☕️ EPF savings - tragic difference between T20 vs B40

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

Today’s numbers are courtesy of the ongoing Parliament session. Let’s go!

37.2% (168,927) out of a total of 453,761 of all houses built since 2018 by the private sector cost above RM1 mil, comprising the biggest category followed by houses costing below RM300k (162,284 / 35.8%), RM500k to RM1 mil (70,779 / 15.6%) and RM300k - 500k (51,771 / 11.4%). Malaysia’s overhang (supply > demand) residential property units as of 3Q22 stood at 29,534 units with a value of RM19.95 bil. Property developers got to revisit their numbers — how many Malaysians can afford properties above RM1 mil? 

RM597 bil — total assets of the T20 income earners (2.6 mil members) in EPF as of Dec 2022, up 11% from RM538 bil in Apr 2020. As for the 5.2 mil B40 EPF members, it’s really bleak - they held RM7 bil, down 46% from RM13 bil in the same comparable period. Deputy Finance Minister Ahmad Maslan described the EPF as “monopolised” by the T20. On a per capita basis, a back-of-the-envelope calculation shows that a T20 EPF member, on average, holds 170x more assets than a B40 member. What a vast disparity. Some parties are still calling to allow for early EPF withdrawals. The most recent EPF total investment asset provided was as of Sep 2022, amounting to RM961.1 bil — using this as a rough approximation, the T20’s assets accounted for 62.1%.

A tiered dividend scheme has been suggested, essentially paying a higher effective rate to members with lower balances by reducing the effective rate on members with higher balances. Good or bad idea? An analysis by The Edge here. 

Watch top personal finance influencer Financial Faiz giving a piece of his mind on the EPF withdrawal issue.

7,648 body cameras will be fitted on police personnel in the field, mainly the police patrol car and motorcycle patrol units. Each unit of body-worn camera (BWC) costs between RM2k-2.5k. An allocation of RM30 mil was approved in 2021 for this purpose. Using the US as a comparison, it costs between USD1.5k-1.8k for a “low-cost camera”.

2,350 people since 2000 have been sentenced to death. The bulk of them (97%) were drug and murder related — 1,589 (67.6%) of those sentenced to death were drug traffickers and 690 (29.36) committed murder. The balance is as follows:

• 31 (1.32%) for discharging weapons

• 19 (0.81%) for kidnapping

• 13 (0.55%) for waging war against the King

• 5 (0.21%) for possession of a firearm without lawful authority (0.21%)

• 3 (0.12%) for gang robbery

In summary, the above offences above are punishable by death. Note to self: think twice before committing any. 

3. IN MALAYSIA 🇲🇾

MACC-led joint operation busts major investment scam syndicateThe operation dubbed Op Tropicana raided 24 premises simultaneously in Kuala Lumpur and Penang, including three call centres or “boiler rooms”, offices and homes of syndicate members. The syndicate members included those from Australia, the UK, South Africa and the Philippines. They targeted victims in Australia and the UK, causing total losses of AUD60 mil (RM181.9 mil) to victims since 2019. 

The damage is believed to be much larger, involving sums of RM1 bil cheated from victims worldwide, as the operation here was just part of a larger international syndicate. 5 Brits and 3 Malaysians were among the ten suspects remanded by MACC. A New Zealand national tried to pull off a Jacky Chan move during the raid by jumping from the 14th floor and landing on the 11th floor with a broken hand and leg. 

The joint operation involved the Immigration Department, Inland Revenue Board (LHDN) and Tenaga Nasional. There’s no mention of PDRM participating in this raid. It was reported that the syndicate was suspected of bribing certain authorities to protect its members and boiler rooms in the country. However, it was not reported which law enforcement agency was compromised. Sounds like there was an Andy Lau planted amongst the authorities. 

The Andy Lau reference is based on the highly acclaimed 2002 Hong Kong movie Infernal Affairs (trailer here), starring Andy Lau and Tony Leung, among the big names. Andy Lau played a high-ranking police officer who secretly worked for the triad and Tony Leung played an undercover gangster working for the triad who secretly worked for the police. Both the triad and police were trying to oust each other’s mole within the force. The success of Infernal Affairs saw it being remade into the Oscars-winning US movie, The Departed (trailer here), by Martin Scorsese, starring Leonardo DiCaprio, Mark Wahlberg and Matt Damon.

LCS project - fate to be decided by CabinetDefence Minister Mohamad Hasan told the Parliament that the Cabinet will decide on the finer details of the continuation of the littoral combat ships (LCS) project, such as the reduction from 6 to 5 vessels. The ‘discount’ on the number of vessels was decided by Cabinet in the previous government in Apr 2022. To recap, the government had paid RM6,08 bil of this RM9.13 bil contract to local contractor Boustead Naval Shipyard but had none of the ships delivered.

Another major issue faced by the project was the involvement of a third party. The government had proposed signing an international settlement agreement to remove the third party. However, the party requested a letter of indemnity to be signed to excuse them from any wrongdoing, which the ministry did not agree to and has referred to the Attorney-General’s Chambers (AGC) for advice. 

Jana Wibawa saga - Segambut Bersatu deputy chief slapped with another 2 chargesThe businessman and Segambut Bersatu deputy chief Adam Radlan Adam Muhammad pleaded not guilty to the additional two new charges linked to the Jana Wibawa programme. The two charges are:

• Accused of receiving an RM2 mil bribe from Nepturis Sdn Bhd managing director Lian Tan Chuan for helping Lian’s company to obtain the RM141 mil Klang Utara Police HQ project from the government. 

• Accused of receiving an RM2.1 mil bribe from MIE Infrastructure & Energy Sdn Bhd managing Mat Jusoh Mamat for helping the company to obtain an RM47.8 mil road construction project. 

Malaysiakini’s quick guide here on the Jana Wibawa programme. The gist of this programme is to support bumiputra contractors during the pandemic. The MD of Nepturis Sdn Bhd, Lian Tan Chuan, doesn’t even sound remotely close to a bumiputra - but with scant details on him, for all we know, he is a bumiputra with a Chinese name. 

Shorts:

1. Following a meeting yesterday afternoon, the 6 Chief Ministers and Menteri Besars have reached an understanding to dissolve their respective assemblies in the last two weeks of June to pave the way for the state elections within 60 days from the dates of dissolution. This discussion, ongoing since January, would simplify the logistics by running all state elections concurrently. These 6 states are Selangor, Negeri Sembilan, Kedah, Kelantan, Terengganu and Pahang. 

2. It will take at least seven months to repair the Ampang LRT line between the Masjid Jamek and Bandaraya stations, according to Transport Minister Anthony Loke. The damage to the affected structure poses serious safety risks, believed to be caused by the construction of a 44-storey hotel nearby, which did not obtain approval from the Land Public Transport Agency that is required for construction near railways. Legal action might be taken pending the completion of investigations, Loke said. 

Business talk: 

1. An RM860 mil, 624-bed private hospital, KL International Hospital (KLIH), will be built in the KL Wellness City, which is scheduled to begin operation in Q1 2026 and create over 3,000 job opportunities. Learn more about KL Wellness City here.

2. Farm Fresh Bhd founder and CEO Loi Tuan Ee shared that the company plans to enter more segments of the ice cream market following its acquisition of The Inside Scoop, namely in the consumer packaged goods segment. He mentioned Nestle and Unilever’s dominance in the packaged ice cream space and believes Inside Scoop can enter the space once it sorts out its distribution points and the cold chain. Farm Fresh is also going up against Tealive with its Jomcha brand. With eight outlets as of Nov 2022, the company plans to open up to 300 outlets under its 3-year business plan.Listen: Loi Tuan Ee’s BFM interview, sharing on life after IPO, buying Inside Scoop and ensuring Farm Fresh doesn’t “lose its soul”. 

4. AROUND THE WORLD 🌎

China to deepen ties to Russia, expresses concern over Japanese military buildupThe Asian superpower pledged to “deepen cooperation” with Russia, a move hailed by Russian leader Vladimir Putin, who looks forward to welcoming Chinese premier Xi Jinping to Moscow. The announcement came from a top Chinese diplomat in Russia, who said his country’s ties to Moscow could not be influenced by other countries. This also comes after Putin announced the suspension of Russian participation in a nuclear-arms treaty with the US, a mark of the worsening diplomatic relations between Russia and the US.

China also expressed concern over a Japanese military buildup, with a senior diplomat criticising his Japanese counterpart for Japan’s adoption of a “Cold War mentality” in the first formal security talks between Japan and China in four years. The talks were meant to ease tension between the two countries, as Japan is concerned that Beijing would resort to military action to take Taiwan in the wake of Russia’s aggression on Ukraine.

A lot about jobs - layoffs, end of WFH, 4-day workweek

• Uber to cut employees in “more rigorous” performance reviewsHowever, the decision was not made due to poorer financial results but to “ensuring the talent bar remains very high”. Uber has also mentioned it will be maintaining its headcount by rehiring for affected positions after the reviews and layoffs. Uber’s fourth-quarter results on February 8 showed revenue of USD8.6 billion, a 49% increase year-on-year, with gross bookings growing 19% as well. The company also expects continued growth in bookings for its first quarter of 2023.

• McKinsey set to axe 2,000 staffMarking one of the biggest layoffs in the company's history, consulting giant McKinsey will be laying off 2,000 people, with the move expected to focus on support staff who are not client-facing. The company noted it was “re-designing” how its non-client-serving teams operate for the first time in over a decade to better support and scale with the company and will see the centralisation of several roles. McKinsey advises businesses on a variety of matters, including, ironically, layoffs.

• Amazon staff to petition against back-to-office ordersOver 14,000 Amazon employees have expressed confusion, frustration, and anger in a Slack channel after CEO Andy Jassy announced a policy that requires staff to be in the office three days a week starting in May. The channel, created soon after the announcement, advocates continued working from home and gathered anecdotes and research about the benefits of remote work. A poll in the channel also showed almost 80% of the employees would be looking at other jobs due to the policy, which comes with a lack of clarity from upper management. This follows Amazon entering a cost-cutting phase that saw many projects scaled back or shut down, along with 18,000 layoffs.

• Bernie Sanders advocates four-day work week, citing UK successThe US senator is calling for employers in the US to move to a four-day work week “without loss of pay”. This follows a successful pilot programme in the UK, which saw over 3,000 workers reporting numerous benefits from a shorter work week, with over 90% of companies involved planning to keep the four-day work week. The programme found that workers were doing better, with companies making more money. Sanders referenced the programme, saying that “workers must benefit from technology, not just corporate CEOs”.

Shorts:

1. Olive oil + coffee? It’s coming soon. Starbucks launches olive oil-infused coffee drinks in Italy – the Oleato line is also expected to arrive in Southern California in the spring, with the UK, Japan, and the Middle East to see the drinks this year as well. Olive oil is a key component in a Mediterranean diet and reportedly adds an “unexpected, velvety, buttery flavour” to the drinks. Starbucks founder and CEO Howard Schultz called the new olive oil-coffee line “a transformational moment” in the company’s history.

2. Steven Spielberg won the lifetime achievement award – the director, famous for works such as the Indiana Jones series and Jaws, picked up the award at the Berlin Film Festival. He is currently working on an HBO series titled “Napoleon”, a script left unfinished when Stanley Kubrick passed away in 1999.

5. FOR YOUR EYES 📺

1. The Turkey earthquake turned a flat olive field into a deep valley.

2. Eclipse happens in 2 instances: 1) when Earth is between the sun and the moon (lunar eclipse) and 2) when the moon is between Earth and the sun. When the sun is between the moon and Earth, it’s game over.

1. Watch an iceberg flip, sending two ice climbers into the cold sea. Fortunately, they survived.