PJD LINK: A HIGH-STAKES PROJECT FOR SELANGOR p6

F R I DAY, AU G U S T 4 , 2 0 2 3 t h e e d g e m a l ay s i a . c o m
ISSUE 614/2023

CEOMorningBrief HOME: Fed Court: Departure levy does not impinge on right to travel abroad p2
Malaysia resilient in face of Covid-19 challenges — World Bank p4
MRCB’s net gearing could exceed 0.49 times if KL Sentral,
Shah Alam Sports Complex redeveloped concurrently — HLIB Research p7
WORLD: China spooking commodity traders with probes into suspicious deals p15
China investment shrinks in almost one third of provinces p16

Vinvest’s ‘missing’
EA Holdings shares
in the limelight
Report on Page 3.
 F R I D AY A U G U S T 4 , 2 0 2 3
the edge ceo morning brief
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PUTRAJAYA (Aug 3):The Federal Court on
Thursday (Aug 3) ruled that the Departure
Levy Act 2019, which imposes tax on Malay-
sians who travel overseas, is a valid law and
does not impinge on the right of its citizens
to depart from the country to travel abroad.
Federal Court judge Tan Sri Nallini Path-
manathan, who chaired a three-member panel,
said this in a unanimous decision to not grant
leave (permission) to lawyer R Kengadharan,
who sought to challenge the imposition of the
levy on his right to travel abroad.
“The Departure Levy Act merely pro-
vides a tax on a departure from the country.
The right to travel abroad is not an issue in
the Act. It does not impinge on the right to
depart from the country or to travel.
“In other words, the right to travel abroad
is an accepted right (to all Malaysians). As
this right is not the subject matter of the
Act, it does not bring the issue of the right
to life or personal liberty stipulated in Ar-
ticle 5 [as being] contravened,” she said.
Nallini added that the ability to depart from
the country is not an issue here, so Article 5(1)
of the Federal Constitution is not breached.
“As to the levying of the tax is concerned,
this court finds it appears the law is valid
and in accordance with Article 96 of the
Federal Constitution. For this reason, this
court rules that the appellant (Kengadha-
ran) has not passed the threshold of Section
JITRA (Aug 3): Kedah Menteri Besar Da-
tuk Seri Muhammad Sanusi Md Nor has
been urged to explain his visit to the Bukit
Enggang Forest Reserve, Sik on Feb 19,
where illegal mining activities of rare earth
elements (REE) were believed to have been
conducted.
Home Affairs Minister Datuk Seri Sai-
fuddin Nasution Ismail wanted an expla-
nation following the disclosure of several
photographs of the alleged visit.
“...actually, there has already been a
visit, [based on] the photos that were taken
on Feb 19, which means as early as Febru-
ary this year, the Kedah menteri besar had
visited and witnessed the theft (of REE),
he saw for himself the destruction of the
area, how the mining was done intensively,
involving such a large area.
“…but from that day on, no serious ac-
tion was taken... he did not just leave and
2 THEEDGE CEO MORNING BRIEF
H O M E
published by
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Level 3, Menara KLK, 1 Jalan PJU 7/6,
Mutiara Damansara, 47810, Petaling Jaya,
Selangor, Malaysia
Fed Court:
Departure levy
does not impinge
on right to travel
abroad
BY HAFIZ YATIM
theedgemalaysia.com
96(b) of the Courts of Judicature Act, for
this court to grant leave (to hear the case
on its full merits),” she added.
Article 96 of the Federal Constitution
stipulates that no tax or rate shall be levied
by or for the purposes of the Federation, ex-
cept by or under the authority of federal law.
The court did not make an order as to
costs, noting that it was a public interest
litigation.
The other two judges who heard the mat-
ter were Federal Court judges Datuk Seri
Hasnah Mohammed Hashim and Datuk
Nordin Hassan.
Kengadharan was represented by A Sri
Murugan and Dr Shamsher Singh Thind,
while senior federal counsel Suzana Atan
Sanusi told to
explain visit to site
of illegal rare earth
mining in Kedah
Bernama
do nothing, [but] he continued to deny
that he had information about this inci-
dent,” he said at a press conference here
on Thursday (Aug 3).
Saifuddin Nasution said the situation
raised serious concerns about the issue of
transparency and accountability of the leader.
He also questioned the lack of investiga-
tion papers into the illegal mining activities,
publisher + . Ho Kay Tat
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chief commercial officer . Sharon Teh
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appeared for the Finance Minister and the
Malaysian Government.
Kengadharan, who is also a DAP member,
filed a challenge to the Departure Levy Act
2019, wherein he sought a declaration that
the orders breach Article 5(1) of the Federal
Constitution and cannot be enforced.
In his affidavit to support the suit, Ken-
gadharan said any form of tax imposed, in-
cluding on those who wish to go on a pil-
grimage or to perform the haj, is a violation
of fundamental liberties.
On Feb 27, 2020, the High Court dis-
missed Kengadharan’s judicial review ap-
plication to challenge the imposition of the
tax, when then High Court judge Datuk
Seri MarianaYahya (now a Court of Appeal
judge) ruled that the court was bound by the
decision of the Federal Court in former Da-
mansara member of Parliament Tony Pua’s
case, and in Loh Wai Kong’s case, where
the right to travel overseas is not absolute.
LohWai Kong vs Public Prosecutor is a case
where Loh sought a ruling or declaration from
the courts that Malaysian citizens were enti-
tled to travel overseas, as it was a fundamental
right as accorded under Article 5 of the Con-
stitution regarding the liberty of the person.
The Court of Appeal on March 14 this
year upheld the High Court’s decision and
dismissed the appeal resulting in Thursday’s
Federal Court hearing.
despite the Kedah Land and Mine’s Of-
fice director (Datuk Md Shumaime Abdul
Rahmah) being a member on the Ment-
eri Besar Incorporated board of advisors.
“...he (Md Shumaime) is also a member
of the state Mineral Resources Committee,
which is the authority responsible for in-
vestigating matters related to the Mineral
(Kedah) Enactment 2004...the effects of
illegal mining and REE theft go beyond
environmental concerns.
“...it has a huge economic risk. It is im-
portant that those entrusted with the respon-
sibility of upholding the law take decisive
action to protect natural resources,” he said.
Saifuddin Nasution claimed that Mu-
hammad Sanusi knew all operations related
to REE in the Bukit Enggang Forest Reserve,
urging the Kedah menteri besar to explain
these in detail, including the involvement of a
Chinese national who has now disappeared.
 F R I D AY A U G U S T 4 , 2 0 2 3
Vinvest’s ‘missing’ EA Holdings
shares in the limelight
KUALA LUMPUR (Aug 3): Vinvest
Capital Holdings Bhd’s allegation of
losing its 17.82% stake in EA Holdings
Bhd has caught the investing fraternity
by surprise as to how this could happen
without the knowledge of the parties
involved.
Vinvest’s share subscription in EA
Holdings back in November 2021 was
aimed at opening more opportunities
for both companies to collaborate and
leverage on each other’s strengths. For
example, Vinvest’s property develop-
ment and construction projects could
benefit from the smart solutions in the
technology field to be provided by EA
Holdings.
Having held the shares for more than
a year, Vinvest noticed that all its EA
Holdings shares had been sold on the
open market via its TA Securities cen-
tral depository system (CDS) account
between June 23 and July 11.
The selling price was half a sen per
share or a total sum of RM5.486 mil-
lion, a huge discount compared to the
acquisition sum of RM23.21 million
back then.
And this prompted Vinvest to take
legal action against EA Holdings over
the matter, including “urgently applying
for the necessary prohibitory injunc-
tive orders to stop further derogation of
the company’s rights over those shares”.
Vinvest has been granted an interim in-
junction by the High Court against EA
Holdings.
In its statement of claim filed on
Thursday (July 28) through Messrs
Wilson Lim and sighted by The Edge,
Vinvest said the 1.1 billion EA Holdings
shares were originally kept in Maybank
Investment Bank Bhd’s CDS account
for safekeeping and not used for trading.
It claimed that the defendants were re-
sponsible to look after its interests since
the company held the second-highest
stake in EA Holdings.
EA Holdings’ annual report 2023,
however, shows Vinvest was the single
largest shareholder in EA Holdings with
a 17.1% stake as at June 21 this year,
followed by EA Holdings CEO and ex-
ecutive director Mohammad Sobri Saad
at 7.8%.
EA Holdings is involved in ICT ser-
vices, software solutions, automation
systems and F&B distribution. For the
18-month period ended March 31,
3 THEEDGE CEO MORNING BRIEF
H O M E
BY HAFIZ YATIM & LEE WENG KHUEN 2023, it incurred a net loss of RM17.47
theedgemalaysia.com million.
For Vinvest, its 18-month financials
ended Dec 31, 2022 show a net loss of
RM70.82 million, while in the latest
quarterly results ended March 31, 2023,
it recorded a net profit of RM743,000.
Vinvest stressed that Vinvest’s major shareholders are its
it had no intention to chief executive director Datuk Seri Chia
dispose of the shares, Kok Teong (30.4%), Golden Key Port-
and it was done folio Sdn Bhd (17.5%) and EA Hold-
without a company ings (6.5%).
In the legal suit, Vinvest has also
resolution — no forms named a 30-year-old stock market an-
were signed — and alyst from Ipoh as the second defendant.
without its knowledge. Vinvest is alleging that fraud has been
committed by both EA Holdings and the
analyst, stressing that the appointment
of the analyst was on EA Holdings’ rec-
ommendation. Sometime in May, the
analyst suggested that the company
opened a second CDS account, and sub-
Vinvest Capital Holdings Bhd sequently a second account was opened
Vol (mil) Sen at TA Securities Holdings Bhd on May
350 30 22, with all the EA Holdings shares then
deposited into the second account.
300 Vinvest stressed that it had no inten-
25
250 tion to dispose of the shares, and it was
done without a company resolution —
200 20
no forms were signed — and without
150 18 sen its knowledge. It is perplexed as to how
15
EA Holdings and the stock market ana-
100 7 sen lyst, either individually or together, had
10 failed to detect or observe the significant
50
change in the shareholding.
0 5 Vinvest is seeking a declaration that
Aug 3, 2022 Aug 3, 2023 the transfer of the 1.1 billion shares
from its TA Securities account, either
Source: Bloomberg
on the open market or via off-market,
is null and void. It further wants a dec-
laration that the trade and transfer of
the shares on June 23 is declared illegal,
EA Holdings Bhd and that Vinvest remains the owner of
Vol (bil) Sen the shares.
2.5 1.5 It is also seeking general damages
for the losses as a result of the alleged
2.0
fraudulent sales and illegal instruction
1.2 or transactions.
1 sen A report was lodged with the Secu-
1.5
rities Commission Malaysia, police and
0.9
Bursa Malaysia between July 17 and 21.
1.0
Shares of EA Holdings are down
0.6 33% year to date to close at one sen on
0.5 Thursday, giving it a market value of
0.5 sen RM64.5 million.
0 0.3 Closing at seven sen on Thursday —
Aug 3, 2022 Aug 3, 2023 for a market capitalisation of RM67.8
Source: Bloomberg
million, Vinvest’s share price has de-
clined 63.2% since early this year.
 F R I D AY A U G U S T 4 , 2 0 2 3
KUALA LUMPUR (Aug 3): Malaysia has
emerged with notable resilience and a poten-
tial for recovery amid the challenges brought
about by the Covid-19 pandemic, said the
World Bank.
In its report “Building Malaysia’s Resil-
ience: Lessons from Covid-19’s Economic
Impacts and Policy Responses”, the World
Bank said Malaysia led the way in a survey
which included Cambodia, Indonesia, Mon-
golia, the Philippines and Vietnam.
The survey examines the economic con-
sequences and government responses to the
pandemic in the six economies.
The six experienced the crisis differently
and implemented various measures to con-
tain the spread of the virus and to mitigate
economic impacts with varying degrees of
success, the bank noted.
Country manager for Malaysia Yasuhiko
Matsuda said the Covid-19 shock reduced
employment and household income, but the
report showed that Malaysia did relatively well
compared to the other five on a macro level.
“Sales shocks in Malaysia were more sub-
dued, while work stoppages were moderate.
However, the impact of the pandemic was
uneven.
“Within Malaysia, smaller companies
and poorer, more vulnerable households
suffered and they have less access to gov-
ernment assistance as well. The problem is
digital divide, for example,” Matsuda noted.
Senior economist Ririn Salwa Purnamasa-
ri in her report presentation highlighted that
Malaysia’s economy was stable and growing
before the pandemic, with a 5% annual growth
rate and was the wealthiest among the six.
“Despite the progress, Malaysia still
faced challenges in reducing poverty and
Former minister urges gradual fuel subsidy rationalisation,
more effective communication from govt
KUALA LUMPUR (Aug 3): The gov-
ernment should update its approach to
rationalising the fuel subsidy programme
and make sure this is done in a gradual
manner for it to be successful.
The use of savings from the rationali-
sation process also needs to be well com-
municated to the public to avoid backlash,
said former deputy international trade and
industry minister Ong Kian Ming.
“It should be gradual, not a sudden
increase like it was done previously. For
example, the government could increase
it by 10 sen monthly so that the market
can adjust.
“Secondly, the government should
announce a series of measures where-
by the amount it saved from the fuel
4 THEEDGE CEO MORNING BRIEF
H O M E
Malaysia
resilient in face
of Covid-19
challenges —
World Bank
Bernama
inequality, with the Gini index remaining
relatively high for an aspiring high-income
country,” she said, adding that the pandemic
provided valuable lessons to build resilience
and manage future crises.
“Governments should prioritise equi-
table recovery, leverage technological ad-
vancements and strengthen social safety
nets to protect vulnerable groups.
“Continually evaluating and improving
policies and investments in data-driven de-
cision-making will be crucial in effectively nav-
igating future challenges and ensuring a more
resilient and inclusive labor market,” she said.
During the pandemic, aid from the gov-
ernment comprised a diverse mix of instru-
ments for firms and households, but they
could have been better targeted and cali-
brated; support to firms appeared to be bi-
ased towards more productive, larger firms,
while support to households was pro-poor
but not as responsive to shocks, Ririn said.
She noted that compared with other
countries in the region, Malaysia relied more
heavily on support to firms in the form of
liquidity, credit and lending — “below-the-
Bernama
subsidy can be spent in ways that are
very easy to understand by the people
and also impactful to them.
“For example, part of the savings can
be allocated to the Health Ministry so that
some of the contract doctors can be giv-
en permanent postings, queues to receive
treatment can be reduced, for expansion of
certain wings in certain crowded hospitals
and more,” he said
He told reporters on the sidelines of the
launch of the World Bank report entitled
“Building Malaysia’s Resilience: Lessons
from Covid-19’s Economic Impacts and
Policy Responses” that allocation could
also be channelled to increase public trans-
line” measures — and relatively low on di-
rect support to households.
“Targeted payment deferrals (taxes or
loan repayments) were more effective than
income and liquidity support to address
working capital crunch.
“Wage subsidies helped workers from
shouldering the full brunt of the economic
crisis and preserved the relationship between
employers and employees while social as-
sistance eased the burden on households
during the crisis, but the level of benefits
remained largely insufficient,” she said.
Moving forward, she said given the tight-
ening fiscal space and continued distress,
better targeting and consolidation of sup-
port instruments is needed.
Active labour market programmes, which
include rescaling and upscaling to empower
the people to help themselves, are also need-
ed. These measures are more sustainable
and beneficial over the longer term, she said.
On the use of cash transfers, Matsuda
said although the government was able to
cover a large segment of the population, the
amount was relatively small compared with
those received in other countries. Hence,
the impact of cash transfers in Malaysia is
limited.
Some, who were on the receiving end,
did not get quite enough to really make a
difference, he said, adding that reach and
coverage is important.
“The crisis boosted digital technology
adoption, highlighting its potential to drive
productivity and innovation. Governments
and businesses should invest in digital in-
frastructure and remote work capabilities
to enhance resilience and efficiency during
future crises,” he added.
portation spending while part of it can
go into increasing the allocation for cash
assistance.
He was of the view that taking away
the subsidy and giving back to the people
directly in the form of cash or some sort
of card which they can use to buy fuel
was not going to work, because the whole
system will be more prone to leakages.
Commenting on the findings of the
World Bank report, he said during Cov-
id-19 pandemic, there was a need to have
a whole of government approach towards
fighting the crisis and also to be able to
address some of the longer term issues.
Read the full story
F R I D AY A U G U S T 4 , 2 0 2 3 5 THEEDGE CEO MORNING BRIEF
 F R I D AY A U G U S T 4 , 2 0 2 3 6 THEEDGE CEO MORNING BRIEF

H O M E

PJD Link: A high-stakes

project for Selangor
BY SUFI MUH AMAD
theedgemalaysia.com

KUALA LUMPUR (Aug 3): The termi-

nation of the controversial Petaling Jaya
Dispersal (PJD) Link project by the Sel-
angor state government, with less than two
weeks before the state polls on Aug 12, is
perhaps an indication of just how much is
at stake for the Pakatan Harapan-led (PH)
government that is trying to keep the state
under its administration.
While the move was welcomed by many
Petaling Jaya residents and non-govern-
mental organisations who have been call-
ing for the project to be scrapped due to
environmental and social concerns, Parti
Pribumi Bersatu Malaysia (Bersatu), one
of the main component parties of Perikatan
Nasional (PN), has questioned the right
of the caretaker Selangor government led
by Menteri Besar Datuk Seri Amirudin
Shari in making such an impactful deci-
sion ahead of the polls.
Bersatu also slammed Amirudin for say-
ing that the PJD Link project might be
revived if it complied with requirements
set by the state government. The party,
however, did not state its stance on the
project, which was approved under the
PN-Barisan Nasional (BN) government
in April 2022.
Should the project materialise, it would
cut through four constituencies within the
state — N30 Kinrara, N33 Taman Med-
an, N34 Bukit Gasing and N36 Bandar
Utama — that is home to over 300,000
voters. The four constituencies are located
within three Parliamentary seats, name-
ly P105 Petaling Jaya, P104 Subang and
P106 Damansara. Muda’s Lim Hooi Sean and PN-Gerakan’s to win the seat in 2018 with a margin of
With 313,017 voters representing rough- Nur Aliff Mohd Taufid. 29.1%. Ahmad Akhir will contest against
ly 8.3% of 3.75 million Selangor voters, the In Bukit Gasing, Ranjiv Rishyakaran PN-Bersatu candidate Afif Bahardin.
four state seats will see the PH-BN unity (PH-DAP) is up against Nallan Dhana- PJD Link is also in close proximity to
government, PN and the Malaysian Unit- balan (PN-Gerakan) and Kalyana Rajase- N35 Kampung Tunku, which has 58,357
ed Democratic Alliance (Muda) vying for karan Teagarajan (Muda). Ranjiv won the voters — 15.7% of which are Malay voters.
votes in the coming days.While Kinrara and seat in 2018 after securing 29,366 votes or This election, in terms of number of
Taman Medan will be a straight fight be- 86.9% of the total, with a winning margin voters, Kinrara has the highest among the
tween PH-BN and PN, Bukit Gasing and of 76.5%. four at 123,782, while the number of Ma-
Bandar Utama will be three-cornered fights Over in Kinrara, the incumbent Ng Sze lay voters is highest in Taman Medan, at
as Muda has fielded candidates there. Hen (PH-DAP) will be taking onWongYong 68% of 61,959 voters.
All four state seats were dominated by Kan (PN-Bersatu). Ng took the seat in 2018 Amirudin said his administration can-
PH in the last state election in 2018, with with 52,207 votes polled, or 83% of the total, celled the project as it was not satisfied with
Bandar Utama recording the highest win- with a winning margin of 71.8%. the impact assessment reports submitted by
ning margin among the four, at 81.4%, For Taman Medan, PH-PKR has nom- the concessionaire, PJD Link (M) Sdn Bhd,
after PH-DAP candidate Jamaliah Ja- inated Ahmad Akhir Pawan Chik as its and because it did not meet certain condi-
maluddin secured 90.5% of the votes cast, candidate, replacing Syamsul Firdaus, who tions set by the state government, particu-
defeating the BN candidate. This time, Ja- secured 21,712 votes or 57.8% of the to- larly the social impact assessment reports.
maliah will be defending her seat against tal votes in the predominantly Malay area CO N TI N UES O N PAGE 7
 F R I D AY A U G U S T 4 , 2 0 2 3
KUALA LUMPUR (Aug 3): Malaysian
Resources Corp Bhd’s (MRCB) net gear-
ing levels could surpass 0.49 times if it un-
dertakes the redevelopment of transport
hub KL Sentral simultaneously with that of
the Shah Alam Sports Complex, said Hong
Leong Investment Bank (HLIB) Research.
In a note on Thursday (Aug 3), analyst
Edwin Woo said rough calculations show
that net gearing levels could rise to 0.49
times if the redevelopment of KL Sentral
alone — which is estimated to cost over
RM1 billion — took place after the disposal
of Menara CelcomDigi to Sentral REIT.
According to the group’s financial state-
ment for the year ended Dec 31, 2022, its
gearing level stood at 0.45 times.
MRCB was given a letter of intent by
the Selangor government to create a pro-
posal for the redevelopment of Shah Alam
Sports Complex in Section 13, Shah Alam,
which includes the area’s namesake stadi-
um and its surrounding Malawati Stadi-
um, Shah Alam Mini Stadium, and Shah
Alam Extreme Park.
On Wednesday, Transport Minister
Anthony Loke said the Cabinet had ap-
proved in principle the redevelopment of
KL Sentral.
According to him, the project will be
done via privatisation at an estimated cost
of over RM1 billion, which MRCB will
shoulder, in return for the rights to develop
the area above the station with commercial
and residential buildings.
Woo, in his note, said: “Given that the
(KL Sentral) project will be done on a pri-
vate-finance initiative (PFI) basis, MRCB’s
monetisation timeline will be a relatively
long one — when residential and/or com-
mercial units are developed and sold.
“This will take place once redevelop-
FROM PAGE 6
RTO of Scomi Energy cancelled
The proposed PJD Link is a 25.4km elevat-
ed highway with two-lane dual carriageway
(four lanes).
Aimed at dispersing traffic congestion
in Petaling Jaya by providing major con-
nection with existing roads and highways,
the project was first approved in principle
by the Cabinet during BN’s administra-
tion in November 2017, before the state
government then approved it in principle
in September 2020 — subject to satisfac-
tory impact assessments done.
The highway, which was to be 100%
privately funded, was to start after the
North Klang Valley Expressway (NKVE)
toll plaza on the SPRINT Highway, Da-
mansara and end at the Bukit Jalil highway
interchange.
With the project in the pipeline then,
7 THEEDGE CEO MORNING BRIEF
H O M E
MRCB’s net
gearing could
exceed 0.49 times
if KL Sentral,
Shah Alam
Sports Complex
redeveloped
concurrently —
HLIB Research
BY LAM JIAN WYN
theedgemalaysia.com
the concessionaire PJD Link (M) Sdn Bhd
announced in October 2022 that it was
seeking a listing on Bursa Malaysia via the
reverse takeover (RTO) of Practice Note
17 (PN17) company, Scomi Energy Ser-
vices Bhd, whose share surged following
the announcement.
The RTO was to be part of the regu-
larisation plan that would lift Scomi En-
ergy from its PN17 status. In June this
year, the concessionaire also said it had
secured RM922 million in funding from
MCC Overseas (M) Sdn Bhd — a subsid-
iary of China Metallurgical Group Corp
— as part of its project financing for the
project.
But Scomi Energy suddenly announced
on July 17 that the framework agreement
it inked with the concessionaire for the
RTO had been “mutually terminated with
immediate effect”, but did not elaborate.
ment of the station is complete. From what
we gather, demand has been strong histor-
ically, with residential developments seeing
take-up rates of 85% and above.”
Woo believed that there are five acres
of land that are not developed yet in KL
Sentral, out of the original 60 acres, and
thus the redevelopment is a timely oppor-
tunity for MRCB to widen its commercial
exposure in a prime and strategic location.
According to him, KL Sentral has a
gross development value of RM18 bil-
lion while over 200,000 commuters pass
through the station daily.
“At a designed daily capacity of
100,000, the station has been due for up-
grades for some time,” he noted.
Woo kept his “hold” rating on the stock,
with an unchanged sum-of-parts derived
target price of 34 sen, which implies a
price-earnings multiple of 30.9 times
for its forecasted FY2023 performance,
22.7 times for FY2024, and 21.4 times
for FY2025.
At the midday break, MRCB shares
were up 1.5 sen or four sen at 39 sen, for
a market capitalisation of RM1.74 billion.
The concessionaire is a private con-
struction company with Amrish Hari
Narayanan as its chief executive officer.
He was previously involved in the now-de-
funct RM2.42 billion Kinrara Damansara
Expressway (Kidex), which was rejected
by the then Pakatan Rakyat-led Selangor
government in 2015 due to its failure to
submit traffic, social and environmental
impact assessments within the stipulated
deadline.
Scomi Energy’s shares had been sus-
pended since July 24 as it had failed to
submit its regularisation plan to Bursa
Securities on time and could not secure
another extension of time to do so. Del-
isting was possible on July 26, but it had
submitted an appeal to the regulator to
prevent that. Scomi Energy’s shares were
last traded at half a sen apiece, giving it a
market capitalisation of RM2.34 million.
 F R I D AY A U G U S T 4 , 2 0 2 3 8 THEEDGE CEO MORNING BRIEF

H O M E

KUALA LUMPUR (Aug 3): Fraser &
Neave Holdings Bhd’s (F&N) net prof-
it increased 1.9% to RM99.37 million
for its third quarter ended June 30, 2023
(3QFY2023), from RM97.50 million a year
earlier, driven by overall higher prices, margin
and cost management, as well as contribution
from Cocoaland Holdings Bhd, which the
group acquired in November 2022.
However, earnings were partially offset
by one-off non-operating items (fair value
loss on investment properties, impairment
loss on property, plant and equipment, and
inventories written down), the group said
in a filing with Bursa Malaysia.
Quarterly revenue jumped 19% to
RM1.33 billion from RM1.12 billion,
thanks to robust festive sales, improvement
in the food and beverage (F&B) markets
in both Malaysia and Thailand, recovery
in export markets and the additional Co-
coaland contribution.
For the first nine months of FY2023,
F&N’s net profit increased 40.5% to
RM399.34 million from RM284.32 mil-
lion in the previous corresponding period,
while revenue improved 12.7% to RM3.76
billion from RM3.33 billion.
Heading into the final quarter of the
financial year, F&N is maintaining a cau-
F&N 3Q profit tiously optimistic outlook amid the vola-
tility in commodity prices and foreign ex-
up on higher change rates, and inflationary pressures
on its costs and its impact on consumer
prices, maintains demand.
“Although some commodity prices have
cautiously stabilised, challenges persist in prices of
tin plates/cans, raw milk and palm oil, and
optimistic outlook the upward trend in sugar prices. We have
purchased substantially our raw material
amid volatility in requirements for the fourth quarter,” the
group said.
commodity prices Nevertheless, F&N said it will remain
vigilant and proactively navigate this vol-
atile and inflationary environment, lever-
BY PRIYATHARISINY VASU aging on its diversified brand portfolio.
theedgemalaysia.com “We have taken a significant stride to-
wards our vision of becoming a leading
milk producer in Malaysia with the recent
ground-breaking ceremony of our integrat-
ed dairy farm in Gemas, Negeri Sembilan
marking the beginning of our journey into
the upstream fresh milk sector,” it said.
F&N shares closed up two sen or 0.08%
at RM24.92, valuing the group at RM9.14
billion.

KUALA LUMPUR (Aug 3): QL Resourc-
es Bhd said its wholly-owned subsidiary,
QL Oil Sd Bhd (QLO), has commenced
arbitration proceedings against two Indo-
nesian firms to resolve disputes relating to
a master joint venture agreement (MJVA)
signed by the three parties in 2006.
QLO filed the notice of arbitration
against Hang Ting Pte Ltd (HT) and PT
Pipit Citra Perkasa (PCP) at the Singa-
pore International Arbitration Centre on
Thursday (Aug 3), said QL Resources in
a bourse filing.
Under the MJVA, QLO and HT formed
a joint venture company known as QL Mu-
tiara (S) Pte Ltd, which in turn owns a
95% stake in plantation firm Pipit Muti-
ara Indah (PMI), with PCP holding the
remaining 5% stake.
QLO thus has an effective interest of
74.5% in PMI, whereas HT and PCP col-
lectively have an effective interest of 25.5%
in PMI.
QL Resources said PCP and HT are
affiliated companies owned by the fami-
ly of the Kristianto Kandi Saputro. Juliet
Kristianto Liu is the spouse of Kris.
The group said that in August 2021,
PCP initiated a lawsuit in Indonesia against
PMI, QL Mutiara, as well as QL Resources
director Chia Seong Fatt in his capacity
as a director of PMI, for alleged manage-
ment negligence and sought compensation
amounting to about RM221.87 million.
PCP claimed that the negligence caused
QL Resources
launches arbitration
proceedings against
Indonesian JV
partners to resolve
disputes
BY JUSTIN LIM
theedgemalaysia.com
PMI to suffer eight years of continuous loss-
es since the commencement of its operations
between 2012 and 2020. PCP on its part
allegedly suffered losses due to not receiv-
ing any distributable dividends from PMI.
PCP is also challenging the accuracy of
the losses reported in the annual financial
statements of PMI presented by Chia, as
the basis of the non-distribution of divi-
dends by PMI.
The minority shareholder also alleged
that QL Resources’ two subsidiaries and
Chia have not performed in accordance
with good corporate governance required
under Indonesian law and under the con-
tractual arrangement between PCP and the
accused parties regarding PMI’s annual
financial statements, as it alleged that the
accused parties had failed to disclose the
data and information requested by PCP.
In December 2021, PMI, Chia and QL
Mutiara obtained an interim injunction or-
der against PCP to restrain PCP from con-
tinuing with the Indonesian proceedings.
However, PCP had, in breach of the in-
junction order and the MJVA, deliberately
proceeded and continued with the Indo-
nesian proceedings until around March
2022, claimed QL Resources.
In March 2022, PCP applied to with-
draw and annul the lawsuit against PMI,
Chia and QL Mutiara.
QL Resources said QLO is now launch-
ing the arbitration to seek relief from HT
and PCP, and specific performance or-
ders to compel HT and PCP to comply
with their obligations and duties under the
MJVA. QLO is also seeking damages from
the two firms.
Apart from the potential damages to be
assessed and costs which may be awarded
against HT and PCP, and the correspond-
ing legal costs on the part of QLO, QL
Resources said the arbitration is not ex-
pected to have any other material financial
impact on the company for the financial
year ending March 31, 2024. The arbitra-
tion is also not expected to have any busi-
ness and operational impact on the group.
QL Resources’ share price closed up
two sen or 0.37% at RM5.37 on Thursday,
giving the group a market capitalisation of
RM13.07 billion.
F R I D AY A U G U S T 4 , 2 0 2 3 9 THEEDGE CEO MORNING BRIEF
 F R I D AY A U G U S T 4 , 2 0 2 3 10 THEEDGE CEO MORNING BRIEF

H O M E

NEWS IN BRIEF

Sunview Group aborts plan to

Sunway Property acquires venture into biogas renewable
245-acre freehold industrial land energy sector
for RM115 mil KUALA LUMPUR (Aug 3): Renewable
KUALA LUMPUR (Aug 3): Sunway energy player Sunview Group Bhd has
Bhd’s property arm, Sunway Property, aborted plans to venture into the biogas
announced that its wholly-owned renewable energy industry after it
subsidiary — Sunway Rawang City terminated the proposed acquisition of
Sdn Bhd — acquired a 245-acre land in Provectus Bioenergy Sdn Bhd. Provectus
Kuang, Rawang for a cash consideration Bioenergy is engaged in the operation of
of RM115 million. In a press release development of the 245-acre land will generation facilities that produce electric
on Thursday (Aug 3), the company be carried out via a joint venture with energy. In a bourse filing on Thursday
said that Sunway Rawang signed a Amal Resources Sdn Bhd for a proposed (Aug 3), Sunview said the termination
sale and purchase agreement (SPA) industrial tech park comprising factories, was due to the parties’ inability to reach
on Wednesday (Aug 2) to acquire the warehouses and commercial components, a consensus on the terms of the share
freehold land from Kauthar Equities carrying a gross development value of at sale agreement (SSA) for the entire
Sdn Bhd. The acquisition and proposed least RM2 billion. — by Reyanna Ng shareholding in Provectus Bioenergy.
Under the earlier deal, Sunview was to
own 20% in Provectus Bioenergy while
AWC secures RM10 mil sub-contract Suntech Energy, Warrants RE Assets,
works from Crest Builder unit Intechcity Construction and Pasir
KUALA LUMPUR (Aug 3): A unit of AWC Lembayung were to own the remaining
Bhd has been awarded sub-contract works 80% post-acquisition. — by Kang Siew Li
for a multi-block mixed development
in Klang, Selangor, from a unit of Crest Serba Dinamik’s liquidator calls for
Builder Holdings Bhd worth RM10.01 meeting with creditors in October
million. In a Bursa Malaysia filing, AWC said KUALA LUMPUR (Aug 3): Serba Dinamik
Kumpulan Kitacon bags RM62 mil its unit Qudotech Sdn Bhd had on Aug 2 Holdings Bhd’s liquidator has called for
contract from KL Kepong to build accepted the letter of award from CBTech a meeting with the group’s creditors in
cluster houses (M) Sdn Bhd for the project’s water and October to provide a status update on
KUALA LUMPUR (Aug 3): Kumpulan Kitacon sanitary plumbing system and rainwater the liquidation as well as to consider
Bhd has secured a RM62.3 million contract downpipe system for CB Land Sdn Bhd. the appointment of a committee of
from Kuala Lumpur Kepong Bhd (KLK) to The engineering services provider said inspection. Serba Dinamik said four
build houses in Bandar Seri Coalfields, Sungai Qudotech will supply, deliver, install, test separate meetings had been scheduled
Buloh. The construction group said its wholly and commission the systems.  The sub- with the creditors of the group as well
owned subsidiary, Kitacon Sdn Bhd, was contract works commenced on July 1, 2023 as the creditors of its subsidiaries Serba
awarded the contract by KLK’s wholly owned and would be completed by June 30, 2026. Dinamik Group Bhd, Serba Dinamik Sdn
unit, KL-Kepong Country Homes Sdn Bhd, to — by Anis Hazim Bhd and Serba Dinamik International Ltd.
build 128 units of two-storey cluster houses  The meetings are scheduled to be held
within a period of 18 months. The group said on Oct 11 to 13, said the troubled oil and
the contract will not have any effect on its gas group in a bourse filing on Thursday
share capital and its shareholding structure, (Aug 3). “A separate announcement
but will contribute positively to its earnings to all contributories calling for the
and net assets for the financial year ending contributories meeting will be issued at a
Dec 31, 2023 and until the expiry of the date closer to the meeting date,” said the
contract. — by Anis Hazim group. The liquidator for Serba Dinamik
and the three subsidiaries, Victor Saw
Seng Kee of PriceWaterhouseCoopers
Ge-Shen to buy controlling stake in rubber and medical device maker Advisory Sdn Bhd, had in May filed
for RM17 mil an application to the High Court for a
KUALA LUMPUR (Aug 3): Johor-based plastic injection moulding and metal stamping meeting of creditors and a meeting of
company Ge-Shen Corp Bhd is buying a controlling 60% equity interest in Kedah-based contributories. — by Anis Hazim
Kibaru Manufacturing Sdn Bhd (KMSB) for RM16.8 million cash. This is in line with the
group’s objective of acquiring strategic stakes in companies involved in high value-added
industries with potential for future growth. KMSB is involved in the manufacturing
of and dealing in all kinds of rubber products and medical devices. Ge-Shen said the
proposed acquisition will enable the group to further expand its overall engineering
and manufacturing capabilities and product offerings to its customers. “The proposed
acquisition will expand Ge-Shen Group’s scale of operations and further complements
the group’s presence in the medical device segment, which is higher in value per unit and
yields better profit margin,” it said in a bourse filing on Thursday (Aug 3). — by Kang Siew Li
 F R I D AY A U G U S T 4 , 2 0 2 3
Zahid’s
ex-secretary:
He never asked
me to use
Yayasan Akalbudi
funds to pay
personal bills
BY TIMOTHY ACHARIAM
theedgemalaysia.com
KUALA LUMPUR (Aug 3): A former
secretary of Deputy Prime Minister Da-
tuk Seri Dr Ahmad Zahid Hamidi told the
High Court during his corruption trial that
he had never asked her to use his charity
Yayasan Akalbudi funds to pay any of his
personal bills.
Datuk Rosiah Osman, 71, who was Za-
hid’s executive secretary from 1994 to 2011,
testified that while she was serving him, all
his personal bills such as credit cards, road
taxes, and insurance policies were paid using
his personal Maybank accounts.
She also testified that it was the same
when it came to his wife’s credit card bills.
Upon questioning from Zahid’s lawyer
Datuk Ahmad Zaidi Zainal, Rosiah said
Yayasan Akalbudi funds were strictly used
for charitable activities and donations via
cheques to worthy causes.
She then testified, however, that there
were occasions when Zahid had to use his
personal credit card to purchase items for
charity and then he would get reimbursed
by Yayasan Akalbudi.
“Datuk Zahid used the credit card to
pay for items to be donated, from there we
paid (him back) using Yayasan Akalbudi’s
cheques to (reimburse) his credit cards,” she
said upon questioning from deputy public
11 THEEDGE CEO MORNING BRIEF
H O M E
prosecutor Datuk Mohd Dusuki Mokhtar.
She said this was done sometimes to
pay for objects for charity which couldn’t
be paid for by cheque.
She further clarified that this was done
on only a handful of occasions, adding that
“not all” Yayasan Akalbudi’s donations
were done this way.
Zahid’s contention in this case is that
Rosiah’s successor Major Mazlina Ma-
zlan @ Ramly, who took over in Decem-
ber 2011, was negligent in handling his
accounts as well as finances in Yayasan
Akalbudi, which led to him being charged.
He said among the negligence Mazli-
na committed was failing to understand
and read his credit card statements, which
caused her to make either insufficient or
excessive payments.
Zahid said Mazlina had used Yayasan
Akalbudi cheques to pay his credit card
bills without his instruction, knowledge
or agreement.
Testifying before judge Datuk Collin
Lawrence Sequerah, Rosiah said that dur-
ing her 18-year stint with Zahid, he had
never given her orders to pay his person-
al credit card bills, vehicle insurance and
road taxes using Yayasan Akalbudi funds.
Rosiah testified that there were always
sufficient funds in Zahid’s personal ac-
counts to pay off these bills.
Zahid, who is also Umno president and
Barisan Nasional chairman, is facing 47
charges, of which 12 are for criminal breach
of trust (CBT), eight for corruption, and
27 for money laundering, involving RM31
million of Yayasan Akalbudi funds.
For the 12 CBT charges, Zahid is alleged
to have used the funds to make payments
for personal credit cards, insurance policies
and licences for his personal vehicles, remit-
tances to a law firm, and contributions to the
Royal Malaysian Police football association.
Each of the charges, under Section 409
of the Penal Code, carries a maximum of
20 years in jail, whipping and fine.
The trial continues before Sequerah
next Monday (Aug 7).
ZAHID IZZANI/THE EDGE
Rajan Paramesran
is MARC’s new CEO
effective Aug 1
MARC appoints
key executives;
Rajan Paramesran
named new CEO
BY KAYLA CHAN
theedgemalaysia.com
KUALA LUMPUR (Aug 3): Malaysian
Rating Corporation Bhd (MARC) an-
nounced a slew of new appointments,
including Rajan Paramesran as the new
chief executive officer effective Aug 1.
Having joined MARC in 2008, he
had been the rating firm’s chief rating
officer since 2014.
In a statement released on Thursday
(Aug 3), MARC said: “With over 38 years
of extensive experience in the financial ser-
vices industry, he now oversees the ratings
operations. Prior to joining MARC, Rajan
held various positions at prestigious insti-
tutions, including Peregrine Fixed Income
Ltd and BNP Paribas.”
Meanwhile, Hafiza Abdul Rashid is
the new chief rating officer of MARC
Ratings. She had served as the head of
ratings portfolio for infrastructure and
telecommunications since 2019 and later
assumed the role of deputy chief rating
officer from September 2022.
On the other hand, Badrul Hisham
Zawawi has been MARC’s chief com-
mercial officer since June this year,
bringing in 25 years of seasoned com-
mercial banking experience.
Moving on, Ray Choy is the new chief
economist of MARC. He has 21 years
of experience in financial areas includ-
ing economic research, foreign exchange,
commodities analysis, funds management,
equities investments and credit risk ratings.
MARC also announced the promo-
tions of two key heads of portfolios. Sha-
ridan Salleh has been appointed as the
senior head of ratings portfolio for oil and
gas, and power, whereas Taufiq Kamal has
been promoted to the role of senior head
of ratings portfolio for property, conglom-
erates and automotive services.
 f r i d ay A U G U S T 4 , 2 0 2 3
KUALA LUMPUR (Aug 3): A special task
force will be set up next month to review
and strengthen the country’s laws, espe-
cially concerning investment and business,
said Minister in the Prime Minister’s De-
partment (Law and Institutional Reform)
Datuk Seri Azalina Othman Said.
“We will look into laws involving big
businesses and online trade, sale and
purchase contracts, and trade, including
(countering) scammers. The laws of many
countries in Asean like Indonesia and Thai-
land have changed. So we will look into
this,” she said.
Azalina said it was important to empower
the country’s laws to help realise the unity
government’s agenda of developing the coun-
try under the Madani Economy framework.
She said apart from good governance, a
well-functioning legal framework can give con-
fidence to investors to invest in the country.
She said this on Thursday (Aug 3) when
speaking on RTM’s “Selamat Pagi Malay-
sia” programme entitled “Tatakelola Baik
Asas Ekonomi Madani” (Good Governance
the Basis of Madani Economy).
BATU KAWAN (Aug 3): Penang Devel-
opment Corp (PDC), an agency under the
state government, plans to grow its pres-
ence in the renewable energy (RE) sector,
particularly solar energy, and turn it into
one of its core businesses in the future.
Chief executive officer Datuk Aziz
Bakar said this initiative is in line with the
state’s aspiration to transform into a green
economy as well as the country’s effort to
ensure that RE accounts for 70% of the
country’s electricity generation by 2050.
“We expect investments in RE to be
ramped up exponentially and we believe
Penang has an exciting and major part to
play, being home to multiple multinational
corporations in the manufacturing sector.
“PDC is committed to doing its part in
helping others embark on the RE journey,
thereby expediting Malaysia’s transition to-
(From left) Caretaker Chief Minister Chow Kon Yeow and Penang Development
Corp CEO Datuk Aziz Bakar
12 TheEdge CEO morning brief
h o m e
“This special task force will also study
Azalina:Task
issues related to AI (artificial intelligence)
involving technology fraud and whether
force to look into
we are prepared to manage businesses in
this field,” she said.
law reform in
The Madani Economy framework was
launched by Prime Minister Datuk Seri An-
line with Madani
war Ibrahim last Thursday (July 27) to boost
Malaysia’s economy and generate benefits
Economy
for the people to enjoy a better quality of life.
Azalina said the task force would work
together with local universities and related
agencies to conduct studies and the review.
Bernama She was confident that if everything pro-
ceeded smoothly, the task force’s proposal on
legal amendments and enhancements could
Bernama be tabled in next year’s Parliament session.
She said investors would feel more con-
fident and safer if the country’s laws could
offer all quarters adequate protection, with-
out favouring or marginalising anyone.
“Given the country’s peace and security
and leaders who are now seen as capable
of protecting them with good governance
without issues like ‘back payments’, inves-
tors will come to Malaysia,” she added.
Penang
PDC collaborated with Solarvest Holdings
Bhd, which is responsible for consultation,
Development
design and engineering, procurement, pro-
ject management and construction.
Corp to turn
The solar PV system has been installed
at Marelli Automotive Lighting Malaysia
solar energy into
Sdn Bhd’s factory in Batu Kawan, with
PDC investing RM12 million.
a core business
Aziz said they signed a power purchase
agreement with Marelli Automotive Light-
ing Malaysia, an automotive component
manufacturer from Italy, in February
Bernama 2023, and construction began the fol-
lowing month.
wards a net zero future,” he told reporters Following the completion of the project,
at the launch of the PDC Solar Photovol- PDC will continue to own, operate and
taic (PV) System here on Thursday (Aug maintain this solar PV system with a ca-
3), which was also attended by caretaker pacity of 3,149.56 kW on behalf of Marelli.
Chief Minister Chow Kon Yeow. “PDC and Marelli are long-term part-
He said for its first solar energy project, ners since 2013 as it is leasing the land and
building from PDC for 20 years commenc-
Bernama ing 2013. PDC will provide exceptional
solar system solutions through our sub-
sidiary company, Solar Voltech Sdn Bhd.
“In the immediate future, we have two
more projects with Solarvest to install
this solar PV system at other factories in
Penang,” he added.
The solar power system was developed
under Solarvest’s solar financing programme,
Powervest, which enables businesses to adopt
clean energy with zero initial capital outlay.
The system is anticipated to generate
4.4 gigawatt-hours of clean energy annual-
ly, enabling Marelli to offset 2,410 tonnes
of carbon dioxide per annum and achieve
about 20%-30% in electricity bill savings.
 f r i d ay A U G U S T 4 , 2 0 2 3
KUALA LUMPUR (Aug 3): Sultan of
Brunei Sultan Hassanal Bolkiah was ac-
corded a state welcome at Istana Negara
on Thursday (Aug 3) in conjunction with
his three-day state visit to Malaysia.
On arrival at the palace at 11am, Sul-
tan Hassanal Bolkiah and his consort Raja
Isteri Pengiran Anak Saleha were greet-
ed by Yang di-Pertuan Agong Al-Sultan
Abdullah Ri’ayatuddin Al-Mustafa Billah
Shah and Raja Permaisuri Agong Tunku
Azizah Aminah Maimunah Iskandariah.
Also present were Prime Minister Datuk
Seri Anwar Ibrahim and his wife Datuk
Seri Dr Wan Azizah Wan Ismail, Deputy
Prime Minister Datuk Seri Fadillah Yusof
and Cabinet ministers.
The state welcoming ceremony began with
the singing of the national anthems of the
two countries by the Royal Malay Regiment
central band, followed by a 21-gun salute.
The Sultan of Brunei then inspected a
guard of honour mounted by four officers
and 103 rank-and-file personnel of the First
Battalion of the Royal Malay Regiment.
Sultan Hassanal Bolkiah and Al-Sultan
Abdullah then planted a Simpor tree (Dille-
nia Suffroticosa) in the palace compound, wit-
nessed by Raja Isteri Pengiran Anak Saleha,
Tunku Azizah, Anwar and Dr Wan Azizah.
The two kings then held a meeting,
during which they discussed matters con-
cerning the long-standing bilateral rela-
KUALA LUMPUR (Aug 3): Global semi-
conductor company Infineon Technologies
AG has announced the expansion of its
Kulim facility to build the world’s largest
200-millimetre (mm) silicon carbide (SiC)
power fabrication (power fab) plant, with
an additional investment of up to €5 billion
(RM24.9 billion) over the next five years.
It said the investment will lead to an an-
nual SiC revenue potential of about €7 bil-
lion by the end of the decade, together with
the planned 200-millimetre SiC conversion
of Villach, Austria and Kulim, Kedah.
“This highly competitive manufacturing
base will support Infineon’s SiC market
share target of 30% towards the end of the
decade,” the company said in a statement
on Thursday (Aug 3).
According to the statement, Prime Min-
ister Datuk Seri Anwar Ibrahim expressed
his appreciation for Infineon’s commitment
to creating a significant wide bandgap hub
in the country.
“Malaysia’s continued appeal as a pre-
ferred investment destination comes with a
well-established landscape for developing
innovative and sustainable technologies.
“Infineon and other well-established
German corporations’ continued faith in
Malaysia is a vote of confidence in Malay-
13 TheEdge CEO morning brief
h o m e
Brunei Sultan
accorded state
welcome at
Istana Negara
Bernama
tions between Malaysia and Brunei.
Yang di-Pertuan Agong and Raja Per-
maisuri Agong also hosted a state banquet
in honour of the visiting monarch.
The Sultan of Brunei is scheduled to
have a meeting with Anwar at Seri Perdana
in Putrajaya on Thursday afternoon and
Zafrul: Infineon’s
RM25 bil Kedah
investment sign
of confidence in
Madani govt
Bernama
sia’s new economic growth agenda premised
on inclusivity and sustainability, enabled by
strong policies on knowledge transfer, qual-
ity investments, business enablement and
socio-economic wellbeing based on equita-
ble sharing of the nation’s wealth,” he said.
Infineon chief executive officer Jochen
Hanebeck said the market for SiC shows
accelerating growth, not only in automotive
but also in a broad range of industrial ap-
plications such as solar, energy storage and
high-power electric vehicle (EV) charging.
“With the Kulim expansion, we will se-
cure our leadership position in this market.
“With the industry’s leading scale and
a unique cost position, we are leveraging
bernama
Yang di-Pertuan Agong
Al-Sultan Abdullah
Ri'ayatuddin Al-Mustafa
Billah Shah with Raja
Permaisuri Agong
Tunku Azizah Aminah
Maimunah Iskandariah
and Sultan of Brunei
Sultan Hassanal Bolkiah
with his consort Raja
Isteri Pengiran Anak
Saleha at Istana Negara
on Thursday (Aug 3)
also to witness the signing of several bilater-
al instruments between the two countries.
On Thursday night, the Brunei Sultan
is also scheduled to attend a dinner host-
ed by the prime minister at the Malaysian
Petroleum Club located in the iconic Pet-
ronas Twin Towers.
In 2019, Al-Sultan Abdullah undertook
a three-day state visit to Brunei to strength-
en the existing ties and bilateral relations
between the two countries.
Brunei was the first country visited by
Al-Sultan Abdullah after his appointment
as Malaysia’s 16thYang di-Pertuan Agong.
In 2022, Brunei was Malaysia’s 26th
largest trading partner and the sixth largest
within Asean with a total trade amounting
to RM13.22 billion, an increase of 68.%
compared to the recorded value in 2021.
our competitive position of best-in-class
SiC trench technology, the broadest pack-
age portfolio and unrivalled application
understanding,” he said.
Meanwhile, Minister of Investment,
Trade and Industry Tengku Datuk Seri
Zafrul Abdul Aziz described Infineon’s ad-
ditional investment in Kulim as a strong
vote of confidence in the Madani govern-
ment’s investment policies.
“This expansion will not only create
high-skilled employment opportunities
but also position Malaysia as a frontrun-
ner in driving green technologies, a cru-
cial aspect of achieving global sustainable
development goals.
“We value the trust, confidence and rec-
ognition in Malaysia’s promising growth
prospects shown by esteemed German
corporations like Infineon.
“The cutting-edge power semiconductor
technologies produced in Infineon’s SiC
Power Fab is a milestone development to-
wards elevating Malaysia’s position in the
semiconductor industry, while also fos-
tering a partnership focused on creating
a more sustainable future for our nation
and the world,” he said separately in a joint
statement by the Malaysian Investment De-
velopment Authority (Mida) and Infineon.
 f r i d ay A U G U S T 4 , 2 0 2 3
Barisan to give
way to Amanah
in Simpang
Jeram, Pulai by-
elections — Zahid
Bernama
KUALA LUMPUR (Aug 3): Barisan Na-
sional (BN) will give way to Amanah to
contest in the by-elections for the Pulai
parliamentary and Simpang Jeram state
seats in Johor on Sept 9.
BN chairman Datuk Seri Dr Ahmad
Zahid Hamidi said the decision was made
in the spirit of political collaboration in the
unity government.
“We respect equality in the unity gov-
ernment and we know that the Pulai par-
liamentary seat belongs to Amanah, which
is a political partner in the government and
they are the incumbent.
“The Simpang Jeram state seat also be-
longs to Amanah. So, in the spirit of the
MOH:
Candidates,
election officials
with influenza
symptoms
advised to wear
face masks
Bernama
PUTRAJAYA (Aug 3): Candidates and
election officials involved in the six state
elections are encouraged to observe pre-
cautionary measures by wearing face masks
and exercising social distancing if they are
having symptoms of influenza.
Health Minister Dr Zaliha Mustafa
said wearing a face mask while cam-
paigning can curb the spread of infec-
tious diseases.
“Influenza is a contagious disease. For
those who have symptoms regardless of
whether they are candidates or election
officials, if they are having the symptoms,
they should see a doctor quickly and take
14 TheEdge CEO morning brief
h o m e
Madani government, we support both seats
to be contested by Amanah,” he told the
media after launching the TVET Jelita pro-
gramme at the World Trade Centre Kuala
Lumpur on Thursday (Aug 3).
The Election Commission (EC) onThurs-
day fixed polling day for both seats on Sept 9.
Nomination of candidates will be on
Aug 26, with early voting falling on Sept 5.
the necessary precautionary measures, like
wearing a face mask.
“Among the symptoms of influenza are
fever, body aches, frequent sneezing, runny
nose, sore throat, cough and headache,”
she told a media conference after a meeting
with the Joint Council of the President and
the Secretary General of the Ministry of
Health’s Trade Unions (MAPSU KKM)
here on Thursday (Aug 3).
Also present was MAPSU KKM pres-
ident Ajulahin Japin.
Zaliha said this in response to media
reports of overcrowding in private hospi-
tals in the country due to the increase in
the number of influenza patients.
Last Monday (July 31), the Malaysian
Association of Private Hospitals confirmed
a report that many hospitals are reaching
their capacity, causing delays in admissions.
According to its president, Datuk Dr
Kuljit Singh, the increase in bed capacity
in many hospitals was due to many factors,
most notably the influenza virus.
On Wednesday, Defence Minister Da-
tuk Seri Mohamad Hasan, who is also
Umno deputy president, was confirmed
down with influenza and was instructed
by his doctors to rest for three days.
Read also: PN confusing voters on central
govt change via state polls — Loke
The Edge file photo
The by-election for the Pulai parliamen-
tary seat and the Simpang Jeram state seat
follows the death of incumbent Datuk Seri
Salahuddin Ayub on July 23.
Salahuddin, 61, who was also the do-
mestic trade and cost of living miniter, died
at the Sultanah Bahiyah Hospital in Alor
Setar, Kedah at 9.23pm after undergoing
brain haemorrhage surgery.
Dr Mahathir
admitted to IJN
for infection
Bernama
KUALA LUMPUR (Aug 3): For-
mer prime minister Tun Dr Mahathir
Mohamad has been admitted to the
National Heart Institute (IJN) for
treatment of an infection.
In a post on Dr Mahathir’s official
Facebook page on Thursday (Aug 3),
two photos were shared showing him
going through some files at the ward.
“Tun Dr Mahathir Mohamad
writing and going through some files
at his hospital ward at the Institut
Jantung Negara on Thursday.
“Dr Mahathir was admitted on
Tuesday (Aug 1) and treated for in-
fection,” it said.
The 98-year-old former Langkawi
Member of Prliament was admitted
to IJN in January 2022 to undergo
an elective medical procedure.
Dr Mahathir was again admitted
to IJN after he was confirmed posi-
tive for Covid-19 in August last year.
 f r i d ay A U G U S T 4 , 2 0 2 3
China spooking commodity traders with
probes into suspicious deals
(Aug 3): Chinese authorities are intensi-
fying a crackdown on some commodities
transactions they view as offering little eco-
nomic benefit, leading to a pullback by in-
dustry participants that’s poised to reduce
both trading volumes and volatility in the
domestic market.
Authorities have escalated probes into
trades they suspect are being used to ob-
tain cheap financing or government sub-
sidies rather than serving the real econo-
my, according to traders and officials with
knowledge of the investigations.
Chinese commodity trading and its
financing is vast but often opaque, and
Beijing has long been eager to curb firms’
ability to deal in and hoard industrial com-
modities for profit, thereby pushing up
prices for manufacturers and ultimately
consumers. The recent escalation of offi-
cial efforts comes at a time of regulatory
leadership transition and as strained lo-
cal government finances make it harder
to crank up economic growth.
Nearly 20 traders, warehouse manag-
ers and smelter executives interviewed by
Bloomberg since April said the investiga-
tions have made some Chinese firms more
hesitant to initiate new contracts in met-
als, chemicals and coal and have led to the
termination of some existing supply deals.
A trading unit of the Aluminum Corp of
China Ltd, the country’s top state-owned
metals producer, cancelled some alumin-
ium contracts with independent trading
firms last month.
Traders said they expected the probes to
lower trading volumes for some metals, re-
ducing their ability to cash in on volatility.
“The move to intensify compliance
checks into local subsidies and other sus-
pected irregular behaviors on commodi-
ties trades is a proactive step to squeeze
financial bubbles out of the industry and
bring the market back to a more trans-
parent order,” said Jia Zheng, a Shang-
hai-based trader with Shanghai Dongwu
Jiuying Investment Management Co. “I
believe it will create a fairer market in the
long term, even as some traders might be
hurt seriously during the checks.”
China’s State-Owned Asset Super-
vision and Administration Commission
warned in April that it will investigate
trade financing used to inflate sales or
those deals serving as collateral to access
bank loans.
Government investigators have been au-
diting trade books, reviewing the back-
15 TheEdge CEO morning brief
w o r l d
by Alfred Cang
Bloomberg
ground of counterparties and inquiring
about details like financing and logistics
to check if there has been any misuse of
local government funds or fabrication of
data connected to commodity trades, ac-
cording to the traders, who asked not to
be identified because of the sensitivity of
the matter.
The Aluminum Corp unit, China Alu-
minum International Trading Group Co,
has notified several traders about the can-
cellation of the trades for the second half
of the year, some traders said.
Aluminum Corp of China Ltd, known
as Chalco, didn’t respond to Bloomberg
requests for comment. The chairman of
Chalco’s parent firm said the company
must resolutely put an end to false trade
and fraudulent accounts during its mid-
year conference, according to the group’s
official WeChat account.
Some traders estimated that the Chal-
co unit logs more than 300,000 tonnes
of primary aluminium sales each month
and most had been suspended, although
no actual number has been disclosed of-
ficially. This means large volumes of the
metal are likely to be delivered directly to
manufacturers, bypassing traders.
The move, together with a produc-
tion resumption by aluminium smelters
in the southwestern province of Yunnan,
quickly cooled the physical market. Data
from consultancy Shanghai Metals Mar-
ket show that aluminium premiums —
incentives paid by buyers to traders —
have already fallen from a peak of 400
yuan (RM256.60) per tonne to zero in
five weeks.
Trading opportunities might be reduced
together with lower volatility in spot pre-
miums due to less hoarding in warehous-
es, traders said. But the impact on Chi-
na’s commodities imports is still unclear
as global supply and demand is the dom-
inating factor.
Local subsidies
From Shandong to Zhejiang, some local
governments had been offering trading
firms incentives to register their trades
in the region in order to boost economic
data. Traders would import the commod-
ities from the free trade zone into local
warehouses based on agreements with the
governments.
The payments range from 200 yuan
to 500 yuan a tonne for copper. The in-
centives aren’t delivered immediately, and
are usually handed out only monthly or
quarterly. Some traders are concerned they
might not be able to receive some of the
money because of the probes.
Chinese traders, especially small pri-
vate ones, already suffered from declin-
ing margins from a slow economic recov-
ery. The troubles of copper trading titan
Maike Metals International Ltd left some
hopeful for larger market shares and more
profitable imports. But that resurgence
didn’t come.
The Chinese benchmarks for refined cop-
per have been below the ones on the Lon-
don Metal Exchange for most of this year.
For some other large-sized traders and
their counterparties, the investigations in-
troduced another challenge.They were told
by the governments that so-called back-
to-back transactions, an arrangement in-
volved one trader selling one cargo and
purchase the same good back from an-
other trader after rounds of deals, would
no long be counted as valid sales for ac-
counting purposes because some deals are
clustered without any physical movement
of the materials.
The move, if fully executed, might re-
duce the revenues of these traders and the
credit they could obtain from lenders.
Now, traders said some state firms have
started attempting to acquire processing
capacities so that their trades can be linked
with production facilities.
Read also:
PBOC pledges more financial resources
for private firms
The People’s Bank of China (PBOC) said
it would ensure the private sector received
the extra resources it needed to grow, a pledge
that came after the central bank made a
rare disclosure about meeting with company
executives.
China rally is just an opportunity to sell
for many global funds
US and European long-only fund managers
were net sellers of Chinese and Hong Kong
stocks in July, according to Morgan Stanley,
which is now advising clients to take profits
on the recent rally and has downgraded
China to equal weight.
 f r i d ay A U G U S T 4 , 2 0 2 3 16 TheEdge CEO morning brief

w o r l d

China investment
(Aug 3): Almost a third of Chinese prov- and making it difficult for the Ministry
inces recorded shrinking investment in of Finance to meet its income forecast

shrinks in almost
the first half of the year, the most wide- for the year.
spread decline for the same period since Guangxi and Tianjin were among

one third of
2020, as financially strained local gov- the 10 provinces cited by Fitch Ratings
ernments and companies cut back on where local government-related debt

spending.
Some of the most debt-laden provinc-
es, like Guangxi and Tianjin, had the big-
gest contraction in fixed-asset investment
in the period, according to a Bloomberg
News analysis of reports published by lo-
cal governments.
The decline in investment is weigh-
ing on the economy’s recovery, which
has lost momentum since China’s reo-
pening surge in the first quarter. Weak-
er economic growth, in turn, will make
it difficult for some provinces to service
their debt, resulting in a further pullback
in investment.
Along with Guangxi and Tianjin,
Jiangxi province also reported a dou-
ble-digit contraction in investment in
the first half of the year, according to
the data compiled by Bloomberg News.
Another six provinces saw fixed-asset in-
vestment declining in the period, while
six others reported slower growth than
the nationwide rate of 3.8%. Investment
rose only 1.8% in Fujian and 1.4% in
Chongqing.
Local governments have pulled back
on investment following a slump in land
revenue, a key source of income in many
provinces. In the first half of 2023, in-
come from land sales dropped 21% from
a year earlier, reducing revenue for the
various government fund budgets by 17%
provinces
Bloomberg
Along with Guangxi and
Tianjin, Jiangxi province
also reported a double-
digit contraction in
investment in the first
half of the year, according
to the data compiled
by Bloomberg News.
Reuters
was most at risk of refinancing pressure.
Tianjin’s debt was almost three times
its income last year, according to data
compiled by Bloomberg, while Guangxi’s
was 144%. Yunnan and Guizhou, which
were also highlighted on the Fitch list,
had debt ratios of 172% and 164%, re-
spectively.
The provincial data also showed weak
economic growth in several places. Ji-
angxi’s economy expanded just 2.4% in
the first six months compared to a year
earlier, the slowest pace of all the prov-
inces, while Guangxi grew 2.8%.
Shanghai’s 9.7% expansion was the
fastest, although some of that was likely
due to the low base of comparison with
last year, when the city spent months un-
der a lockdown, which crushed economic
activity. Industrial output in Beijing and
Heilongjiang shrank in the first half, while
retail sales in Ningxia fell.
The financial strain means provinc-
es are curbing fiscal support when their
economies need it the most. The main
budget deficit in 19 provinces shrank in
the first half of the year, while Shanghai
was in surplus. However China’s top of-
ficials have vowed to do more to support
growth and consumption in the econo-
my, but have stopped short of providing
direct fiscal support to consumers and
companies to increase spending.

Alibaba rolls out

HONG KONG (Aug 3): Chinese tech gi- institutions worldwide,” the company said.
ant Alibaba Group’s cloud computing unit However, for companies with more than

open-sourced AI
released two open-sourced artificial intel- 100 million monthly active users, they will
ligence (AI) models on Thursday (Aug 3) need to seek a licence from Alibaba before

model to take on
in a bid to take on Meta Platform. using the two models. Similarly, Meta’s
The Hangzhou-based company said Llama 2 also requires a licence from users

it has open-sourced two large language
models (LLM), a type of AI model, named
Qwen-7B and Qwen-7B-Chat on Thurs-
day in a press release.
Each model has seven billion param-
eters, which is often used to measure the
strength. This marks the first time a big
Chinese tech company has open-sourced
its LLM.
It also comes after Meta unveiled a
similar open-sourced model named Lla-
ma 2 last month, a move that has garnered
widespread interest. Some analysts said
that open-sourced models can chip away
the current market dominance enjoyed by
OpenAI, the developer of ChatGPT, and
Google whose AI models charge users ex-
pensive fees.
Meta’s Llama 2
by Josh Ye
Reuters
Alibaba Cloud announced its LLM
named Tongyi Qianwen in April which
comes with multiple versions featuring
different numbers of parameters. Alibaba
said Qwen-7B and Qwen-7B-Chat are two
small-size versions of the Tongyi Qiawen
which aim at helping small and medium
businesses to start using AI.
The two models’ “code, model weights,
and documentation will be freely accessible
to academics, researchers and commercial
with more than 700 million users.
Alibaba said Tongyi Qianwen has ver-
sions with higher number of parameters
which have not been open-sourced, but
it did not say how many parameters its
biggest model contains.
The biggest version of Meta’s Llama 2
features 70 billion parameters.
China has been trying to catch up to
the US in the field of AI as Beijing en-
courages Chinese companies to quickly
develop homegrown and “controllable”
AI models that can rival those developed
by US companies.
Other than Alibaba, tech giants such as
Tencent Holdings and Huawei have been
aggressively developing their own AI mod-
els in recent months.
 f r i d ay A U G U S T 4 , 2 0 2 3
(Aug 3): Saudi Arabia extended its unilat-
eral oil production cut by another month,
and said it could be prolonged further or
even deepened.
The leader of the Organization of Pe-
troleum Exporting Countries (Opec) will
prolong the cutback of one million bar-
rels a day — launched last month — into
September, according to a statement on
state Saudi Press Agency. That will hold
output at about nine million barrels a day,
the lowest level in several years. Crude fu-
tures jumped.
The measure — which comes on top of
supply curbs Riyadh was already making
with others in the Opec+ producers group
— is intended to “to reinforce the precau-
tionary efforts made by Opec+ countries
with the aim of supporting the stability
and balance of oil markets”.
Oil prices have recovered recently,
reaching a three-month high above US$85
(RM386.99) a barrel earlier this week in
London, as the post-pandemic recovery
in fuel demand, combined with output
curbs by Opec+ countries, begins to tight-
en world crude markets.
(Aug 3): Spot rates for shipping containers
jumped by the most in more than two years,
a sign that a 16-month slump in ocean-freight
costs that helped ease the sting of goods in-
flation is over.
The Drewry World Container Index
composite increased 11.8% to US$1,761
(RM8,018) for a 40-foot container, the
fourth straight advance and biggest week-
on-week percentage gain since June 2021.The
composite — which reflects short-term rates
across eight trade routes connecting Asia, Eu-
rope and the US — had fallen in 15 of the
16 months through June.
The costs for shipping from Shanghai to
Los Angeles reached US$2,322 per 40 ft con-
17 TheEdge CEO morning brief
w o r l d
Saudis extend 1 mil
barrel oil cut, say can
be deepened
by Grant Smith
Bloomberg
But with the economic outlook still cloud-
ed by lacklustre data from China and fears
of recession in the US, Riyadh is showing no
signs of relaxing its grip. Besides, the king-
dom may need prices of as much as US$100
a barrel to cover government spending, ac-
cording to Bloomberg Economics. Brent fu-
tures surged as much as 1.7% after the Saudi
announcement on Thursday (Aug 3).
The decision to extend was in line with
the expectations of traders and analysts sur-
veyed by Bloomberg last week.The kingdom’s
hawkish approach has drawn criticism from
major importing nations, which fear that ris-
ing fuel costs may inflict another inflationary
spike on consumers and thwart central banks
Global shipping costs
sailing higher after
16-month freefall
by Brendan Murray
Bloomberg
tainer unit, an 11.3% gain from the previous
week and fifth straight increase, according
to Drewry. From Shanghai to Rotterdam,
the rate jumped 25% to US$1,620, the most
since January 2021.
as they try to taper interest-rate increases.
The Saudis introduced the extra mil-
lion-barrel cut earlier this summer as a
unilateral move, with most other mem-
bers of the Opec already pumping below
their assigned targets and unlikely to re-
duce supplies further.
It since has been joined by Russia, a
member of the wider Opec+ alliance,
which appears to be finally delivering on
pledges to lower shipments. Moscow had
maintained exports for many months in or-
der to maximise revenue for its war against
Ukraine, but tanker-tracking data show
that flows are starting to come down.
Defending the market has come at a
cost for the Saudis. The kingdom suf-
fered the sharpest downgrade to economic
growth projections by the International
Monetary Fund, which sees the country
expanding by just 1.9% this year, a frac-
tion of its performance in 2022.
The Saudis and Russia will chair an
online review of market conditions by key
Opec+ nations on Friday (Aug 4). The full
23-nation Opec+ alliance is due to meet
in late November.
Shipping rates jumped tenfold to record
highs during the height of the pandemic as
consumers loaded up on household items and
Covid-19 led to clogged logistics networks.
The costs to move containers have since re-
turned to levels reached before the health
crisis, weighed down recently by bloated in-
ventories and subdued consumer spending.
Matson Inc, a Honolulu-base container
carrier that runs an express service from Chi-
na to the US and charges a premium for the
faster route, earlier this week said retailers are
continuing to manage inventories carefully
amid weaker demand.
“Absent an economic ‘hard landing’ in the
US, we continue to expect trade dynamics to
gradually improve for the remainder of the
year as the transpacific marketplace transi-
tions to a more normalized level of consumer
demand and retail inventory stocking levels,”
Matson CEO Matt Cox said in a statement
on Aug 1.
Matson shares this week reached the high-
est level since June 2022.
Last week, closely held French carrier
CMA CGM SA laid out a gloomy outlook
for the industry, especially on more estab-
lished trade lanes. East-West shipping routes
are “under more pressure and dropping faster
than the North-South trade, which remains
pretty dynamic,” CMA CGM chief finance
officer Ramon Fernandez told reporters.
On Friday (Aug 4), Copenhagen-based
AP Moller-Maersk A/S, the world’s No 2
container carrier, is scheduled to release an
interim report for its second quarter results.
 f r i d ay A U G U S T 4 , 2 0 2 3
NEW YORK (Aug 3): Billionaire investor
William Ackman on Wednesday (Aug 2)
said his hedge fund Pershing Square Cap-
ital Management has placed a bet against
US 30-year Treasuries, calling it both a
hedge on the impact of higher long-term
rates on stocks and a good standalone bet.
“We are short in size the 30-year T,” Ack-
man wrote on messaging platform X, for-
merly known as Twitter. He argued that if
long-term inflation is 3% not 2%, the 30-year
Treasury yield could rise to 5.5%, adding
“and it can happen soon”. On Wednesday,
the yield on the 30-year Treasuries climbed
to 4.16%, the highest close of the year.
“We implement these hedges by pur-
chasing options rather than shorting bonds
outright,” Ackman wrote.
Ackman said higher defence costs, energy
transition and the greater bargaining power
of workers all point toward higher inflation.
The Federal Reserve has raised interest rates
aggressively to curb inflation and signalled
last month that it is keeping its options open
after having raised rates by a quarter point
to their highest level since 2001.
Ackman, once one of Wall Street’s most
voluble investors who cemented his reputation
as an activist investor by pushing for changes
Singapore bank
DBS’ 2Q profit
beats estimates;
expects record year
by Yantoultra Ngui
Reuters
(Aug 3): Singapore’s biggest bank DBS
Group said on Thursday (Aug 3) its sec-
ond-quarter profit jumped a forecast-beating
48% to a new record as higher interest rates
helped drive income growth, and forecast
growth in its net interest margin (NIM).
DBS said the outlook for NIM, a key
indicator of profitability, had improved due
to unexpected US interest rate increases
in the second half and a rise in the Hong
Kong Interbank Offered Rate.
It looked forward to continued support
from one-fifth of its commercial book yet
to reprice and lower deposit repricing pres-
sure than it had expected.
DBS shares rose 0.5% by midday onThurs-
day amid a slightly lower broader market.
DBS’ views followed that of smaller peer
United Overseas Bank, which last Thurs-
day said it had a more positive outlook
for NIM following the latest US rate rise
18 TheEdge CEO morning brief
w o r l d
Billionaire
investor Ackman
says he is shorting
30-year Treasuries
by Svea Herbst-Bayliss
Reuters
at companies ranging from Chipotle Mexican
Grill to railroad Canadian Pacific, has recent-
ly used the social media platform to opine
on economic policy and presidential politics.
On Wednesday, he wrote: “There are few
macro investments that still offer reasonably
probable asymmetric payoffs and this is one
of them.” In 2020 Ackman was among a
small number of investors to call the Cov-
id-19 crisis early and put on a hedge that
earned his fund proceeds of US$2.6 bil-
lion (RM11.84 billion) early in the year.
“The best hedges are the ones you would
invest in anyway even if you didn’t need the
hedge,” Ackman wrote. “This fits that bill,
after it chalked up a 27% increase in sec-
ond-quarter earnings.
Besides higher interest rates, Singapore
banks have also benefitted from strong inflow
of wealth amid global uncertainty due to the
city-state’s status as a financial safe-haven.
Oversea-Chinese Banking Corp is due to
announce its second-quarter results on Friday.
DBS, which is also Southeast Asia’s
largest lender by assets, expects another
record year, projecting full-year return on
equity at above 17%.
“We think we will have a record year,”
DBS chief executive officer Piyush Gupta
told reporters in a briefing after the bank’s
earnings results.
“We do benefit from interest rate
hikes,” he said. “Our focus on digitising,
on cash management, on both the cor-
porate and consumer side and on wealth
is really paying off.”
DBS said April-June net profit hit a quar-
terly record high S$2.69 billion (RM12.3
billion) from S$1.82 billion a year earlier.
This exceeded the average estimate of
S$2.41 billion from four analysts surveyed
by Refinitiv.
DBS’ NIM rose for sixth consecutive
quarter to 2.16% during the quarter from
1.58% a year earlier.
Read also: DBS CEO sees more inflows
to Singapore from China doldrums
reuters
Billionaire
investor William
Ackman
and also I think we need the hedge.”
He remarks on X were made after rat-
ing agency Fitch on Tuesday downgraded
the US government’s top credit rating, a
move that drew an angry response from the
White House and surprised investors, com-
ing despite the resolution of the debt ceil-
ing crisis two months ago. Ackman didn’t
address the Fitch move in his posting.
A spokesman for Ackman didn’t respond
to a Reuters request for additional comment.
Traders’ immediate response to the
Fitch downgrade was to embark on a
safe-haven push out of stocks and into
government bonds and the US dollar.
Warren Buffett
says not worried
about Fitch’s US
downgrade — CNBC
by Anirudh Saligrama
Reuters
BENGALURU (Aug 3):Warren Buf-
fett said he is not worried about the
recent US downgrade by Fitch, but
noted the concerns are valid, CNBC
reported on Thursday (Aug 3), cit-
ing comments by the billionaire and
chairman of Berkshire Hathaway Inc.
Berkshire bought US$10 billion
(RM45.6 billion) in US Treasuries
on Monday, the CNBC report said,
citing Buffett.
“The only question for next Mon-
day is whether we will buy US$10
billion in 3-month or 6-month,” Buf-
fett said.
Read also: Yellen: Fitch down-
grade ‘entirely unwarranted’ amid
US economy’s strength
 f r i d ay A U G U S T 4 , 2 0 2 3
NEW DELHI (Aug 3): India on Thurs-
day (Aug 3) said it will impose a licens-
ing requirement for imports of laptops,
tablets and personal computers with im-
mediate effect, a move that could hit hard
the likes of Apple, Dell and Samsung and
force them to boost local manufacturing.
Current regulations in India allow com-
panies to import laptops freely, but the new
rule mandates a special licence for these
products similar to restrictions India im-
posed in 2020 for inbound TV shipments.
Industry executives said a licensing re-
gime would mean prolonged wait times for
each new model they launch, and would
come just ahead of a festive season in In-
dia when sales typically surge.
The government notification gave no
reason for the move, but Prime Minister
Narendra Modi’s government has been
promoting local manufacturing and dis-
couraging imports under his “Make in
India” plan.
India’s electronics imports, which in-
clude laptops, tablets and personal com-
puters, stood at US$19.7 billion (RM89.8
billion) in the April to June period, up
6.25% year-on-year.
(Aug 3): Qualcomm Inc, the largest maker
of smartphone processors, fell 8.7% during
premarket trading in New York on Thurs-
day (Aug 3) after giving a tepid sales fore-
cast for the current quarter, indicating that
demand for mobile devices remains weak.
Sales will be US$8.1 billion (RM36.87
billion) to US$8.9 billion in the fis-
cal fourth quarter, Qualcomm said on
Wednesday (Aug 2) in a statement. The
midpoint of that range is well below the
US$8.79 billion average analyst estimate.
The outlook renews concerns about
a smartphone industry in the grips of its
worst downturn in years. Qualcomm and
its chipmaking peers saw a steep drop in
orders from handset manufacturers, which
19 TheEdge CEO morning brief
w o r l d
India mandates
licensing for
laptop, tablet
imports in blow
to Apple, Dell
by Aftab Ahmed & Munsif Vengattil
Reuters
Laptops, tablets and personal comput-
ers account for about 1.5% of India’s total
annual imports, with nearly half of those
from China, according to government data.
Many of Apple’s iPads and Dell’s lap-
tops are imported into the country, rather
than being manufactured locally.
The intent seems to be “substitution of
certain goods that are imported heavily”, said
Emkay Global economist Madhavi Arora.
Apple, Dell and Samsung did not imme-
diately respond to Reuters’ requests for com-
ment.They, along with Acer, LG Electron-
Qualcomm falls
as smartphone
slump drags on,
job cuts loom
by Ian King
Bloomberg
ics, Lenovo and HP Inc, are some of the
key sellers of laptops in the Indian market.
The move is expected to benefit con-
tract manufacturers like Dixon Technol-
ogies, whose shares rose more than 7%
on the news.
“The move’s spirit is to push manu-
facturing to India. It’s not a nudge, it’s a
push,” said Ali Akhtar Jafri, former director
general at electronics industry body MAIT.
India’s government has extended a
deadline for companies to apply for a US$2
billion incentive scheme to attract big-tick-
et investments in IT hardware manufac-
turing, which covers products like laptops,
tablets, personal computers and servers.
The scheme is key to India’s ambitions
to become a powerhouse in the global elec-
tronics supply chain, with the country tar-
geting annual production worth US$300
billion by 2026.
The country has imposed high tariffs in
the past on products like mobile phones
to catalyse domestic output.
Read also: Apple and Amazon results pose
tech rally’s toughest hurdle yet
suddenly had more inventory than they
needed.The reduction in spending on com-
ponents for phones and other electronics
will drag on until the end of the year, Qual-
comm executives said on a conference call.
The company is taking steps to reduce
its expenses, Qualcomm said, even as it in-
vests in new products that will capitalise on
the spread of artificial intelligence to smart-
phones. Already, it’s been reducing head-
count. Last quarter, Qualcomm recorded
US$285 million in restructuring charges,
mostly from severance payments, and ex-
pects to conduct more workforce reductions.
“We are taking a conservative view of the
market and will be proactively taking additional
cost actions to ensure Qualcomm is well-po-
sitioned to deliver maximum value for stock-
holders in an uncertain environment,” chief ex-
ecutive officer Cristiano Amon said on the call.
The shares fell as low as US$118.71 in
extended trading on Wednesday following
the earnings announcement. Before the
report, Qualcomm’s stock had increased
about 18% this year.That underperformed
a broader rally for the chip industry, with
the Philadelphia Stock Exchange Semicon-
ductor Index gaining about 47% in 2023.
Minus certain items, profit will be
US$1.80 to US$2 a share in the current
period, Qualcomm said. That compares
with a US$1.94 projection.
Read the full story
 f r i d ay A U G U S T 4 , 2 0 2 3
TOKYO (Aug 3): The benchmark 10-year
Japanese government bond yield hit a fresh
nine-year peak on Thursday (Aug 3) before
pulling back after the Bank of Japan again
intervened to cool the speed of the rise.
The central bank offered to buy ¥300
billion (RM9.55 billion) of bonds with
5-10 years left to maturity and ¥100 bil-
lion of paper maturing in 3-5 years at
0400 GMT, after the 10-year yield rose to
0.655% for the first time since April 2014.
The BOJ had also conducted an un-
scheduled ¥300 billion purchase of bonds
with 5-10 years to maturity on Monday,
when the yield climbed to 0.605% for the
first time since June of 2014.
The benchmark yield was last one basis
point (bp) higher at 0.635%.
Investors and the BOJ have played a cat-
and-mouse game all week, feeling out the
appropriate speed for the 10-year yield’s
ascent after the central bank took the un-
usual step on Friday of leaving the official
ceiling at 0.5% under yield curve control
(YCC), but shifting the yield for its regular
purchase operations to 1% — a de-facto
doubling of the cap.
“The BOJ of course made the YCC
framework more flexible, but it is try-
BOJ makes bold shift as yen risks grow too big to ignore
TOKYO (Aug 3): The Bank of Japan’s
surprise decision last week to raise a cap
on interest rates was partly driven by pol-
icymakers’ growing worries ultra-loose
monetary settings would spark a repeat
of the bruising yen selloff that the econ-
omy saw last year.
The tweak to the BOJ’s bond yield
curve control (YCC) was the result of
brainstorming sessions that came to a
head in May, say sources familiar with
the decision, just over a month after Ka-
zuo Ueda succeeded his dovish predeces-
sor Haruhiko Kuroda as the bank’s chief.
Pressure from Prime Minister Fumio
Kishida’s government also played a part,
suggesting that future policy tweaks will
be driven not just by the inflation out-
look but market moves — notably the
yen, the sources said.
“Yen moves have been and will remain
a very important factor shaping Japan’s
monetary policy,” one of them said. “The
BOJ made that point clear this time in a
way unseen in the past.”
The BOJ’s decision shook markets on
Friday (July 28) and contrasted sharply
with Ueda’s more cautious comments
in recent months about the dangers of
retreating too quickly from accommo-
dative Kuroda-era policies.
20 TheEdge CEO morning brief
w o r l d
BOJ conducts
emergency bond
buying as yields
push to fresh
nine-year peak
by Kevin Buckland
Reuters
bloomberg
by Leika Kihara
Reuters
The focus on yen moves also means
policymakers are now prioritising dealing
with the side-effects of decades of mas-
sive monetary stimulus, such as Japan’s
yawning interest rate gap with economic
peers that has pummelled its currency.
“Deep inside, Ueda probably feels
the role of YCC has ended and is wor-
ried about its side-effects,” said an offi-
cial who has known Ueda for decades.
“There’s also a small but probable risk
of inflation overshooting in Japan, which
gave the BOJ reason to act.”
This account of the BOJ’s decision
last week is based on conversations with
over a dozen government officials, Kishi-
da administration aides and sources with
direct knowledge of the central bank’s
deliberations.
Most spoke on condition of anonym-
ity as they were not authorised to speak
publicly, or declined to comment on re-
cord due to the sensitivity of the matter.
Last week’s move means the BOJ
will likely refrain from further tweaks
to YCC unless inflation perks up much
faster than expected and keeps the 10-
year yield elevated near the new 1%
ing to keep moves gradual given the
large global uncertainties, particularly
for the US economy and interest rates,”
said Masayuki Kichikawa, chief macro
strategist at Sumitomo Mitsui DS Asset
Management.
“If market moves continue to be too
fast, the BOJ will continue to intervene.”
Investors and analysts had expect-
ed the BOJ might increase the purchase
amounts at its fixed-rate buying operations
on Wednesday, and took the decision to
leave them unchanged as a signal of ad-
ditional upside for yields.
Other JGB tenors, whose yields had re-
newed multi-month highs earlier on Thurs-
day, eased from those levels.
The 30-year yield, which had risen as
high as 1.57%, was last at 1.56%, just 0.5
bp higher than Wednesday’s close.
The 20-year yield had risen to 1.305%
but was last at 1.295%, a 1.5 bps increase
from the previous session.
The five-year yield rose 1.5 basis points
to 0.2%, after earlier pushing to 0.21%.
The two-year yield, which is more firm-
ly anchored by the BOJ’s negative short-
term interest rate policy, remained 0.5 bp
higher at 0.015%.
ceiling, the sources said.
More substantial moves toward pol-
icy normalisation, such as interest rate
hikes, will come after close scrutiny of
data for clues on next year’s wage and
inflation outlook, they said.
“It’s clear the direction the BOJ is taking
is towards an exit from easy policy,” a third
source said. “But it will take time, perhaps
the entire five-year term for Ueda.”
New priorities
The BOJ’s policy decision last week sig-
nalled to investors that it would now al-
low the 10-year government bond yield
to move closer to 1% before it intervenes.
UnderYCC, first introduced in 2016,
the central bank seeks to rev up stagnant
consumer demand by keeping credit ex-
tremely ample, specifically by guiding
short-term rates at -0.1% and the 10-
year bond yield around 0%.
That policy runs smoothly when infla-
tion and economic growth are subdued,
but hits trouble when prices creep up, as
they have over the past year, putting upward
pressure on the 10-year bond yield and
forcing the BOJ to ramp up bond buying.
Read the full story
 f r i d ay A U G U S T 4 , 2 0 2 3
BENGALURU (Aug 3): Mahindra and
Mahindra has raised US$145 million
(RM660.8 million) from Temasek for
its electric vehicle unit at a valuation
of up to 805.8 billion rupees, the latest
fundraising by the Indian automaker as
it looks to ramp up EV sales.
Temasek will take up to a 3% stake
in the company which last year raised
up to US$250 million from British In-
ternational Investments (BII) at a val-
uation of as much as US$9.1 billion.
The automaker is aggressively trying
to lift the share of its electric SUVs in a
market that is dominated by larger rival
Tata Motors, as the government pushes
to grow EV sales to 30% by 2030 from
less than 2% on Thursday (Aug 3).
Mahindra said it expects electric
models to make up between 20% and
30% of its total SUV sales by March
2030 — pushing back an outlook it gave
last year of meeting that target by 2027.
“Temasek’s investment is a step for-
ward, as we execute our strategy towards
(Aug 3): BMW AG is stepping up spend-
ing on its electric-car rollout after the lux-
ury-car maker’s battery-vehicle deliveries
more than doubled during the first half
of the year.
The level of buyer interest in EVs
means BMW is “investing more than
originally planned in the global ramp-
up of e-mobility,” chief financial officer
Walter Mertl said Thursday (Aug 3), add-
ing that investments in batteries for the
current and next generation of EVs are
“massive.”
During the second quarter, develop-
ment spending jumped by nearly a fifth
to €1.84 billion (RM9.1 billion).
Battery-powered car sales made up
about 13% of group deliveries during the
first half led by demand for models like
the i4 sedan and iX3 SUV. Next year,
the proportion of EV deliveries is set
to rise to at least one-fifth, BMW said.
Incumbent carmakers are battling
to catch up to Tesla Inc, which is
pulling away in the global EV sales
race following aggressive price cuts.
In China, the most important market
for Germany’s Volkswagen, BMW and
Mercedes-Benz, local manufacturers
like BYD Co are increasingly dominat-
ing in EV sales.
BMW kept global prices stable for
its pure-electric models, chief executive
officer Oliver Zipse said in a call with
reporters, adding that the company is
currently “rather content” with its EV
pricing in China.
All of BMW’s EV variants are turning
21 TheEdge CEO morning brief
w o r l d
Mahindra’s EV
future leadership in electric SUVs,” Ma-
hindra CEO Anish Shah said in a press
unit raises funds
release.
India’s EV market is small but grow-
from Temasek
ing, attracting interest from global play-
ers including Tesla.
at US$9.8 bil
The world’s biggest EV maker is in
talks with the government to invest in a
valuation
potential factory that would build low-
cost EVs, targeting a price of around
US$24,000. Analysts say this could pose
stiff competition for local automakers.
by Chris Thomas & Aditi Shah Rival Tata Motors in 2021 raised
Reuters US$1 billion from TPG’s Rise Climate
Fund at a valuation of about $9.1 bil-
lion.
Mahindra had been in talks with
global investors, including green funds
and private equity players, for nearly a
year to raise between US$250 million
and US$500 million to accelerate its
EV plans, Reuters has reported.
Mahindra shares fell as much as 2.5%
after the deal and were last trading down
1.2%.
Reuters
tric sibling, the i5, which is set to help
BMW boosts
boost volumes during the second half of
the year. The shares fell as much as 3.1%
electric car
in Frankfurt trading.
While demand for its luxury cars re-
spending to
mains strong, BMW warned Tuesday that
increased costs for parts are reducing its
catch up with
cash flow while also citing logistics issues
as a constraint. The company will incur
Tesla
higher costs from increased inventories to
ensure meeting customer demand, Mertl
said Thursday in speech notes.
Several carmakers face new logistics
by Wilfried Eckl-Dorna constraints after a shortage of semicon-
Bloomberg ductors eased, allowing them to produce
more vehicles. Volkswagen AG lowered its
delivery outlook last week as shortages
of trains and truck drivers left finished
vehicles stranded at factories. Porsche
AG had to restrict sales of its electric
Taycan after grappling with sourcing
certain components.
BMW group earnings before
interest and tax increased 28% to
€4.34 billion compared to the second
quarter of last year, beating average
analyst estimates of a €4.23 billion re-
sult. Automotive returns rose to 9.2%.
Reuters
Read also:
in a profit, which will increase as the car-
maker has now started to offer pure-elec- BMW reports solid revenue growth in
tric variants in its higher 7-series and first half
5-series segment, Mertl said.
BMW also increased its car sales fore-
cast for 2023 to now expect solid gains Tesla’s China-made EV sales slump 31%
with the new 5-Series sedan and its elec- m-o-m in July
 f r i d ay A U G U S T 4 , 2 0 2 3
(Aug 3): Local-currency investors from
emerging Asian nations aren’t shying away
from hedging their overseas investments even
as the cost of protection rises to the highest in
14 years amid concern dollar weakness may
erode the value of their portfolios.
The aggregate hedging cost for funds
from seven emerging-Asian economies has
risen to the highest since at least 2009,
according to data compiled by Bloomberg,
mainly due to the divergence between their
monetary policies and those of the US.
And while the prospect of a Federal Re-
serve rate pause ensures that gap doesn’t
widen further, increasing bearishness to-
ward the dollar is prompting investors to
safeguard their holdings.
“Local funds will increase hedging of
their dollar investments after the Dollar
Index slumped past the 100.0 level in July,
with hedging interest to also pick up on con-
cerns that a further gap lower in the dollar
will incur an even larger cost of hedging,”
said Christopher Wong, a strategist at Over-
sea-Chinese Banking Corp in Singapore.
(Aug 3): The UK’s biggest banks stand to
gain billions this year from hedging against
rising rates.
Structural hedges, the balance sheet
exercise which reduces banks’ sensitivi-
ty to interest rate moves, were worth well
over £1 billion (RM5.9 billion) at each
of Britain’s top lenders in the first half of
2023. At Barclays plc, hedging income for
2023 is expected to surge more than 60%
to £3.6 billion.
Finance chiefs this quarter confirmed
that the hedge, which could also be de-
scribed as a bank’s fixed-income portfolio,
will be a major contributor to earnings as
swap contracts reprice at higher interest
rates. This trend is widely expected to help
lenders offset income hits from tougher
mortgage competition and pressure to
pass on a greater share of rate hikes to
customers.
This year’s collapse of US regional
lenders including Silicon Valley Bank has
underscored the importance of lenders’
asset and liability management, which
can come under particular pressure
when depositors withdraw huge sums
or switch to higher-yielding savings ac-
counts.
Lenders therefore buy financial de-
rivatives with the effect that rate moves
don’t impact interest income as fast as they
would without a hedge.
“The reason that we have the struc-
tural hedge is to smooth the income of
our banking book businesses over time,”
Barclays chief financial officer Anna Cross
told analysts last week.
22 TheEdge CEO morning brief
w o r l d
A 14-year high
Asian currencies rose 1.5% versus the
dollar in July as they snapped three straight
hedging cost is
months of losses, according to a Bloomberg
Index. Meanwhile, asset managers boost-
hardly scaring
ed their short dollar bets to a record level
in July, while hedge funds also flipped to
Asian investors
a net short position on the US currency
in the same month, Commodity Futures
Trading Commission data show.
“If investors are bearish on the dollar
by Marcus Wong until the year end, then of course hedg-
Bloomberg ing now would be the best strategy,” said
Stephen Chiu, a currency and rates strat-
Bloomberg egist at Bloomberg Intelligence. Hedging
costs may remain elevated as long as the
Fed doesn’t appear to entertain any rate
cuts in the near-term, he said.
The aggregate hedging cost is the dif-
ference between the three-month onshore
forward implied yield and the equivalent
US secured overnight refinancing rate. Lo-
cal forward implied yield moves relative
to equivalent US rates have made it less
favorable for emerging Asian investors to
offer local currency in exchange for dollars.
UK banks set to
said Justin Fox, group treasurer at Virgin
Money UK plc. “In reality treasury is a
reap billions from
critical business partner to the commer-
cial teams, helping balance risk and reward
hedging against
pricing strategies.”
The number of Treasury staff who work
rising interest
on the structural hedge can vary from 50 to
500, depending on the bank’s size, with asset
rates
and liability management analysts and exe-
cution teams mostly involved. Decisions on
the hedge are also made at banks’ risk com-
mittees which typically include board mem-
by Leonard Kehnscherper bers, the finance chief and chief executive.
Bloomberg
Caterpillar or dynamic
reuters There are two main approaches.
The first one — called ‘caterpillar’ —
doesn’t see a bank take a view on future
interest rate moves, while the other, ‘dy-
namic’ approach is employed by banks that
make calls on the market and time pur-
chases of swap contracts accordingly.While
Barclays and NatWest follow the ‘cater-
pillar’ approach, Lloyds Banking Group
plc’s treasurers are known for applying a
‘dynamic’ one.
One of the most profitable moves in Brit-
ish banking was overseen by Antonio Hor-
Ivory towers ta-Osorio, who was chief executive officer
The hedge is implemented by treasury of Lloyds between 2011 and 2021. When
teams, one of whose main responsibilities Horta-Osorio took over at the then-partly
is to secure banks’ wholesale funding.They state-owned lender, he repositioned Lloyds’
have a reputation for being more academic hedge which allowed the bank to earn bil-
than a typical trader. lions from rightly predicting that rates would
“I’ve heard the term ‘ivory tower’ a cou- stay low for a longer period.
ple of times in my career, seeing treasury
as a place for technical discussions that feel
disconnected with the rest of the bank,” Read the full story
 f r i d ay A U G U S T 4 , 2 0 2 3
(Aug 3): CK Hutchison Holdings Ltd
warned of global risks from inflation to
geopolitics and climate change as the con-
glomerate founded by Hong Kong billion-
aire Li Ka-shing posted its biggest drop in
profit since 2015.
The group’s net income tumbled 41%
from a year earlier to HK$11.2 billion
(RM6.53 billion) in the six months through
June, it said on Thursday (Aug 3), amid a
strong dollar and higher operating costs.
Revenue fell to HK$223.9 billion from
HK$229.6 billion a year earlier. The con-
glomerate, now led by Victor Li, announced
an interim dividend of HK$0.756 per share,
compared with HK$0.84 a year before.
The firm warned that the outlook for
the rest of the year is clouded. While Chi-
na’s economy bounced back strongly in
the first quarter after the country reopened
from three years of Covid zero, growth is
losing momentum amid a property market
slump, weakening consumption and falling
exports. Elsewhere, Europe’s outlook re-
mains gloomy as inflation pressures persist.
“Consumer and business confidence in
particular may continue to soften as the
longer term effects of higher interest rates
and more constrained credit environments
weigh on sentiment,” chairman Li said in
the earnings release. “Although energy and
commodity prices have eased from their
2022 highs, they remain volatile and the
risks of supply side driven spikes cannot
be ruled out. Further, risks associated with
Viu ramps up Asian expansion after Canal+ deal
(Aug 3): Viu, the streaming unit of Hong
Kong billionaire Richard Li’s business em-
pire, is considering an Asian expansion and
creating more premium content through a
partnership with Canal+ that could see the
French broadcaster eventually invest US$300
million (RM1.37 billion) in the firm.
The platform is assessing the potential
of new markets across Asia, as well as the
possibility of utilising Canal+’s extensive
presence in Europe to strengthen its dis-
tribution networks, chief executive officer
(CEO) Janice Lee said in an interview,
without identifying specific countries.
The collaboration could also provide
opportunities for Viu to adapt some of
Canal+’s biggest offerings for Asian au-
diences, Lee said. Some of the French
company’s best-known titles include the
Paddington films and the crime thriller
series The Brigade.
One of the largest streaming plat-
forms in Southeast Asia, the firm set up
by Li Ka-shing’s younger son Richard
Li in 2015 wants to accelerate growth
23 TheEdge CEO morning brief
w o r l d
CK Hutchison
warns economic
risks building as
profit slumps
by Shirley Zhao & Shawna Kwan
Bloomberg
climate change may be intensifying with
impacts which are increasingly difficult to
anticipate.”
Ports, telecom
The company’s ports business was hit
by stagnant global demand for consum-
er goods, weak Chinese exports to major
Western markets and elevated inventories
in the US and Europe. That overstocking
is likely to continue to hinder the recovery
in cargo demand in the second half, but
volumes are expected to increase in late
2023 as global demand rebounds, it said.
The telecom unit saw a 20% drop in
earnings before interest, taxes, deprecia-
tion, and amortisation (Ebitda), partly due
to foreign currency revaluation of some
monetary assets. But CK Hutchison also
said it faces rising energy costs and higher
capital requirements to expand existing
mobile networks especially in Europe.
by Shirley Zhao
Bloomberg
after reporting its first annual profit last
year. A deal in June saw Canal+, part of
billionaire Vincent Bollore’s media con-
glomerate Vivendi SE, pay US$200 million
for a 26.1% stake in Viu. The investment
could swell to US$300 million if certain
conditions are met and the French firm
could then increase its holding to 51%.
“We want to look at growing ourselves
in our markets more rapidly, but also con-
sider strategic partners who can bring and
reinforce what we want to achieve,” said
Lee. With the backing of Canal+ and Viu’s
parent PCCW Ltd, “we are set up well for
the next stage of growth,” she said.
Global streaming services are increasingly
looking to expand in Asia as growth stalls in
saturated Western markets. Southeast Asia is
particularly attractive, with its increasingly
wealthy population of 675 million pushing
the value of the streaming market to US$3.2
billion this year, according to consultancy
CK Hutchison has been reducing its
exposure in the region’s telecommunica-
tions sector. In June, its Britain-based car-
rier Three UK agreed to merge with Voda-
fone Group plc’s unit, in a deal that will
create the biggest wireless company in the
country if it gets approval from authorities.
Vodafone will have the right to acquire the
entire merged business after three years, if
it reaches a value of at least £16.5 billion
(RM95.11 billion) including debt.
The conglomerate also cut holdings in its
Italian mobile and fixed network business,
forming a partnership with Swedish private
equity group EQT AB, which will see CK
Hutchison hold 40% of a newly formed firm
that will own and operate the business.
Retail was a rare bright spot in the earn-
ings report, posting a 17% increase in Ebit-
da. That was driven by gains in Europe
and Asia, particularly the robust recovery
in demand for health and beauty prod-
ucts in mainland China at the start of the
year, it said.
CK Hutchison’s sister company CK As-
set Holdings Ltd, which focuses on real
estate development, reported HK$10.3
billion in net income in the first half, com-
pared with HK$12.9 billion in the year
before, according to a separate filing on
Thursday. Property sales revenue slumped
by almost 60% in the period. The interest
rate environment may cloud the outlook
for the business and Hong Kong’s office
leasing market remains under pressure.
Media Partners Asia, which predicts fur-
ther growth to US$5 billion by 2028.
But Viu’s regional dominance faces
growing competition and the strategy it
deployed to build its presence — supple-
menting paid subscriptions with a free,
advertising-supported tier — has become
commonplace. Smaller rivals such as In-
donesia-based Vidio and Tencent Hold-
ings Ltd-backed WeTV operate tiered
subscriptions, while international names
like Netflix Inc and Walt Disney Co are
doubling down on investment in premium
content, from Korean dramas to local-lan-
guage shows targeting specific markets.
Critical mass
The deal with Viu is also a boon for Ca-
nal+, which will expand its footprint in Asia
beyond its current presence in justVietnam
and Myanmar, Canal+ International CEO
Jacques du Puy said in an interview.
Read the full story
 f r i d ay A U G U S T 4 , 2 0 2 3 24 TheEdge CEO morning brief

w o r l d

news In brief

Hong Kong’s new crypto regime awards

Vote for Thai PM postponed, uncertainty prolonged first exchange licence to HashKey
BANGKOK (Aug 3): Thailand’s house speaker said on Thursday (Aug 3) that a (Aug 3): The first licence under Hong Kong’s
parliamentary vote for the next prime minister would be postponed, prolonging a political new crypto regime went to HashKey
deadlock that has raised questions about stability since a May general election. Many Exchange, legalising the retail trading of
voters in the May 14 vote rejected nearly a decade of rule by the military and a military- tokens in the city as officials seek to foster
backed government but the progressive party that won, Move Forward, has been blocked a global hub for the digital-asset sector.
from taking power because of conservative opponents and a nominated upper house. HashKey will be able to “expand its business
Parliamentary speaker Wan Muhamad Noor Matha said the vote for a prime minister, scope from serving professional investors
which had been scheduled for Friday, could only be held after the Constitutional Court to retail users” after receiving an upgrade of
rules on a appeal by Move Forward against the thwarting of its bid to appoint a premier. its existing licences, the company said in a
“We have to wait for the constitutional court to make its decision on August 16 before Thursday (Aug 3) statement. A spokesperson
determining when we will have the vote again,” Wan Noor told reporters. The Thai baht at the Securities and Futures Commission
has weakened this week on the political uncertainty. Pheu Thai, the latest incarnation (SFC) said the licensee “shall at all times be
of a party founded by former telecommunications tycoon Thaksin Shinawatra, came in compliance with the requirements” of the
second in the polls and is hoping to get its candidate elected prime minister to form Guidelines for Virtual Asset Trading Platform
a government. After the election Move Forward, along with Pheu Thai and six other Operators, which went live in June. Hong
parties, forged an alliance to try to form a government. But Move Forward’s leader, Kong started a mandatory crypto framework
Pita Limjaroenrat, was twice blocked by parliament from becoming prime minister. On this summer in an effort to restore its image
Wednesday, Pheu Thai said it would seek to form a new alliance without Move Forward as a cutting-edge financial centre. The pivot
and would nominate real estate tycoon Srettha Thavisin for the premiership. — Reuters stirred substantial interest and contrasts
with a US digital-asset clampdown, but the
city has yet to win big investments from an
Morgan Stanley upgrades India to reuters industry chastened by a market rout last year.
‘overweight’, terms it top pick among HashKey said it has partnered with Standard
emerging markets Chartered plc to provide fiat currency deposit
BENGALURU (Aug 3): Morgan Stanley and withdrawal services. The company also
has upgraded its view on Indian markets announced the launch of its virtual asset over-
to “overweight” from “equal weight”, the-counter trading service. — Bloomberg
citing easing valuations as compared
to October 2022, when the global Read the full story
brokerage identified the onset of a new
bull market in Asian and emerging market France’s AFP sues Musk’s X social Decline in euro zone business
equities. India is now the top ranked, media, cites refusal to discuss activity accelerated in July
most-preferred market among emerging payment for news LONDON (Aug 3): The downturn in euro zone
markets (EMs), rising from the sixth spot, (Aug 3): Agence France-Presse (AFP) business activity worsened more than initially
due to supportive foreign inflows, macro said on Wednesday (Aug 2) it filed thought in July as the slump in manufacturing
stability and positive earnings outlook, the a lawsuit in Paris against Elon was accompanied by a further slowing of
brokerage said in a note late Wednesday Musk’s X social media platform, growth in the bloc’s dominant services
(Aug 2). “We see a secular trend towards formerly known as Twitter, accusing industry, a survey showed. HCOB’s final
sustained superior earnings per share it of failing to discuss potential Composite Purchasing Managers’ Index (PMI),
(EPS) growth versus EM over the cycle,” payment for the distribution of compiled by S&P Global and seen as a good
Morgan Stanley analysts said, adding the news agency’s content. France gauge of overall economic health, dropped to
that a young demographic profile is in 2019 enacted a copyright rule an eight-month low of 48.6 in July from June’s
supporting equity inflows. Sectorally, dubbed “neighbouring rights” that 49.9. That was below the 50 mark separating
the brokerage remains overweight on compels large online platforms to growth from contraction for a second straight
financials, consumer discretionary and open talks with publishers seeking month and shy of a preliminary estimate for
industrial segments in India, and has remuneration for news. “Agence 48.9. “The final euro zone PMIs confirmed
an “add” rating on Larsen & Toubro and France-Presse has expressed its that economic conditions deteriorated in
Maruti Suzuki India in its Asia Pacific concerns over the clear refusal from July, with the composite index consistent
focus and Global Emerging Markets lists. Twitter (recently rebranded as ‘X’) with GDP declining slightly,” said Franziska
The situation in Indian markets is in stark to enter into discussions regarding Palmas, senior Europe economist at Capital
contrast to that in China, with the country the implementation of neighbouring Economics. Tuesday’s manufacturing PMI
at the start of a long-wave boom at the rights for the press,” the news agency showed factory activity across the euro zone
same time as China may be ending one, said in a statement. Musk criticised contracted in July at the fastest pace since
it said. “We think returning India to an AFP’s move in an X social media post. Covid-19 was cementing its grip on the world
“overweight” rating and downgrading “This is bizarre. They want us to pay and Wednesday’s services PMI showed
China to “equal weight” is warranted,” *them* for traffic to their site where slowing growth in the industry. The headline
analysts said, referring to the Indian they make advertising revenue and we services index fell to 50.9 from 52.0, coming in
markets’ outperformance over China as a don’t!?” he said. X did not respond to a under the preliminary 51.1 reading. — Reuters
sign of a structural breakout in favour of request for comment. — Reuters
India. — Reuters Read the full story
 f r i d ay A U G U S T 4 , 2 0 2 3
Scientists say they’ve detected a huge
methane leak in Kazakhstan
(Aug 3): A natural gas well blowout in a
remote region in Kazakhstan has triggered
a huge methane leak, scientists say, show-
ing the risks of prospecting for fossil fuels.
Satellites observed giant clouds of meth-
ane spewing from the site at least nine
times in the month leading up to July 23,
French geoanalytics firm Kayrros SAS
said. Its findings were broadly corrobo-
rated by scientists at SRON Netherlands
Institute for Space Research.
The Kazakh explorer developing the
well, Almaty-based Buzachi Neft LLP,
confirmed in an emailed statement Aug
1 there was an accident at exploration well
No 303 in the Karaturun Vostochny gas
field in eastern Kazakhstan on June 9, and
said the site has been burning continuous-
ly since then. However, it claimed satellite
images likely show hot vapour clouds with
minimal traces of the greenhouse gas.
The Kazakhstan Ministry of Energy
didn’t respond to a request for comment.
Scientists who use satellite observa-
tions to track greenhouse gas emissions
disagreed with Buzachi Neft’s assessment.
“It is extremely unlikely to mistake wa-
ter vapour for methane on multiple images
captured by two hyperspectral satellites,
whose very high spectral resolution leaves
little doubt about the nature of the gas
observed,” Kayrros said in a statement.
Hyperspectral satellites collect data across
the electromagnetic spectrum.
At least two satellites — the European
Space Agency’s Sentinel-5P and the Italian
Space Agency’s Prisma — have observed
the plumes. Sentinel-5P’s spectrometer was
designed specifically to detect methane.
25 TheEdge CEO morning brief
w o r l d
by Aaron Clark & Nariman Gizitdinov
Bloomberg
The Kazakh explorer
developing the well,
Almaty-based Buzachi
Neft LLP, confirmed in
an emailed statement Aug
1 there was an accident
at exploration well No
303 in the Karaturun
Vostochny gas field in
eastern Kazakhstan on
June 9, and said the
site has been burning
continuously since then.
Although Buzachi Neft said that the
fire was combusting the leaking gas, sat-
ellites have previously observed significant
methane plumes coming from blowouts
and even dedicated flare stacks that mix
the fuel with oxygen with the aim of com-
busting the gas into carbon dioxide.
Kayrros estimated emission rates from
the site ranging between 35 and 107 metric
tonnes of methane per hour based on the
satellite detections. If that’s accurate, then
the methane spewing continuously from this
site since June 9 has inflicted the same short-
term climate damage as the annual emissions
from roughly 814,000 US cars at the lower
end of the range and 2.49 million cars at the
Bloomberg
top end. The geoanalytics company said it
was likely the worst methane leak attribut-
able to a single source this year.
SRON said the mean emissions rate
from methane plumes it attributed to
the incident using observations from the
Sentinel-5P satellite was about 100 metric
tonnes of methane an hour. Of the approx-
imately 1,200 methane plumes the group
has detected so far this year globally, only
10% have exceeded 100 tonnes an hour.
Satellites detect concentrations of meth-
ane from space by analysing the way sun-
light reflects off the Earth. As light passes
through a cloud of the gas, its intensity is
weakened on certain wavelengths. Meth-
ane absorbs light in the short-wave infrared
portion of the electromagnetic spectrum.
Methane is the primary component of
natural gas and has a devastating impact on
the climate because its warming power is
more than 80 times that of carbon dioxide
during its first 20 years in the atmosphere.
As the planet rapidly warms, triggering ex-
treme weather events from wildfires to heat
waves, countries are getting more serious
about tracking and halting avoidable leaks
of methane in what could be one of the most
powerful steps to slow global warming.
Both the European Union and the US
are working on new rules that are intended
to limit methane emissions and some 150
countries have joined the Global Methane
Pledge, an initiative that aims to reduce glob-
al releases of methane 30% by the end of this
decade. Although Kazakhstan isn’t a signa-
tory, the nation signed a memorandum of
understanding with the European Bank for
Reconstruction and Development in Sep-
tember to work towards joining the pledge.
The epicentre of the fire in Kazakhstan is
blazing at about 650C, burning natural gas
leaking from the site and generating steam
from water, Buzachi Neft said.The company
said in a statement sent to Bloomberg on July
31 that the site was spewing about 12,000
cubic metres of natural gas a day.
Buzachi Neft, its contractor which drilled
the well, Zaman Energo Ltd, several other
companies and the Ministry of Emergency
Situations are pooling efforts to seal the leak.
Workers are drilling two directional re-
lief wells that they hope can divert the gas
to controlled flares, the exploration firm
said.There are also plans to flood the blow-
out with water to stop the flow of gas and
allow workers to seal it. That work will be
carried out this month and is expected to
be completed by Sept 1, it added.
 f r i d ay A U G U S T 4 , 2 0 2 3
M A R K E T S
CPO RM 3,823.00-92.00 OIL US$ 83.09-0.11 RM/USD 4.5553 RM/SGD 3.3935 RM/AUD 2.9752 RM/GBP 5.7698 RM/EUR 4.9790
Top 20 active stocks
NAME VOLUME CHANGE CLOSE YTD MARKET
(MIL) (RM) CHANGE CAP
(%) (RM MIL)
UEM Sunrise Bhd 141.20 -0.02 0.490 92.160 2478.70
Classita Holdings Bhd 136.90 0.04 0.160 -56.160 197.20
Malaysian Resources Corp Bhd 73.60 0.00 0.375 27.120 1675.30
Mudajaya Group Bhd 68.30 0.00 0.185 -17.780 347.00
Komarkcorp Bhd 47.50 0.00 0.040 -27.270 46.20
KNM Group Bhd 46.40 0.00 0.090 80.000 364.00
Widad Group Bhd 37.00 0.00 0.430 0.000 1309.60
YTL Power International Bhd 34.40 0.01 1.460 104.200 11829.10
Sarawak Consolidated 32.60 0.00 0.435 200.000 278.50
RGB International Bhd 31.80 0.01 0.365 102.780 562.40
Tanco Holdings Bhd 27.80 0.00 0.555 65.670 1072.00
YTL Corp Bhd 25.80 0.03 1.210 108.620 13266.50
Daythree Digital Bhd 25.54 -0.04 0.455 N/A* 218.40
Advance Synergy Bhd 22.60 0.00 0.165 -5.710 417.30
Catcha Digital Bhd 21.40 0.01 0.480 159.460 212.70
Dagang NeXchange Bhd 19.50 -0.01 0.455 -10.780 1436.10
Top Glove Corp Bhd 19.40 -0.02 0.900 -0.550 7207.30
Bahvest Resources Bhd 19.00 -0.02 0.305 0.000 378.10
ES Ceramics Technology Bhd 17.90 -0.02 0.300 36.360 158.80
Artroniq Bhd 17.50 0.00 0.765 7.750 301.40
Data as compiled on Aug 3, 2023 *Listed in July Source: Bloomberg
Top gainers (ranked by %)
NAME CLOSE CHANGE VOLUME YTD MARKET
(%) (‘000) CHANGE CAP
(%) (RM MIL)
EA Holdings Bhd 0.010 100.00 360.100 -33.33 64.50
DGB Asia Bhd 0.010 100.00 1360.00 -33.33 18.8
Key Alliance Group Bhd 0.010 100.00 164.000 100.00 36.8
MMAG Holdings Bhd 0.015 50.00 1259.6 -40 36.3
Green Ocean Corp Bhd 0.015 50.00 82.500 -25 31.7
Metronic Global Bhd 0.015 50.00 2557.900 -25.00 23.0
Mlabs Systems Bhd 0.020 33.33 0.500 0.00 29.0
Classita Holdings Bhd 0.160 28.00 136924.000 -56.16 197.2
Handal Energy Bhd 0.220 25.71 12894.400 41.94 58.6
G3 Global Bhd 0.025 25.00 589.500 -16.67 94.3
Wegmans Holdings Bhd 0.230 21.05 15124.800 15.00 126.4
SMTrack Bhd 0.030 20.00 681.500 -40.00 35.8
Saudee Group Bhd 0.030 20.00 419.500 -33.33 34.2
Johan Holdings Bhd 0.060 20.00 1.000 9.09 70.1
Ahmad Zaki Resources Bhd 0.265 17.78 17085.900 60.61 158.1
PDZ Holdings Bhd 0.035 16.67 210.100 -12.50 20.3
BSL Corp Bhd 0.040 14.29 935.1 -40.83 77.3
Sapura Energy Bhd 0.045 12.50 8850.000 28.57 719.1
WMG Holdings Bhd 0.095 11.76 3.400 0.00 42.2
Infraharta Holdings Bhd 0.110 10.00 85 -12 41.7
Data as compiled on Aug 3, 2023 Source: Bloomberg
Top gainers (ranked by RM)
NAME CLOSE CHANGE VOLUME YTD MARKET
(RM) (‘000) CHANGE CAP
(%) (RM MIL)
Nestle Malaysia Bhd 133.000 1.000 51.9 -5.00 31,188.5
Batu Kawan Bhd 21.400 0.300 22.00 -4.04 8,418.4
Heineken Malaysia Bhd 26.040 0.240 48.1 3.33 7,866.6
Hong Leong Financial Group 18.540 0.200 1,096.7 -0.32 21,232.8
Allianz Malaysia Bhd 14.84 0.180 29.8 4.80 2,641.1
Frontken Corp Bhd 3.370 0.130 7,944.2 9.42 5,299.0
Kotra Industries Bhd 5.520 0.130 0.7 -16.36 818.7
Petronas Chemicals Group 6.850 0.100 4,410.7 -20.35 54,800.0
Greatech Technology Bhd 4.580 0.100 745.7 -5.37 5,741.4
Petronas Gas Bhd 17.100 0.100 238.1 -0.12 33,836.3
Malayan Cement Bhd 3.200 0.090 183.1 50.94 4,192.6
KLCCP Stapled Group 6.850 0.080 53.3 2.09 12,366.5
CELCOMDIGI BHD 4.500 0.060 4,868.4 12.50 52,791.8
Riverview Rubber Estates BHD 3.170 0.060 90.8 -12.50 205.6
Dutch Lady Milk Industries 21.420 0.060 24.6 -29.17 1,370.9
Nationgate Holdings Bhd 1.580 0.050 4,366.2 0.00 3,276.8
RCE Capital Bhd 2.250 0.050 162.8 33.14 1,648.9
Kuchai Development BHD 1.400 0.050 22.8 6.06 173.2
Pertama Digital BHD 3.050 0.050 3,340.8 73.30 1,336.5
Infomina Bhd 1.820 0.050 1,415.5 26.39 1,094.3
Data as compiled on Aug 3, 2023 Source: Bloomberg
26 TheEdge CEO morning brief
World equity indices
CLOSE CHANGE CHANGE CLOSE CHANGE CHANGE
(%) (%)
DJIA * 35,282.52 -348.16 -0.98 INDONESIA 6,898.08 43.57 0.64
S&P 500 * 4,513.39 -63.34 -1.38 JAPAN 32,159.28 -548.41 -1.68
NASDAQ 100 * 15,370.74 -347.27 -2.21 KOREA 2,605.39 -11.08 -0.42
FTSE 100 * 7,561.63 -88.82 -1.17 PHILIPPINES 6,576.76 93.48 1.44
AUSTRALIA 7,311.68 -42.92 -0.58 SINGAPORE 3,304.06 -20.96 -0.63
CHINA 3,280.46 18.77 0.58 TAIWAN 16,893.73 -319.14 -1.85
HONG KONG 19,420.87 -96.51 -0.49 THAILAND 1,529.01 -21.27 -1.37
INDIA 65,323.54 -459.24 -0.70 VIETNAM 1,210.95 -9.48 -0.78
Data as compiled on Aug 3, 2023 * Based on the previous days’ closing Source: Bloomberg
Top losers (ranked by %)
NAME CLOSE CHANGE VOLUME YTD MARKET
(%) (‘000) CHANGE CAP
(%) (RM MIL)
Top Builders Capital Bhd 0.005 -50.00 16,375.1 -75.00 3.5
TECHNA-X Bhd 0.010 -33.33 4556.5 -60.00 22.1
Nexgram Holdings Bhd 0.010 -33.33 111 -85.71 6.5
Ivory Properties Group Bhd 0.060 -14.29 8,086.3 -25.00 29.4
Reach Energy Bhd 0.030 -14.29 100.6 -33.33 63.9
Kanger International Bhd 0.035 -12.50 680.2 -12.50 22.7
Fitters Diversified Bhd 0.035 -12.50 1,208.8 -50.00 81.9
China Ouhua Winery Holdings 0.050 -9.09 44.0 -23.08 33.4
Concrete Engineering 0.930 -8.82 3.0 -11.43 69.4
Hong Seng Consolidated Bhd 0.055 -8.33 13,813.1 -75.00 281.0
Daythree Digital Bhd 0.455 -8.08 25,546.8 N/A* 218.4
Pan Malaysia Holdings Bhd 0.060 -7.69 11,820.5 -14.29 55.7
Kia Lim Bhd 0.325 -7.14 32.0 0.00 20.1
Oversea Enterprise Bhd 0.065 -7.14 1,658.2 -17.89 81.7
Icon Offshore Bhd 0.065 -7.14 1,472.2 -31.58 175.9
Puncak Niaga Holdings Bhd 0.345 -6.76 4,105.9 46.81 154.3
Southern Acids Malaysia BHD 3.370 -6.39 233.7 -7.67 461.5
Luster Industries Bhd 0.075 -6.25 1,261.6 -21.05 226.7
TSR Capital BHD 0.225 -6.25 7.5 12.50 39.3
Paragon Globe Bhd 0.230 -6.12 2,120.6 27.78 171.7
Data as compiled on Aug 3, 2023 *Listed in July Source: Bloomberg
Top losers (ranked by RM)
NAME CLOSE CHANGE VOLUME YTD MARKET
(RM) (‘000) CHANGE CAP
(%) (RM MIL)
HextarTechnologies Solutions 26.200 -0.400 5.1 53.58 3,370.6
Malaysian Pacific Industries 28.280 -0.380 93.4 -1.67 5,624.8
Ayer Holdings Bhd 7.220 -0.230 2.0 9.39 540.4
Southern Acids Malaysia BHD 3.370 -0.230 233.7 -7.67 461.5
PIE Industrial BHD 2.640 -0.110 1,687.8 2.16 1,013.9
Imaspro Corp Bhd 4.790 -0.100 501.5 -18.12 383.2
PMB Technology Bhd 3.830 -0.100 246.9 -8.81 6,207.9
Maxis Bhd 3.950 -0.090 4,277.1 2.86 30,936.7
Concrete Engineering 0.930 -0.090 3.0 -11.43 69.4
Hengyuan Refining Co Bhd 3.310 -0.090 271.7 -5.97 993.0
Paragon Union BHD 2.800 -0.090 9.6 50.54 234.7
Petronas Dagangan Bhd 22.640 -0.080 305.1 -0.91 22,491.8
Ajinomoto Malaysia Bhd 16.220 -0.080 76.3 24.01 986.2
Carlsberg Brewery Malaysia 20.720 -0.080 225.7 -9.44 6,335.1
Apollo Food Holdings Bhd 4.430 -0.080 244.3 14.77 354.4
Bursa Malaysia Bhd 6.720 -0.080 1,011.4 1.05 5,438.5
Sarawak Oil Palms Bhd 2.500 -0.070 332.7 -3.85 2,225.7
TIME dotCom Bhd 5.350 -0.060 1117.2 21.33 9880.6
United Plantations BHD 15.920 -0.060 108.3 6.06 6,603.4
Rapid Synergy Bhd 22.700 -0.060 73.9 42.23 2,426.6
Data as compiled on Aug 3, 2023 Source: Bloomberg