☕️ Wild wild Bursa - multiple limit downs and another stock fell as much as 58%

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

FGV Holdings Bhd has refunded RM72.2 mil in recruitment fees to its 19,673 migrant workers (RM3,670 per worker) as part of its efforts to address the Withhold Release Order (WRO) issued by the United States Customs and Border Protection (CBP). The plantation company has allocated RM112 mil to reimburse recruitment fees to migrant workers, including former ones, in three tranches paid in March, June, and September 2023.

Consumers only increased their spending on mobile apps by 3% in 2023, with total spending across the App Store, Google Play and third-party Android app stores in China reaching USD171 bil. Consumer spending on non-game apps grew 11% YoY in 2023 to reach USD64 bil. TikTok, along with other social apps, played a major role in this growth. Last year, TikTok achieved a significant milestone by surpassing USD10 bil in lifetime spending. This made it the first non-game app to achieve such a feat. You can download the “State of Mobile” report here.

Despite facing potential imprisonment in February 2024 after pleading guilty to US criminal charges in November 2023, former Binance Holdings Ltd CEO Changpeng Zhao experienced a significant increase in his estimated wealth in 2023 (by USD25 bil) to over USD37 bil. This surge occurred amid a strong rebound in the cryptocurrency market, particularly Bitcoin, which saw a more than 160% increase. Zhao's estimated net worth, while below its peak in early 2022 (USD97 bil), reflects the resilience and growth in the cryptocurrency sector throughout the year.

3. IN MALAYSIA 🇲🇾

Wild wild Bursa — multiple stocks limit down and another plunged by 58%

1. After hitting a three-month high of RM1.19 the day before, Sarawak Consolidated Industries Bhd (SCIB) fell 29.83% to close at RM0.835 (limit down) yesterday. The sell-off ended a three-month rally since October 2023, where the counter rose by 161% to its highest peak of RM1.19 on Jan 15, since June 2021. The group returned to the black in its first quarter ended Sept 30, 2023 (1QFY24).

2. Shares of Rapid Synergy Bhd (Rapid) and YNH Property Bhd (YNH), which are both linked to businessman Dr Yu Kuan Chon, experienced heavy selling. Both counters hit limit down again, causing Rapid Synergy shares to hit four of its last five trading days, including Tuesday. Rapid's closing price was RM5.65, which was 29.9% lower. Similarly, YNH's closing price was RM1.73, which was 29.96% lower. On the other hand, Imaspro Corp Bhd, another company linked to Dr Yu, saw its shares fall another 18.47% or 29 sen to RM1.28. In just five days, these three counters saw RM2.897 bil in market capitalisation wiped out.

3. Leform Bhd, a steel products manufacturer, had the worst performance of the day as its share price fell as much as 28.5 sen 58.16%, ending a three-month bull run that doubled its value. Leform closed at 27 sen, which is still 44.9% down from its Monday close of 49 sen. Bursa Malaysia issued an Unusual Market Activity (UMA) query to the company.
   Learn: What is Bursa’s Unusual Market Activity?

Daim + Tommy Thomas vs the AGC
On January 10, Tun Daim Zainuddin and his family submitted an application for leave to commence judicial review against the investigation conducted by the Malaysian Anti-Corruption Commission (MACC) on their assets and properties. During the hearing, Senior Federal Counsel Shamsul Bolhassan argued that the issuance of a freeze order is a discretionary power given to law enforcement during the criminal investigation process. Therefore, the freeze order issued by MACC on the assets owned by Daim and his family cannot be challenged through a judicial review. SFC Shamsul further explained that if Daim’s application for leave for judicial review is granted, it would impede the investigation process.

SFC Liew Horng Bin argued that Daim was already conducting a “fishing expedition” even before he was charged in court. He claimed that if permission was granted to Daim to proceed with the judicial review, the MACC would be obligated to reveal their justifiable reason for investigating the business magnate.

Former AG Tommy Thomas representing Daim and his family members, stated that the Federal Court has previously permitted the review of the Attorneys’ powers. Therefore, the court can also review the Malaysian Anti-Corruption Commission’s (MACC) investigative powers in Daim's case. Thomas further argued there is an illegality and irrationality in the investigations into Daim and the others, as the offence has not been identified.

After hearing the submissions, High Court judge Justice Wan Ahmad Farid Wan Salleh fixed March 4 to deliver his decision on Daim's leave application.

MADANI hard at work

1. AI untuk rakyat! — Artificial Intelligence, not Anwar Ibrahim
   The government has introduced an Artificial Intelligence (AI) Programme For The People (AI Untuk Rakyat) — a four-hour online course — to close the digital literacy gap among Malaysians. The program provides a basic overview of AI, allowing one to better understand the technology and possibly build a career in this sector. You can sign up here.

2. Capital gains tax exempted until 2028
   In a bid to make capital market investments in Malaysia T20 rakyat-friendly, Finance Minister II Amir Hamzah Azizan announced that the government has agreed to exempt the imposition of capital gains tax (CGT) as well as taxes on foreign-sourced income (FSI) on unit trusts. Exemption on CGT is until Dec 31, 2028, while FSI is until Dec 31, 2026. The gains from the disposal of unlisted shares by companies are still subject to taxes. Music to the capitalists’ ears.

3. Seven guidelines to be developed under PDPA
   Digital Minister Gobind Singh Deo said the guidelines would be developed by the Department of Personal Data Protection (JPDP) through the Personal Data Protection (PDP) commissioner and a company under the Ministry of Finance, namely Futurise Sdn Bhd. Gobind stated that Futurise possesses the necessary abilities and skills to assist the PDP commissioner in developing comprehensive standards and guidelines while also improving the Personal Data Protection Standard that was established in 2015. While guidelines are good, will they be adhered to? What will be the penalties for those who breach them?

4. HR Minister: Pay workers your workers despite there is no work to be done
   Steven Sim, the Minister of Human Resources, has announced that 751 Bangladeshi migrant workers were deceived into coming to Pengerang, Johor, for jobs that did not exist. These workers have now filed a claim for RM2.21 mil for unpaid wages from their employers. The case is set to be heard at the Pengerang district labour office on February 5, as the workers may not be able to afford to travel to Kuala Lumpur. Some employers claim they don’t pay their workers because there is no work to be done, which the minister deems as wrongdoing and will be punished. Sim stressed that the country’s position on foreign workers is “very clear”.

5. Mat Sabu: The country’s agriculture and food sectors intact despite tensions in the Red Sea
   The country’s agriculture and food sectors are not impacted due to the tensions in the Red Sea, given that the Red Sea route is commonly used for oil trade instead. Agriculture and Food Security Minister Mohammad Sabu said his ministry will continue to monitor the impact of the tensions. On top of that, Mat Sabu also announced the implementation of 12 programmes that would be game-changers to transform the country’s padi and rice industry by increasing the income of food producers throughout the food chain. The programmes would bring the country closer to achieving a 100% rice self-sufficiency rate (SSR), compared to 65% SSR in 2023.

4. AROUND THE WORLD 🌎

US condemns Iran for “reckless” missile strikes on Iraqi city
Iran’s ballistic missile strikes on the city of Irbil, in northern Iraq, have come under condemnation from the US, who called the strikes “reckless and imprecise”, with Iraq recalling its ambassador from Tehran while calling the strikes a “blatant violation of sovereignty”. Iran’s Revolutionary Guards claimed they were firing on an Israeli “spy headquarters” in Iraq’s semi-autonomous Kurdistan Region, defending other missile strikes in Syria as attacks on “terrorist bases” in response to a recent suicide bombing in Iran.

Ikea signals deflation with lowered prices, freight operator DP World says otherwise
Jesper Brodin, the CEO of Ikea parent Ingka Group, revealed that Ikea will follow through with its planned price cuts this year - you read it right, price cuts, not hikes. This price cut follows price hikes in 2022, with Ikea citing supply chain bottlenecks and higher raw material costs. Brodin stated that there was “quite significant deflation” upstream in its supply chain, and the lower input costs will allow Ikea to pass on savings to consumers. The furniture retailer also has enough inventory to offset price hikes from supply chain shocks. US grocery chain Walmart also signalled deflation in November, though this was before the Red Sea Houthi attacks.

Ikea’s acknowledgement of deflation comes as some economists and politicians are alleging companies of deliberately keeping prices high to boost profit margins despite improving conditions. The phenomenon has been coined as “greedflation”.

However, Yuvraj Narayan, CFO of port and freight operator DP World stated that the disruptions to Red Sea shipping from Houthi attacks will likely drive up prices of consumer goods, especially after the Houthi militia has threatened to expand its attacks to include US ships in response to US and British strikes on its sites in Yemen. Narayan expects European consumers to be hit the hardest by the disruptions, with the cost of goods into Europe from Asia becoming “significantly higher”.

Singapore deals

1. Singapore’s GIC contemplates selling hotel in Japan for USD580 mil

   GIC, Singapore’s sovereign wealth fund, is considering selling the 1,053-room Hilton Fukuoka Sea Hawk hotel in Western Japan with an asking price of up to USD583 mil - this works out to USD553.7k per room. This allows the sovereign fund to capitalise on the popularity of hotels in Japan as real estate investments in 2023, with many properties drawing interest from foreign and domestic buyers. The sale process is still at an early stage, however, with no guarantee that the hotel would change hands at the asking price or at all. In Q3 of 2023, about half of all hotel transactions in Asia took place in Japan.

2. Alternative asset manager Blackstone looks towards SEA expansion with headcount expansion plans in Singapore

   New York-based Blackstone will double its private equity business headcount in Singapore in the next two years, with the world’s largest alternative asset manager with USD1 tril assets under management looking to tap into the growing number of deals in SEA. The team is expected to grow to “six or seven people”, with Aravind Krishnan, a managing director in Blackstone’s private equity practice, moving to Singapore from Mumbai to lead the team. Blackstone is the latest in a growing list of global asset managers expanding or setting up offices in Singapore.
   It’s ok if you got confused with Blackrock and Blackstone - same same but different. Both are giant asset managers with the former focused on mainstream assets whilst the latter on alternative assets. In fact, Blackrock was part of Blackstone, which eventually saw Blackrock being spun off and is a lot bigger than Blackstone in terms of AUM with USD10 tril.
   Read: Blackstone vs Blackrock

Flying hazards

1. Korean Air & Cathay Pacific aircraft clip wings in Japan

   The two aircraft clipped wings at New Chitose Airport in Hokkaido, Japan, amid wintry conditions. No injuries were reported on either plane, according to local media. The incident happened when a towing car pushing the Korean Air plane backwards ahead of departure slipped due to snow on the ground, leading to the plane’s left wing clipping the Cathay Pacific plane’s right tail wing. It’s barely been two weeks into 2024. Japan, what’s going on over there?

2. Fog causes flight cancellations and rising tempers in Indian airports

   Hundreds of domestic flights have been delayed since Sunday after a thick fog engulfed Delhi and other North Indian cities. Delhi is notably the main hub for major airlines such as IndiGo and Air India. While the fog is an annual occurrence, the situation at the Delhi airport this year is reportedly worse due to factors such as parking shortages from the grounded aircraft and a runway being shut for maintenance. The delays have led to rising tempers — people taking to social media to complain and a man being arrested after he was accused of assaulting a co-pilot of IndiGo after a flight delay of over 10 hours.

3. Air miles prove undoing of USD130 mil money laundering scheme

   An international money laundering scheme fell apart after investigators cracked the case by tracing a ringleader’s frequent-flier miles, which revealed that over USD131 mil in cash was smuggled from London to Dubai in 83 trips. The US National Crime Agency said the network collected cash from criminal groups across the UK, believed to be the proceeds of drug deals, and packed the cash into suitcases containing about USD500,000 each. A total of 16 people have been convicted in the money laundering scheme. Just goes to show there are different hazards for different people. Oh, and that crime does not pay.

5. FOR YOUR EYES 📺

1. On average, a person in Malaysia consumed 39,587 kWh of electricity in 2022. Click on the graph to view the growth of Malaysia’s energy consumption since 1965.

2. Using the difficulty.