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☕️ Uno, dos, tres, cuatro - PMX keeps scoring Bersatu MPs
Coming in today - Muar MP Syed Saddiq corruption trial verdict. WeWork bankruptcy to cost Masayoshi Son USD11.5 bil + credibility. Saudi Arabia to host Arab, Islamic summits to discuss Israel-Gaza.
1. MARKET SUMMARY 📈
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2. NUMBERS AT A GLANCE 🔢
Warren Buffett’s holding company Berkshire Hathaway’s cash pile keeps growing, hitting a record USD157 bil (RM735.3 bil) last quarter, exceeding its previous record of USD149 bil in late 2021. The conglomerate pulled back on share purchases last quarter, becoming a net seller instead and also reduced its stock buybacks. Cash owned by Buffett knows no rest - most of it is invested in short-term Treasury bills, up 36% to USD126 bil. Just parking it in T-bills and doing nothing more, Berkshire is making at least USD6 bil in interest income a year with T-bills yielding at least 5% per annum. Money makes money, and Buffett takes it to another level.
What’s the black market price for forged documents? RM1,000 for passports and RM200 for other document types (e.g. labour cards, i-cards, UNHCR cards, fake student IDs). The Immigration Department busted a syndicate masterminded by 2 Africans recently involved in forging documents.
Just like American public debt, the number of roundabouts in the US has exploded from 356 in 2020 to about 10,000 roundabouts today. Roundabout (aka traffic circles, rotaries) predecessors were first introduced in the early 1700s and the birth of the modern roundabout came about in Great Britain in the 1950s. Roundabouts are effective as they reduce the number of potential conflict points. A conflict point at an intersection is where the paths of 2 or more vehicles/road users cross or have the potential to cross. The more conflict points, the more likely vehicles are to crash. A roundabout has 8 potential conflict points vs 32 at a conventional 4-way intersection.
“Risk is what’s left over after you think you’ve thought of everything.”
3. IN MALAYSIA 🇲🇾
Uno, dos, tres, cuatro - PMX keeps scoring Bersatu MPs
These Bersatu MPs, one by one, coming out to support PMX is starting to turn into an interesting story.
A day after Gua Musang MP declared support for PM Anwar Ibrahim, now Jeli MP Zahari Kechik has joined the wave but will remain loyal to the party, making him the fourth Bersatu MP to do so in less than a month after Kuala Kangsar MP and Labuan MP similarly declared their support. His reason? No different from his party comrades — for the sake of his Parliamentary constituency. He added that his support was not made under any duress or threats. Labuan MP confirmed that he has received allocations for his constituency, though he did not disclose the amount. Government MPs are allocated RM3 mil annually for this purpose. These 4 MPs made up 13% of the 31 parliamentary seats Bersatu won in GE15. How many more Bersatu MPs are going to jump ship without jumping ship?
PM Anwar has now come under fire over this Constituency Development Fund (CDF) allocation. Bersatu supreme council member Wan Saiful Wan Jan claimed that money politics is rampant and accused PM Anwar of being the source. The Coalition of Clean and Fair Elections (Bersih) has also expressed its disappointment in the PM over failing to ensure equal distribution of the CDF to MPs. Bersih said the government should refrain from using the CDF as “bargaining chips” to obtain support from opposition representatives.
There seems to be a loophole in the recently enforced anti-hopping law. Instead of ‘frogging’ and losing their seats, the MPs who are sacked from their parties are exempted from losing their seats. They can play their card in this manner to force their parties to sack them from the party, yet still leave them still holding on to their seats.
Muhyiddin defends against PM Anwar’s RM500 mil publicity claim
In a Facebook post, the former PM refuted PM Anwar’s statements in the Dewan Rakyat that the former government had spent RM500 mil on advertisements and publicity, which contradicted the statement made by Armizan Mohd Ali, Minister in the PM’s Department, that the PN government had only spent RM181,752.20 for branding purposes and pointed out this is lower than the RM489k and RM62 mil PM Anwar and Ismail Sabri spent respectively.
He further defended this spending, saying that he was the PM during the pandemic and the publicity purposes were for billboards, radio and TV ads used for public service announcements on Covid-19 matters. If Muhyiddin could exaggerate his contribution to the country, likewise, the opposite could happen here, underplaying the publicity spending. During the election campaign trail, Muhyiddin claimed his government spent RM530 bil during the pandemic for the nation. Well, a big chunk of it was out of rakyat’s own pocket (i.e. EPF withdrawals).
Electronic driving test system in pilot phase
The Road Transport Department said that the electronic driving test system is currently being tested in 5 driving institutes. Instead of drivers being tested on the road, the test circuit (i.e. slope test, 3-point turn, reverse parking, parallel parking) will be conducted electronically. How we are imagining it — like in an arcade car race simulator.
The full implementation of the system is subject to the policy and direction of the Transport Ministry and no plans to make the system mandatory for all driving institutions. The system will remove claims of unethical practices (no more lesen terbang/kopi-o) and speed up the testing process.
Communications and Digital Minister Fahmi Fadzil said the government is studying the possibility of regulating TikTok and its e-commerce features, following in the footsteps of Indonesia to protect small, local businesses. TikTok was earlier accused of spreading fake news and censoring content on the Israel-Palestine conflict.
Big day for Muar MP Syed Saddiq today. The High Court at 9am later will deliver its verdict on his corruption trial. Saddiq is facing 4 charges of abetting in criminal breach of trust (CBT), misappropriation of property and money laundering in connection to RM1 mil of Angkatan Bersatu Anak Muda (Armada) funds. The High Court ordered Saddiq to enter his defence back on Oct 28 last year after the prosecution successfully established a prima facie case against him.
4. AROUND THE WORLD 🌎
Saudi Arabia to host Arab, Islamic summits to discuss Israel-Gaza conflict
Saudi Investment Minister Khalid Al-Falih shared that Saudi Arabia will be convening an emergency summit of Arab nations in Riyadh “this week”, followed by a summit of Islamic nations “in a few days”, intending to drive towards a peaceful resolution of the conflict “under the leadership of Saudi Arabia”. There will also be a summit with African nations, though there is no specified date.
Meanwhile, the G7 summit ended with the bloc issuing a joint statement calling for humanitarian pauses in the conflict to allow in aid and help the release of hostages and for Israel and Hamas to return to a broader peace process. While the statement did not make any mentions of a ceasefire demand, the bloc affirmed its stance that “Israel has the right to defend itself” but underscored the need to protect civilians and for both factions to comply with international humanitarian law.
Side note: Turkey’s parliament removed Coca-Cola and Nestle products from its restaurants over the two companies allegedly supporting Israel, promising that “the products of companies that support Israel will not be sold in restaurants, cafeterias, and tea houses in the parliament campus”.
Corruption concerns: Portugal PM resigns, Indonesian ex-telecoms minister arrested
Portuguese Prime Minister Antonio Costa declared his resignation hours after his chief of staff was detained in a probe into alleged corruption in his government’s handling of lithium mining and hydrogen projects. Costa made the announcement after meeting President Marcelo Rebelo de Sousa and professed his innocence in the matter, stating he “totally trusts the justice system”.
Meanwhile, Indonesia’s ex-communications minister Johnny G. Plate was sentenced to 15 years in prison for receiving USD1.14 mil kickbacks from companies linked to a USD1.09 bil project to build telecommunications towers to provide internet connectivity to thousands of villages. He is among six of Joko Widodo’s ministers to have faced graft charges, with the court also fining him USD63,900 after finding him “convincingly guilty of corruption”.
Business and Economics
No major trade partners manipulating currencies says US Treasury
The US Treasury’s semi-annual currency report (view report here) also placed Vietnam back onto a foreign exchange monitoring list while removing Switzerland and South Korea. The list includes China, Germany, Malaysia, Singapore, and Taiwan. Vietnam was returned to the list after its global current account surplus shot up to 4.7% of its GDP during the monitoring period, likely due to its rapid export growth. There are three thresholds to assess currency manipulation: 1) trade surplus with the US above USD15 bil, 2) a high global current account surplus above 4% of GDP, and 3) persistent net foreign currency purchases exceeding 2% of GDP every year.
WeWork bankruptcy to cost USD11.5 bil as Masayoshi Son takes a hit to his credibility
WeWork, backed by Masayoshi Son’s SoftBank Group, will likely cost more than USD11.5 bil in equity losses, especially since there is a further USD2.2 bil in debt still up in the air. Against the objections of his lieutenants, Son handed over billions of dollars to WeWork’s Adam Neumann to push the co-working space giant’s valuation to USD47 bil in 2019, not including the USD9.5 bil rescue package when WeWork’s IPO failed. This decision, coupled with SoftBank’s Vision Fund suffering a record loss of USD32 bil last year, has led to Son’s reputation as a shrewd investor taking a beating.
Legend of Zelda gets live-action movie in Nintendo-Sony collaboration
According to co-producer and video game designer Shigeru Miyamoto, the development of the film has begun, with Nintendo heavily involved in the production. The movie, also featuring the talents of the Spider-Man trilogy’s Avi Arad and The Maze Runner’s Wes Ball, comes at a time when video game films are claiming box office hit status, making hundreds of millions. Nintendo’s Super Mario Bros movie, released earlier this year, earned over USD1 bil, while a previous offering, Detective Pikachu, pulled in USD450 mil.
‘One Piece’ found: USD10 bil on the line in lawsuit over ownership rights of 300-year-old sunken warship
US salvage company Sea Search Armada is contesting the government of Colombia’s claim to a sunken Spanish warship off the coast of Cartagena, Colombia, stating it was the first to find traces of the wreck. The wreck’s estimated worth is about USD20 bil, with Sea Search Armada suing for half the amount. The Colombian government is disputing the claims, stating the treasure is a national heritage. So who will be the true King of Pirates? Stay tuned!
Christie's auctions off rare blue diamond for over USD40 mil
The auction house said the 17.61-carat, pear-shaped Bleu Royal diamond is the “largest internally flawless fancy vivid blue gem” to ever appear for sale in auction history. The gem, set in a ring, was part of a private collection for 50 years before it was sold for USD43.8 mil. This is the third fancy vivid blue diamond over 10 carats to appear for sale in Christie’s 250-year auction history. Check out the diamond here.
The outage suffered by Optus, the firm in question, led to transport delays as train services were crippled, with contact to hospitals and emergency services also cut, shutting down payment systems as well. Over 10 million people and thousands of businesses were affected in the 12-hour disruption, which the firm blamed on a “technical network fault”. Optus CEO Kelly Bayer Rosmarin has stated it will take time to properly identify the root cause of the outage.
5. FOR YOUR EYES 📺
A look inside real vs fake AirPods with industrial CT scan
Nokia’s iconic ringtone came from a piece of solo guitar music by Spanish composer Francisco Tarrega called Gran Vals (1902) — listen to the full song here. The ringtone starts at 0:16.
Whenever politicians say stupid stuff (i.e. Kepala Batas PAS MP), rest assured, comedian Douglas Lim will make kick-ass comedy out of it.