☕️ Fuel subsidy rationalisation's first target - Diesel

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

Kuala Lumpur has been ranked the second-greatest city in Southeast Asia in the Oxford Economics Global Cities Index 2024, placing 135th out of 1,000 cities globally. Singapore took the top spot in the region, ranking 42nd globally. Other notable Southeast Asian cities include Bangkok at 192nd, Manila at 256th, and Jakarta at 284th. The Global Cities Index, covering 1,000 major cities across 163 countries, evaluates cities based on five categories: economy, human capital, quality of life, environment, and governance, which are aggregated into an overall score for each city. Which category do you think KL scored the worst on? The answer is at the end of the newsletter.
Read: Key Findings of Global Cities Index

With a population of just 10 mil, Sweden boasts one of the highest proportions of “dollar billionaires” per capita. By 2021, there were 542 “kronor billionaires” (USD91 mil) in Sweden, collectively owning wealth equivalent to 70% of the nation’s GDP, according to an analysis by Aftonbladet. Forbes' 2024 rich list includes 43 Swedes worth USD1 bil or more, which is about four per million people. In comparison, the US has around two billionaires per million people, with 813 billionaires among its 342 million residents. The rise of the new super-rich is attributed to Sweden's thriving tech scene, which has earned the country the reputation as the Silicon Valley of Europe. In the past two decades, the country has produced over 40 unicorn start-ups. Some of tech companies from Sweden: Spotify, Skype, Candy Crush creator King, Minecraft creator Mojang (acquired by Microsoft in 2014 for USD2.5 bil), and buy-now-pay-later giant Klarna.

Colombia's military has reported the loss of over 5 mil of bullets, thousands of grenades, and several missiles, according to President Gustavo Petro. This came to light during surprise inspections at two military bases—Tolemaida and La Guajira—on 12 February and 1 April, respectively. At Tolemaida, over 808,000 bullets and nearly 10,000 grenades were missing compared to official records. At La Guajira, discrepancies included nearly 4.2 mil bullets, over 9,300 grenades, two Spike missiles, 37 Nimrod missiles, and 550 rocket-propelled grenades. At least it’s not missing military ships.

3. IN MALAYSIA 🇲🇾

Fuel subsidy rationalisation has begun
The Madani government is starting by pulling back blanket subsidies for diesel in Peninsular Malaysia. Diesel prices will be moved closer to market levels, away from the current subsidised rate of RM2.15 per litre. Implementation in Sabah and Sarawak will be delayed due to their heavy reliance on diesel for daily transportation. PM Anwar Ibrahim announced that the subsidies would continue for traders using diesel-powered commercial vehicles; public transport such as buses, taxis, and 23 goods transport vehicles under the Subsidised Diesel Control System (SKDS); certain categories of fishermen. Cash aid will also be provided to eligible small traders and farmers with diesel-powered vehicles. The move is to ensure that subsidies benefit lower and middle-income groups instead of the wealthy and the 3.5 mil foreigners in the country. The govt estimates to save RM4 bil annually from this. The implementation timeline is yet to be given but retail prices of RON97, RON95 and diesel will remain unchanged until May 29.

Perodua marching towards its first EV model by 2025
Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is progressing towards launching its first electric vehicle (EV) model, the MyVI Conversion, with the aim to release it by the end of 2025. The EV's price is projected to be between RM50,000 and RM100,000. The prototype, showcased at the Malaysia Autoshow 2024, features a power bench, power converter, and styling developed primarily in Malaysia in collaboration with an Australian company. The power bench development involved partnerships with Universiti Tenaga Nasional, Universiti Kuala Lumpur, and Universiti Putra Malaysia, which started back in September 2022. This collaboration has helped Perodua enhance its expertise in EV technology. Perodua plans to engage over 60 local vendors for mass production and is considering expanding its infrastructure, either by building a new factory or partnering with other entities. The goal is to develop EV-related products not only for Perodua but also for other manufacturers. Hopefully, the EV infrastructure will also improve by then.
Read: EV or Fuel powered car in Malaysia?

Business

1. Pos Malaysia is shedding non-core businesses

   Pos Malaysia Bhd is selling its ship chartering unit, PNSL Bhd, to SWA Shipping Sdn Bhd for RM123.21 mil as part of its strategy to divest non-core businesses. This sale includes settling outstanding intra-group trading debts and advances owed to Pos Malaysia in pursuit of improving cash flow and reducing interest expenses. Pos Malaysia reported a narrower quarterly loss of RM19.69 mil for 1QFY2024, down from RM27.66 mil a year ago. The company has been unprofitable since FY2019. Of the sale proceeds, RM55.61 mil will be for the equity interest in PNSL, and RM67.60 mil will settle intra-group debts. Pos Malaysia plans to use RM92.94 mil of the proceeds for working capital and RM27.81 mil to repay bank borrowings, which were approximately RM505 mil as of December 31, 2023.

2. A turnaround for the glove manufacturers?

   • Hartalega Holdings Bhd reported a net profit of RM15.12 mil for 4QFY2024, a turnaround from a net loss of RM334.97 mil a year ago, aided by a provision reversal of a foreign subsidiary in bankruptcy during the quarter (RM18.9 mil). If not for this one-off provision reversal, Hartalega would still be in the red. Revenue for the quarter rose 2.4% year-on-year (y-o-y) to RM529.83 mil from RM517.55 mil due to higher average selling prices from currency movements.
     View: Hartalega Holdings Bhd Q4 2024 Financial Report

   • Kossan Rubber Industries Bhd posted its third consecutive quarterly profit of RM31.45 mil for 1QFY2024, up from a net loss of RM24.25 mil in 1QFY2023, driven by higher sales volume and lower natural gas prices. Revenue for the quarter climbed 14.4% y-o-y to RM451.63 mil from RM394.71 mil. The company also expects a slight increase in raw material prices and fluctuating natural gas prices.
     View: Kossan Rubber Industries Bhd Q1 2024 Financial Report

Shorts

1. Perlis MB’s son and ex pol-sec to be charged

   The son of Perlis Menteri Besar Mohd Shukri Ramli and his former political secretary are set to be charged in separate courts on May 23 (today) for submitting false claims totalling RM600,000. MACC will charge the MB’s son at the Kangar Sessions Court in Perlis, while the former pol-sec at the KL Sessions Court under Section 19 of the MACC Act 2009. Mohd Shukri was also questioned by MACC for alleged power abuse related to infrastructure projects and released on bail.

2. Heirlooms said to be Hang Tuah’s 600-year-old keris

   Tun Muhammad Amin Tun Ahmad from Riau, Indonesia, claimed to be the 11th heir of the legendary Admiral Hang Tuah and has refused offers of up to RM1 mil for the 600-year-old “Keris Sudang” and “Keris Hukum” along with other heirlooms. Despite attempts to buy from various parties, he considers them priceless family heirlooms and has no intention of selling them. The two keris were handed to Melaka Chief Minister Ab Rauf Yusoh for display at the upcoming Hang Tuah Exhibition, along with other family relics, heirlooms, and his family tree.

4. AROUND THE WORLD 🌎

Gaza Updates
Israel’s bff, the US, is considering possible sanctions against the International Criminal Court over the arrest warrants of Israel’s top officials. US Secretary of State Antony Blinken suggested he would work with lawmakers on potential sanctions against the ICC. Blinken stated he was “committed” to taking action against the “profoundly wrong-headed decision”. His suggestion comes amid a Republican push to impose sanctions on ICC officials, which may see a vote within the week.

Elsewhere, Norway, Ireland, and Spain will be formally recognising the Palestinian state on 28th May, despite Israel’s warnings that recognising Palestine risks those nations becoming “pawns in the hands of Iran and Hamas”. Al-Jazeera reported that Malta and Slovenia are also expected to make similar announcements. This has led to Israel recalling its ambassadors to Ireland and Norway, with Israeli Foreign Minister Israel Katz declaring Israel “will not be silent”. Currently, 143 countries recognise Palestine as a state.
View: Which countries recognise Palestine?

But what happened to the cease-fire talks? CNN reported that an Egyptian spy single-handedly ruined a potential deal by secretly changing the terms of the deal before passing it between the two sides. Ahmed Abdel Khalek, the intelligence official, made the change by adding more of Hamas’ demands to the framework after Israel had approved the deal. The changes were made in a bid to get Hamas’ approval. Officials from Qatar, the US, and Israel were “blindsided and angered” by the changes. The deal was initially expected to stave off Israel’s assault on Rafah, which is currently ongoing.

SIA flight hits “severe extreme turbulence”, leaving one dead, injuring dozens
Flight SQ321 was bound for Singapore from London when it hit severe turbulence over the Indian Ocean, causing the Boeing 777-300ER to drop about 1.8km in altitude in three minutes. The aircraft had to make an emergency landing in Bangkok. The incident led to the death of 73-year-old British national Geoff Kitchen, who died of a suspected heart attack during the flight. Of the 211 passengers – which included 16 Malaysians – and 18 crew members, 104 were treated, while a further 58 are still warded in Smitivej Hospital, Bangkok. 20 of those 58 are currently in the intensive care unit.

Singapore Airlines CEO Goh Choon Phong has apologised for the “traumatic experience”, expressed his condolences to the family of the victim, and promised that the airline is “fully cooperating with relevant authorities on the investigations”. More than 140 passengers and the crew of the flight have also finally reached Singapore.

As to the turbulence, weather forecasting service AccuWeather said that rapidly developing, explosive thunderstorms near the flight path of SQ321 most likely contributed to the turbulence. BBC Weather’s Simon King shared that most turbulence occurs in clouds where there are up– and downdrafts of wind, such as in thunderstorm clouds.
Learn: What is flight turbulence and why does it happen?

Tech and Business

1. ByteDance buys earbud maker Oladance in USD50 mil deal

   TikTok parent ByteDance acquired Chinese earphone maker Oladance in a USD50mil deal, which marks its latest step towards developing wearable devices as it looks to go beyond smartphones in extending its social ecosystem. Oladance specialises in earbuds that keep users aware of their surroundings, and ByteDance management believes there is potential in turning wearables into a platform for generative AI services. This dovetails with the development of its own AI chatbot, Doubao, which recently surpassed Baidu’s Ernie as China’s most downloaded ChatGPT-style app.

2. New weapon in war - semiconductor chips

   Taiwanese chipmakers ASML and TSMC have ways of disabling their chipmaking machines should China escalate its aggression to a full-scale invasion. Sources shared that ASML has the ability to remotely disable its chipmakers, with the company assuring Dutch government officials who met with the company to raise their concerns. TSMC chairman Mark Liu also hinted during a September interview with CNN that any invader of Taiwan would find the company’s chipmakers to be out of order, with Liu stating that “nobody can control TSMC by force” and that any invasion “will render the TSMC factory non-operable”. As a side note, the Chinese appear to be seeking to dominate the market for less advanced chips, which the US CHIPS Act does not address. China is poised to hold 50% of said market by 2030, leading to the US losing out on the supply chain control it is aiming for.

Shorts:

1. Australian billionaire gets first-hand Streisand effect experience
   Gina Rinehart, the richest woman in Australia, did not want people to see her portrait as depicted by two paintings in the National Gallery of Australia, so she demanded they remove the paintings. However, this has backfired on her in a classic example of the Streisand effect, as Australian media reporting on the matter has pushed her portrait into global headlines, sparking a debate over art and censorship. The Streisand effect, named after singer Barbra Streisand, is said to occur when an attempt to silence, suppress, or stop something backfires, leading to more attention being paid to whatever is being suppressed.

2. South Korea bans TikTok video idolising North Korean leader
   Seoul’s media regulator will be banning the video, which features a viral North Korean propaganda tune, as it paints North Korean leader Kim Jong Un as a “friendly father” and “great leader”, representing a violation of South Korea’s National Security Act. 29 versions of the Friendly Father music video, the latest in Pyongyang’s propaganda machinations, will be blocked. In another example of the Streisand effect, this has led to South Koreans looking up the video.

5. FOR YOUR EYES 📺

1. Ever had a ring stuck on your finger? Here’s a simple way to get it out — no baby oil, no dishwashing soap — just a thread. Warning - only works to remove the physical ring, not the underlying meaning of the ring.

2. As global temperatures continue to rise and disasters get more severe — it’s also timely to learn what constitutes a disaster. There are three elements involved — Hazard, Exposure and Vulnerability.