☕️ Tan Sri's house raided by MACC in RM4.5 bil corruption probe involving government vehicles

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

Apple accounted for more than 20% of the almost 1.2 bil smartphones shipped in 2023, according to the International Data Corporation, with Samsung making up 19.4%, overtaking Samsung as the world’s biggest smartphone maker. Apple was also the only player among the “Top 3” to show positive growth annually, despite increased regulatory challenges and renewed competition from Huawei in China, Apple’s largest market. The IDC also stated the smartphone market is entering a “very interesting time” with the growing number of Android providers splintering the market.

According to a report by the World Health Organization (WHO), global tobacco use has decreased significantly in the last 20 years. The report indicates that one in five people currently smoke tobacco, in contrast to one in three in 2000. The report also highlights the ongoing efforts by the tobacco industry to influence global health policies. In 2022, 1.25 bil people aged 15 or older used tobacco, compared to 1.36 bil in 2000. The study predicts that tobacco use will continue to decline, with an estimated 1.2 bil people using tobacco by 2030, despite the world's population growth. You can download the full report here.

GBP22,000 (RM131.8K) — the price of two scripts from two episodes of the popular TV show 'Friends' were sold at an auction. These drafts of the season four finale were recovered from a bin by a former staff member at Fountain Studios, Wembley, in 1998 when the two episodes were filmed. Bidders went crazy for the scripts, with an initial estimate of GBP600-800 being quickly exceeded, according to Hanson Ross auctioneers in Royston, Hertfordshire. They were ultimately purchased by an online international bidder for GBP22,000, with the total amount paid by the buyer amounting to GBP28,864 when fees were included - that’s a 31.2% fee charge!

3. IN MALAYSIA 🇲🇾

A blockbuster raid by the authority
The Malaysian Anti-Corruption Commission (MACC) chief commissioner Azam Baki has confirmed that Tan Sri’s residence and four companies, which included a government vehicle supplier, have been raided. This raid is in relation to the RM4.5 bil corruption case involving procurement and management of the government's fleet of vehicles. Media outlets stopped short of naming the Tan Sri involved.

If you recall, back in 2019, seven companies bid for a contract to supply the government with vehicles. It was initially awarded to a joint venture firm between Berjaya Corporation Bhd and Naza Corporation Holdings Sdn Bhd. However, there was a twist in the tale — during Muhyiddin’s administration, the letter of intent was withdrawn and surprisingly Spanco Sdn Bhd was awarded the contract again. This situation led to an eventual lawsuit against the Government being filed by Berjaya and Naza.

Who is Spanco? Since 1993, Spanco Sdn Bhd has been the sole company that manages the government’s fleet of vehicles. When the 25-year contract expired in 2018, it triggered an intense race to win the new 15-year contract worth RM300 mil annually after the fifth year.

We might be seeing a new Sarawak Governor soon
According to a report by the New Straits Times, the swearing-in ceremony for the new Sarawak Governor may be held on January 29. However, it was not known whether acting governor Mohamad Asfia Awang Nassar or a new individual will be appointed as the new governor. Another name was mooted to be thrown into the mix, which is former Dewan Negara President Wan Junaidi, who allegedly had resigned from the Dewan Negara post recently.

Responding to this matter, Sarawak Premier Abang Johari Tun Openg said that it is the King’s prerogative to appoint the Sarawak Governor and declined to comment further.

The future is gloomy for Malaysia, said former Bank Negara Malaysia (BNM)’s deputy governor
In a LinkedIn post, former BNM deputy governor Sukudhew (Sukhdave) Singh portrayed Malaysia as akin to a ‘lost child’ in the future, mainly due to the extremists. He added that Malaysia will struggle economically, burdened by inflated pensions and diminished opportunities, especially for the Chinese and Indians, as they are experiencing below-replacement-level birth rates coupled with huge emigration. He also said that the diminishing numbers of non-Malays will lead to a disappearing notion of diversity that will weaken the country in the future, both economically and culturally. Personally, the diversity that we enjoy now is our advantage. Perhaps we should stop blaming other races for our misfortune and start to look into ourselves first.

What is in your water bill?
Amidst the current dissatisfaction due to the nationwide hike of the water tariff, let’s educate ourselves on where the monies paid for the water bills flow to, to rationalise the hike better. Before we start, to provide context, according to the National Water Services Commission (SPAN), the total cost to provide treated water is RM1.75 per cubic meter, compared to the average revenue that the water operators earn (from your water bills payment) which is RM1.43 per cubic meter. This 32 sen shortfall led to difficulties with water operators maintaining and upgrading their pipes and treatment plants. SPAN is revising the Tariff Setting Mechanism (TSM) to address this shortfall, leading to the recently announced new water tariff. Back to our initial query, five components comprised the cost for treated water, namely:

1. Opex (Operational expenditure) – such as salaries, raw water extraction, chemicals for water treatment, and distribution costs.

2. Capex (Capital expenditure) – such as replacing old pipes, building new water treatment plants, and upgrading existing ones.

3. Electricity – this is adjusted annually instead of every three years based on the previous year’s imbalance cost pass-through (ICPT) surcharge, which is reviewed every six months.

4. Environmental cost – the cost of conserving water catchment areas. This component is not currently being used for tariff calculation since its mechanism is still being refined.

5. Regulated profit – This is supposed to be a single-digit percentage figure for the water operator’s profit margin.

300 mil-year old politician fossils found in Perak
A group of researchers from the Perak Geotourism Association unearthed a number of coral fossils aged to 300 mil years old in a 6.9 hectares area near Kampung Changkat Tualang. According to the association’s vice chairman, Mohd Fadly Md Noor, the discovery is the first in Perak and the fossils uncovered were from the time before the dinosaurs. Consequently, after the discovery, the Perak state government announced that the 6.9-hectare site would be gazetted as another geosite in the state.

Business

1. The subsidiary of iFast Corp, Bondsupermart Malaysia, has received approval in principle from the Securities Commission Malaysia to operate a bond marketplace. The bond marketplace will be launched in 2H2024. Currently, iFast Corp handles RM800 mil equivalent in monthly trading volume, both in ringgit and foreign currency-denominated bonds. iFast also runs fundsupermart — a site to buy unit trusts. NFA.

2. KPJ Healthcare Bhd has filed a lawsuit against its former board directors regarding the sale of its 49% stake in pathology and laboratory unit Lablink (M) Sdn Bhd to KL Kappa Sdn Bhd for RM119.92 mil. Based on the lawsuit, KPJ claimed that the 11 former board directors did not exercise reasonable care and diligence during the sale of the 49% stake to KL Kappa. KPJ is seeking an admission that the defendants were negligent and also an RM95.77 mil compensation for the losses KPJ suffered.

4. AROUND THE WORLD 🌎

Israeli PM Netanyahu publicly rejects US push for two-state solution
PM Benjamin Netanyahu publicly rejected once more the idea of creating a Palestinian state, hours after a phone call with US President Joe Biden, in which the US leader indicated that Israel may still accept the idea. What a way to embarrass your major foreign aid funder - the US has given Israel more than USD260 bil in aid since World War II. Netanyahu reiterated his stance that after Hamas is obliterated, Israel must retain security control over Gaza to ensure Gaza will no longer pose a future threat towards Israel, a requirement that contradicts the demand for Palestinian sovereignty. This security control is also extended towards the Israeli-occupied West Bank, he further commented. His comments dampened hopes of restarting any diplomatic negotiations and the peace process. 

Cracks amongst Israel’s war cabinet are also surfacing as one of its key members and former military chief Gadi Eizenkot has said that Netanyahu shared “sharp and clear responsibility” for failing to protect the country on Oct 7 and urged for fresh elections, adding that there is no trust in Israel’s current leadership. A recent poll found that just 15% of Israelis want Netanyahu to keep his job after the war. Eizenkot, whose son was killed fighting in Gaza last month, said Israel should prioritise retrieving the remaining 130 Israeli captives in Gaza instead of focusing on taking out the leaders of Hamas. 

India to open temple at religious fault-line, 30+ years after one of India’s darkest day
India’s President Narendra Modi has set open a grand temple to Lord Ram, one of Hindusm’s most revered deities in the holy city of Ayodhya. The temple cost USD217 mil to build, funded by private donations. An additional USD3 bil was spent on the makeover of the city by the government. However, the temple built on top of the land sits on a dark history for India.

Dec. 6, 1992, was a defining moment in India’s history as it saw the political rise of the Hindu right wing. Hundreds of thousands of Hindu men demolished the 16th-century Babri mosque on that day, causing violence to sweep across India, with nearly 2,000 people killed across various cities. The campaign to build a Hindu temple on the site was spearheaded by then small political party, the Hindu Nationalist Bharatiya Janata Party (BJP), which is the party of Modi and the current ruling government. Many Hindus believe emperor Babur destroyed a temple that stood at the birthplace of Lord Ram and built a mosque over it more than 500 years ago. Some BJP senior leaders expressed regret over the demolition in 1992 and said it should never have happened. 

The incident caused violence to sweep across India, with nearly 2,000 people killed in various cities. Although dozens had faced charges and jail time, no one has been convicted for demolishing the mosque. The site was handed over to Hindus by a Supreme Court judgement in 2019, although the judges found the mosque’s demolition had been illegal. Modi and his party have been criticised for violating the constitution by turning a religious event into a state-sponsored one (India’s general election later this year). The government has also been criticised for moving idols into an unfinished temple, with some Hindu religious leaders accusing the government of prioritising electoral gains over the sanctity of Hindu rituals. 

Space things

• Friday was a proud day for Japan as its SLIM spacecraft successfully landed on the moon, marking the first time Japan has ever touched down on the lunar surface. This feat also marks the third nation to land on the moon in the 21st century, behind China and India, and the fifth nation to ever do so, including the US and the Soviet Union. However, Japan’s lunar mission might be shortlived as the spacecraft isn’t generating solar power due to unknown issues. 

• To the uninitiated, Martians were seeing their version of a UFO in the form of a human-made mini helicopter. NASA announced that it has re-established contact with Ingenuity, the tiny 50 cm helicopter that arrived on Mars in 2021 on the Perseverance rover and became the first motorised craft to fly autonomously on another planet. NASA has previously lost contact with Ingenuity for two months in 2023. The drone has far exceeded its original goal of undertaking five flights over 30 days and has since covered over 17 km and reached altitudes of up to 24 m. 

Shorts

1. South Africa turning into GTA 
   Soaring violent crimes in South Africa is seeing more audacious crimes taking place. Security vans carrying money getting hijacked also known as cash-in-transit hijacks (CIT), have become a growing phenomenon (watch video footage here - disturbing). These CITs were described as “military organised”, involving explosives and automatic weapons. One of the security firms that provide CIT services had 15 of their guards killed last year during robberies. Crime rates are so bad in SA that business is booming for private security firms, whose officers now outnumber their police counterparts. 

2. Customer service AI chatbot gone wrong
   A UK parcel delivery service company experienced its AI chatbot malfunctioning and behaving erratically, including swearing at the customer and complying with the customer’s request to provide an exaggerated criticism of the company’s service. The customer shared the interaction in a tweet here. In a separate incident, a car dealer saw its chatbot agreeing to sell a Chevrolet for a single dollar, leading to removing the chat feature. We are only in the early days of AI and it has already started screwing us humans over. 

3. The tough business of music streaming
   Spotify, despite having more than 600 mil, subscribers and a market cap of USD40 bil. It had never reported an annual profit since it launched in 2006. A good analytical piece here by the Wall Street Journal breaks down Spotify’s various attempts to diversify away from its core business, with mixed results, including podcasting, concert ticketing, hardware and audiobooks. In short, unlike video streaming, which pays once to license a movie or TV series, Spotify’s costs grow in tandem with its subscriber base, paying USD0.70 to music owners for every dollar it generates. In business lingo, this is known as a business with low operating leverage - companies with high costs that vary directly with their sales.

5. FOR YOUR EYES 📺

1. The Louis Vuitton sandwich bag was designed by its men’s creative director, Pharrell Williams (yes, that same singer Pharrell). Price? RM15,900 — check it out here. Plenty of Subways you can buy.

2. Creative animal-inspired cloud art to kickstart your creative juice for the work week.