☕️ Brace yourself, not safe for taxpayers - Auditor-General's Report

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

After 14 years under the Conservative Party (the Tory), the average person in the UK is significantly worse off than if the economy had maintained its pre-2010 growth. An analysis by the Centre for Cities shows Britons had GBP10,200 less to spend or save during 2010-2022 compared to 1998-2010, equivalent to 15 weeks of the average wage or eight months of rent. Economists blame Brexit and chronic underinvestment from austerity for the UK’s lagging productivity.

Setting aside an additional 1.2% of global land as nature preserves could prevent most predicted extinctions of plants and animals, costing about USD263 bil, a recent study states. This effort supports the global goal to protect 30% of the world by 2030, aiming to combat wildlife decline due to climate change, pollution, and habitat destruction. The proposed protections cover 1.6 mil square km across 16,825 sites, on top of the nearly 16% of protected land. The cost includes acquiring these areas, many of which are private properties.

In 2023, Singapore's resident total fertility rate (TFR) was 0.97, one of the world's lowest. The increasing number of single women is a significant factor in Singapore’s declining birth rate, with TFR falling below 1 for the first time in 2023. Singapore’s Department of Statistics (DOS) analysis revealed that the TFR drop from 2005 to 2023 is mainly due to fewer married women despite slight increases in fertility rates among married women. The proportion of married women aged 25 to 29 declined from 52.1% in 2005 to 29.2% in 2023.

3. IN MALAYSIA 🇲🇾

Auditor-General’s Report Special

Brace yourself. Not Safe For Taxpayers.

1. Former prime minister Najib Razak-era River of Life project is not making anyone livelier as even after RM3.915 bil spent on the project, the objectives (such as clean water suitable for recreational purposes) are not met and the project is unlikely to be completed this year. The River of Life project has been running for so long since 2011 until various infrastructure built have broken down. The AG’s report blamed the failure of the project on the project’s flawed business model that relied heavily on the Government’s funding.

2. The AG’s report red-flagged a flow of funds amounting to RM373,516 from the National Professors Council (NPC) to two companies owned by the board-of-trustee members. NPC refuted the audit findings by stating that the two companies were formed to help NPC generate income after NPC was temporarily removed from public patronage in 2018. NPC, which consists of professors, should answer smarter, as most discrepancies highlighted by the AG’s report happened when public money was reinstated to NPC in November 2021.

3. While Malaysian mums like to hoard Tupperware, our Navy likes to hoard expensive military parts. The audit report discovered that the Royal Malaysian Navy (TLDM) has hoarded RM384.5 mil worth of unused ship parts, where some were deemed unusable. The AG’s report blamed the Malaysian mums’ attitude of the TLDM due to weakness in the navy’s inventory management. The report also highlighted that 29 out of 49 naval ships are beyond their intended lifespan by 9 to 25 years. TLDM is forced to use these high-maintenance-cost ships because new ships are slow to come by. Even the Malaysian ship, KD Lekiu, that is being sent to the infamous multinational military exercise RIMPAC, is almost 25 years old.

4. The next disappointment is arriving soon. The AG’s report also found that both the Mass Rapid Transit Line 1 (MRT1) and MRT lines failed to meet the targeted daily ridership, number of trains in operation, and peak-hour frequency. The AG’s Report also signalled that MRT Corp’s financial position remained unstable although the loss before tax has been in a downward trend, from RM3.61 bil in 2021 to RM181.5 mil in 2023. To be fair, MRT Corp is an AssetCo and not an OpCo that does not enjoy the biggest slice of the revenue — the train fares. View the average daily ridership here.

5. Apart from the MRT1 and MRT2 in the Klang Valley, MRT Corp is also in hot water for its project in Johor as AG underlined that the cost of the Rapid Transit System Link (RTS Link) has increased by 29.9% from RM4.03 bil to RM5.24 bil. The increase was partly due to the expansion of the depot work scope from light to heavy maintenance, new contracts for the traffic diversion scheme, and the construction of the customs, immigration and quarantine (CIQ) complex.

6. A new entrant in the AG’s naughty list is the Human Resources Development Corporation (HRD Corp). The AG’s report found a suspicious disbursement of training grants amounting to RM51.6 mil, especially via the Gerak Insan Gemilang scheme. It gets so suspicious that the audit report stated that 234 participants in the scheme had the same names and identification numbers. That is not all. There are irregularities in the RM120 mil deposit payment process for the Menara Ikhlas acquisition, an unrealised loss of RM49.38 mil due to investment transactions and many more. Why on Earth is HRD Corp involved in investment? Just focus on collecting and distributing the levies. The situation at HRD Corp is so bad that the AG has called on the Ministry of Human Resources (HRD Corp is under the HR Ministry's purview) to keep HRD Corp in line and to report any irregularities to the authorities.

7. Not only did the AG find HRD Corp fishy, but even the PAC thought so too. Public Accounts Committee (PAC) chairman Ermieyati Samsuddin highlighted that HRD Corp had utilised RM3.77 bil in levies collected towards a number of investments. Mas Ermieyati reiterated that HRD Corp is created for the development of human resources to encourage the training and development of employees, trainees and apprentices — HRD Corp is not a hedge fund.

Will anyone be behind bars over some of the jarring mismanagements above? Unlikely. Come 2025 - same sh*t, different year.

Shorts

1. AwanBiru Technology Bhd (Awantec) scored big as the company secured an RM25.69 mil contract to provide cloud-based solutions to all schools under the Ministry of Education. The contract will run for three years until July 2027.

2. Former Selangor UMNO chairman Noh Omar has turned to the dark side as he has officially joined Bersatu with immediate effect. Noh said that the move was driven by his disappointment that his previous boss, Najib Razak, did not get the ’work-from-home’ order from the High Court. Malaysia, truly comedic.

4. AROUND THE WORLD 🌎

The next US President - President Obama? Michelle Obama, that is. 
In a new poll by Reuters and Ipsos, the survey showed that the former first lady, 60, is the only prospective candidate who could beat Donald Trump, 78, by 10 points. President Joe Biden has been facing mounting pressure from his own camp to step down from running in the presidential election this coming November following his disastrous debate with Donald Trump last week. Obama polled better than potential Democratic candidates, including Vice President Kamala Harris and Gavin Newsom. The poll showed that  1 in 3 Democrats thinks he should end his campaign in the wake of the CNN debate. 

Mrs Obama has seen support for her surging despite previously ruling out running and endorsing Mr Biden’s re-election bid. She reportedly was absent from Biden’s campaign due to her disappointment over how Biden’s family treated Kathleen Buhle, Hunter Biden’s ex-wife. Hunter Biden is President Biden’s son. View the survey insights here. 

The US military side business - casino
TIL that the US military provides gaming services as a form of stress relief. As of 2017, the Department of Defense operated more than 3,100 slot machines on US military installations in a dozen foreign countries, generating more than USD100 mil annually in revenue. This activity is seen as a morale booster for the welfare and recreation of servicemembers, comparable to activities like golf and libraries. And no one would expect this to lead to gambling addiction. Domestically, slot machines are prohibited on military bases, though casinos are frequently located nearby. 

According to research by the Department of Veteran Affairs, diagnoses of pathological gambling disorders among servicemembers and veterans are soaring, with more patients receiving diagnoses in the first half of 2024 exceeding all of 2022. Servicemembers are more vulnerable than civilians to gambling disorders and may be hesitant to self-report, fearing losing their security clearance or avoiding the stigma attached to gambling problems, the research found. 

Terrorist group Jemaah Islamiyah to disband
The authenticity of a June 30 video statement by 16 JI leaders announcing its dissolution has been confirmed by the Institute for Policy Analysis of Conflict (IPAC). The allegedly al-Qaeda-linked group is accused of orchestrating some of the deadliest attacks in Indonesia, including the 2002 Bali bombing that killed more than 200. The leaders in the video confirmed their commitment to the Indonesian state and law and said all material taught in JI-affiliated schools will not teach extremism anymore. JI was formed in 1993 with the mission of forming an Islamic state in Southeast Asia. 

IPAC suggested some reasons the organisation was disbanded: the influence of intellectuals within JI who are less interested in violence, cost-benefit analysis on the best way to protect the group’s biggest asset, which is its schools and intensive engagement with counterterrorism officials. Indonesia’s National Counter Terrorism Agency declined to comment but said it would hold its news conference soon. It’s still too early to let the guards down - IPAC said the group has a history of splinter groups that could still pose a potential threat.

Shorts

1. Saks Global is acquiring Neiman Marcus
   Saks Global, the parent of Saks Fifth Avenue, has agreed to acquire bankrupt rival Neiman Marcus in a USD2.65 bil deal. Amazon and Salesforce have taken a minority stake in the deal and will provide Saks with technology and logistical expertise. The combined company will have annual sales of USD10 bil and 75 stores and will give it better negotiation power with large suppliers (i.e. luxury brands), that have been eating the retailer’s business through the brands’ own stores and websites. 

2. Popular weight-loss drugs could lead to blindness
   A new study of 16,827 patients over a six-year period found that people with diabetes prescribed with semaglutide, more commonly known under the brand names Wegovy and Ozempic, were more than 4x more likely to be diagnosed with an eye condition NAION, a disorder in which arteries that supply blood to the optic nerve in the eye become blocked leading to loss of eyesight. There is no known treatment for the condition, which affects about 10 out of 100,000 people in the general population. The fast and easy way of doing things always has its hidden cost. 

3. EU ups tariffs on Chinese EVs

   The new tariffs imposed range from 17.4% to 37.6% on top of a 10% duty that was already in place to counter “unfair subsidisation” by the Chinese government for all EVs imported from China and affects 3 Chinese brands - SAIC, BYD and Geely. The new rate is based on how much state aid each firm received and how cooperative these brands were during the probe. This is a major blow as the EU is the largest overseas market for the Chinese EV industry, with almost 8% market share in 2019.

5. FOR YOUR EYES 📺

1. If you’re looking to explore the country during this long weekend via the good ol’ KTM in the Greater Klang Valley, you’re likely required to take the stairs.

2. From a USD11.7 bil company to USD200 mil today - what happened to GoPro?

3. Something delightful to end the week. Mama elephant waited calmly as PERHILITIAN officers helped rescue a baby that fell into a drain.