☕️ Casino in Forest City? PM Anwar says no

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

American women are experiencing record-low birth rates, with the total fertility rate dropping to 1.62 births per woman in 2023, marking a 2% decline from the previous year and the lowest rate since tracking began in the 1930s. This trend reflects various economic and social challenges, leading some women to delay or forgo having children. Factors contributing to this trend include women having fewer children later in life, increased uncertainty about the future among young people, and higher spending on homeownership, student debt, and childcare. In 2023, there were 3.59 mil births in the U.S., down 2% from 2022's 3.66 mil.

Deputy Health Minister Datuk Lukanisman Awang Sauni disclosed that nearly 5 mil Malaysians are pre-diabetic (about 15% of total population), putting them at risk of developing diabetes. He highlighted that diabetes often presents no symptoms, leading many individuals to be unaware of their condition. According to an awareness survey involving 5,000 respondents, 76% had never undergone diabetes testing. Diabetes also has a social cost — Diabetes accounts for nearly 50% of the treatment cost, which is worth almost RM4 bil of the total annual allocation used by the Health Ministry.

French scientists have created the world’s most powerful magnetic resonance imaging (MRI) machine called Iseult, which takes images 10 times more detailed than standard hospital MRIs. It takes only four minutes to produce images that would take hours on a regular machine. The strength of MRI magnets is measured in Teslas, and most hospital machines range between 1.5 and 3 Teslas. Iseult's magnets are 11.7 Teslas, allowing for higher spatial resolution which enables neuroscientists to focus on the activity of approximately 850 neurons in a single 3D pixel (voxel), compared to 600,000 with standard MRIs. This breakthrough could lead to improved treatments for diseases like Alzheimer’s and Parkinson’s.
Read: What is MRI and how it works?

3. IN MALAYSIA 🇲🇾

All about the new EPF Account 3
Employees Provident Fund (EPF) CEO Ahmad Zulqarnain Onn said that the soon-to-be-introduced Account 3 dubbed the Flexible Account, where savings in this account can be withdrawn at any time, is optional for its members. Between May 11 and August 31, EPF members aged 55 and below have a one-time option to transfer part of their savings in their Sejahtera Account (previously Account 2) as an initial amount to the Flexible Account. If the members decide not to exercise the option, the Flexible Account will have no money.

Under this new structure, Zulqarnain expected about RM25 bil will be withdrawn from the Flexible Account in the first year, a comparatively small amount if compared to the pandemic-era EPF withdrawals amounted to RM145 bil. However, Zulqarnain reassured that the withdrawals from the Flexible Account will not impact EPF’s portfolio. View FAQ here.

Casino in Forest City? PM Anwar says no
PM Anwar Ibrahim dismissed the rumours that Putrajaya is planning to develop a casino within the RM480 bil Forest City project in Johor to revive the failed project. Previously, Bloomberg reported that an alleged meeting between PM Anwar, Berjaya Corp founder Vincent Tan, Genting Group’s Lim Kok Thay and the King’s representative was conducted to discuss the matter. At the moment, Resorts World Genting in Genting Highlands is the only legal land-based casino in Malaysia. This license has to be renewed every three months at the discretion of the Finance Minister.

Putrajaya intends to introduce Komuter service to support the RTS Link
Transport Minister Anthony Loke announced that the Government is planning to introduce Komuter service to support the Rapid Transit System Link (RTS Link) Project that will be fully operational on January 1, 2027. At the moment, the current RTS Link station in Bukit Chagar will also house the Gemas-Johor Baru Electrified Double Tracking Train Project below the RTS station. The aim is to integrate the ETS and RTS tracks so that people living on the outskirts of Johor Bahru can take the Komuter service to Bukit Chagar and exchange to RTS to go to Singapore. Komuter is a commuter rail service brand in Malaysia operated by Keretapi Tanah Melayu (KTM) and was introduced in 1995.

While we are on the Johor-Singapore topic, Malaysia is set to follow in Singapore’s footsteps in utilising QR codes for immigration clearance as the Home Ministry will launch the pilot initiative in June. Under the pilot initiative, only Malaysians travelling on board factory buses will be able to enjoy this privilege at both of Johor’s land checkpoints. Immigration officers will board the factory buses with handheld scanners at the checkpoints, and this exercise is estimated to save up to 30 minutes in time.

Shorts

1. Former PM Tun Abdullah Badawi, better known as Pak Lah, has been admitted to the National Heart Institute's (IJN) critical care unit (CCU) after being diagnosed with lung issues. Pak Lah’s son-in-law, Khairy Jamaluddin, informed the public via an Instagram Story posting that the fifth PM is in good condition and just needs sufficient rest.

2. Economy Minister Rafizi Ramli said that Putrajaya will announce its subsidy rationalisation soon to replace the current regressive blanket subsidy program. Rafizi added the 11.6 mil individuals (52.6% of Malaysians aged 18 and above) that registered on the Centralised Database Hub (Padu) provided the Government with enough data to minimise both exclusion and inclusion errors and ensure an equitable distribution of subsidies to those that need them most.

Business shorts

1. Axiata Group Bhd and Indonesia-based PT Sinar Mas Group have agreed to combine their telecommunications operations in Indonesia in a deal that could merge their telco arm into an RM16.74 bil entity with about 100 mil customers. Although it is well known that Axiata is consolidating its business left, right, and centre, Indonesia’s telecom market has also been in a consolidation mode for the past few years. In 2022, CK Hutchison Holdings Ltd and Qatar’s Ooredoo merged in a USD6 bil transaction as they sought to fend off competition.

2. Capital A & Co. kicks off its series of major announcements. AirAsia X Bhd (AAX) will be taking over Capital A Bhd's aviation business in an RM6.8 bil transaction via share swap and debt deal. Before anything happens, a new company (NewCo) called Air Asia Group Sdn Bhd will be created and absorb AAX, where AAX shareholders will swap their shares with the shares of the NewCo on a one-to-one basis. Then, the NewCo will acquire Capital A’s aviation business - AirAsia Bhd and AirAsia Aviation Group Ltd (AAAGL).
   View chart: Proposed NewCo’s expected shareholding structure

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4. AROUND THE WORLD 🌎

Biz: Mega M&A, luxury brand sales going strong, and McK in drug trouble

• BHP bids USD39 bil to buy out rival Anglo American

  The world’s largest public-listed mining firm, BHP, has approached rival Anglo American with a takeover offer potentially worth USD39 bil. UK-based Anglo-American revealed that its board of directors is currently reviewing the proposal. Should the deal go through, it will be marked as one of the mining industry’s biggest mergers. Through the takeover, BHP will gain access to Anglo-American’s “world-class copper assets”. This comes as the price of copper continues to rise globally, with an increase of more than 15% this year alone. This deal, should it succeed, will also result in the formation of a group which controls about 10% of the global output of copper.

• Luxury conglomerates Hermes and Prada report fantastic first quarters

  The two luxury brands saw surges in their respective first quarters, with both attributing the growth to stronger demand in Asia, which defies a broader weakness in market demand. Hermes reported a 17% surge in sales to USD4.1 bil for the first quarter, noting that sales in Asia, excluding Japan, grew 14%, with double-digit rises in other regions. Prada, on the other hand, reported sales of USD1.3 bil, a 16% growth, with the firm attributing the gains to continued growth in Asia, as well as an 89% jump in sales from Miu Miu.
  View earnings: Prada, Hermes 

• McKinsey under investigation for advising opioid producers on boosting sales

  Management consultancy firm McKinsey is under investigation by the US Department of Justice for the role it played in the opioid crisis, which caused the deaths of hundreds of thousands of Americans. The investigation looks into the decades of work McKinsey did with opioid-producing drugmakers, with one example listed as “Project Turbocharge”, which involved doubling a drugmaker’s marketing budget, lobbying doctors, and targeting medical practitioners to boost the sales of OxyContin. Notable is that McKinsey has paid nearly USD1 bil to all 50 US states, Native American tribes, local governments, and other groups to resolve lawsuits without admitting wrongdoing.

Closer to home - wonderful neighbours

• Vietnam jails soft drinks tycoon on fraud

  The latest high-profile case in Vietnam’s crackdown on corruption sees soft drinks tycoon Tran Qui Thanh and his two daughters guilty of scamming investors over loans issued in 2019 and 2020 worth about USD40 mil. The chairman of the Tan Hiep Phat beverage group, known for its bottled tea and energy drinks, was sentenced to eight years in prison. His older daughter, Tran Uyen Phuong, who was the group’s deputy CEO, was given a four-year jail sentence, while his younger daughter, Tran Ngoc Bich, was given a suspended three-year jail sentence. Fortunately for the family, they escaped the gallows. Two weeks ago, a property tycoon, also in Vietnam, was sentenced to death in Vietnam’s largest financial fraud involving USD12 bil.

• SGD outshone major trading partners with 40% growth under PM Lee

  Under the reign of Lee Hsien Loong, the Singapore dollar saw a growth of 40% against its major trading partners since 2004, underpinned by an economy that has doubled in size to USD390 bil in the past 20 years. Lawrence Wong, who will take over stewardship of the city-state when Lee steps down on May 15, will have to find a way to build upon the successes of his predecessor.
  On 1 Jan 2004, MYR/SGD was trading at 2.2384. Today, it’s 3.5137 - that’s 57% growth against the MYR. In ghetto terms, MYR got tapao-ed, no matter how well our past leaders painted the picture of our nation’s growth.

Toyota making major progress despite safety scandal
Carmaker Toyota launched a pilot programme in Thailand with nine fully-electric Hilux Revo pickup trucks, modified into song-taews for public transportation. This marks Toyota’s latest move in a battle for electric vehicle dominance in the Southeast Asian country, a key market where Chinese EVs are trying to break in on a wave of over USD1.4 bil in investments in Thailand.

The launch comes as Toyota celebrated record highs in global sales and production over the last financial year ending Mar 31. The Japanese carmaker attributed the growth to robust demand and the absence of semiconductor supply constraints. Sales rose 7.3% to 10.3 million units sold, passing the 10 million mark for the first time, with output coming up to 9.9 million units, up 9.2% year-on-year. Still, the group will be delaying the start of its EV production in the US, with domestic production trimmed to ensure product safety and quality after a series of scandals. Guess the Daihatsu safety scandal thing isn’t going away any time soon, though they plan to resume production by the end of 2024 at the earliest.

More biz but emotions in tech: Zuck’s RFP (P = patience), mercy appeal letters from Binance CZ’s friends & gang

• Zuckerberg asks investors for patience - again 
  Meta CEO Mark Zuckerberg asked yet again for investors to remain patient following the revelation that the firm will be spending billions of dollars more than expected this year due to its investments in AI. The current expectation is Meta spending up to USD40 bil, compared to a previous estimate of up to USD37 bil. This is a repeat of a similar request back when Zuckerberg was pushing the metaverse angle, which cost the tech giant USD16 bil in 2023 (tens of billions cumulatively). However, the CEO noted that advancements and successes in the past year, such as with Meta’s AI chatbot and Ray-Ban smart glasses, give him confidence that further investment is needed.
  Meta stock got hammered, down 15% following the RFP (request for patience in this case, not proposal), despite its latest quarterly performance exceeding expectations. Nevertheless, Meta stock still had a good year-to-date performance, up 25.7% at the time of writing.

• Binance co-founder has friends, family, even royalty seeking mercy for him 
  Zhao “CZ” Changpeng, the co-founder of Binance, saw over 160 friends, colleagues, and investors writing to a Seattle court to plead on his behalf, with the letters offering insight into the life of Zhao, who kept to a low profile despite his status as crypto’s richest man. Among the authors are the two mothers of his children, big names in and out of the crypto industry, government elites, and even two members of ruling families in the United Arab Emirates. Talk about having cables. For a closer look into his private life, here’s a link to a summary of the 161 letters of support.

5. FOR YOUR EYES 📺

1. This an epic TV lighting setup that we never knew we needed.

haikettua_atl

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2. A father and his young son jamming to The Eagle’s Hotel California guitar solo. This classic hit song, released in 1976, is pretty much older than most of us here. Fun fact — the working title for the song was “Mexican Reggae” — the name would have made a huge difference. Other fun facts about this song here.
   Put down your phone (only after you have read our newsletter and referred your friends to subscribe) and have a good weekend playing with your kids.

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