☕️ Public transport usage broke record in May 2024, more than 1 mil journeys daily

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

May 2024 saw record-breaking public transport usage in the Klang Valley, with combined train and bus ridership exceeding one mil daily. On May 29, Rapid Rail hit its highest-ever rail usage, recording 1,004,591 journeys. Prasarana Malaysia Bhd reported that more than a million journeys were made using the LRT, MRT, and monorail, marking a new high. Bus journeys in Kuala Lumpur, Penang, and Kuantan also saw significant increases, reflecting a broader rise in public transport usage. With more subsidy rationalisation plans in the pipeline, this figure is poised to go higher.
View table: 2024 ridership figures by transportation type

Honduras is implementing stringent measures to combat organised crime, including building a 20,000-capacity "mega-prison," labelling gang members as "terrorists," and conducting collective trials. President Xiomara Castro announced these actions in response to escalating violence and public outcry amid the country’s high homicide rate of 34 per 100,000 inhabitants, significantly above the global average. Where is Honduras?

The following news is not for furry friend lovers. Across Asia, over 30 mil dogs end up in stews and barbecues. Some Asians consider dog meat a delicacy, believed to bring good luck or provide relief from heat. However, attitudes are shifting. Lately, Asia has been moving away from consuming dog meat. In January, South Korea joined China, Taiwan, Thailand, and Singapore in prohibiting the dog meat trade. Asians are having fewer babies, so pets are offering companionship. In South Korea and Taiwan, there are as many pet dogs and cats as there are children aged 14 and under. In Thailand, pets outnumber children by roughly 7 mil.

3. IN MALAYSIA 🇲🇾

SC is going after prominent investor Yu Kuan Chon
The Securities Commission Malaysia (SC) sued Yu Kuan Chon for alleged market rigging and manipulation involving shares of Shangri-La Hotels (M) Bhd in 2018. The regulator alleged that Yu traded Shangri-La shares between March 1, 2018, and July 24, 2018, in a manner that caused a surge in the traded volume and share price of the hospitality group. The Securities Commission (SC) is filing a civil suit to compel Yu to pay disgorgement totalling RM26.57 mil, which is three times the gain from the alleged manipulation, as stated in a regulator's announcement. The SC also seeks a civil penalty of RM1 mil to be imposed on Yu, along with a five-year ban on managing any public company and trading on the stock exchange.

How did SC determine it was market manipulation? According to the regulator, Yu’s trades during the period represented approximately 81.9% of the total volume of Shangri-La Hotels shares traded on the market. SC said his trading activities were in breach of Sections 175(1) and/or 176(1) of the Capital Markets and Services Act 2007.

The rich vs the richest. The former, Yu, had a networth of USD430 mil in 2023 according to Forbes while the latter, Robert Kuok, has an estimated networth of USD11.5 bil in 2024. Why did we mention Robert Kuok? Shangri-La Hotels (M) Bhd’s biggest shareholder is Shangri-La Asia Limited (the ultimate holding co.), which is majority-owned by the Kuok family. Yu founded Bursa-listed property development company YNH Property Bhd, which was caught in a smallcap stock sell-off early in the year, wiping out billions. He also picked a fight with another tycoon - Yu blocked tycoon Quek Leng Chan from his attempt to privatise Hong Leong Capital Bhd in 2013.
Read: Rapid fall of Dr Yu’s shares shatters his invincible image

The Mavcom union with CAAM is happening
The Dewan Rakyat has approved two bills that will merge the Malaysian Aviation Commission (Mavcom) with the Civil Aviation Authority of Malaysia (CAAM), forming a single regulatory body. The Malaysian Aviation Commission (Dissolution) Bill passed with 93 MPs in favour, 63 against, and 66 absent, while the Civil Aviation Authority of Malaysia (Amendment) Bill passed by a majority voice vote. Mavcom, which oversees economic and commercial aviation matters, will transfer all responsibilities to CAAM, which handles technical and safety regulations.

While this plan was vehemently opposed by the Opposition bloc, Transport Minister Anthony Loke said a single regulatory mechanism is used in countries such as the US, UK, Germany, China and Singapore. Loke added that the merger will reduce bureaucracy and improve the efficiency of civil aviation service delivery, especially in licensing services. If we want more airlines to use Malaysia as a hub, this is definitely a plus. Loke also addressed the allegations that the merger was part of the government’s ploy to ease the sale of the Malaysia Airport Holding Bhd (MAHB) shares. Loke said the merger is expected to happen six to nine months after the passing of the bills, while the sale of the MAHB shares is expected to be completed within six months.

Felcra’s woes because of incompetence — nothing surprising
The Public Accounts Committee (PAC) discovered that the primary cause of Felcra Berhad’s debt is the losses incurred by its subsidiary companies, totalling RM309.8 mil, and Felcra Properties’ debt of RM842.7 mil. Felcra Bhd is wholly-owned by the Minister of Finance Inc (MOF Inc) but supervised by the Ministry of Rural and Regional Development (KKDW).

As a result of the debts, the government had to grant RM544 mil to complete the Semarak20 commercial development on Jalan Semarak. The designated development company lacked the expertise for such a large project, and a shift from a design, build, and finance model to only design and build further strained Felcra’s finances, necessitating government intervention (i.e. taxpayers money).

Last month, the Malaysian Anti-Corruption Commission arrested two senior officers suspected of abuse and misappropriating funds from the Ministry of Finance (MoF) for a development project worth RM1.2 bil. The PAC confirmed that this arrest was linked to the mismanagement of Felcra Berhad. Peninsular needs to start looking at Sarawak to stop funding GLCs.

Shorts

1. BNM may take action against banks for service outages
   Deputy Finance Minister Lim Hui Ying said Bank Negara Malaysia (BNM) may take supervisory actions and impose penalties on violations of regulatory provisions under its supervision following recent incidents of online banking services outages. This was in response to a question from Wee Ka Siong (BN-Ayer Hitam) about the government’s view on the issue.

2. Dr M vs LGE
   Former finance minister Lim Guan Eng published a Facebook post stating that the former prime minister Dr Mahathir Mohammad, threatened to sack him thrice in front of other Cabinet members. Lim said this was due to disagreement over the implementation of PH’s 2018 election manifesto. The latter refuted the claims and called them lies. Mahathir explained the Cabinet cannot be a rubber stamp simply because of trying to fulfil the promises.

3. We’ve got a new EC chief
   Former Rural and Regional Development Ministry secretary-general Ramlan Harun has been appointed as the new chairperson of the Election Commission (EC). We tried to find more information about Ramlan, but there isn’t much. Another parachute appointment.

4. Buddha statue found in Kedah older than Angkor Wat
   A Buddha statue discovered at the Bukit Choras Archaeological Heritage Site in Yan, Kedah, dates back to the eighth or ninth century, making it older than Angkor Wat and Borobudur. The find underscores the area's historical significance as a religious site. The discovery was made by a team from Universiti Sains Malaysia's Global Archaeological Research Centre.

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4. AROUND THE WORLD 🌎

Conflict Updates
As Hamas and Israeli forces continue to clash in Rafah, humanitarian conditions for Gazans continue to deteriorate, with a high risk of famine persisting across the territory. More than 495,000 people across the Gaza Strip are facing the most severe level of food insecurity, with the number making up over a fifth of Gaza’s population. At this level, households suffer an extreme lack of food, with acute malnutrition in young children and an imminent risk of starvation and death. The intensified Rafah offensive also led to further displacement of the refugees in Rafah to areas with less water and fewer health services, increasing the risk of disease outbreaks, which would exacerbate the situation. Rafah was a primary route for humanitarian aid to enter Gaza, and the offensive has hampered the safe delivery of aid to the population.

Meanwhile, presidential hopeful Donald Trump has received a plan to end the Ukraine-Russia conflict, which he has promised to do quickly if he wins the presidential election on 5th November. The plan was crafted by retired Lieutenant General Keith Kellogg and Fred Fleitz, who served as chiefs of staff in Trump’s National Security Council during his previous stint. It involves telling Ukraine it will only get more US weapons if it enters peace talks. Russia would be warned that should it refuse to negotiate, there would be increased US support for Ukraine.

Kenyan President rejects contentious finance bill as protests take a violent turn
President William Ruto declined to sign a highly contentious finance bill, instead sending it back to parliament for amendments. This comes as nationwide protests against tax hikes unexpectedly turned violent when lawmakers, in a bid to raise an additional USD2.7 bil, voted through tax hikes. At least 23 have died nationwide in clashes, with the initial conflict happening when protestors broke into the parliamentary compound, which led to police opening fire on the crowd. A section of the parliament building was also set ablaze by the protestors. The mainly youth-led rallies started peacefully last week, with thousands marching nationwide to protest tax hikes as Kenya faced a cost-of-living crisis.

Tech Matters

SG firm secures USD45 mil to better protect young gamers
Singaporean internet safety start-up k-ID secured USD45 mil in venture capital funding in a round led by US-based venture capital firms Andreessen Horowitz and Lightspeed Venture Partners. The firm, which offers tools to help game publishers and parents protect young gamers, touts a first-of-its-kind software that offers granular parental controls and verifications that comply with differing regulations regardless of where players are located. 

Salesforce challenger Creatio hits unicorn status with USD200 mil fundraiser
The customer relationship management platform became a unicorn firm after it secured USD200 mil in a funding round led by Sapphire Ventures, pushing its valuation to USD1.2 bil. The firm, which competes with tech giant Salesforce, offers a low-code automation platform that provides a user with the freedom to automate workflows on the fly, according to Creatio founder and CEO Katherine Kostereva. The funds will go towards further accelerating product development, with the use of generative AI to accelerate the automation of marketing and sales-related tasks.

Seven firms form AI dataset licensing sector's first trade group
The seven-firm Dataset Providers Alliance, the first trade group in the AI dataset licensing sector, will advocate “ethical data sourcing” in the training of AI systems, including rights for people depicted in datasets and the protection of the intellectual property rights of content owners. The group will also be focusing heavily on pushing for legislation to create penalties for generating unauthorised digital replicas of people’s voices or likenesses.

Currently, there are AI models that are being trained by being fed content scraped off the internet for free without the consent of those who created the works or owned the rights to them. The prospect that demand for licensed datasets will grow should copyright owners win their legal fights to secure their intellectual property has led to the emergence of companies selling licensed datasets and groups that establish ethical standards for the sector.

Shorts

1. NATO appoints Dutch PM as next Secretary-General
   Dutch Prime Minister Mark Rutte will be stepping into his new role on 1st October, after his only rival for NATO’s top job, Romanian President Klaus Iohannis, quit the race. Rutte will be replacing Norway’s Jens Stoltenberg, who held the position for the past decade.

2. South Korea halts battery maker's operations to probe deadly fire
   The authorities ordered a halt to lithium battery manufacturer Aricell’s operations after a fire killed 23, with three company officials being investigated for suspected safety violations. The cause of the blaze is still undetermined, though questions have been raised about the firm’s hiring of foreign workers on a temporary basis and whether said workers received adequate safety training.

3. Volkswagen to start joint venture with Tesla rival Rivian
   The German auto giant will be investing up to USD5 bil in Rivian, with the joint venture allowing the two firms to share technology. The agreement will see VW initially investing USD1 bil in the EV firm, with a further USD4 bil to be invested by 2026. VW will also gain immediate access to Rivian’s software through this partnership, allowing the German automaker to use said software in its cars. Tech giant Amazon owns a 17% stake in Rivian. When you can’t beat them, join them.

5. FOR YOUR EYES 📺

1. All these years of debating against corporate big-wigs during his former roles, Finance Minister Amir Hamzah explained the diesel subsidy rationalisation plan rather eloquently in the August House.

2. There’s a dilemma when it comes to consuming meat — swapping beef burgers for chicken burgers lowers your environmental footprint but is worse for animal welfare. The chart below shows for odd relationship between the two — environmental footprint vs lives required (for the type of protein).