☕️ Malaysia ranks #2 in The Economist 2021 Crony-Capitalism Index
EPF dividends could be higher, up to 6.7%, due to withdrawals. MY to initiate discussion (again) on KL-SG HSR, considering KL-Bangkok HSR. Shenzhen, dubbed 'world's factory' lockdown due to Covid-19.
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1. MARKET SUMMARY
2. NUMBERS AT A GLANCE
81 people were executed in a single day by the Saudi Arabia government last Saturday for various terrorism-related offences. The figure exceeded the total number it sentenced to death in total (69) last year.
Only six nuclear power plants in Japan are operating, accounting for just 3.7% of energy use in 2020, down from 26% in 2010 (before the Fukushima nuclear power plant’s incident in 2011). Japanese lawmakers are looking to restart more nuclear power plants to diversify energy sources and reduce dependence on Russia.
USD19 billion — the money made by the world’s top 10-hedge fund managers in 2021, according to an annual roundup from Institutional Investor. Topping the list was 83-year-old James Simons — he made USD3.4 billion last year. He’s made the list every year since its debut.
Luck, is largely responsible for my reputation for genius. I don’t walk into the office in the morning and say, ‘Am I smart today?’ I walk in and wonder, ‘Am I lucky today?’
James Simons of Renaissance Technologies
3. COVID-19 SUMMARY
Pfizer chief executive officer (CEO) Albert Bourla said a fourth dose of the Covid-19 vaccine will be necessary to keep hospitalisations manageable and sicknesses milder. Not forgetting, a bigger bonus for himself.
4. IN MALAYSIA 🇲🇾
Highlights from Finance Minister Tengku Zafrul’s speech in Parliament yesterday:
The 6.1% EPF dividend for conventional savings for 2021 could have been higher, up to 6.7%, or an additional RM5.4 bil had it not been for the withdrawals (e.g. i-Lestari, i-Citra, i-Sinar) that were allowed due to the pandemic.
Responding to other lawmakers calling for another round of withdrawal, Zafrul said allowing for withdrawals of up to RM10k would cost another RM63 bil.
EPF’s portfolio rebalancing due to withdrawals have cost the government an additional RM830 mil in interest payments last year as interest rates on Malaysian Government Securities (MGS) was pushed up by an average of 100 basis points (1 basis point = 0.01%) vs Q3 2020.
After factoring for settlements and penalties, the government is still short of RM17 bil to repay the 1MDB’s remaining balance of interest and principal, totalling RM38.8 bil for the period 2023 to 2039. Eagerly awaiting Najib Razak’s response on this matter that the government did not have to fork out any money to repay 1MDB’s obligations.
Malaysia is losing out to about RM30 bil worth of rubber production as 40% or 400,000 hectares of rubber plantations operated by smallholders nationwide have been found to be inactive or inconsistently producing rubber, according to Plantation Industries and Commodities Minister Zuraida Kamaruddin. She said the reasons are mainly due to no one tapping, smallholders are ageing and no one wants to manage the plantation.
Transport Minister Wee Ka Siong shared that discussions with Singapore to revive the KL-SG High-Speed Rail (HSR) project will commence in Q2 2022. This project was terminated in 2020 and had to pay Singapore RM300 mil for terminating the project. The Transport Ministry is also considering a KL-Bangkok HSR.
The Melaka government plans to build an undersea tunnel for a rail system network between Melaka and Dumai - in Sumatera, Indonesia. Yeaps, an undersea tunnel below the Malacca Strait. This is the shortest distance between Sumatera and Peninsular Malaysia of 47km. The approval of the Indonesian government is required, not to mention financing costs as well. Apparently, a Malaysian firm can finance 50% of the total project cost.
Kuala Nerus MP and senior PAS leader, Khairuddin Aman Razali, has resigned from the party effective yesterday and will now be an independent MP in Dewan Rakyat. He was recently sacked as PAS Syura Ulama Council secretary and served as the minister of industries, plantations and commodities under former PM Muhyiddin.
Malaysian men’s doubles Goh Sze Fei-Nur Izzuddin Rumsani, ranked #17 globally, clinched their first major title in 5 years in the final of BWF German Open on Sunday, defeating China. The match lasted for 1 hour 10 minutes.
Yeok Seok Hong, managing director of YTL Power International Bhd, says its shares are undervalued at current levels. Its share price currently stands at RM0.58, valuing the company at RM4.73 bil. He attributed this to the lack of understanding of how regulated assets are valued by the investment community.
He explained that unlike with its power purchase agreement that drops in value as the years left in the concession reduces, its regulated assets, on the other hand, appreciates given the requirement to reinvest by the government and is “inflation-protected”.
5. AROUND THE WORLD 🌎
Despite the fatal shelling of a residential building in Kyiv, Ukraine continued its quest for a ceasefire and immediate withdrawal of troops and security guarantees with Russia. It may amount to little again as the political systems of Russia and Ukraine are too different, claims Ukrainian negotiator Mykhailo Podolyak.
Russia had requested military equipment and other assistance from China since the start of the invasion, according to US officials. There were signs that Russia was running out of some weaponry as the war in Ukraine extends into its third week. Zhao Lijian, China’s foreign ministry spokesperson, dismissed the claims, citing “disinformation”. Kremlin has also denied the claims by US officials.
Meanwhile, Elon Musk has asked for a 1v1 against Russian President Vladimir Putin on Twitter — the winner gets to keep Ukraine. Not sure if Putin will see it since Twitter has been blocked.
China put the southern city of Shenzhen and its nearly 18 million residents into lockdown until at least Mar 20 on Sunday. And it’ll upset some Apple fans — Foxconn, Apple's top iPhone assembler, is suspending operations at its China headquarters and an essential manufacturing plant because of the lockdown. The lockdown will reverberate across the global supply chain, not just Apple’s. After all, Shenzhen is known as the world’s factory.
Apple is probably the only technology firm in the world that would receive positive comments for releasing an old phone — the iPhone SE with 5G (2022). The SE’s design has followed iPhone 8’s released back in 2017, yet one financial analyst thinks the iPhone SE is a USD20 bil opportunity for Apple. Imagine Samsung committing the same crime. Just imagine!
Tencent Holdings Ltd is facing a potential record fine for violations of some central bank regulations by its WeChat Pay mobile network. Financial regulators concluded in late 2021 that WeChat Pay had flouted China’s anti-money-laundering rules and had lapses in compliance. China’s crackdown on technology firms is unnerving a lot of investors.
Binance has announced that it has signed a Memorandum of Understanding (MoU) to explore the acquisition of Sim;paul Investimentos, a Brazilian securities brokerage firm. Completion of the transaction will require the approval of regulatory authorities, including the Central Bank of Brazil.
Australia and the Netherlands initiated legal proceedings yesterday against the Russian Federation at the International Civil Aviation Organisation (ICAO) for the downing of Malaysia Airlines Flight MH17 in 2014. The horrific act that claimed 298 victims was believed to be shot down by a Russian-made surface-to-air missile. 43 Malaysians were on-board. How is Malaysia not involved in the legal proceedings? Will justice be ever sought by the government?
6. FOR YOUR EYES 👁👁
Ukraine President Volodymyr Zelensky has been asking for a “no-fly zone” over Ukraine for a while now, but why are its allies refusing to implement it? Because it would put them in direct combat with Russia, likely worsening the situation.
Crony-capitalism index by The Economist measured by billionaire wealth as % of GDP. Malaysia ranked #2 behind Russia. Surprisingly, Singapore is #3.
Ten mood booster visuals by Alex - Visual Illustrator