☕️ PM Anwar denies rumours of cabinet reshuffling again

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

116 — the number of F-bombs in Deadpool & Wolverine. This is a Deadpool franchise record, with the second film clocking only 90. Another record being broken by the latest instalment in the box office — which should surpass USD1 bil over the weekend, as the second film in 2024 to do so (Inside Out 2 is the only other film this year that’s managed the feat to date).

For all the talk about dedollarisation, the greenback still remains dominant - for now. The US dollar is used in about 50% of all global payments, and 84% of trade finance contracts, far outpacing its closest competitor, the euro, which accounts for 23% of all global payments and just 6% of trade finance, according to data from SWIFT. As much as China tries to exert its dominance in this space, the Chinese yuan only accounts for less than 5% of global payments and trade finance and a paltry 2.3% of global reserves. The USD also dominates what large institutions want to keep its in global foreign exchange reserves, accounting for 60% of the FX holdings of central banks. Changes happen gradually, then suddenly.

There are about 60,000 DBKL flats in KL paying an average rent of RM124 per month and has remained the same for at least 20 years, according to the Mayor of KL, Kamarulzaman Mat Salleh, which translates to a total rent collection of RM89.28 mil per year. However, at least RM60 mil or 67.2% of this amount is outstanding in DBKL’s books. Maintenance cost per unit comes up to RM250 per month and adding in repairs, this amounts to more than RM300 per month per unit, meaning the average rent is far from sufficient to cover the most basic of maintenance. DBKL, unlike in many countries, is not an independent local government and any decision has to be taken by the cabinet.
View: DBKL’s income statement FY2020 and FY2019

3. IN MALAYSIA 🇲🇾

More on the public-listed company CEO that allegedly misappropriated RM1.5 mil 
Bursa-listed Encorp Bhd (67.13%-owned by Felda Investment Corp Sdn Bhd) has suspended its group CEO Hazurin Harun to facilitate internal investigations over allegations by MACC. The company did not reveal the allegations but confirmed that 3 of its officers were arrested by MACC last week. MACC source said the suspects were being investigated for irregularities in construction and mining projects valued at about RM80 mil. Preliminary findings suggest their involvement in establishing an authorised company for a RM258 mil project and embezzling approximately RM3 mil in property rental funds. FIC is wholly owned by Felda and serves as the investment arm for the agency overseen by the Ministry of Rural and Regional Development. 

PAC: Set pay cap at federal statutory bodies
The Public Accounts Committee (PAC) has called on the government to set a salary cap for federal statutory bodies to prevent the agencies from paying excessive remuneration to its top executives. PAC chair Mas Ermieyati Samsudin said the committee was made to understand that there is no such ceiling at present, with the salaries of CEOs and directors vary from body to body, though the PAC did not have any information on the salary range of the top management in federal statutory bodies. Then-PM Tun M in 2018 ordered the salaries and allowances of federal statutory bodies, commissions and government-linked companies to be reviewed following the finding that the salary and allowance for the Malaysian Aviation Commission CEO had reached RM85,000 a month.

A federal statutory body is an agency incorporated under federal law and is a public authority to enable the government to act more efficiently and swiftly without being constrained by government administrative regulations, in line with private sector companies. Amongst such bodies are Felda, Lembaga Tabung Haji, the Malaysian External Trade Development Corp (Matrade) and Tourism Malaysia. 

If the intention is to be in line with the private sector, then the firing of its top executives should also be equally practised towards incompetent individuals drawing high compensation but with little to nothing to value add. It’s not about the salary cap - it’s the mindset - our tolerance towards mediocrity and twisted embrace and celebration of failing upwards.

Homegrown fashion brand Carlo Rino gets listing upgrade to ACE Market
Carlo Rino Group Bhd announced it has obtained Bursa Malaysia’s approval to transfer its listing from the LEAP Market to the ACE Market. However, the transfer is not as straightforward as transferring from ACE to Main Market as it requires the company to undertake an Initial Public Offering (IPO), despite having already listed on LEAP. Carlo Rino designs and sells women’s handbags, footwear, and accessories under the “Carlo Rino” and “C.Rino” brands in 36 boutiques in shopping malls and 5 boutiques at premium outlets in Malaysia.
Read: Companies ready to make the LEAP to ACE - understanding the transfer framework

For the financial year ended 30 June 2023, the company generated RM113.53 mil in revenue and RM23.85 mil in net profit (21% net margin!). The listing would offer investors a 26.58% stake in the company (IPO price yet to be determined). Chiang Fong Yee is the current managing director of the company and is the son of Carlo Rino founder Chiang Sang Sem, who also founded Bursa-listed Bursa Corp Bhd. View IPO prospectus here. 
Read: 12 brands you didn’t know were actually Malaysian

Shorts

1. Cloud seeding can really be effective in replenishing a dam. The water level at Bukit Merah Dam, Bagan Serai, has nearly tripled from 12% before cloud seeding to 33% in less than a week from the rainfall induced by the geo-engineering operations. The dam’s water level dropped to a critical level on July 15, at 19.54%. The dam would be restored for agricultural use once its capacity reaches 40%.
   Learn: How cloud seeding boosts rainfall - and why that’s controversial 

2. Less than a year since the cabinet was reshuffled, another cabinet shake-up is said to be in the works, according to well-placed source from PKR. A prominent minister from the party will either be moved to another ministry or dropped altogether due to subpar performance and a menteri besar is believed to be taking a ministerial post. PM Anwar denied reports of the cabinet reshuffle.

4. AROUND THE WORLD 🌎

Another day, another rise in likelihood of a Middle East war

Ceasefire talks: Hamas has called for mediators to present a plan based on previous talks, taking into account “US President Joe Biden’s vision, and the UN Security Council resolution”, ahead of the next round of negotiations with Israel this week, leading to speculation that the group may not be taking part in the meeting. The group also asked that the mediators “enforce” the plan on Israel “instead of pursuing further rounds of negotiations”, claiming the meetings are being used to cover for Israel’s “aggression”. This also comes as Israel continues to conduct strikes across the Gaza Strip amid global concerns that a wider regional conflict could break out.

Iran vs Israel: Israel has also warned the US that Iran is preparing for a large-scale military offensive on Israel, with Israeli Defence Minister Yoav Gallant calling US Defense Secretary Lloyd Austin to discuss operational and strategic coordination. This has led to the US making the rare move of publicly announcing the deployment of one of its guided missile submarines, with orders also issued to the US aircraft carrier strike group to “accelerate its deployment to the region” in a bid to prevent tensions in the Middle East from boiling over. Sail faster.

Reaction from others: Other countries have also voiced out, with the UK, France, and Germany calling on Iran and its allies to refrain from attacks against Israel. The countries’ joint statement also called for the fighting in Gaza to “end now”, with Hamas releasing all its hostages. China, on the other hand, has vocally offered its support for Iran “defending its sovereignty, security, and national dignity”, and that Beijing “stands ready to maintain close communication with Iran”. Don’t we all just love proxy wars?

Greek capital evacuates as wildfires approach
The Greek government has ordered the evacuation of hospitals, monasteries, and more than a dozen areas in the towns and villages surrounding Athens as a large wildfire approaches, the latest wildfire in a summer that has seen record temperatures in the Mediterranean nation. The fire burns on two separate fronts and is spreading despite the hundreds of firefighters working to control the blaze. 670 firefighters, backed by 27 teams trained for wildfires that include more than 80 members of the armed forces are currently battling the fire, supported by more than 180 vehicles and over 30 water-dropping aircraft.

Business Highlights

• Budget hotel startup Oyo loses 75% of valuation

  India’s second-most valuable startup, which saw its valuation peak at USD10 bil, saw that figure drop to USD2.4 bil in its latest funding round, where it raised USD173.5 mil. The budget hotel chain’s current valuation also puts it below its total capital raised, which comes in at about USD3.3 bil in combined equity and debt financing. This follows Oyo withdrawing its IPO prospectus, and Oyo shareholder SoftBank internally cutting the valuation of the startup to USD2.7 bil in 2022. Downgraded from decacorn, but at least still a unicorn.

• Barcelona latest city to ban Airbnbs

  The Spanish city has followed up on its partial ban on short-term rentals in 2021 by now announcing it aims to eliminate all of its registered short-term rental listings by 2028. This crackdown ranks among the most severe on Airbnb and other tourist rentals worldwide. The move follows overtourism protests by city residents in July, which led to the city’s mayor declaring that skyrocketing rents and home prices are Barcelona’s “biggest problems”. Barcelona is also the latest city cracking down on short-term rentals, with major cities worldwide implementing regulations on short-term rentals in bids to relieve pressure on housing markets.

The future of transporation

• China test-flies biggest cargo drone

  The drone, developed by Sichuan Tengden Sci-tech Innovation Co, carried a payload of two metric tons and flew for about 20 minutes (watch here) on a soon-to-open 100km route to Shanghai from Sichuan, and marks the next step up by the Asian nation looking to build and capitalise on a low-altitude economy that would also see both manned and unmanned air-taxis. Said economy could reach a value of USD279 bil by 2030, and Beijing has identified the low-altitude economy as a new growth engine that could be a “new productive force” in logistics and mobility.

• Vietnam to subsidise electricity for EV charging stations

  The home of EV maker VinFast is planning to subsidise electricity prices for EV charging stations in a bid to promote EV use and meet its energy transition commitments. Vietnam is targeting carbon neutrality by 2050 and currently has over 150,000 EV charging ports, most of which are owned and operated by VinFast. The government will look to ensure all urban areas have public EV charging systems, with a unified set of technical standards issued by the end of this month. Also promised are possible incentives for EV production and imports, and for drivers to switch over to EVs.

Shorts:

1. Thai PM Thavisin faces ouster 
   Thai PM Srettha Thavisin could be ousted this week depending on a ruling by the Thai Constitutional Court on his appointment of a cabinet minister with a criminal record. He stands accused of violating ethics rules with his appointment of lawyer Pichit Chuenban, who was sentenced to a six-month jail term in 2008 for a corruption-related offence. Thavisin’s case also comes a week after the same court disbanded main opposition party Move Forward and banned its former leader from politics for a decade. Said opposition has since formed a new party.

2. Ugandan rubbish dump landslide kills 21 
   So much rubbish that it is deadly enough to cause a landslide. Rescuers are continuing to dig through the rubbish at the landfill hoping to look for survivors of the landslide, which followed weeks of heavy rain. The Kiteezi landfill is the only landfill that services the whole of Kampala, Uganda’s capital, which has a population of about 4 million people. Many people earn their living by looking for items in the trash that can be resold, and the city’s mayor fears that “many, many more could be still buried”.

5. FOR YOUR EYES 📺

1. Paris Olympics closing highlights. Tom Cruise did the flag handover in Mission Impossible style. The next Olympics wil be held in Los Angeles, becoming the third city in the world to host the games 3 times.

2. How Amazon founder Jeff Bezos responded to shareholders after its stock price crashed 80% after the dotcom bubble popped.

3. BFM interviewed Tony Lim, co-founder of BananaBro on growing the chain into a RM70 mil a year business