Discover more from The Coffee Break
☕️ High cost of living issue government's own doing due to price control mechanism, according to World Bank
1MDB witness: funds in Najib's account not from Arabs, but MY Chinese. North Korea shows off largest nuclear missiles, Kim Jong Un's potential successor. Why is it so hard to predict earthquakes?
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1. MARKET SUMMARY 📈
2. NUMBERS AT A GLANCE 🔢
National Property Information Centre (Napic) reported that 105,204 units of residential properties were sold in Q3 of 2022. The number of overhang residential units in Malaysia as of 3Q22 also dropped by 15.4% to 29,534 units, with a total value of RM19.95 billion.
LeBron James broke the NBA’s all-time points scoring record after scoring a total of 38,388 points in his 20-year career. The record was unbeaten for 39 years, held by Kareem Abdul-Jabbar, who was present at the game where LeBron broke the record. Kareem was amongst the first to congratulate him.
Read: How LeBron James claimed the NBA’s scoring crown, step by step.
Malaysians who work from home save 69 minutes on average per day, according to a report by the National Bureau of Economic Research. The six researchers who put together the paper estimate that working from home saved about two hours per week per worker in 2021 and 2022. If your bosses are not convinced about working from home, show them this tweet
3. IN MALAYSIA 🇲🇾
The meeting is not meant for you YET, says PM Anwar Ibrahim to MUDA
Regarding the absence of the Malaysian United Democratic Alliance (MUDA)’s representative (but their logo was present in the background) in the newly-formed Unity Government Secretariat meeting, PM Anwar Ibrahim says that the meeting is only for the ‘founding members’. Rafizi Ramli further clarified that only signatories to the memorandum of understanding (MoU) attended, which included coalitions with three parliamentary seats. MUDA only has one MP in the form of Syed Saddiq.
In a statement that can further strain the relationship between MUDA and the other members of the unity government, the MUDA secretary-general said that the recently sacked and suspended Khairy Jamaluddin and Shahril Hamdan, respectively, are ‘national assets’ and the door is always open for them to join MUDA.
Nazri Aziz is the new ambassador to the United States
Former UMNO MP Nazri Aziz has been appointed as the new ambassador to the United States. Previously, he rejected the chance to be the ambassador to Switzerland
as it is not California as he needed to resign as an MP first. Other than Nazri Aziz, below are the list of other key individuals that have been announced as ambassadors too:
Syed Md Hasrin Tengku Hussin — Ambassador to Indonesia
Abdul Malik Melvin Castelino Anthony — Ambassador to the Philippines
Hendy Assan — Ambassador to the Vatican City
All things about airports
The government and Malaysia Airport Holdings Berhad (MAHB) have agreed in principle to a new operating agreement (OA2023). Under OA2023, a new development trust will be created for the sole purpose of airport development. Dubbed the Airport Development Fund (ADF) and a game-changer, Transport Minister Anthony Loke said the money for the trust will come from the airport users themselves. 50% of the Passenger Service Charge (PSC) that the users paid now will be channelled to the trust account. Currently, the PSC rate is RM11 for domestic flights, RM35 for international (ASEAN) flights and RM73 for international (non-ASEAN) flights.
MAHB will also manage, maintain and develop 39 airports and airfields in Malaysia until 2069 under OA2023. MAHB shareholders can rejoice.
KLIA and klia2 will be rebranded as KLIA Terminal 1 and KLIA Terminal 2, respectively, to improve the airports' marketability and effectiveness. Long overdue, but the airports need more than just rebranding to compete with other international airports in the region.
Not Arabs, but Malaysian Chinese linked to Jho Low - 1MDB witness on the source of funds into Najib’s Ambank account
In Najib Razak’s RM2.28bil corruption trial, key witness and former AmBank relationship manager Joanna Yu Ging Pin testified that it was not Arabs but several Malaysian Chinese linked to Jho Low that had been depositing money to then-prime minister Najib Razak. Joanna said that Najib Razak’s account normally receives over-the-counter funds from associates linked to Najib Razak.
Consumer group insists that the electricity tariff hike should be done in stages
The National Chamber of Commerce and Industry of Malaysia (NCCIM) president, Soh Thian Lai, urges the government to stagger the drastic electricity tariff hike in phases so that industries and businesses can adapt to these changes. The statement by Soh comes after the government announced a drastic increase in electricity tariff surcharge from 3.7 sen/kilowatt-hour(kWh) to 20 sen/kWh for medium and high-voltage users.
Although the hike is drastic, the increase in tariff surcharge may be necessary as we want to avoid what happened to South Africa's state-owned electricity supplier, Eskom. In South Africa, blackouts are constantly happening as dilapidated coal power plants break down. Moreover, Eskom is unable to buy diesel to power emergency generators. All this happened due to Eskom’s precarious financial position and the tariff increase they imposed came too little, too late.
Price controls on food supplies are driving the price up instead of down
According to the World Bank’s lead economist, Dr Apurva Sanghi, the price controls mechanism in Malaysia have an adverse effect on the final price of food supplies. This happens because producers of goods cannot produce food profitably with the current controlled price. In return, there are low supplies of food staples based on the basic law of demand and supply, thus driving up the final price of food.
In other words, it’s a paradox. Why is our food expensive? Well, Malaysia has the most price-controlled items in the region.
Replace the K with a D
KJ is now a DJ as a former minister and MP Khairy Jamaluddin will join Media Prima’s Hot FM as a radio presenter on its morning segment called ‘Bekpes Hot’. Interestingly, Titiwangsa MP and UMNO member Johari Abdul Ghani owns 20.08% (2022) of Media Prima Berhad via his private investment vehicle, JAG Capital Holdings Sdn Bhd.
In another KJ-related news, he dismissed accusations that the procurement of the Covid-19 vaccine did not obtain approval from the Attorney-General's Chambers (AGC).
4. AROUND THE WORLD 🌎
About missiles: North Korea, Malaysia Airlines MH17
The Joint Investigation Team (JIT), an international team of investigators investigating the Malaysian Airlines MH17 flight that was shot down over Ukraine, said there are “strong indicators” that Russian President Vladimir Putin approved the supply of the missile to separatists that shot down the plane. The JIT added that it has no further evidence to prosecute any more suspects and suspended its 8.5-year inquiry into that tragedy. As for Putin, he gets away with immunity by virtue of his position as a head of state. Back in November, a Dutch court convicted 2 Russians and a Ukrainian for murder over this disaster. This is far from over, as there are still various cases being pursued over MH17.
North Korea flexes its new and largest nuclear missiles through the capital Pyongyang to mark the 75th founding anniversary of North Korea’s army. Amongst the nuclear-capable weapons paraded were Hwasong-17s, dubbed the “Monster Missiles”, the hermit nation’s largest-yet intercontinental ballistic missiles (ICBM). NK News, which monitors events in North Korea, suggested that the Hwasong-17s, which appeared only once back in 2020, “mass production of the new missile and heavy launchers is well underway”, and the parade is “an effort to demonstrate new missile technology”.
Watch: What is an Intercontinental Ballistic Missle (ICBM)?
Another spotlight during this celebration is Kim Jong Un’s daughter, sending strong indications that she might succeed him as North Korea’s next dictator. Kim Jung Ae, believed to be 10 or 11, has made just her 4th appearance and her prominence in the pictures and presence in recent public appearances strongly suggest she is being prepared for leadership. Kim Jong Un is believed to have three children, including a son older than Kim Jung Ae.
North Korea is a hereditary dictatorship. Kim Jong Un was appointed successor to his father, Kim Jong Il, when he was 8, according to analysts.
Microsoft is seriously coming after Google’s lunch
For once, Google’s search stranglehold dominance is facing a real threat. Microsoft CEO Satya Nadella, in an interview with the Financial Times, said that he is willing to accept the “demonetisation” of Bing, Microsoft’s USD11 bil-per-year search business, to eat into Google’s business. Microsoft’s overhaul of Bing by integrating ChatGPT (already live but limited accessibility- get on the waitlist here) has given the company a real, credible Edge and renewed confidence to go up against Google finally. Microsoft has little to lose — it only commands a low single-digit search market share, whereas Google’s market share has consistently been around 90%.
“From now on, the (gross margin) of search is going to drop forever.”
“There is such margin in search, which for us incremental. For Google, it’s not, they have to defend it all.”
— Microsoft CEO Satya Nadella interview with FT
The announcement of ChatGPT integration into Bing has pushed Microsoft’s share up by 4% - back into the 2-member USD2 tril market cap club (the other fellow is Apple). Google responded (more like reacted) by announcing its own chatbot AI - Bard and the consequences of its unpolished product were quick to show in its share price — Google’s parent company, Alphabet Inc, tumbled 9%, a staggering USD100 bil lost in market value after Reuters pointed out that Bard provided an incorrect answer in a promotional video (watch below). This selloff was way more significant than the recent 2.8% drop after Alphabet’s earnings missed estimates showing how important AI has become for investors.
Beyonce: stellar music career, struggling fashion venture
Beyonce’s music career is on a roll after achieving the most career wins for Grammy awards. But not so great for fashion ventures. Her gender-neutral Ivy Park line, in partnership with Adidas, is coming up short on sales projections as sales decreased by more than 50% to roughly USD40 mil last year, way off the company’s forecast of USD250 mil.
Ivy Park was launched in 2020 and the partnership will expire after 2023. The fate of the brand is uncertain as Adidas is in the midst of discussing the brand’s future - to end or revise the deal. Given these figures, comparatively, the Adidas Yeezy brand was a huge success, bringing in close to USD2 bil per year before Adidas ended the relationship with Ye (fka Kanye West). Check out Ivy Park’s products on its Instagram page.
Didn’t even know that megastar Beyonce had a sports brand line with Adidas until this news came out.
The happiest place on earth is becoming gloomy for its employees as the House of Mouse (Disney) announced a restructuring, including the layoff of 7,000 staff to achieve USD5.5 bil in cost savings. USD3 bil of it will come from budget cuts for movies and TV shows.
Trafigura, one of the world’s largest traders of energy and metals, uncovered a systemic fraud perpetrated against the company by a nickel trading partner after it found that some cargoes it bought didn’t contain the metal. The company estimates the loss to be USD577 mil.
Weekend read: Why is it so hard to predict earthquakes?
There are hundreds of earthquakes every single day, but they are not always strong enough for us to notice them. Despite all the massive data collected, scientists are still unable to predict an incoming earthquake. An interesting read, especially on understanding the Richter scale, a measure of an earthquake’s strength - it’s read on a logarithmic scale. In other words, a magnitude 7 earthquake is 10x stronger than a magnitude 6, and 100x stronger than a magnitude 5 earthquake.
5. FOR YOUR EYES 👁👁
Pepsi vs Coke - Ant’s choice
Google reveals AI-powered Maps app - taking Maps to a new level.
Turning lemons into millions.