☕️ Products from Shein, Temu & AliExpress contain toxic chemicals above acceptable levels

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

Malaysia’s capital market is oozing with money. In the first half of 2024, Malaysia's IPO capital market led Southeast Asia, raising USD450 mil, which accounted for 33% of the region's total IPO proceeds of USD1.4 bil, according to Deloitte. Despite this strong performance, the overall number of IPOs in Southeast Asia declined to 67 in 1H 2024 from 85 in 1H 2023.

Hundreds of European firefighters are set to arrive in Greece as the country battles a massive wildfire near Athens. Around 700 firefighters, supported by 200 fire engines and nine aircraft, are currently combating the blaze, which started in Varnavas, 35 kilometres northeast of Athens. The fire has devastated at least 10,000 hectares (24,700 acres) of land, claimed one life, injured 66 people, including two firefighters, and forced thousands to evacuate. The National Observatory is also under threat from the wildfire.

Mpox, previously known as monkeypox, has been declared a public health emergency in Africa by the Africa Centres for Disease Control and Prevention (Africa CDC). The rapid spread of a new strain has caused concern among scientists. Since the start of the year, over 13,700 cases and 450 deaths have been reported in the Democratic Republic of Congo. Mpox can be transmitted from animals to humans and between people through close contact, including sex, skin-to-skin interaction, and close-range talking or breathing.

3. IN MALAYSIA 🇲🇾

All about transport

1. Malaysia plans to acquire new passenger trains for Keretapi Tanah Melayu Berhad (KTMB) through a USD2.4 billion (RM10.7 billion) leasing agreement with China. In the first phase (2024-2027), the government aims to acquire 62 train sets, paid in instalments over a 30-year lease period. This deal is intended to expedite acquisition, enhance track utilisation, and address the current availability and reliability challenges of local rail services. KTM takers, rejoice!
   Learn: Difference buying vs leasing

2. The government is drafting new legislation to impose fines on men who trespass into pink coaches reserved for female passengers on public transport. Transport Minister Anthony Loke stated that commuter service operators KTMB and MRT have been instructed to increase monitoring of these women-only coaches. Auxiliary police will be mobilised more frequently at railway and MRT stations to enforce these measures and ensure compliance.

3. The Malaysian Anti-Corruption Commission (MACC) is expected to conclude its investigation within two months into the Selangor government’s Demand Responsive Transit (DRT) pilot project. The investigation focuses on potential conflicts of interest, as the contract was awarded to Asia Mobiliti Technologies Sdn Bhd, a company co-founded by the husband of Youth and Sports Minister Hannah Yeoh. Asia Mobiliti has denied any wrongdoing, dismissing allegations of foul play as baseless.

Two biggest MY banks fined over RM5 mil by BNM over outages
Malayan Bank Berhad (Maybank) and CIMB Bank Berhad found themselves in hot water with the Bank Negara Malaysia (BNM). Maybank, whose Regional Mobile Banking Platform and e-banking services namely MAE, faced multiple unplanned downtimes between 1 June 2023 to 31 May 2024. An investigation by BNM found that Maybank breached the thresholds specified in paragraph 10.32 of the Risk Management in Technology policy document, as Maybank’s intervention failed to restore services in time. Maybank was fined a total of RM4.32 mil for failing to quickly recover from system disruptions, which was paid on Aug 8.

On the other hand, CIMB faced a wider albeit shorter duration outage throughout their banking capabilities that similarly breached BNM’s thresholds. From e-banking services, ATM machines to debit and credit cards, CIMB was slapped with a RM760,000 fine for having interruptions on April 8 and 9 of this year. CIMB has also since paid the imposed fine, just 4 days after Maybank on August 12.

Both banks have publicly acknowledged the fines and expressed their commitment to improving service reliability and customer experience, emphasising ongoing investments in technology and systems to prevent future outages.

Norway’s oil fund increases investment in Malaysia
Known as Norway’s Government Pension Fund Global (GPFG), the world’s largest sovereign wealth fund raised its investment in 214 Malaysian stocks with a total worth of USD2.32 bil, an 11% increase compared to stocks in 180 companies worth USD2.05 bil at the end of last year. GPFG also holds USD178 mil worth of Malaysian government bonds but has yet to invest in renewables or real estate in the country.

Globally, GPFG with USD1.7 tril of assets (owns 1.5% of all listed stocks worldwide) generated 8.6% in H1 2024, translating to a massive USD138 bil gains. The fund generated a 12.5% return from equity investments but suffered losses in fixed income, unlisted real estate, and renewable energy infrastructure. The strong equity performance was mainly driven by technology stocks due to increased demand for artificial intelligence solutions. We’ve all heard the term GenAI countless times in the last couple of months.

The fund’s top three holdings in Malaysia are CIMB Group Holdings Bhd, Malayan Banking Bhd, and Public Bank Bhd, with new funding in oil-and-gas service provider Keyfield International Bhd, computer storage component supplier JCY International Bhd and telecom services firm OCK Group Bhd, amongst others. The increased investment by GPFG in Malaysia aligns with the country's efforts to attract foreign investments, as the country aims for a 5% growth in approved investments in 2024.
View table: GPFG’s top 20 Malaysia-listed equity holdings

Home Ministry takes full control over foreign worker recruitment
Beginning August, the recruitment of foreign workers in Malaysia has been fully transferred to the Home Ministry, including the operations of the One-Stop Centre (OSC). This shift follows a government announcement made on December 21 2022, which designated the OSC under the Home Ministry while the One-Channel System (OCS) for domestic workers remains with the Human Resources Ministry. Confusing abbreviations indeed. The OSC is responsible for critical processes such as quota applications, conditional approvals, and levy payments for foreign workers.

The change aims to streamline the recruitment process, making it easier for employers to hire foreign workers, as the Home Ministry also oversees immigration and work permit issuance.

4. AROUND THE WORLD 🌎

No chance for Israel-Hamas ceasefire?
In what seems a provocative move, Israeli Finance Minister Bezalel Smotrich published plans for one of Israel’s proposed new settlements in the occupied West Bank just before the next round of ceasefire talks are set to happen. Most UN member nations consider settlements built in any West Bank territory seized by Israel during the 1967 Middle East War to be illegal under international law, with the Palestinian Authority under President Mahmoud Abbas decrying the construction of settlements and destruction of Palestinian homes as ethnic cleansing.

As it stands, Hamas has stated it will not be joining the talks in Qatar on Thursday, lowering hopes for a ceasefire that would also have delayed Iran’s “retribution”, according to Iranian sources. One of the sources, also said Iran and its allies will launch a direct attack if the talks fail or if they perceive Israel to be dragging out negotiations. This comes after Iran dismissed calls to exercise restraint from France, Germany, and the UK, with Iran’s foreign ministry saying the calls "lack political logic and contradict principles of international law".

Meanwhile, the US ambassador to the UN has told the UN Security Council that the US intends to “turn the temperature down” in the Middle East, with President Joe Biden hoping to reach a ceasefire deal between Israel and Hamas. The volatility in the area has also forced US Secretary of State Antony Blinken to postpone plans to travel to the Middle East to take part in the ceasefire talks. This news is also followed by the US approving the sale of a USD20 bil weapons package to Israel comprising F-15 jets, army vehicles, and ammunition for tanks and mortars, with the approval signed by Blinken.

Changes in Leadership

1. Thai PM out for constitution violation

   The Thai Constitutional Court has ruled that Prime Minister Srettha Thavisin has violated the “rules on ethics” through his “display of defiant behaviour” in appointing a former lawyer who was once jailed to his cabinet, leading to his dismissal less than a year into his reign. This also makes Thavisinm, Thailand’s 30th PM and the third PM to be removed by the same court in 16 years. In the meantime, Deputy Prime Minister Phumtham Wechayachai has become the caretaker Prime Minister until the Thai Parliament convenes to elect a new PM this Friday.

2. Japan PM takes fall for party scandal, steps down

   Prime Minister Fumio Kishida announced he will be stepping down after the ruling Liberal Democratic Party chooses a new leader next month, stating that the most obvious way to show the public that the party has changed would be for him to step down. He also has “no qualms taking responsibility” for a political kickback scandal that has plagued his party. The scandal has led to low confidence in his Cabinet, as well as local election losses for his party, as the public expressed frustration over how the party raised and managed money for political purposes.
   Read: Explainer: What is the fundraising scandal engulfing Japan’s ruling party?

Tech Updates

1. The New Pixel 9: Google's AI Play

   Tech giant Google has unveiled its latest smartphone offering, the Pixel 9, which has deeper integrations of its AI technology and its chatbot, Gemini. Upgrades include a redesigned exterior, camera upgrades, and the inclusion of Google’s new Tensor G4 chip. Most of its new features are AI-powered, such as the zoom enhance and smart photo editing features, with a notable feature being its Add Me function (pretty cool for group picture - watch here). The device will be available in Malaysia, with Bursa-listed VSTECS Bhd named the sole distributor. Still, the most basic unit will retail at RM3,999.

2. China EV firm claims world's fastest-charging battery

   Chinese automaker Geely’s Zeekr claims its new EV batteries charge faster than any of its rivals, including Tesla and BYD. The firm said its batteries can be charged from 10% to 80% in 10 and a half minutes using its ultra-fast charging stations. Zeekr’s new 2025 model 007 sedan will be its first vehicle to sport the new battery, which the company says also performs well in cold weather.

Economics and Business

1. US inflation slows as consumer prices increase

   The US consumer price index rose 0.2% in July with an annual increase of 2.9% year-on-year, marking this as the lowest increase of inflation since early 2021. While this is still elevated, it is a drop from 3.3% in June, putting the trend on track to reaching the US Federal Reserve’s target of 2%. Data from the Labor Department also shows inflation is firmly back on a downward trend, leading to stronger expectations that the US Fed will cut interest rates next month. 

2. South Korean authorities find toxic substances in Temu, Shein products

   The most recent inspection sampled 144 products from Shein, Temu, and AliExpress, with multiple products from all three failing to meet legal standards. The highest came from a pair of shoes from Shein, which had 229 times the legal limit of phthalates – chemicals used to make plastics more flexible. High levels of these chemicals affect reproductive functions and can even cause premature birth. Other chemicals found in excessive levels include two different carcinogens, formaldehyde, and lead. The inspection was prompted by concerns about the companies’ business practices following their explosive growth, leading to increased scrutiny.

3. Rolls-Royce inks deal to provide engines to Cathay-Pacific

   The engine maker’s civil aerospace division will be building 60 Trent 7000 engines for Cathay-Pacific, which will power the airline’s 30 new Airbus A330-900neo aircraft. The deal also includes a TotalCare service agreement covering wing and maintenance work for the aircraft. A Rolls-Royce representative said the combined aircraft and engines will reduce emissions by 14% while making Cathay-Pacific the world’s largest operator of that make of engine.

5. FOR YOUR EYES 📺

1. Nvidia's shareholders experienced significant market volatility over the past six weeks, with a historic drop in market value followed by intense fluctuations. However, the tide appears to be turning, as Nvidia's shares have surged 17% in the last four sessions, regaining nearly USD424 bil (RM1.87 tril) in market value. Signs suggest that the worst might be over for the chipmaker, one of the world's largest companies. It’s over provided its major customers don’t reveal any shocking news — Microsoft alone contributes almost 20% of its revenue.

2. If you’ve enjoyed the bromance of Hugh Jackman and Ryan Reynolds on the screen, you’ll probably enjoy this episode of Hot Ones.

3. The swastika in modern times got a bad name due to the Nazis. Historically for thousands of years, this symbol represents something positive. We got curious and went into a rabbit role about the controversial Swastika symbol.