☕️ PM Anwar: Education should be free for all Malaysians, except for the rich

1. MARKET SUMMARY 📈

Japan’s main stock market benchmark, the Nikkei 225, closed above 33,000 for the first time in 33 years, driven by technology shares. One man must be smiling wide now - Warren Buffett. His investments in the 5 Japanese trading houses (aka sogo shosha) - Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo - have nearly tripled in value to USD17 bil since Berkshire Hathaway disclosed its stake in Aug 2020. Meanwhile, Bursa Malaysia no stim.

2. NUMBERS AT A GLANCE 🔢

23 — the number of Grand Slam titles Novak Djokovic has won after his championship at the 2023 French Open, earned via a 7-6 (1), 6-3, 7-5 victory over Casper Ruud on Sunday. Djokovic had been tied at 22 with Nadal; Federer, who announced his retirement last year, has 20. In an interview, he said: “I look forward, already, to Wimbledon.”

The Malaysia Healthcare Travel Council (MHTC) anticipates that the nation's health tourism sector, once fully recovered, will generate revenue exceeding RM1.7 bil — matching the pre-pandemic performance in 2019. This optimistic projection highlights the council's confidence in the industry's ability to bounce back and attract international travellers seeking healthcare services.

The surge in special-purpose acquisition company (SPAC) activity has resulted in significant losses for investors. In contrast, insiders involved in the companies going public through SPACs have benefited from the situation. Executives and early investors had capitalized on well-timed trades, selling shares worth a staggering USD22 bil and profiting from these transactions before share prices experienced a subsequent decline. This discrepancy in gains has highlighted the disparity between insiders and general investors in the SPAC market. Companies that went public this way have lost more than USD100 bil in market value. At least 12 have filed for bankruptcy, including Richard Branson’s Virgin Orbit — the satellite-launching spinoff of Virgin Galactic.

3. IN MALAYSIA 🇲🇾

The Healthcare White Paper has been releasedThe White Paper on Health was published on the Parliament’s website on Tuesday. The 57-page document will underline the proposed healthcare reforms for the next 15 years and will be tabled in the lower house of the Parliament today.

One of the key pillars in the white paper is to ensure sustainable healthcare funding to sustain the universal health coverage that we are enjoying now. Putrajaya is aiming to increase the allocation towards public healthcare to 5% of the gross domestic product (GDP) from 2.58% in 2020. However, the budget will not come from the Government’s coffers alone. The idea of the creation of a social compact towards healthcare funded by philanthropists and corporate foundations is mooted in the white paper.

University education should be free, says PM AnwarIn a forum with university students at Universiti Kebangsaan Malaysia (UKM), PM Anwar Ibrahim suggested that education, from primary school to university, should be free, except for the rich. However, he admitted that the Government could not provide free tertiary education at the moment due to budgetary constraints, among others, mentioning the high level of national debt, to the tune of RM1.3 tril.

PM Anwar assures that the sovereignty of the country is not compromised after the signing of treaties with IndonesiaPM Anwar assured the Parliament that he has the country’s best interest at heart and that not one inch of our land is sacrificed when the PM signed two maritime treaties with Indonesia. The treaties, involving the delimitation of maritime borders at the southernmost part of Malacca Strait and Sulawesi Sea, were signed by both leaders of the countries when Indonesian President Joko Widodo visited the country recently. The conclusion of the treaties ended an 18-year maritime border dispute between both nations. However, the maritime borders between both Malaysia and Indonesia at Pulau Sebatik, Sabah and Tanjung Pelepas Port are still under negotiations.

The State of Johor is in the spotlight

1. Mah Sing Group Bhd finalised the purchase of 75.7 acres of land in Pulai, Johor Bahru, for RM76.1 mil. The purchased land is earmarked for a landed residential project dubbed M Tiara that has a projected gross development value (GDV) of approximately RM480 mil.

2. Deputy Finance Minister Steven Sim told the Parliament that Khazanah Nasional Bhd never sold the assets of Iskandar Malaysia Studios. Iskandar Malaysia Studios is the OpCo (operating company) of the film and television production complex in Iskandar Puteri, Johor. Thus, what happened was Khazanah Nasional disposed of its holdings in the OpCo for RM32 mil to Studio Management Services Sdn Bhd. Sim stated that if Khazanah Nasional did not proceed with the sale, the sovereign wealth fund will need to absorb losses of up to RM14 mil per annum. Ultimately, the 19.8 hectares site that houses the film and television production complex is parked under a Khazanah Nasional-owned AssetCo (asset company) called Tanjung Bidara Ventures Sdn Bhd.

Business shorts

1. GITN Sdn Bhd, a wholly-owned subsidiary company of Telekom Malaysia Bhd, secured the 10-year MyGov*Net 2.0 concession from the Government worth a whopping RM4.9 bil. GITN will be responsible for providing a secured, integrated telecommunication network connecting more than 10,000 state premises in Malaysia and abroad.

2. Texas Instruments Inc (TI) will be investing RM14.1 bil more in Malaysia, especially in Kuala Lumpur and Melaka, which will create 1,800 new jobs. Under this multi-billion investment, TI will add more than one million sq ft of space beside its existing Kuala Lumpur plant and expand its Melaka facility by another 400,000 sq ft.

3. Petronas Chemicals Group Bhd (PetChem) will proceed with a related party transaction with its 40% owned unit BASF Petronas Chemicals Sdn Bhd (BPC) to purchase the maleic anhydride (MAn) plant in Kuantan, Pahang. Around 50% of the world's maleic anhydride output is used to manufacture unsaturated polyester resins (UPR). Chopped glass fibres are added to UPR to produce fibreglass-reinforced plastics that are used in a wide range of applications, such as pleasure boats, bathroom fixtures, automobiles, tanks and pipes.

4. AROUND THE WORLD 🌎

Meta wants to disrupt Musk’s pet project — TwitterAccording to sources, Facebook parent Meta has revealed plans for a text-based social network that aims to compete with Twitter. The proposed platform may enable users to follow accounts they already follow on Instagram. Meta's Chief Product Officer, Chris Cox, has stated that coding work is currently underway for the text-based social network platform — codenamed P92. The tech giant has a goal of launching the platform in the near future, although an exact release date has not been disclosed. If even 25% of Instagram users (around 2 bil) can be coaxed into using P92 (it will undoubtedly have a sexier name when it launches), it will instantly become bigger than its rival.

London to be the next crypto hub?On Monday, venture capital firm Andreessen Horowitz announced the opening of its first office outside of the United States — in London. The Silicon Valley firm, renowned for its investments in prominent tech companies like Airbnb and Coinbase, aims to capitalise on what it perceives as a favourable landscape for cryptocurrency entrepreneurs in the UK. With the belief that the UK will emerge as a prominent global player in the fields of cryptocurrency, blockchain, and digital currencies, Andreessen Horowitz is expanding its presence to tap into these opportunities. This move seems ripe, with the United States intensifying its regulatory scrutiny of the cryptocurrency industry. Andreessen Horowitz has been one of the most active investors in crypto and Web3.

Paul McCartney is pro AIOne of the frontmen of The Beatles, Paul McCartney, has embraced artificial intelligence (AI) after he has created a “new” Beatles song using AI, which will be released to the public later this year. The song in question incorporates vocals from late member John Lennon (who was shot dead), sourced from an old demo recording. According to a report by the BBC, it is likely that the vocals are from a 1978 Lennon recording titled 'Now and Then.' This particular recording was captured on cassette in Lennon's New York City living room shortly before his passing. The inspiration for the song came from Peter Jackson’s documentary ‘Get Back’.

Thailand’s PM frontrunner Pita faces yet another hurdleThailand’s leading candidate for prime minister, Pita Limjaroenrat, is facing an investigation into his eligibility to run in the recent election, according to a senior official. The Election Commission of Thailand is conducting an inquiry into whether Pita knowingly violated the eligibility criteria for parliamentary candidacy by owning shares in a media company, which is prohibited by election rules. Pita has stated that he inherited his father's shares in ITV television station, which has not broadcast since 2007. If found in violation and ineligible to run as a parliamentary candidate, Pita could potentially face disqualification, up to 10 years of imprisonment, and a 20-year ban from participating in politics.

Shorts

1. Microsoft’s proposed USD68.7 bil acquisition of game maker Activision Blizzard has hit a roadblock with the US Federal Trade Commission (FTC). The agency has reportedly applied for an injunction to prevent the deal from going ahead before its own official judgment on the situation later this year.

2. US consumer prices experienced minimal growth in May, resulting in the smallest annual increase in inflation in over two years. The Consumer Price Index increased 0.1% in May and in the 12 months through May, the CPI climbed 4.0%. However, underlying price pressures remained robust, indicating that the Federal Reserve might maintain its current interest rates while adopting a more hawkish stance.

5. FOR YOUR EYES 📺

1. Who is a fan of Wes Anderson? You’ll enjoy the reel below.

2. How much does Malaysia spend on Research & Development? Approximately 1% of the country’s GDP — RM10.23 bil. Apple alone in 2022 spent USD26.25 (RM121.5 bil) on R&D, nearly 12x more than Malaysia. Many factors influence the economic growth of a nation, and R&D expenditure, we believe, is a crucial factor as it reflects the mentality of the nation’s participants towards innovation.