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- ☕️ Malaysia ranked 34th most competitive economy (out of 67), 10th in APAC
☕️ Malaysia ranked 34th most competitive economy (out of 67), 10th in APAC
100,000 applications approved for Budi Madani diesel cash subsidies. Anti-hopping law put to a real test after surprise Nenggiri state seat vacancy. Boeing CEO "proud of the safety record".
1. MARKET SUMMARY 📈
The US market was closed yesterday on a Juneteenth holiday, celebrated annually to commemorate the ending of slavery in the US. It’s also known as Freedom Day, Emancipation Day or America’s second Independence Day. The holiday’s name is a portmanteau of the words “June” and “nineteenth”, as it was June 19, 1865, when emancipation was fully enforced.
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Information as of 0720 UTC+8 on June 20, 2024.
2. NUMBERS AT A GLANCE 🔢
A total of RM19 mil in losses have been recorded in 22 criminal breach of trust (CBT) cases (average of RM864k per case) involving lawyers this year, according to Comm Ramli Mohamed Yoosuf. Comm Ramli, director of the Bukit Aman Commercial Crime Investigation Department (CCID), believes the figure will continue to increase this year and urged the Bar Council to take sterner action against rogue lawyers to prevent more victims from being duped. Last year, 31 CBT cases involving lawyers resulted in RM35.9 mil in losses. Comm Ramli noted that these cases range from property purchases to payments for legal proceedings.
Learn: What is a criminal breach of trust?
Mark your calendar - the KLIA aerotrain project is expected to be completed by Jan 31, 2025 – two months ahead of its original schedule. Malaysian Airports Holdings Berhad (MAHB) announced the revised completion date following a contract signed with Alstom Transport Systems (Malaysia) Sdn Bhd and a joint venture of IJM Construction Sdn Bhd and Pestech Technology Sdn Bhd. The new aerotrains are expected to arrive from China by the end of Q3 2024 and will undergo testing before official operations. MAHB will oversee the delivery of three new trains, the upgrading of two lines, and comprehensive safety testing. Finally, a project is delivered ahead of time instead of more delays.
100,000 applications have been approved for cash subsidies on diesel under the Budi Madani initiative, according to Finance Minister II Amir Hamzah Azizan. Over 76,000 applicants have already received their cash aid of RM200. Applicants submitting by the end of June will receive payments in early July. It is estimated over 700,000 people are eligible for this cash aid.
3. IN MALAYSIA 🇲🇾
China’s Premier Li Qiang visit
Chinese Premier Li Qiang reaffirmed China's strong partnership with Malaysia, highlighting its commitment to enhancing cooperation and mutual development. He noted the significant consensus reached during the meeting between Prime Minister Anwar Ibrahim and Chinese President Xi Jinping last year, which set a new direction for bilateral relations. Speaking on the 665km-long East Coast Rail Link (ECRL) project, costing RM50.2 bil, Li expressed China's readiness to work closely with Malaysia to ensure the project brings prosperity and happiness to Malaysians.’ But let’s not forget the history of how ECRL contracts were inflated during the administration of prisoner and former PM Najib Razak. in return for which Chinese state-owned companies undertook to pay the massive debts of 1MDB as revealed in Kuwait court documents.
“Standing at a new historical starting point, China-Malaysia friendship is like this continuous railway track, spanning mountains and seas, with a promising future.” — Li Qiang at the groundbreaking ceremony of ECRL Gombak Integrated Terminal Station.
From orangutan diplomacy, we now have durian diplomacy. This was achieved through Li Qiang’s visit following the signing of the Protocol on Phytosanitary Requirements for the Export of Fresh Durian from Malaysia. Agriculture and Food Security Minister Mohamad Sabu said the protocol allows registered durian growers who received approval from the General Administration of Customs China (GACC) based on compliance with the conditions prescribed in the protocol to export fresh durians to the country. Previously, Malaysia could only export durian in the form of pulp, paste and frozen whole fruit. Over 63,000 durian growers nationwide stand to benefit from this protocol, should they receive approval. China is the main export market for durians from Malaysia, with an export value totalling RM887 mil in 2022.
14 memoranda of understandings and agreements (MOUs and MOAs), protocols and joint statements involving nine Malaysian ministries were exchanged between Malaysia and China during Li’s official visit. The coverage was extensive — digital economy, green development, manufacturing, robotics, entrepreneur development, innovation and start-ups, higher education, communications, housing and urban development, and research and development in agriculture and primary industries.
Malaysia ranked 34th most competitive economy
We have dropped to 34th place in the IMD World Competitiveness Ranking 2024, falling seven places since last year, while Singapore remains in first place. In the Asia Pacific region, Malaysia is 10th out of 14 – lower than Thailand (25th) and Indonesia (27th). The ranking, based on data and surveys from 67 economies, highlights Malaysia’s strengths in prices, basic infrastructure and tax policy but notes weaknesses in education, business legislation, and productivity. Key challenges include boosting R&D investment, optimising the labour market, updating policies, mitigating costs and leveraging advanced technologies. The disparity between us and Singapore continues to be unsurprising. View the full rankings here.
Anti-hopping law put to a real test
Kelantan state assembly speaker Mohd Amar Nik Abdullah notified the Election Commission (EC) of the vacancy of the Nenggiri state seat in Kelantan after its incumbent Mohd Azizi Abu Naim lost his membership in Bersatu on June 13. The EC will convene on June 28 to discuss the holding of polls. Azizi, also Gua Musang MP, was among the seven Bersatu lawmakers whose party memberships were terminated for voicing support for the Madani government. Bersatu recently amended its party constitution to state that any elected representative who defects will automatically cease to be a party member. The Registrar of Societies approved the amendment in April.
As a result of the termination, the anti-hopping law per Article 49A of the Federal Constitution and their seats have to be vacated. Wan Saiful Wan Jan, a Bersatu supreme council member, said Mohd Amar’s decision has set a precedent in the State Assembly. Wan Saiful urged the Speaker of Dewan Rakyat, Johari Abdul, to ensure uniformity between the implementation of rules of the State Assembly and the Dewan Rakyat after what happened with the Nenggiri seat.
Business
Top Glove Corp Bhd rises from the ashes
The world’s largest glovemaker by volume reported a net profit of RM50.67 mil for the third financial quarter ended May 31, 2024 (3QFY2024) from a revenue of RM638.88 mil after 7 consecutive quarters of losses. However, it’s not entirely a turnaround for the sector as the profit was due to a RM54.34 mil gain from land disposal and an unrealised foreign exchange gain of RM22.3 mil. The growing demand for gloves allowed the company to offset some cost increases through upward revisions in average selling prices (ASPs). View earnings here.Third IPO flop of 2024
Sabah-based integrated property developer KTI Landmark Bhd (KTI) is the third company so far this year to close below the initial public offering (IPO) price on the first trading day on the ACE Market. The share price of KTI closed at 28.5 sen, 5% lower than its IPO price of 30 sen. The company anticipated a market capitalisation of RM240 mil upon listing, valuing it at 17.4 times its price-earnings multiple. This valuation was based on its earnings per share of 1.7 sen for the financial year ended December 31, 2023. This isn’t too far off from the industry’s PE ratio of 18.2x.
4. AROUND THE WORLD 🌎
Biden's Bold Border Bet
US President Joe Biden unveiled an immigration regularisation programme that offers citizenship to hundreds of thousands of immigrants without legal status in the country. This initiative will allow some undocumented spouses of US citizens to apply for permanent residence and citizenship without having to leave the country, a change from the previous process. More than 500,000 spouses of US citizens, along with about 50,000 noncitizen children aged under 21, will be eligible. This has been well-received by such families, but the move has also been seen as a political gambit by Biden, especially since it is an election year. The programme is also seen as Biden fulfilling a campaign promise for a more humane immigration solution, considering his opponent will be hardliner Donald “Build-A-Wall” Trump. Still, Biden’s programme, in conjunction with tougher immigration enforcement by Mexico, appears to be lowering illegal border crossings.
China police investigate drug-related money laundering case after US tip
Chinese police took up investigating a case of illegal foreign exchange activity and money laundering after receiving tip-offs from the US, with China’s public security department lauding the case as a successful example of counter-narcotics and law enforcement cooperation between the US and China. The US Department of Justice corroborated this with information released about Mexico’s Sinaloa Cartel conspiring with groups based in California and tied to Chinese underground banking to launder over USD50 mil. The collaboration has been dubbed a “rare instance” and comes as the US continues to push the Netherlands and Japan to restrict China’s ability to produce cutting-edge semiconductors.
As an aside, President Xi Jinping has admitted to there being “deep-seated problems” in the nation’s military when discussing an ongoing military anti-corruption purge, with the national leader stating the problems were deeply rooted in the military’s politics, ideology, work style, and discipline. Xi called for “cadres at all levels” to “deeply self-reflect” and “make earnest rectifications”.
Boeing CEO "proud of the safety record"
A Senate hearing saw Boeing CEO David Calhoun defend the aviation firm’s safety record even as the company is beset on all sides due to safety concerns and whistleblowers coming forward with information on Boeing’s lack of safety. The CEO also pushed the safety issues as resulting from an “untrained workforce”, blaming the layoffs and worker turnover since the Covid-19 pandemic. A funny, dark meme here on Boeing’s safety — don’t view it if you are easily offended.
Calhoun, who scored a USD33 mil payday in 2023, did apologise to the families of 346 victims from two crashes who appeared at the hearing. However, the families, who were shouting at him throughout the hearing, will continue to push for justice, with Boeing and its corporate executives held accountable.
Meanwhile, the Senate subcommittee released a new report investigating Boeing’s safety and quality practices, detailing allegations about how staff were ordered to “move improperly stored” aircraft parts to “intentionally hide” them from FAA inspectors at the firm’s Renton, Washington factory. There were also allegations that staff at Boeing’s manufacturing team regularly tried to retrieve bad parts slated for disposal, including paperwork that helped them justify the reclamation.
Putin and Kim sign mutual defence pact
The two national leaders sealed the deal during Russian President Vladimir Putin’s visit – his first in 24 years – to North Korea, with North Korean leader Kim Jong Un stating that the pact basically amounted to an “alliance”, to which Kim has pledged “unconditional support”. The pact also included the possibility of weapons and technology ties, which Putin stated was in response to the West delivering advanced long-range weaponry such as F-16 fighters to Ukraine. This comes after the US and its allies have expressed concern that Russia could provide aid for North Korea’s missile and nuclear programmes and also follow accusations by the West that Pyongyang has been providing ballistic missiles and artillery shells that Russia has used in Ukraine.
After his Pyongyang visit, Putin is slated to head to Vietnam for a two-day visit, in what experts are saying is his way of showing he still has clout in the East despite Russia being shunned by the West. Talks are expected to focus on Vietnam and Russia strengthening their strategic partnership while discussing regional and global issues. Several bilateral documents will also be signed. The US, which is a leading trade partner with Vietnam, has expressed its displeasure at Putin’s visit, with a spokesperson stating that no country should give Putin a platform to normalise his atrocities.
Shorts
Thai PM proposes USD102 bil budget to revive economy
Prime Minister Srettha Thavisin proposed the budget for the 2025 fiscal year aimed at “helping the economy grow at its full potential”. The proposed budget projects a 7.8% rise in spending and an increase of 24.9% in the budget deficit from the 2024 fiscal year. USD4.1 bil of the 2025 budget will also go towards financing a signature 500 bil baht (USD13.6 bil) “digital wallet” handout scheme, which will see some 50 million Thais receiving 10,000 baht (USD272.72) to spend in their communities. In crypto lingo, this is called an airdrop.Indonesian Govt pilots four-day workweek
The Indonesian Ministry of State-owned Enterprises started the pilot programme, dubbed the “Compressed Work Schedule”, aimed at testing the impact of the four-day workweek on productivity and employee well-being. The programme will run over the next two months and will allow the ministry’s employees to apply to work four days a week every fortnight. To qualify, they must work a minimum of 40 hours in four days, have measurable work output, and have the request approved by their supervisors.
5. FOR YOUR EYES 📺
Since 1950, global fertility rates have decreased by half, from almost 5 children per woman to 2.3. In many countries, fertility rates have dropped below the “replacement level,” which is the rate at which a population replaces itself from one generation to the next — typically defined as 2.1 children per woman.
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Credits: Our World in Data
I binged the Tour de France: Unchained Season 2 over the weekend — intense and emotional, if you’re up for that kind of ride. Pun intended. The Tour de France, considered the most prestigious bicycle race, is won at an individual level, but teams are formed to ensure the leader of the team wins the tour.