Discover more from The Coffee Break
☕️ RM22.98 mil in fees made by Najib Razak's speechwriter over 3 years for 22 speeches, PR services
Rumours of rift in Bersatu - Muhyiddin vs Hamzah. Amazon, Hilton, Marriot etc to hire thousands of refugees in Europe. Credit card rewards - the hidden wealth transfer from the poor to the rich.
1. MARKET SUMMARY 📈
Short sellers betting against the US stock market are taking a major hit of about USD120 bil mark-to-market losses due to the AI-fuelled market rally. USD72 bil of the losses alone was incurred in the first half of June.
2. NUMBERS AT A GLANCE 🔢
EUR120,000 (RM609.9k) — the speeding fine paid by one of Finland’s richest men, Anders Wiklof, about the same price Kelantan Menteri Besar paid for the Mercedes S450 L AMG in 2020. His driver’s license was suspended for 10 days as well. He was caught by the police for driving 82 km/h in a 50 km/h zone. In Finland, speeding fines are calculated based on the offender’s income. Finland was the first Nordic nation to implement the income-based “Day Fine” system in 1921. The main reason for adopting the new system was to introduce a system where fines would have an equal impact on people with varying means. Sounds like an equitable idea ain’t it? CC: Anthony Loke
915,874 road accidents were recorded in 2021 (370,286) and 2022 (545,588). Of these, a total of 10,619 deaths were reported, says the Transport Ministry. This means if you get into a road accident, your odds of meeting your creator (i.e. dying) is 1.16%. The accidents were mainly caused by human behaviour, followed by the design, condition of road infrastructure and vehicles’ condition, though no breakdown was given.
Japan’s birth rate declined for the seventh consecutive year in 2022 to a record low. The fertility rate, or the average number of children born to a woman, was 1.2565, far below the 2.07 considered necessary to maintain the population. The youth population will start decreasing drastically in the 2030s, making the current moment the last shot to reverse the trend of dwindling births. Newborns slid 5% to 770,747 last year, a new low, whilst deaths shot 9% to 1.57 mil.
3. IN MALAYSIA 🇲🇾
Omar Mustapha - the multi-million ringgit speechwriter of Najib Razak
Najib Razak’s RM2.28 bil 1MDB-Tanore trial resumes. Omar Mustapha, the 45th prosecution witness, Najib’s main special officer (2004-2006) and former speech writer (2011-2014), told the court his company Semarak Konsortium Satu Sdn Bhd was paid RM22.98 mil over 3 years from Mar 2011 to Apr 2014 for providing speech writing services. He said he was paid RM1 mil for each speech and wrote a total of 22 speeches for Najib and was paid through cheques issued through Najib’s personal account. He felt the amount he charged was “absolutely reasonable”.
How did Omar land such a lucrative gig? It started with the termination of APCO Worldwide, an international public relations firm, by the government after it became an issue raised in parliament by the opposition over a total payment of RM76.8 mil to the firm from July 2009 to June 2010 — that’s RM6.4 mil per month for PR services. Omar discovered this termination, sensed an opportunity, hired APCO Malaysia CEO Paul Stadlen to work under his company, and met Najib in 2011 at the PM’s office to offer his speech writing services and an international media team. He did not seek a contract but would be compensated on a reimbursable basis.
How was Najib able to pay for such an exorbitant amount? Did he not check for market rates for such services? Omar’s rate per speech could probably make it into the Guinness World Record. Pays to be a speech writer — only in the pre-ChatGPT era
New IGP and Deputy IGP in the house
Following Inspector-General of Police (IGP) Acryl Sani Abdullah’s early retirement four months ahead of his contract, Home Minister Saifuddin Nasution announced that Deputy IGP Razarudin Husain has been appointed as the new IGP and Ayob Khan Mydin Pitchay previously the Criminal Investigation Department director has been made the Deputy IGP.
As Razarudin, 61, has passed the retirement age, his appointment is on a contract basis for the next two years, with Ayob Khan, 57, speculated to be on a fast track to be his successor, coinciding with Johor ruler Sultan Ibrahim ascending the federal throne to be the next Yang di-Pertuan Agong in early 2024. Sultan Ibrahim has taken a liking for Ayob Khan following his stint as the Johor police chief in 2020, though their relationship did not start off well (Tun M as the then PM a large factor in this) — read the story here and Ayob’s background.
Rift in Bersatu - Muhyiddin vs Hamzah Zainuddin
Rumours are going around that Bersatu President Muhyiddin Yassin and sec-gen Hamzah Zainuddin are clashing over the direction of the party with regards to how PN and Bersatu ought to operate. This is reported by the Malaysia Gazette, according to a Bersatu leader, speaking under anonymity. It’s also rumoured that Hamzah might be replaced as the opposition leader by Arau MP Shahidan Kassim or Ketereh MP Khlir Nor. Another Bersatu source claimed that the rift stemmed from Azmin Ali’s role in the party, who is the party’s future “poster boy”.
AirAsia has been voted as the World’s Best Low-Cost Airline at the Skytrax World Airline Awards 2023 for the unprecedented 14th time in a row. Over 100 customer nationalities participated in the survey, with 20.23 mil eligible entries counted for the results.
Was AirAsia overwhelmingly voted ahead of the runner-up? Lots of Malaysian AA customers would beg to differ. Then again, in such things, it’s always a comparison — there might be worse players than AirAsia out there. Oh well, how to argue with 20 mil people.
Main Market bound property developer SkyWorld Development Bhd is to raise RM320 mil in its IPO, making it the third-largest IPO on Bursa Malaysia this year. The company is scheduled to make its debut on 10 July. RM153.6 mil or 48% of the proceeds will be used to purchase existing shares from both its founder, Ng Thien Ping and Lam Soo Keong. In other words, the sweet sound of ka-ching for both founders. Post-IPO, both men will own 57.97% of the company. How much does it cost to go IPO? In SkyWorld’s case, it’s 3.5% of the IPO proceeds of RM11.2 mil, which is allocated for IPO-related expenses, going to pay the bankers, lawyers and accountants.
View table: Bursa Malaysia’s IPO activity (YTD 2023) - list of companies, proceeds and IPO prices
Now you can WORQ remotely from Pulau Perhentian. Coworking space provider WORQ has partnered with Aluman Resort In Pulau Perhentian to launch its WORQ Express to provide workspaces and meeting facilities on the island. This marks WORQ’s first outlet outside central Malaysia. The company claimed to be profitable since its inception in 2017 and even during pandemic, and is on track to double its total space under management to 200,000 sq feet by the end of the year. Check out its Pulau Perhentian offering here.
4. AROUND THE WORLD 🌎
President Biden’s "dictator” name-calling sparks a chain of reaction from China, Russia and North Korea
US President Joe Biden called Chinese leader Xi Jinping a “dictator” when speaking at a fundraiser in California. His statement was that Xi had not known about the balloon that floated over the US earlier this year and that not knowing what happened is “the great embarrassment for dictators”. This also comes a day after US Secretary of State Antony Blinken met Xi during his diplomatic mission to China.
This led to backlash from China, which called Biden’s remarks “absurd” and that the statement was a provocation following efforts by both sides to lower tensions. Mao Ning of China’s Foreign Ministry also stated that the comments by Biden “seriously violated facts, diplomatic protocol, and China’s political dignity”.
Meanwhile, Russia has used the event to criticise US foreign policy, calling it “inconsistent and erratic” following Biden’s comments. The Kremlin also took the chance to show off its close ties to China, as the two countries had declared a “no limits” strategic partnership last year. North Korea hopped on the name-calling boat as well, but by taking a shot at Blinken’s diplomatic trip instead. The North Korean administration called the visit a “begging trip” to ease tensions following a “policy failure to pressure China”.
Still, China might be making its provocative moves, as Beijing is allegedly planning to set up a new joint military training facility in Cuba, which could allow China to house troops permanently on the island nation, about 160km off the coast of Florida.
Automakers scramble for non-China graphite, even as China offers tax breaks to boost local EV demand
Automakers are scrambling to secure graphite supplies outside of dominant producer China due to the demand for EV batteries becoming the largest use for the mineral as EV demand soars. The forecast is that EVs will account for more than 50% of the natural graphite market this year. This follows legislation by the US and Europe to cut reliance on China for critical minerals. However, with no investment in Western graphite, automakers will likely see a graphite shortage in the coming years, with a projected global supply deficit of 777,000 tonnes by 2030. China produces 61% of global natural graphite and 98% of the final processed material to make battery anodes.
Meanwhile, China is instead looking to bolster a declining local demand for EVs by announcing tax breaks worth RMB520 bil (USD72 bil) over the next four years for EVs and other green cars. This marks the biggest set of tax breaks for the Chinese auto industry, which has seen slower sales growth, which calls into question China’s economic growth as a whole. The local auto industry saw stocks rallying, with expectations that EV sales would grow by 30% in 2024.
Amazon, Hilton, among firms to hire thousands of refugees in Europe
Businesses across Europe have banded together in a show of support for refugees from Ukraine and other countries, pledging either work or career support to enable refugees to provide for themselves. The show of support is coordinated by the Tent Partnership for Refugees charity. Among the businesses are names such as Amazon, Hilton, and Marriott, who have pledged to collectively hire 13,680 refugees for their workforce over the next three years. Staffing agencies like Adecco will provide career support for another 150,000, while Microsoft and Accenture will help train more than 86,000. Given the refugees' vulnerable position, this opportunity might inadvertently play out to be exploitation.
Titanic tourist sub goes missing – Operations are underway in a frantic search for a submarine carrying five people on a tour to see the wreck of the Titanic when the vessel lost contact during its dive on Sunday. The five are British billionaire Hamish Harding, who also holds three Guinness World Records; British-Pakistani billionaire Shahzada Dawood and his son Suleman, members of one of the most prominent business families in Pakistan; French explorer Paul-Henri Nargeolet and; Stockton Rush, CEO of OceanGate, the company that organises and operates the submersible trips.
Netflix launches websites based on fictional Streamberry – In a marketing stunt, Netflix launched two websites based on the fictional streaming service Streamberry, which was featured in its original series Black Mirror. The two sites are Streamberry.tv, an exact copy of the fictional platform, and youareawful.com, where users can upload their own photos to become the subject of a Streamberry show. However, users are advised to read the fine print before signing up for the second website, as the photos may end up on billboards, and users must consent to Netflix using those photos for its marketing campaign.
Musk: Tesla will be in India “as soon as humanly possible” – This comment follows Musk’s meeting with Indian PM Narendra Modi during the latter’s state visit to the US. The Indian government stated it had previously invited Musk to explore investment opportunities in electric mobility and the commercial space sector in India, to which Musk said he was “trying to figure out the right timing”.
Weekday Watch: The hidden wealth transfer in credit card rewards from the poor to the rich
Whilst most of us happily swipe our cards and enjoy the card rewards, unknowingly without bad intentions, it’s a zero-sum game affecting certain groups of people. Since you are going to spend anyways, why not use a credit card and earn the rewards — that’s how banks sell their credit cards to everyone. There’s no such thing as free lunch and somebody somewhere has to fund the rewards. It turns out, usually, the lower-income credit cardholders are the ones ‘funding’ the rewards.
Credit card companies make their money in three primary ways: interchange fees, fees (e.g. late charges, forex fees, annual fees) and interest income. In 2019, 63.7% or USD89.7 bil of the US’ largest banks’ credit card revenue came from interest income earned from those that do not settle their outstanding monthly bill, which tends to be cardholders from lower-income households. A transactor is a cardholder that pays off their monthly bills, and a revolver doesn’t pay it in full and rolls it over, hence incurring interest charges. Drawing on past banking experience, the credit card business model for banks in Malaysia should more or less reflect that of its US counterparts.
5. FOR YOUR EYES 📺
How a rescue squad prevented a suicide attempt.
Fun fact: the treadmill was created as a punishment tool to punish English prisoners in the 1800s. Created in 1818 by English engineer Sir William Cubitt, the original version resembled more like modern stepper machines. The modern treadmill as we know it today was created in 1952, whipping us into shape.