☕️ PETRONAS to lose 30% of its revenue?

1. MARKET SUMMARY 📈 — The performance of 2024

FTSE Bursa Malaysia KLCI experienced a 12.9% growth in 2024. US’s S&P500 and NASDAQ increased by more than 20%. An index which tracks the Magnificent Seven surged of 67% in 2024. Bitcoin had a great year in 2024, thanks to the Trump pump.

2. NUMBERS AT A GLANCE 🔢

50 years ago, Manchester United were relegated, and now, as they face the possibility of a similar fate, fans are bracing for a potential shock. In December, Manchester United lost six games across all competitions, marking only the third time in their history they’ve experienced such a poor month. By New Year’s Eve, they were in 14th place in the Premier League, their lowest position at the turn of the year since 1989, when they finished 15th at year-end, ultimately ending the season in 13th. Historically, four teams in the Premier League have been relegated after being in 14th place at the turn of the year, with Leeds being the most recent two seasons ago.

4 listings were recorded on the Singapore Exchange (SGX) in 2024, raising just SGD40.55 mil (RM132.85 mil), making it the worst-performing exchange in Southeast Asia in terms of initial public offerings (IPOs) and funds raised. This leaves SGX far behind regional competitors, with 47 listings on Bursa Malaysia, 39 on the Indonesia Stock Exchange, and 30 in Thailand. The biggest IPO last year in the region was 99 Speed Mart Retail Holdings, which raised RM2.36 bil in Malaysia.

USD2.2 bil (RM9.84 bil) was stolen by hackers from cryptocurrency platforms in 2024, marking a 21% increase from the previous year, according to blockchain analysis firm Chainalysis. The number of incidents rising to 303 from 282 in 2023. Notable hacks include the theft of USD305 million from Japan’s DMM Bitcoin in May and USD235 million from India’s WazirX in July. Crypto hacking linked to North Korea more than doubled, reaching a record high of USD1.3 bil in 2024. North Korea has been using cryptocurrency to bypass international sanctions, although the country denies involvement in such cybercrimes.

3. IN MALAYSIA 🇲🇾

PETRONAS reviewing its productivity after news alleging future layoffs emerge
The nation’s O&G custodian, PETRONAS, announced that it is currently conducting a comprehensive review of its own productivity, after a news article suggested that PETRONAS might be laying off employees due potential downsizing after the settlement with Sarawak’s PETROS on the gas aggregation in Sarawak. The review is supposedly based on 'streamlining ways of working, eliminating inefficiencies, and focusing on undertakings that deliver value,' as part of efforts in PETRONAS’ energy transition strategy.

The article published last Saturday alleges that the Fortune 500-listed company is expected to lose about 30% of its annual revenue (last year’s stood at a gargantuan RM343.6 bil) once the dust settles with its Sarawak O&G counterpart. To cope with this immense loss, internal meetings and department town halls discussed potential downsizing of its 54,000 or so employees. In addition, PETRONAS is expected to discontinue bonuses and slash previously lucrative salary increments, besides giving contract-based staff the boot.

There appears to be no further dispute between the two companies, as PM Anwar Ibrahim announced that discussions were settled as of December 12 last year, with the nitty-gritty, such as parameters and legal implications, still being fine-tuned. Anwar is expected to reveal the details in the future, according to Sarawak Premier Abang Johari Openg.

Kuching's two mega infrastructure projects: A deep-sea port and airport
As part of Sarawak’s bid to become a regional aviation and seas hub, the state government and private sector are expected to invest in excess of RM100 bil over the next 5 to 10 years to fund the two mega projects, according to Premier Abang Johari Openg. Abang stated that these planned ventures are “massive” in scale, and will work in tandem with other large and strategic projects to propel Sarawak to become a new economic force in the ASEAN continent.

The state government might also welcome collaboration with Malaysia Airports Holdings Bhd on the new project, subject to capital capability. Completion of the airport is paramount to establish a regional carrier to connect Sarawak to other states and regionally, upon take-over of MASwings. Abang acknowledges that operating an airline is no small feat, but is doubling down on investing in the new airline as it suits their business model — Kuching International Airport served 5.32 mil passengers last year.

For the deep-sea port, Abang Johari said last month that it would be a cutting-edge smart port, equipped with a state-of-the-art gas terminal, built on an artificial island. The project is estimated to carry a price tag of between RM25 bil and RM30 bil, on top of PETROS’ RM2 bil gas turbine power plant project which is already under construction. This new deep-sea port is pivotal for Sarawak to successfully transition to the sole gas distributor in the state as it takes over from PETRONAS. For the previously existing Bintulu Port, the federal government is expected to have handed over all operations by the end of last year, besides changing the port’s designation from a federal to a state port.

PAS and UMNO to reunite before GE16?
Here we go again. New year, same political musical chairs.

PAS is set to join a rally next week to show solidarity for ex-PM Najib Razak with their former allies that they operated with under the Muafakat Nasional banner, UMNO. The two parties last worked together in 2022 — could this open the floodgates for a reunion? Perak PAS chief Razman Zakaria stated that there are efforts underway to form a government before GE16, as the party claims that waiting for GE16 carries too much “harm”, during a PAS-organised ceramah themed “Selamatkan Malaysia”. Despite their need for supporting parliamentary seats, Razman still took shots at UMNO, alleging that the latter’s decision to team up with DAP prevented the United Malays party from fighting for Islam or Malays.

The response from the government has been colorful, to say the least. Perak Amanah Youth Chief Khairol Najib Hashim found Razman’s remarks to be disappointing, bringing the YDPA into the mix who had forbidden any attempts to topple the government. Khairol added that PAS’ lustful approach in gaining premiership disrespected democratic processes, and also put blame on Perikatan Nasional for persistently misleading the public with false predictions about the demise of the Madani government.

Shorts

1. Export to China for bird's nest products temporarily suspended 

   After fears of a potential Newcastle Disease outbreak in local chicken and ducks between March and June, Malaysia has received a request to temporarily suspend the export of raw bird’s nest products, both cleaned and uncleaned, to China beginning December 20 last year. The suspension caused a total of 22 consignments weighing 1.769 tonnes and valued at RM7.23 mil to encounter clearance issues at China’s entry points. In response, Malaysia’s Department of Veterinary Services held discussions with producers and exporters to provide updates and go through possible solutions to the suspension.

2. Authorities considering making Bukit Bintang pedestrian-only area

   To combat gridlock on Jalan Bukit Bintang during peak hours, authorities are considering redirecting oncoming traffic and completely closing vehicle access to the area, designating it as a pedestrian zone. The police pinpointed several issues causing traffic standstills both morning and night time, including vehicles illegally stopping in Bukit Bintang, street performers, and taxi as well as e-hailing drivers stopping for passenger duties, obstructing traffic. The police also have plans of installing AI-powered CCTVs to monitor the area and enforce laws remotely.

3. Teenagers caught on 'basikal lajak' punished with squats

   No summonses, but squats (ketuk-ketampi), for teenagers caught playing with ‘basikal lajak’ in KL. About 20 teenagers were caught on video performing squats under the instruction of a JPJ officer, while being overseen by other on-duty police officers. To rub salt in the wound, a crowd gathered to watch the teenagers and some recorded the incident. The operation, conducted in conjunction with the New Year’s Eve celebration on Sunday night and into the early morning, aimed to curb illegal racing and traffic law violations. View the video here.

4. AROUND THE WORLD 🌎

Power Games and Energy Plays

1. End of Russian Gas

   Russia’s gas exports to Europe via pipelines through Ukraine have ended after Ukraine refused to renew a transit agreement, according to Russia’s gas firm Gazprom. The gas had flowed through nearly three years of war, allowing time for Europe to prepare for the eventual end. Being widely expected, the stoppage will not impact prices for consumers in the EU, as the union had slashed its dependence on Russian gas by turning to Norway, Qatar, and the US.

2. Data Centre Disruption
   As AI computational needs grow and the number of data centres increases, the US power grid could be the one taking the hit as a result. Data has shown that households living within 32km of significant data centre activity show the worst power distortions, which lends credence to the theory of a link between data centre proximity and less-than-ideal electrical power flows to homes. Such distortions could eventually destroy plugged-in appliances, increase vulnerability to electrical fires, and even lead to brownouts and blackouts. TNB better be paying attention to this.

3. Singapore's Tariff Win
   Lower energy costs will see Singapore’s household electricity and gas tariffs dropping for the period between January to March 2025, marking a second quarter of tariff drops. This results in a reduction of SGD3.58 in the average monthly electricity bill for households. Such tariffs are reviewed every quarter based on guidelines set by the Energy Market Authority. As an aside, did you know that a bulk carrier flying the Singapore flag had a collision in China’s Yangtze River? No injuries, but about nine metric tonnes of fuel oil was reported to be spilled.

The War on...Healthcare?

1. Israel and Gaza

   The UN Human Rights Office has issued a 23-page report documenting various attacks by Israeli forces that resulted in severe consequences on Palestinian access to medical attention. The conclusion is that Israel’s attacks on Gaza’s hospitals have devastated the region’s healthcare system, and the UN agency has raised serious concerns about Israel’s compliance with international law. Israel responded by calling the report “fabricated” and that it operates in accordance with international law. Conversely, Israel accused Hamas of using the hospitals for “terror activity”. The UN report did touch upon this topic, but not enough information was made public to substantiate the claims.

2. The US and Drugs

   Pharmaceutical firms in the US are planning to raise the prices of at least 250 branded medications there, including Pfizer’s COVID-19 treatment, Bristol Myers Squibb’s cancer cell therapies, and Sanofi’s vaccines. However, the price hikes will be below 10% across the board, with most “well below” the 10%, with the median price being 4.5%, in line with the price increases from last year. This comes as President-elect Trump is due to take his seat soon, bringing with him his vow to lower drug costs in the US healthcare system.

Data Security Lessons

1. US Treasury's "Major Incident"

   American officials accused China of sending state-sponsored hackers to break into the US Treasury’s systems earlier this month, with the hackers accessing employee workstations and unclassified documents. The department is working with the FBI and other agencies to investigate the “major incident”. China has denied any involvement. This also marks the latest in a series of high-profile and embarrassing security breaches in the US that were blamed on China.

2. Bank Insiders Part of Scam Surge

   US banking is seeing a rising trend where the lowest-paid workers of the banking industry are getting caught selling sensitive customer information becoming a critical area of weakness. This also comes at a time when banks are arguing against policymakers and the public that the customer bears the primary responsibility for not being conned. What makes the issue harder to address for companies is how workforces are being scaled up, leading to a higher risk that access to sensitive information will be abused. This makes us wonder if similar modus operandi is happening here, since reported victims tend to be scammed huge amount of money. Coincidence or scammers have good intel?

An IPO and A Rare Earths Startup

1. Lional Messi IPOs Real Estate

   The football star’s IPO valued the portfolio of his real estate properties at USD232 mil. The properties were parked under a firm called Edificio Rostower Socimi, which was listed as a real estate investment trust (REIT). The portfolio comprises seven hotels, commercial real estate for shops and offices, as well as houses. The move to list the firm was also seen as being relatively quick, considering the firm only became a REIT in mid-December.

2. BMW, Yamaha Motor Backs US Startup

   The two heavyweights are backing rare earth metals processing startup Phoenix Tailings in an attempt by manufacturers to boost the production of strategic metals outside Chinese control. The startup says its process for refining the metals from mined ore or recycled equipment produces little to no emissions. While the startup did not disclose each investor’s funding, it did state it will be using the funding to build a USD13 mil facility that can produce 200 metric tonnes of rare earth metals a year, slated to open in June 2025. The remainder will be used for research, engineering, and business development.

Shorts:

1. At least 10 dead in New Orleans tragedy

   A man intentionally drove a pickup truck into a crowd and started firing a weapon, leaving 10 dead and 35 injured, including two police officers. The FBI has marked this as an act of terrorism, as the driver was “hell-bent on creating the carnage and the damage that he did”.

2. Jeju Air gets another scare

   After the tragic crash that took 179 lives, Jeju Air saw another of its places forced to return to the ground after a landing gear problem. No injuries were reported, and the issue was solved mid-air. The flight returned so the aircraft could be thoroughly inspected. Considering both flights were Boeing aircraft, it should not be a surprise that Boeing is set to be the biggest loser in 2024 on the Dow Jones Index.

5. FOR YOUR EYES 📺

1. People from different cultures value relationships differently. In some places, friendships are very important, while in others, family, work, or being independent might matter more. If you want to make new friends in 2025, you may want to check this survey out.

2. What were people searching for on Google in 2024?

3. A mesmerizing ‘dolphin stampede’ was recorded last week with around 5,000 dolphins swimming off the coast of Dana Point, Southern California.

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