☕️ AirAsia X has big plans, consolidation of 7 airlines under one

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

Malaysia has seen a dramatic four-fold increase in heatwaves since the 1960s, according to a Unicef report. The country now averages eight heatwaves annually, each lasting around five days, compared to just two per year in the 1960s. These heatwaves have also grown more severe, with temperatures rising from 0.35°C above the 1960s' average to 0.69°C in the 2020s. The report highlights that this escalation, compounded by earlier hot and dry seasons due to El Nino events, now affects approximately 750,000 children living in areas with double the days exceeding 35°C compared to the 1960s.

In October 2022, Apple Music's catalogue reached 100 mil songs, with an average of 120,000 new tracks uploaded daily, now totaling around 176 mil. Despite this, many older songs remain forgotten, which is where Rob Johnson steps in. By day, he's a business development professional, but by night, he's a music industry crusader, unearthing obscure tracks and persuading record labels to make them available online. Over the past six years, Johnson has been responsible for 725 releases, including music by Sting, Cher, and late '90s pop icons like Billie Piper and S Club.

A Mark Rothko painting once owned by businessman Jho Low is set to be auctioned at Sotheby's in Hong Kong this November. The 1954 abstract work, Untitled (Yellow and Blue), is valued between USD30 mil (RM126 mil) and USD45 mil (RM189 mil), making it the first Rothko oil painting to be auctioned in Asia. The painting will be part of a Modern and Contemporary art auction on Nov 8 at Sotheby’s Maison in Hong Kong, with a preview display available through Sept 25. The Untitled (Yellow and Blue) Rothko painting, which measures approximately 8 feet tall (2.4m) and 6 feet wide (1.8m), previously sold for USD46.5 mil (RM195 mil) at Sotheby’s in New York in 2015, according to the Artnet Price Database. View the artwork here.

3. IN MALAYSIA 🇲🇾

JAIM staff under fire
Four staff of the Melaka Islamic Religious Department (JAIM) faced disciplinary action for using a political leader’s image in the slides presented during Friday sermons. The slides were prepared by members of the Mosque Management Divisions who then admitted their mistake upon investigation. Some were dismissed while others were transferred to different departments and districts. Chairman of State Education, Higher Education, and Religious Affairs Committee, Rahmad Mariman apologised for the blunder and will ensure such incidents never repeat. 

Additionally, Rahmad also shared the rebranding process of all religious primary schools (SRA) under JAIM in which they will adopt the names of religious figures and scholars. An allocation of RM7.41 mil has been approved by the federal government through JAKIM for the maintenance of SRA under JAIM. The state government also successfully built five new SRA with the support of the federal government.

Pantheon Ventures dupe scammed millions
17 individuals were taken into custody by the Bukit Aman Commercial Crime Investigation Department (CCID) for allegedly being involved in an investment scam. Impersonating Pantheon Ventures, a legitimate investment firm in the UK, these individuals acted as company directors and agents to find mule accounts for the syndicate. During their arrest, the CCID managed to seize 13 phones, 6 ATM cards and a laptop. Upon further investigation, the syndicate operated wholly online and used 20 bank accounts — 7 company accounts, 12 business accounts, and a personal account. The group used Facebook to draw in potential victims by offering daily returns ranging between 6% to 400%. Believing the falsehoods fed to them, victims deposited money into designated accounts and were asked to download apps like APEX and NEEQ. Investigation papers opened by the CCID show a total loss of RM32.9 mil by victims. Stop being naive, Malaysians!

AAX’s big plan
AirAsia X (AAX) is looking to gain its shareholders' approval to take over Capital A Bhd’s aviation business for RM6.8 bil through a detailed circular. Believe it or not, the circular is said to be more than 700 pages. Capital A will be holding its extraordinary general meeting on October 14, 2024, where the idea of disposal of its aviation business to AAX will be put forth for shareholders’ approval. The airline is planning to consolidate AirAsia-branded airlines across Malaysia, Thailand, Indonesia, Philippines and Cambodia into a unified aviation group.

This consolidation will allow the coverage of a full spectrum of short, medium and long-haul air travel services while also capitalising on growing travel demand. The scheduling and deployment of aircraft can be adjusted according to current market demand allowing the aviation group to provide competitive flight ticket prices but also maintain a profitable margin. However, each of the airlines will still hold their airline operator certificates separately.

Read: AirAsia X Berhad Circular.

Long way to go for GISB folks — remand extended, bail rejected

1. The remand of 24 individuals including the CEO of GISB and his wife has been extended for four more days. Previously, they were only remanded for 7 days but the magistrate court issued the remand extensions until September 28, 2024.

2. 22 suspected members of GISB had their bail applications rejected by the Shah Alam magistrate court. All of them were taken to the central lockup at Shah Alam district police headquarters where they truly belong. They were seen to be escorted by armed police officers in and out of court.

3. After a joint probe together with the Inland Revenue Board, the police revealed that Global Ikhwan Services and Business Holdings (GISB) has never paid its taxes. The Police Chief, Razarudin Husain, did not say how long the taxes have been unpaid.

The public needs the truth and a conviction (if not more).

Shorts

1. Another sinkhole episode in Malaysia

   A sinkhole 5m wide appeared at the entrance of KLIA’s Bunga Raya Complex which is known to be used by VIPs when they fly off or arrive at KLIA. The Work Ministry confirmed that the roads are still accessible to all vehicles but a traffic management plan is being implemented in the sinkhole area. Malaysia Airports Holding Bhd (MAHB) started investigating a sewage pipe suspected of leakage to see if that is what caused the sinkhole. MAHB will be releasing a detailed report after a thorough investigation.

2. J-kom DG fired, Fahmi kept mum on the reason
   Fahmi Fadzil confirms the termination of Khairuddin Othman from his position as Community Communication Department (J-Kom) director-general. He also deemed this termination to be a routine matter. When asked for the reason for Khairuddin’s sudden termination, Fahmi refused to answer but confirmed the post has been temporarily filled without revealing the name of the acting director-general. There is no confirmed timeline set for a permanent appointment.

4. AROUND THE WORLD 🌎

88 bodies on a truck
Israel loaded 88 Palestinian bodies in a container on a truck, which was then sent through an Israeli-controlled crossing, to return the bodies. The Gaza Strip’s health ministry has refused to bury the bodies until Israel discloses details about the bodies’ identities and causes of death, with the Hamas-led government stating that Israel needs to “act according to international humanitarian law” and return the bodies in a way that preserves the dignity of the dead and their families.

Health officials have also called on the International Committee of the Red Cross to seek details from Israel, with the organisation stating it was not involved in the transfer process, but reiterated that all families have the right to receive news and bury their loved ones respectfully and in line with their traditions. The bodies were sent back to the border crossing until Israel provided the required details.

This also comes as the Israel-Hezbollah conflict continues to escalate, with the former unleashing more airstrikes in Lebanon while Hezbollah claims it launched a rocket attack on the headquarters of Israel’s Mossad spy service near the capital, Tel Aviv. The expanded airstrikes have reportedly displaced up to half a million Lebanese, while Israel reported that the rocket attack was aimed at civilian areas.

Still, Iran’s President Masoud Pezeshkian told the UN General Assembly that Iran is ready to improve ties with the West, even to the point of talking about its nuclear programme, as long as all parties involved “acted in good faith”. Still, he did lambast Israel for “its genocide in Gaza” and its “crimes against humanity”. 

However, Republican presidential candidate Donald Trump, who imposed strict sanctions on Iran during his time as president, has reported receiving a briefing on “real and specific threats from Iran to assassinate him”. He alluded to previous attempts made by Iran that “didn’t work out”, but warned that he is more well-protected now than he ever was. As an aside, the golf course gunman who was arrested near the club-swinging politician has been charged with attempted assassination and is currently in jail to await trial.

TikTok going after Google, Google vs Microsoft, FTX

1. Social media giant TikTok will be shutting down its music streaming service on 28 November, officially ending a “years-long experiment” to compete with Spotify and Apple Music. Users have been notified to transfer playlists to other services by 28 October at the latest or see the data deleted. In place of the music-streaming service, TikTok will be pushing users to its “Add To Music App” feature, which was introduced last year. The feature allows users to save tracks they like on TikTok to playlists on partner services such as the aforementioned Spotify, Apple Music, and Amazon.

   Meanwhile, the social media giant is expanding its search engine ambitions to allow advertisers to target its search results page, something that encroaches on Google’s search ads business. Research by both tech giants has shown that users are turning to social media apps for their searches instead of Google. TikTok’s testing has also found that advertisers running Search Ads in addition to its existing In-Feed Ads see a 20% increase in conversions on average.

2. On the topic of Google, the company that has been on the receiving end of antitrust allegations regarding its monopoly on online ads has launched its own antitrust complaint to the EU, levied at Microsoft. The accusation is that Microsoft is engaging in “anti-competitive practices” to lock customers into Microsoft’s cloud platform Azure to prevent competition. This involves a 400% mark-up charged to customers who want to run Windows Server operations on rival cloud computing operators, which does not apply if customers use Azure. According to Google, this costs European businesses and public sector bodies USD1.12 bil per year on Microsoft licensing penalties. As an aside, Microsoft will be looking to invest USD1.3 bil over the next three years in Mexico to build up its infrastructure for cloud computing and AI, aiming to improve connectivity and boost the adoption of AI technology for 5 million Mexicans and 30,000 small and medium-sized businesses in that time.

3. Meanwhile, an update to the FTX crypto exchange saga is the sentencing of Sam Bankman-Fried’s ex-girlfriend, Caroline Ellison, to two years in jail for her part in the exchange’s financial fraud. The sentence is part of a plea deal where she admits to charges including wire fraud and money laundering while testifying against the FTX founder, along with forfeiting over USD11 bil to the court. If she had not cooperated with prosecutors, she would have faced a maximum sentence of 110 years. Speaking of Bankman-Fried, the “King of Crypto” will be welcoming a new roommate – Sean Combs, better known as P Diddy. Diddy is being held after being denied bail on federal sex-trafficking and racketeering charges.

Business matters

1. Sequoia's next space investment: a sunlight seller

   The venture capitalist firm, whose last space investment was SpaceX, will be investing in Reflect Orbital, a startup that develops satellites bearing large mirrors to precisely reflect sunlight onto specific spots on the ground, allowing additional daylight - yes, selling sunlight. Sequoia is leading the startup’s previously undisclosed USD6.5 mil seed round, with the startup looking to make its first orbital launch next year. Check out the prototype here.

2. UK banks to be required to refund scam victims

   As of 7 October, banks must make the mandatory refund to victims of authorised push payment (APP) fraud within five days, with the compensation capped at £85,000 (USD113,390). The bank would then be able to claim half of the amount back from the financial institution that the fraudster used to receive the stolen money. The Payment Systems Regulator believes the new rules will see all victims of APP fraud receive the same level of help. BNM, something to learn. 

3. VW under strike threat as carmaker faces off against union

   As the German carmaker looks to axe jobs and close plants in Germany, a first for the company, it goes up against the IG Metall union, which has warned VW against making a “historic mistake”. The two sides, with the union representing about 130,000 German VW workers, have entered talks that will likely decide how aggressively VW will pursue layoffs and plant closures. The union is seeking a 7% pay rise, or strikes will start from early December. VW, however, is arguing that high energy and labour costs in Germany is putting it at a disadvantage to European peers and Chinese rivals.

5. FOR YOUR EYES 📺

1. Fish and seafood farming, known as aquaculture, has grown a lot in recent years. Most of this growth has happened in East Asia — Asians in general do love their fishes.

2. Interested to know more about the potentially largest private car collection (sans royalties) in Malaysia? From the east to the west.