☕️ Malaysia's diesel subsidy rationalisation - Thailand, Singapore feel the pain

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

After 41 seasons and 8,000 episodes later, long-time TV personality Pat Sajak will retire as the host of Wheel of Fortune (lots of nostalgia here for Gen Y and older). The 77-year-old has been hosting the game show since 1981 and has collected 3 Emmy Awards, a People’s Choice Award and a star on the Hollywood Walk of Fame. Sajak will still be working from behind the scenes as he will remain a consultant on the show for the next 3 seasons, and his role will be succeded by Ryan Seacrest, the popular host of American Idol. in 2018, Sajak became the longest-running host of a game show, overtaking The Price is Right’s Bob Barker. The show has awarded over UD250 mil (RM1.18 bil) in prizes since its launch.

Pixar’s latest sequel, Inside Out 2, broke box office records, bringing in an estimated USD295 mil (RM1.39 bil) over the weekend globally. This makes it the biggest box office opening for the year, and the highest global opening by an animated film of all time, and second-best in the North American market behind the 2018 release of The Incredibles 2, Pixar parent Disney announced. Oscar-winning Inside Out, released in 2015, grossed USD858 mil worldwide. Weekend activity for the family? Watch the trailers — Inside Out and Inside Out 2.
Fun fact: Apple’s Steve Jobs acquired Pixar from George Lucas (Star Wars and Indiana Jones creator) in 1986 for USD5 mil. In 2006, Jobs sold Pixar to Disney for USD7.4 bil in an all-share transaction, making Jobs the single largest shareholder of Disney then. 

Malaysia targets a 40% mix of renewable energy in the country’s fuel mix by 2035 and further increases it to be a net zero country as early as 2050, according to Deputy PM and Energy Transition and Water Transformation Minister Fadillah Yusof. This will reduce carbon dioxide emissions by 10 mil tons per year. The minister also shared that the country’s energy sector represents 29% of Malaysia’s Gross Domestic Product (GDP) and employs a quarter of the country’s workforce.

3. IN MALAYSIA 🇲🇾

The diesel subsidy rationalisation’s ripple effect

• Eggs: In a move to ease the burden of the rakyat, Putrajaya has announced a 3-sen reduction in the prices of Grade A, B, and C chicken eggs across the country, effective yesterday. PM Anwar Ibrahim stated in the announcement that for every 10-sen the Government subsidised egg prices, it will incur an expenditure of RM100 mil. The Government spent RM927 mil to subsidise the price of eggs in 2023.

• Singapore: Cross-border tour agencies between Singapore and Malaysia have lamented a tough journey ahead as they expect a 20% to 40% increase in cost due to the diesel subsidy rationalisation plan announced by Malaysia. Singapore Cab Booking CEO Farid Khan stated that after the diesel subsidy is cut, the diesel price in Malaysia is almost equal to Singapore’s diesel price. How to become a developed country 101 — leeching of your developing neighbour’s fuel subsidy.

• Thailand: Not only Singapore but even our northern neighbour - Thailand, is also in tatters after we cut off the supply of highly subsidised diesel into the country. Traders in Southern Thailand (Sungai Golok, Narathiwat and Yala provinces) that are selling smuggled Malaysian subsidised diesel may have to ‘gulung tikar’ as they are having difficulties to source for this ‘cheap’ diesel. Previously, Malaysian diesel was sold at between RM3.20 and RM3.45 per litre. However, after the diesel price in Malaysia increased by more than 50%, Malaysian diesel is selling for between RM4 and RM4.50 per litre to motorists in Thailand. The current retail price of diesel in Thailand is RM4.26 per litre. Malaysia, truly subsidising Asia.

• School buses: Despite the diesel subsidy being rationalised, PM Anwar said that diesel subsidy is still around for certain groups of users and Putrajaya is footing RM7 bil in subsidies related to diesel in Peninsular Malaysia. One of the groups of users that still benefit from the diesel subsidy is operators of school buses. Last week, PM Anwar issued a warning to school bus operators not to hike prices as they still receive the full diesel subsidy (school bus operators pay RM1.88 per litre compared to the current diesel price of RM3.35 per litre). In response to PMX’s warning, the Federation of School Bus Associations Malaysia president Amali Munif Rahmat threatened the Government by stating — ‘If we stop driving 16,000 school buses nationwide, 1.5 mil pupils will be unable to get to school’. A day later, another school bus operator association, Malaysian School Bus Association Alliance president Rofik Mohd Yusoff, reassured that there would be no increase in bus fares, at least until December.

Possible three-way fight in Sungai Bakap by-election?

• PN: After PH announced their candidate last week, now it is PAS’ turn to announce their man into the fight and *kompang roll* the candidate is Nibong Tebal PAS deputy chairperson Abidin Ismail (view his profile here). In announcing Abidin’s candidacy, PAS deputy president Tuan Ibrahim Tuan Man stated that Abidin owns an ISO 14001 certification. If that is truly the case, Abidin will be the first and only person in the world to own an ISO certification. For your information, ISO certifications can only be granted to organisations, not individuals. In Malaysia, the Department of Standard Malaysia (Standards Malaysia) is the responsible agency that can issue such certifications.

• MUDA: Analyst Asrul Hadi Abdullah Sani said that Muda is mulling the decision to contest in Sungai Bakap in order to revive the party following the resignation of Syed Saadiq as its president. Asrul added that Muda will have better winning chances if the party contested in mixed race seats and Sungai Bakap is a good starting point. Sungai Bakap, a seat in the Penang state assembly, has a mixed electorate, with Malay voters comprising 59.4%, Chinese 22.5%, Indian 17.4%, and others 0.7%.

Mastermind behind RM24 mil FD fraud nabbed
Even leaving your funds in fixed deposits doesn’t seem to sound any safer than scams. Police have arrested an individual in Kota Kinabalu suspected to be the mastermind of a syndicate in the fraudulent withdrawal of RM24.2 mil from several FD accounts. Investigations revealed the involvement of syndicate members from within and outside the bank, who colluded in facilitating the unauthorised withdrawals. Police received reports from account holders and bank staff in early June in Petaling Jaya, Selangor, after victims noticed suspicious cash withdrawals from their FD accounts made in Kota Kinabalu.

Oriental Kopi goes IPO
Modern kopitiam operator Oriental Kopi Holdings Bhd has filed for an IPO on the ACE Market as it seeks to open a total of 15 new owned-operated cafes between 2024 and 2026 in various states. Its IPO pricing and valuation is not known yet. Oriental Kopi currently has 14 outlets and also sells packaged coffee and tea in-store. The brand has also secured its first export order in February to Hong Kong and signed a JV agreement with Paradise Group to expand into Singapore. Last year, the company generated RM133.01 mil in revenue and a net profit of RM20.03 mil (15.05% net margin). View its prospectus here.

4. AROUND THE WORLD 🌎

Ukraine peace conference and Putin’s proposal
During the weekend, more than 90 countries gathered in Switzerland for the Summit of Peace in Ukraine, dedicated to discussing an exit out of the conflict with Russia, but Russia was not invited to the summit. China, a key ally of Russia, was also not present, further blunting any potential impact of the summit. Ahead of the summit, Russian President Vladimir Putin released a statement laying out his ceasefire conditions before negotiations can begin. Firstly, he called for the Ukrainian government to withdraw from 4 regions partially occupied by Russia - Donetsk, Luhansk, Kherson and Zaporizhzhia (Europe’s largest nuclear energy site located here). Secondly, Ukraine has to officially give up its effort to join the NATO military alliance. Ukraine blasted the proposal as “offensive to the common sense”.

The Group of 7, comprising the world’s seven largest “advanced” economies - the US, UK, Canada, Japan, Italy, France and Germany — also met ahead of the peace summit for their annual gathering in Italy. This year’s cohort is said to be the weakest that have attended the summit, displaying a “crisis in of Western authority” as many of them face domestic issues threatening their authority and grip on power.
Read: 6 lame ducks Giorgia Meloni: Meet the G7 class of 2024

The world’s most neglected displacement crises
The Norwegian Refugee Council (NRC) publishes a report each year of the ten most neglected displacement crises in the world to draw more attention and focus on these people whose suffering rarely makes international headlines. To an extent, media attention is positively correlated to the aid funding these countries will receive and also attention from global leaders. As the saying goes — out of sight, out of mind. 9 out of these 10 countries are from Africa, the other being Honduras. Most of these countries are facing conflicts within and outside the borders, with war in some countries spelling over to their neighbours (view map below). For the second year in a row, Burkina Faso, which is under military rule, tops the list. With a population close to 23 mil, the country saw a record-breaking 707,000 new displacements and about 2 mil civilians trapped in 36 blockaded towns across the country. 
View report: The world’s most neglected displacement crises in 2023

World of Crime

• Drug cartels diversifying its business model
  The FBI reported that Mexican drug cartels, including the Jalisco New Generation Cartel, Gulf Cartel and the Sinaloa Cartel are cashing in on the most lucrative criminal enterprise now - online scams. The scam of choice appears to be timeshare fraud, targeting mostly older Americans. More than USD300 mil have been lost to this scam over the past five years. Timeshare is a vacation home in which multiple people share ownership.

• Sextortion victim turns ordeal into documentary
  A Spanish filmmaker’s nude photos were leaked after her laptop was stolen in 2019. Hackers got in touch with her three months after it was stolen to demand money, or they would leak the intimate photos. Despite the stress, she was able to draw on her skills as a filmmaker and document the whole episode on film from her perspective as it unfolded. As the hackers continued to extort her and as she ran out of options, she eventually decided to upload the images on her social media, which altered the balance of power between her and the hackers. It was effective and the hacker has stopped contacting her. Her documentary called ‘My Sextortion Diary’, which has just been screened at the Sheffield Documentary Festival, was well received — watch trailer here.
  Learn: Sextortion and Blackmail: How to Deal with it

• Man jailed for ‘stealthing’ during sex
  Secretly taking off a condom during sex is known as “stealthing” as it is classified as rape in the UK. A woman had agreed to have sex with a man on the condition a condom was used but discovered later that he took it off. Though the law does not specifically mention stealthing as an offence, “conditional consent” is needed during sex, otherwise, the act is deemed as non-consensual sex as they were tricked about the “nature” of the sex. The man was found guilty of rape and sentenced to 4 years and 3 months in prison.

Shorts

1. Oil spill in Singapore
   A collision between 2 ships saw about 400 tonnes of oil leaked into the sea, with large quantities washed offshore, blackening the city-state’s southern coastline. The oil leak has been contained and cleaning-up efforts are ongoing. Swimming and other sea activities are prohibited on the resort island of Sentosa. The initial biodiversity survey showed no significant impact on marine wildlife. View the incident here.

2. Gaza War gone to Wiki Wars
   A fierce “edit war” has taken place on a Wikipedia page dedicated to the deadly Israel raid in the Nuseirat refugee camp that saw 4 Israeli hostages rescued at the expense of the lives of a few hundred Gazans. Since its creation, the page was edited 627 times by 103 users in just a week as compared to the Wikipedia page about the Oct 7 Hamas attack that saw 1,705 edits by 368 people over the course of 8 months.

5. FOR YOUR EYES 📺

1. The turnaround story of apparel brand Abercrombie & Fitch, once deemed as America’s most hated retailer. Its stock has gone up +415% in the past 1 year, even more than Nvidia’s +200%. Under the leadership of its CEO Fran Horowitz since 2017 and shifting the brand from loud branding and sex appeal to being more inclusive, the brand has transformed itself from a dying mall brand to a Wall Street darling.

2. The crazy market caps of Apple, Microsoft and Nvidia. Combined, they are worth more than every stock exchanges outside of the US.