☕️ PN might withdraw support for PM Sabri, PM Sabri says govt ready for GE15 if it happens
2x Commonwealth gold in gymnast by 16 yo Joe Ee. Rafizi Ramli: "Masaklah Najib kali ini", detailed expose on LCS in coming weeks. TikTok's parent Bytedance new biz - hospitals.
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1. MARKET SUMMARY
“Risk is what’s left when you think you’ve thought of everything.”
— Carl Richards, Certified Financial Planner and creator of The Sketch Guy column of The New York Times
2. NUMBERS AT A GLANCE
4,763 units of Proton X50 were sold in July 2022, making it the best-selling vehicle in Malaysia of the month and the first SUV to do so. The SUV outsold top performers Saga, Bezza and Myvi.
There are 34,948 Starbucks cafes (or restaurants) worldwide after the coffee chain opened 318 net new locations worldwide during the second quarter. The coffee giant reported fiscal third-quarter revenue of USD8.15 bil (RM36.32 bil) — that’s RM1.04 mil per store during the quarter.
3rd — Malaysia’s ranking in the list of Asian countries that are the least secure to work remotely, based on a study commissioned and released by UK-based Reboot Digital PR Services on the safety of digital nomads. The ranking was based on the prevalence of phishing and malware along with botnet networks in each country. Malaysia almost scored an A — overall cyber danger score of 79.9 out of 100.
3. IN MALAYSIA 🇲🇾
A weekend of blames, denials and red herrings.
In the littoral combat ships issue, former PM Najib Razak blames the Pakatan Harapan government for the delays and the Public Accounts Committee (PAC) chairman for painting an inaccurate picture. Well, the contract of the ships started during his tenure as a prime minister and finance minister (July 2014). The RM9 billion project went wrong under his nose but it is someone else’s fault!
Defence Minister Hishammuddin Tun Hussein said opposition leader Anwar Ibrahim’s call for phase six of the littoral combat ship (LCS) project to be stopped is merely for political mileage.
The Malaysian Anti-Corruption Commission (MACC) wasn’t sleeping on the LCS project — the commission’s chief commissioner Azam Baki said the probe into the project is in its final stages. The findings cannot be revealed yet as they involve sensitive matters. Deputy Defence Minister Ikmal Hisham Abdul Aziz told Dewan Rakyat the ball is now in the Attorney General Counsel’s court (AGC) as MACC has submitted recommendations for the Attorney General to decide on the next course of action. Rafizi Ramli said he will make a detailed expose in the coming weeks. He added: “Masaklah Najib kali ini (Najib will be fried this time)”.
Lim Guan Eng’s reputation is worth RM19 million, according to Zarul Ahmad Mohd Zulkifli, a key prosecution witness in the corruption trial of the former finance minister. Zarul Ahmad had apparently paid RM19 million to Gnanaraja — someone who is allegedly close to Najib Razak — to “settle” the case back in 2017. The irony — bribing someone to close a corruption case.
What should you do when you are caught red-handed? Deny and deny only. Facebook’s parent company, Meta Platforms Inc., releases a detailed report on adversarial behaviours every quarter. In the latest report released last week, the social media giant removed 596 Facebook accounts, 180 pages, 11 groups and 72 Instagram accounts for violating its policy against coordinated inauthentic behaviour. It must have been a multi-level marketing syndicate, right? But it wasn’t. The report pointed its finger at — the Polis Diraja Malaysia or PDRM (Royal Malaysian Police) for running an online troll farm with an audience of 427,000 accounts! PDRM, of course, denied it. Why a troll farm, though? Because it can impact elections.
The Bersatu-led Perikatan Nasional (PN) might push the button, triggering a collapse in Prime Minister Ismail Sabri Yaakob’s government after the PM cancelled a meeting with the PN delegation at the 11th hour. The PM is unfazed as he said the government is always prepared to face any possibility, including holding GE15 early.
An unfortunate day for Malaysian mothers as the Court of Appeal, in a 2-1 majority decision on Friday (Aug 5), ruled that the children born overseas to Malaysian women who are married to foreign spouses are not entitled by the operation of law to be Malaysian citizens. The decision was overturned due to a technicality — the use of the word “father” in the Federal Constitution cannot be construed to include “mother”. Who can change the Federal Constitution? Our lawmakers, but fat chance of it happening soon.
Onto the business side of things
The Malaysia Competition Commission (MyCC) said five companies have conspired to fix the prices of poultry feed, consisting of soybean meal and maize, which also led to the increase in poultry prices. These companies are given 30 days to explain their suspected involvement.
Dindings Poultry Development Centre Sdn Bhd;
Gold Coin Feedmills (Malaysia) Sdn Bhd;
Leong Hup Feedmill Malaysia Sdn Bhd and;
PK Agro-Industrial Products (M) Sdn Bhd.
Why did Malaysia’s sovereign wealth fund Khazanah Nasional skip investing in Grab? Because the fund’s investment strategy was to focus on large investments — not direct startup deals. Chief Investment Officer Azmil Zahruddin told CNBC, “VC investing is not really what we do, and it’s not really our expertise and skill set.” Fashion Valet over Grab then. Easy.
It’s official — without subsidies, Malaysia’s inflation could reach around 11%, according to Finance Minister Tengku Zafrul Abdul Aziz. He added the subsidies are necessary for the short-term economic recovery but aren’t sustainable for the country.
Good to know news
National rhythmic gymnast Ng Joe Ee, 16, won two medals at the Birmingham 2022 Commonwealth Games. In her maiden appearance at the Games, Joe Ee contributed gold in the ball and ribbon disciplines after recording 29.700 and 27.800 points, respectively. Congratulations!
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4. AROUND THE WORLD 🌎
Chinese warships and aircraft crossed the median line on the Taiwan Straits, prompting Taiwan to scramble its jets, which Taiwan has accused the Chinese army of simulating an attack on its main island. The median line is a 180 km-long strait that acts as an unofficial but once largely adhered-to border between Taiwan and China.
China has fired back against the US by imposing unspecified sanctions on US House Speaker Nancy Pelosi and her immediate family following her highly controversial visit to Taiwan last week. Beijing also halted cooperation with the US on 8 specific measures, including climate change (US and China are the top 2 largest carbon emitters in the world) and military issues, amongst others. Snickers candy bar maker Mars Wrigley found itself caught in the crossfire after a viral image of an event suggested that Taiwan is an independent country, prompting it to issue an apology.
Israel launched air strikes in Gaza due to an “immediate threat” by the Palestinian Islamic Jihad, killing its second-in-command. The Israeli military warned that the operation could last for a week. 31 Palestinians are reported to have died. This is the worst flare-up since May 2021. See the timeline of major attacks by Israel on Gaza since 2005.
In China — TikTok hospital, Alibaba downsizing, Evergrande deleveraging:
What’s next for TikTok’s parent Bytedance after short-form video and e-commerce? Healthcare, more specifically - hospitals. The tech giant has now upped its stake in Beijing Amcare Medical Management Co, China’s largest private hospital chain specialising in O&G (obstetrics and gynaecology, not oil and gas), to now wholly own it through 2 of its affiliates. The deal received unconditional approval from the regulator. The value of the deal was not disclosed.
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Alibaba Group Holdings let go of 9,241 employees during the April to June quarter, trimming down its overall personnel to 245,700, in its renewed efforts to cut down expenses. In H1 2022, it let go of 13,616 employees, marking the first time its payroll size shrunk since March 2016.
Last Thursday, Alibaba announced that its profits fell 50% to RMB22.74 bil (USD3.4 bil) whilst revenue remain flat at RMB205.56 bil (USD30.7 bil).
The world’s most indebted developer China Evergrande will receive USD818 mil in return for cancelling a contract to build a football stadium in Guangzhou. A nano progress in its debt restructuring as it has more than USD300 bil debt on its balance sheet.
Institutions embracing crypto
Blackrock, one of the world’s largest asset managers with assets of more than USD8 tril, is partnering with Coinbase to provide access to the former’s institutional clients to invest in Bitcoin. Coinbase surged as much as 40% on this announcement and settled around +10% at closing, causing a mark-to-market loss (basically, paper loss) of USD324.2 mil to short sellers.
Fairfax County Retirement Systems, a USD6.8 bil pension fund for government employees and police in Virginia, US, has obtained approval to invest in cryptocurrency yield farming, where investors lend out crypto tokens to crypto projects in returns for a fixed stream of payments. The pension fund has already invested USD21 mil in crypto indirectly through a fund in 2019.
Berkshire Hathaway reported a loss of USD43.8 bil (RM195.17 bil) for its second quarter of 2022, no thanks to the drop in global financial markets as the company is required to include the swings in the value of its stock and derivatives portfolio as part of its earnings each quarter. Berkshire’s stock portfolio fell in value to USD328 bil, from USD391 bil at the end of March. Warren Buffett’s preferred measure of performance — operating income (which excludes fluctuations in stock positions) — rose 39% to USD9.3 bil. If you think your portfolio hasn’t been doing well this year, you’re not the only one. Berkshire’s portfolio is also negative YTD.
5. FOR YOUR EYES 👁👁
A bird’s eye view of just how confusing this interchange at Damansara Perdana is.
Household income classification by state in 2019. In KL, even a combined household income of RM9k puts one in the B40 segment. Really tough for those earning minimum wage of RM1.5k in KL.
3. Nurul Izzah, a member of the PAC, ELI5 on the LCS issue. Solid charisma.