☕️ Malaysia's human trafficking record improves

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

The numbers don’t lie. Total diesel retail sales at petrol stations dropped by almost eight mil litres per day, or nearly 30%, during the first week after the announcement of retargeting the diesel subsidy (June 10 to 17) compared to the previous week (June 1 to 8), said Finance Minister II Amir Hamzah Azizan. Meanwhile, commercial diesel sales increased by four mil litres per day, indicating that some subsidised retail diesel was being used by industries that should pay market prices. Additionally, diesel sales at country borders saw a 40% decline.

Over the past three days, Nvidia’s market cap has plunged by approximately USD430 bil, marking the largest three-day value loss for any company in history. From its intraday peak on Thursday (June 20, 2024), the drop exceeds half a trillion dollars, nearly equivalent to the total value of Tesla (USD570.9 bil). This massive decline, attributed to profit-taking and speculation about AI data centre spending peaking, poses significant concerns for the broader stock market. Is the AI hype coming to an end?

The billionaire family behind Chanel will have received USD12.4 bil (RM58.4 bil) in payouts from the luxury brand's earnings over the past three years, significantly boosting their personal wealth and supporting their diversification away from high fashion. The 5th biggest company by market capitalisation on KLSE, IHH Healthcare Bhd, is worth RM55.5 bil. The family can tapao IHH and still have some change to retire comfortably. The Wertheimers’ Cayman Islands-based holding company for Chanel is set to receive a USD5.7 billion dividend for 2023, the largest annual payout since Chanel began publishing results in London six years ago.

3. IN MALAYSIA 🇲🇾

Malaysia advances to Tier 2 Watch List in Trafficking report
We have been elevated to Tier 2 in the 2024 Trafficking in Persons (TIP) report by the US State Department. This is an improvement from last year’s Tier 2 Watch List status and Tier 3 in 2021 and 2022, which carried the threat of export sanctions. Tier 2 countries, while not fully meeting the minimum standards to eliminate human trafficking, are recognised for making significant efforts to do so – as the report highlighted Malaysia’s increased efforts, including more trafficking investigations and a higher number of convictions with substantial sentences. The report also pointed out issues such as persistent corruption and the government’s requirement for victims to actively participate in investigations to receive protection and services, which is terrible and traumatising for the victims.

Migrant rights activists also criticised the report for upgrading Malaysia to Tier 2, arguing that despite what the report recognises, there have been no significant on-the-ground improvements. There is the belief that we should be downgraded to Tier 3 instead due to the inadequate response to labour trafficking and lack of accountability. An analyst even suggested that the US decision could be politically motivated to present a more favourable image for potential investors. Vietnam, Indonesia and Thailand also hold Tier 2 status, while Singapore and South Korea are in Tier 1.

Sarawak to end GLC funding by 2027
Starting 2027, the Sarawak government will cease funding GLCs; beginning with the Sarawak Economic Development Corporation (SEDC) and Bintulu Development Authority (BDA). The funds saved will be redirected to infrastructure projects such as schools and clinics. GLCs are encouraged to generate their own revenue, with subsidiaries in commerce, like those in palm oil, exploring new innovations and products for income instead. The aim is to of course, reduce dependency on government funding and promote self-sufficiency. Much like other firms. There is a need for GLCs to adopt the mindset of financial independence to ensure efficient management and prevent complacency, which is prevalent in most GLCs already. Sarawak Premier Abang Johari thinks that SEDC and BDA can pave the way for other GLCs and thrive independently, citing their investment potential in methanol projects and industries in the Samalaju Industrial Park. Semenanjung GLCs, maybe it’s time to take some notes.

Chinese firms eyeing Malaysia to avoid US tariffs
Chinese tech companies, including lithium battery producer Eve Energy, are exploring relocating manufacturing here to sidestep US tariffs. They seek assurances from Malaysian officials to persuade Washington to waive tariffs on products assembled in Malaysia, but our officials stated that they cannot guarantee US actions. No one can, really. Similar inquiries were made in Johor by a Chinese medical devices company.

As China faces new tariffs from the Biden administration, especially affecting EV exports, many tech firms are shifting operations to Southeast Asia to avoid the barriers. The Madani government is intensifying efforts to boost its semiconductor manufacturing sector to compete with Thailand and Vietnam. Currently, we control 13% of the global market for semiconductor packaging, assembly, and testing services – contributing significantly to the GDP and supplying 20% of the US semiconductor imports annually. This could pose a good economic move for Malaysia.

MAHB targets expansion with 15 new foreign carriers
Malaysian Airport Holdings Berhad (MAHB) is actively seeking to attract 15 more foreign carriers to operate in Malaysia over the next two years in pursuit of enhancing KLIA as a premier international hub. Currently, KLIA serves 70 airlines, surpassing its pre-pandemic level of 69. By year-end, British Airways, Thai VietJet, and 9 Air are expected to commence operations at KLIA. As support, MAHB launched the Airline X-celeration Programme, offering incentives like landing fee waivers, airport office rental rebates, and marketing support. Around RM3 mil was allocated for marketing on Malaysia-China routes alone. A sizable sum. But increased traffic was reported, driven by the visa-free travel exemptions as well.

Official attire for the 2024 Olympics: Minimalist or Drab?
The official attire for the Malaysian Olympic team was launched earlier this week, and very few had nice things to say about the collection. While many other countries have shown off their designs with pride, like France, Japan and the US (designed by Ralph Lauren - check it out here) for example, ours unfortunately were criticised by locals online as boring (the tamest criticism by far). As the 2024 Olympics are to be held in Paris, THE city of fashion, countries have taken the opportunity to showcase their talents and dress their athletes in attire that serves the best design, quality, and presentation. A few online said that the minimal effort put into the attire shows a lack of respect for our athletes, and that seems about right when you compare it with others.

Why didn’t anyone think of using actual athletes who will be wearing these instead of mannequins? Taichi-ing it away wouldn’t look good look on a minister too.

Shorts

1. Landslide at Mount Kinabalu foothills

   A landslide was reported at the foothills of Mount Kinabalu on the morning of June 24. Ranau Fire and Rescue Department said that the incident at Mesilau, Kundasang, did not involve any casualties or damages to property. The video clip of the landslide went viral on social media, causing some panic online. But the landslide occurred well away from the mountain-climbing trail and the situation is already under control. Watch the landslide here.

2. Highway concessionaire CEO arrested for bribery involving RM1.6 bil projects

   The CEO of a prominent highway concessionaire in Klang Valley, along with two senior company officials, was arrested by MACC for alleged bribery linked to two highway projects totalling RM1.6 bil. Arrests were made following information received by MACC about bribes given as “rewards” for awarding contracts for highways valued at over RM1 bil and RM650 mil. Five others associated were detained and remanded for three days, and the concessionaire’s executives until Friday. It doesn’t come as a surprise anymore, which is terrifying. What does that say about our country?

4. AROUND THE WORLD 🌎

Ukraine-Russia conflict
Volodymyr Zelensky, Ukraine’s president, dismissed Lieutenant General Yuriy Sodol, the commander leading the war against Russia in eastern Ukraine since earlier this year. Mr Zelensky did not give a reason for the shake-up, but hours earlier, a prominent soldier accused Mr Sodol of “killing more Ukrainian soldiers than any Russian general”. The public is also unhappy with the situation in Ukraine, having criticised the excessive casualties and accusations of incompetence. Ukraine has made several military changes as Russia has regained the initiative in the war.

The West continues to pressure Russia. European Union (EU) announced another package of sanctions (14th) on Russia. The new restrictions on gas are designed to reduce Russia’s revenues from liquefied natural gas (LNG) exports. This will be achieved by banning trans-shipments (transferring cargoes from one ship to another) off EU ports and by providing Sweden and Finland with the ability to cancel some LNG contracts. The measures likely will impact millions of euros, rather than billions, are they did not go as far as imposing an EU ban on LNG imports, which have increased since the beginning of the war.

Finally, an end to the WikiLeaks founder’s ordeal
WikiLeaks founder Julian Assange has been freed from prison in the UK and is expected to return to Australia after agreeing to plead guilty to breaching US espionage law. Assange, 52, will plead guilty to one count of conspiracy to obtain and disclose classified US national defence documents.

Assange gained prominence with WikiLeaks, an online whistleblower platform launched in 2006. Notable leaks include footage of a US Apache helicopter attack in Baghdad and classified documents on the Afghanistan and Iraq wars (and plenty of US atrocities - read link below), as well as diplomatic cables. In 2019, former President Donald Trump decided to charge Assange with 17 counts of breaching the Espionage Act. Fast forward to 2024, after Assange served five years in prison, the pressure on US President Joe Biden to drop the case intensified, with the Australian government officially requesting the case be ended, citing its prolonged duration. Following his plea, Assange is anticipated to travel back to Australia, bringing a significant chapter in his legal battles to a close.
Read: Wikileaks: Document dumps that shook the world

Technology giants — “caught” for little acts

1. EU vs Microsoft
   The European Commission has accused Microsoft of anti-competitive behaviour by bundling its Teams app with its Office suite. The charge sheet outlined concerns that Microsoft’s act gave Teams an “undue advantage,” harming rivals such as Slack (acquired by Salesforce in Dec 2020 for USD27.7 bil) and Zoom. The latest case follows a tough battle with regulators regarding Microsoft’s USD75 bil acquisition of Activision Blizzard last year. This comes as the company faces scrutiny over its partnerships with artificial intelligence start-ups, including OpenAI.

2. Foxconn allegedly won’t hire married women in India
   Reuters, in a special report, revealed that Foxconn, a major manufacturer of Apple devices, has been excluding married women from assembly jobs at its main iPhone plant in India. Foxconn's main plant in India avoids hiring married women due to perceived increased responsibilities, confirmed by a former HR executive and several employees. Reasons cited include pregnancy, absenteeism, family duties, and traditional jewellery worn by married Hindu women, which could interfere with manufacturing processes. These hiring guidelines are allegedly communicated to recruitment agencies by Foxconn executives.
   View report: Apple supplier Foxconn rejects married women from India iPhone jobs

Shorts

1. Novo Nordisk ramping up manufacturing its highly demanded drugs
   Demand for Wegovy and Ozempic has outpaced supply, causing shortages in the US and prompting Novo Nordisk to significantly expand its manufacturing capacity. Novo Nordisk plans to invest USD6.8 bil in production this year, up from USD4 bil last year. The company will spend USD4.1 bil to build a new manufacturing facility in Clayton, North Carolina.

2. China took rocks from the Moon
   China’s Chang’e-6 lunar probe returned to Earth with the first-ever samples from the Moon’s unexplored side after a nearly two-month-long mission. Scientists believe the samples could provide answers about how planets are formed. China is the only country to have landed on the far side of the Moon — the part of the moon which faces away from Earth. Some say the Decepticons hide on this side of the moon. 

5. FOR YOUR EYES 📺

1. Last week, Bugatti launched its latest offering, the successor to Chiron, the Tourbillon — a GBP3.8 (RM22.65 mil) mil supercar. Why is it so special?

2. Food for thought. It doesn’t apply all the time, though.