☕️ The upcoming House Arrest Law and Budget 2025

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

98,054 notices, totalling RM24.5 mil in fines, have been issued by the Health Ministry over the past nine months for smoking-related offences in prohibited areas. Health Minister Dr Dzulkefly Ahmad noted that this exceeds last year’s total of 96,127 notices, which amounted to RM24 mil in fines. If the enforcement of Regulation 11 of the Control of Tobacco Product Regulations (PPKHT) 2004 continues through the end of 2024, the ministry expects to issue over 130,000 notices, amounting to RM32 mil in fines. Being a vigilante to uphold the perpetrators isn’t easy — last week, a man in Puchong took out a gun-looking object when confronted not to smoke.

Currently, only 2 bil tonnes of carbon dioxide are removed from the atmosphere annually through human-led efforts, primarily via reforestation. Researchers at the University of Oxford estimate that to limit global warming to 1.5°C above pre-industrial levels, the rate of carbon extraction must increase to between 5 billion and 10 billion tonnes per year by 2050. At a target of 10 bil tonnes, the carbon-removal market could reach a size between USD300 bil and USD1.2 tril, according to McKinsey. The next big thing?

Nearly 300 Indian antiques, some dating back as far as 4,000 years, were presented to Indian Prime Minister Narendra Modi by U.S. President Joe Biden during Modi’s recent trip to the United States. These artefacts, which include rare terracotta, stone, metal, wood, and ivory pieces, had been smuggled out of India over the past few decades and were seized by American authorities. It is a lucrative market — USD6 bil is the estimated annual worth of the global smuggling market for paintings, sculptures, and other artifacts, which is heavily influenced by organized crime.

3. IN MALAYSIA 🇲🇾

Budget 2025 Special
For today, our local section will be dedicated to the recently announced Belanjawan 2025. We will try our best to do justice in covering Budget 2025. Enjoy!

We will kick start things with the key highlights from Belanjawan 2025, the last annual budget announced as part of the 12th Malaysia Plan:

1. The GST will not be reintroduced but instead, the existing sales and service tax (SST) will be expanded from May 1, 2025, to cover premium imported goods (avocados, salmon) and commercial services such as fee-based financial services.

2. A 2% dividend tax will be introduced for dividend income exceeding RM100,000. However, dividend income from government funds such as EPF and ASB will be exempted. Fuh, thank god.

3. The war on sugar will continue and the excise duty imposed on sugar-sweetened beverages will increase from 50 sen to 90 sen.

4. The blanket subsidy for RON95 and the subsidy for health and education will be rationalised. PM Anwar stated that only the T15 group will be affected. What is the definition of T15? Who the hell knows?

5. The monthly minimum wage will increase from RM1,500 to RM1,700 effective Feb 1, 2025. Employers with fewer than five workers will be given a six-month grace period.

6. Putrajaya will mandate EPF contributions for foreign workers too, to be implemented in phases.

7. The Federal Government will raise Sabah and Sarawak’s special grant from RM300 mil to RM600 mil.

8. A new law to introduce house arrest will be drafted soon. At the moment, house arrest is not a form of punishment under Malaysian law. However, there is an exemption under Section 3 of the Prisons Act 1995 that may allow any house to be used as a ‘prison’. So, will Malaysia Official 1 be out of jail soon?

The new budget could spark a class war
Muar MP Syed Saddiq Syed Abdul Rahman — by the way, his party MUDA just announced a new logo — stated that the planned subsidy rationalisation could trigger a class divide. During the next-year budget announcement at the Parliament, PM Anwar Ibrahim said that the top 15% of Malaysians will no longer receive subsidies for petrol, education, and healthcare. Under the definition outlined by the Department of Statistics Department (DOSM), the top 15% of households earn about RM12,000, meaning if you and your spouse, both working and earning about RM7,000 per month each, will no longer enjoy subsidy in the future. If the subsidy rationalisation plan is based on this definition, those who earn at the precipice of the T15 entry-point but have huge commitments will be the ones who suffer the most, Syed Saddiq says. An empty barrel makes the most noise.

In response to the unclear definition of T15, the Economy Minister said that a new method of defining the T15 income group will be rolled out soon, that will not based on gross household income alone. Rafizi also added that for the rationalisation of the blanket subsidy of RON95 petrol, a two-tier pricing system will be introduced where the T15 will pay the market price while the rest of the population will still enjoy the petrol at the subsidised pricing. So, should the people initiate the Langkah EV soon?

PSM is not happy with the minimum wage increase
The feel-good Parti Sosialis Malaysia (PSM) was disappointed with the minimum wage increase, as they felt that the increase was not high enough. Via a TikTok posting, PSM deputy chairperson S Arutchelvan said that even former PM Ismail Sabri increased the minimum wage by RM300, compared to PM Anwar’s RM200 increase. Additionally, Arutchelvan stated that the RM1,700 minimum wage is lower than the threshold set for the public sector, which was RM2,000.

While PSM is fumed with the newly announced minimum wage, the Malaysian Trades Union Congress (MTUC) and Federation of Malaysian Manufacturers (FMM) welcome the new minimum wage as it is a win-win situation for both parties where the workers can keep up with the rising cost of living while at the same time, there is still room for industries to have sustainable growth. Although the preferred minimum wage (living wage) for those living in urban areas is RM2,700, as disclosed by Bank Negara Malaysia, changes need to be gradual and not sudden because the market perlukan masa to adjust to changes in increased wage cost.

JAKIM is among the agencies to receive RM2 bil
Instead of being penalised for letting GISB fester under their noses, the Department of Islamic Development (JAKIM) sees an increase in funding for 2025. Compared to the RM1.9 bil allocated for Islamic affairs for 2024, next year a bonanza RM2 bil will be put aside for Islamic affairs. PM Anwar also announced that RM25 mil in taxpayers’ money will be utilised to implement faith rehabilitation programs for the abused children who were rescued from Global Ikhwan Service and Business Holdings (GISB) linked welfare homes.

Although the intention is noble, but why not use GISB money to cure the kids damaged by GISB? During the Op Global operation initiated by the police, the authorities froze and seized RM19.91 mil worth of assets owned by GISB, which do not include the RM52 mil worth of the organisation’s assets overseas, spread across 10 countries. Even graft offenders need to pay monetary penalties for accepting bribes, so why not implement the same logic for religious offenders?

Oh, MACC’s budget for next year is RM360 mil. 

All-in-all, the budget does focus more on expanding the country’s revenue while targeting the proceeds to rakyat’s welfare programs. No flashy projects were announced — no news on the KL-Singapore High Speed Rail and Klang Valley MRT3 Project. Nonetheless, Belanjawan 2025 is still the country’s biggest budget, with RM421 bil of expenditure programs announced, a 3.31% increase compared to last year’s budget

4. AROUND THE WORLD 🌎

Hamas confirmed the death of its leader, Yahya Sinwar, but Netanyahu insists that the “war is not over”
Following the death of Yahya Sinwar on Thursday, Netanyahu took to a televised address and said that the war is not over, and is only “beginning of the end”.

His sentiments were echoed by other prominent Israeli politicians, including leader of the centre-right National Unity party Benny Gantz, who said the “mission is not over” and Israeli forces would operate in Gaza for “years to come”. Israeli military chief Herzi Halevi said his forces would keep fighting “until we capture all the terrorists involved in the October 7 massacre and bring all the hostages home”. These appeared to dampen expectations among Western leaders that Sinwar’s demise would hasten the end of the war. Many perceive Sinwar as a martyr who gives great lustre to the cause of the Palestinians. Watch here his final moments captured by a drone.

Analysts believe that Netanyahu would seek other pretexts to keep his country at war for personal gain and to further an Israeli expansionist dream of maintaining an indefinite occupation of their lands. He is not budging, even following a reported drone attack on his private residence.

Yahya Sinwar, who is accused by Israeli authorities of masterminding Hamas’s October 7 attacks, was killed in a firefight on Wednesday in Rafah in southern Gaza. Palestinians mourned over his death, with many attributing him to the spirit of the resistance, even those who opposed his ways and strategies.

Former defence minister Prabowo Subianto takes office as Indonesia president
Prabowo Subianto, former general and defence minister was sworn in yesterday as new president of Indonesia, succeeding Joko Widodo. Prabowo won by a landslide of nearly 60% of the votes in February elections, with bold campaign pledges that included a USD28 bil free meal plan for children of Indonesia.

Interestingly, Prabowo faces allegations of rights abuses during his tenure as a military commander. NGOs and his former military bosses are accusing him of the abduction of democracy activists at the end of dictator Suharto's rule in the late 1990s. He was discharged from the military over the abductions, but denied the allegations and was never charged. The US had once refused to give Prabowo a visa because of his rights record, and he was also reportedly included on a blacklist in Australia for a while. He has also been accused of involvement in military crimes in East Timor, which Indonesia invaded and occupied in 1975 until 2002.

Nevertheless, the new president appeared all-endearing to his people as he made his first speech, promising to make Indonesia more self-sufficient, and free from fear, poverty, hunger, ignorance, oppression and suffering. Security was heightened across the capital Jakarta ahead of the inauguration, with around 100,000 police and army personnel deployed, including riot squads, sniper units and anti-drone teams. Dozens of diplomats were in attendance, including our PMX Anwar Ibrahim, British foreign minister David Lammy and Chinese Vice President Han Zheng.

Busine$$

• Mitsubishi to invest USD320 mil in 6.5% stake of fintech unicorn Mynt
  Mitsubishi has recently announced that they are investing USD320 mil in Philippine fintech unicorn Mynt, which has a valuation of around USD5 billion in August and owns GCash, Philippines’ largest mobile wallet service. The largest trading company of Japan will purchase half of the stake owned by Manila-based conglomerate Ayala in the financial services company, which has a 13% stake in Mynt. Mitsubishi said it expects the Philippines – where access to banking is low leading to a surge in e-wallet users – to have the highest population and economic growth among the 10 Association of Southeast Asian Nations countries.

• Uber's potential bid for Expedia could lead it to realise its 'super app' vision
  Uber has reported being very interested in bidding for the travel-booking website Expedia, which has a market cap of about USD20 bil. If the acquisition comes to fruition, it could actually bring Uber closer to the one-stop “super-app” that its CEO Dara Khosrowshahi has been talking about. He did mention a lot of times that he wants to add more services to Uber, citing that he aspires for Uber "to be that everyday app that you go to”. To date, Uber users can request rides and order restaurant meals through the app, but more recent additions include grocery delivery, and travel offerings such as sales of train tickets in the UK. Btw, Khosrowshahi was the CEO of Expedia before taking up his current job at Uber.

• Netflix subscribers boomed and beat expectations yet again
  Netflix threw analysts into another surprise as its subscriber base has apparently grown more than what was expected in Q3, despite its move on clamping down viewer’s sharing log-in credentials. In Thursday's earnings report, Netflix announced that its new subscribers had totaled up to 5.07 mil, where analysts at Bloomberg initially expected only 4.5 mil. Netflix gained 8.76 mil paying viewers in the same period a year earlier. Their quarterly revenue of USD9.83 bil also came in slightly above Bloomberg's estimate of USD9.78 bil. Nevertheless, analysts were expecting that the boost did come from the password-sharing crackdown and advised that the company could grow revenue by expanding its ad and gaming businesses or increasing subscription costs. Let’s not forget how valuable Netflix is, with a market cap of USD328 bil. View its earnings announcement here.

5. FOR YOUR EYES 📺

1. Wall Street giant Jane Street pays its intern a base salary of USD250,000. Immediately T1 even before they graduate.

2. It’s Breast Cancer Awareness Month. Women, and also men (if you have the opportunity), here are the symptoms and signs to look out for.