☕️ Finance Minister II: Khazanah to continue investing in startups despite FashionValet issue

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

RM5.48 bil is the total amount Khazanah Nasional Bhd has amassed so far this year from dividend payouts and stake disposals. This includes RM2.8 bil in dividends from eight public listed companies (PLCs) and RM2.37 bil from divesting shares in three PLCs, based on off-market data and estimated discounts. Durian runtuh for Khazanah. A drop in the ocean compared to the RM27 mil loss arising from the Fashion Valet investment. Investment losses should be seen as part of an entrance fee to the capital market. If everyone reaps profits on a risk-free basis — are we really enterprising?

USD1.02 bil (RM4.57 bil) is the value of South Korea’s instant ramyeon exports from January to October this year, marking the first time exports have exceeded the US$1 billion mark. This represents a 30% increase from the same period last year. The amount exported equates to approximately 2.07 bil instant noodles, enough to circle the globe 2,600 times. Officials project that ramyeon exports could reach USD1.2 bil by the end of the year.

432 billionaires, or 36%, have dropped off China’s rich list since 2021, as the number of billionaires in the country fell from 1,185 to 753, according to the annual Hurun rich list. The decline reflects the toll of economic difficulties and government crackdowns. Many of China’s wealthiest individuals have either chosen to lie low or leave the country, often finding covert ways to move their wealth abroad.

3. IN MALAYSIA 🇲🇾

Sabah, Negeri Di Bawah Bayu Koruptor
The whistleblower behind the latest Sabah corruption scandal released another snippet of a longer video, depicting the whistleblower (a businessman) and Tempasuk assemblyperson Mohd Arsad Bistari. The conversation between the two revolved around the whistleblower’s project that was being blocked by allegedly CM Hajiji Noor and the ‘old team’. When asked by the whistleblower whether other projects were being blocked too, Arsad stated that another RM70 mil project in Tenom, Sabah was also rejected, where Arsad allegedly will pocket a 20% ‘commission’. The ‘old team’ that Arsad was referring to consists of CM Hajiji Noor and Sabah State Finance Minister Masidi Manjun.

In a separate event regarding the same matter, Kemabong assemblyman Rubin Balang said that all was good and no hanky panky things were happening at his end. The statement was made as Rubin was also featured in a previous video leaked by the whistleblower, where both of them negotiated a business deal in relation to a firm belonging to the former’s children. The whistleblower claimed that no bribes were given and it was a business discussion that was not finalised. Sabah has about 11 tril cubic feet (tcf) of gas and 1.5 bil barrels of oil in its reserves, representing about 12% and 25% of Malaysia’s gas and oil reserves. We can safely say that Sabah is not poor from the get-go. Unfortunately, Sabah has among the lowest GDP per capita in 2023, where the state recorded RM31,147, well below the country’s GDP per capita of RM54,612. Sabah’s neighbour, Sarawak, rakes in RM72,411 GDP per capita. Why does Sabah remain poor?

MACC is not done yet with FashionValet
After bringing in 14 individuals for questioning, MACC Chief Commissioner Azam Baki said that investigations into the RM47 mil cash flow received by the founders of e-commerce platform FashionValet Sdn Bhd (FashionValet) is far from over and another four individuals will be called in to record their statement. To date, MACC has frozen several of the couple's private and company bank accounts containing about RM1.1mil on Nov 6.

In Parliament, Finance Minister II Amir Hamzah listed the Covid-19 pandemic, the changing trend of e-commerce platforms and difficulties in raising additional funds by the founders among the reasons why FashionValet bungkus. Despite the loss incurred from FashionValet’s investment, Amir Hamzah told the Parliament that Khazanah Nasional will continue pursuing new investments in venture capitals and start-ups, with more stringent governance and oversight.

Netflix makin lama makin mahal
Effective immediately, Netflix has announced a price increase for its Malaysian customers, that will affect all packages under its brand. Below are the new prices:

• Basic Plan: RM29.90, a 6.8% increase;

• Standard Plan: RM49.90, a 10.9% increase;

• Premium Plan: RM62.90, a 14.4% increase;

• Mobile Plan: RM18.90, a 11.2% increase.

No justification was given for the price hike.

The increase in Netflix’s price may be too much for some until they need to resort to ‘alternative’ ways to earn money. Recently, the Malaysian Communications and Multimedia Commission (MCMC) has been investigating a student from a public institution of higher learning for allegedly selling self-produced pornographic videos on the platform X. The male student, who has over 100,000 followers on X, is able to earn up to RM3,000 a month by pocketing in RM150 per video. The male student is being questioned under Section 233(2) of the Communications and Multimedia Act 1998, which carries a maximum fine of RM50,000 or imprisonment for up to one year, or both.

Women killed by toppling container
Straight from a scene from the Final Destination movie -  a container that toppled off from a lorry, after the driver of the lorry failed to control its vehicle following a sharp left turn, has unfortunately crushed onto a Perodua Bezza car at the traffic light junction in Jalan Bukit Tengah in Penang. The driver of the car, 21-year-old Lee Zi Rou died at the scene.

But, before she passed away, she managed to call her mother, Ms Lim, stating that she was in excruciating pain. Ms Lim said, quoting her - ‘She called at 9.24 am and my daughter had died by 9.30 am’. Another car was also hit by the container and the 25-year-old driver of the second vehicle was left seriously injured. As for the lorry driver, a remand order was issued on the 51-year-old driver and he may face up to 10 years of jail sentence, up to RM50,000 fine and driving license disqualification for causing death by reckless driving.

Shorts

1. Finance Minister II Amir Hamzah enlightened the Parliament that the accountant-general’s department holds a total of RM12.8 bil in unclaimed money. At the moment, Putrajaya is exploring a proposal to use updated data from the National Registration Department (JPN) to locate rightful owners or heirs and directly credit the funds into their accounts. For your information, the Government will hold any unclaimed money for a period of 15 years in a Consolidated Trust Account. Beyond the period, the Government can consider the money as revenue.

2. With the North East Monsoon (MTL) coming soon, which brings heavy downpours to the east coast states of Peninsular Malaysia, Education director-general Azman Adnan stated that a total of 883 schools were flagged as high flood risk across the country. From the figure, about 31% of the schools are situated in the east coast states of Kelantan, Terengganu and Pahang. Normally schools are repurposed as temporary shelters for flood victims during monsoon season. If the schools also banjir, where people should go to get shelter? Climate change is not fake news and the Government need to be proactive in this issue.

4. AROUND THE WORLD 🌎

Spotlight on the Sudan war
The existential war between Sudan’s army and paramilitary Rapid Support Forces (RSF) that erupted in April 2023 has plunged the country into the world’s worst internal displacement crisis, with at least 14 mil of its people uprooted from their homes.

Here are the major key points to help us understand and visualise this horrific war:

• The warring sides exchanged a total of 8,942 attacks averaging 16 a day, mainly in the regions of Khartoum, Gezira state and North Darfur and spread in the rest of Sudan. Imagine a family living in the midst of a constant, fiery battle.

• At least 24,000 people have been reported killed across Sudan, with the actual death toll likely much higher especially when it accounts for deaths due to diseases, malnutrition and lack of adequate healthcare

• The conflict has fragmented Sudan into 3 divisions between the army, RSF and several smaller armed groups.

• About 30% of Sudan’s 48 mil population – more than 14 mil people – have been forced to flee their homes due to the war

• At least 3 mil people have crossed international borders, placing immense strain on neighbouring countries, such as Chad, South Sudan, and Egypt

Despite numerous attempts to negotiate a ceasefire, the violence shows little sign of abating, leaving millions in urgent need of assistance. The raging violence is also forcing Sudanese women to take their own lives, out of fear of being raped by violent army forces. Survivors of sexual violence are running away and hiding because their families have threatened to end their lives to wash away dishonour. The UN reports of mass killings and horrific sexual violence in Gezira show that women and girls continue to be at the centre of horrendous suffering.

​​Tech race:

1. ChatGPT is killing Chegg

   Chegg, a popular education app that is widely used by students worldwide to “cheat” on their assignments appears to be losing big to AI, with its market cap collapsing from USD14 bil in February 2021 to just USD191 mil in November 2024, including a 49% single-day drop in May 2023. The heart of Chegg’s operation relies on 70,000 human experts in advanced maths, science, technology and engineering degrees in India, working 24/7 to supply answers to questions posted by its subscribers. ChatGPT on the other hand is simpler — one can simply upload a screenshot for the AI to give a solution. A survey of college students by investment bank Needham found 30% intended to use Chegg in the current semester, down from 38% in the spring, and 62% planned to use ChatGPT, up from 43%. What a bummer.

2. Bluesky attracting more users to leave X after US elections

   More people are leaving X and moving to Bluesky, a micro-blogging site founded by Jack Dorsey in 2019, that has gained a reputation as a refuge for left-leaning users dissatisfied by X’s rightward turn under Musk’s stewardship. Bluesky has reported gaining more than 1 mil new users since the US presidential election, with an increase of about 9 mil users since September. Bluesky’s users now have reached more than 15 mil. Users have cited reasons for the move including Musk’s alliance with Trump and a rise in hateful content on X. Some 115,000 US-based web visitors deactivated their X accounts on the day after the US election, the biggest single-day decline under Musk, according to internet traffic analyser Similarweb.

China battles violent crime in its society, amid its struggle with economic problems
Analysts are saying that China’s economic fatigue could be the reason for more of its people to commit violent crimes out of anger or desperation, following the deadly car-ramming incident at a sports complex in the southern city of Zhuhai that killed 35 and wounded 43. It followed a string of similar crimes as China struggles to revive economic growth, keep people employed and boost confidence since it ended rigid Covid curbs in late 2022. Signs of economic distress have multiplied in China in recent years, from capital flight and emigration to rising joblessness, anger at expensive housing and childcare, and youth cultures glorifying low expectations and rejecting the rat race. Experts believe that it will continue to be a big challenge to the China government, and the country may be tipping “towards a different type of society, an uglier society”.

Shorts:

1. Ben & Jerry's sues Unilever for silencing them from speaking about Gaza

   Ben & Jerry’s ice cream brand has filed another lawsuit against its parent company Unilever, claiming that the company has silenced its attempts to express support for Palestinian refugees, and threatened to dismantle its board and sue its members over the issue. The lawsuit requires Unilever to settle and make a total of USD5 mil (RM22.3 mil) in payments to Ben & Jerry's for the brand to make donations to human rights groups of its choosing. In 2021, Ben and Jerry sued Unilever for selling its business to its licensee in Israel which allowed marketing in the West Bank and Israel to continue. That lawsuit was settled in 2022.

2. Scientists discovered the world’s largest coral in the Pacific Ocean

   At a time of global warming and widespread coral death, one mega-coral is discovered thriving in the Solomon Islands, in the southwest Pacific Ocean. Measuring 34m wide, 32m long and 5.5m high (view it here), the gigantic organism is a complex network of polyps – tiny individual creatures – that have grown over three centuries. It is longer than a blue whale and nearly as long as a Boeing 737-400 aircraft. The discovery reminds us that we need greater protection for the oceans and coral reefs. Only about 8% of the world’s oceans are protected to some degree, and nations in 2022 agreed on a goal to protect 30% of the planet’s land and oceans by 2030.

3. US cruise company offers a 4-year round-the-world voyage to escape Trump presidency

   It appears that Trump’s victory has prompted many despondent Americans to look at moving abroad in order to escape the presidency. An American residential cruise operator Villa Vie Residences is offering a more “attractive” option — it recently announced its four-year “Skip Forward” package that will take passengers around the world on its Villa Vie Odyssey cruise liner. Except that, it costs a whopping USD159,999 (RM717K) per person for a double-occupancy room, while single occupancy will cost USD255,999. The voyage will take passengers to all seven continents, with visits to over 425 ports across 140 countries.

   Meanwhile, meditation app Calm took up a creative 30-second ad space after Trump won the election:

5. FOR YOUR EYES 📺

1. Vietnamese dancer MT Pop won the Red Bull ‘Dance Your Style’ Championship dancing to Punjabi MC’s hit song Mundian To Bach Ke (listen here on Spotify). With his dance moves, he deserved it!

2. 44 Michelin Bib Gourmand for 2025 restaurants in Malaysia. The Bib is an award given to restaurants that offer meals at reasonable prices.

3. AI imagines Malaysia covered in snow — or before climate change gets to us first.

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