☕️ Nearly RM2 bil could be saved from re-evaluating direct nego flood mitigation projects

1. MARKET SUMMARY

2. NUMBERS AT A GLANCE

As of 4pm yesterday, there were as many as 66,718 flood victims housed at temporary relief centres in five states — Kelantan, Terengganu, Pahang, Perak and Johor. Selangor’s Menteri Besar Amirudin Shari said the Selangor state government will donate RM500,000 each to flood-hit Kelantan and Terengganu. We hope the weather situation will improve.

Remember all the times you see RM19.99 or RM99.99 and you think the figure is actually lower instead of what it is closer to (RM19 instead of RM20) — it’s called left-digit bias. Research by Avner Strulov-Shlain showed that the perceived gap is much higher than RM0.01. Based on his study (US), the difference between USD4.99 and USD5.00 is 21 cents. Not one cent. Let your subconscious take the fall 😉

Read his paper here.

The world’s consumption of coal is likely to increase by 1.2% in 2022 — a staggering 8 bil tons in a single year, for the first time, according to an International Energy Agency report published last Friday. Russia’s curtailment of gas supplies to Europe this year has forced the continent to draw on other energy sources. The demand for coal is likely to remain at this level until 2025.

Wisdom of Wednesday

“So, what if, instead of thinking about solving your whole life, you just think about adding additional good things. One at a time. Just let your pile of good things grow.” 

— Rainbow Rowell, author of Attachments.

3. IN MALAYSIA 🇲🇾

RM163.6 bil budget approved for 1H2023The Parliament approved RM107.7 bil for operating expenditure and RM55.96 bil for development expenditure. The approved sum represents about 44% of Budget 2023 that was tabled on Oct 7, which was not passed due to the dissolution of the Parliament on Oct 10. PM Anwar Ibrahim said the interim budget is essential for the functioning of government services, pending the tabling and approval of the revised Budget 2023 in February.

It’s a sweet budget, almost diabetic. Uh, where are we getting the money from?

1. Early school assistance of RM150 to all students.

2. Nine million households will receive an allocation of RM2 bil — RM300 for each household and RM100 for singles.

3. Small rubber farmers will get RM200 in January.

4. Civil servants in grades 11 to 56 will get a special additional annual salary increment of RM100 in 2023.

5. One-off RM700 financial assistance to 1.3 mil servants of grade 56 and below and one-off RM350 to one mil government retirees.

How to save nearly RM2 bil? Stop direct negotiationsPM Anwar Ibrahim, who is also the finance minister, said officials from the Finance Ministry had previously briefed him about the amount of savings to the government and the minimum was RM1 billion if the flood mitigation project contracts were awarded differently. His administration has paused some of the projects that were directly rewarded. He mentioned almost RM2 bil can be saved.

Why delay flood projects that are crucial to ensure the well-being of the rakyat? Because those projects were slated to be completed between 2025 to 2027. Former environment and water minister Tuan Ibrahim Tuan Man said it was urgent.

The PM added that close scrutiny of the direct negotiation deals showed that some of the contracts had been awarded to families and friends, which raised the possibility of nepotism and cronyism.

RM650 mil worth of projects under the Transport Ministry to be converted to open or limited tenderTransport Minister Anthony Loke Siew Fook said five development projects worth RM650 million that were initially approved through direct negotiations will be converted through open or limited tender. The ministry could do this as the government had not issued a letter of acceptance to the developers yet.

11 items have been listed under the Christmas Festive Season Maximum Price Control SchemeThe Ministry of Domestic Trade and Cost of Living said prices of the 11 items would be under the scheme for five days, from Dec 23 to Dec 27. Its minister, Salahuddin Ayub, assured that the price of chicken and chicken eggs will continue to be controlled as per the current price control mechanism in place. The 11 items are:

• Live old chicken (controlled in Sarawak only); Chicken wings (controlled in Sarawak, Sabah and Labuan); imported mutton; live pig (controlled in Sarawak, Sabah and Labuan); pork belly, and pork meat/fat (controlled in Sarawak, Sabah and Labuan).

• Carrots, tomatoes, green capsicums, potatoes (imported from China), and round cabbages (imported from China and Indonesia).

Batang Kali tragedy updates:

1. Selangor Fire and Rescue Department (JBPM) said it will not give up on the search and rescue (SAR) operations in the landslide incident at the Father’s Organic Farm campsite in Gohtong Jaya. As of 4pm yesterday, 24 victims have been confirmed dead, while nine others are still missing out of the total of 94 people involved in the incident.

2. The search for the missing nine in a new area — Zone C — did not yield any positive outcome yet. Camp materials such as barrels and blankets were found in the area, but no leads.

Business

1. If you’re expecting at least a 5% dividend from the Employees Provident Fund (EPF) for FY2022, EPF would need to match its 3Q performance in the last quarter of the year — a gross investment income of RM12.32 bil. Can EPF do it? Time will tell.

2. TA Securities Research projects Malaysia’s real gross domestic product (GDP) could grow between 2% to 3% in 2023 in the worst-case scenario — the world economy falling into a deep recession and falling in domestic demand. If the world doesn’t fall into tatters next year, our real GDP could grow by 4.5% next year, according to the firm.

4. AROUND THE WORLD 🌎

Fortnite creator Epic Games facing epic finesThe US Federal Trade Commission (FTC) has fined Epic Games, creator of popular games like “Fortnite” and “Fall Guys” with a record USD520 mil settlement over charges related to violation of children’s privacy. The company has violated the Children’s Online Privacy Protection Act (COPPA) by deploying “design tricks, known as dark patterns, to dupe millions of players into making unintentional purchases”. 

The fine is divided into 2 parts: USD275 mil COPPA fine, the largest ever penalty for violating FTC rule and USD245 mil refund to customers for what it calls “dark patterns and billing practices”, also another FTC record for the largest-ever refund in a gaming case. Back in April, Epic Games announced that it raised USD2 bil at a USD31.5 bil valuation from Sony and Kirkbi, the parent company of Lego Group - ironically, to fund its kid-friendly metaverse. 

Interesting video on dark patterns in action:

Meta: Potential multibillion anti-trust fine, charging on into the metaverseFacebook parent Meta is also facing a potential fine, an even more epic one than Epic Games. The European Union is investigating Meta for a potential breach in antitrust (anti-competition) policies over its social network Facebook dominant control over its online classified services Facebook Marketplace. If guilty, it faces fine of up to 10% of its annual global revenue. Based on 2021 figures, Meta is staring at a potential fine of up to USD11.8 bil. 

Read: Antitrust Laws: What they are, how they work, major examples

Meta CTO Andrew Bosworth in a blog post defending its metaverse venture, said Reality Labs, the division that houses Meta’s virtual reality ambitions, will dedicate 20% of its 2023 investment towards the metaverse despite objections and criticisms from investors, understandably after incurring nearly USD20 bil of losses with nothing to show for in the past 2 years. He added the company will not give in to “short-termism”. 

Toyota, a holdout amongst major car companies against a full EV futureThe world’s largest automaker has questioned whether electric vehicles should be the only exclusive answer to a greener future. Toyota President Akio Toyoda said he is among the industry’s silent majority in questioning this, as others chose to remain silent and ride the trend. Rivals like General Motors and Honda have set dates for their lineups to be all-EV, whilst Toyota has stuck to its strategy of investing in a diversified lineup that includes hydrogen-powered cars and hybrids. Nevertheless, Toyota revealed plans to spend USD35 bil on its EV lineup through 2030. 

Reuters’ Special Report on Binance, the world’s largest cryptocurrency exchangeBinance is facing growing scrutiny after the recent collapse of FTX. Reuters’ latest investigation into the company found that Binance’s books are like a black box, with little insights and information to gain on the company’s revenue, profit and cash reserves. Binance defended itself that since they are a private company, they are not required to publicize its finances. It’s also hard to pin down where exactly Binance.com, its main exchange operates from. Wei Zhou, Binance’s former CFO did not have access to the company’s full accounting during his 3-year tenure there, according to sources. 

Binance will be acquiring bankrupt crypto firm Voyager Digital’s assets for USD1 bil, which mostly consists of the debt Voyager owes to its clients. It also announced that it has taken full control of its Indonesian unit, PT Crypto Indonesia Berkat, known as Tokocrypto, lifting its shareholding from 51%, which it acquired 2 years ago, to nearly 100%. 

Fun Fact: Binance says it has 120 mil users and did USD34 tril in trading volume in 2021. In 2022 so far, it has processed USD22 tril in trades.

Shorts:

1. The House select committee investigating, capping an 18-month investigation into the 6 Jan Capitol riot in the US has asked the Department of Justice to prosecute former President Donald Trump over 4 charges in his role in the deadly insurrection as it had “overwhelming evidence” that he “orchestrated and oversaw” efforts to overturn the 2020 election result. 

2. Google demonstrated its AI technology that it has been working with pharmacists to decipher read sloppy handwriting - something doctors have long been accused of having. Times reported that doctors’ handwriting can potentially lead to deadly consequences for patients, citing a 2006 study that found sloppy doctor handwriting to have killed over 7,000 people a year.Watch: How Google plans to decode doctor’s prescription

3. 57.5% or 10 mil voters have voted for Elon Musk to step down as the head of Twitter. Musk has kept mum on whether he will step down, despite having told users he would abide by the poll results. Following this, Musk announced that only Twitter Blue subscribers (USD8 per month subscription) will be able to vote on policy-related matters.

5. FOR YOUR EYES 👁👁

1. Which camp are you in? Dogs or Cats? Statista showed the breakdown of some countries in its new edition of the Statista Global Consumer Survey.

2. How much of what we eat contributes to the climate crisis humanity is facing?

3. When Bukit Bintang turned into a football stadium