI PALANI through media reports as well.
ness of his heart”. theedgemarkets.com
OnTuesday, Sidek had also testified that
Sidek, who was testifying at the “So, out of the goodness of his heart [I he did not question Najib or any other par-
1MDB-Tanore trial, said that his salary thought] this was just a vehicle [for com- ties related to 1MDB about the troubles
was not adequate compensation for the pensation],” he said upon cross-examina- in the state-owned strategic development
duties he was carrying out. tion from Najib’s lawyerTan Sri Muham- company because he assumed that 1MDB
mad Shafee Abdullah. was established as a political fund for the
The 71-year-old, who served as chief then Barisan Nasional (BN) government.
secretary to the government from Septem- While he did receive remuneration,
ber 2006 until he retired in June 2012, Sidek said he was never involved in any During cross-examination onWednes-
said that Najib had offered him to be on meetings or discussions relating to 1MDB’s day, he agreed with Shafee that he did not
the board of advisers of 1MDB to make issues or investments, nor did he receive have any “hard and fast” evidence to sup-
up for his relatively low salary. any reports from the 1MDB management port this observation.
relating to the company’s operations.
OnTuesday, Sidek said that he received However, during re-examination by lead
a monthly advisory fee of RM30,000 per Tan Sri Mohd prosecutor Datuk Seri Gopal Sri Ram, Sidek
month while he was on 1MDB’s board Sidek Hassan qualified his assumption adding that there
of advisers from July 1, 2010, despite not was a Cabinet discussion about 1MDB funds
having to attend any meetings or discus- SHAHRIN YAHYA/THE EDGE where ministers were encouraged to suggest
sions related to the troubled fund. projects and proposals for their constituencies.

After his retirement in 2012, 1MDB Sri Ram: Those projects were meant
still retained him on the board of advisers for whom?
with a monthly fee of RM10,000 effective
January 2013, an amount he received every Sidek: For ministers [and] their con-
month until June 2015. stituencies

On Wednesday, Sidek reiterated that Sri Ram: So how did that lead you to
Najib had given him a role in 1MDB with assume it was for BN?
the RM30,000 salary out of the “goodness
of his heart” for compensation over his low Sidek: The ministers were from BN.
salary with the government. Later, Sri Ram highlighted that it was not
the purpose of the Cabinet to discuss party
“I thought the reason why the [then] politics. Sidek replied that one could not sep-
PM offered me that was because of my arate party politics and government policies.
salary... I hate this because it appears in “I was a civil servant through and
all the papers again today... [my thinking through. The government policy is the
was that] the [then] PM thought that [for] policy of the party in power, [whether] it
the responsibility that I had[, the salary is BN or [others].You can’t really differ-
was low]. entiate the two,” he said.

KUALA LUMPUR (June 8): The Elec- Sg Udang state The grounds included that Aleef was
tion Court in Melaka declared onWednes- seat in Melaka bribed to join Bersatu, and that he and
day (June 8) that the Sungai Udang state remains with Deputy Defence Minister Datuk Seri Ik-
seat belongs to the Parti Pribumi Bersatu Bersatu, rules mal Hisham had bribed army officials.
Malaysia (Bersatu) candidate Dr Mohd
Aleef Yusof. court The petition also alleged that there were
election irregularities, postal voter irregu-
Justice Datuk Azman Abdullah dis- theedgemarkets.com larity and allegedly double voting.
missed Umno/Barisan Nasional candidate
Datuk Seri Mohamad Ali Mohamad’s elec- Mohamad Ali had named Aleef, the
tion petition challenging the result for the Election Commission (EC) and the re-
seat during the state election in Novem- turning officer as respondents.
ber last year.
The Umno/BN petitioner, who is Mel-
Aleef’s counsel Rosli Dahlan, who ap- aka Umno secretary, was represented by
peared with Chethan Jethwani, confirmed Datin Rosfinah Rahmat and Nur Hazirah
the outcome of the decision to theedge- Abu Haiyan.
markets.com.
Senior federal counsel Ahmad Hanir
“The election judge dismissed the pe- Hambaly appeared for EC.
tition on all five grounds cited in the pe-
tition,” he said. In the state election, Aleef garnered a
majority of 530 votes in a four-cornered
fight.

T H U R S D A Y J U N E 9 , 2 0 2 2 10 T H E E D G E C E O M O R N I N G B R I E F

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KUALA LUMPUR (June 8): Datin Seri Rosmah gives this notice of motion does not prejudice
Rosmah Mansor has relinquished her up claim on any party and is made in accordance with
claim on a US$220,000 white gold dia- diamond bracelet the provisions of the law,” she said.
mond bracelet which is now kept in Bank
Negara Malaysia’s vaults. Bernama Muhammad Jamil allowed the applica-
tion to amend the notice of motion and set
The matter was informed by Rosmah’s Meanwhile,lawyer Syazwani Mohd Zawa- Sept 26 and 27 for the hearing of the pros-
lawyer Azamuddin Abd Aziz during case man- wi, acting on behalf of Najib, said his party ecution’s application to forfeit the items.
agement before High Court judge Datuk Mu- has yet to receive the prosecution’s response
hammad Jamil Hussin onWednesday (June 8). over a representation submitted on May 26, In 2019, the prosecution filed the forfei-
regarding the former prime minister’s claim, ture application to seize various items in-
“Our client no longer wants to proceed as a third party on seven wrist watches. cluding 11,991 items of jewellery, 401 wrist
with the claim on the item (white gold di- watches, 16 watch accessories, 234 pairs
amond bracelet),” the lawyer said. Deputy Public Prosecutor Faten Hadni of spectacles, and 306 handbags as well as
Khairuddin said the Attorney General’s cash in various denominations amounting
Lawyer Datuk David Gurupatham, Chambers had received the representa- to RM114,164,393.
representing Lebanese jewellery com- tion which was still being reviewed and
pany Global Royalty Trading SAL, also the prosecution would inform the court if Datin Seri
confirmed that the wife of former prime there was any development on the matter. Rosmah
minister Datuk Seri Najib Razak did not Mansor
want to proceed with the claim. Earlier, Faten Hadni applied to amend
the list of properties in the notice of motion SUHAIMI YUSUF/THE EDGE
He said the withdrawal of Rosmah’s to forfeit 2,436 pieces of jewellery, seven
claim would save costs and time of all par- wrist watches, and 29 handbags that were
ties involved in the case. seized from the condominium unit owned
by Obyu Holdings on May 17, 2018.
Apart from Rosmah, Global Royalty is
also staking a claim on the bracelet. “We argue that the application to amend

The jewellery was among various items
seized by the police from the premises be-
longing to Obyu Holdings Sdn Bhd at Pa-
vilion Residences in May 2018, which were
allegedly linked to the 1Malaysia Develop-
ment Bhd scandal.

KUALA LUMPUR (June 8): The High Case management ther believe that no advocate and solicitor
Court here has set June 16 for case man- for Najib’s practising in Malaysia can be said to pos-
agement in Datuk Seri Najib Abdul sess an equal degree of accomplishment,
Razak’s application to allow a Queen’s Queen Counsel experience and expertise which has been
Counsel (QC) to represent him in his fi- application on acquired by the applicant,” Shafee said.
nal appeal at the Federal Court against his
July 2020 conviction in the SRC Interna- June 16 Shafee said the Federal Court would
tional Sdn Bhd trial. benefit from being able to draw upon Laid-
BY TIMOTHY ACHARIAM law’s experience in the case.
High Court Deputy Registrar Syeela theedgemarkets.com
Marlina Uttaman had set the date before “It is respectfully suggested that the
Justice DatukWan Ahmad FaridWan Salleh. At the case management next week, par- Federal Court would benefit from being
ties will set the dates for the hearing of the able to draw upon the applicant’s experi-
The High Court will decide whether application to allow Laidlaw to act as lead ence and counsel in this important, sen-
the QC, Jonathan Laidlaw, can be admit- counsel in Najib’s Federal Court appeal. sitive and constantly evolving area and in
ted to practise as an advocate and solicitor circumstances where it is likely that inter-
in the Malaysian High Court pursuant to In the application filed at the court last national trial observers will be present at
week, Najib’s lawyer Tan Sri Muhammad court given the identity of the appellant
Section 18(1) of the Shafee Abdullah said no advocate and so- (Najib) and the profile of the case,” he said.
Legal Professions licitor in Malaysia has the same degree of
Act 1976. accomplishments as the QC. On July 28, 2020, the High Court sen-
tenced Najib to 12 years in jail and fined
SHAHRIN YAHYA/THE EDGE “I verily believe that the applicant’s him RM210 million after he was found
(QC’s) said accomplishments are of an guilty by Justice Datuk Mohd Nazlan
exceptional degree and excel the meas- Mohd Ghazali of seven charges involv-
ure of accomplishments reached by the ing SRC.
advocates and solicitors of Malaysia. I fur-
The seven charges comprised one count
Najib as seen at the Kuala Lumpur Court of abuse of power involving Retirement
Complex on Wednesday (June 8). Fund Inc (KWAP)’s RM4 billion loans
to SRC, three counts of criminal breach
of trust involving RM42 million and three
counts of money laundering.

The Court of Appeal on Dec 8, 2021
upheld the High Court’s decision.

The Federal Court is set to hear the
appeal on Aug 15 to 26, with written sub-
missions to be filed by July 31.

T H U R S D A Y J U N E 9 , 2 0 2 2 11 T H E E D G E C E O M O R N I N G B R I E F

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Serba Dinamik’s “If they don’t comply then the petition- Magna Prima’s
creditors agree to ers will go back to the winding-up court,” shareholders
stay appointment a source said.
reject directors’
of interim On April 29, theedgemarkets.com re- fees payment
liquidator ported that Serba Dinamik and three of its
subsidiaries were served with winding-up BY SULHI KHALID
BY TIMOTHY ACHARIAM petitions from six financial institutions that theedgemarkets.com
theedgemarkets.com were involved in providing RM1.2 billion
in syndicated term financing. KUALA LUMPUR (June 8): Magna
KUALA LUMPUR (June 8): Serba Dina- Prima Bhd’s shareholders have re-
mik Holdings Bhd’s creditors have agreed The subsidiaries were Serba Dinamik fused to approve the directors’ fees
to stay their applications for winding-up International Ltd (SDIL) based in Labuan, up to RM200,000 during the group’s
proceedings and the appointment of an SDSB, and SDGB. 27th annual general meeting (AGM)
interim liquidator on the condition that on Wednesday (June 8).
the beleaguered oil and gas group complies The creditors proposedVictor Saw Seng
with payment timeline and contract order. Kee, a licensed liquidator of Pricewater- The property developer said 14 votes
houseCoopers Advisory Services Sdn Bhd, representing 61.4% of voted shares were
Lawyers for both sides informed Jus- to act as liquidator for Serba Dinamik, against the resolution, according to its
tice NadzarinWok Nordin of the arrange- SDGB, SDSB and SDIL. filing with Bursa Malaysia onWednesday.
ment during case management at the High
Court on Wednesday (June 8). The creditors comprise AmBank Islam- To recap, last week, the group an-
ic Bhd, UOB (M) Bhd, Standard Char- nounced the resignation of its chair-
The creditors who are petitioners in the tered Bank (M) Bhd, Bank Islam (M) Bhd, man Tan Sri Adzmi Abdul Wahab,
winding-up application were represented by MIDF Amanah Investment Bank Bhd, and following “failure of company to pay
lawyers Datin Jeyanthini Kannaperan and HSBC Amanah (M) Bhd. directors’ fees, meeting attendance al-
Benjamin Dawson.Also in attendance were lowance and passage leave since April
Datuk John Clark Sumugod and KarenTan. The court documents said SDGB, SDSB 2020”. Adzmi, 79, has held the po-
and SDIL were named as the security par- sition in the group since May 2006.
Mak Lin Kum appeared for Serba Di- ties under the syndicated term financing.
namik and its subsidiaries — SD Con- Magna Prima’s annual report for
trols Sdn Bhd, Serba Dinamik Develop- The creditors are of the view that Serba the financial year ended Dec 31, 2020
ment Sdn Bhd, Serba Dinamik Group Dinamik is unable to pay its debts as per (FY20) had highlighted its severe finan-
Bhd (SDGB), and Serba Dinamik Sdn Section 465(1)(e) and Section 466(c) of cial constraints, prompting the board of
Bhd (SDSB). the Companies Act 2016, taking into ac- directors to take a drastic step and forgo
count the company’s current, contingent the payment of directors’ fees, meeting
Sources linked to the case told theedge- and prospective liabilities. attendance allowance and leave passage
markets.com that the petitioners decided allowance to ease the group’s financial
to stay the applications for the appointment Besides the default on the RM99 million burden. All directors’ remunerations
of an interim liquidator on the condition instalment, the petition was also filed on the have been suspended since April 2020.
that Serba Dinamik’s four units comply grounds that Serba Dinamik could not meet
with the payment and conditions in the the payment obligations related to RM1.78 At the AGM, a few resolutions to
contract order under Section 366 of the billion in syndicated term financing. seek re-election were also withdrawn.
Companies Act. “Ordinary resolutions 3, 4, 10 and 11
These events of default included its were withdrawn in view of the resigna-
“The financial institutions negotiat- failure to meet its payment obligations, tion of Adzmi and Sazali Saad on June
ed for safeguards like the appointment of failure to submit audited accounts within 1. Ordinary resolution 5 was withdrawn
monitoring accountants as well as inde- the extended deadline of Nov 30, 2021, as as Datuk Darawati Hussain had on June
pendent financial advisers to oversee Serba well as Serba Dinamik’s classification as a 7 withdrawn her offer for re-election as
Dinamik,” they said. Practice Note 17 company on Jan 6, 2022. the director of the company.”

The sources also said that if the firms Four senior executives of Serba Dinamik Last April, Magna Prima’s independ-
do not comply with the conditions, the were charged last December for submitting ent auditor Messrs HLB Ler Lum raised
petitioners will proceed with winding-up a false statement in relation to the group’s a material uncertainty related to its abil-
proceedings. record high revenue of RM6.01 billion for ity to continue as a going concern.
the 12-month period ended Dec 31, 2020.
At the group and company level,
However, the Attorney General’s Cham- current liabilities exceeded current
bers subsequently decided to withdraw the assets by RM108.37 million and
charges following a letter of representation RM309.19 million respectively for the
by the accused persons, who paid a total financial year ended Dec 31, 2020. Net
compound of RM16 million and had the losses came in at RM152.20 million
charges withdrawn by the Securities Com- and RM17.78 million each.
mission Malaysia.
Shares in Magna Prima closed
On March 24, four Serba Dinamik sub- untraded at 43 sen on Wednesday,
sidiaries, namely SDGB, SDSB, Serba Di- giving it a market capitalisation of
namik Development and SD Controls, with- RM172.62 million.
drew their applications filed a month earlier
at the High Court for these companies to
be placed under judicial management after
strong objections from its creditors.

On June 2, Justice Atan MustaffaYus-
sof Ahmad recorded a consent order with
regard to Serba Dinamik’s application for
a restraining order and scheme of arrange-
ment against the financial institutions.

T H U R S D A Y J U N E 9 , 2 0 2 2 12 T H E E D G E C E O M O R N I N G B R I E F

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KUALA LUMPUR (June 8): Analysts are Analysts “We are positive on this development,
positive on IHH Healthcare Bhd’s plan positive on IHH as the enterprise value of RM1.345 bil-
to divest its medical education arm, IMU Healthcare’s plan lion implies an EV/EBITDA multiple of
Health Sdn Bhd, for an enterprise value to divest medical 16.6x (based on IMU’s adjusted EBITDA
of RM1.35 billion, as the move will allow education arm of RM81.4 million in FY21), which is at
the company to dispose of its non-core an 80% premium to SEGi’s EV/EBIT-
assets at a relatively attractive valuation BY SYAFIQAH SALIM DA of 9.2x.
and further strengthen its core hospital theedgemarkets.com
business. “Post disposal, IHH will cease to con-
of RM7.96 per share on IHH,” it said in solidate the results of IMU. IMU ac-
The group reached an agreement with a note on Wednesday (June 8). counts for [about] 1.4% of our FY22-24f
Inbound Education Holdings onTuesday revenue forecasts and we note that the
(June 7) to sell 100% of its stake, or 1.14 In addition, MIDF said the dispos- segment has been providing a consist-
million shares, in IMU. Under the agree- al of IMU is not expected to result in ent profit contribution of [about] RM55
ment, IMU will also sell IMU Education a significant dent on IHH’s financial million to the group in the recent years
(IMUE), which is still under construction, performance. “As at FY21, the divi- (with the exception of FY20). Hence,
to Columbia Asia Sdn Bhd. The consor- sion only contributed to about 1% of we estimate a loss of income of [about]
tium of investors is led by The Rise Fund the total revenue and 3% of the total 3% for FY23- 24f, once the deal is com-
(founded by TPG) and Hong Leong profit. Hence, we make no changes at pleted. Assuming all the cash proceeds
Group. this juncture to our earnings forecasts. received (RM1.346 billion) are used to
We are of the opinion that IHH is mov- repay debts, [the] gearing ratio will also
Despite IHH losing its education arm, ing within our trajectory range,” said the decline from 0.21x in 1QFY22, to 0.16x,”
MIDF Investment Bank Bhd believes research house. said HLIB.
the handsome gain from the divestment
of IMU to the consortium of investors Meanwhile, Hong Leong Investment Kenanga Research, on the other hand,
will be advantageous to IHH in the long Bank (HLIB) Research, which kept its reiterated its “market perform” rating for
run, as it continues to concentrate on its “buy” call for IHH with a TP of RM7.75, IHH with a TP of RM6.65.
hospitals, medical operations and equip- said the disposal did not come entirely as
ment, research and diagnostics, and dig- a surprise. Based on Kenanga’s back of envelope
ital healthcare. calculation, if the divestment goes through,
its TP for the stock is expected to rise by
“We continue to view IHH positively for 1.5%.
its comprehensive expansion and growth
plans, as well as a strong and focused bal- IHH’s share price closed three sen or
ance sheet. All in, we maintain our ‘buy’ 0.5% higher at RM6.53 on Wednesday,
call with an unchanged target price (TP) translating into a market value of RM57.48
billion.

KUALA LUMPUR (June 8): MIDF Re- MIDF raises mature oil reserve outside of Malaysia.
search raised its target price on Dialog Dialog’s target The research house believes the ac-
Group Bhd to RM3.96 (from RM3.80) price to RM3.96
after the group announced the purchase quisition has the potential to improve
of a Canadian listed company for about BY SYAFIQAH SALIM Dialog’s upstream segment in the long
RM170 million as it will positively impact theedgemarkets.com term. Nevertheless, it remains cautious of
the group’s earnings from the financial year the risks to the transaction, which would
ending June 30, 2023 (FY23). include but are not limited to highly vol-
atile oil prices, unfavourable currency
Dialog had on Tuesday (June 7) an- exchange, as well as environmental and
nounced that its wholly-owned Singa- political risks.
pore-based subsidiary Dialog Systems
(Asia) (DSA) has entered into an agree- “The acquisition will not have any effect
ment to purchase 100% of Pan Orient En- on the earnings and net assets of Dialog
ergy Corp (POEC) — an Alberta, Cana- for the current FY22.
da-incorporated company.
“However, it is believed the positive
The acquisition is set at US$38.7 mil- impact will be visible by FY23 onwards,
lion (approximately RM170 million) cash, albeit the group is expecting a marginal
to be paid via internal funding or external increase in gearing ratio to a suggested
borrowing. 0.14 times from 0.11 times in the long
run.
Despite the group’s recent lower third
quarter (3QFY22) performance, MIDF “As such, we make slight changes to our
said it is confident that this acquisition FY23-24 estimates upwards by +3% and
will be advantageous to Dialog, on the +7%, and hence revise our target price to
basis of the expansion and diversification RM3.96 (previously RM3.80), pegged at
of its upstream operations in the wake 32 times to a revised EPS23 of 12.4 sen,”
of the rising crude prices, the availabil- it said in a note on Wednesday.
ity and accessibility of onshore facili-
ties belonging to POEC upon purchase MIDF maintained its “buy” call for the
in addition to Dialog’s existing assets, counter.
and the rare opportunity to take over a
Dialog shares were up by seven sen or
3.1% to RM2.34 on Wednesday, with a
market capitalisation of RM13.21 billion.

T H U R S D A Y J U N E 9 , 2 0 2 2 13 T H E E D G E C E O M O R N I N G B R I E F

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KUALA LUMPUR (June 8): Malaysia’s DOSM: hor (20.6%), Selangor (19.0%), Sarawak
trade value recorded a new achievement Malaysia’s trade (6.8%), and Kuala Lumpur (3.5%), the
in 2021, surpassing RM2 trillion — the value surpassed chief statistician explained.
fastest growth since 1994, according to RM2 tril in 2021,
the Department of Statistics Malaysia fastest growth “The export expansion was under-
(DOSM). pinned by strong exports of electronic in-
since 1994 tegrated circuits in Penang. Meanwhile,
The country’s total trade posted a dou- higher exports recorded in Johor were
ble-digit growth of 24.8% to RM2.2 trillion BY SYAFIQAH SALIM contributed by refined petroleum prod-
in 2021 from RM1.8 trillion in 2020 after theedgemarkets.com ucts, while rubber gloves were the main
recording negative growth for two consecu- contributors of exports in Selangor. Liq-
tive years with all states recording an increase BLOOMBERG uefied natural gas (LNG) was the main
in total trade, said DOSM in a statement. contributor of exports in Sarawak,” he said.
billion), Pahang (RM10.3 billion),Tereng-
The DOSM said world trade returned ganu (RM8.5 billion), Melaka (RM7.9 bil- On the other hand, Mohd Uzir said
to strength after experiencing a disruption lion), Negeri Sembilan (RM3.1 billion), imports also grew by 23.3% to RM987.2
of the global supply chain as well as eco- Labuan (RM1 billion), Perlis (RM177.2 billion in 2021 compared with RM800.5
nomic uncertainty triggered by the Cov- million) and Kelantan (RM97.1 million),” billion in the previous year.
id-19 pandemic. The global economic said Mohd Uzir.
recovery is driven by economic recovery The increase in imports was due to high-
strategies implemented by each country Among the top five major exporting er imports from Selangor (RM49.8 billion),
and the rapid increase in vaccination rates states, Penang remained the top export- Penang (RM44.5 billion), Johor (RM39.5
thus contributing to the increase in de- er with a share of 29.3%, followed by Jo- billion), Kedah (RM19.4 billion), and Kua-
mand for goods and services. la Lumpur (RM10.2 billion).

According to Malaysia’s chief statisti- “Selangor remained as the largest im-
cian Datuk Seri Mohd Uzir Mahidin, all porter with a share of 27%, followed by
states recorded an increase in total trade, Penang (23.5%), Johor (20 %), Kuala
dominated by Selangor with RM112.6 bil- Lumpur (7.3%) and Kedah (5.9%).
lion, followed by Penang (RM94.4 billion)
and Johor (RM87.4 billion). “Higher imports recorded in Selangor
and Kuala Lumpur were contributed by
“Malaysia’s exports valued at RM1,239.8 other electrical and electronic products.
billion in 2021, weighed up 26% as com- In addition, electronic integrated circuits
pared to RM983.8 billion in 2020. were the main contributors of imports in
Penang and Kedah. Meanwhile, refined
“The increase in exports was due to the petroleum products were the main con-
higher exports by all states namely Selan- tributors of imports in Johor,” he added.
gor (RM62.8 billion), Penang (RM49.9 Read also: DOSM: Malaysia’s 2021
billion), Johor (RM47.9 billion), Sarawak service trade deficit widened to record
(RM17.6 billion), Kedah (RM12.8 bil- high of RM60.7 bil Click here
lion), Kuala Lumpur (RM12.1 billion),
Perak (RM11.3 billion), Sabah (RM10.4

KUALA LUMPUR (June 8): RAM Rat- RAM Ratings sees likely take place in 2023 as the repayment
ings has projected 2022 full-year loan 2022 loan growth trends of borrowers who have just graduated
growth at 4.5% to 5% despite rising in- from relief assistance will become evident
terest rates, underpinned by the gradual at 4.5%-5% only in time,” wrote RAM’s co-head of fi-
reopening of the economy. despite rising nancial institution ratings,WongYin Ching.
interest rates
The rating agency said banks’ core earn- RAM said the recent rate hike by Bank
ings before tax will see some upside this BY SULHI KHALID Negara Malaysia (BNM) and a prospective
year, premised by more moderate impair- theedgemarkets.com further increase in the second half of the
ment charges and further net interest mar- year will be a boon to banks’ NIMs this
gin (NIM) expansion. provisions through management overlays. year, although it is mindful of potential-
“In 1Q22, the average credit cost ratio ly keener deposit competition which will
However, banks’ bottom line may be drive up the cost of funding.
weighed down by the implementation of of the eight banks plunged to an annu-
the one-off prosperity tax (cukai makmur), alised 18 basis points (bps) due to lower The rating agency also noted that as
it added in a statement. management overlays and even a sizeable at end-March, the banking sector’s gross
writeback seen at one bank. impaired loan ratio (GIL) stood at 1.54%,
RAM noted a better banking industry which included the impairment of two
profitability in the first quarter of this year “We expect the banking system’s credit large oil and gas exposures.
(1Q22) as all but one of eight selected local cost ratio this year to come in at the lower
banking groups reported a year-on-year end of our 40-50bps guidance. For most It said loan defaults are expected to
increase in profit before tax, after adjust- banks, any major provision writebacks will trend up in the coming months as bor-
ing for one-off items. rowers resume repayments, which may see
the system’s GIL ratio reach 2.5% at the
“Various loan relief programmes offered end of 2022.
to borrowers amid the pandemic had tem-
porarily suppressed bad loans. During this “At this level, we still view the asset
time, banks buttressed their loss absorption quality of banks to be manageable,” the
buffers by proactively setting aside more rating agency said.

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DXN Holdings by its founder Datuk Dr Lim Siow Jin. SFP Tech’s
eyes re-listing on Its direct selling network consists of IPO shares
oversubscribed
Main Market, members (including stockists) and exter- by 41.61 times
releases prospectus nal distribution agencies who exclusively
carry its products to on-sell and distribute BY JUSTIN LIM
exposure to other members and end-consumers, its theedgemarkets.com
prospectus exposure said.
BY SULHI KHALID KUALA LUMPUR (June 8): SFPTech
theedgemarkets.com “Our group’s other business activities Holdings Bhd, which is set to be listed
that primarily serve to support our core on Bursa Malaysia’s ACE Market on
KUALA LUMPUR (June 8): DXN Hold- business include conducting laboratory June 20, said its shares made available
ings Bhd is offering up to 1.41 billion testing services for third parties, offering for the public has been oversubscribed
shares in an initial public offering (IPO) of lifestyle products and operating a café. by 41.61 times.
as it seeks to re-list on Bursa Malaysia’s
Main Market, according to its prospec- “Our top 10 markets in terms of reve- In a statement, the one-stop inte-
tus exposure published on the Securities nue for FY Feb 28, 2021 are Peru, Mex- grated engineering and automation
Commission Malaysia (SC) website on ico, India, Bolivia, Malaysia, Philippines, solutions provider said it received
Wednesday (June 8). the Middle East, United States,Thailand 15,634 applications for 1.70 billion
and Colombia. shares with a value of RM511.33 mil-
The 1.41 billion shares — 25.1% of lion, for the 40 million new shares
its enlarged issued share capital — com- “Our group has sales branches in these made available for the public under
prise 1.25 billion new shares and an offer top 10 markets except for the Middle East, the initial public offering (IPO).
for sale of 160 million existing shares. where our group uses an external distri-
The issue price as well as the opening bution agency structure,” it said. “For the Bumiputera portion, a to-
and closing dates of the IPO have yet tal of 7,713 applications for 538.40
to be fixed. Of the 1.25 billion new shares, a to- million new shares were received,
tal of 623.13 million shares are allocated which represents an oversubscription
DXN is an investment holding compa- to Bumiputera investors approved by the rate of 25.92 times.
ny engaged in provision of management Ministry of Industry and Trade (MITI),
services. Through its subsidiaries, DXN Malaysian institutional and selected in- “For the public portion, a total
is involved in the sales of health and well- vestors (other than Bumiputera investors of 7,921 applications for 1.17 bil-
ness consumer products through a direct approved by the MITI) and foreign insti- lion new shares were received, which
selling model. Previously listed in 2003, tutional and selected investors. represents an oversubscription rate
it was subsequently delisted in December of 57.30 times,” it added.
2011 following a takeover and privatisation The offer shares of 160 million will be
allocated to the directors of DXN, eligi- Under the eligible directors and
ble employees of DXN and its subsidiar- employees category, the group said all
ies, persons who have contributed to the 24 million new shares made available
success of the group and the Malaysian had been fully subscribed.
public.
“The placement agent has con-
Maybank Investment Bank Bhd is the firmed that the 143.44 million new
principal adviser, managing underwriter shares made available for application
and placement agent for the IPO. by way of private placement have been
fully placed out,” said SFP Tech.
KUALA LUMPUR (June 8): Unique Unique Fire inks
Fire Holdings Bhd signed an underwrit- underwriting Public Investment Bank Bhd is the
ing agreement with Alliance Islamic Bank principal adviser, sponsor, sole under-
Bhd on Wednesday (June 8) in conjunc- agreement with writer and sole placement agent for
tion with its initial public offering (IPO). Alliance Islamic this IPO exercise.

The group, which manufactures fire Bank SFP Tech had earlier stated that
protection systems, equipment and acces- it plans to raise RM62.23 million in
sories for the built environment, is seeking BY SYAFIQAH SALIM proceeds from the IPO exercise.
a listing on Bursa Malaysia’s ACE market. theedgemarkets.com
It has earmarked RM24.5 mil-
The IPO entails a public issue of 83.75 The 30 million shares for sale will be lion to purchase new machinery and
million new shares and an offer for sale of offered to selected investors by way of pri- equipment, RM15 million for the
30 million existing shares, the group said vate placement. construction of its third plant, and
in a statement. RM10 million for repayment of bank
Unique Fire’s managing director Liew borrowings.
Of the 83.75 million new shares, 20 Sen Hoi said the IPO will enhance the
million shares will be allocated to the Ma- group’s corporate profile and provide Another RM5.13 million would
laysian public via balloting and 8 million funds for future expansion be used for working capital expendi-
shares will be made available for applica- ture, RM4.6 million will be allocated
tion by the group’s eligible directors, em- Alliance Islamic Bank is the principal for the design and development cen-
ployees and persons who have contributed adviser, sponsor, sole underwriter and tre, while the remaining RM3 mil-
to the success of Unique Fire. placement agent for the IPO exercise. lion would go towards defraying list-
ing expenses.
Another 5.75 million shares will be
placed out to selected investors, while
50 million shares will be made available
to government-approved Bumiputera in-
vestors.

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KUALA LUMPUR (June 8): Industry Be more sensitive cially those in the labour-intensive rubber
players should be more sensitive of the of US CBP’s gloves and plantation sectors — to pay heed
United States (US) Customs and Border to CBP’s sensitivities.
Protection’s (CBP) forced labour rule to forced labour rule
circumvent the Withhold Release Orders to circumvent Hence, she said industry players should
(WROs) pitfall, Plantation Industries and WRO pitfall, work around a remedial action plan to
Commodities (MPIC) Minister Datuk Zu- says Zuraida avoid being slapped again by a WRO for
raida Kamaruddin said. accusations of forced labour.
Bernama
She said MPIC has no intention of dis- “In this regard, MPIC wishes to com-
puting CBP’s prerogative, but feels the mend the Malaysian Rubber Gloves Man-
claims were unfair and biased. ufacturers Association (MARGMA) for its
recent engagement with CBP to further
“As much as we cannot totally agree with its develop a clear respect and understand-
reliance on remote or third-party evidence in ing of the roles played by both parties in
its investigation process, we have to accept that the governance of labour issues,” she said.
at the end of the day, the enforcement agen-
cy is vested with the prerogative to act based It is learnt that MARGMA has been
on what it deems as proprietary information. spearheading such efforts since 2018, when
it advocated a zero-debt policy and initiat-
“The ban on Malaysian palm oil and palm ed remedial actions to be undertaken by
oil products (or rubber gloves for the matter) each member to dislodge itself from the
is based only on allegations of forced labour stigma of forced labour by leveraging the
claims made by the non-governmental or- International Labour Organisation’s (ILO)
ganisations (NGOs) and other groups,” she 11 indicators as the guiding principle.
said in a statement onWednesday (June 8).
“Above all else, MARGMA has also
The US CBP had onThursday last week formed an ESG Unit (environmental, so-
(June 2) clarified on how it pursued its inves- cial, and governance unit) and task force
tigations that led to products from six Ma- to actively educate and sensitise members
laysian firms still being prevented from en- and its employees on the 11 ILO indica-
tering the US market, after being slapped
with WROs. tors of forced labour.
“This vigorous exercise is done via
Zuraida said now that the modus op- partnership with the ILO, and the
erandi of the CBP and how its verdict US, UK and European Union
was passed had been made clear, the embassies/high commissions
onus is on industry players — espe- in Malaysia,” she said.

NEWS IN BRIEF

Vortex Consolidated proposes Change of Name by the CCM.” Vortex BNM’s international reserves at
name change to Harvest Miracle Consolidated is principally involved in US$112.8 bil as of May 31
Capital information technology and property
construction activities. Its shares ended on KUALA LUMPUR (June 8): Bank Negara
KUALA LUMPUR (June 8): Vortex Wednesday 0.5 sen or 2.7% higher at 19 Malaysia’s (BNM) international reserves
Consolidated Bhd has proposed to sen, giving it a market value of RM207.6 amounted to US$112.8 billion as of May
change its name to Harvest Miracle million. — by Sulhi Khalid 31, 2022. The central bank, in a statement
Capital Bhd. In a Bursa Malaysia filing, on Wednesday, said the reserves position is
the group said the new name was sufficient to finance 5.7 months of imports
approved by the Companies Commission of goods and services and is 1.1 times of the
of Malaysia (CCM) on June 8. “The total short-term external debt. The main
proposed change of name is subject components of the international reserves
to the approval of shareholders of were foreign currency reserves, which
the company at a general meeting stood at US$100.3 billion as of May 31, as
to be convened, and if approved, well as the International Monetary Fund
will take effect upon the issuance of reserve position (US$1.4 billion), special
the Certificate of Incorporation on drawing rights (US$6 billion), gold (US$2.4
billion), and other reserve assets (US$2.7
billion). — Bernama

Ranhill Utilities secures contract to upgrade effluent treatment plant in Johor

KUALA LUMPUR (June 8): Ranhill Utilities Bhd has secured a contract to upgrade
an industrial effluent treatment plant for MSM Sugar Refinery Sdn Bhd in Johor. In
a Bursa Malaysia filing, the group said the RM6.1 million project was awarded to its
wholly-owned subsidiary, Ranhill Water Technologies Sdn Bhd (RWT).The project, to
be undertaken over the next 12 months, will contribute positively to the earnings of
RWT and Ranhill for the year ending Dec 31, 2022 (FY22) and FY23, said Ranhill.
— by Sulhi Khalid

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PARIS (June 8): The war in Ukraine has OECD slashes which are much more driven by services
made the growth outlook far bleaker even growth outlook, than in the 1970s, are less energy-intensive
though the global economy should avoid a but sees limited now and central banks have a freer hand to
bout of 1970s-style stagflation, the OECD stagflation risk fight inflation, independent of governments
said onWednesday, slashing its growth fore- more concerned about unemployment.
casts and jacking up its inflation estimates. BY LEIGH THOMAS
Reuters The OECD said it saw a strong case for
The world economy is set to grow 3% steady removal of monetary policy stimulus
this year, much less than the 4.5% expected in high-inflation countries like the United
when the Organisation for Economic Co- States and eastern Europe.
operation and Development last updated
its forecasts in December. As the pandemic-related fiscal boost
expires, the US economy was seen grow-
Growth will then slow further next year, ing 2.5% this year then slowing to 1.2%
easing to 2.8%, down from a previous fore- in 2023 — less than previous forecasts for
cast of 3.2%, the Paris-based policy forum growth of 3.7% in 2022 and 2.4% in 2023.
said in its latest Economic Outlook.
China’s economy, which has been hit
Meanwhile, any quick relief from price by a fresh wave of Covid-19 lockdowns,
hikes is unlikely, with inflation expected is seen growing 4.4% this year and 4.9%
to peak at 8.5% this year in OECD coun- next, down from 5.1% previously expected
tries before slipping to 6.0% in 2023. Pre- in both years.
viously the OECD had expected inflation
to peak at 5% before gradually receding More exposed to Russian energy im-
to 3% in 2023. ports and the fallout from the war in
Ukraine, the euro zone economy was seen
Despite the lower growth and higher growing 2.6% this year and 1.6% in 2023,
inflation outlook, the OECD saw a lim- down from forecasts of 4.3% and 2.5%
ited risk of stagflation like that seen the respectively.
mid-1970s, when the oil price shock trig- Read also: Shock of war threatens lasting
gered runaway inflation and surging un- impact on global economy Click here
employment.

In particular, developed economies,

Ray Dalio says BLOOMBERG
central banks to
cut rates in 2024,

AFR reports

BY ADAM HAIGH
Bloomberg

(June 8): Billionaire hedge fund founder have already raised borrowing costs in a averted, stagflation may endure for several
Ray Dalio said central banks across the bid to rein in accelerating inflation. years, the World Bank warned this week.
globe will be required to cut interest rates TheWashington-based lender cut its fore-
in 2024 after a period of stagflation con- “It is a structural inflation situation that casts for global growth and said the world
strains their economies, according to the is going to produce stagflation,” Dalio told economy may enter a period of stagflation
Australian Financial Review. the AFR. reminiscent of the 1970s.

“We believe that we are in a tighten- Even if a global recession is ultimately
ing mode that can cause corrections or
downward moves to many financial as-
sets,” Dalio, the founder of Bridgewater
Associates LP, said in an interview with the
newspaper. “The pain of that will become
great and that will force the central banks
to ease again probably somewhere close to
the next presidential elections in 2024.”

Markets are pricing in rate cuts in the
US in around two years’ time, and also in
other developed economies including the
UK, according to futures. For now, much
of the focus is on the speed of the tighten-
ing as more than 60 monetary authorities

T H U R S D A Y J U N E 9 , 2 0 2 2 17 T H E E D G E C E O M O R N I N G B R I E F

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(June 8): Economists and investors criti- Australian Central “From a forecasting perspective, that’s
cized Australia’s Central Bank for confus- Bank criticized embarrassing.We should forecast this bet-
ing communications after it raised interest after surprising ter. We didn’t,” he said at a press confer-
rates by twice as much as expected, having markets ence after the RBA’s May meeting. “But
previously signaled a preference for quar- what we did do in 2020 was make sure
ter-point moves. BY SWATI PANDEY & MATTHEW BURGESS that we took every possible step that we
Bloomberg could take to help the country.”
The Reserve Bank onTuesday increased
its cash rate by 50 basis points to 0.85% interpreted as meaning the RBA wouldn’t The RBA’s surprise half-point hike
— the largest hike in 22 years — follow- need to use outsized hikes because it met and accompanying hawkish commentary
ing a 25-basis-point rise in May.That sent monthly and could move in short, quick prompted a number of economists, includ-
government bond yields surging and the steps, unlike the Federal Reserve which ing at Australia’s biggest banks, to boost
stock market falling. convenes less frequently. their cash rate predictions, with many now
forecasting another half-point rise in July.
It also wrongfooted swaps traders who The RBA has been under pressure since
were fully pricing in a 25-basis point move the onset of the pandemic. Initially for be- Aggressive tightening raises the risk of a
and saw 40 as next most likely. Money ing slow to respond to the demand shock hard-landing, particularly given the heavy debt
markets have now shifted to predicting the from virus-induced lockdowns and later load carried by households,much of which was
RBA will keep moving aggressively and for only implementing a quantitative easing built up from entering the property market.
take the cash rate above 3% by year’s end. program after the currency had jumped.
That implies a 40 basis-point hike at each Separately, the RBA is facing its first
meeting — rather than the 25- or 50-basis It has also been chided for poor eco- review in a generation as new Treasurer
point increments the RBA prefers. nomic forecasting. Then, late last year it Jim Chalmers makes good on a pledge to
scrapped a yield target amid a bond rout, ensure the nation’s monetary and fiscal
“It’s got to the point now where you causing losses for some investors, and fi- regimes are fit for purpose.
just can’t rely on anything the RBA tells nally abandoned its forward guidance on
you,” said Darren Langer, a fixed income rates earlier than expected. Chalmers saidWednesday that the review
portfolio manager atYarra Capital. “Now is expected to begin in the next few months
they’re just going to keep the market guess- Lowe has acknowledged the RBA’s ear- and be completed around mid-2023.
ing. I don’t think that’s a terribly good way ly, gloomy forecasts about the pandem- Read also:
to run monetary policy.” ic-era economy didn’t come to pass. He India raises benchmark rates for
says that stronger-than-predicted domestic second straight month to tame ‘steep’
Langer said a widening gap between yields activity, hiring and inflation allowed policy inflation Click here
on Australian 10-year government bonds and makers to raise rates much earlier than the
Treasuries implied that offshore investors now initial guidance of 2024. Thai central bank holds key rate at
“see Australia as a more risky proposition.” record low, raises 2022 GDP outlook
Click here
The confusion stems from Governor
Philip Lowe’s comments after the May 3
meeting, when he said the RBA’s quar-
ter-point increase represented a return to
“normal operating procedures.”That was

BRUSSELS (June 8):The euro zone econ- Euro zone GDP icantly in the last quarter of 2021, to 0.2%
omy grew much faster in the first quarter of growth speeds from a 2.3% quarterly expansion in 3Q,
the year than in the previous three months up in 1Q despite Eurostat’s final data show.
despite the impact of the war in Ukraine, Ukraine war,
the European Union statistics office said revised data show The better-than-expected growth in the
onWednesday, revising its earlier estimates first quarter was driven by a rise in exports
sharply higher. BY FRANCESCO GUARASCIO and stocks, which more than offset drops
Reuters in governments’ expenditure and consum-
Euro zone employment growth was also ers’ purchases.
revised upwards, to show a further accel- ments now revised by national statistics
eration in the January-March period com- offices. Economic growth was very strong in
pared with the previous quarter. smaller countries, with Ireland posting a
The final data show that euro zone stellar 10.8% quarterly expansion. Among
In its final reading for the Janu- growth gained speed in the first quarter the largest economies of the bloc, GDP
ary-March period, Eurostat said the gross from a lacklustre final quarter of 2021, de- grew 0.2% in Germany and 0.1% in Italy,
domestic product (GDP) of the 19 coun- spite Russia’s Feb 24 invasion of Ukraine, while falling 0.2% in France.
tries sharing the euro rose 0.6% quar- which disrupted supply chains, hit confi-
ter-on-quarter, for a 5.4% year-on-year dence and caused energy prices to soar. Employment growth in the first quarter
expansion. was 0.6% quarter on quarter and 2.9% on
The negative impact of the war is how- the year, Eurostat said, revising its earlier
The figures were significantly revised ever expected to be felt in the second quar- estimates from 0.5% and 2.6% respectively.
upward from a previous flash estimate re- ter. Growth in the euro zone slowed signif-
leased in mid-May, when euro zone quar- Employment growth also accelerated
terly growth was estimated by Eurostat at from the previous quarter when it was
0.3% and the year-on-year expansion was 0.4% quarterly and 2.1% on the year.
expected at 5.1%. Read also: Japan’s 1Q GDP falls less than
first thought on stronger consumption
Eurostat said its earlier estimates were Click here
based on a more limited data set and on
preliminary estimates from EU govern-

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Oil gains above US$120 as UAE delivers
warning on higher prices

BY ALEX LONGLEY REUTERS
Bloomberg

(June 8): Oil extended gains after the group has struggled to meet its targets in stockpiles rose by 1.82 million barrels last
UAE said prices may well climb further recent months. week, according to people familiar with
as Chinese demand recovers in the com- the data.That’s unlikely to provide much
ing months. “There is a shift in focus from high- relief to a tight fuel market, with invento-
er production by OPEC+ towards the ries at the lowest seasonal level in years.
West Texas Intermediate futures rose declining spare capacity,” said Hans Van
above US$120 a barrel, trading near a Cleef, a senior energy economist at ABN US crude stockpiles rose by about 1.85
three-month high. Amro Bank NV. “I find it difficult to see million barrels last week, while inventories
arguments for lower prices in the near of distillates — a category that includes
At a conference in Jordan, the UAE’s term.” diesel — increased by about 3.38 million
energy minister said the prospects for a barrels, the API said. Official government
jump in Chinese demand means prices On Tuesday, the American Petrole- data are due later Wednesday.
could keep rising. um Institute reported that US gasoline

The amount of oil that producers can
add to the market “is not very encourag-
ing,” Suhail Al-Mazrouei added, under-
scoring concerns about spare production
capacity in the oil market.

The comments came after banks in-
cluding Goldman Sachs Group Inc and
Morgan Stanley underlined calls for high-
er prices in the coming months.

The oil market has maintained its up-
ward momentum this year as economies
rebounded from the pandemic, though
Russia’s invasion of Ukraine and a virus
resurgence in China has led to extreme
volatility. Beijing continues to roll back
its Covid-19 curbs as infection rates ease.
Last week, OPEC+ lifted output by more
than it had previously planned, though the

Oil prices are ‘nowhere near’ peak yet, says OPEC member UAE

CAIRO/AMMAN/LONDON (June 8): BY SALMA EL WARDANY, “We’re lagging by almost 2.6 million
Oil prices are “nowhere near” their peak MOHAMMAD TAYSEER, GRANT SMITH barrels a day, and that’s a lot,” Al Maz-
as an impending rebound in Chinese de- rouei said.
mand threatens to strain a global market & ANTHONY DI PAOLA
already pinched by tight supplies, said Bloomberg Only Saudi Arabia and the UAE have
key OPEC member the United Arab significant volumes of idle production
Emirates. conference onWednesday in Jordan. “Chi- capacity, but even that is only enough to
na will come with more consumption.” offset a portion of the supply gap created
The comments serve as an acknowl- by sanctions on Russia.
edgment that last week’s decision by the Al-Mazrouei warned that without more
OPEC+ coalition to bolster output will investment across the globe, OPEC+ can’t “The situation is not very encourag-
give consumers little respite from the guarantee sufficient oil supplies as demand ing when it comes to the quantities that
soaring cost of energy this summer.The fully recovers from the coronavirus pan- we can bring,” Al Mazrouei said.
Organization of Petroleum Exporting demic. Prices can reach “unseen” levels
Countries is struggling to restore pro- if Russian oil and gas is completely taken OPEC Secretary-General Moham-
duction as planned, with spare capaci- off the market, he said. mad Barkindo echoed the UAE’s com-
ty confined to just a few members, the ments, stressing the lack of spare capacity
UAE minister conceded. OPEC+ agreed last week to open its oil in the group.
taps a little faster in the summer months.
“With the pace of consumption we That modest supply boost amounts to just “With the exception of two-three
have, we are nowhere near the peak be- 0.4% of global demand over July and Au- members, all are maxed out,” he told
cause China is not back yet,” Energy gust and comes after several months in Bloomberg, expanding on remarks given
Minister Suhail Al-Mazrouei said at a which the group has struggled to hit its at a conference hosted by RBC Capital
production targets. Markets in NewYork. “The world needs
to come to terms with this brutal fact.”

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BLOOMBERG

Garuda
administrators

recognise
US$8.3 bil
of claims

Trucker strike to points within the country, down from BY HARRY SUHARTONO
in South Korea the usual daily delivery of about 100,000 & TASSIA SIPAHUTAR
poses new risk tons. Strikes are taking place at steel ports
to global trade Pohang and Gwangyang, according to an Bloomberg
ITF spokeswoman.
BY ANN KOH, HEEJIN KIM, KYUNGHEE PARK (June 8): Administrators for PT
& JEONG-HO LEE Tire maker HankookTire &Technology Garuda Indonesia have acknowl-
Bloomberg Co couldn’t move any tires from its plant edged claims worth 120.5 trillion
in Daejeon onTuesday, compared with its rupiah (US$8.3 billion) as the be-
SINGAPORE/SEOUL (June 8): Thou- typical daily shipment of about 70 contain- leaguered airline seeks to restructure
sands of truck drivers in South Korea have ers. More than 70% of tires produced at its debts.
gone on strike at major ports and container the firm’s two plants in Daejeon and Ge-
depots, posing the latest threat to strained umsan are for exports, the company said. Documents posted online showed
global-supply chains. the biggest claim coming from Airbus
Soju maker Hite Jinro is carrying only SE at more than 7.8 trillion rupiah.
The truckers union, which is seeking to 38% of normal supply of the Korean liq- Oil company PT Pertamina, which is
prevent a change to wage rules, is holding uor, as outsourced truck drivers joined looking to recover 7.5 trillion rupiah,
protests at 16 locations across the country, the protest. also featured on the list labelled “final”.
according to the International Transport
Workers’ Federation.Transport has slowed or The damage so far, however, appears The figures come ahead of a key
stopped to the Busan New Port, Pyeongtaek to be limited. HMM Co, which operates scheduled court date for Garuda on
Port and Uiwang container depot in Gyeo- a terminal in Busan under a joint venture Thursday to lay out its restructuring
nggi province, the federation saidWednesday. with PSA International, said earlyWednes- plan. A final vote on the proposal is
day there have been no major disruptions. due to take place later this month.
The strike come at a time when glob- Busan Port Authority said it is blocking
al supply chains are struggling to recover vehicles that the union is trying to push Like many airlines, the Indone-
from lockdowns in China’s cities and Rus- into the port area, and police are ensuring sian carrier’s business took a hit due
sia’s invasion of Ukraine.While not all of the smooth movement of vehicles. to Covid-19. It currently is operating
the nation’s drivers are taking part in the only about 20% of its pre-pandemic
protests, the rallies threaten to slow South The first large-scale strike under newly fleet, limiting its ability to raise rev-
Korea’s exports of everything from steel elected President Yoon Suk Yeol came as enue to repay its debts.
to plastics and consumer goods if they go the truck drivers push the government to
on for weeks, local media said. not abolish current rules that guarantee The acknowledged tally of 120.5
minimum wage for the drivers, amid rising trillion rupiah stands in contrast to
Busan is the world’s seventh-largest fuel prices. Created in 2020, the three-year 163 trillion rupiah worth of bills
port, handling 23 million container box- rule is set to expire this year. that creditors put forward, the doc-
es last year, according to Korea’s Ministry uments showed. The latter is lower
of Oceans and Fisheries. The union is demanding that the gov- than the previously reported figure
ernment extend the scheme to all drivers of 198 trillion rupiah.
“The impact of the strike is already being of freight vehicles, who sometimes resort
felt at ports, petrochemical complexes, and to overloading their trucks to keep up with Martin Patrick Nagel, a court-ap-
other logistics hubs,” said the ITF, which is the rising costs of living, the ITF said. pointed administrator, did not an-
affiliated with the group on strike -- the Car- swer calls nor respond to text mes-
goTruckers Solidarity division of the Korean “It’s hard to resolve, especially under the sages from Bloomberg News on
Public Service andTransportWorkers’ Union. new president who came from the conserv- Tuesday seeking clarification on the
ative party that focuses on economic growth discrepancies.
Almost all trucking activity at petro- rather than social welfare,” said Kim Ki-
chemical complexes in Ulsan,Yeosu and Chan, a business administration professor Among the reasons cited by ad-
Daesan has stopped, the union said in an at Catholic University of Korea in Seoul.“It ministrators for rejecting claims were
update on its website Wednesday. may take several months for the government that bills had already been paid or that
and the union to settle on the issue.” there was no record of the expendi-
Posco said it is struggling to ship a total ture. Some claims from sukuk hold-
of 35,000 tons of steel from its two plants When asked about the strike Tuesday, ers got rejected on the grounds they
Yoon told reporters that he “will handle needed to submit them via a trustee.
any illegal activities by workers or employ-
ers by the law,” without elaborating. Once an agreement between the
carrier and its creditors is struck,
Police have arrested 25 people so far for the Indonesian government plans a
blocking some facilities, the ITF spokes- rights issue in two stages this year to
woman said. raise additional funds.

T H U R S D A Y J U N E 9 , 2 0 2 2 20 T H E E D G E C E O M O R N I N G B R I E F

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BLOOMBERG

Credit Suisse the US$5.5 billion hit from Archegos, the Already at a
weighs new job collapse of partner Greensill Capital and record, UK
cuts round after a string of profit warnings that eroded in- petrol price
vestor confidence, weakened key business- soars by most
loss warning es and prompted an exodus of talent.The in 17 years
lender has said that 2022 will be a year of
BY CATHY CHAN, AMBEREEN CHOUDHURY, transition, as it seeks to reduce risk at the BY JACK WITTELS
MARION HALFTERMEYER & MYRIAM BALEZOU investment bank while shifting resources to Bloomberg
wealth management.
Bloomberg LONDON (June 8):The cost of filling
The Swiss lender had about 51,000 em- up a standard car in the UK, already at
(June 8): Credit Suisse Group AG is weigh- ployees at the end of March. It recently over- an all-time high, surged by the most in
ing a fresh round of job cuts, part of a re- hauled top management saying that its chief 17 years to underscore the inflationary
newed push to slash costs after warning of financial officer, legal counsel and head of pressures the country faces from soar-
a second-quarter loss, according to people Asia would all be either stepping down or ing fuel bills.
familiar with the matter. leaving the company. It also named former
Bank of Ireland Group Plc Francesca Mc- Unleaded petrol jumped by 2.23
The Swiss bank is considering headcount Donagh as head of the Europe, Middle East pence a liter on Tuesday, the biggest
reductions across divisions including invest- and Africa region. one-day increase since the early 2000s,
ment banking and wealth management in according to the RAC, a UK motoring
multiple regions, the people said, asking not Even before Wednesday’s warning, the organization. That drove it to a fresh
to be identified as the matter is private.The bank had been struggling to keep pace high of 180.73 pence (about US$8.60
shares slumped as much as 7.6% to trade with rivals’ trading results after reducing a US gallon) and lifted the cost of filling
near their lowest level in three decades. risk because of Archegos. Equities revenue up a car with a 55-liter tank to £99.40.
dropped 47% in the first quarter while the Diesel also jumped to a new record.
The dismissals are likely to come as the fixed income business, typically a source of
bank prepares to update investors on risk, strength, did even worse. Results laid bare “These are unprecedented times,”
compliance, technology and wealth man- the other steep challenges still facing the said RAC fuel spokesman SimonWil-
agement on June 28, said the people. The bank as it seeks to regain investor confi- liams. “Sadly, it seems we are still some
final tally of cuts is still to be decided, they dence, including still-to-come legal hits and way from the peak.”
said.A Credit Suisse spokeswoman declined weaker-than-expected wealth management
to comment, pointing to the lender’s state- results. While the price of diesel is heading
ment on Wednesday, which said it would toward £2 a litre, the cost of wholesale
accelerate cost cutting efforts. Beyond the bank’s self-inflicted damage, petrol unexpectedly dropped by about
Gottstein is contending with a multitude 5p a litre onTuesday,Williams said. If
The bank warned it expects a third of macro factors outside his control that that lower price is maintained in com-
straight loss this quarter, driven by a slump further risks derailing the recovery.Wealthy ing days, it could stem the flow of daily
at its investment banking and trading di- investors, particularly in the Asia Pacific re- record retail prices, he said.
vision. Credit Suisse pointed to widening gion, are sitting out the volatility in mar-
credit spreads and client deleveraging amid kets, hurting fees for the private bank. Covid Oil prices surged this year follow-
volatile markets, though other banks have lockdowns in the region are reviving fears ing Russia’s invasion of its neighbour,
said the volatility has benefited their trad- of supply chain disruptions, while M&A ac- which led to a number of large com-
ing desks. tivity has taken a hit after Russia’s invasion panies and countries shunning the na-
of Ukraine. tion’s oil. More recently, China’s ma-
“Today’s profit warning blames ‘the cur- jor cities have been loosening Covid
rent geopolitical situation’ and ‘significant The latest troubles are in stark contrast to restrictions and the US summer driv-
monetary tightening’ yet we would argue the message from investment banking and ing season is now underway — both of
CS’ predicament may be largely self-inflict- capital markets head David Miller, who has which are bullish for demand.
ed,” Citigroup Inc analysts led by Andrew been telling clients this year that the bank
Coombs wrote in a note to clientsWednes- “is back” and ready to underwrite deals. Wholesale prices for gasoline and
day. diesel have risen faster than crude oil
While Credit Suisse saidWednesday that since the war began, helped by a bot-
Chief Executive Officer Thomas advisory fees generated by Miller’s dealmak- tleneck in the global oil refining system
Gottstein’s two years in charge have seen ers have been “resilient”, it said low levels at a time when demand has been re-
of debt and equity issuance contributed to covering from the virus.
the investment bank likely posting a loss
this quarter. Rising fuel costs appear to be taking
up a larger share of people’s expendi-
ture in the UK, according to a report
from from Barclaycard. Spending on
energy and fuel increased 34.5% and
24.8% respectively in May, while out-
lays at supermarkets fell 2%.

The RAC’s prices are UK averages.

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WORLD

MILAN (June 8):The candidate to replace Generali tensions REUTERS
entrepreneur Francesco Gaetano Calt- reignited by
agirone on the board of Italy’s Generali vacant board Committee roles
has turned down the position, potentially seat dilemma FormerTelecom Italia CEO Flavio Cattaneo
opening the way for one of Caltagirone’s and academic Marina Brogi are the other
defeated leadership candidates to take up BY GISELDA VAGNONI, GIANLUCA SEMERARO, board members from the Caltagirone slate.
the role. STEFANO BERNABEI, AGNIESZKA FLAK
& VALENTINA ZA Caltagirone, Cattaneo, and Brogi had re-
Caltagirone, Generali’s second-largest Reuters fused to join any of the board committees be-
shareholder, quit the board last month, cause they wanted the company to have a com-
opening a new chapter in a long-standing The Caltagirone camp opposed Neri’s mittee that gives a preliminary assessment on
shareholder dispute. nomination to the board, two other sourc- strategic transactions — a task which Generali
es close to the matter said on Wednesday, proposed entrusting to the board as a whole.
The company’s appointment committee on the basis that Generali should stick to
proposed co-opting Roberta Neri, the next a by-law saying that a director should be Generali said onTuesday that the invest-
unelected candidate on the slate presented replaced by someone of the same sex. ment committee had been given a mandate
by Caltagirone for a board renewal in April. to oversee deals, alliances, and partnerships
But the company said in a statement late worth over €250 million (US$267 million).
on Tuesday that she had said no.
Brogi and Cattaneo have now agreed to
The board has now instructed the ap- join the committees once the board mem-
pointment and corporate governance com- bership is finalised, Generali said.
mittee to propose a new candidate, Gen-
erali said. By 0945 GMT,shares in Generali fell 0.9%
underperforming a flat Italian blue-chip index.
It did not say why Neri rejected the role.
A source familiar with the situation said The Generali board is next due to meet
Neri wanted all the board members to back on June 22.
her as a condition for accepting the role.
After Neri’s decision, the next two
names on the Caltagirone slate would be
Claudio Costamagna and Luciano Ciri-
na, its defeated candidates for the roles
of chairman and chief executive officer
(CEO) in the April shareholder vote.
At the April shareholder meeting, Cal-
tagirone challenged a decision by Gener-
ali’s board to give a third term to CEO
Philippe Donnet. His bid to appoint his
own leadership candidates was defeated
but he did secure three board seats.

(June 8): A former analyst at Citadel LLC Ex-Citadel Fake payroll
was ordered to spend more than four years analyst gets Prosecutors said Blotnick falsified infor-
in federal prison for scamming US$4.6 51 months for mation about Brattle Street in his PPP
million in Covid relief loans for his start- Covid scam loan applications, telling one bank the
up hedge fund, most of which he lost in fund employed 45 people with a monthly
the market. BY CHRIS DOLMETSCH payroll of more than US$325,000. In re-
Bloomberg ality, according to the government, Brat-
Gregory Blotnick, 35, was sentenced on tle Street paid no wages at all in 2019 or
Tuesday to 51 months behind bars by a BLOOMBERG 2020.
federal judge in Newark, New Jersey, and
ordered to pay US$4.6 million in restitution. Blotnick, a resident of New York and
He pleaded guilty in October to submitting Palm Beach, Florida, sought US$6.8 mil-
21 fraudulent loan applications to 13 lenders lion in loans and received about US$4.6
under the Paycheck Protection Program of million, prosecutors said. He went on to
the March 2020 covid stimulus bill. deposit much of the money in brokerage
funds and lost more than US$3 million in
Blotnick worked as an analyst at Citadel unsuccessful stock trades.
for less than a year and was let go in 2018,
according to Zia Ahmed, a spokesman for The federal sentence may not be the
the firm. He founded Brattle Street Capital only jail time Blotnick gets. According to
LLC in 2019, according to an SEC filing. court records, he also pleaded guilty in
October to similar charges brought by the
Defense lawyer Adam Kaufmann said Manhattan district attorney’s office. He
Blotnick accepted full responsibility for his faces a possible state court sentencing on
actions and had taken steps to make things Thursday.,
right. “Mr Blotnick will serve his time with
dignity and looks forward to becoming a The case is U.S. v Blotnick, 21-cr-796,
contributing member of society when his U.S. District Court, District of New Jer-
sentence is completed,” Kaufmann said. sey (Newark.)

T H U R S D A Y J U N E 9 , 2 0 2 2 22 T H E E D G E C E O M O R N I N G B R I E F

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(June 8):Taiwan Semiconductor Manufac- TSMC expects Over the longer term,TSMC remains a
turing Co. expects revenue to grow about 30% sales rise linchpin of global business, a key supplier to
30% in 2022, signaling resilient demand for despite global industries from automobiles to crypto and
electronics despite global macroeconomic the internet. Its technology is among the
uncertainty. economic most sought-after in the industry.This week,
ructions a senior economist at a government-run re-
Sales growth this year should acceler- search group in China — which considers
ate from 2021’s 24.9%, which was in dol- BY DEBBY WU Taiwan its territory — called on authorities
lar terms, Chairman Mark Liu said at the Bloomberg to seize the company.
company’s annual shareholder meeting on
Wednesday.That’s in line with executive re- TSMC, the most advanced maker of TSMC will continue with its new fab
marks in April that gave an official outlook of chips for tech giants from Apple Inc. to Nvid- in Arizona despite a lack of progress in
topping mid- to high-20% growth in 2022. ia Corp., rose more than 1% inTaipei, after Congress on approving a US$52 billion
having shed more than a tenth of its value chip-funding bill, Liu told shareholders
TSMC’s projection comes as concerns this year.While theTaiwanese company has Wednesday.That could push up costs though
persist that inflation, the war in Ukraine and been one of the biggest beneficiaries in past it would be manageable, the TSMC chair-
Chinese lockdowns will hammer demand years of soaring demand for chips in a grow- man added.
for gadgets. On Wednesday, executives ac- ing range of connected devices, investors fear
knowledged smartphones and computers policy tightening around the world will begin TSMC is building a US$12 billion plant
have been hard-hit but that spending in other to erode consumption in 2022. in Arizona in addition to capacity expansion
areas such as electric vehicles have exceeded underway closer to home. Speculation has
expectations.They played down the effect of Apple is planning to keep iPhone produc- persisted that the chip giant is considering
inflation, saying the rise in prices was grad- tion roughly flat in 2022, Bloomberg News a factory in Europe, but it has no concrete
ually abating. has reported — a conservative stance as the plans to build a fab in that region for now,
year turns increasingly challenging for the Liu said.
“The current inflation has no direct im- smartphone industry.At the same time, wait
pact on the semiconductor industry as the times for semiconductor delivery hit a record Executives reiterated that the company
demand drop is mainly for consumer de- high in May though some companies are has earmarked US$40 billion to US$44 bil-
vices like smartphones and PCs while EV starting to see relief. Chipmakers are also lion this year to expand and upgrade its fa-
demand is very strong and partially exceeds raising prices due to rising costs. cilities and should again spend more than
our supply capacity so we are making inven- US$40 billion in 2023.That’s a record outlay
tory adjustments,” Liu said.“Utilization rate intended to keep the company at the fore-
is full for the rest of the year.” front of a rapidly evolving technology and
sating future demand.
TSMC reaffirmed previous projections
for US$17.6 billion to US$18.2 billion of “TSMC has entered a period of struc-
revenue this quarter, supporting gross mar- tural high growth,” Liu said. “Technology
gins of as much as 58%. leadership is key to our growth.”

REUTERS

BYD executive
says it will supply
batteries toTesla

‘very soon’

BY ZHANG YAN & BRENDA GOH
Reuters

SHANGHAI (June 8): China’s BYD is pre- plug-in hybrids, has been working on to which has been installing such batteries in
paring to supply Tesla Inc with batteries supply batteries to other automakers in- cars manufactured in the Shanghai plant
“very soon”, a senior company executive cluding Toyota. since 2020.
told a state media anchor in a video released
early on Wednesday. In 2020, BYD officially launched Tesla disclosed that nearly half of the ve-
its Blade battery, a less bulky lithi- hicles it produced in the first quarter were
“We are now good friends with Elon um-iron-phosphate (LFP) battery that its equipped with LFP batteries — a cheaper
Musk because we are preparing to sup- Chairman Wang Chuanfu believed to be rival to the nickel-and-cobalt based cells
ply batteries toTesla very soon,” said Lian safer than other alternatives in the market that dominate in the West.
Yubo, BYD’s executive vice president in and would not catch fire.
an interview with Kui Yingchun, an an- Panasonic and LG Energy Solutions
chor with China’s state-owned broadcast- Chinese battery giant CATL is currently are the main suppliers of nickel-and-co-
er CGTN. the sole supplier of LFP batteries toTesla, balt based cells to Tesla.

BYD andTesla did not immediately re-
ply to requests for comment.

BYD, the world’s biggest manufacturer
of the fleet including electric vehicles and

T H U R S D A Y J U N E 9 , 2 0 2 2 23 T H E E D G E C E O M O R N I N G B R I E F

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South Korea eyes South Korea.Terraform Labs was founded in Singapore
guidelines for 2018, according to its LinkedIn page. trading platform
crypto bourses
Global push recognises
afterTerra crash South Korea joins governments around the crypto assets
world in pushing for more crypto oversight of accredited
BY SANGMI CHA in the wake of theTerraUSD collapse. Much
Bloomberg of the recent efforts have centered on ensur- investors
ing that investors in stablecoins, a vital part
(June 8): South Korean policymakers are of the cryptocurrency ecosystem, are better BY ANSHUMAN DAGA
pushing the country’s cryptocurrency ex- protected. Reuters
changes to come up with industry guidelines
for listing and delisting digital tokens, in a bid Such tokens, which are typically pegged to SINGAPORE (June 8): Singapore-based
to protect the public after the collapse of the an asset like the US dollar, have a combined private securities platform ADDX said
TerraUSD stablecoin. market value of about US$160 billion, ac- it has become the first financial firm in
cording to CoinGecko.Yun said theTerraUSD the city-state to recognise cryptocurrency
Yun Chang-hyun, a lawmaker who heads failure underscores the need for better investor in their assessment of assets of high-net
the ruling party’s virtual assets committee, has protections in crypto. worth clients.
called a second meeting with bourses Upbit,
Bithumb,Coinone,Korbit and Gopax for next Yun didn’t elaborate on the details of the The move underscores the growing
week, he said in an interview. The aim is to draft guidelines.They’re likely to include strict- acceptance of digital currencies among
agree on a draft of the non-binding guidelines, er reporting requirements to provide trans- financial services firms as they seek to
he said.The country would employ a self-reg- parency rather than a tightening of trading tap a wide array of investors.
ulatory system, like Japan does. procedures, according to people familiar with
the matter, who asked not to be identified ADDX, whose backers include Sin-
“There are a lot of shortcomings compared discussing private information. gapore Exchange, said in a statement on
with traditional finance,”Yun said by phone. Wednesday that it would recognise only
Crypto “was neglected for too long without Representatives for four of the five ex- cryptocurrencies with a higher market val-
order and discipline.” changes — which together account for almost ue and would apply discount rates when
99% of cryptocurrency trading in South Ko- valuing these assets.
The move comes after the high-profile im- rea — confirmed the meeting but said they
plosion of algorithmic stablecoin TerraUSD weren’t aware of its agenda.The FSC said it “Cryptocurrencies are here to stay.
last month.Around US$40 billion in market knows about the gathering but was unable to They no longer exist only on the fringes
value was erased globally for holders of Ter- comment on the plan.The exchanges would of wealth and investment conversations,”
raUSD and its sister coin Luna when Ter- make the announcement if any guidelines were said ADDX CEO Oi-Yee Choo.
raUSD plunged far below its US$1 peg. An established, it said.
estimated 280,000 South Koreans had invest- “With a large minority of investors
ed in Luna,according to the Financial Services The ruling party held a first meeting with owning crypto, it is reasonable for these
Commission, the country’s financial regulator. the five exchanges on May 24. digital assets to be recognised as a part of
one’s portfolio — not unlike any other as-
Do Kwon and Daniel Shin, the co-found- Apart from the planned self-regulatory sets that can be valued in the marketplace,
ers of Terraform Labs, the company behind guidelines, the Korea Blockchain Associa- such as real estate or equity,” Choo said.
the two cryptocurrencies, were both born in tion, an industry body, has been drawing up
a draft manual on behalf of its 19 members Under Singapore’s regulations, indi-
setting out comprehensive guidelines for how viduals need to have at least S$300,000
to operate, saidYun Sung Han, its director. (US$217,991.57) of income from the past
The association’s members include the five 12 months, S$1 million in net financial
crypto exchanges, he said. assets or S$2 million in net personal assets
to qualify as accredited investors.
BENGALURU: PayPal Holdings Inc said PayPal allows
on Tuesday (June 7) that it will now allow transfer of crypto ADDX said it will accept crypto as-
users to transfer cryptocurrencies including sets only in the category of net personal
bitcoin to external wallets, nearly two years to external assets and will apply a 50% discount rate
after the fintech giant opened up its platform wallets for bitcoin or ether when calculating the
to digital currencies. value of these holdings and a 10% dis-
BY NIKET NISHANT count for USDC stable coin.
The feature will be available to select US Reuters
users starting onTuesday and will be rolled Cryptocurrencies — once seen as a
out to all eligible US customers in the com- Since last year, the crypto market has seen niche asset for risk-hungry investors —
ing months, the San Jose, California-based a surge of investor interest with large venture became more popular during the COV-
company said. investors, celebrities and blue-chip compa- ID-19 pandemic.While bitcoin’s value has
nies doubling down on crypto investments. recently fallen, the overall crypto market
PayPal started allowing customers to buy, However, the prices of such currencies have is still valued at US$1.2 trillion.
sell and hold bitcoin, ethereum, bitcoin cash remained volatile, dimming their appeal as
and litecoin in October 2020. But users were a hedge against inflation. “In time to come, we are likely to en-
not allowed to move crypto holdings off its able customers to fund their investment
platform earlier. wallets with cryptocurrencies and to con-
vert their assets between fiat currencies
Users had been requesting for the new and crypto,” said Choo.
feature since the company permitted buying
and selling of crypto, PayPal said. Shares of
the company were up 0.3% at US$87.08.

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Draft Indonesia would receive incentives for their develop- REUTERS
renewables bill ment.
proposes coal- Record
based fuels as It also calls for an increase in manda- prices haven’t
‘new energy’ tory domestic sales for coal to 30%, from
25% currently, and the removal of all diesel stopped
BY STEFANNO SULAIMAN power plants by 2024. Singapore
& STANLEY WIDIANTO residents
Reuters “Any support for ‘new energy’ will only wanting cars
prolong the transition (to cleaner energy),”
JAKARTA (June 8): Environmental experts Mahawira Dillon, a energy policy research- BY KEVIN VARLEY
onWednesday slammed an Indonesian par- er at clean energy think tank CERAH, told Bloomberg
liamentary proposal for a bill aimed at pro- Reuters.
moting renewables that prominently fea- (June 8): The right to even own a
tures the development of coal-based energy. Another energy research group, the Insti- car in Singapore has surged to a re-
tute for Essential Services Reform, said in a cord, adding to the cost of living in
The draft bill, a copy of which was ob- commentary in March the draft bill shows the city-state.
tained by Reuters, proposes classifying parliament is accommodating the interests
coal bed methane, coal liquefaction and of the coal industry “which wants to con- In the latest round of bid-
coal gasification as sources of “new ener- tinue to gain market share when the coal ding, the certificate of entitlement
gy” alongside nuclear and hydrogen pow- market for electricity generation declines”. (COE) premiums for motor vehi-
er. Parliament is set to vote on it next week cles breached the S$100,000 mark
before sending it to government for further CERAH also called for nuclear energy for the first time in history. Singa-
discussion. to be removed from the bill due to safety pore requires motorists to have the
risks and high development costs. COE for the right to own and op-
Indonesia has signed up to a global erate a vehicle for 10 years, after
pledge to phase out use of coal, the most Some lawmakers on the energy commit- which, they are required to renew
polluting fossil fuel, which is seen as key to tee contacted by Reuters did not respond to it to continue using the car.
cutting emissions and keeping warming be- requests for comment.They have previously
low 1.5 degrees Celsius. It has also pledged said Indonesia should take advantage of its This is just one of the costs
to reach net-zero carbon emissions by 2060. large coal reserves and consider affordability which have been soaring in Sin-
of energy as it transitions to cleaner energy. gapore, where core inflation has
The Southeast Asian country is the accelerated to the fastest in more
world’s biggest thermal coal exporter and Indonesia’s state utility PLN has pledged than 10 years on rising prices of
the industry is a major source of govern- to retire all coal power plants by 2056, while food, retail goods and energy.It’s
ment revenue. Coal also powers roughly the government has promised to double been three weeks since the last COE
60% of its electricity output, far greater than the share of renewables in its energy mix tender exercise, which is an addi-
the 12% powered by renewables. to 23% by 2025. tional week more than the typical
interval, and this could mean that
The draft bill, which was verified by a To encourage investment in renewables, car dealers have the opportunity to
member of parliament’s energy commit- lawmakers have proposed compensating collect more orders, putting pres-
tee, lists hydro, wind, solar, and geothermal the state power company for losses when sure on premiums, the StraitsTimes
as renewable energy sources, all of which it provides power from renewable sources. reported.

The draft bill also contains proposals for Open category COEs, which
fiscal incentives and support in the form of can be used for any vehicle type
land, infrastructure and government guar- in Singapore, but end up being
antees for the development of both new and used mainly for large cars, rose to
renewable energy sources. a record S$100,697 (US$73,213),
while category B premiums rose to
Lawmaker Sugeng Suparwoto said on a fresh high of S$100,684.
Tuesday that parliament aims to pass the
bill into law before this year’s G20 summit,
which Indonesia will host in November.

REUTERS

A heavy machinery unload coal from barges into trucks to be distributed, at the Karya Citra Nusantara
port in North Jakarta, Indonesia, Jan 13, 2022. Picture taken with a drone.

T H U R S D A Y J U N E 9 , 2 0 2 2 25 T H E E D G E C E O M O R N I N G B R I E F

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CPO RM 6,470.00-35.00 OIL US$ 122.131.56 RM/USD 4.3945 RM/SGD 3.1924 RM/AUD 3.1573 RM/GBP 5.5012 RM/EUR 4.7041

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(MIL) (RM) CHANGE CAP
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DYNACIATE GROUP BHD 271.90 -0.025 0.145 45.00 141.6

LGMS BHD 246.99 0.345 0.845 69 385.3

BCM ALLIANCE BHD 232.30 0.000 0.025 -16.67 50.9

MNC WIRELESS BHD 87.30 0.005 0.020 33.33 45.7

YONG TAI BHD 55.80 -0.005 0.085 -34.62 118.5

TOP GLOVE CORP BHD 50.70 -0.070 1.180 -54.44 9,448.5

SAPURA ENERGY BHD 50.20 -0.005 0.045 -10.00 719.1

NWP HOLDINGS BHD 41.50 0.025 0.245 0.00 129.0

TA WIN HOLDINGS BHD 40.40 -0.005 0.100 -20.00 342.2 World equity indices

DAGANG NEXCHANGE BHD 38.50 -0.015 0.975 28.29 3,077.3

WIDAD GROUP BHD 29.20 0.000 0.360 -1.370 990.9 CLOSE CHANGE CHANGE CLOSE CHANGE CHANGE

KUMPULAN JETSON BHD 26.50 -0.035 0.280 33.33 75.0 (%) (%)
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GENTING BHD 26.00 0.130 5.340 14.350 20,562.1 S&P 500 4,160.68 39.25 0.95 JAPAN 28,234.29 290.34 1.04

CNERGENZ BHD 25.00 0.020 0.655 0.00 326.2 NASDAQ 100 12,711.68 112.05 0.89 KOREA 2,626.15 -0.19 -0.01

SERBA DINAMIK HOLDINGS BHD 24.90 0.000 0.115 -67.14 426.6 FTSE 100 7,580.92 -18.01 -0.24 PHILIPPINES 6,769.62 15.61 0.23

HIBISCUS PETROLEUM BHD 22.50 0.000 1.290 58.28 2,596.0 AUSTRALIA 7,121.10 25.36 0.36 SINGAPORE 3,225.80 -5.74 -0.18

IFCA MSC BHD 21.70 -0.005 0.335 11.67 203.1 CHINA 3,263.79 22.03 0.68 TAIWAN 16,670.51 157.63 0.95

ARTRONIQ BHD 21.30 0.055 0.695 13.01 220.9 HONG KONG 22,014.59 482.92 2.24 THAILAND 1,636.89 4.97 0.30

HEXTAR INDUSTRIES BHD 21.10 -0.015 0.355 121.88 407.3 INDIA 54,850.90 -256.44 -0.47 VIETNAM 1,307.91 16.56 1.28

Data as compiled on Jun 8, 2022 Source: Bloomberg Data as compiled on Jun 8, 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)

EA HOLDINGS BHD 0.015 50.00 752.1 -25.00 96.8 CHINA AUTOMOBILE PARTS 0.010 -33.33 993.0 0.00 13.6

FINTEC GLOBAL BHD 0.015 50.00 3752.3 50.00 88.8 SILVER RIDGE HOLDINGS BHD 0.130 -18.75 340.5 -36.59 25.5

MNC WIRELESS BHD 0.020 33.33 87303.5 33.33 45.7 IMPIANA HOTELS BHD 0.025 -16.67 18,639.5 -66.67 36.1

DGB ASIA BHD 0.020 33.33 297.0 -33.33 33.9 BORNEO OIL BHD 0.025 -16.67 3,379.4 -16.67 187.2

MLABS SYSTEMS BHD 0.03 20 200.3 0 43.5 AE MULTI HOLDINGS BHD 0.025 -16.67 50.0 -16.67 54.1

XOX NETWORKS BHD 0.035 16.67 21.5 16.67 39.7 SCOMI ENERGY SERVICES BHD 0.025 -16.67 305.1 -54.55 11.7

TOP BUILDERS CAPITAL BHD 0.040 14.29 12244.6 14.29 28.2 DYNACIATE GROUP BHD 0.145 -14.71 271,868.6 45.00 141.6

FAST ENERGY HOLDINGS BHD 0.045 12.50 16935.1 -52.63 33.2 XOX TECHNOLOGY BHD 0.030 -14.29 162.0 -40.00 26.8

NWP HOLDINGS BHD 0.245 11.36 41549.2 0.00 129.0 LAY HONG BHD 0.265 -11.67 12,627.3 10.42 196.2

GOLDEN LAND BHD 0.470 10.59 15.3 13.25 100.8 KUMPULAN JETSON BHD 0.280 -11.11 26,481.6 33.33 75.0

METRONIC GLOBAL BHD 0.110 10.00 4169.9 -45.00 23.9 CME GROUP BHD 0.045 -10.00 553.2 -25.00 #VALUE!

TECHNA-X BHD 0.055 10.00 10444.8 -26.67 121.8 SAPURA ENERGY BHD 0.045 -10.00 50,193.6 -10.00 719.1

ADVANCE INFORMATION 0.110 10.00 0.2 -15.38 29.3 MQ TECHNOLOGY BHD 0.050 -9.09 14,230.9 0.00 62.6

FSBM HOLDINGS BHD 0.280 9.80 591.9 51.35 49.8 REACH ENERGY BHD 0.050 -9.09 392.5 -16.67 54.8

MESINIAGA BHD 1.6 9.59 1.1 1.27 96.6 TAS OFFSHORE BHD 0.200 -9.09 2.1 -21.57 35.0

PAN MALAYSIA HOLDINGS BHD 0.060 9.09 2.0 -25.00 55.7 TEXCHEM RESOURCES BHD 3.530 -9.02 4,610.9 204.31 415.2

VELESTO ENERGY BHD 0.125 8.70 7718.8 4.17 1027.0 PRICEWORTH INTERNATIONAL 0.160 -8.57 8,033.7 166.67 217.5

ARTRONIQ BHD 0.695 8.59 21252.9 13.01 220.9 CYPARK RESOURCES BHD 0.330 -8.33 15,907.3 -63.74 194.3

LAMBO GROUP BHD 0.065 8.33 161.2 -23.53 100.1 TRIVE PROPERTY GROUP BHD 0.055 -8.33 38.4 83.33 69.5

CENSOF HOLDINGS BHD 0.335 8.06 9029.7 6.35 185.0 ZELAN BHD 0.060 -7.69 1,228.9 -25.00 50.7

Data as compiled on Jun 8, 2022 Source: Bloomberg Data as compiled on Jun 8, 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)

FRASER & NEAVE HOLDINGS BHD 20.50 0.700 587.5 -17.14 7519.0 NESTLE MALAYSIA BHD 132.600 -1.200 42.9 -1.19 31094.7

DUTCH LADY MILK INDUSTRIES 33.60 0.690 0.6 0.24 2150.4 PPB GROUP BHD 16.000 -0.560 584.5 -6.43 22761.6

LGMS BHD 246.99 0.345 0.845 69 385.3 PETRONAS DAGANGAN BHD 21.100 -0.540 250.0 2.43 20961.9

RAPID SYNERGY BHD 12.18 0.220 48.2 22.41 1302.0 TEXCHEM RESOURCES BHD 3.530 -0.350 4610.9 204.31 415.2

LINGKARAN TRANS KOTA HOLDINGS 4.87 0.190 1,496.1 29.52 2620.4 MALAYSIA SMELTING CORP BHD 3.220 -0.240 4286.5 -0.92 1352.4

CARLSBERG BREWERY MALAYSIA 22.74 0.160 115.6 13.25 6952.7 HONG LEONG FINANCIAL GROUP 19.460 -0.220 53.2 12.23 22286.4

PIE INDUSTRIAL BHD 3.36 0.160 986.4 -10.95 1290.4 YNH PROPERTY BHD 3.060 -0.190 38.6 15.47 1617.2

MESINIAGA BHD 1.60 0.140 1.1 1.27 96.6 HARTALEGA HOLDINGS BHD 3.810 -0.180 3969.3 -33.51 13020.5

SIME DARBY PLANTATION BHD 4.83 0.130 4963.1 28.46 33402.9 GENTING PLANTATIONS BHD 7.300 -0.150 83.6 10.74 6549.5

GENTING BHD 5.34 0.130 26032.7 14.35 20562.1 CHIN HIN GROUP BHD 3.400 -0.150 1214.4 30.27 3008.0

BRITISH AMERICAN TOBACCO 12.22 0.120 202.4 -12.59 3489.2 HONG LEONG INDUSTRIES BHD 9.120 -0.140 77.6 -0.65 2913.6

UNITED PLANTATIONS BHD 14.56 0.100 94.8 6.23 6017.7 HONG LEONG BANK BHD 20.980 -0.140 482.3 12.67 45478.7

MALAYSIAN PACIFIC INDUSTRIES 33.20 0.100 180.8 -32.74 6603.4 KHIND HOLDINGS BHD 2.700 -0.100 2.0 -29.13 108.2

HAP SENG CONSOLIDATED BHD 7.67 0.100 222.5 -0.39 19095.8 PRESS METAL ALUMINIUM 5.080 -0.100 7541.1 -12.11 41857.3

BERJAYA FOOD BHD 4.89 0.100 632.3 127.44 1763.0 WESTPORTS HOLDINGS BHD 3.530 -0.100 9136.4 -12.84 12037.3

CYCLE & CARRIAGE BINTANG BHD 2.60 0.090 161 21.50 261.9 SARAWAK OIL PALMS BHD 5.310 -0.090 646.0 52.15 3103.7

CHIN WELL HOLDINGS BHD 1.87 0.090 642.7 35.51 535.7 ORIENTAL HOLDINGS BHD 7.790 -0.080 112.3 48.38 4832.6

CHIN TECK PLANTATIONS BHD 9.79 0.090 24.9 38.87 894.4 PMB TECHNOLOGY BHD 3.000 -0.080 789.3 22.15 3590.2

HEINEKEN MALAYSIA BHD 24.58 0.080 252.0 17.95 7425.6 PANASONIC MANUFACTURING 27.360 -0.080 3.2 -5.33 1662.0

ALLIANCE BANK MALAYSIA BHD 3.63 0.080 873.8 26.92 5619.6 AXIATA GROUP BHD 3.040 -0.080 3145.8 -26.92 27897.5

Data as compiled on Jun 8, 2022 Source: Bloomberg Data as compiled on Jun 8, 2022 Source: Bloomberg