☕️ Civil servants to get pay hike of 13%, price tag of RM10 bil to Budget 2025

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

Minister of Plantation and Commodities Johari Abdul Ghani is mooting the idea of consolidation of independent smallholders (ISHs), totalling 214,680 individuals working on 822,073 hectares of land, into clusters spanning about 8,000 to 10,000 hectares each. The objective behind consolidation is to enhance land productivity, given that smallholders manage 27% or 1.5 mil hectares of oil palm plantations. Many smallholders, often with land parcels of just 4 hectares, struggle to boost their yields. Smallholders are typically defined as farmers who own or lease less than 40.6 hectares of land.
View chart: Average CPO yield per hectare of Malaysian estates (1975-2022)

Generation Z, born between 1997 and 2012, is making its mark as a significant force in the workforce. In American workplaces, the number of full-time Gen Z employees is projected to surpass that of baby boomers, born from 1945 to 1964. Over 6,000 Gen Z chief executives and 1,000 politicians are now part of America's landscape. Those in Gen Z who have entered the workforce are earning respectable incomes across the rich world. For instance, the average net income of French individuals aged 16-24 has risen from 87% to 92% of the overall average since 2007. In some regions like Croatia and Slovenia, Gen Z-ers are earning on par with the average income. This trend could signal a shift in the workforce dynamics, with Gen Z potentially outearning their millennial and baby boomer counterparts.

Of the world’s 7,000 languages, nearly half are projected to vanish by the 21st century’s end. Colonialism and capitalism are often cited as major causes of this decline. Colonial powers imposed their languages in conquered territories, marginalising or outlawing local languages. Additionally, industrialisation and urbanisation have led to a shift towards larger languages used in workplaces, displacing smaller languages spoken at home.

3. IN MALAYSIA 🇲🇾

Malaysia’s higher education sector is slowly gaining international recognition
The top six universities in the country have improved their rankings in the Times Higher Education’s (THE) 2024 Asia University Rankings compared to last year.

1. Universiti Teknologi Petronas (the highest-ranked in the country) jumped 11 spots to 52nd.

2. University of Malaya (2nd highest in the country) went up one place to 65th.

3. Universiti Teknologi Malaysia leapt 76 spots to 85th.

4. Universiti Sains Malaysia also took a huge leap — 71 places to 99th.

5. Universiti Kebangsaan Malaysia ranked 101st.

6. Universiti Putra Malaysia ranked 102nd.

According to the rankings, universities were evaluated based on 18 performance indicators. It was noted that Malaysian universities performed at or above the regional average across most of the metrics. The universities performed particularly well on two newly introduced research quality metrics, namely research excellence and research influence. THE chief global affairs officer, Phil Baty, said while a number of countries’ universities improved in this year’s rankings, Malaysia’s institutions really impressed in 2024. Education is a money-making machine — Australia, known for its education, saw the sector add AUD34 bil to export revenue in 2023.

View: Asia University Rankings 2024

Sedition charges for Papagomo and Chegubard

1. Wan Muhammad Azri Wan Deris, who is also known as Papagomo, a political activist, has been arrested for allegedly insulting His Majesty Sultan Ibrahim, the King of Malaysia. In a video, Papagomo questioned Sultan Ibrahim's decision to meet with the owner of KK Super Mart regarding the recent socks issue. In the same video, he claimed that Sultan Ibrahim instructed the authorities to charge Chegubard (real name Badrul Hisham Shaharin) under the Sedition Act.

2. Badrul Hisham Shaharin, a member of the Bersatu information committee, claimed trial at the Sessions Court in Kuala Lumpur a day after being charged with making seditious remarks against His Majesty Sultan Ibrahim, the King of Malaysia. Commonly known as Chegubard, the 45-year-old pleaded not guilty after the charge was read out to him by Sessions Judge Rasidah Roslee. The charge sheet states that Badrul Hisham allegedly made seditious remarks on his Facebook page regarding reports on discussions about the Forest City casino.

Business

1. Duopharma Biotech Bhd secured contracts worth RM578.1 mil from Pharmaniaga Bhd
   Pharmaniaga Logistics Sdn Bhd, a subsidiary of Pharmaniaga Bhd, has issued 11 letters of offer to wholly-owned subsidiaries of Duopharma Biotech Bhd to supply 86 pharmaceutical and/or non-pharmaceutical products worth RM578.1 mil to government offices and facilities that Pharmaniaga operates. The contracts are valid and binding until Dec 31, 2026. Duopharma Biotech is 44.11% owned by Permodalan Nasional Bhd (PNB), with an additional 8.58% indirect stake held by the Employees Provident Fund (EPF).

2. KLSE is well and alive
   Stock exchange operator Bursa Malaysia Bhd reported a healthy net profit of RM75.03 mil for the 1QFY2024 period ending March 31, 2024, an increase of 34% yoy. Revenue for the quarter climbed 20% YoY to RM187.2 mil. Earnings were driven by a 23% increase in the Securities Market’s operating revenue to RM123.1 mil. Trading velocity in 1QFY2024 increased from 31% to 39%, signalling a high level of market activity. The average daily trading value for the securities market’s on-market trades is RM2.9 bil.
   View: Bursa Malaysia Bhd 1QFY2024 financial results

   

   Bursa revenge breakdown

Shorts

1. Civil servants to get pay hike of over 13%
   PM Anwar Ibrahim announced the revamped Public Service Remuneration System (SSPA), under which civil servants will receive a minimum monthly income of RM2,000. Currently, civil servants’ minimum overall income is RM1,765 — with the revamped scheme, that figure will increase to RM2,000 including allowances, a sweet 13% hike, which the PM called it the “best increase in history”. It’s only going to come into effect later this year in December 2024. The details of the proposal will be announced during the tabling of Budget 2025. Take a guess how much it will cost the government in 2025. Only RM10 bil.

2. Potential disruption for air travel in Sabah until May 5
   Mount Ruang, located north of Sulawesi and east of Sabah, erupted again on Tuesday morning, spewing ash that filled the surrounding air. The ash reached a height of 63,000ft or 20km. Muhammad Helmi Abdullah, director-general of MetMalaysia, said that flight operations in the Kota Kinabalu Flight Information Region (FIR) could face disruption. Based on the trajectory model from the National Oceanic and Atmospheric Administration (NOAA), volcanic ash is expected to enter the airspace and have a significant impact throughout the forecast period until May 5.

4. AROUND THE WORLD 🌎

Gaza updates
As part of his current visit to the Middle East, US Secretary of State Antony Blinken met Israeli Prime Minister Benjamin Netanyahu to push for getting more aid into Gaza, urging the Israeli government to take specific steps to facilitate aid to the war-torn region. Blinken also called for Hamas to accept a deal that would halt fighting and free hostages, though he stuck to the US position that Hamas is “standing in the way of a ceasefire”. The current deal offer, which Blinken describes as “extraordinarily generous”, would see 33 hostages released in exchange for a larger number of Palestinian prisoners and a halt to the fighting, with the possibility of further steps towards a comprehensive deal later. And yet, the Rafah offensive is deemed “on the immediate horizon” by the UN. So much for peace.

Meanwhile, even peace protests can turn violent, as a group of Israel-supporting demonstrators at the University of California in Los Angeles (UCLA) attacked a camp set up by pro-Palestinian protestors. Police were deployed in force to respond to “multiple acts of violence”. Over at Columbia University, police arrested dozens of pro-Palestinian protestors who had occupied a building on campus, dismantling a protest encampment that the school had been trying to dismantle for almost two weeks.

Big Names, Big Problems

1. Binance co-founder gets four months in jail

   Zhao “CZ” Changpeng, co-founder and former CEO of crypto exchange Binance, was sentenced to a four-month jail term after his guilty plea to violating US laws against money laundering. The prosecutors are happy with the verdict despite the sentence being far below the three years they requested. This also comes after hundreds of letters supporting Zhao were sent to plead his case against a longer jail term. Zhao thanked his supporters in a post on X (formerly known as Twitter) and stated he hopes to close this chapter in his life before moving on to the next.

2. Iran commutes billionaire's death sentence

   Babak Zanjani, who was sentenced to death in 2016 for pocketing USD2.7 bil of government funds, will now serve a 20-year prison sentence after commution. Notably, this follows an announcement from Iran’s judiciary that Zanjani has agreed to cooperate with authorities and that his overseas assets had been transferred to Iran. It was reported that initial assessments by the judiciary found Zanjani’s overseas assets were “sufficient to pay his debts and damages”. He was among the high-profile Iranian business figures targeted with asset freezes for his role in helping the Iranian government avoid sanctions.

3. Warren Buffett's PacifiCorp faces USD30 bil fire claim demand

   The demand comes from the victims of Oregon’s 2020 Labour Day wildfires and marks the next escalation in PacifiCorp’s, an electric grid operator, legal struggles. The growing liabilities of PacifiCorp have led Buffett to warn investors that wildfires have turned utilities across the western US into risky investments, especially since utilities firms in California, Colorado, Hawaii, and Texas have also faced billions in fire liabilities in the past. So far, jurors have awarded 36 victims USD220 mil, about USD6 mil per person. This is way below the USD30 mil per person that victim lawyers requested, which sought up to USD 5 mil for actual losses and up to USD25 mil in psychological trauma.

4. Trump won't rule out election violence if he loses to Biden

   The presidential candidate believes he will “have a big victory”, and that he thinks there will be no violence. However, he later said that election violence could happen if he loses, stating “it always depends on the fairness of an election”. He has also considered pardoning each of the Capitol Hill rioters, even as 84% of ex-members of Congress expressed their worry about election-related violence in 2024.

Global F&B giants report drops amid budget-conscious consumers
Starbucks, McDonald’s, and Yum (the parent of KFC and Pizza Hut) all reported missing quarterly targets, citing budget-conscious consumers as the common reason for the drops in sales. The coffee chain saw an overall 6% drop in transactions, while McDonald’s saw a slump in sales growth to 1.9%, the fourth sales growth drop in a row. Yum reported a revenue drop of nearly 3% to USD1.6 bil, with global KFC sales dropping 2%, while Pizza Hut saw a 7% global drop.

Indonesian spotlight

1. Evacuation continues following volcano eruption

   Authorities are continuing the evacuation of over 12,000 people from Tagulandang Island with the warning that a tsunami could hit the island as a result of the nearby Ruang volcano eruption. The people will be evacuated to North Minahasa Regency on Indonesia’s Sulawesi island by sea, as air traffic in the area has been suspended. The volcano erupted on 30th April, spewing lava into the surrounding waters. All 843 residents of Ruang Island have been safely evacuated.

2. Indonesian government to offer dual citizenship to fight brain drain

   The offer is for the nation’s skilled diaspora, with the announcement made by the Coordinating Minister of Maritime Affairs and Investment Luhut Panjaitan without further details. This flies in the face of Indonesia’s prohibition of dual citizenship and speaks of its efforts to stem the brain drain of local talent. The minister shared that as many as 1,000 students decide to become Singaporean citizens each year, even as the country seeks to have nearly 3,000 youths ready to work as developers by 2029.

Shorts:

1. WeWork unveils restructuring plan, refuses former CEO's acquisition bid
   The co-working space firm announced it has raised USD450 mil in equity funding, which it will use to exit bankruptcy, with a plan in place to eliminate all USD4 bil of its outstanding debt. The plan has the support of the owners of most of WeWork’s debt. USD337 mil of the funding will come from Cupar Grimmond, the investment arm of software services provider Yardi. Tellingly, the plan does not involve co-founder and ex-CEO Adam Neumann, who submitted a bid of USD650 mil for WeWork.

2. Australia pledges USD600 mil to help domestic violence victims 
   The funds will go towards victims fleeing domestic violence in response to a “national crisis” of gendered violence. The programme will be permanent, according to Prime Minister Anthony Albanese, who made the announcement after an emergency meeting. Australia will also be introducing legislation to ban the creation and non-consensual distribution of deepfake pornography, with a USD4.2 mil pilot programme to test ways to stop children from accessing inappropriate content online.

5. FOR YOUR EYES 📺

1. Advances in the global healthcare system have saved an estimated 100 mil children — if the mortality rate has remained the same at the level of 1990.

2. Hope you had a good break over Labour Day. Here’s some ugly truth about the wage situation in Malaysia. Will the country’s vision of becoming a high-income nation remain only a vision?