☕️ Grab could face lawsuits after disappointing share price, losing 70% in value since its listing 3 months ago

1. MARKET SUMMARY

2. NUMBERS AT A GLANCE

USD7.4 billion — Australia’s budget for a new base to house a future fleet of nuclear submarines. Prime Minister Scott Morrison warns the Ukraine war will “inevitably stretch” to the Asia-Pacific.

USD723 million in loans and grants have been approved by the World Bank to Ukraine as the country fights against a Russian invasion. Another USD3 bil package is on its way too.

64% of Americans are living paycheck to paycheck at the start of 2022, according to a LendingClub report. With wages trailing the pace of inflation, workers have a harder time making ends meet.

3. COVID-19 SUMMARY

• Malaysia will have one SOP with nine guidelines in the Transition to Endemic Phase, according to Senior Defence Minister Datuk Seri Hishammuddin Tun Hussein.

• The four-day Citrawarna Keluarga Malaysia Programme 2022 that attracted a crowd of 50,000 people has been declared a Covid-19 cluster by the Sarawak State Disaster Management Committee (SDMC). Surprise, surprise.

4. IN MALAYSIA 🇲🇾

1. During the emergency special sitting in Parliament to debate on the recent flash floods that hit the Klang Valley, Deputy Environment and Water Minister Mansur Othman said that a total of RM160 mil is needed to upgrade and set up new infrastructure for the flood warning system. This includes the upgrade of 516 existing siren stations (cost: RM1.13 mil) and 155 existing webcam stations (cost: RM6.2 mil) and installing 361 new webcam stations (cost: RM32.5 mil). Let’s do some maths. A siren will cost RM2,189 (RM1.13mil/516) to upgrade. Sounds about ok. Now, upgrading an existing webcam station will cost RM40,000 (RM6.2mil/155) per unit and installing a new one will cost RM90,027 (RM32.5mil/361). Do most of the cost accrue towards the ‘station’ component of the webcam? We acknowledge that we lack expertise in flood management and security system, but from a layman’s point of view, a ‘specialised’ webcam in this context can buy at least a new Proton Saga with extra to spare. Seems a bit excessive. Any domain experts in this industry - feel free to enlighten us.

2. Shahidan Kassim, the UMNO lawmaker and Federal Territories Minister in his Parliament debate said he immediately rushed to evacuation centres upon hearing about the torrential downpour from PM Sabri and that he was “already on the ground before the flood even happened”, drawing laughter from several MPs with Fahmi Fadzil (Lembah Pantai MP) heard bursting out in laughter through the microphone. We are still looking for this video clip. Likely that MPs from the same side of the aisle laughed too.

3. The Finance Ministry announced that RON97 would be up by 30sen from 10-16 Mar to RM3.75 whilst RON95 and diesel remain unchanged at RM2.05 and RM2.15 per litre each, respectively. Not bad that RON95 did not increase in price despite oil prices skyrocketing due to the Russia-Ukraine conflict. A tactical move before the Johor state election?

4. The US Customs and Border Protection (CBP) has seized four shipments of palm oil, weighing about 246 tonnes from Malaysia, worth USD2.47 mil (RM10.33 mil), which it said was likely to have been manufactured using forced labour. CBP did not say who the shipments belong to, but in its statement mentioned that effective Dec 20, 2020, there was an order to seize palm oil products by palm oil giant Sime Darby Plantation Bhd.

5. Top Glove Corp Bhd, the world’s largest glovemaker, announced its Q2 ended Feb 28, 2022, quarterly results. Here are the highlights:Top Glove’s market cap stands at RM13.79 bil. Not too long ago, at the height of the pandemic, it was the second most valuable company on Bursa Malaysia, just behind Maybank.

   1. Net profit collapsed 97% to RM87.55 mil in Q2 from RM2.87 bil a year earlier, whilst revenue fell 73% to RM1.45 bil from RM5.37 bil.

   2. The company expects net profit margin to normalise at 8-10% moving forward vs 38-53% in FY2021 as the industry faces oversupply from new entrants hence adding downward pressure to average selling prices (ASP).

   3. The Russia-Ukraine crisis will not have a material impact on the company and will affect less than 5% of its volume.

Joshua Brown, Ritholtz Wealth Management CEO and former CNBC’s Halftime Report host.

5. AROUND THE WORLD 🌎

1. Grab Holdings Inc.’s listing back in Dec 2021 grabbed many’s attention. Now, law firms in the US want a piece of the action — at least eight firms are eyeing class action lawsuits. Within three months, Grab’s share price has plummeted and disappointed many investors — from USD10.15 to USD3.14 at yesterday’s closing. Lawyers are trying to seize on a plunge in the stock price as evidence that a company failed to be forthcoming about looming bad news. If you have Grab Holdings Inc. shares, what would you do?

2. Australian PM Scott Morrison says he will declare a national emergency — a national first — over flooding in two states, New South Wales and Queensland. Heavy rains over the past two weeks have inundated thousands of homes. Angered Australians brought placards during Morrison’s visit to Lismore, a town severely affected by the rain.

3. Banks including JPMorgan Chase & Co. and China Construction Bank Corp. are giving loans to Tsingshan Holding Group Co., which faces billions of dollars in potential losses on short positions in nickel futures, to help it meet a wave of margin calls. Chinese authorities directed Tsingshan’s domestic banks to offer more credit lines to the company.

4. South Korea’s newly elected president, Yoon Suk Yeol, a conservative former top prosecutor. Yoon had 48.6% of the votes against his rival Lee Jae-myung’s 47.8%. Yoon will take office in May and promised to put national unity as his top priority.

5. Ihor Zhovkva, Volodymyr Zelensky’s deputy chief of staff, said Ukraine is ready for a diplomatic solution. Ukraine is open to discussing Russia’s demand for neutrality as long as it’s given security guarantees. Zhovkva added the preconditions for talks with Russian President Vladimir Putin would be a cease-fire and the withdrawal of Russian troops.What happens if President Zelensky is dead or captured by the Russians? The US has made plans in the event this happens.

6. Fitch Ratings downgraded its view of Russia’s government debt, warning a default is “imminent”. Moscow itself said its bond payments may be affected by sanctions. Moscow warned sanctions imposed on its energy industry could limit its ability and willingness to meet its obligations. Every time I come across rating agencies, I am reminded of the scene in The Big Short below.

7. International Energy Agency (IEA) said it is coming up with a 10-point action plan to ease oil prices, saying it can release additional stocks if needed in response to the US’s ban on Russian oil and gas imports. Markets responded — Brent crude futures fell almost 3%, pulling back on its rally.

8. Anyone here remembers LimeWire? It was one of the most popular peer-to-peer file-sharing websites before the emergence of subscription-based streaming services. LimeWire is making a comeback — as a marketplace for trading nonfungible tokens (NFTs). The platform will list prices in US dollars instead of cryptocurrency. 🤨

6. FOR YOUR EYES 👁👁

1. Lamis Abdelaaty, an Associate Professor in Political Science, explains why Ukrainian refugees are treated better than other refugees (think Afghans, Syrians, etc.). Some reasons: identity (skin colour, religion, race, etc.), foreign policy and politics.

2. The massive scale of a marble quarry makes an excavator looks tiny.

3. Virtual Reality (VR) gone wrong in reality.