Discover more from The Coffee Break
☕️ New anti-stalking law in action - first man to be charged today
Tycoon sues Tun Mahathir, govt over corporate takeover in 1997/98. PayPal expands further into crypto - issues stablecoin. WeWork might not work out - "substantial doubt" to continue operating.
1. NUMBERS AT A GLANCE 🔢
Early state election stats:
The voter turnout for the six state elections and a by-election in Terengganu has surpassed 90% during the early voting period.
According to data released by the Election Commission (EC), there are 294 voters in the Pulai parliamentary constituency and 14 voters in the Simpang Jeram state constituency who are over 100 years old.
Election Commission (EC) chairman Abdul Ghani Salleh hopes the turnout for this weekend’s elections will exceed the 86% recorded in GE15.
In the second quarter of 2023 (2Q 2023), Malaysia’s construction sector experienced an 8.1% YoY increase in the value of work done, reaching a total of RM32.4 bil, according to the Department of Statistics Malaysia (DoSM). Chief statistician Mohd Uzir Mahidin noted that this growth was driven by a consistent double-digit expansion in civil engineering, with a growth rate of 10.4% in this quarter (compared to 17.2% in 1Q 2023).
A winning ticket in Florida has matched all the numbers to win a massive USD1.58 bil Mega Millions lottery jackpot, marking the third-largest jackpot in US history. The lucky ticket was sold at a supermarket located in Neptune Beach, a town in northern Florida near Jacksonville. This significant win comes after 31 consecutive drawings since the last jackpot was won on April 18 in New York. The odds of winning such a jackpot are estimated to be about one in 300 mil. The winning numbers for the jackpot were 13, 19, 20, 32, 33, and the gold “mega ball” was 14.
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3. IN MALAYSIA 🇲🇾
Anti-stalking law in action - first man to be charged
Local photographer Acacia Diana earlier shared her ordeal of nearly eight years being stalked and sexually harassed by a man and documented her experience in a Google sheet as evidence collection. The 37-year-old man even stalked her all the way to the UK, where she was studying. He will be charged today under the newly minted Section 507A of the Penal Code for stalking, according to Selangor police chief Hussein Omar Khan. If found guilty, he will face a maximum jail sentence of up to 3 years, a fine, or both. If you are a victim of stalking, you can reach out to the Women’s Aid Organisation for further advice here.
A win for the Pulau Tioman, rice farmers
The federal government, in principle, agreed not to proceed with the construction of the proposed Tioman International Airport, which will involve 76% of the sea reclamation area due to environmental concerns. The Environmental Impact Assessment (EIA) Technical Committee found that the proposed new airport would pose a very significant negative impact on the quality of the environment as it would reclaim marine protected areas that would destroy coral reefs. If you want to read the EIA report, you can get it here or you can read its summary by Malaysiakini here.
PM Anwar announced the increase in subsidy for rice farmers by RM140 to RM500 under the Padi Price Subsidy Scheme with immediate effect, making it the first increase since the 1990s when it was last increased by Anwar himself when he was the finance minister. With this move, rice farmers will earn at least RM1,700 per metric tonne, further motivating them to increase production (though subsidy, if not implemented properly, tends to have the adverse effect of masking inefficiency). The increase will lead to an additional financial implication of RM360 mil, bringing the total allocation to RM1 bil per year.
Muhyiddin’s son-in-law clears the air on his fugitive status
Muhammad Adlan Berhan, the son-in-law of former PM Muhyiddin Yassin, via a statement, denied that he is a fugitive on the run as stated by MACC and claimed that he had informed MACC he was travelling overseas for business. He added that he will return to Malaysia the soonest possible to assist in the investigation. In response to this statement, MACC chief commissioner Azam Baki told him to “just come back, don’t give so many excuses”. Azam said his officer has been trying to contact him since June, saying that he would return but never did. Muhyiddin Yassin said he has “no comment” when asked about his son-in-law's wanted status. No PDF was issued.
Kelantan water issue - “not a big deal”, dig own wells, according to Kelantan deputy MB
Not having tap water is “not a big deal”, according to caretaker Kelantan deputy MB Amar Nik Abdullah, as villagers know how to figure it out themselves and dig wells to get underground water. He blamed the federal government for not allocating sufficient funds and was only given “millions of ringgit” when “hundreds of millions of ringgit” is needed to resolve the state’s water issue. PM Anwar in June announced an extra allocation of RM500 mil for this purpose.
To understand why Kelantan is so far behind compared to other states, one just has to watch the debate on the nation’s economy between PKR deputy president Rafizi Ramli and PAS Mohd Syahir Sulaiman that happened last night. The lack of technical knowledge and incompetency of Rafizi’s opponent was on full display.
One of the jaw-dropping moments was when he claimed despite low government spending in Kelantan, Kelantanese have very high purchasing power or, in his words, “purchasing power sangat tinggi” as they save, instead of consume, in land, cows and goats - watch this moment here. By his logic, either DOSM income data is wrong or Kelantanese are just very wealthy but have low income.
Tycoon sues Tun Mahathir, government
The corporate drama of the Asian Financial Crisis in 1997/98 is still playing on today. Businessman Halim Saad has sued Tun Mahathir, former second finance minister Nor Mohamed Yakcop and the government over losses he suffered during the government’s multibillion takeover of United Engineers Malaysia (UEM) Bhd and Renong Bhd in 2001. The whole episode is a bit lengthy — read here for further details on what transpired.
MR D.I.Y Group: Q2 ended 30 June FY23
Revenue up 4.8% year-on-year (yoy) to RM1.1 bil, and net profit up 11.2% to RM150.3 mil yoy. The group remains on track to open at least 180 new stores across all three of its 3 brands (the other 2 being Mr Dollar and MR TOY), bringing its total store network to over 1,200 stores nationwide.
Market cap: RM13.5 bil
Maxis: Q2 ended 30 June FY23
Revenue up 1.98% to RM2.47 bil yoy, net profit up 2.48% yoy to RM330 mil. Higher net profit is attributed to higher service revenue, discontinued prosperity tax and prudent capital expenditure.
Market cap: RM31.2 bil
Hartalega: Q1 ended 30 June FY24
Revenue halved to RM440.04 yoy, net loss of RM52.47 mil compared to RM88.28 mil a year ago. The glove market remains challenging, with lower selling average prices and reduced sales volume against the backdrop of the continued oversupply situation.
Market cap: RM7.16 bil
Hup Seng Industries: Q2 ended 30 June FY23
Firstly, this is Hup Seng the biscuit maker, not Hap Seng the conglomerate. Revenue up 10.49% yoy to RM81.55 mil, net profit surged 187.13% to RM8,72 mil. Improvement in profit due to cost reduction of certain major input materials.
Market cap: RM524 mil
4. AROUND THE WORLD 🌎
WeWork might not work out
Co-working office company WeWork Inc saw shares freefalling by over 25% after it announced there is “substantial doubt” in its ability to continue operating, citing sustained losses and cancelled memberships to its office spaces. The firm, once one of the most valuable startups in the US worth USD47 bil at its peak (paper value), will focus on increasing revenue and raising capital while reducing rental costs and renegotiating leases over the next 12 months. This comes mere months after WeWork cut a deal with its biggest creditors to cut its debt load by USD1.5 bil and extend other loan periods. Now, its share price is trading at just 13 cents at a market cap of USD279.8 mil.
PayPal enters crypto with stablecoin, right after Tether reports billion-dollar operational profit
PayPal’s dollar-denominated stablecoin, PayPal USD (PYUSD), marks a further expansion by the financial institution into digital currencies, even as US regulators scrutinise digital assets in an aggressive crackdown. Previously, PayPal was already offering trading in bitcoin and ether. PayPal USD will be issued by the Paxos Trust Company, a firm regulated by the New York State Department of Financial Services. PayPal USD will be redeemable one-to-one for US dollars, with the stablecoin’s reserves held in US dollar deposits, short-term Treasuries, and other assets. However, scammers are already moving to capitalise on the launch, with over 60 fake PayPal USD tokens appearing on networks.
Meanwhile, the world’s largest stablecoin issuer Tether announced an operational profit of over USD1 bil for Q2, a gain of 30% from Q1. The company also reported a USD850 mil increase in reserve assets for a total of USD3.3 bil to back the value of its stablecoins. The firm also announced its exposure to US Treasuries, with USD72.5 bil in direct T-bill investments, repurchase agreements, and deposits in money market funds. Its treasury holdings make it one of the biggest in the world, rivalling countries like Australia and the Netherlands.
Read: What is a stablecoin, how it works and types.
The piling debts of the US
Over the next two years, there will be a maturing corporate debt of USD1.8 tril, according to a Goldman Sachs estimate. With interest rates staying elevated as they are to combat inflation, firms are expected to take hits to their revenue to service their debts. US corporate debt maturity:
2024: USD790 bil
2025: USD1.07 tril
2026-2030: >USD4 tril
This does not include the USD230 bil debt maturing in 2023.
As corporate revenue is pressured, Goldman Sachs expects the US job market to take a hit, with up to 5,000 jobs axed per month in 2024. This has the potential to hit 10,000 jobs per month in 2025 should interest rates remain elevated. Americans are already faced with daunting loan issues of their own, with over USD1 tril in credit card debt held in the second quarter of 2023, a new record, and an increase of USD45 bil over Q1. This pushes total household debt in the US to a record USD17 tril. This will likely be further compounded by the restart of student loan repayments in October.
41 migrant lives lost in shipwreck off Italy
The latest refugee tragedy saw only 4 survivors from a boat of 45 people, including three children. After being hit by a big wave, the boat sank within hours after it left Sfax, Tunisia. The survivors were rescued by a cargo ship before being transferred to an Italian coast guard vessel. Over 1,800 people have lost their lives this year in crossing from North Africa to Europe as migrants seek safety and a better life.
China now bearish with export drop, deflation
China’s exports dropped by 14.5% in July compared with a year earlier, marking the biggest drop for the past three years. Imports also fell by 12.4% over the same period. With China’s economy still suffering from the strict Covid-19 restrictions, the trade figures raise more concerns that the country’s economic growth could slow further this year. China’s consumer sector also fell into deflation, with the consumer price index falling 0.3% in July compared with a year earlier, the first decline since February 2021. Worried consumers and companies are hoarding cash rather than spending or investing, despite lower interest rates.
US banks to be fined for using Signal, Whatsapp to evade regulator oversight The banks were fined a collective USD549 mil for failing to maintain electronic records of employee communications, violating federal securities laws. The banks also admitted that employees used side channels like WhatsApp and Signal to discuss company business, a practice that US regulators are working to stamp out. More than USD2.5 bil fines were issued since this probe began in Dec 2021. On another note, Whatsapp announced that it has introduced screen-sharing feature during video calls.
5. FOR YOUR EYES 📺
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