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☕️ MACC uncovered smuggling syndicate that cost RM3.5 bil in loss taxes

Next by-election: Sg Bakap, Penang @ July 6. Nvidia now worth USD3 tril+, more than Apple. Waterfalse - China's tallest waterfall fed with pipe.


Information as of 0730 UTC+8 on June 7, 2024.

Looks like rate cut season is coming. The EU becomes the second major global economy to announce a rate cut for the first time in 5 years, following Canada’s decision on Wednesday. The main interest rate is reduced from an all-time high of 4% to 3.75%, despite a slight uptick in inflation in May. So why not retain the rate until inflation is successfully under control? Elevated interest rates mean it gets more expensive for governments to borrow and to service their debt.


Global analytics software firm Fico’s latest consumer fraud research reveals that 32% of Malaysians are most concerned about being tricked into making payments to criminals, leading to instant, irrevocable losses. The survey highlights ongoing apprehension regarding real-time payment scams amid the growing use of fast payment channels. Additionally, over 25% of Malaysians cite identity theft as their top financial crime concern, which can compromise credit scores and complicate restoring financial integrity. A worrying 76% of Malaysians have received unsolicited messages they believed to be scams. Unsurprisingly, Malaysia is also ranked No. 5 in terms of data breach density, where approximately 5,436 accounts were breached per day.

Bette Nash, the world's longest-serving flight attendant, has died at 88 after nearly 70 years of service. Beginning her career at 21 with Eastern Airlines, she worked on the Washington DC to Boston shuttle, a route she preferred for its convenience. Though she initially planned to move on after a few years, she remained, becoming a beloved figure to frequent flyers even after the route was taken over by American Airlines. Nash never officially retired from her post. Salute, she stayed longer in the company than the official retirement age in Malaysia (60).

Once a king in the pay-TV service provider, the streaming platforms took a huge chunk of subscribers away from Astro. Astro’s subscription revenue has declined significantly over six years, dropping from over RM1 bil per quarter in FY2019 to RM650 mil per quarter in FY2024. Paid subscribers have also decreased from over 3.3 mil to just under 2.2 mil. Consequently, TV subscription revenue, which once comprised more than 80% of the group's top line, has fallen from over RM4 bil in FY2019 to RM2.7 bil in FY2024. However, the group hasn’t given up on this market. See how its business has declined over the years in the special report below.
Read: Special Report: Astro sweating assets in pivot towards streamers, content creators.


Another day, another by-election in Malaysia
The Election Commission (EC) has announced that July 6 will be the voting day for the Sungai Bakap by-election in Penang, making it the eighth by-election after GE15 in Nov 2022. Voters in the constituency need to go to the polling station earlier than planned due to the death of its incumbent, Nor Zamri Latiff, from PAS last month because of stomach inflammation. During the state election last year, Nor Zamri won comfortably with a 1,563 majority. EC stated that this by-election will cost Putrajaya an estimated RM2.1 mil.

More by-elections are expected and are in the pipeline as Bersatu’s decision to vacate the seats of six rebel MPs will surely put a test on the anti-hopping law. However, legal observers indicated that Bersatu’s decision could be challenged by the MPs in court as a ‘forced resignation’ could be viewed as sacking, which does not violate the anti-hopping law. Under the anti-hopping constitutional amendments, an MP would only lose their seat if they quit their parties or joined another party. The final decision on whether to vacate the seats has not been decided yet and it is up to the Dewan Rakyat speaker Johari Abdul.

More than 30,000 individuals to receive BR1M Budi Madani cash assistance
An estimated 30,000 individuals will receive the first phase of Budi Madani cash assistance on June 10, amounting to RM200 each, which will be remitted to their bank accounts or claimable at any Bank Simpanan Nasional (BSN) branch nationwide to those unbank individuals. Budi Madani is a government initiative to ensure that subsidy allocations are targeted at eligible groups; divided into individual assistance (Budi Individu), farmers and small growers (Budi Agri-Komoditi), and companies and transport vehicles (MySubsidi Diesel). In total, about 410,000 individuals are expected to benefit from Budi Madani. Individual applicants who are not approved can check their application status and appeal on the Budi Madani website at https://budimadani.gov.my

We thought we already had the Central Database Hub (Padu). Why must we register and apply for cash assistance on the Budi Madani database? According to Bapa Padu, Economy Minister Rafizi Ramli stated that the information captured on Padu is very much focused on a household basis, while the diesel cash aid via Budi Madani is meant for individuals, thus, a separate Budi Madani database is needed. Communications Minister Fahmi Fadzil, in a separate event, said that the Budi Madani registration drive aims to fill gaps in the Padu database and served as an alternative to those who missed the March 31 deadline to register on Padu. While Tun Dr Mahathir is Bapa Pemodenan, can we call PMX as Bapa Database?

MACC uncovered an RM3.5 bil smuggling gang
A special task force led by the Malaysian Anti-Corruption Commission (MACC) has uncovered a smuggling syndicate at Port Klang that has been operating for more than 10 years and cost the country RM3.5 billion in tax revenue losses. The modus operandi of the syndicate was to deploy several freight forwarding companies registered under individuals who were unaware of these insidious activities. With these forwarding companies, they can make false tax declarations and wipe their hands off if they get caught, as the companies are registered to parties unrelated to the syndicate. The gang is believed to be masterminded by a foreign national based overseas and has been active for more than 10 years.

Everything can be smuggled and we move our attention to human trafficking now. Human traffickers are keeping up with the times, jumping onto the digitalisation bandwagon to sustain their businesses. It has been reported that some human traffickers have opted for TikTok to openly advertise ‘transport’ services to undocumented Indonesians in Malaysia looking to return to their country. The trips, which were advertised for those travelling without passports or with expired visas, are priced between RM1,500 and RM2,200. According to Johor Malaysian Maritime Enforcement Agency (MMEA) director First Admiral Nurul Hizam Zakaria, the syndicate that operates this ‘transport’ service is also responsible for three major boat tragedies off Johor's waters in Teluk Balau (2021), Teluk Ramunia (2022) and Pontian (2022). Those accidents claimed the lives of some 35 people.


  1. How uncompetitive is Malaysia compared to our friends in the region? According to Geely chairman Li Shufu, the lack of competitiveness of local automotive parts in Malaysia led to higher supply chain costs, about 30% higher than China’s and more than 10% higher than Thailand's. The situation is not looking better in the near future as Malaysia’s automotive parts supply is still import-heavy and the local market is too small for local players to achieve higher economies of scale. Before the uninitiated wonder who is he to draw these conclusions, Geely owns Proton. Also, Volvo. Throw in Mercedes-Benz and Aston Martin into Li’s stable of automaker ownership.

  2. 1MDB fugitive Jho Low’s Cypriot citizenship and passport have been revoked after he failed to appeal against the Cyprus (view on map) government’s decision. Jho Low was granted Cypriot citizenship in 2015 via the island’s citizenship-by-investment program dubbed the ‘golden passport’ program. Before he was granted citizenship, Low transferred RM30.7 mil into an account at the Bank of Cyprus, purchased a seaside mansion for EUR5 mil and donated EUR310,000 to the late ex-Archnishop Chrysostomos, who advocated for him to Cyprus’ interior ministry.


Israel’s new bombing target - UN-linked school
Israeli forces bombed a school linked to the UN agency for Palestinian refugees (UNRWA), killing at least 40 people and injuring more than 70. The school is being used as a shelter for displaced Palestinians in central Gaza. Hamas condemned the attack as a “horrible massacre” and said many women and children were among those killed and wounded. 

Israel has confirmed the bombing by its fighter jet. For far too many times, Israel’s justification for such attacks that involved innocent lives is that they are targeting Hamas’s compound. The same reason is being used again, this time claiming that a “Hamas compound embedded inside an UNRWA school” and that its bombing “eliminated terrorists who were planning to carry out an attack” against its forces. This wouldn’t be the last time dozens of innocent lives will be sacrificed in the name of ‘precise attacks’ on Hamas. 

As for the US-proposed ceasefire plan - no progress. 

The future of flying taxis

  • US: Flying taxi company Archer Aviation has received regulatory clearance for commercial operations from the Federal as it obtained an air carrier and operator certificate. It’s a major step forward for the electrical-vertical-take-off-and-landing (eVTOL) company (more commonly referred to as flying taxis) towards its goal to transform urban travel as it aims to replace ride-share services between city centres and airports. The certification allows it to begin operating to refine its system before it can launch its flagship Midnight aircraft (check it out here). US airline United Airlines made a big bet on the future of flying taxis with Archer as it placed a USD1 bil order for Midnight. Archer is the second eVTOL manufacturer to receive FAA approval after Joby Aviation. 

  • China: Guangzhou wants to be the world-leading hub for the “low-altitude economy” — services that operate in airspace below regular commercial aviation. This industry includes piloted and autonomous civilian aircraft that fly at altitudes of up to 3,000 meters vs around 10,000 meters for commercial jetliners. To this end, the Chinese government is investing RMB10 bil (USD1.4 bil) by 2027 in Guangzhou, home to China’s tech centre, Shenzhen.  The funds will go towards building infrastructure for flying vehicles, such as airborne taxis, including over 100 takeoff and landing points. The city is home to 2 leading eVTOL manufacturers — Xpeng AeroHT (a subsidiary of EV maker Xpeng) and EHang. The latter was granted a production certificate to mass-produce its vehicles in April but is yet to be granted an air operator certificate from Chinese regulators to open for business.

You can also bet on the future of flying taxis by investing in Archer Aviation and EHang, both listed in the US #nfa. Back in Feb 2022, Capital A CEO Tony Fernandes announced plans to launch air ridesharing services by 2025 with a fleet of at least 100 eVTOLs. We are not too far away from 2025. 


  • Sports: The National Basketball Association (NBA) is closing massive media rights deals with NBC, Disney’s ESPN, and Amazon that could generate about USD76 bil in media revenue over 11 years (average of USD6.9 bil per year), the Wall Street Journal reported. In the case of NBC, WSJ reported that it would pay an average of USD2.5 bil a year to show around 100 games per season, averaging USD25 mil per game. Sports leagues are a highly valuable asset for media companies to attract and retain loyal subscribers. Astro’s future would be totally different if it wasn’t for its rights to the English Premier League.

  • Crypto: Trading platform Robinhood is making a serious entry into crypto. The company announced that it would acquire cryptocurrency exchange Bitstamp for around USD200 mil in a cash deal. Bitstamp is amongst the oldest, if not the oldest, crypto exchanges around, founded in 2011. Since its founding, the exchange has operated within the boundaries of the law and holds 50 active licenses and registrations globally. 


  1. AI companies to the moon
    Nvidia has now overtaken Apple to be the world's second-most valuable company, with its market cap breaching USD3 tril. At USD3.012 tril, Nvidia isn’t too far away from Microsoft with a market cap of USD3.15 tril. Few of you might have heard of this name - ASML Holding NV. The Dutch company riding on the AI wave has become Europe’s second-most valuable company with a market cap of EUR377 bil, overtaking luxury conglomerate LVMH. ASML produces equipment that makes sophisticated semiconductors. One of its most sophisticated chipmaking tools comes with a price tag of EUR350 mil a unit. Holding the top spot in Europe is pharma giant Novo Nordisk.

  1. Instagram testing unskippable ads 
    Instagram confirmed to BBC that it is testing this feature with a countdown timer until users can continue doom scrolling. IG’s reasoning for this feature is to “test formats that can drive value for advertisers”. A win for advertisers, but a big L to its users. In a court filing, Instagram generated revenue of USD16.5 bil in the first 6 months of 2022, contributing almost 30% of the group’s revenue.


  1. We’re almost crossing into the second half of the year — here’s some food for thought if you’ve been contemplating your job.

(Protip — Make sure you have something lined up before quitting!)

  1. A hiker discovered a pipe feeding China’s tallest waterfall (more like waterfalse) - the 312 m Yuntai Falls, located inside the Yuntai Mountain Geopark, a UNESCO Global Geopark. The park operator explained that this “small enhancement” is made during the dry season so visitors would not be disappointed.