☕️ BlackRock's total investment in Malaysia - RM27.5 bil

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

The Causeway, connecting Johor and Singapore, celebrates its 100th anniversary today. Historian Dr. Kassim Thukiman highlights its role in shaping the region's socio-economic development. In the olden days, the Straits of Johor was congested with boats transporting goods like gambier, pepper, and rubber to Singapore, the British proposed the construction of the Causeway in 1917. Approved in 1919, Johor funded GBP15.4 mil for the project, facilitating the transport of people and goods and boosting regional trade. The Causeway was officially opened on June 28, 1924.

Around GBP1.4 bil (RM8.3 bil) worth of personal protective equipment (PPE) was destroyed or written off in what is considered the most wasteful government deal of the pandemic in the UK. Figures obtained by the BBC show that 1.57 bil items of PPE provided by Full Support Healthcare, despite meeting standards, will never be used. Full Support provided 2.02 bil items to the NHS Supply Chain, managing healthcare product deliveries, but only 232 mil were dispatched to the NHS or other care settings. Wes Streeting, the Shadow Health Secretary, mentioned that the lost money "could have paid the salaries of 37,000 nurses.”

The hardest parliamentary seat to win in Malaysia is probably Bangi. Bangi is the most populous parliamentary constituency in Malaysia, with 708,300 people as of 2023. According to the Parliament and State Legislative Assembly Subnational Statistics 2024, Kota Raja and Subang, both in Selangor, follow with populations of 538,900 and 492,600, respectively. Wangsa Maju in Kuala Lumpur has the highest population density at 13,587 people per square kilometre.

3. IN MALAYSIA 🇲🇾

Malaysia declares war on e-waste syndicates 
Following China’s ban on the import of e-waste effective Jan 2018, some developed countries have diverted their dumping ground to other Southeast Asian countries like Thailand and Malaysia as illegal waste import syndicates moved their operations to this region. It’s big business - authorities recently raided an illegal e-waste recycling facility, hidden within a palm oil plantation in Tikam Batu, which extracted more than RM100 mil of metals annually sourced locally and internationally. As much as e-waste contains valuable precious metals, illegal e-waste recovery could cause environmental pollution and air and water contamination. There are 175 licensed facilities in the country to process e-waste from local sources. 

During a 3-month period from Mar 21 to Jun 19, at least 106 containers filled with e-waste were seized at the nation’s ports by the Customs Department. Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad said the government had declared war on these syndicates with the amended Environmental Quality Act 1974 coming into effect on July 7 which will see the maximum fine increased by 20 times from RM500,000 to RM10 mil plus mandatory imprisonment. 

BlackRock has tens of billions worth of investments in Malaysia
The controversial privatisation of MAHB has thrust the world’s largest asset manager (USD10 tril of assets under management), BlackRock, into the limelight, as the latter was accused of involvement in the Palestinian genocide. Investment, Trade and Industry Minister Tengku Zafrul shared the extent of BlackRock’s presence in the Malaysian market during the minister’s question time in Dewan Rakyat:

• BlackRock has RM27.5 bil total assets in Malaysia since its entry in the 1990s.

• RM20.5 bil is invested in the stock market, with investments in 100 listed companies, with 3 of the largest entities being banking institutions. 

• Other investment interests include TNB (RM8.6 mil), Press Metal Aluminum Holdings Bhd (RM625 mil) and CelcomDigi Bhd (RM526 mil). 

• The remaining RM7 bil is invested in government and corporate bonds, including bonds of Petronas, Malaysia Wakala Sukuk Bhd and Export-Import Bank of Malaysia Bhd.

Status: It’s complicated - Malaysia’s relationship with the R in BRICS
The R here being Russia. In response to Machang MP (PN) Wan Fayhsal Wan Ahmad Kamal on the absence of an official visit to Moscow, Foreign Minister Mohamad Hasan (aka Mat Hassan) replied that Wisma Putra takes a cautious approach with regard to the PM’s potential visit to Russia despite receiving multiple invitations for the PM to visit. Mat Hassan said that the country wants to avoid being entangled in complex global politics, and any visit could be interpreted as endorsing bilateral relations with the host nation. He added that Malaysia’s interest in joining BRICS is as it represents a loose coalition instead of a bloc based on defence or security (i.e. NATO). 

Nenggiri by-election is on after High Court bins injunction
The High Court has dismissed the ousted Nenggiri assemblyman Mohd Azizi Abu Naim’s application for an interim injunction to stop the Election Commission (EC) from holding a by-election for the seat. Azizi’s seat was vacated last week by the Kelantan state assembly speaker after he was fired from Bersatu after he pledged his support for PM Anwar. Azizi still holds his position as the member of Parliament for Gua Musang, though this position also could be on a countdown timer. Judicial commissioner Roz Mawar Rozain ruled that the court could not stop the EC from performing its constitutional duty. The EC is scheduled to meet today to discuss matters relating to the Nenggiri by-election.
Learn: What is a judicial commissioner? 

Shorts

1. Some interesting product updates from Maybank
   Innovation — moving at the speed of bank. Firstly, Maybank introduced its Single Device Access feature for its MAE app, making it convenient for sole proprietors to manage multiple banking access. Sole proprietors can now have up to a max of 5 M2U accounts in a single app MAE app on one device. Secondly, property developer Tropicana Corp Bhd partnered with Maybank MyDeco Financing to provide funding up to 120% of property value or up to RM250k, whichever is lower. This financing scheme will offer liquidity and flexibility to fund their interior design dreams.

2. World’s smallest elephant in danger of extinction
   Conservation body IUCN has placed these Borneon pygmy elephants on its ‘red list’, no thanks to deforestation. Standing at just 3 feet shorter than their bigger Asian cousins and known for its gentle and playful nature, these elephants are found only on the island of Borneo (most found in Sabah), only an estimated 1,000 now remain in the wild. The IUCN has now assessed more than 163,000 species, of which 45,000 are threatened with extinction. Check out these elephants here. 

3. Syed Saddiq launches Langkah Muar to raise funds 
   Don’t worry - this langkah is more innocuous than Langkah Sheraton and with a grand total of only 1 participant. Muar MP Syed Saddiq plans to run from Muar, in Johor, to Parliament over 200 km to protest the lack of funding for Opposition MPs and to raise funds for his constituency’s community service centres. According to Saddiq, government MPs each get RM20 mil each term.

Weekend Read: Buy Now, Pay Later in Malaysia - the damage
There are an estimated 2.9 mil active BNPL users in Malaysia and about RM4.3 bil transactions from January to September last year, according to the Consumer Credit Oversight Board (CCOB), an organisation led by the Ministry of Finance, BNM and the Securities Commission to regulate non-bank credit providers and credit service providers. Channel News Asia took a look at this financial innovation in Malaysia and its consequences on Malaysian consumers.

4. AROUND THE WORLD 🌎

About banks

• Grab-Singtel bank receives USD169 mil booster shot

  GXS Bank, the joint-venture bank owned by Grab and Singtel, received a SGD229.5 mil (USD169 mil) capital injection. Grab took the majority of the 229.5 mil SGD1 shares, being allotted 191.8 mil (83.6%), with Singtel taking the remainder 37.7 mil. While the bank reported a wider loss in 2023 at USD153.4 mil compared to 2022’s USD97.6 mil, GXS Bank also reported full-year revenue of USD11.9 mil in 2023, up from USD3.8 mil in 2022.

• US bank stress test: 31 major banks able to handle severe recession scenario

  The US Federal Reserve stated that the 31 biggest banks operating in the US would be able to withstand a severe recession scenario while maintaining more than the minimum required capital levels. The annual stress test assumed unemployment would surge to 10%, commercial real estate values would drop 40%, and housing prices would fall 36%. The test also showed the banks will be able to operate despite taking nearly USD685 bil in total hypothetical losses. However, a current industry risk was also identified: the banking industry is holding more consumer credit card loans and more downgraded corporate bonds, which would affect banks’ capital levels.

  In the wise words of Benjamin Brewster: “In theory, theory and practice are the same. In practice, they are not”. 

Business: Cartoon, tech, space

• Korean webcomic giant sets market value at USD2.7 bil ahead of US listing

  Webtoon Entertainment, the self-professed world’s largest webcomic platform, set its market value at USD2.67 bil, with its shares due to starting to trade on the Nasdaq stock exchange at USD21 apiece. The firm is owned by South Korean tech giant Naver, and claims it has 170 mil monthly active users in over 150 countries. Webtoon Entertainment’s IPO is looking to raise USD315 mil through the sale of 15 mil shares, with fund manager BlackRock already expressing interest in buying up USD50 mil of shares. The webtoon industry made USD4.7 bil in 2021 and is projected to grow to USD60.1 bil by 2030. Webtoon is a scroll comic format that originated in Korea and has now evolved to become a term used to refer to comics that use that format.

• Amazon: New USD2 tril milestone, copying Temu

  An AI-fueled rally pushed tech giant Amazon to a USD2 tril market valuation for the first time, placing the firm in the same exclusive club as Google’s Alphabet, Nvidia, Microsoft, and Apple. The firm’s stock was bolstered over the past year by the company’s cost-cutting and restructuring plans seeking to take advantage of the AI frenzy, with investors also being optimistic about the firm’s Amazon Web Services business showing signs of re-accelerating growth. Amazon has also revealed plans to launch an online store for low-priced apparel and home goods in a bid to counter the rise of discount platforms like Temu and Shein. This also marks the largest move by Amazon to counter the rise of said discount platforms.

• SpaceX: USD843 mil to take down the ISS

  Elon Musk’s SpaceX has been awarded a contract worth USD843 mil to build the “US Deorbit Vehicle”, which will be used to guide the International Space Station’s descent to Earth after it is retired in 2030. Meanwhile, Boeing is saying its space mission is going well, even though the two Starliner astronauts are still stuck on the ISS. The company will become more valuable as it will be selling insider shares at USD112 each in a tender offer, a price that is higher than expected, considering the firm was last valued at USD180 bil in December. Marked as the world’s second-most valuable start-up, SpaceX’s decision to price its shares higher than the USD200 bil valuation discussed last month was due to “significant investor demand,” according to sources.

Crypto: The new giant crypto exchange, USD5 mil bounty for cryptoqueen

• Bybit - world’s #2 crypto exchange

  The exchange took the second spot in terms of global trading volume after targeting former clients of the now-defunct FTX exchange, which was owned by Sam Bankman-Fried. Bybit co-founder and CEO Ben Zhou said the firm saw the opportunity, and the exchange’s market share by trading volume has doubled to 16% since October, overtaking US leader Coinbase (market cap of USD56 bil) in March. The top position is still held by Binance, with 54% of total trading volume. Exchanges have generally benefitted from the doubling in Bitcoin’s price over the past year, a comeback from 2022, when the industry was marred by scandals such as FTX’s crash.
  View chart: Crypto exchanges market share

• Reward for information on missing Cryptoqueen now USD5 mil

  US authorities issued the notice as Ruja Ignatova, a Bulgarian-born German woman also known as the missing Cryptoqueen, is wanted by the FBI for masterminding a USD4.5 bil cryptocurrency scam called OneCoin. She has been missing since 2017 and has links to the Bulgarian mafia, which has led to speculation that she has been murdered. She was added to the FBI’s top 10 most wanted list in 2022, with an initial reward of USD100,000, which was later upped to USD250,000, then upped again to USD5 mil - that’s a huge jump - interesting. 
  Watch: How the cryptoqueen stole billions

Shorts

1. Ukraine signs security pacts with EU, Lithuania, Estonia 
   The security agreements were signed at a summit in Brussels, Belgium, and are meant to complement other similar agreements between Ukraine and its allies. While these are by no means mutual defence pacts, Ukraine will see help in nine areas of security and defence policy and can look forward to provisions of weapons and other aid to defend itself and deter any future invasion.

2. Honduras ex-president sentenced 45 years for aiding drug traffickers 
   Juan Orlando Hernandez, once seen as an important US ally with a tough stance on crime in his policies, was found guilty of accepting millions of dollars in bribes to protect US-bound cocaine shipments. Hernandez professed his innocence at the sentencing and claimed he was “wrongly and unjustly accused”. His defence lawyers also accused convicted traffickers of being out for revenge over the former president’s anti-drug policies.

5. FOR YOUR EYES 📺

1. Mix FM brought back the mannequin challenge. Well played. For context here. Hint: Olympics.

2. Weekend entertainment - Elon Musk gave YouTuber Tim Dodd, who runs Everyday Astronaut, a long tour of SpaceX’s Starfactory rocket production centre. Part 1 below, part 2 here.