Discover more from The Coffee Break
☕️ Shopee pulling out from Spain, 3rd international exit this year after France, India
Malaysia qualified for 2023 Asian Cup Finals, first in 42 years. Binance to hire, Coinbase to fire. Proton owner Geely acquiring majority stake in smartphone maker Meizu from its founder, Alibaba
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1. MARKET SUMMARY
2. NUMBERS AT A GLANCE
RM417.3 mil in export revenue generated from the floriculture industry (i.e. selling flowers) in Malaysia in 2021, with orchids being the major contributor.
Malaysians seem to be buying fewer phones this year as the country shipped 28.8% fewer phones (year over year) in the first quarter of 2022. According to IDC, the drop was due to supply chain issues for low-end 4G models.
While Malaysians were puzzled by the fact there are more registered vehicles than humans in this country, our neighbours in Singapore have to fork out as much as SGD110,500 (RM351,000) to purchase the RIGHTS (Certificate of Entitlement) to purchase large cars.
3. IN MALAYSIA 🇲🇾
Some MARA Corp officials probably didn’t sleep much last night as the Malaysian Anti-Corruption Commission (MACC) has submitted its recommendations to the Attorney-General’s Chambers (AGC) to charge Mara Corp officials with abuse of power. MACC chief commissioner Azam Baki said the commission had also proposed a list of names of those to be prosecuted.
On another note, Azam Baki also commended the establishment of special corruption courts as he believes it is a key factor in the high conviction rate of corruption cases — 91.1% (vs international standard of 75%). May the conviction rate systemically improve in the coming months and years.
Youth and Sports Minister Ahmad Faizal Azumu found himself on the wrong side of the crowd, again, as he had to apologise to all the Harimau Malaya fans. Why? He blamed the “12th player” or fan support for Harimau Malaya for Malaysia's loss to Bahrain in the 2023 Asian Cup football qualifier last Saturday. On another note, Harimau Malaya qualified for the 2023 Asian Cup Finals for the first time in 42 years after beating Bangladesh 4-1 last night.
Transport minister Dr Wee Ka Siong said the Ministry of Transport will be discussing further with the Ministry of Federal Territories “soon” on the possibility of developing a maglev system for the Putrajaya area. Construction costs for maglev tracks are generally much higher than conventional rail tracks, hence why they are commercially viable for long distances. Putrajaya has a total area of 49 km square, go figure.
Minister in Prime Minister’s Department (Economy) Mustapa Mohamed said the Kota Bharu-Kuala Krai Highway (KB-KK) Package 2B has suffered a delay of 308 days. The delay was due to three reasons:
Lack of manpower.
The rise in construction costs.
Unsatisfactory performance of the contractor.
Johor Menteri Besar Onn Hafiz Ghazi said the state government is mulling over the implementation of the same weekend for both government and private sector. Currently, the government is closed on Friday and Saturday, whereas the private sector is closed on Saturday and Sunday.
Economist Dr Jomo Kwame Sundaram has rung the bell, saying Malaysia’s labour and productivity data paints the wrong picture. The contribution of foreign labour is underreported — 4.5 million foreign workers, especially the undocumented, are not captured in our data. Dr Jomo highlighted the productivity of the public sector (measured by income) is exaggerated as there is a trend of a significant increase in emoluments given prior to general elections.
Justice Mohamed Zaini Mazlan will give his decision on June 24 on whether to call on former 1Malaysia Development Bhd (1MDB) president and CEO Arul Kanda Kandasamy as a witness in the 1MDB audit report tampering trial.
Eric Tan Kim Loong, believed to be a close associate of Jho Low, has been declared bankrupt after failing to pay an income tax of RM68,334,219.01 to the government.
“We simply attempt to be fearful when others are greedy and be greedy only when others are fearful.”
- Warren Buffett
4. AROUND THE WORLD 🌎
All is good for Russia, even when the US and the EU cut off crude oil imports. Russia was estimated to have made USD98 bil in oil exports in the first 100 days of the Ukraine invasion. Contributors? Asia, mainly China and India, replaced the demand void with 50% of Russia’s daily export of 3.55 mil barrels of oil ending June 10 headed to Asia.
Neither China nor India has condemned Russia’s invasion of Ukraine. Beijing even criticised the sanctions against Russia. Interestingly, the White House has said that India and China aren’t violating sanctions by buying Russian oil. We are witnessing the shift in geopolitical power and the gradual decline of US hegemony in real-time.
Proton and Volvo owner Zhejiang Geely Group Co has entered the smartphone game. Through its unit Hubei Xingji Shidai Technology Co bought, it is acquiring a 79% stake in smartphone maker Meizu (transaction value undisclosed) from Meizu’s founder and Alibaba, which failed to see the brand take off. Automotive seems to be a common interest amongst tech companies — Xiaomi is planning to launch four EVs and Baidu, together with Geely invested USD700 mil in EV maker Jidu. Not to mention, Google’s and Apple’s too. Watch Jidu’s reveal its first concept production car revealed five days ago:
The 5-year streaming and TV rights from 2023 for the Indian Premier League (its cricket btw, not footbalL) have been sold for a record USD6.02 bil to Viacom18, backed by Reliance Industries billionaire and India’s richest person Mukesh Ambani and Disney-owned Star India each respectively. It’s a highly lucrative market with more than 600 mil viewers.
The IPL has overtaken English Premier League (EPL) in terms of per match broadcast value at USD12 mil per match vs EPL’s USD11 mil per match but lags behind the National Football League’s (NFL) of USD17 mil, the highest for any sports league.
Coinbase, one of the world’s largest crypto exchanges, announced that it will be laying off 18% of full-time employees or 1,100 people of its 5,000 workforce. Its CEO Brian Armstrong said it had grown “too quickly: during the bull market. Earlier in the year, the company said it planned to add 2000 jobs and has come to realise in this market downturn that its “employees costs are too high to effectively manage this uncertain market”.
Binance, on the other hand, will continue hiring as it currently has more than 2,000 roles open. Its CEO CZ said Binance has “a very healthy war chest” that the company will take advantage of this crypto winter and the company will also be aggressive in M&A activity.
Same business, differing fortunes.
After announcing layoffs across its global markets yesterday, Shopee now will be exiting Spain less than a year since its entry making Spain the third departure from the international market after France and India in March.
It seems that Poland is the last country standing for Shopee. The company is also present in far-flung Latin America. How much has this ex-SEA markets expansion cost Shopee? Sea Limited, Shopee’s parent company, has lost USD160 bil from its high in October. Its current market cap is USD40.5 bil, down 67.6% year-to-date (YTD).
Charles Schwab, amongst the largest stock broker in the US with USD7.28 tril in assets, has been fined USD187 mil by the SEC for misleading its robo-advisor investors. Its ‘algo’ recommended investors to hold a cash position of 6% - 29.4% rather than invest in stocks or other securities between 2015 to 2018. However, Schwab used those funds to issue loans and collected interest on it. The penalty includes USD52 mil forfeiture of profits derived from the robo-advisory programme.
5. FOR YOUR EYES 👁👁
Scooby-Doo’s iconic minibus the Mystery Machine can now be rented on Airbnb for USD20 per night hosted by actor Matthew Lillard who played Shaggy in “Scooby-Doo: The Movie”.
Even at Apple’s market cap today of USD2.14 tril, it’s up by 286x in 21 years - that’s a compound annual growth rate of 30.9% per annum!$APPL market cap of $7.48B on 31 Jan 2001 but none could have predicted or even possible for any company to reach market cap of $2.94T on 11 Dec 2021. Similarly, KQID time engine has predicted $TSLA market cap of $10T by 2030 is not only possible but probable. History will tell
3. Current state of the stock market