☕️ Malaysia says 'no thanks' to 2026 Commonwealth Games

We start the week with good news. The Cabinet, on last Friday, has decided to decline to host the 2026 Commonwealth Games. Sometimes, the best investments are the investments the country doesn’t make.

1. MARKET SUMMARY 📈

Brace for a more expensive chocolatey experience. Cocoa has gained 186% over the past 12 months, even surpassing Bitcoin’s 150% gain. Heavy rains in West Africa, where most of the world’s cocoa is grown (Ivory Coast and Ghana both accounting for 60% of global supply), have hampered production for the last six months.

2. NUMBERS AT A GLANCE 🔢

RM197 bil — PM Anwar Ibrahim’s target for tax collection in 2024. He highlighted that Malaysia has a relatively low tax base, standing at around 11.2% of its gross domestic product, compared to neighbouring countries like Singapore (12.6%) and Thailand (16.4%). Anwar acknowledged the success of the Inland Revenue Board’s (IRB aka LHDN) efforts in boosting revenue but urged both companies and individuals to fulfil their tax obligations. He noted a disparity, with only around 29% of registered companies, approximately 435,000 out of 1.5 mil, currently paying taxes.

Knight Frank's latest Wealth Report revealed that nearly 70 individuals per day attained ultra-high-net-worth status in the previous year, contributing to a global increase of 4.2% in ultra-high-net-worth individuals (UHNWIs) to approximately 627,000 individuals. To qualify as a UHNWI, one must possess a net worth of at least USD30 mil. However, to rank among the top 1% of wealthy Americans, a substantially lower net worth of USD5.8 mil is required, according to Knight Frank. The report highlighted North America as the region with the swiftest growth in UHNWIs, experiencing a 7.2% rise.

204 units of Toyota Hilux were stolen in 2022 — crowning it the most stolen private vehicle of 2022, surpassing the usual target that is the Proton Wira with only 170 units stolen in the same year. Road and Transport Department (JPJ) enforcement division senior director Datuk Lokman Jamaan said Overall thefts in Malaysia have reduced by 89% from 2013 (38,322) to 2022 (4,352) for all types of vehicles, including motorcycles, private cars and commercial vehicles — in 2013, one vehicle was stolen every 14 minutes while in 2022, one vehicle was stolen every two hours.

3. IN MALAYSIA 🇲🇾

Creativity meets criminals

1. RM10.8 mil — An illegal drug storage facility that camouflaged as a childcare centre in Taman Dagang, Ampang, was raided by the police on Friday. The raid on the storage facility, where the police uncovered RM10.8 mil worth of drugs, was the end of the domino effect that started from the arrest of a 38-year-old drug transporter in Cheras last Tuesday. The drugs were believed to be transported from northern Peninsular Malaysia — hint: Golden Triangle.

2. RM14.5 mil — The police raided a luxury condominium in Kajang as it was being repurposed into an illegal drug storage facility. During the raid, the police confiscated RM14.5 mil of drugs, where the majority of them is syabu. Bukit Aman Narcotics Criminal Investigation Department (NCID) director Comm Khaw Kok Chin said that the seized drugs could have been supplied to about 1.8 mil users spanning across the local and overseas markets.

3. Harapkan pagar, pagar makan padi - The Malaysian Anti-Corruption Commission (MACC) confirmed that a senior police officer was arrested for allegedly accepting bribery in return for protecting individuals involved in vice activities. MACC revealed that they found RM2 mil in cash at several premises belonging to the senior police officer.

PADU that is not so ‘padu’ at the moment
Following the Sarawak state government’s decision to delay the registration of its citizens on the Central Database Hub (PADU) platform, PM Anwar Ibrahim has directed the Economy Minister Rafizi Ramli to explain the PADU registration issues being highlighted by Kuching at the Cabinet meeting this week.

According to the Chief Statistician, Dr Mohd Uzir Mahidin, more than 7.36 mil or about 35% of the country’s population have updated their information on PADU. Dr Mohd Uzir stated that his department, the Department of Statistics Malaysia (DOSM), is confident more individuals will register on the platform and DOSM will open more physical counters to facilitate public registration and to prevent errors. Dr Mohd Uzir also revealed that the daily registration rate last Saturday was 300,000. Given that the daily run rate is maintained for the final seven days until the March 31 deadline, PADU will receive approximately an additional 2.1 mil registrations.

As for the March 31 deadline, Economy Minister Rafizi Ramli told the public that the Government has no intention to extend the deadline beyond the end of this month as it would delay the Government's implementation of planned subsidy restructuring and targeted subsidies. Rafizi said that granting extensions will lead to Putrajaya having to fork out an additional cost of RM2 bil a month in fuel subsidies.

Schools gone wild

1. Sepang OCPD Asst Comm Wan Kamarul Azran Wan Yusof confirmed that a 37-year-old female teacher has been investigated by the police for allegedly having a sexual relationship with a 16-year-old male student. The police investigation was prompted when the mother of the student lodged a police report when she discovered red marks on his son’s neck. Upon asking her son, the male student claimed that the red marks were the result of being hugged and kissed by the teacher.

2. A 17-year-old student was found dead at a school dormitory in Lahad Datu, Sabah, after it was believed that he was beaten to death due to a misunderstanding about a smartphone charger. Thirteen boys aged between 16 and 19 have been detained to assist the authorities in the investigation. This incident brought us goosebumps as it had similarities to the death of Cadet Zulfarhan Osman from the National Defence University of Malaysia (UPNM) after he was tortured to death by his peers for allegedly stealing a laptop.

MAB is now Manchester United’s official airline
Malaysia Airlines Bhd (MAB) is now Manchester United’s official commercial airline after both parties announced a long-term partnership. MAB’s mother company, Malaysia Aviation Group (MAG) group managing director Captain Izham Ismail, justified the partnership for branding purposes, as he believes Manchester United can help boost MAB’s branding in Europe and Southeast Asia, where United has a large fanbase.

Although the value of the partnership is not revealed, Manchester United’s previous official commercial airline, Russian state-owned Aeroflot paid between GBP5 mil to GBP6 mil per annum to the Manchester-based club. Converting it to Ringgit, it would be safe to assume that MAB will need to fork out between RM29 mil to RM35 mil a year to sustain this partnership in the absence of any extra information. By the way, Malaysia Airlines logo will not appear on the team’s playing kit.

Shorts

1. McD Malaysia 🤝 BDS

   McDonald’s Malaysia has withdrawn its legal suit against Boycott, Divestment, and Sanctions (BDS) Malaysia after a successful out-of-court mediation process. With this, BDS Malaysia has acknowledged that McDonald’s Malaysia is wholly independent and not linked to the one in Israel.

2. Controversial amendments to the citizenship law dropped
   After many setbacks and criticism from the public, the Home Ministry has decided to drop two controversial proposed amendments - Section 19B and Section 1(e) - from the overall suite of amendments to the citizenship law. With this, the Bill on the proposed amendments to the citizenship law is slated for its first reading at the Parliament today. The two dropped amendments would have deprived foundlings and stateless children of automatic citizenship and would see them needing to register for it instead.

3. Quantum Metal Exchange Inc. in hot soup
   Quantum Metal Exchange Inc (QMEI) has been directed by the Securities Commission Malaysia (SC) to immediately cease and desist from offering the company’s shares to the Malaysian public. This directive is issued as QMEI operates in contravention of Section 212 (5) of the Capital Markets & Services Act 2007.

4. AROUND THE WORLD 🌎

Russia concert hall attack, 130+ people killed
More than 133 people were killed and more than 100 others were injured following a terrorist attack at Moscow’s Crocus City Hall on Friday before a performance. 11 people had been detained, including four directly involved in the attack. The assailants fired indiscriminately throughout the hall and reportedly threw explosive devices, leaving the concert venue in flames with its roof collapsing. Earlier in the month, the US embassy in Russia warned Russia of imminent plans by extremists to target large gatherings in Moscow. On Tuesday, the Russian President had blasted the warning as “provocative”, saying that it “resembles outright blackmail and the intention to intimidate and destabilise our society”. 

ISIS-K (aka Islamic State of Khorasan Province) has claimed responsibility for the attack and US officials have confirmed the authenticity of that claim (that was fast for the US to confirm, hmm). ISIS-K is a bitter rival of the Taliban, and one of the theories for the attack is that ISIS views Russia as an ally of the Taliban. In Putin’s first public address after this carnage, he claimed the gunmen involved had links to Ukraine and were escaping towards Ukraine, an allegation that Kyiv had rejected. 

Some footage of the attacks here and here (warning - graphic).

In the Russia-Ukraine war, the Ukrainians have found the sweet spot to hurt Russia by targeting their drone attacks on Russia’s oil infrastructure, such as refineries, storage depots and other sites, affecting Russia’s oil processing capacity by 7%. This strategy has gotten pushback from an unexpected party - the US, according to the FT. The US worries it will drive up oil prices (concerns about hurting itself) and provoke retaliation, where Russia could target the energy infrastructure of the West (again, concerns about hurting itself). 

About AI

• Apple x Baidu
  Following a report last week that Apple is in talks with Google to use its AI model Gemini to power Apple’s upcoming software updates, a new report surfaced that Apple is in talks with the Google of China, Baidu, in its iPhones and other devices within China, as regulators require all AI models to be vetted.

• Microsoft’s peculiar deal with Inflection AI
  Last week, Microsoft made a shocking announcement that Inflection’s co-founders Mustafa Suleyman (Google acquired Suleyman’s previous company DeepMind for USD400 mil in 2014) and Karen Simonyan to lead its AI division. Microsoft agreed to pay the AI company USD650 mil, largely to license its AI software and hire most of the startup’s staff. The unusual deal resembled an ‘acqui-hire’ but without an acquisition. The deal is said to make Inflection’s investors whole, with a modest return on investment (view the figures here), though they have forgone further upside, if any, from the AI startup, which was once valued at USD4 bil after raising USD1.3 bil in 2023. 

  Suleyman told Bloomberg last week that Inflection had not succeeded in finding an effective business model. Seems like Microsoft has just provided a soft landing for Inflection. The startup counts Bill Gates and Reid Hoffman (LinkedIn co-founder and Microsoft board member) as its investors. OpenAi, on the other hand, saw its annual revenue run rate hit USD2 bil in Dec 2023. 

Water crisis to fuel more conflicts: UN
The UN Water Development Report 2024, released on Friday in conjunction with World Water Day, said that increasing global water scarcity is fuelling more conflicts and contributing to instability. It added that clean water is critical to promoting peace. Some highlights from the report (view here): 

• 2.2 bil people worldwide have no access to clean drinking water.

• 3.5 bil people lack access to safely managed sanitation.

• Girls and women are the first victims of water scarcity, as they are primarily responsible for collecting supplies, which takes a few hours a day. This is a contributing factor to girls dropping out of school. 

• Lack of water security drives migration and displacing the population. At least 10% of global migration is linked to water stress.

• 153 countries share water resources, but only 24 countries signed cooperation agreements covering all of their shared water. 

This reminds us of the never-ending water row between Malaysia and Singapore. Especially with this kind of heat, we are grateful for the easy and cheap access to clean water.

Shorts

1. 2100 - a shrinking world

   A major study by the Institute of Health Metrics and Evaluation at the University of Washington published in the Lancet found that fertility rates in nearly every country will be too low to sustain their populations by the end of this century. By 2100, populations in 198 out of 204 countries will be shrinking. This future trend in fertility rates will reconfigure the global economy and the international balance of power, according to Natalia Bhattacharjee, co-lead author of the research (view here).

2. US to spend another USD1.2 tril

   President Joe Biden signed a USD1.2 tril spending package into law, a stopgap measure to avoid another partial government shutdown. The new package will provide USD886 bil funding for the Defence Department, including a raise for US troops. For the past six months, the government was funded with four short-term stopgap measures, taking its total debt to above USD34 tril. US debt (aka Treasuries) is usually considered a safe-haven asset for parking money. How far can this label go? 

3. A study of the most pesticide-contaminated fruits

   The Environmental Working Group (EWG) published its annual Shopper’s Guide to Pesticides in Produce report, which ranks fruits and vegetables by pesticide contamination. Strawberries continue to take the top spot of the “Dirty Dozen” list in the study. The report analysed data collected from tests conducted by the US Department of Agriculture (USDA) and Food & Drug Administration (FDA) on 47,510 samples from 46 fruits and vegetables. A similar research in Malaysia would be helpful. View the report here.

5. FOR YOUR EYES 📺

1. The world’s first Dragon Ball theme park will be built in Saudi Arabia and will be funded by Saudi government’s Public Investment Fund (PIF). The theme park will span over 500,000 sqm, featuring 7 themed lands and 30 over rides. Watch the official trailer announcement below. This comes a few weeks after the passing of Akira Toriyama, the creator of the famous Dragon Ball manga.

2. Visual effects artist @olivervisualfx created the actual scale of the Universal Pictures trailer that is usually shown before a movie starts, where the logo flies above Earth. Real cool! Do check out his other interesting VFX content too!

olivervisualfx

View more on Instagram

3. When the brains were left elsewhere — protesters boycotting at the wrong retailer. Watch here.