☕️ ASEAN Poll: Southeast Asians trust China > US

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

In 2023, the world witnessed a staggering loss of 37,000 square kilometres of tropical primary forest, a figure that’s as vast as Switzerland! This loss, also known as old-growth forests or untouched by humans, in the tropics, was 9% less than the previous year, 2022. The consequences of this forest loss were dire, leading to the release of a massive 2.4 gigatons of carbon dioxide emissions, an amount nearly half of the United States' annual fossil fuel emissions.
Read: Forest Pulse: The Latest on the World’s Forests

According to data and analytics company, GlobalData, Malaysians are expected to use their credit and debit cards to spend around RM387 bil this year as the country moves towards a cashless society. Out of this figure, debit card usage is estimated to account for RM156.4 bil, while the remaining RM230.5 bil will be spent through credit cards. GlobalData's senior banking and payments analyst, Poornima Chinta, stated that Malaysia's payment card market is predicted to continue its upward growth trajectory, with a compound annual growth rate of 8.3% expected between this year and 2028.

JPY12 bil (USD81 mil) is the annual fee Japan’s Government Pension Investment Fund (GPIF) earns by lending foreign shares to short-sellers. The practice of lending foreign shares was stopped in 2019, as GPIC was afraid of losing its voting rights by lending those shares. However, Nikkei reported that GPIF may resume the practice with a twist — by allowing itself to temporarily retrieve share certificates after making the lending. Short-selling is the opposite of buying low, selling high. In this case, one sells at a high and buys back lower, theoretically meaning unlimited downside (the share price can go to infinity) with a capped downside (the share price can only go as low as zero).

3. IN MALAYSIA 🇲🇾

Is Najib Razak on a fishing expedition for a royal addendum?
Home Minister Saifuddin Nasution Ismail said that he had never seen the purported royal addendum that stated Najib Razak could serve the remaining of his jail term on house arrest. Previously, former PM Najib Razak, in his judicial review leave application, claimed that there is an addendum attached to the royal partial pardon that he received to serve the remaining of his six-year jail term under house arrest. However, Najib said that the addendum was not revealed to the public and now he is seeking a court order to compel the home minister, the attorney-general, the Pardons Board, Putrajaya, and a few other respondents to confirm this alleged addendum.

Kuala Kubu Bharu to head to the ballot box on May 11
Following the unfortunate death of three-term assemblyperson Lee Kee Hiong following a long battle with ovarian cancer on March 21, the Election Commission (EC) has announced May 11 as the polling day for the Kuala Kubu Bharu by-election. EC chairperson Abdul Ghani Salleh stated that the by-election will cost about RM2.5 mil and 20 polling stations will be activated involving 760 officials.

During last year's Selangor State Election, Pakatan Harapan Lee Kee Hiong won the seat with 4,119 votes and managed to capture 54.40% of the votes, a 3.45% decrease compared to Lee’s performance in 2018.

LTAT is still standing strong, for now
The Armed Forces Fund Board (LTAT) has announced a 5% dividend for FY2023, with a total payout of RM485.08 mil compared to RM476.45 mil last year. The dividend announcement was backed by LTAT’s positive financial performance, where LTAT recorded a 24% increase in net profit for FY2023, bagging RM537.80 mil in 2024 from RM432.47 mil in 2022. LTAT CEO Ashraf Radzi attributed the positive financial performance to active portfolio rebalancing exercises, strengthening talent reserves, prudent management practices, and strategic foresight.

In related news, Boustead Heavy Industries Corp Bhd (BHIC), a company associated with LTAT, will receive a repayment sum of RM49.7 mil as a result of the write-off of the RM384.43 mil net debt owed by Lumut Naval Shipyard Sdn Bhd (Lunas). Lunas was previously known as Boustead Naval Shipyard Sdn Bhd (BNS) before BHIC sold its stake in BNS to the Ministry of Finance for RM1. A bit out of topic - why is an RM1 deal to buy a company too good to be true? This is because most of the time, the RM1 company will either be laden with a lot of debt or be in deep trouble. Another famous RM1 company was when Tony Fernandes and Kamarudin Meranun bought AirAsia from DRB-Hicom for RM1 in 2001. At that time, AirAsia had accumulated RM40 mil in debt.

Shorts

1. The EV ecosystem will be more robust in the country as Perusahaan Otomobil Nasional Sdn Bhd’s (Proton) green mobility arm, Proton New Energy Technology Sdn Bhd (Pro-Net), has secured a RM200 mil financing from CIMB Bank Bhd to fund its digital ecosystem and supply chain in EV infrastructure. Pro-Net is also the exclusive importer and distributor of smart vehicles in Malaysia and Thailand.

2. Axiata Group Bhd will be exiting Myanmar by disposing of its stake in the local tower business for RM713 mil, though it did not disclose who the buyer is. The total loss is yet to be known but in its FY2023, Axiata took an impairment hit of RM887.9 mil from its Myanmar unit. Khazanah Nasional Berhad is the largest shareholder of Axiata Group Bhd, holding 36.73% of the company.

3. MyDigital ID Sdn Bhd, the vehicle responsible for introducing MyDigital ID in Malaysia, said that its digital identification platform will be secure. This is because the platform will only be a single-sign-on platform that can be used to verify the identity of its users and log them into various online services without storing any data inside. So, in short, given that the platform is compromised in any way, there is nothing to steal.

4. AROUND THE WORLD 🌎

The politics of elephants - Botswana’s threat to send 20,000 elephants to Germany
Germany has suggested imposing stricter limits on importing trophies from hunting animals, which Botswana warned could impoverish its people as the country and other southern African countries generate significant economic value from rich Westerners who pay thousands of dollars for a permit to shoot animals and take their heads and skin back home as trophies. Botswana banned the practice in 2014 but made a u-turn in 2019 after facing pressure from local communities. 

Hunting trophies, besides generating income, helps keep the population of elephants in check. Botswana is facing an infestation of elephants, being home to about a third of the world’s elephant population of over 130,000. The overpopulation has caused destruction to property, crops and humans. Ironically, the population of elephants exploded due to conservation efforts, according to Botswana’s President Mokgweetsi Masisi. So, there’s a double-whammy here from Germany’s suggestion towards Botswana’s economy and domestic safety. Following this, Botswana has threatened to send 20,000 elephants to Germany so the people will get a taste of living alongside these animals. Probably Germany chuckled at this empty threat as it would be a logistical nightmare to ship these elephants across the continent and how they gonna pass through customs.

Arguably, hunting is cruel, but the case of Botswana has become a grey area where livelihoods and safety of its people become at risk. The typical hypocrisy of Westerners is displayed here - it’s easy to uphold their morals and conscience when the problem is ‘outsourced’ to other countries. Another common example is desiring cheap goods but complaining when labour abuses happen. 
View map: Location of  Botswana, Angola and Mozambique

Now - Human Politics

1. Israel’s internal strife
   Israel war cabinet member Benny Gantz and main rival of PM Benjamin Netanyahu have called for snap elections in September. Gantz, an opposition member, joined Netanyahu’s war cabinet in the early days of the war as a gesture of political unity during the crisis. A national poll found 70% of the population agrees with a major poll. Netanyahu rejected this call, claiming it would set Israel back by 6 to 8 months. What’s not said by Netanyahu — the poll also found Gantz to be well ahead of Netanyahu, whose popularity has been on a decline. What’s worse than losing a war? Losing power. 

2. ASEAN Poll: Southeast Asians trust China > US
   In the State of Southeast Asia 2024 survey released this week, 50.5% of Southeast Asian respondents said they would side with China over the US, up over 11% compared to last year. The annual survey (view here) is conducted by the Singapore-based ISEAS-Yusof  Ishak Institute. The survey, however indicated a love-hate relationship with China - 67.5% of respondents distrust Beijing, fearing its growing economic influence and military power, which it could use to coerce countries in the Southeast Asia region. A scholar said the survey has to be taken with a pinch of salt. It might not necessarily be the respondents being pro-China but rather anti-US over the latter’s support towards Israel in the Gaza conflict. 

Tech stuff: Spotify inflation, Apple’s next big thing

• Spotify — Some subscription inflation is coming to Spotify. Spotify reportedly plans to increase its subscription price between USD1 and USD5 in 5 markets, including the UK, Australia, and Pakistan, by the end of the month and later in the year in the US. It also plans to start charging for its audiobook feature, which it has been pushing to crack the dominance of Amazon’s Audible (acquired in 2008 for USD300 mil). Spotify's first hike happened nine months ago, raising concerns over subscription cancellations. It turns out that Spotify grew its paid subscribers by 31 mil, or 15%, in 2023, to a total of 236 mil.

• Apple — EV AI Home robots - Bloomberg reported that Apple is setting its sights on home robots in search of its “next big thing”. The tech giant discontinued its EV ambitions earlier in the year and has been lagging in the generative AI race. Little is known apart from a robot that follows users around their houses and a tabletop device that uses robotics to rotate the display.  If Apple’s next big thing could change the bed sheet like the one below, we would buy this iBed.

josephsmachines

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Shorts

1. Eu Yang Sang found a buyer

   Japanese trading firm Mitsui & Co. and Rhoto Pharmaceutical have agreed to acquire 86% of the Chinese medicine retailer for USD594 mil (valuing it at about USD690.7 mil). The current owners include Temasek, Tower Capital and members of the founding family of Eu Yan Sang. Founded in 1879, the retailer has more than 170 outlets across Asia. Eu Yan Sang was privatised in 2016 for USD269 mil. 

2. Mike Tyson is back to the ring

   Former boxing champion Mike Tyson will be going up against YouTuber Jake Pual on July 20 in an exhibition match and not an official fight. The difference? An exhibition will not count toward their professional records, wear bigger gloves, 2-minute round fights and fight in fewer rounds, and no winner will be declared. The match will be live-streamed on Netflix. This will be a match between a soon-to-be 58-year-old and a 27-year-old YouTuber.

   ‘In reality, I am invincible’ - watch Tyson’s interview on the upcoming fight.

5. FOR YOUR EYES 📺

1. A pedestrian safety campaign in Vancouver. Provide bricks when crossing the road — a cheap and concrete solution.

2. The founding story of LEGO. Creating and selling plastic bricks is no small business - the Danish company generated USD9.65 bil in revenue and USD1.92 bil in net profit in 2023. The toymaker has about 1,000 stores worldwide and plans to open 100 more this year.