☕️ MY Gov to get RM50 bil of dividends from Petronas. Petronas reported a PAT of RM101.6 bil for FY22.
Petronas' record-high 12-figure profit for FY2022. The United States of Bank Failures - 3rd bank collapsed in a week. Fire at world's largest refugee camp - "planned sabotage" by gangs.
1. MARKET SUMMARY 📈
2. NUMBERS AT A GLANCE 🔢
RM7.71 bil — the total dividends paid by 7 Petroliam Nasional Bhd (Petronas)-linked companies in the financial year ended 31 Dec 2022. This marks the second-highest payout in the past five years, down 25.52% from RM8.93 bil paid in FY2021. Of this RM7.71 bil, Petronas takes home RM4.55 bil or about 59%. Petronas, in turn, paid 11x this amount to the government in FY2022 - more below. View the table here of these 7 Petronas-linked companies.
12% of the world’s top 500 cybersecurity firms are based in Israel, the second highest after the US Silicon Valley, with a 32% share. That’s a high concentration for a country with a population of 9.36 mil in 2021. How did Israel get there? Through education. Cyber courses are taught at all high schools in Israel and are made a required subject for graduate exams. All universities in Israel teach cyber technology and have cyber research centres to develop cutting-edge tech.
RM19 bil - the projected export value of downstream timber products, including furniture, in 2025, accounting for 68% of the country’s total timber export products according to the National Agricommodity Policy 2021-2030. Malaysia exports wooden furniture to 160 countries, raking in RM11.14 bil in 2022. Is it too much to hope that the industry's growth doesn’t come at the expense of our forest reserves?
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3. IN MALAYSIA 🇲🇾
Ministry says no public money is used to bring in imported eggs
The Agriculture Ministry stated that J&E Advance Tech Sdn Bhd, the sole authorised importer of eggs from India, did not receive any public money to subsidise its cost, like what local egg producers enjoy. The decision to import eggs was made to ensure food security in the country and the Government is talking to local egg producers to flood the market with ‘festive’ eggs before the Eid shopping frenzy kicks in.
Update from the courts:
In Syed Saddiq’s criminal trial, his former private secretary Siti Nurul Hidayah stated that the Muar MP utilised his own money for election programmes during GE14, on top of monies raised from fundraisers. Siti said that transactions related to the fundraisers were directed towards a business account owned by Bersatu’s youth wing and not Syed Saddiq’s personal account for the sake of convenience.
Kulim International Airport Project now receives a royal intervention
Sultan of Kedah had called out Putrajaya to reconsider its decision on the Kulim International Airport (KXP) project that will be a game-changer for Kedah and the centrepiece of the development of Kedah Aerotropolis, which will include a logistic hub and a Maintenance, Repair and Operation (MRO) hub.
In a move to echo the support from the Sultan of Kedah, Kedah Menteri Besar, Sanusi Nor said that there is another company ready to collaborate in the KXP project after Syed Mokhtar Albukhary’s company decided not to participate in the RM7bil project.
Economy Minister Rafizi Ramli said that the Chuping Valley Industrial Area (CVIA) in Perlis is projected to attract RM2.5 bil in committed investments once the industrial area is fully open. CVIA, which focuses on high-impact sectors such as green manufacturing, renewable energy and halal industries, is still under construction and its infrastructure will be done by 2023Q1.
Learn more: Chuping Valley Industrial Area - Thematic Industrial Parks.
Surprise, surprise, as according to a source, Pharmaniaga Bhd is expected to dismiss its CEO Zukarnain Md Eusope, following a high-level meeting on Sunday. The rumoured dismissal is believed to be caused by the vaccine saga that led to the company recording a net loss of RM644.9 million for the fourth quarter ending Dec 31, 2022.
However, miraculously, Lembaga Tabung Angkatan Tentera (LTAT), the 59.4% majority owner of Boustead Holdings Bhd, which in return owns Pharmaniaga Bhd, announced a 5% dividend for 2022, higher than its 4.1% dividend rate in 2021. The total payout of RM476.45mil was backed up by RM652.36mil in the gross income generated by the statutory body in 2022. With this Pharmaniaga mess and the announced Boustead privatisation exercise, LTAT’s 2023 dividend rate looks bleak.
Our national cash cow that produces black ‘milk’ Petronas reported a 12-figure record-high profit after tax (PAT) for FY2022 of RM101,620,000,000 or RM101.62 bil, almost 100% higher than its 2021 figure of RM50.87bil. It declared a juicy RM50 bil dividend to its sole shareholder — the Malaysian government. The positive financial outcome was driven by high oil and gas (O&G) prices — Brent grade crude oil price averaged USD101.31 per barrel in 2022, some 43% higher than in 2021. On top of that, Petronas announced that the company will invest RM300bil in capex for the next five years, where a fifth of the money will go towards decarbonisation and energy transition activities.
4. AROUND THE WORLD 🌎
Saudi Arabia: Aramco’s massive profits, diversifying away from black gold
The world’s largest oil company Aramco reported a record profit of USD161.1 bil for 2022, up 46% year-on-year from USD110 bil, helped by soaring energy prices and higher volume. For comparison, the West’s five largest oil companies brought nearly USD200 bil in profits in 2022. Free cash flow also rose to a record high of USD148.5 bil in 2022, compared to USD107.5 bil in 2021. The firm is rewarding shareholders with a USD19.5 bil dividend for its fourth quarter and bonus shares of 1 for every 10 shares owned. The Saudi government benefits the most as it owns 95% of Aramco.
In the world of commodities, good times don’t last. Saudi Arabia has been diversifying away from its reliance on fossil fuels with various mega projects. The country plans to turn itself into an aviation and tourism hub (Dubai, Abu Dhabi, Qatar - watch out) as the nation’s sovereign wealth fund, Public Investment Fund, will launch an airline called Riyadh Airline, led by former Etihad Aviation Group boss Tony Douglas,
It aims to connect to 100 destinations worldwide and attract 100 mil visitors a year by 2030. The airline is expected to add USD20 bil to Saudi’s non-oil growth and create more than 200,000 direct and non-direct jobs. The airline is reported to be nearing a USD35 bil order for jets from Boeing Co.
The United States of Bank Failures
In a short span of a week, after Silvergate and Silicon Valley Bank (SVB) collapsed, Signature Bank, another crypto-friendly bank, was shut down by regulators on Sunday, citing systemic risk without disclosing the damage suffered by the bank. As of Dec 2022, Signature has roughly USD110 bil in total assets and USD83 bil in deposits. The New York-based bank has 40 branches across five states in the US. The damage suffered by the bank wasn’t disclosed.
The regulators came to the rescue. Fortunately for SVB and Signature, uninsured deposits above USD250,000 will be made whole. The Fed Reserve unveiled the USD25 bil Bank Term Funding Programme - the key feature of this programme allows these banks to borrow from the Fed by pledging their bonds, which will be valued at par instead of current depressed market prices due to rising interest rates (remember - bond prices move inversely with interest rates). Par value is when a bond is held until maturity and is redeemed at this par value. The magic of financial engineering - banks can borrow to fund deposit outflows without being forced to sell and crystalise their losses at market prices.
The next US bank on the brink of collapsing — First Republic Bank. Despite securing additional funding of USD70 bil from JP Morgan and the US Federal Reserve, investors weren't convinced of its survivability and hammered its stock down by 67%.
HSBC Holdings PLC will acquire the UK arm of SVB for a grand total of GBP1 - a boost to its exposure to the tech and life-science sectors. SVB’s UK unit has GBP5.5 bil (USD6.7 bil) in loans and GBP6.7 bil (USD8.2 bil) in deposits - a rounding error for HSBC, which had USD493 bil in UK customer deposits at the end of 2022.
The TSMY* that won for the day at the Oscars
Tan Sri Michelle Yeoh made history by becoming the first Asian to win the best actress Oscar for her role in the movie Everything Everywhere All At Once. A filial daughter she is as she thanked her 83-year-old mum and all other mothers in the world in her acceptance speech. The movie continues its winning streak seen in the earlier Emmy and Screen Actors Guild Awards, bagging seven awards, including best picture, best director, best original screenplay and 3 of the acting categories.
*The other TSMY is Tan Sri Muhyiddin Yassin, who was charged again in court for allegedly laundering RM5 mil on the very same day Michelle Yeoh made history. How poetic.
View: Complete list of winners at 95th Academy Awards (aka Oscars)
India made history too, as it won 2 awards: a breakout hit song from the movie RRR, “Naatu Naatu” (listen here on Spotify), won the award for the best original song (was performed during the Oscars), making it the first homemade movie from India to win the honour and Kartiki Gonsalves became the first Indian director to win the documentary short film award for The Elephant Whisperers (watch the trailer here, available to watch on Netflix), a documentary about an indigenous couple in southern India who adopt an orphaned baby elephant and care for him.
98-year-old Japanese billionaire Masatoshi Ito, who helped turn the 7-Eleven (7E) convenience store into a global business empire, has passed away of old age. There are more than 83,000 7E stores around the world! Ito spotted a 7E store during a visit to the US in the 1970s, forged a deal with the owner, Southland Corporation, and opened Japan’s first 7E in 1974. A short profile of Ito on Forbes here.
A fire that broke out last week in the world’s largest refugee camp (more than 1 mil Rohingyas live there) in Bangladesh, leaving more than 12,000 people without shelter, was a “planned act of sabotage”, according to authorities. Authorities said it was a deliberate attempt by community-based gangs to establish supremacy inside the camp.
5. FOR YOUR EYES 📺
Today’s section is dedicated to TSMYs — yes, both TSMYs.
Michelle Yeoh’s mum Janet Yeoh celebrated her daughter’s historic moment in a live-streaming event of the Oscars at Dadi Cinema, Pavilion. Joining the celebration in the video: Berjaya boss Vincent Tan, Women, Community and Development Minister Nancy Shukri and Youth and Sports Minister Hannah Yeoh (she made a funny response to a tweet jokingly asking if she was related to Michelle Yeoh).
Congratulatory billboards here and here, including one by Julie’s, the biscuit maker.
Michelle Yeoh, in her teenage years
Michelle Yeoh played a character in Jackie Chan’s 1992 Police Story 3, which was partly filmed in KL.