UNIVERSITI TEKNOLOGI MARA KAMPUS BANDARAYA MELAKA

WRITTEN REPORT (GROUP)

INVESTMENT CHALLENGES AND OPPORTUNITIES

MBA246 4B

INTERNATIONAL INVESTMENT

IBM556

PREPARED BY:

NO NAME MATRIKS ID

1. IZZ AZRI BIN AFFINDI 2020461502

2. NUR AINA EIMEERA BT MAZLAN 2020840356

3. MOHAMAD AMIRUL HAIQAL BIN YAACOB 2020859752

4. DAYANG KHAIRUNNISA ATHIRAH BINTI 2020828772

MASRANTI

PREPARED FOR:

SIR MOHD ZAKI SADIK

SUBMISSION DATE:

WEEK 13

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 TABLE OF CONTENT

NO. CONTENTS PAGES

1.0 Overview of the Industry 3-4

2.0 Propose and Justify The Right Financial Market 5-6

3.0 Opportunities 7-8

4.0 Challenges 9-10

5.0 Conclusion 11

6.0 References 12

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1.0 OVERVIEW OF THE INDUSTRY

The Electrical and Electronics (E&E) industry is the one we have picked for this
report. We, as Petroliam Nasional Berhad (Petronas) international investment
managers, intend to propose an investment plan to build a charging station, commonly
known as electric vehicle supply equipment (EVSE) or EV charger. An EV charger is
a piece of equipment that supplies electrical power for charging plug-in electrical
vehicles. This proposal is likely to be approved by the board of directors because it not
only adds value to the firm but also helps to address Malaysia's environmental
concerns. Electric cars, as we all know, are better for the environment than gasoline
ones. It will help to reduce air pollution and eliminate carbon monoxide emission.

In Malaysia's manufacturing sector, Electrical & Electronics (E&E) is the most

liberalised and leading industry. Malaysia's strong E&E sector is a result of the
government's efforts to encourage labour-intensive, export-oriented sectors. As a
result of a high number of multinational firms (MNCs) from the United States, Japan,
Europe, Taiwan, and Korea choosing Malaysia as their production base, Malaysia has
become a key worldwide manufacturing hub for the E&E Industry. Malaysia's largest
contributor to output, jobs, investments, and exports is the E&E sector.

Electronic equipment for industrial and consumer electronics items such as

televisions, mobile devices, and printed circuit boards are produced and sold by the
electrical and electronics (E&E) industry. Telecommunications, electronic
components, appliances, industrial electronics, and consumer electronics are all part
of the electronics sector. To make their products available to consumers, electronics
companies may build electrical equipment, generate electrical components, and sell
items at retail.

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 Electrical and electronics are one of Malaysia's primary exports, making the
E&E industry a substantial contributor to the country's economy. China, the United
States, Singapore, Hong Kong, and Japan are among its top export destinations. Apart
from those countries, semiconductor manufacturing is very popular all over the world.
Despite the global pandemic, this sub-industry is predicted to rise due to increased
demand for mobile devices such as smartphones and tablets, as well as
optoelectronics and storage devices. This not only increases the value of the
investment but also leads to the development of new jobs.

This E&E industry appears to be the best and most appropriate industry for
Petronas to invest in. With the E&E industries' market performance seeming to
outperform every year, we have a wonderful project ahead of us. We also know that
gasoline automobiles will be replaced by electric or hybrid cars in the future, as they
appear to offer more benefits to both people and the environment. Petronas must
constantly be one step ahead of the future plan in order to be the best at providing our
services or products to our valued consumers.

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2.0 PURPOSE AND JUSTIFY THE RIGHT FINANCIAL MARKET

Choosing the investment with high return of investment is what all investors
want after deploying their funds. Investors can choose what avenue of investment they
want like shares, bonds, equity or cash equivalent. All the major investments can lead
to different advantages to the investors. For PETRONAS’ investment in the electrical
and electronics industry, we focus on bonds and equity.

Bonds are known as lending instruments which is lending the bond issuer
money by buying a bond. The advantages of bonds are they can be issued by both
parties which are companies and the government. Paying interest to the lender by the
borrower in the place of the funds borrowed is more successful. PETRONAS want
their investors to have safety, income, and modest capital growth and PETRONAS
see bonds are often distributed equally or with a minor tilt in balanced portfolio

The investment is known as equity money that has been invested by the
investors by buying the shares of the company. By owning the shares of the
PETRONAS, automatically the person becomes the owner of the company too. They
have the right to vote and shape the company based on their ideas. Buying shares of
a company is not just about getting the profit but the ownership also comes with the
responsibilities and also the risk that the company too. This is known as high risk
investment with high return.

In equity investment, the investors can have two different sources of income.
They can sell their shares or gain the dividen profit from the share. The investors gain
the dividend and make it a regular source of income when the company pays to the
shareholders or sell the shares when the price goes up. The price values of the shares
can go up and down depending on the economy and there won't be economic return
for them when the price falls. The only thing to do is wait for the shares to recover.

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 So PETRONAS decided to choose equity and bonds due to the our company
objective in the Electrical & Electronic investment. We focus on investing in a balanced
portfolio. Focusing on growth and income make us choose these types of investment
to balance our mutual fund. Balancing the risk and return and the investing strategy in
our portfolio is very important to attract more investors to invest in our company.

PETRONAS decided to stick to the stock to bond ratio as 60/40 bonds to stocks
with the balanced mutual funds that mix with stock and debt holding. By creating the
balance fund, the investors can seek income, safety and capital growth. To preserve
in the long run the investors benefits, PETRONAS makes a stock component to protect
the investors and their retirement savings.

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3.0 OPPORTUNITIES

Many experts, notably the International Energy Agency (IEA), believe that
urban habits and policies, as well as local governments responsible for constructing
EV charging infrastructure, promote EV use and its ecological and financial benefits.
With the move to clean energy well underway, it's crucial to know why your community
wants to establish electric charging stations and encourage people to buy zero-
emission vehicles.

According to the Air Resources Board, motor vehicles account for roughly half
of all smoke. Gas and diesel cars emit a variety of gases and toxic substances in their
exhaust. To summarise, air pollution is detrimental to human health. By transitioning
as much local traffic as feasible to zero-emission electric vehicles, communities can
take meaningful strides toward cleaner air.

When you drive an electric vehicle without the need for a tailpipe, you are
channelling different toxins from the environment around the road, such as nitrogen
oxides and fine particles, to a power plant. "The overall effect is still a significant
increase in air quality," Marianne Hatzopoulou, an associate professor of civil and
mining engineering at the University of Toronto, said.

EVs are cheaper to fuel and maintain than gas automobiles, according to
research after study. The Union of Concerned Scientists, for example, looked at the
cost of petrol vs electric car refuelling in the United States. When compared to
traditional combustion automobiles, EV users save an average of $ 770 per year,
according to the study. The American Automobile Association compares gasoline and
maintenance costs. Fuel savings are estimated to be $ 709 per year by AAA, with
maintenance savings of another $ 330. When a town encourages electric vehicles and
charging stations, it is a boon to its inhabitants and businesses.

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 EV communities get a lot of publicity. All politics is local, as the adage goes.
Whereas the effects of climate change, sea rise, droughts, hurricanes, and other
natural disasters are huge and broad, local communities all around the world may help
to mitigate damage. Cities of all sizes are creating sustainability plans. The plan calls
for a shift towards electric vehicles for city fleets, as well as increased the use of
renewable energy and water conservation. Some governments have already
established a deadline for when gasoline and gasoline cars will be prohibited, and
municipal buses and ride-sharing services will be required to run entirely on electricity.

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4.0 CHALLENGES

Electric vehicles have been heralded as the mode of transportation of the

future, crucial in the fight against climate change. However, in order for such a vision
to become a reality, this vehicle must be a realistic option for the general population.
An electric automobile should be affordable to the average consumer, as well as the
infrastructure to allow quick and efficient recharging. To enhance public health and
combat climate change, many nations support the shift from gasoline engines to
electric vehicles (EVs).

The Malaysian government has declared in the national budget for 2022 that
electric vehicles will be totally exempt from import charges, excise duties, and all taxes,
in an attempt to motivate people to switch to electric vehicles. This is a positive step,
and it might not be sufficient. It's one thing to make it more affordable, but it's another
to maintain it practical.

Long distance issues are one of the most significant obstacles. It began to
manifest with what was occurring around the electric automobile within a few minutes
on the route from Kuala Lumpur to Melaka, for example. Torque and handling are silky
smooth. It's never been easier to change lanes or accelerate. The car was spotted
gliding past traffic after a short knock on the pedal and a slight tow just on the steering
wheel.

The absence of charging points and infrastructure is one of the most commonly
mentioned difficulties with electric automobiles. In Malaysia, for example, its ChargEV
GreenTech Malaysia system currently has over 300 recharging stations across the
country to assure full battery levels.However, PETRONAS Malaysia is partnering with
Mercedes and JomCharge to expand its EV Charger service. The corporations have
formed a three-way cooperation to build rapid charging stations at retail petrol stations
around the country.

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 In addition, one of the obstacles of EV in Malaysia is responding with
developments in the automotive value chain. From gas-powered automobiles to
electric vehicles, Original Equipment Manufacturer (OEM) supplier relationships are
vastly different. An electric motor has around 3,800 less parts than an internal
combustion engine. This has a number of benefits for both automobile manufacturers
and end users, including significant cost savings, less maintenance, and a lower
overall cost of ownership. However, there are apparent disadvantages for providers.
They're closer to the OEMs and almost have to use the same simulation tools. As a
result, integration is more key to achieve than it has ever been.

As the demand for electric vehicles grows, so do the design team's challenges.
Current EV design obstacles, including restricted driving range, increased price,
storage issues, long charging times, and insufficient charging infrastructure, as well as
concerns with different power transistors and other devices, are tough to overcome,
but not impossible. Increased communication from interdisciplinary design teams, as
well as sophisticated design tools that allow for extensive modelling and simulation
features, are the keys to success.

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5.0 CONCLUSION

It is important to invest in new industries especially in the electrical and

electronic industry (E&E) because nowadays this industry is very important for every
country. PETRONAS takes this opportunity to invest in new industries to cope with the
demand of the economy and the users that keep increasing from day to day. More
profits can be gained by investing in the electrical and electronic industries especially
when PETRONAS decided to invest in EV charging infrastructures that not many
companies do it yet.

By remaining the status quo and resist to invest in this industry, PETRONAS
could possibly be less profitable. Back then, car manufacturers only produce cars that
works by using gas thus, the demand of gas is high because there is no other option
rather than gas. Today, some manufacturer had started to produce cars that can work
like a phone by just charging it and we are good to go. This situation has given the
users other option to make their car move which will make the demand for gas
decrease. PETRONAS see this as a good chance to enter this new industry because
we are sure that electrical vehicle will have a large number of users in the future.

Lastly, PETRONAS is sure that this investment is good move for the
organization to make sure our organization is not left behind and can adapt the
changes in our environment.

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6.0 REFFERENCES

1. Dashveenjit Kaur | 26 February, 2021. (2021, August 16). Malaysia to have

1,000 EV charging stations by 2025. Tech Wire Asia. Retrieved January 31,
2022, from https://techwireasia.com/2021/08/malaysia-to-have-1000-ev-
charging-stations-by-2025/

2. Investor relations. PETRONAS Global. (n.d.). Retrieved January 31, 2022, from
https://www.petronas.com/investor-relations

3. 8 benefits of EV charging for businesses you can't ignore. Mer. (2022, January
27). Retrieved January 31, 2022, from https://uk.mer.eco/news/undeniable-
benefits-of-ev-charging-stations-for-business-mer/

4. Equities vs. bonds. Financial Edge. (n.d.). Retrieved January 31, 2022, from
https://www.fe.training/free-resources/financial-markets/equities-vs-bonds/

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