☕️ MACC Head: RM277 bil lost to grafts in the last 5 years.

1. MARKET SUMMARY 📈

Bursa Malaysia achieved a new milestone, as its equities market capitalisation surpassed RM2 tril. Main market stocks accounted for 97% of the entire value with the ACE and LEAP markets accounting for the rest. The benchmark index, FTSE Bursa Malaysia KLCI (FBM KLCI), also soared past 1,600 points for the first time in two years yesterday. Fun fact — KLSE has the most publicly listed companies in ASEAN — 1,025 to be exact.

2. NUMBERS AT A GLANCE 🔢

USD143,000 (RM677,200)— the phone bill of a Florida man after his wonderful trip to Switzerland. He only used 9.5 gigabytes of data, that’s a whopping USD15k per GB (think one Myvi per GB). Rene Remund initially thought he was charged USD143 for sending photos and texts to friends and family from the Alps. This happened because apparently his phone was not set up for international roaming. Fortunately for Remund, a T-Mobile spokesperson confirmed that the carrier agreed to credit Remund's account for the entire month. Phew.

According to a recent nationwide survey, six out of ten Malaysian youths between the ages of 15 and 30 exhibit mild to severe depressive symptoms. However, the survey also showed that the overall quality of life experienced by Malaysian youth was satisfactory. The survey was part of the Malaysian Youth Mental Health Index 2023 (MyMHI’23), conducted by the Institute for Youth Research Malaysia (Iyres) and the United Nations Children's Fund from October to November 2022 and March to April 2023. The survey covered seven domains, including lifestyle, surrounding environment, personal characteristics, life experiences, social support, coping mechanisms, and healthy mind, with the support of 28 indicators. View the research here.

Studies have indicated a potential link between increased social media use and poorer mental health among children, but causation remains unproven. It's possible that children experiencing depression or loneliness may gravitate towards spending more time on social media platforms. In 2017, Roberto Mosquera and colleagues conducted an experiment where a group of Facebook users in America refrained from using the platform for a week. The abstainers reported lower levels of depression compared to the control group, engaged in more diverse activities, and consumed less news. Interestingly, participants still valued Facebook's utility at USD67 a week, and after the week-long break, they even valued it more highly.

3. IN MALAYSIA 🇲🇾

MACC’s findings and statements:

1. No plans to arrest Tun M anytime soon

   The Malaysian Anti-Corruption Commission (MACC) chief Azam Baki stated that there are no immediate plans to arrest former PM Mahathir Mohamad as the investigations are still ongoing. Additionally, Azam clarified that MACC has not started investigations into Housing and Local Government Minister Nga Kor Ming regarding a RM5.21 mil allocation, which was criticised as potential vote-buying funds by BERSIH. 

2. RM277 bil lost to grafts in the last 5 years

   Malaysia has lost at least RM277 bil to corruption over the past five years (RM55.4 bil per year - think ~1MDB every year), according to Azam Baki. Derived from the country's GDP estimates between 2018 and 2023, this figure underscores the significant economic and social consequences of graft, substantial money which could have been used for better initiatives. The revelation came during the launch of the National Anti-Corruption Strategy (NACS) 2024-2028 by PM Anwar Ibrahim.

3. NACS to combat corruption

   NACS, the successor of the NACP, where the P stands for Plan instead of Strategies, focuses on enhancing corruption prevention and improving governance in public services and GLCs. Strategy components include education, public accountability & opinion, enforcement, and incentives. Honestly, not much difference from the previous Plan, so we’ll just have to see if it changes anything other than the wording.

Business

1. Over 98% of manufacturing projects approved in 2023 already underway

   Minister of Investment, Trade, and Industry (MITI) Tengku Zafrul announced that over 98% of manufacturing projects approved in 2023 are underway or in planning as of early May. The country approved RM152 bil in manufacturing investments last year, with RM46.1 bil already realised across 445 projects. 

   Additionally, the Malaysian Aerospace Industry Blueprint 2030 aims to make Malaysia the leading supplier of the aerospace industry workforce in Southeast Asia, with a target annual revenue of RM55.2 bil and the creation of 32,000 jobs by 2030. Last year, total trade was RM23.2 bil, bolstered significantly by the aerospace sector. Recent trade missions to Germany and France have also potentially secured investments worth up to RM46 bil from major aerospace companies like Airbus Group.

2. “Green-loan” secured to finance USD1.5 bil AI data centre in Johor

   Singapore’s Princeton Digital Group has secured a USD280 mil green loan for its USD1.5 bil data centre project in Johor, marking its first venture into environmentally friendly financing. The loan was provided by Malayan Banking Bhd (Maybank), Standard Chartered Plc, and United Overseas Bank Ltd. This initiative is part of a broader push by tech companies and investors, including Microsoft and KKR, to expand data centre infrastructure in Asia due to a growing demand for AI development and cloud services, which is expected to increase by 25% annually. Princeton Digital recently purchased land in Johor to build a 150-megawatt hyperscale data centre, the first in the country. Johor is becoming a significant AI data centre hub in Asia, highlighted by Nvidia Corp’s collaboration with YTL Power International Bhd to establish a USD4.3 bil AI data centre park there.

Addicts need help, not judgment and contempt
The Home Ministry (KDN) is nearing completion of amendments to the Drug Addicts (Treatment and Rehabilitation) Act 1983, which aims to replace prison sentences for drug abuse with rehabilitation. KDN Minister Saifuddin Nasution highlighted that the changes are being made in collaboration with the Prisons Department and the National Anti-Drug Agency (AADK). These amendments are intended to offer a second chance to addicts, alleviate overcrowding in prisons, and shift the focus from criminalization to rehabilitation.

Data showed that within 41 prisons and 78,000 inmates, most committed crimes related to drugs – from drug trafficking to drug abuse. The proposed amendments will also enable drug rehabilitation officers to conduct urine tests to determine if individuals require rehabilitation, a task that previously only medical officers could perform. The amendments are expected to be presented at the next Dewan Rakyat session. Finally. Drug users should be rehabilitated, not incarcerated.

Shorts:

1. Tree incident in KL; DBKL to develop prevention guidelines

   After the collapsing tree incident that occurred in KL yesterday, DBKL has been directed to develop new guidelines for managing the city’s ageing trees to prevent future accidents. One death was reported from the incident due to the storm yesterday. DBKL is urged to catalogue the city’s trees, but how efficient is that when the weather is unpredictable now? Watch the incident here.

2. Visa-free travel to China extended to end of 2025

   Ouyang Yujing, the Chinese ambassador to Malaysia, announced that visa-free travel to China for Malaysians has been extended until the end of 2025. The visa exemption was previously set to expire in November 2024. The policy allows Malaysian passport holders to enter China for up to 15 days for purposes such as business, tourism, family visits, and transit.

4. AROUND THE WORLD 🌎

Israel takes Rafah crossing
Despite the ongoing talks of a truce, Israel continues its offence as the Israeli military said its troops have taken “operational control” of the Palestinian side of the Rafah border crossing between Gaza and Egpyt. Rafah is the key entry point for aid and the only exit for people to flee. The United Nations (UN) said the closure of Rafah meant that a vital route for humanitarian aid had been cut off. Israel has ignored warnings from its closest allies that the offensive on Rafah will put a huge number of civilian casualties. Before it launched the attack to control the border, the Israeli military asked the 1.4 mil or so Palestinians in Rafah to evacuate. The irony is that most of them are displaced following previous instructions from the Israeli military, leading to them fleeing to Rafah — with this blockage, where can they evacuate to?

Aramco’s net income fell in Q1FY24; Disney’s streaming service turned a profit.
Saudi Arabia’s state-owned Aramco (the one rumoured to be buying Shell Malaysia’s gas station operation) reported a lower net income of USD27.3 bil in the Q1 of 2024, 14% lower than a year before. In the same quarter, Aramco reported a free cash flow of USD22.8 bil, but it is forking out a dividend payout to the tune of USD31 bil to the Saudi government and other investors. The generous payouts from the world’s biggest oil exporter act as a buffer for the Gulf state as crude prices remain below the levels it needs to balance its budget. According to Bloomberg Economics, the kingdom needs oil at around USD108 a barrel to balance the budget when in reality, benchmark crude prices were trading only near USD83 per barrel. Saudi Arabia has already postponed certain projects that are part of its economic reform plan beyond 2030 and has reduced its ambitions for Neom. Its economy has been contracting for three consecutive quarters while the budget has been in deficit for the past six quarters.
View: Aramco Q1 2024 results

Disney+ finally becoming a plus in Disney’s foray into the streaming industry. The Disney+ and Hulu streaming unit earned USD47 mil in its second fiscal quarter ended on March 30, 2024, compared with a USD587 mil loss a year earlier. The streaming business has lost more than USD11 bil since its launch. To achieve profitability, the company embarked on cost-cutting measures and price increases. It will be a long way to the breakeven point at this rate. Overall, Disney reported a net loss of USD20 mil on USD22.1 bil in revenue in the same quarter, largely due to the goodwill impairments. Bob Iger, the chief executive of Disney, said the latest results were proof that the turnaround and growth plans set last year are yielding positive results.
View: The Walt Disney Company Second Quarter FY24 Earnings

Boeing’s never-ending troubles

1. The (US) Federal Aviation Administration (FAA) opened an investigation into Boeing’s 787 Dreamliner jets. FAA learned that the company may not have completed the required inspections on the jets. 😱 FAA investigation started because of allegations made by a Boeing engineer regarding the improper fastening of sections of the fuselage of the 787 Dreamliner. The engineer, Sam Salehpour, who worked on the plane, has claimed that the sections could break apart during flight after multiple trips. Salehpour detailed his concerns in interviews with The New York Times and in documents sent to the FAA. Btw, this jet is different from the Boeing 737 Max 9 which had a door panel blown out.

2. Boeing’s Starliner Spacecraft launch was also postponed just two hours before launch because of a safety check. The spacecraft was scheduled to launch from Cape Canaveral in Florida and head to the International Space Station (ISS). The project had already been delayed for several years due to setbacks in the development of the spacecraft. However, the launch was halted due to a possible issue with an oxygen relief valve in the Atlas rocket, which is operated by the United Launch Alliance. The issue has nothing to do with Boeing's spacecraft, which is situated on top of the rocket.

France welcomes BYD with open arms
Finance Minister Bruno Le Maire stated that France would be open to welcoming China’s electric vehicle (EV) giant BYD if the company decided to establish a factory in France. Le Maire emphasized France’s openness to all industrial projects and expressed a warm welcome to BYD and the Chinese auto industry. He made these remarks during a meeting with car sector executives, coinciding with a rare state visit to Paris by China’s President Xi Jinping. Of course, they are welcoming China, the euro zone’s second-largest economy stagnated at 0% in the final three months of last year according to INSEE’s (the National Statistics Bureau of France) quarterly GDP report, following a flat third quarter.

5. FOR YOUR EYES 📺

1. Why is Gucci losing its lustre? Its parent co., Kering, used to be on par with LVMH in terms of market capitalisation. However, LVMH lifted off and left Kering in the dust. Kering also owns Bottega Veneta, Saint Lauren, Alexander McQueen, amongst others.

2. The 5-year performance of a USD1,000 investment in stock indexes. Had you put in this amount in NIFTY 50, an index of the 50 largest and most actively traded Indian stocks, you would have gained a cool USD924. NFA.