☕️ School caning rules: who can cane, who can be caned

1. MARKET SUMMARY 📈

Bad start to the year for Bursa investors — Jan 2025 was the worst first month of the year in 3 decades since 1995, as the benchmark FBM KLCI declined 5% month-on-month. Fret not - February historically is positive.

2. NUMBERS AT A GLANCE 🔢

966 startups shut down in 2024, marking a 25.6% increase from the 769 that closed in 2023, according to valuation software company Carta. This trend reflects the aftermath of the overfunded boom of 2020 and 2021, with many startups unable to sustain themselves. The numbers specifically track US-based companies that were Carta customers and closed due to bankruptcy or dissolution, indicating a continued tough landscape for startups heading into 2025.

6,266 banks and building society branches have closed since January 2015, at an average rate of 53 per month, according to the consumer group Which?. Lloyds Banking Group plans to shut another 136 branches by March next year, citing a shift towards digital banking. The decision comes as in-person transactions have dropped by an average of 48% over the past five years, with more customers opting to use mobile services for payments, the bank explained.

Hedge funds have charged USD1.8 trillion (RM7.96 trillion) in fees from 1969 to December 2024, according to data from hedge fund investor LCH Investments. Over the past 55 years, hedge funds have kept roughly half of the profits they make from trading, with top-performing hedge funds taking around 34.3% of their gains before fees. The top 20 performing hedge funds tend to charge higher fees but offer better returns and experience fewer outflows, the report notes. Damn, we’re definitely in the wrong business. Help us stay in this ‘wrong’ business’ - sapot us here!

3. IN MALAYSIA 🇲🇾

Reform Friday

Four new auditing guidelines expand NAD to cover any entity that receives public funds
PM Anwar Ibrahim announced four new auditing guidelines by the National Audit Department (NAD) that will expand the scope of auditing the management of public money and boost audit recommendations to any entity that receives public funds. The four new guidelines are -

• The guidelines for the audit of the management of government companies;

• The ‘Follow the Public Money Audit’ (FPMA) guideline — provides powers to the Auditor General (AG) to audit companies that receive public funds if the AG deems it necessary for the public interest;

• The guideline for follow-up audit;

• The Auditor General’s certification guideline for financial statements.

NAD also launched the e-SelfAudit system which acts as a tool to promote accountability, transparency, and good governance in GLCs. The system is one of the eight existing components under the NAD's Service Digitalisation project. Although Putrajaya claimed that the system was internally developed, it stated that the Government ‘took views’ of strategic partners such as Deloitte, Ernst and Young and PricewaterhouseCoopers. When will Putrajaya start not to trust these Big 4 firms too much? For example, Deloitte was at the centre of the 1MDB corruption scandal where both the firm and the Malaysian Government agreed to an out-of-court settlement of RM324 mil in 2021. On a separate matter, while it did not happen in Malaysia, PwC has been involved in a tax leak scandal in Australia, which some say is not isolated to that country. The scandal involves PwC leaking confidential government tax plans to clients.

About Education

• All schools to become one session
  Education Minister Fadhlina Sidek announced that her ministry aims to achieve 100% conversion of all schools to a one-session school system before the end of the decade. At the moment, 9,000 out of over 10,000 schools nationwide have already implemented a uni-session system. Fadhlina acknowledges there are still challenges to unifying the school system, mainly due to insufficient schools, dilapidated schools, locations and the management of the schools themselves.

• No caning for female students
  Fadhlina also announced that moving forward, the caning will no longer be gender-neutral as the punishment cannot be imposed on female students. On top of that, implementing the punishment needs to be subject to strict guidelines - only can be administered by headmasters/teachers with authority and not being carried out publicly or at school assembly sites. Can anyone sue their teacher for what happened 20 years ago? Asking for a friend.

Khazanah declared RM5.1 bil profit
The nation’s sovereign wealth fund, Khazanah, posted a RM5.1 bil profit from operations in 2024, a 13.4% decrease compared to the profit recorded in 2023. The weaker performance was attributed to the delayed impact of higher interest rates and a tough financing and exit environment.

However, its net asset value (NAV) rose to RM103.6 bil in 2024, up from RM84.8 bil in 2023, reflecting a significant increase of RM18.8 bil. Khazanah MD Amirul Feisal Wan Zahir added that 2025 will not be an easy year as higher-for-longer US interest rates and volatile trade policies will be a treacherous path to chart through. Thus, Khazanah will bank on domestic investments and readjust its portfolio so that more than 60% of its investments are based in Malaysia. In 2024, close to 58% of Khazanah’s were local.

Read the full announcement here.

Shorts

1. Timor Leste ASEAN permanent membership expedited

   Malaysia is not sitting still in its role as the ASEAN chairman as Kuala Lumpur has contributed USD100,000 in total to the Timor Leste unit at the ASEAN Secretariat in Jakarta, Indonesia, to expedite Timor Leste’s permanent membership into this 10-member nation bloc. Timor Leste was recognised as an ASEAN observer state and joined the ASEAN Regional Forum in 2005 before officially applying for membership on March 4, 2011. View our new neighbor soon on maps here.

2. JPA scholarship open for applications Feb 3 to 28

   JPA has announced the anticipated 2025 Yang di-Pertuan Agong Scholarship (BYDPA) and is now open for applications from February 3 to 28. The prestigious scholarship is available to full-time master’s and doctor of philosophy students at both local and international universities. Fields eligible for the scholarship include science, technology, engineering, and mathematics (STEM), economics, law, Islamic finance, and artificial intelligence (AI). For more information, click here. On average, less than 20 people receive this scholarship per year, where all Malaysians under the age of 35 can apply.

3. IHH Healthcare claiming RM5.7 bil damages against Japanese drugmaker

   IHH Healthcare Bhd is making a RM5.7 bil damage claim against Japanese drugmaker Daiichi Sankyo Co Ltd as the latter prevented the former from purchasing a stake in India-based Fortis Healthcare in 2018. In 2018, IHH terminated its open offer to buy an additional 26% stake in Fortis Healthcare after a court ruling ordered the status quo to be maintained after Daiichi filed a contempt plea against Fortis Healthcare.

4. AROUND THE WORLD 🌎

US backtracking on Trump’s Gaza plans after global outcry
Trump’s mention of taking over and “cleaning-up” Gaza on Tuesday had sent the world into an uproar of protests and condemnation, and so yesterday, the US administration appeared to walk back the proposal.

Secretary of State Marco Rubio made a statement that said that the idea “was not meant as hostile”, describing it as a “generous move”. Meanwhile, the White House Press Secretary Karoline Leavitt later said Washington would not fund Gaza’s reconstruction after more than 15 months of war between Israel and Palestinian group Hamas. She added that the US involvement does not mean that American taxpayers will be funding the effort, and that Trump wanted Palestinians to be only “temporarily relocated” out of Gaza. However, he does expect the US partners in the region, particularly Egypt and Jordan, to accept Palestinian refugees, temporarily, so that they can rebuild their home.

A revisit to Trump’s proposal and his words appears to imply that he is not going to “rebuild Gaza” for the Palestinians though. More statements from him yesterday saying that the Gaza Strip would be turned over to the US by Israel at the conclusion of fighting, and by then the Palestinians 'would have already been resettled in far safer and more beautiful communities, with new and modern homes, in the region'.

Israel’s Defence Minister Israel Katz supported the idea and said that “Gaza residents should be allowed the freedom to leave and emigrate, as is the norm around the world” and called for countries who have opposed Israel's military operations in Gaza to take in the Palestinians, adding that those countries are “legally obligated” to allow any Gaza resident to enter their territories.

Sounds like an episode of gaslighting the world, and particularly the American taxpayers, again.

Philippine VP Sara Duterte impeached over allegations including plot to kill President Marcos
The political rift between political dynasties Marcos and Duterte in the Philippines is getting wider, following the impeachment of VP Sara Duterte on a range of accusations, approved by the legislators in the House of Representatives many of whom are allies of the President.

The impeachment complaint against the vice-president focused on a death threat she allegedly made against the president, his wife and the House speaker last year. However, Duterte said that she was merely “expressing concerns for her own safety”. Other allegations for the impeachment include irregularities in the use of her office’s intelligence funds and failure to stand up to Chinese aggression in the disputed South China Sea.

Before they took office, both of them ran together in 2022 on a campaign battle cry of unity in a deeply divided Philippines. Although both are the offspring of different former leaders accused of separate human rights violations, their regional bases of support combined to give them landslide victories. Sara Duterte didn’t immediately comment on her impeachment, but her brother, representative Paolo Duterte, said it was “a clear act of political persecution.”

Pollution threats

Scientists discovered lung cancer among non-smokers caused by air pollution 
A new study published in the Lancet Respiratory Medicine journal on Tuesday has shown that air pollution is fuelling the rise of adenocarcinoma, a most common form of lung cancer among non-smokers, and has become predominant among women in 185 countries. Lung cancer is the most common form of the disease, with 2.5 mil people diagnosed in 2022. Adenocarcinoma accounts for 53% to 70% of cases of lung cancer among people who have never smoked worldwide, with the highest levels of adenocarcinoma linked to air pollution being detected in East Asia, particularly China.

UN warns of air pollution’s toll on young children in East Asia, Pacific 
UNICEF has reported that more than 100 children under the age of five die each day in East Asia and the Pacific from air pollution-related causes, translating to nearly 40,000 deaths annually among children under five in the two regions.

The exposure of toxic air outside and inside the home is said to be the source of pollution. Pollution inside the home comes from fuels used for cooking and heating, such as wood and dried dung. Air pollution from outside the home include sources like factories and power plants, emissions from transportation as well as forest fires and agricultural burning. These emissions release toxic compounds such as carbon monoxide, nitrous dioxide and ozone. The most dangerous particle called PM2.5 is the one that goes deep inside the lungs and into the bloodstream. More than 325 mil children live in countries where the average annual PM2.5 level exceeded World Health Organisation guideline levels by over five times. Globally, nearly 2,000 children die every day from health problems linked to air pollution, which is now the second-biggest risk factor for early death worldwide.

Shorts: 

1. No more transgender women competing in female sports

   Transgender women are now being prevented from competing in female sports categories in the US, following an executive order signed by President Trump, which provides guidance, regulations and legal interpretations regarding the matter. The order also includes the 2028 Olympic Games in Los Angeles, where Trump plans to deny visas for transgender Olympic athletes trying to visit the US to compete at the games. Republicans say it restores fairness to sports but LGBT advocacy and human rights organisations have described the move as discriminatory.

2. Some countries cautious with DeepSeek data practices and user info
   South Korean authorities are wary over the data insecurities of China’s newly debuted DeepSeek AI, leading them to block the app on national work devices, especially those in the military sector. South Korea, France and Italy, have submitted enquiries to DeepSeek about their data practices and handling of user information, but there was no response from the Chinese. Last week, Italy launched an investigation into DeepSeek's R1 model and blocked it from processing Italian users' data, while Australia banned DeepSeek from all government devices on the advice of security agencies.

3. World's oldest iceberg to crash in Antarctica 
   There is such a thing as a “megaberg”, a whopping chunk of the world's largest and oldest iceberg named A-23-A. The iceberg broke away from the Antarctic shelf in the 1980s, and scientists now report that it is drifting towards South Georgia, a British overseas territory island in northern Antarctica. It measures 40 meters tall and weighs an estimated 1 tril tonnes. If it crashes into South Georgia, it would be devastating to the biodiversity as the island is often referred to as the "Galapagos of the South" because of its rich abundance of wildlife.

5. FOR YOUR EYES 📺

1. As ASEAN tries to admit its new member Timor Leste, let’s understand the war happening in our backyard that has been unresolved for many years.

2. Creative level: 999. Meet Randimals — a new children's story of hybrid animals. Hork? Horse + Shark. B-Rex? Well, bee + T-Rex. Check out the site here.

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