☕️ Malaysians have RM1.53 trillion of household debt as of end 2023

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

62.3°C — that’s how hot it felt at Rio de Janeiro last Sunday, though the actual maximum temperature was 42°C . The heat index measures how hot the temperature feels by taking into account humidity. This was the highest mark since Alerta Rio began keeping such records since 2014. Due to the extreme, the Ipanema and Copacabana beaches were crowded with people. Meanwhile, heavy rainfall was causing widespread damage in the southern regions and is expected to persist through the week, as reported by officials.

According to Prime Minister Anwar Ibrahim, Malaysia's total household debt reached RM1.53 trillion by the end of 2023. Anwar, who is also the finance minister, stated that housing loans accounted for the largest portion of aggregate household debt at 60.5%, followed by vehicle loans (13.2%) and personal financing (12.6%). The aggregate household debt for the previous year was RM1.45 trillion in 2022. Furthermore, Anwar highlighted that there was a 5.1% annual growth rate in household debt from 2018 to 2023.

Bonus ATM in Ethiopia — Some USD40 mil was withdrawn from the Commercial Bank of Ethiopia on Saturday as the customers discovered that they could take out more cash than they had in their accounts at the bank. Reports of a technical malfunction started to circulate among universities, primarily through messaging apps and phone calls. This caused long queues to form at campus ATMs, with a student in western Ethiopia telling BBC Amharic that people were withdrawing money until police officers arrived on campus to prevent further withdrawals. It took several hours for the institution to stop the money from free-flowing.

Wisdom of the day

3. IN MALAYSIA 🇲🇾

The price of imported white rice to drop today
The retail price of imported white rice will be reduced by RM2 to RM3, effective today, according to Agriculture and Food Security Minister Datuk Seri Mohamad Sabu. The previous price was around RM38-RM45 for a 10 kg pack, which will now be about RM35. This move by the government, through the National Action Council on Cost of Living (Naccol), is aimed at helping Malaysians reduce their cost of living given the month of Ramadan and upcoming Eid festivities. He added that existing rice stocks amounting to 140,000 metric tonnes must be immediately processed and supplied to domestic markets to boost rice distribution. A long-term action plan to create a realistic rice production cost structure is in the works, which will help guarantee a sustainable rice industry and protect the welfare of local rice farmers.

We love rice; we love cheaper rice even more.

PAS MP: Possibility of a ‘Cartel’ behind Allah-printed socks
Afnan Hamimi Taib Azamudden (Alor Star-PN) claims that a “cartel” seems to be involved in the ‘Allah’-printed socks issue which has shaken the public, the act deliberately done to sabotage national unity. He asks the government to take prompt action as this incident infringes on the 3Rs (religion, race, royalty) and could trigger racial tension. Afnan is adamant that stiffer punishments should be carried out under Sections 298 and 298a of the Penal Code, dealing with offences related to religion. PDRM has found only 5 pairs of socks out of 18,000 pairs during a search in a factory suspected of producing them.

42 reports were lodged nationwide regarding the socks. KK Supermart and Superstore Sdn Bhd founder Datuk Seri K.K Chai apologised and explained that the socks were among 1,200 pairs imported from China, and admitted fault for not thoroughly performing checks before sales. Umno Youth chief Akmal Saleh leads calls for a boycott despite the apology and removal of socks from stores. Let this be a lesson learned for stores to QC their products properly.

Business:

1. YTL AI Cloud, Malaysia’s first artificial intelligence cloud
   YTL Power International Bhd has launched YTL AI Cloud, Malaysia’s first artificial intelligence (AI) cloud focused on large-scale graphics processing unit (GPU)-based computing. YTL AI Cloud will deploy Nvidia’s new Blackwell GPU (more in the Global section), placing YTL at the forefront with the adoption of Nvidia’s cutting-edge hardware designed for high-demand computational tasks. This initiative, supported by Nvidia and the Malaysian government, aims to enhance scientific research, innovation, and economic progress in Southeast Asia. The supercomputer will be housed in the YTL Green Data Center Campus in Johor, powered by its on-site 500MW solar power facility. This venture is set to cater to the growing need for advanced AI and machine-learning solutions in SEA.

2. Kelantan’s Sultan Muhammad V joint-owner of HeiTech shares

   Farhash Wafa Salvador, a former political aide to PM Anwar Ibrahim and PKR’s Perak Chief, emerged as a substantial shareholder in HeiTech Padu Bhd with a 15.91% stake (worth RM41.2 mil at yesterday’s closing price). The ownership of the shares is held via private vehicle Rosetta Partners Sdn Bhd with Kelantan’s Sultan Muhammad V. The shares are apparently part of an investment strategy to help Bumiputera companies. When criticised by the opposition, Farhash denied ties with the government and political parties.

   Rosetta Partners bought 16.12mil shares, resulting in a 15.91% stake in the company, shortly after HeiTech Padu was reported to be a leading contender for the National Integrated Immigration System (NIISe) project, valued at over RM1bil. The project aims to integrate biometric technology at the electronic gates of the nation’s immigration checkpoints. Big bucks await HeiTech should they secure the contract.

Shorts

1. 80% of almost 4,000 citizenship applications were approved, according to Home Minister Saifuddin Nasution Ismail. The rest were rejected due to incomplete documentation and failure to pass security checks. Among those who received the citizenship were 35 children between the ages of six to 16 born by Malaysian mothers outside the country.

2. Johor party youth member arrested for alleged sexual assault

   A high-positioned party youth member in Mersing, Johor was arrested for allegedly sexually assaulting a teenage boy. Mersing OCPD Supt Abdul Razak Abdullah Sani confirmed the arrest following reports by two individuals who claimed that the suspect sexually assaulted a 15-year-old boy. However, he denied any information regarding the suspect’s link to a political party, as investigations are still ongoing. Please help report to the police or visit this link to find a helpline for any sexual assault case.

3. Fin Min II: MYR top performer after coordination measures
   Finance Minister II Amir Hamzah Azizan said MYR was the top performer among ten regional currencies since the government implemented coordination measures with Bank Negara Malaysia (BNM), GLCs, and GLICs. Increased market interest in the Ringgit saw immediate positive market feedback. Against the greenback, MYR appreciated by 0.85%, compared to SGD’s 0.19% and IDR’s -0.54%. View: Ringgit vs US dollar performance tops ASEAN peers currencies since Feb 24.

4. AROUND THE WORLD 🌎

Evergrande’s subsidiary overstated its sales by almost USD80 bil
The cat’s finally out of the bag — China Securities Regulatory Commission found Hengda Real Estate, Evergrande Group’s main operating vehicle in China, had substantially inflated crucial reported financials in 2019 and 2020 by a quantum of RMB564.1 bil (USD78.4 bil). This could potentially be the biggest financial fraud in history, making Enron’s financial scandal a rounding error. Hengda had relied on these misleading figures to sell bonds. The regulator said the unit committed financial fraud by improperly recognising revenue in advance. In light of this, Evergrande Group could be on the hook for a potential fine of more than half a billion dollars.
View infographic: Major accounting scandals by numbers

Evergrande’s founder and former chairman, Hui Ka Yang, and former Chief Executive, Xia Haijun, will be banned from the financial markets for life. Both men will also be fined.

Nvidia’s new Blackwell chips could make execs at Meta cry
Jensen Huang and team continue to extend the lead for Nvidia. Nvidia has announced that their new B200 graphics processing unit (GPU) that can provide up to 20 petaflops of FP4 power from its 208 bil transistors. Additionally, it also announced GB200, which features two of the same GPUs along with a single Grace CPU that can offer 30 times the performance for LLM inference workloads while also being much more efficient.

Nvidia claims that this combination can reduce cost and energy consumption by up to 25 times when compared to a flagship Hopper GPU (H100). The H100 chip, costing around USD30,000 (RM141.9k) per chip is the one fueling the explosive sales in Nvidia. Training a 1.8 trillion parameter model would have previously taken 8,000 Hopper GPUs and 15 megawatts of power, Nvidia claims. Nvidia’s CEO says 2,000 Blackwell GPUs can carry out the same task while consuming just four megawatts.

Okay — enough with the geeky stuff. The new processor design is named after David Blackwell, the first Black scholar inducted into the National Academy of Science. Huang aims for the chips to realise the promise of AI for every industry. Blackwell will assist in advancing AI beyond basic tasks like speech recognition and image creation, according to the company. However, the challenge remains for Nvidia to scale its technology to more customers. Well, Nvidia already has secured at least one customer — YTL Power International Berhad.

Will Meta’s billion-dollar bet on the H100 goes to waste? Mark Zuckerberg had earlier in the year announced Meta’s roadmap for AI requires building a “massive compute infastructure.” According to Zuckerberg, the infrastructure will include 350,000 H100 graphic cards from Nvidia. Based on the report from CNBC, that could mean USD9 bil in expenditures.

Japan finally raises its interest rate
Japan's central bank, the Bank of Japan (BOJ), has implemented its first interest rate hike in 17 years, raising its key rate from -0.1% to a range of 0% to 0.1%. This move follows a surge in wages following an increase in consumer prices — Japan’s core inflation in January 2024 was 2%. The decision to cut rates below zero in 2016 aimed to stimulate Japan's stagnant economy. With this hike, no countries remain with negative interest rates. Additionally, the BOJ has abandoned its yield curve control (YCC) policy, which involved purchasing Japanese government bonds to manage interest rates. Although in place since 2016, the YCC policy faced criticism for distorting markets by preventing long-term interest rates from rising.
Learn:
1) What is YCC?
2) What happens in a negative interest rate environment?

Shorts

1. Unilever’s plans to spin off ice cream unit, cut 7,500 jobs
   Unilever plans to spin off its ice cream unit, including brands like Magnum and Ben & Jerry's, into a separate business. This comes with a cost-saving initiative involving cutting 7,500 jobs. The spin-off will commence immediately and be completed by the end of 2025. After the split, Unilever aims for mid-single-digit sales growth and margin improvement. They have also launched a program to save EUR800 million (RM4.1 bil) over the next three years. FMCG sales slowing down, too?

2. GoTo aims to breakeven* by 2024
   Indonesia's tech conglomerate, GoTo, expects to achieve adjusted core earnings* parity this year after its first quarterly profit in Q4 2023. The company reported adjusted EBITDA of 77 bil rupiah (~ RM23.2 mil) in Q4 2024. Cost-cutting measures, including reduced incentives and marketing expenditure, contributed to the shift to profitability. GoTo also highlighted its partnership with TikTok, which acquired a majority stake in Tokopedia, GoTo's e-commerce arm, in December 2023, as a factor expected to boost profitability in the future.
   View deck: 4Q 2023 & FY2023 Results

3. Grab Singapore allows its users to pay using crypto
   Following Grab's tie-up with payment firm Triple-A, users of Grab’s services will now have the option of topping up their GrabPay e-wallets in cryptocurrencies. Users can top up using five cryptocurrencies: Bitcoin, Ether, StraitsX’s Singapore dollar-backed stablecoin XSGD, United States dollar-backed stablecoin USDC, which is managed by global payments firm Circle, and stablecoin Tether, also known as USDT. Wen Grab Malaysia?

5. FOR YOUR EYES 📺

1. Mr Beast, aka Jimmy Donaldson, is at it again, asking one of its many fans to protect a prize, this time a Lamborghini, against a moving train.

2. Maybe it is about time The Coffee Break reactivate its TikTok account. Adults in the US are slowly relying on TikTok for news as users’ behaviour shifts. It's interesting to note that surveys conducted by Pew Research have found that last year, 43% of TikTok’s users regularly turned to the app to get their news. This figure is up 21% from 2020 and suggests a shift away from more traditional information sources like Facebook, which have fallen out of favor.