☕️ Water bills to increase from 1st February 2024

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

The number of prisoners in Malaysia’s 60 prisons has exceeded the designated capacity by 5.6%, with approximately 75,000 inmates nationwide surpassing the limit of 71,000 prisoners, causing overcrowding. Malaysia plans to reduce prison overcrowding by 66% by 2030 years by using more community corrections, according to the Malaysian Prisons Department Commissioner-General. This shift towards community corrections is part of Malaysia’s goal to decrease the number of people in prison and enhance the rehabilitation of individuals convicted of less serious crimes.

How to increase town council revenue? Fines. In Manchester, a Freedom of Information request showed thousands of drivers have been fined for driving along the Oxford Road bus gate. Between April 2022 and September 2023, the council collected a total of GBP10.2 mil (RM60.9 mil) in revenue from these fines. The bus gate, which is similar to a bus lane, restricts certain parts of the road and limits access only to buses, black cabs, and pedal cycles from 06:00 to 21:00.

The verdict on human drivers vs driverless cars is finally out — according to Alphabet-owned Waymo’s analysis of 7.13 mil miles of driverless fully autonomous driving across Phoenix, Los Angeles and San Francisco, Waymo's driverless cars were found to be 6.7 times less likely than human drivers to be involved in a crash resulting in an injury, resulting in 85% reduction compared to human drivers. The study also found that Waymo's autonomous vehicles were 2.3 times less likely to be in a police-reported crash.

3. IN MALAYSIA 🇲🇾

Water bills are about to get expensive🚰
Inflation. Shrinkflation. Greedflation. Upcoming one- we don’t have a nice sounding singular word for it so let’s just call it water bill inflation. By February 1, 2024, the National Water Services Commission (Span) will increase the water tariffs by an average of 22 sen per cubic meter across states in Peninsular Malaysia and Labuan. Households will see a bill charge increase of RM1.60 to RM8 based on household usage of 20 cubic meters per month. According to Span chairman Charles Santiago, this is still below the average cost of providing treated water, which is RM1.75 per cubic meter.

The tariff structure for water supply in Malaysia is standardised under the Tariff Setting Mechanism (TSM). This mechanism, implemented for states on the peninsula and Labuan, involves a review every three years to maintain consistency in determining fees. The increase in water tariffs will impact approximately 6.9 mil domestic category users, constituting 86.6% of the 7.9 mil account holders.

While any increase in the cost of living is not welcomed, this water tariff hike is required to improve the infrastructure and also (hopefully) the service of one of the most important resources the human body needs. Some service providers, such as Pengurusan Air Pahang Berhad, have not revised their domestic water tariffs for 40 years. Penang also has not hiked water tariff rates in over 31 years. The state, empathetic to the B40’s woes, will provide an RM10 monthly rebate for B40 households of more than eight people and household income of lower than RM2,250, according to Penang Chief Minister Chow Kon Yeow.

Busy week for the folks at Bursa Malaysia

1. The same players saw limit downs yesterday as well — Rapid Synergy Bhd (Rapid), YNH Property Bhd (YNH) and Sarawak Consolidated Industries Bhd (SCIB). Bursa Malaysia Securities Bhd has frozen the lower limit price of these three counters as well.

   • Rapid, YNH and Imaspro Corp Bhd (Imaspro) — entities connected to Dr Yu Kuan Chon — responded to Bursa’s unusual market activity (UMA). Rapid and YNH clarified that their managements were currently considering proposals to sell certain landed properties of the companies and their subsidiaries while Imaspro said there was no corporate development in the company that has not been previously announced.

     Collectively, these three counters lost a staggering RM3.35 bil in market value over a 6-day period. Dr Yu himself personally got ‘poorer’ by RM857.75 mil — that’s a lot of water bills one can pay for.

   • SCIB responded to Bursa Malaysia’s unusual market activity (UMA) query following the limit down, saying that it is in talks with the Sarawak state government over a potential land acquisition.

2. New joiners to the list — Artroniq Bhd and Mercury Securities Bhd. The former, an ICT provider, saw its share price plunge 37.75%. The latter, a provider of stockbroking and financial services, closed 39.33% lower at 29.5 sen. Both were also slapped with a UMA. Mercury lost RM384 mil in market cap, falling from RM790.3 mil to RM406.3 mil.

Business

1. PowerChina's subsidiary, China Hydropower (Malaysia) Co Ltd, and Semarak Renewable Energy Sdn Bhd have entered into an RM1.883 bil deal for a green hydrogen project in Perak, Malaysia. The project focuses on green hydrogen production and storage using floating photovoltaic power generation. It involves the redevelopment of an abandoned tin ore lake, contributing to Malaysia's efforts in green and low-carbon transformation. This initiative is poised to be Malaysia's first large-scale green hydrogen production project utilising floating photovoltaic power generation.

2. The aerotrain at our international airport, KLIA, should be up and running by the first quarter of 2025, following the announcement by Malaysia Airports Holdings Bhd (MAHB) on the new consortium consisting of ALSTOM Transport Systems (Malaysia) Sdn Bhd, IJM Construction Sdn Bhd (IJMC) and Pestech Technology Sdn Bhd, who will be completing the project. Alstom and Pestech were the original contractors of the project but MAHB terminated the project in August 2023 due to Pestech being behind schedule. The new contract is expected to cost RM456.1 mil, 15% higher than the original, in order for the project to meet the original timeline. Only in Malaysia — fail in a project and a 15% pay raise to complete it. Also to note, IJM Corp Bhd acquired a major stake of 44.83% in Pestech International Bhd for RM124 mil back in July - here’s IJM’s explanation for acquiring such a large stake in the troubled engineering company at a sharp discount.

Shorts

1. Malaysia’s first stalker acquitted and discharged
   Mohamad Safiq Rosli, the first person charged with the crime of stalking under Section 507A(1) of the Penal Code, has been acquitted and discharged from the crime by the Shah Alam Magistrates Court on the grounds that he was of unsound mind when he committed the offence. Magistrate Sasha Diana Sabtu ruled that Safiq did not realise his actions were against the law. The court, invoking Section 348 of the Code, then ordered Safiq to be sent to Hospital Bahagia Ulu Kinta for as long as the Selangor Sultan allows.

2. PM and team sent a postcard to the United Nations
   Prime Minister Datuk Seri Anwar Ibrahim and the Cabinet members signed a special postcard addressed to the United Nations (UN) Secretary-General Antonio Guterres. The postcard expresses Malaysians' wishes, urging the UN to accept Palestine as a member state and demanding an immediate halt to violence and cruelty against the Palestinian people. Anwar encourages Malaysians to join the campaign by purchasing postcards for RM2 each (including a 90 sen stamp). Check out the postcard here.

3. ‘Mentega Terbang’ wounding the religious feelings of others
   The director and producer of the banned indie movie ‘Mentega Terbang’ were charged at the Kuala Lumpur Magistrate court under Section 298 of the Panel Code for deliberate intention of wounding the religious feelings of others. A gag order was also imposed on the duo to prevent them from commenting on the case in public. The thought-provoking movie revolves around a young Malay Muslim girl who comes to terms with losing her terminally ill mother through researching what other religions say about life after death.

4. AROUND THE WORLD 🌎

Conflict updates

1. Iran claims missile strikes aimed at Pakistan targeted “militant bases”

   A fresh Iranian missile attack hit two sites in western Pakistan, which are linked to the Jaish al-Adl militant group, according to Iran’s state TV. However, Pakistani officials have come forward saying two children were killed with three others injured, with Islamabad calling the attack “illegal” and warning of “serious consequences”. China has come forward, calling for the “close neighbours” to “show restraint” and “avoid actions that would lead to an escalation of tension”. You know it’s bad when China tells you to calm down. View both countries and their borders on the map here.

2. Russia currently recruits 30,000 new troops a month to replace frontline losses

   Top Ukrainian intelligence official Vadym Skibitskyi shared that Russia recruits 30,000 new soldiers a month to make up for the losses from its “meat grinder” tactics in Ukraine, with the Institute for the Study of War’s assessment showing that Russia can “conduct routine operational level rotations” – bring in fresh troops, in layman’s terms. While Russians are currently motivated to join the army due primarily to salary considerations, the administration is ready and able to “declare a more massive mobilisation”. However, Putin faces pushback from the wives and mothers of soldiers who want their loved ones to come home, which could hamper his re-election plans if he were to declare such a move.

Economic conditions behind China’s population decline
China’s population has declined for a second consecutive year, with data showing a population of 1.409 bil at the end of 2023, a decrease of 2.08 mil from 2022. Beijing stated that the birth rate was now down to 6.39 per 1,000 people, on par with other advanced East Asian nations like Japan and South Korea. While the government has lifted its controversial one-child policy and introduced incentives such as subsidies and payments to encourage people to start families, these changes have made little impact. Young people in modern cities are notably citing deterrents such as the cost of living and career priorities after COVID-19 as reasons for not having children.

The business of food

1. Canned-tuna giant to exit Red Lobster with USD530 mil write-off

   Thai Union Group PCL, one of the world’s biggest makers of canned tuna, will be taking a USD530 mil hit to exit the unprofitable US seafood restaurant chain Red Lobster. According to CEO Thiraphong Chansiri, the one-time impairment charge will be reflected in its fourth-quarter financial results. Red Lobster suffered during the Covid pandemic and faced “sustained headwinds, higher interest rates, and rising material and labour costs”, resulting in a “prolonged negative financial contribution to Thai Union”. Thai Union Group, which owns the Chicken of the Sea and John West brands and has a market capitalisation of USD1.9 bil and listed on the Thai stock exchange, paid USD575 mil in 2016 for a 25% stake in Red Lobster and preferred stock that can convert into a further 24% shareholding and bought another 13.7% in 2020. An expensive lobster meal there.

2. Burger King’s owner to purchase the largest franchisee for USD1 bil to sell back to “motivated, local franchisees”

   Burger King and Popeyes parent Restaurant Brands International (RBI) will be buying more than 1,000 restaurants from its largest Burger King franchisee, the New York-based Carrols Restaurant Group. The deal, which includes 60 Popeyes restaurants, is valued at USD1 bil. RBI, which also owns Tim Hortons and Firehouse Subs, said it also plans to invest USD500 mil in modernising about 600 Burger King restaurants over the next five years, after which it plans to “put them back into the hands of motivated, local franchisees” as part of its overall “Reclaim the Flame” plan. Fun fact, the Burger King fast-food chain in Malaysia and Singapore was acquired by 99 Speedmart founder Lee Thiam Wah in 2015 for RM74.6 mil when Ekuiti Nasional Bhd was looking to divest. An interesting documentary on Burger King below.

New cancer drug only hits cancer cells, “kinder than chemotherapy”
Blinatumomab or Blina, a type of targeted cancer drug used in a treatment form called immunotherapy, is noted as being less toxic than chemotherapy. This is due to how the drug seeks out cancer cells while leaving healthy cells untouched, unlike with chemo. While Blina is already licensed to treat adults, the UK is trying it out for children with B-cell acute lymphoblastic leukaemia. The treatment involves a bag of liquid administered through a thin plastic tube that runs into a vein in the patient’s arm for months, with a battery-operated pump controlling the flow of the drug into the bloodstream. Notably, the kit is fully portable and can be carried in a backpack “smaller than an A4 textbook”.

Shorts

1. Shein sued by Uniqlo for allegedly copying their work – In the lawsuit, Uniqlo accused Shein of copying its popular Round Mini Shoulder bag (see bag here). Uniqlo parent Fast Retailing called for the entities that operate the Shein brand to “immediately cease sales of imitation products” and compensate for damages.

2. JAL names former cabin attendant as first female president – Talk about climbing the corporate ladder - Mitsuko Tottori will take on the role from April 1, having risen through the ranks from cabin attendant to a senior managing executive officer. The move is a “deeply symbolic step” for Japan Airlines in a country struggling to close a vast gender gap at work. Japan is already facing increasing pressure to boost gender diversity and address a gender pay gap that is the worst among the Group of Seven nations.

3. Research paper: Gamers at risk of irreversible hearing loss – Gaming for long periods with the volume turned up beyond safe limits can lead to irreversible hearing loss or tinnitus. The paper by BMJ Public Health reviewed 14 studies involving over 50,000 people, with the aim of raising awareness of the issue for gamers, the same way the issue applies to live music and headphones. This actually explains that odd ringing in my ears.

5. FOR YOUR EYES 📺

1. Parenting and child psychology advice worth reading.

2. Hug- anyone?