Discover more from The Coffee Break
☕️ Former PM Muhyiddin to be charged again today
MACC officer arrested over bribery allegation in Jana Wibawa programme. Legal assisted suicide in Switzerland - learn more. 16th largest US bank collapsed.
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1. MARKET SUMMARY 📈
2. NUMBERS AT A GLANCE 🔢
USD876 million (RM3.96 bil) is needed this year to provide basic food and shelter for nearly 1 million refugees living in one of the world's largest refugee settlements, Rohingya camps in Bangladesh, according to United Nations officials. However, there is a shortfall of more than 50% in funding the amount amid growing donor fatigue over other urgent demands.
11.88 mil — the number of mobile subscribers of Maxis as of the end of 2022, making it the second largest mobile operator in Malaysia in terms of subscribers after the newly merged CelcomDigi, which had 20.21 mil subscribers.
Some Selangor folks are a little cheeky. Selangor Islamic Religious Council chairman Abdul Aziz Mohd Yusof revealed that the state recorded 1,617 polygamous marriages without permission from 2019 until last year. That is double the amount of the number of applications who applied for polygamy registration — 859 cases — in the same period. FYI — it is an offence to have polygamous marriages without consent under Section 124 of the Islamic Family Law Enactment (Selangor State) 2003. You may be fined up to RM1,000 or imprisoned for up to six months, or both.
Read: Understanding polygamy in Islam.
3. IN MALAYSIA 🇲🇾
Former PM Muhyiddin Yassin charged with abuse of power and money laundering
+1 member to the court cluster as former PM Muhyiddin Yassin was charged with four counts of abuse of power for using his position as the then-PM and two more charges of money laundering at the Sessions Court in Kuala Lumpur. Muhyiddin was alleged to have obtained gratification (received) RM232.5 million in bribes from corporate entities. He pleaded not guilty to all the charges. Sessions Court judge Azura Alwi set the bail at RM2 million, which Muhyiddin settled 90 minutes later. Phew. He will be charged again today.
Four charges of abuse of power, he was charged as the country’s PM and president of Bersatu for:
Obtaining gratification of RM200 mil from Bukhary Equity;
Obtaining gratification of RM1 mil from Nepturis;
Obtaining gratification of RM19.5 million from Mamfor; and
Obtaining gratification of RM12 million from Azman Yusoff for Bersatu.
For the money laundering charges, two counts of received money from unlawful activities amounting to RM195 million from Bukhary Equity. In Jana Wibawa-related news, MACC said it arrested four individuals, including one of its own officers, for allegedly soliciting and taking bribes amounting to RM400k to avoid an investigation involving the Jana Wibawa programme
Muhyiddin accused Pakatan Harapan (PH) chairman Anwar Ibrahim and Barisan Nasional (BN) chairman Ahmad Zahid Hamidi of trying to put him in jail because they were afraid of him. He also queried why didn’t MACC investigate the two coalition leaders for political funding. Muhyiddin also accused former finance minister Lim Guan Eng of revoking Yayasan Al-Bukhary’s tax exemption, which the latter denied. Lim had asked Muhyiddin to retract his statement or face legal action. By the way, there is no mention of Yayasan Al-Bukhary in the charge sheet.
Also — if he is convicted of the money laundering charges (of RM195 mil), he may likely beat Rosmah’s record of RM970 mil by RM5 mil — RM975 mil. Under the AMLA charges, he faces a term of not more than 15 years of jail time and a fine of up to five times the amount of the illegal proceeds or RM5 million, whichever is higher.
The flood situation in Johor worsened again
The number of flood victims at temporary relief centres (PPS) in Johor has risen again to 42,706 as of yesterday afternoon from 42,638. Batu Pahat and Muar saw an increase in flood victims. The water levels of four rivers in Batu Pahat were still above the danger mark. The situation in Melaka, Pahang and Sarawak remained the same.
The National Integrated Immigration System (NIISe) fiasco
According to The Star, the government has cancelled the RM1 bil contract for the National Integrated Immigration System (NIISe) project that was awarded to IRIS Information Technology Systems Sdn Bhd (a subsidiary of Iris Corporation Bhd) because of delays. The project was set to replace the 20-year-old myIMMs system used by the Immigration Department. Only 10% of the project has been completed despite being awarded in 2020 and is classified as a ‘sick’ project.
Meanwhile, Home Minister Saifuddin Nasution Ismail has kept mum on the cancellation, only saying that the government has yet to decide on the fate of the project and the company. Just last month, Iris Corp entered into a share sale agreement to sell 80% equity interest in IITS for RM70 million cash to Tass Tech Technologies Sdn Bhd, which is wholly owned by Tass Tech (M) Sdn Bhd (TTSB). Punting opportunities incoming? Disclaimer — Not Financial Advice.
Electronics manufacturing services provider Cape EMS Bhd went to the moon on Friday during the opening, with a premium of 52 sen or 57.8% over the initial public offering (IPO) price of RM0.90. Its share price closed at RM1.50, expanding its market capitalisation to RM1.39 bil. Cape EMS was the best-performing Main Market IPO stock on its maiden trading day since 2022. How many of you joined in the fun?
Selangor’s Sultan Sharafuddin Idris Shah cautioned preachers against touching on politics and driving a wedge between Muslims or people of other communities. His Majesty also warned preachers against inciting hatred or contempt towards any religion and the government.
Communications and Digital Minister Fahmi Fadzil said the move by several states to prohibit politicians from holding talks in mosques and surau is seen to be helpful in easing the country’s political climate during a Town Hall session at RTM Johor yesterday.
Is the current government infringing on the people’s right to gather? The Royal Malaysia Police (PDRM) has opened an investigation paper in connection with the organising of an assembly and a march — Women’s March — in front of Sogo Complex and Dataran Merdeka. The march was meant to commemorate Women’s Day and meant to champion women’s rights.
4. AROUND THE WORLD 🌎
Iran, Saudi Arabia restore diplomatic ties brokered by rising superpower
Saudi Arabia and Iran both announced that they have restored diplomatic ties and will reopen their embassies in their respective capitals within two months. This is a step towards peace in the Middle East region. Both historical rivals have been engaged in war — not directly, but through proxy wars, primarily in the devastating 8-year war in Yemen and also in Lebanon and Syria.
The undisclosed discussion occurred in Beijing from 6 - 10 Mar and was announced last Friday. China’s role as a mediator between the two regional rivals was not made publicly known before the announcement - this is a diplomatic win for China (a slap in the face to the US) in the region where geopolitics was once dominated by the US, whose relationship with the Saudis have soured over the years. China has also stepped in to mediate peace talks between Russia and Ukraine recently, but that hasn’t achieved anything of significance yet. The world is shifting towards a multipolar one, no longer dominated by the US.
First assisted suicide of a prisoner recorded in Switzerland
A prisoner in Switzerland, whose identity was not disclosed, ended his life on 28 Feb with the help of an assisted suicide organisation called Exit International, which was founded in 1997. Zurich’s Justice Department said euthanasia could not be denied to a prisoner simply because they have been sentenced or serving their sentence behind bars.
Assisted suicide, also known as euthanasia, is reserved for those suffering serious illness or loss of physical capacity causing “unbearable suffering” under the directives of the Swiss Academy of Medical Sciences (SAMS’s guidelines below, if you are curious about assisted suicide process). Euthanasia is more common than we think - it’s been made legal in Switzerland since the 1940s, and assisted suicides represent around 1.5% of the 67,000 deaths recorded on average each year.
Read: Guidelines: Management of dying and death by SAMS
Another bank failure in the US - its 16th-largest bank collapsed
Following the voluntary liquidation of crypto-focused bank Silvergate bank, another Silicon Valley Bank (SVB) shut down and was placed under receivership with the Federal Deposit Insurance Corporation (FDIC, our equivalent of PIDM). This marks the biggest bank failure since the 2008 financial crisis and the second-largest in US history after Washington Mutual collapsed in 2008. As of the end of December, the bank had USD209 bil in assets and more than USD175 bil in deposits. SVB has a long history of being the go-to bank for tech companies, claiming that it banked nearly half of all US-venture blacked startups.
What happened? Similar case as Silvergate — it got hit by a failure to manage its interest rate risk. This is an early indication of cracks starting to show arising from the Federal Reserve’s aggressive interest rate hike since last year. When a bank takes deposits, it can either lend it out or invest in fixed-income securities like bonds. Bond prices and interest rates move in an inverse direction - when interest rate rises, bond prices fall. Most of the bonds bought by SVB occurred at the peak in 2021, and the bank did not hedge it leading to massive losses as the Fed raised rates aggressively last year. Last Thursday, the bank announced that it lost USD1.8 bil from the firesale of USD21 bil of its bond portfolio and said it would raise about USD2.3 bil from investors. This spooked the tech community and triggered a bank run.
Who’s affected? Largely tech companies. Concerns are high now that these companies wouldn’t be able to make payroll next week, especially tech startups. Roku made an SEC filing saying that USD487 mil or 26% of its cash balance sits with SVB - list of other affected firms here.
What happens now? Depositors with up to USD250,000 deposits with SVB would be safe as they are insured under FDIC - they will receive all their cash on Monday. However, this is a small proportion in SVB’s case — a whopping 96% of its USD175 bil deposits aren’t insured by the FDIC. An estimated 30-50% of the uninsured amount might be returned to investors by US regulators. The remaining balance will be paid in dividends from the sale of SVB assets. As for SVB, it awaits whether regulators will bail it out or a white knight will come to their rescue. A tweet suggested that Elon Musk buy SVB and combine it with Twitter to create a digital bank, and Musk replied he’s open to the idea. So much on this dude’s plate already, but with a networth north of USD170 bil, USD2 bil+ bailout of SVB is just a tiny dent to his piggy bank.
Is the US financial system on the brink of collapse? Two back-to-back failures of banks definitely raised the alarm. It’s important to point out that the customer base of both Silvergate and SVB are highly concentrated — the former towards crypto and the latter towards tech companies, unlike the larger banks with more diversified customer bases.
The Kpop agency war has ended — BTS agency Hybe announced that it would withdraw its acquisition of SM Entertainment, citing an overheating market due to competition with Kakao. It also said that it has reached an agreement with Kakao to “cooperate on platform-related matters” in the future.
Two of Southeast Asia’s largest tech companies embarked on a new round of layoffs. Following a surprise profit last week, Shopee parent Sea is cutting about 500 jobs at Shopee in Indonesia. It already laid off more than 7,000 people last year. Likewise, GoTo announced that it will cut 600 roles, following 1,300 jobs that were cut last year.
FC Barcelona has been charged with corruption over payments the club made to Enriquez Negreira, a former VP of Spain’s referee committee, totalling EUR7.3 mil. The alleged payment was made for Negreira to provide the club with advice on topics relating to referees.
5. FOR YOUR EYES 📺
How does night vision work? There are a few methods: image intensification (the green image we always see in movies), image enhancement, thermal imaging, and active illumination.
How does a boomerang work?