Discover more from The Coffee Break
☕️ Mother of 2 sentenced to 14-month jail term for stealing 2 packets of Milo worth RM73
Perodua, Proton aims to resolve backlogs by Q1 2023. 5 mysterious deaths of execs linked to Russia's O&G giant Gazprom. China's high speed rail ambition - USD882 bil in liabilities.
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1. MARKET SUMMARY
Euro fell to a 20-year low against the USD to USD1.0236.
2. NUMBERS AT A GLANCE
51 — the fatalities from mass shootings in the US thus far. At this rate, 2022 will be America’s second-deadliest year for such atrocities since 1982. 2017 was the deadliest, with 117 casualties. Below — the recent July 4 fireworks celebration juxtaposed with the recent mass shooting incident in Philadelphia.
25 basis points — the overnight policy rate (OPR) increase announced by Bank Negara Malaysia’s (BNM) Monetary Policy Committee. OPR is now 2.25%. Not just the price of chicken is up — your loan servicing cost is now up too.
Travelling this weekend? Think again — PLUS Malaysia Berhad (PLUS) expects about 1.9 million vehicles to use the highway every day from July 7 to 12 in conjunction with the coming Hari Raya Aidiladha celebration.
43% of employees globally experienced a lot of daily stress at work — people are more stressed than they did in 2020, according to Gallup. Disengaged employees cost the global economy a staggering USD7.8 trillion.
If you’re stressed, remember to take a (coffee) break! Don’t be too hard on yourself.
3. IN MALAYSIA 🇲🇾
Perusahaan Otomobil Kedua Sdn Bhd (Perodua)’s has a massive backlog of orders up to more than 200,000 units, but it is confident the orders will be fulfilled by the first quarter of 2023. It is a high order, but the national car maker wants its customers to be able to enjoy the sales and service tax (SST) exemption. For comparison, Proton’s backlog stands at 90,000 cars to be resolved by Q1 2023.
PwC Consulting and a labour rights consultant have found no evidence of systematic forced labour practices in the independent review of electronics manufacturing services (EMS) player VS Industry Bhd. PwC identified key areas for VS to improve on — recruitment fees, overtime, accommodation and effective communications.
The Angkatan Koperasi Kebangsaan Malaysia Berhad (Angkasa) said the government will consider its appeal for a digital bank license. Angkasa and Boustead Holdings had jointly announced in July 2021 that they will be submitting an application for one of the licenses but did not receive the license from Bank Negara Malaysia (BNM). Angkasa said its appeal will be considered because seven million members of the cooperative can benefit from it.
Former deputy prime minister Ahmad Zahid frequently cited the term “husnuzon” or the call in Islam to give others the benefit of the doubt during his trial yesterday. He said it in the context of questioning the RM7 million of funds from the donors.
“Yang Arif, it’s very funny, when somebody is donating to your organisation, then you ask the donor, is this money legal or illegal or from illegal activities.”
Ahmad Zahid confirmed that funds in law firm Lewis & Co’s client account — purportedly held on trust for the Yayasan Akalbudi charity — had been used in 2016 to buy shares in hotel operator Ri-Yaz Assets Sdn Bhd. However, he denied his daughter was involved. Yayasan Akalbudi was set up to eradicate poverty. Can someone please enlighten us on how investing in a hotel operator can eradicate poverty?
The High Court will provide its decision on July 21 on whether a Queen’s Counsel (QC) can represent Najib Razak in his final appeal in the case of misappropriation of RM42 million of SRC International Sdn Bhd funds. It’s only a good idea if the QC, Jonathan Laidlaw, is good in health.
Kuala Selangor MP Dzulkefly Ahmad urged the Attorney-General’s Chambers (AGC) to show mercy on a mother who was sentenced to 14 months in jail for stealing two packets of Milo worth RM73. While Dzulkefly stressed he wasn’t questioning the judiciary, he took aim at those accused in serious criminal cases who are still free to roam (Najib’s SRC case amount is 575,342x (RM42mil/RM73) more than this mother).
Kedah Mentri Besar Muhammad Sanusi Md Nor announced that the state government would bear the temporary six-month rental accommodation for victims who lost their homes due to flooding. Thus far, 15 houses had been rendered uninhabitable.
Pengerang MP Datuk Seri Azalina Othman Said said she could not see herself facing the next general election without any anti-party hopping law in a forum organised by Bersih 2.0 and Malaysian Bar. The Anti-Party Hopping Bill would be tabled in the 12-day Parliament sitting this month.
4. AROUND THE WORLD 🌎
Russia — exploding national wealth, murdered executives:
Russia’s national wealth fund, which accumulates profits from the country’s oil exports saw its value grow 6.5% in just a month from USD197.7 bil to USD210.6 bil as of July 1. Experts warned that this boom is temporary and Russia should look at heavily sanctioned Iran and Venezuela as cautionary tales, which could lead to long-term decay in the energy industry.
An executive with contracts from Russia’s state-owned O&G giant Gazprom was found dead, shot in the head. This is the fifth Gazprom-linked death since January.
UK PM Boris Johnson’s premiership is in crisis mode as his government is collapsing with 2 of his most senior ministers, health minister Sajid Javid and finance minister Rishi Sunak announced their resignations within minutes of each other over Johnson’s ability to run the administration after a series of scandals. See the list of the scandals here — relatively peanuts compared to the scandal (e.g. massive corruption, sex scandal, murder) surrounding a former PM of a Southeast Asian nation.
The finance minister (aka Chancellor of the Exchequer) is replaced by Nadhim Zahawi, an Iraqi refugee that grew up in the UK and was the former education minister and vaccines minister. Javid is a British Pakistani and Sunak is a British Indian — talk about minorities holding important government positions in a country where the majority are whites.
China has the most extensive high-speed rail network in the world, exceeding 40,000 km and is more than 10x Japan’s and grew by another 2,168 km in 2021. Operated by state-owned China State Railway Group (CSRG), the government is doubling down on expanding the railway network. Earlier growth has come at a huge cost - CSRG’s total liabilities as of end-2021 reached RMB5.91 tril (USD882 bil).
It lost USD7.4 bil in 2021 on USD159.9 bil in revenue, with passenger numbers down 29% from pre-pandemic levels at 2.53 bil. Despite the monstrous liabilities and loss-making performance, CSRG plans to 50,000 km in 2025 and 70,000 in 2035. With each kilometre costing RMB120 mil to build (USD17.9 mil), this network expansion will cost USD537 bil. The government’s priority is economic growth - concerns over debt and profitability have taken a back seat.
Airlines — one goes bust, another got ‘hijacked’ operationally by a competitor:
Scandinavian airline SAS filed for Chapter 11 bankruptcy in the US, blaming its striking pilots for worsening its financial troubles. The filing came a day after its 1,000 pilots went on strike after pay negotiations failed. The strike will cost USD10-13 mil per day.
Chapter 11, the most complex and most expensive form of bankruptcy, allows a business to continue operating whilst restructuring its obligations - read more here.
India’s largest airline IndiGo saw more than 50% of its flights on Saturday delayed after a significant number of staff called in sick to attend its rival, Air India’s (acquired by Tata Group last year) recruitment fair. One IndiGo pilot that turned up said he waited in the plane for 2 hours for the cabin crew to turn up.
US ice-cream brand Ben & Jerry’s is suing its parent company, FMCG giant Unilever Plc, to block the sale of its Israeli business to a local licensee, saying that it was inconsistent with the brand’s values to sell its ice cream in the occupied West Bank. B&J board voted 5-2 to sue, with the two opposing being Unilever’s appointees. Last July, B&J ended sales in the occupied West Bank and parts of occupied East Jerusalem, severing the 3-decade-long relationship with its licensee in Israel. Israel criticised this move as anti-Semitism and as “economic terrorism”.
Unilever acquired B&J in 2000 for USD326 mil and its board was given the independence to protect its brand.
NFT market looking ugly — sales volume at the largest NFT marketplace, Opensea, collapsed from its peak of USD5 bil in January by 86% to USD700 mil in June.
Warren Buffett-backed automaker BYD overtook Tesla as the world’slargest EV manufacturer by sales. It sold 641k vehicles (up 300% YoY) in the first half of 2022 compared to Tesla’s 564k in the same period.
5. FOR YOUR EYES 👁👁
Which is your favourite Money Heist? Swipe left here to see the cast members.
Dangerous, but somehow synchronised u-turn by multiple vehicles somewhere in Segambut.