☕️ 2018-2021: RM2.3 bil worth of stolen electricity from illegal Bitcoin mining

1. MARKET SUMMARY

Crude palm oil (CPO) prices hit RM8,000 a tonne for the first time ever, as the market seeks alternative oil amid the shortfall in sunflower oil caused by the Russia-Ukraine crisis. Ukraine is the world’s largest producer and exporter of sunflower oil, accounting for 47% of the market, while Russia’s share of global exports stands 29.9%. Sunflower oil is the third-most traded oil globally after palm and soybean oil.

2. NUMBERS AT A GLANCE

Much of USD630 bil of Russia’s foreign-exchange reserves are held overseas. The financial sanctions imposed by the West are frustrating Russia’s ability to defend the value of its currency — rouble trouble. The most important effects of Russia’s financial distress could flow through real economic channels due to the rising oil price.

26.5% on the boards of the top 100 Malaysian public listed companies (PLCs) are women. At least another 30 boardroom seats need to be secured by women for Malaysia to achieve the landmark 30% target of women representing the large capital companies by the end of 2023, according to Ami Moris, the 30% club chairwoman. She is also the CEO of Maybank Investment Banking Group.

Russia has 5,977 nuclear warheads, according to the Federation of American Scientists. However, the figure includes 1,500 that are retired and set to be dismantled. NATO is 5,943.

3. COVID-19 SUMMARY

• Health Minister Khairy Jamaluddin said casual contacts of Covid-19 will not see any change in their status on the MySejahtera but will receive a notification on the app instead.

• Datuk Seri Hishammuddin Hussein confirmed there is a proposed date for the reopening of Malaysia’s borders. The decision is based on three principles:

  • To ease and remove complications for travellers;

  • To make a decision based on scientific data and facts;

  • And lastly, to compare with other countries reopening their borders.

• Malaysia has dropped a requirement for inbound travellers to undergo Covid-19 RTK-Ag tests within six days for its VTL, LITB and OSC programmes. The Covid-19 test which needs to be conducted two days before departure to Malaysia and upon arrival in Malaysia, is still maintained.

• Hong Kong has one of the highest Covid-19 fatality rates among advanced economies due to its under-vaccinated elderly population. More than 600 care homes in Hong Kong are experiencing outbreaks.

4. IN MALAYSIA 🇲🇾

1. A French arbitration court has ordered the Malaysian government to pay a whopping USD14.92 (RM62.6 bil) to the descendants of the last Sulu sultan after Malaysia has breached an 1878 agreement and stopped paying an annual RM5,300 cession money since 2013 following the Lahad Datu armed incursion. No Malaysian representative was present at the international arbitration proceedings. The sultan’s descendants’ initial claim was USD32.2 bil (RM135 bil), including unpaid cession money and oil and gas money found in the region. The Kota Kinabalu High Court judge ruled in 2020 that Malaysia was the right venue to resolve this dispute and not the Spanish court (which was transferred to the French court subsequently) and ruled in favour of the Malaysian government. Interesting read here on the legal aspects of this case.

2. A sting operation between TNB and MACC dubbed Ops Power since 2018 have crippled illegal Bitcoin mining syndicates nationwide. In 2018, 610 cases of electricity theft involving Bitcoin mining was reported, and in 2021 alone, identified cases surged to 7,209, totalling RM2.3 bil worth of stolen electricity since 2018. MACC officers often disguised as TNB officers have received bribes in cash and cryptocurrencies totalling RM2.4 mil to cover up for these syndicates, ranging between RM3k - RM300k. According to The Star, the masterminds could afford this as they were raking in RM50 mil a month from 1,000 premises across the country. MACC chief commissioner Azam Baki (that shares ownership controversy Azam Baki) said Bitcoin mining itself is not illegal, but the act of stealing electricity is. TNB has proposed to Energy Commission (EC) a special tariff for Bitcoin mining operators, a wise step to reduce electricity theft. We are Bitcoin miners, too - legitimate ones. If you are keen to explore Bitcoin mining, check out Compass Mining (the AirBnb of mining), a US-based company. They host and manage your mining rigs, freeing you from all the operational headaches. Most importantly, it is all done by the books (disclaimer: not financial advice). For those who are against Bitcoin due to its energy profile, kindly read these two articles here and here to gain more objective and well-researched insights into Bitcoin mining and its energy consumption.

3. Tim Leissner, the 1MDB star witness, testified that he did not receive any kickbacks from the third bond raised for 1MDB worth USD3 bil as Jho Low had informed him that this money was to be utilised for the coming general election in Malaysia in 2018 and Leissnner said he was made to understand that “handouts” to voters was a “common practice”.

4. Sabah Chief Minister Hajiji Noor said the state government would thoroughly study calls to lift the 1982 freeze on issuing Native Certificates granting bumiputra status to Sino-natives (children of mixed Chinese and native parentage in Sabah) in the state. Before the freeze, Sino-natives could claim bumiputra status and enjoy special rights such as acquiring native land, opening Amanah Saham Bumiputra account and enrolling in public institutions of higher learning. The freeze came about as many non-indigenous persons fraudulently obtained this certificate to acquire bumiputra benefits and land.

5. Petroliam Nasional Bhd (Petronas) recovered to a profit of RM13.35 bil in Q4 for the financial year ended Dec 31, 2021 (FY2021), from losses of RM1.14 bil in the previous year on the back of favourable average realised prices for all products. Some highlights:Petronas will launch a new independent entity in mid-2022 and set up a carbon management unit. The new entity will focus on clean energy solutions in 3 core areas namely renewables, hydrogen and green mobility. The carbon management unit would accelerate the group’s effort to decarbonise across its entire value chain. In FY2022, Petronas looks to spend RM40-50 bil on capex.

   1. For the full year FY2021, Petronas recorded a profit of RM48.6 bil (the highest in 3 years) against a loss of RM21.03 bil in FY2020.

   2. Revenue was up 38.7% from RM178.7 bil in FY2020 to RM248 bil in FY2021.

   3. Petronas will pay the government RM25 bil in dividends (the lowest in 3 years).

6. Menicon Co. Ltd., a Japanese specialised designer and manufacturer of contact lenses and lens care solutions will be investing RM650 mil (JPY18 bil) to build its first manufacturing plant in Malaysia in the Kulim Hi-Tech Park, Kedah, to produce daily disposable contact lenses. Upon completion, the Malaysian plant is set to be the largest facility in the Menicon group globally and will create close to 100 new jobs, with production scheduled to begin in 2025. The company is listed on Tokyo Stock Exchange with a market cap of RM8.59 bil.

7. edotco Group, a unit of Axiata Group Bhd, has announced that it will acquire about 1,000 towers from XL Axiatain Indonesia in a deal valued at about IDR750 bil (MYR219 mil). The acquisition will accelerate its plan to become a top 5 global TowerCo. edotco has a presence in 9 markets across Asia, with over 50,000 managed and owned towers under its watch.

8. MX Global Sdn Bhd, who operates MX Global, one of the four Recognized Market Operator-Digital Asset Exchange (RMO-DAX), announced an undisclosed equity investment from Binance and landed another investment for Redeemable Convertible Preference Shares (RCPS) by Cuscapi Bhd. The new capital injections will be used by MX Global to build brand awareness, hire more high-quality talent and develop new features within Malaysia’s regulatory framework.

5. AROUND THE WORLD 🌎

Russia-Ukraine Crisis Update

1. Ukrainian President Volodymyr Zelenskyy has appealed to EU lawmakers again to allow Ukraine to join the 27-member bloc as Russia gets closer to its goal of capturing Kyiv. Satellite images indicated that a massive convoy of Russian military vehicles is heading towards Ukraine’s capital Kyiv.

2. Shell is following the footsteps of BP as it wants to exit all of its joint ventures with the Russian energy company Gazprom. The associated costs of up to USD3 bil will be marked on its balance sheet later this year.

3. US payment card firms Visa Inc and Mastercard Inc have blocked multiple Russian financial institutions from their network in compliance with government sanctions.

4. As many as 12 sporting bodies have cancelled Russia following its invasion of Ukraine. FIFA and UEFA have banned Russian national and club teams from their competitions until further notice. The Russian Grand Prix, scheduled for Sept 25, was cancelled.

5. YouTube has blocked two Russian news channels — RT and Sputnik — across Europe, stopping these outlets from generating revenue on its platform. Meta blocked RT and Sputnik on both Instagram and Facebook the day before.

6. The global hacking group Anonymous appears to be wading into the Ukraine-Russia conflict by declaring it is at cyber war against President Vladimir Putin and the Russian government.

7. Elon Musk fulfilled his promise to deliver Starlink satellite internet terminals.

 Other international news

1. Just months after launching its maiden foray into Europe, Sea Ltd’s Shopee is pulling out of France as the site will close on Mar 6. Shopee will complete all paid orders till then. Last month, Sea’s signature game Free Fire was banned in India. Investors are growing concerned about Sea’s troubles.

2. German banking start-up N26, backed by Peter Thiel, will be IPO-ready by the end of the year, according to its CEO Maximilian Tayenthal. N26 recently raised USD900 million in fresh funding to help it branch out beyond retail banking. The neo-bank is valued at USD9 bil.

3. Alphabet’s drone service Wing has hit another major milestone — completing 200,00 commercial deliveries. Australia has been the primary market for testing and commercial deployment, making up 30,000 of those deliveries in the first two months of this year. Wing has also partnered up with Coles, one of Australia’s leading supermarket chains, to deliver 250 different items in Australia’s capital, Canberra.

4. China Evergrande Group lost control of some of its property projects around China to several state-owned developers as it grapples to raise capital to pay its borrowings. Evergrande told investors and creditors last month that it intends to roll out a debt restructuring plan within six months. Beijing’s loan limit for real estate companies which pushed many developers to the brink, has since been relaxed.

6. FOR YOUR VIEWING PLEASURE 👁👁

1. Tank-like election campaign car spotted in Johor.

1. The alternative narrative — A collection of ‘White media’ coverage on the Ukraine crisis. Because they are whites, they don’t deserve war, unlike Iraqis and Afghans?

2. From spy to president: The Rise of Vladimir Putin