☕️ 3 approaches considered for subsidy rationalisation - Economy Minister Rafizi Ramli

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

To retire comfortably, RM3.9 mil in average retirement savings is needed, based on findings from the HSBC quality of life report. The survey was targeted towards mass affluent Malaysians — those with investable assets of between USD100,000 (RM464k) to USD2 mil (RM9.28 mil). Each generation in the survey has its amount needed for a comfortable retirement:

• Gen Y (aka millennials, 25-39): RM4.86 mil

• Gen X (40-54): RM4.53 mil

• Boomers (55-69): RM2.57 mil

View report: HSBC Quality of Life Report 2023.

1MDB woes are coming to an end - at least financially. Malaysia will receive RM4.65 bil from Abu Dhabi’s International Petroleum Investment Co (IPIC) next year as part of the settlement over the 1MDB scandal and will be sufficient to pay off the remaining debts of 1MDB, according to Deputy Finance Minister I Ahmad Maslan. The settlement will bring the 1MDB trust fund to RM9.85 bil, enough to service the last principal payment in 2039 of RM5 bil and only one interest payment of RM287 mil in 2024. The government so far has serviced 1MDB debts amounting to RM24.35 bil. But where’s Jho Low? Since we have excess funds recovered, we are sure rakyat would be happy for the government to put up a multi-million dollar bounty to hunt down this fugitive. At least to the rakyat, this would be money well spent. 

Malaysia exported 9.66 mil tonnes of palm oil worth RM40.51 bil for the first eight months of the year. Our biggest customer? India, taking up 1.81 mil tonnes (18.7%) worth RM7.08 bil. This is followed by China (0.85 mil tonnes, RM3.3 bil, 8.8%) and the EU (0.71 mil tonnes, RM3.1 bil, 7.3%) rounding up the top 3. Other major importers include Turkiye, Kenya, Japan, Pakistan, South Korea, the Philippines and Saudi Arabia.

3. IN MALAYSIA 🇲🇾

Subsidy rationalisation plans to be presented to cabinet this month, says Economy MinisterThe proposal for targeted subsidy methods is set to hit the Cabinet's desk for approval this month, with Economy Minister Mohd Rafizi Ramli revealing three potential approaches. These approaches aim to ensure that rationalising subsidies won't weigh down the public and prevent speculative inflation.

• The first method checks how much money an individual has left after covering all their expenses and then provides support based on that.

• The second method examines the surplus income of entire households after they've paid their bills, and if they need help, they'll receive it.

• The third approach combines both individual and household income considerations and involves a subsidy card for implementation. 

The government has allocated RM58.1 bil Budget 2024 for subsidies and social assistance, aiming to improve the efficiency of social assistance distribution and fiscal management.

Two more detained in ongoing i-Serve investment money laundering probeThe MYAirline saga continues. In the ongoing investigation of a money laundering case tied to i-Serve investment company believed to be linked to the co-founder of a low-cost airline, two additional individuals have been apprehended. The suspects, aged 58 and 57, were taken into custody as part of the inquiry. The first suspect, a man, was apprehended at the Immigration Department office at Kuala Lumpur International Airport 2 (KLIA 2), while the second, a woman, was arrested at a Sentul condominium. Preliminary findings suggest a connection between the first suspect and a "Datuk" title holder, and the suspect had admitted that he and the Datuk established the company i-Serve Payment Gateway Sdn Bhd in 2019. Both suspects will be brought before the Jalan Duta Magistrate's Court for a remand application.

Business

1. Malaysia-China Kuantan Industrial Park (MCKIP) attracts RM31 bil in investments The Malaysia-China Kuantan Industrial Park (MCKIP) has hit it big, raking in a whopping RM31 bil in investments across 21 projects. This success is expected to create more than 14,000 job opportunities, as revealed by Deputy Minister of Investment, Trade and Industry Liew Chin Tong. Out of the RM31 bil investment, they've already realised RM14.6 bil. To keep up with the growing interest, MCKIP has expanded its industrial area from 1,200 acres to a whopping 3,500 acres.

2. Malaysian Palm Oil Association urges government review of Windfall Profit LevyThe Malaysian Palm Oil Association (MPOA) and 14 other organisations along the palm oil supply chain are jointly urging the government to reconsider the windfall profit levy (WPL) on oil palm planters. They are calling for a review of the tax at 3%, which is applied when palm oil prices soar above RM3,000 per metric tonne in Peninsular Malaysia and RM3,500 per metric tonne in Sabah and Sarawak. The association is asking for a review to either scrap the WPL or set a higher threshold that matches today's costs and profitability. The tax has been in place since 1999 and has contributed significantly to government revenue over the years, with last year alone yielding over RM3 bil.

3. AMMB appoints Jamie Ling as new Group CEO following Sulaiman Tahir's retirementAMMB Holdings Bhd has a fresh face at the helm, with Jamie Ling stepping in as the new Group CEO and CEO of AmBank (M) Bhd. He's taking over from Datuk Sulaiman Mohd Tahir, who's been steering the ship for eight years and will retire effective November 23, 2023. Sulaiman leaves behind quite the legacy, with strategic growth, talent development, and digital transformation under his belt, especially when AmBank was caught in the middle of the 1MDB scandal.

Shorts

1. The Sultan of Perak, Sultan Nazrin Muizzuddin Shah, honoured the title of Seniman Diraja (Royal Artist) upon the beloved cartoonist, Datuk Mohd Nor Khalid, known to all as Lat. The recognition was part of an official celebration marking the Sultan's 67th birthday. Lat, the 72-year-old cartooning legend, was commended for his huge role in putting Malaysia on the global map. Not sure who Lat is? You might have seen his iconic drawings before — check it out here.

2. Transport Minister Anthony Loke has clarified that a new road tax system for electric vehicles (EVs) is in the works and will be rolled out once the three-year tax exemption ends in 2025. Loke stated that the ministry is working on making this new system budget-friendly, and it will be unveiled before the year wraps up.

3. After the Genting casino heist, now a jewellery heist, took place in broad daylight in Kuala Kangsar as two gold merchants were robbed of RM1.4 mil worth of jewellery by men in masks and armed with machetes and hammers. Watch the incident here. 

4. AROUND THE WORLD 🌎

Israel-Palestine conflict - 1 month on

• 31 days since the conflict erupted on Oct 7 between Israel and Hamas. Israel’s relentless and blind attack on the Gaza Strip to wipe out Hamas has resulted in more than 10,000 deaths of Palestinians, including 4,104 children. The death toll is expected to continue climbing as at least 2,000 people remain under the rubble. 

• The Palestinian Authority (PA) could make a return to the Gaza Strip under a “comprehensive political solution” in this Israel-Palestine conflict, according to PA President Mahmoud Abbas. Hamas is a rival of Abbas’s Fatah party and took over Gaza from PA in 2007 after blocking Fatah from exercising its power despite winning a parliamentary election the previous year. Following this, Israel withdrew its troops and settlers from Gaza and imposed a crippling blockade after Hamas took over. 

China, Germany unveil their OpenAI rival

• 01.AI: Founded by prominent computer scientist Dr Lee Kai-Fu, the Chinese startup became a unicorn in less than eight months since founding after a funding round that included Alibaba Group Holding’s cloud unit. The Beijing-based startup has developed an open-source, large language model (LLM), Yi-34B, that is available in Chinese and English. Yi-34B has already outperformed the leading open-source models, including Meta’s Llama 2, on key metrics. 

• Aleph Alpha: Also working on developing LLM, the AI startup from Germany has raised more than USD500 mil from a consortium of industrial giants, which included the venture arm of Robert Bosch, SAP and Hewlett Packard Enterprise. Germany’s Vice Chancellor and Minister for Economics Affairs Robert Habeck has called this investment a strategic national priority. 

LVMH acquires luxury eyewear Barton PerreiraThe French luxury conglomerate is acquiring eyewear brand Barton Perreira, famed for making James Bond’s shades, as it taps the fast-growing designer sunglass market. Deal terms were undisclosed, but sources familiar with the matter said the deal is valued at around USD80 mil. Global eyewear sales hit USD107 bil in 2022 and are expected to grow in the mid-single digits in the coming years. Barton Perreira has a cult following amongst Hollywood stars and collectors of high-end sunglasses and frames. Its models typically retail for USD500-600 (RM2.4-2.8k) and its limited edition designs are made in small quantities. Check out the brand here. 

Shorts

1. A centuries-long mystery solved — the head of the starfish has been located. To be more accurate, they have heads. By mapping the genes of starfish, scientists discovered (view research here) that these creatures have head-like regions in the centre of each of its limbs. Most animals have what’s called bilateral symmetry, which means they are symmetric along a midline that helps scientists identify the location of the head, trunk, limbs and so on. Starfish lack bilateral symmetry and instead have what’s called five-fold radial symmetry. 

2. Juan Jumalon, a radio broadcaster in the Philippines, was shot dead whilst broadcasting from his home and the brazen killing was captured on the Facebook livestream of his show. This has prompted Philippine President Ferdinand Marcos Jr to order the police to conduct a thorough investigation as this is the fourth journalist killed since he took office June last year. Jumalon was the 199th journalist to be killed since 1986.

5. FOR YOUR EYES 📺

1. US President Joe Biden’s AI Chief Bruce Reed said “voice cloning” is the one thing that keeps him up at night. Very valid concern. Now, watch the video below of our dearest PMX delivering a speech in Korean, edited by AI. To the casual viewers (and those uncles and aunties in WhatsApp groups that spend 0 seconds to verify and main forward), one could easily believe this video to be real. Matter of time AI becomes a political tool with nefarious intent.

1. Deciphering corporate speak.