☕️ Your vision is perfectly fine - it's just haze season again

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

Happy World Coffee Day (Oct 1st)! It’s finally proven — Malaysians love their coffee. Dedicating today’s numbers to coffee.

• The country ranks third among 58 countries in the region for the highest growth in coffee consumption in 2021, behind South Korea and Australia.

• The nation consumed 597,064 coffee bags (60kg each) in 2021, a growth of 73% in coffee consumption as compared to 2020, based on data from the International Coffee Organization (ICO).

• That’s 35.82 mil kg of coffee beans. With a population of 33.57 mil in 2021, Malaysia’s consumption of coffee is more than 1 kg per capita!

• On average, every person in the country drank 52 cups of coffee in 2017. That figure has grown to 107 cups per person — calculated based on each cup using 10 grams of coffee.

• However — we’re only good at consuming and not growing. The area of land used to grow coffee beans has declined by 36% from 2008 until 2021. Production of coffee beans saw an even bigger decline of 82% during the same period. Coffee productivity decreased from 6.52 t/ha in 2008 to 1.82 t/ha in 2022.

• 97% of the coffee we drink in Malaysia is imported to meet domestic demand.

• In 2021, Malaysia produced 4,150.5 tonnes of coffee. Johor was the biggest contributor — 75.3%, followed by Sarawak (21.3%) and Sabah (2.2%). Malaysia was ranked 47th among the 79 coffee-producing countries in 2021.

Thank you to The Star for the excellent coverage of coffee facts!

If you’re feeling generous today and want to buy us a coffee, you can pledge your support to The Coffee Break from as low as RM8.25 per month!

3. IN MALAYSIA 🇲🇾

The government steps in in the QR transaction fiascoThe National Action Council on Cost of Living (NACCOL) will meet tomorrow to discuss the imposition of a transaction fee for payments made via DuitNow QR. Deputy Minister of Domestic Trade and Cost of Living Fuziah Salleh said the government is concerned that the transaction fee may impede its digitalisation plans. More banks have also announced that they will not impose this fee until further notice — Maybank, Bank Islam, and AmBank.

There are only two paths to the QR code problem — either the banks suck it up or the cost will be passed on to the consumers (indirectly). In Australia, consumers are typically charged 1% per card transaction because the merchants pass on the cost (Merchant Discount Rate, MDR) to the customers. Fortunately, Bank Negara Malaysia banned this practice a few years back.

Kedah floods subsiding while the MB was busy campaigningThe number of flood evacuees in Kedah has decreased to 1,383 people from 420 families as of 8 am Saturday, down from 1,550 people from 468 families at 8 pm on Friday. Improved weather conditions have reduced floodwaters in certain areas, allowing some residents to return home, according to Major (PA) Muhammad Suhaimi Mohd Zain, the disaster management secretariat chief of the Kedah Civil Defence Force.

Deputy Prime Minister Dr Ahmad Zahid chided Kedah’s Mentri Besar Muhammad Sanusi Md Nor for campaigning in Pahang for the Pelangai by-election instead of taking care of his own turf. Ahmad Zahid, who called Sanusi a busybody, hoped the latter would be able to assist all flood victims, adding that he was confident the Kedah MB would be able to provide the best service to them. Sarcasm to the max.

Haze season is back againASEAN countries have heightened their alert level for the risk of transboundary haze to Level 2, as increasing hotspot activity with moderate to dense smoke haze has been observed over two consecutive days. 466 hotspots in Kalimantan and Sumatra, Indonesia, are causing haze in Malaysia and other ASEAN countries. Climatologists warned that the higher reading of the Air Pollutant Index (API) may persist until Oct 4, 2023. Those with respiratory and cardiovascular comorbidity are advised to stay indoors and reduce outdoor activities.

Please refer to the Department of Environment’s API website for the most updated readings.

Shorts

1. 11 highways officially implement open payment toll collection systemThe highways are the Akleh, GCE, Besraya, NPE, LDP, SPRINT, Kesas, SMART Tunnel, MEX, DUKE and BKE. Works Minister Alexander Nanta Linggi said this is the first step towards implementing the multi-lane free-flow (MLFF) system in the future. Good to see a monopoly being eroded away.

2. 13 Reasons Why: Muhyiddin Yassin editionThe prosecution team has cited 13 reasons in their appeal to reverse the former prime minister Muhyiddin Yassin’s acquittal of four abuse of power charges in relation to the Jana Wibaba case. Deputy public prosecutor Mohd Dusuki Mokhtar contended that the nullification is equivalent to an abuse of the court process as the full trial has yet to begin. The Court of Appeal set two days, beginning Feb 28 next year, to hear the prosecution’s appeal.

3. Tabung Haji to get back its RM20 bil assets from MOFPrime Minister Anwar Ibrahim, who is also the finance minister, said the government will return Lembaga Tabung Haji (TH) assets worth RM19.9 bil, which were placed under a special purpose vehicle (SPV) of the Ministry of Finance (MOF), back to TH. The decision came after his ministry was satisfied with TH’s management and governance.

4. Syok sendiri exercise Package 11 of the Langat 2 Phase 1 water project has earned recognition from the Malaysia Book of Records as the longest and deepest micro tunnelling twin parallel water pipeline. It has set a benchmark with a remarkable length of 331.50 meters and an average depth of 25.23 meters. Package 11 serves as the primary pipeline responsible for delivering treated water supply to the western corridor of Selangor and Kuala Lumpur.

5. Sarawak to provide free tertiary education by 2026Speaking at the Tidal Bore Festival, Sarawak Premier Abang Johari Openg said he is confident that the implementation of free tertiary education for Sarawakian students at state-owned universities can begin in three more years. The state-owned universities are Sarawak campus of Curtin University of Technology, Sarawak campus of Swinburne University of Technology, University Technology Sarawak, Centre of Technology Excellence Sarawak and I-Cats College University.

6. Amanah Saham Malaysia 3 declares a dividend of 4.5 sen per unitPermodalan Nasional Bhd’s (PNB) unit trust arm Amanah Saham Nasional Bhd announced an income distribution of RM681.96 mil for its Amanah Saham Malaysia 3 fixed price fund. 563,460 unitholders will get 4.5 sen per unit they hold. PNB said the fund outperformed its benchmark Maybank 12-Month Fixed Deposit return at 2.86%.

4. AROUND THE WORLD 🌎

Muslim celebration in Pakistan rocked by double suicide bombingsThe Muslim holy day celebrating Prophet Muhammad’s birthday in Pakistan turned into tragedy when two incidents of suicide bombing occurred - the first happened near a mosque in Pakistan’s Balochistan province, killing 52 people and wounding 58 others. Shortly after, in a neighbouring province, a similar suicide bombing attempt killed 5 people. The Pakistan Taliban, a close ally of the Afghan Taliban, has quickly distanced itself from the attack and this has shifted suspicion towards ISIS, which has been present in the region. Though no group has claimed responsibility for the attack yet, the motive behind the attacks could be explained below.

The Prophet’s birthday celebration has remained a controversial topic over the centuries. The celebration is accepted by a majority of Islamic sects. However, certain denominations consider it unwarranted and a “bida” (a sinful religious innovation). Read: Is it permissible to celebrate Prophet Muhammad’s birthday?

AI: Chatbot funding, ChatGPT smartphone, jail sentenceTIL: Artificial Intelligence in Bahasa Malaysia is KC - kecerdasan buatan. 

• The iPhone of AI is coming. ChatGPT on a smartphone is in the works as ChatGPT creator OpenAI, japan’s SoftBank and Jony Ive (former legendary Apple designer and Steve Jobs’ right-hand man) are joining forces to build OpenAI’s first consumer device. OpenAI has tapped Ive’s company, LoveFrom, to develop the device with funding of more than USD1 bil from SoftBank. No release date was disclosed. 

• It’s the season of AI chatbots — build one, raise billions. Another chatbot startup, Character.AI, is in early talks to raise hundreds of millions in new funding that could value it at more than USD5 bil, following a USD150 mil funding at the beginning of the year that valued it a USD1 bil unicorn. Founded in 2021 by Google alums, the startup builds chatbots that can impersonate virtually anyone or anything. Check out its product here.

• In a first for South Korea, an unnamed man in his forties had been sentenced to two and a half years in prison for using generative AI to generate sexually exploitative images of children. He created about 360 sexual images using an image-generating AI and used prompts such as “10 years old”, “nude” and “child” to generate the images. He did not distribute the images. The court decision showed that fake but realistic images of minors created with “high-level” technology could be considered sexually abusive content. 

Apple in focus: the search engine business, F1 and overheating iPhone 15In the ongoing Google antitrust trial brought on by the US Department of Justice, it was revealed the Microsoft discussed selling its Bing search engine to Apple around 2020, a deal that would have replaced Google as the default search engine on the iPhone maker’s devices. Apple executive Eddy Cue, in his testimony, implied that Bing’s technology was inferior compared to Google and stressed that Apple sees no need to develop its own search tool because Google is the best option. No brainer — why do the hard work and running the ops when Apple easily gets paid USD4-7 bil annually from Google from this arrangement? Until today, Google dominates the market with more than 90% market share. At least Bing can claim it’s in second place (with a single-digit market share)

Apple is now trying to muscle its way to bid for the exclusive global rights for Formula 1 races with a close to a USD2 bil offer. This is about double what Formula 1 Group now makes from the global TV rights. Last year, Apple won the 10-year global broadcast rights to the Major League Soccer (MLS) in the US worth USD250 mil a year. Lionel Messi joining MLS club Inter Miami gave a big boost to the league’s viewership, with Apple TV+ adding about 110k MLS subscribers on 21 July — the day Messi made his debut. 

If you’re reading from your brand-new iPhone 15, fret not — Apple has promised to fix the overheating issues, though no timeline is given. The iPhone maker said the heating was due to an iOS 17 bug and some third-party apps (Instagram is one of them).

Shorts

1. China now plans to make waves in the cruise industry as it embarks on its 10-year plan to break into the multi-billion industry. Meet Adora Magic City — the first Chinese-built and operated cruise ship, which is scheduled to launch commercial service later this year. In 2019, the global cruise industry was estimated to be USD50.5 bil and 2.4 mil people in China went on cruise - a huge number and ranks second globally, but pales in comparison to the US, with 11.9 mil passengers that year. Take a tour of Adora Magic City here - mahjong lounge and hotpot restaurant on board, of course. View: 2021 Worldwide Cruise Line Market Share

2. As China wants to dominate the water (not just the cruise industry but also the South China Sea), Dubai sets its eyes on the skies to be the city leading the flying taxi future by having a complete operational flying taxi network by 2026, according to the CEO of Skyports. Skyports, which builds infrastructure for aerial taxis, announced it will be building launchpads at four sites near Dubai International Airport, Palm Jumeirah, Dubai Downtown and Dubai Marina. 

3. The 1996 fatal drive-by shooting of legendary rapper Tupac Shakur might have been solved after nearly 30 years with the arrest of one of the last living witnesses, Duane “Keffe D” Davis. Davis himself admitted in interviews and in his 2019 tell-all memoir that he was in the car from which the gunfire erupted during the fatal shooting. Shakur is considered one of the most influential rappers and has inspired the likes of 50 Cent (RM2.35 - if you didn’t get this joke read this) and Kendrick Lamar.

5. FOR YOUR EYES 📺

1. The Creator, featuring John David Washington (son of Denzel Washington) and Gemma Chan, is out. The movie is about how the US tries to destroy AI and anyone who is using AI, even peacefully — typical of the US.

2. The USD2.3 bil Sphere in Las Vegas is now open for business, hosting its first performance by rock band U2. Check out the video below and take a tour of it. Looks like a really insane place to experience a concert.

3. Back to work. The final quarter of the year. Soldier on!