☕️ PM Anwar unveils RM95 bil New Industrial Masterplan 2030

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

More than 80,000 luxury watches worth more than USD1.3 bil have been reported as stolen or missing, according to The Watch Register, a company that helps owners, auction houses, and dealers identify stolen timepieces for a fee for over 30 years. About 6,815 watches were added to the list last year, a 60% increase compared to the year before. Thieves’ top favourite watch? Rolex, which accounted for 44% of The Watch Register’s database, followed by Omega and Breitling.

There will be 7 new hotels in Malaysia to be launched by hotel chain Hilton Hotels & Resorts, a 50% jump to 21 and a 48% increase in its room inventory to 7,100 rooms. Malaysia currently holds the largest portfolio of Hilton-branded hotels across Southeast Asia, with 14 hotels across three brands - Hilton, DoubleTree by Hilton and Hilton Garden Inn. Of the seven new hotels, four will be new brands in Malaysia - Curio Collection by Hilton, Waldorf Astoria (former Hotel Istana, owned and being developed by tycoon Syed Mokhtar Albukhary) and Conrad.

With Malaysia finally catching up to the electric vehicle (EV) trend, EV sales are expected to quadruple in 2023, though the penetration rate will remain low at 1.8%. Malaysia has set a goal of having 100,000 EVs on the road by 2030, of which 50,000 are expected to be commercial EVs. To this end, EVs will not be subject to road tax until 31 Dec 2025.

3. IN MALAYSIA 🇲🇾

Putrajaya launches its new industrial masterplanPM Anwar Ibrahim’s Madani Government has started to get their house in order, especially on the communication front, with the launching of the New Industrial Master Plan 2030 (NIMP2030), providing a much clearer signal to investors on the country's economic future. The NIMP2030 requires RM95 bil in investment over 7 years.

Among the key targets under NIMP2030 are increasing the manufacturing sector’s value-added gross domestic product (GDP) by 61% to RM587.5 bil, adding 3.3 mil new manufacturing jobs and above all, improving the median manufacturing wage by 128%, from RM1,976 to RM4,510. Under NIMP2030, the Government will adopt a mission-based approach to achieve all the critical targets underlined within the master plan. So, what are the four key missions?

• Mission 1 - To advance economic complexity where industries are encouraged to innovate. The master plan intends to improve the country’s gross domestic expenditure on R&D (GERD) as a percentage of GDP from 1.0% to 3.5%. The top 10 OECD economies spend between 2.8% - 5.6% of GDP towards R&D.

• Mission 2 - To embrace technology and digital transformation.

• Mission 3 - To push for Net Zero, in line with the recently announced National Energy Transition Roadmap (NETR).

• Mission 4 -  To safeguard economic security and inclusivity by ensuring supply chain security, equitable participation from all states and empowering SMEs. If the execution of NIMP2030 runs according to plan, SMEs will contribute a 25% share of manufacturing exports by 2030.

For those analytical minds, you can view MIDF’s in-depth review of NIMP2030.

Pulai by-election: Things PN saidWhen PM Anwar became the leader of the Unity Government, he commanded two-thirds control of the Parliament, representing a group of 148 MPs out of 222 MPs in the lower house of the Parliament. So, technically, PM Anwar’s Unity Government can amend the Federal Constitution. Thus, PN is using this fact on the offence in this by-election campaign following the passing of former minister Salahuddin Ayub. PN stated that this by-election should serve as the rakyat’s referendum against PM Anwar by denying him the power to amend the Constitution. Muhyiddin, in a ceramah over the weekend, said that the government would use its majority to amend the Constitution to increase the number of parliamentary seats by 78 seats to 300, which Communications and Digital Minister Fahmi Fadzil had called out as baseless and first-time hearing of it.

Johor Bahru Bersatu Women’s chief Azlinda Abdul Latif even went to the extent that DAP under the Unity Government has been plotting to create more Chinese-majority constituencies by utilising the two-thirds power that they currently have to amend the electoral boundaries within a few years.

Economy rice no more - the price of imported white rice ballooned by 36%Padiberas Nasional Bhd (Bernas) stated that the price of imported white rice has increased from RM2,350 per metric tonne to RM3,200 per metric tonne. Bernas listed climate change, weakening foreign currency exchange rates, high operating costs and foreign conflicts as the main factors. The last straw came from India when the world’s biggest rice exporter banned the export of non-basmati white rice in July.

It has been a mixed feeling this past week for Malaysia AirlinesRight out of the gate, the divorce between Malaysia Airlines and Brahim’s Food Services (BFS) is not going smoothly for the former. Malaysia Airlines is struggling so much so that the airliner will allow passengers to bring their own meals on board for affected routes only. BFS is also not making the separation easier by publicly attacking its former ‘spouse’. Brahim’s Holdings Bhd executive chairman Ibrahim Ahmad said that the temporary outdoor production area Malaysia Airlines has set up for its in-flight catering service is certainly not acceptable by normal standards.

MAG, the parent company of Malaysia Airlines, also stated that the group is diversifying its business into non-airline non-passengers, such as aviation services and loyalty and travel solutions (LTS) in the next decade. This revenue diversification exercise will be done to ensure the future sustainability of the company.

4. AROUND THE WORLD 🌎

Ecuador turned gangster land over the weekendLast Friday, 57 prison guards and police officers were held hostage in 6 prisons across the country. Fortunately, 50 of the hostages have been released, though the status of the other hostages remains unknown. Prisons in Ecuador have somewhat turned into the capital of power for drug cartels and gangs. Explosions also went off in the country. Two car bombs exploded near police buildings in the capital Quito and also detonated explosive devices on a bridge, damaging an inter-city route.

The reasons for this gangsta uprising? Retaliation by criminal organisations after hundreds of soldiers and police officers carried out an operation to search for weapons, ammunition and explosives in one of the country’s main penitentiaries (prison for people convicted of serious crimes). Ecuador made headlines in early August as one of its presidential candidates was assassinated during his campaign trail. Ecuador, a nation of 18 mil people, once a peaceful South American nation, has descended into violence due to the drug trafficking trade, as the country is nestled between the world’s largest cocaine producers - Colombia and Peru (see these nations on map here).  

UBS reported biggest-ever quarterly profit after Credit Suisse acquisitionThe Swiss banking giant reported a record USD29 bil second-quarter profit following the government-brokered rescue deal of its rival Credit Suisse (CS). This, however, isn’t profit in the conventional sense but an accounting gain known as ‘negative goodwill’. UBS paid USD3.25 bil to acquire CS, but the latter’s assets are worth more than the acquisition price. The difference between the price and asset value, as such, is allowed to be treated as profit according to accounting standards. 

Excluding this extraordinary gain, UBS reported a modest USD1.1 bil pre-tax profit. The biggest quarterly profit posted by a bank was USD14.3 bil by JP Morgan in early 2021. 

Learn more: What are some examples and implications of negative goodwill in mergers and acquisitions (M&As)?

The theme parks of Japan

• If you are thinking of visiting Tokyo Disneyland, make it next year. The 40-year-old Tokyo Disneyland Resort is scheduled to open its major expansion, the Fantasy Springs area, in spring 2024, which will include attractions by “Frozen”, “Tangled” and “Peter Pan” films. The new expansion, which is 50% the size of the existing park, covers a total area of 1.5 mil sq feet and costs about USD2.2 bil to build. 

• Osaka-based Universal Studios Japan (USJ) clinched the third spot amongst the world’s most visited theme parks last year, lagging behind Disney’s Magic Kingdom and Disneyland. USJ attracted a total of 12.35 mil visitors, around 85% of pre-pandemic levels. A mix of Hollywood and Japanese characters and investments of USD700 mil over the past decade have increased the attraction of the USJ. Super Nintendo World, a massive expansion in 2021 that includes characters like Super Mario, expanded the park size by 70%. Other popular Japanese characters featured in the park - One Piece, Detective Conan and Attack of Titan. 

Giants selling shares 

• Saudi Aramco, the world’s biggest oil company and third most valuable company after Apple and Microsoft, with a market value of USD2.25 tril, is seeking to sell a stake of USD50 bil to other multinational oil companies and sovereign wealth funds. The proceeds will be used to fund the Public Investment Fund (PIF), Saudi Arabia’s USD700 bil sovereign wealth fund. Aramco is expected to pay a base dividend of USD153 bil to the government for 2022 and 2023. For comparison, Petronas announced last week it will pay the government RM40 bil (USD8.6 bil) in dividends this year. 

• What better way to keep a customer around than to get them to invest big bucks and become a shareholder? SoftBank’s Arm Holdings Ltd has secured some of its customers to invest in its IPO. The chip designer counts Apple, Nvidia, Samsung Electronics and Advanced Micro Devices amongst its investors that are investing in its blockbuster, investing between USD25 mil and USD100 mil each, which will value Arm around USD50-55 bil valuation. 

Shorts

1. Thailand’s king has commuted former Thai PM Thaksin Shinawatra’s eight-year jail sentence to one year, a day after the billionaire submitted his petition for the pardon. The pardon was confirmed by the official Royal Gazette, pointing to his service as the country’s PM and stating that “Thaksin accepted his crime and showed remorse”. 

2. 66-year-old Tharman Shanmugaratnam has been elected as Singapore’s 9th president, garnering an astounding 70.4% of the total 2.48 mil votes, beating out two other rivals. The role of the president is largely ceremonial and holds little power, apart from having a say on Singapore’s massive financial reserves. Tharman was formerly the finance minister and deputy PM and was expected to be the first non-Chinese PM. BBC published a post here on why Tharman could have been much more.

5. FOR YOUR EYES 📺

1. Meet the fastest fish on earth - the black marlin. The fish can swim at an incredible speed of up to 129 km/h.

2. How’s Whatsapp doing after Facebook’s USD19 bil acquisition? When Facebook acquired WhatsApp, the messaging app was generating about USD10.3 mil in revenue and a net loss of USD138 mil.