T H U R S DAY, D E C E M B E R 7 , 2 0 2 3 t h e e d g e m a l ay s i a .

c o m
ISSUE 682/2023

CEOMorningBrief

SETTING NEW BENCHMARKS.

SHAPING THE FUTURE.
 CHINA SEEKS TO CONTAIN FALLOUT FROM MOODY’S
BEARISH BOND OUTLOOK p17
T H U R S DAY, D E C E M B E R 7 , 2 0 2 3 t h e e d g e m a l ay s i a . c o m
ISSUE 682/2023

CEOMorningBrief HOME: SC to debut streamlined transfer mechanism to Main Market — chairman p2

UBS emerges as substantial shareholder in BPlant amid privatisation p3
Sime Darby to make takeover offer for remaining stake in UMW Holdings p4
WORLD: McKinsey sees AI adding up to US$340 bil to Wall St profit p20
Wanda’s billionaire founder sells film unit as debt pressure builds p24

IOI Properties to buy W Kuala Lumpur hotel

from Tropicana for RM270 mil cash
Report on Page 4.
BLOOMBERG

GAMUDA BAGS
RM1.77 BIL SINGAPORE
MRT PROJECT
Report on Page 3.

This is the season of This is the season of

stories yet to be written. stories yet to be written.

Start Yours Start Yours

 T H U R S D AY D E C E M B E R 7 , 2 0 2 3
the edge ceo morning brief
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KUALA LUMPUR (Dec 6): The Securi-
ties Commission Malaysia (SC) is seeking
to introduce a streamlined transfer mecha-
nism that will enable qualifying ACE Mar-
ket companies to transfer to the Main Mar-
ket beginning in 2024, said its chairman
Datuk Seri Dr Awang Adek Hussin.
He said the SC, together with Bur-
sa Malaysia, is working to improve effi-
ciency in the public markets to facilitate
a start-up’s initial public offering (IPO),
with measures such as reducing time-to-
market for companies seeking to list on
the stock exchange.
“Details of the proposed automatic
transfer framework will be announced later
this month.The introduction of a new sim-
plified and accelerated transfer process will
facilitate a seamless transfer of listings to
promote sizeable and quality ACE Market
companies to the Main Market.
“By being in the Main Market, it will
open up opportunities for foreign inves-
tors to participate. This should encourage
greater foreign participation in our capital
market,” Awang Adek said in his speech at
the Malaysia Venture Forum 2023 here on
Wednesday.
He said capital markets play an im-
portant role in enabling easier access to
funding for start-ups and micro, small and
medium enterprises (MSMEs), thus the
KUALA LUMPUR (Dec 6): The sec-
ond reading of the Energy Efficiency and
Conservation Bill 2023 and the Electrici-
ty Supply (Amendment) Bill 2023 in De-
wan Negara has been postponed by the
Ministry of Natural Resources, Environ-
ment and Climate Change (NRECC).
Senator Datuk Ahmad Ibrahim, in a
statement on Wednesday, said that the
postponement was following his and sev-
en other senators’ request to Dewan Ne-
gara president Tan Sri Dr Wan Junaidi
Tuanku Jaafar to amend the bills.
He said this was because the bills did
not ensure that the same rights were giv-
en to Sarawak, as enshrined in the Ener-
gy Commission Act 2001 and the Elec-
2 THEEDGE CEO MORNING BRIEF
H O M E
published by
(266980-X)
. 603-77218000
tel
Level 3, Menara KLK, 1 Jalan PJU 7/6,
Mutiara Damansara, 47810, Petaling Jaya,
Selangor, Malaysia
SC to debut
streamlined transfer
mechanism to Main
Market — chairman
Bernama
SC had taken proactive steps to facilitate
fundraising for businesses, particularly in
the early stage of financing.
“Our efforts include allowing flexible
financial instruments, facilitating more
efficient exit options, encouraging more
investments into private markets, and forg-
ing partnerships and collaborations, all of
which are pivotal in nurturing a vibrant
venture capital and private equity ecosys-
tem,” he said.
Awang Adek said SC and Bursa will
continue to facilitate exits for promising
companies, especially in the technology sec-
tor, and recent capital market initiatives
aimed at supporting IPO-ready companies
are expected to have a positive impact.
“These include tax deductions for eli-
gible tech-based companies on the Main
Market and the ACE Market. Concessions
Energy efficiency,
electricity supply
bills’ second reading
postponed
Bernama
tricity Supply Act 1990.
“After a copy of the bills was distribut-
ed to members of the Dewan Negara, our
research found that the bills allowed the
NRECC Minister (Nik Nazmi Nik Ah-
mad) to extend the use to Sarawak.
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on the soon-to-be-implemented capital
gains tax will be made available to IPOs
on Bursa.
“These measures are designed to en-
hance fundraising efforts, sustain the vi-
brancy of the IPO market, and improve
trading liquidity,” he said.
The SC is seeing a healthy pipeline of
IPOs this year, with 32 companies approved
to date for listings on Bursa, many of which
are tech-related.
Malaysia has implemented targeted pol-
icies to foster a more dynamic start-up eco-
system, and this includes RM90 billion to
be invested in the New Industrial Master
Plan 2030.
Start-ups and SMEs are expected to
play a crucial role contributing an antic-
ipated RM30.8 billion in gross domestic
product by 2030.
The SC is also looking into introducing
a small offering exemption in the Capital
Markets and Services Act next year, facil-
itating a clear safe harbour for offerings
of a certain size to sophisticated investors.
“This is intended to reduce the regula-
tory burden in the fundraising process for
start-ups and MSMEs, as well as provide
clarity for instruments like simple agree-
ments for future equity and convertible
notes, which are becoming increasingly
common in start-up funding,” he said.
“This is not in line with previous
practice by the federal government, such
as the Energy Commission Act 2001 and
the Electricity Supply Act 1990, where
its use is suspended in Sarawak,” Ahmad
Ibrahim said.
He said that, following the proposed
amendments, the president of Dewan
Negara informed on Wednesday that the
NRECC will engage with the Sabah and
Sarawak governments to align the two bills.
“We welcome the postponement by
the NRECC, who took note of our con-
cerns, which are related to Sarawak’s au-
tonomous power in the field of electrici-
ty, and also the diverse energy resources
available in Sarawak,” he said.
 t h u r s d ay d e c e m b e r 7 , 2 0 2 3
Gamuda bags
RM1.77 bil
Singapore MRT
project
by Choy Nyen Yiau
theedgemalaysia.com
KUALA LUMPUR (Dec 6): Gamuda
Bhd’s Singapore branch (GBSG), an op-
erating unit of the group, has secured a
S$509.568 million (RM1.77 billion) de-
sign and construction contract for the West
Coast station and tunnel.
This project is part of Singapore’s
15-kilometre (km) Cross Island Line Phase
2 (CRL2) Mass Rapid Transit (MRT) line,
which is also Singapore’s eighth MRT line,
comprising six stations.
In a Wednesday bourse filing, the con-
struction giant announced that the con-
tract, awarded by the Singapore Land
Transport Authority (LTA), includes the
construction of one underground station
and two tunnels, covering approximately
1.9km.
The commencement date for the West
Coast station and tunnels project is sched-
uled within the first quarter of 2024, with
completion expected by 2032, according
to Gamuda.
Gamuda said that the main risks for the
West Coast station and tunnel project are
similar to several MRT stations and tun-
KUALA LUMPUR (Dec 6): In a surprise
move, Swiss-based multinational investment
bank UBS Group has emerged as a substan-
tial shareholder in Boustead Plantations Bhd
(BPlant), which is in the midst of being pri-
vatised, with a 5.36% stake, or 120.06 mil-
lion shares.
UBS had initially acquired 20.71 million
shares in BPlant, equivalent to a 0.92% stake,
on Nov 10, 2023, which increased its stake
to 5.21%, or 116.67 million shares, surpass-
ing the minimum 5% of the definition of a
substantial shareholder, according to the Se-
curities Industry (Reporting of Substantial
Shareholding) Regulations 1998.
Following that, UBS continued to trade
in the shares from Nov 14 to Nov 30, ending
up with a 5.36% stake as at Dec 6, according
to BPlant’s filings to Bursa Malaysia.
According to Bloomberg, UBS is now
the third largest shareholder in BPlant af-
ter Lembaga Tabung Angkatan Tentera
(LTAT) (43.59%) and Boustead Holdings
Bhd (24.42%), followed by Kuala Lumpur
3 TheEdge CEO morning brief
h o m e
Gamuda records RM195 mil profit in 1QFY2024
by Choy Nyen Yiau
theedgemalaysia.com
KUALA LUMPUR (Dec 6): Gamuda
Bhd recorded a net profit of RM195.04
million in the first quarter ended Oct
31, 2023 (1QFY2024), compared to
RM1.168 billion a year ago.
The significant discrepancy in net
profit is due to the earnings of RM1 bil-
lion from the sale of highways last year.
Earnings per share also slipped to
7.26 sen compared to 45.32 sen, the
construction giant said in a bourse fil-
ing on Wednesday.
Quarterly revenue doubled to
RM2.8 billion from RM1.3 billion in
the previous corresponding quarter, on
the back of higher contribution from
neling projects successfully completed for
LTA in comparable ground conditions.The
project will utilise two slurry tunnel bor-
ing machines for the tunneling works, with
station excavations involving rock removal.
“The West Coast station & tunnel pro-
ject is anticipated to make a positive con-
tribution to the revenue and earnings of
the Gamuda group for the financial year
ending July 31, 2024,” it added.
In a separate statement released on
Wednesday, Gamuda said the latest pro-
ject marks its first independent venture in
Singapore without joint venture partners,
UBS emerges
as substantial
shareholder in
BPlant amid
privatisation
by Emir Zainul
theedgemalaysia.com
Kepong Bhd (KLK) (3.09%).
The initial shares acquisition took place
on the same day that the Armed Forces pen-
sion fund made an unconditional mandato-
ry takeover offer for the BPlant shares that
it does not own, at RM1.55 per share, for
BPlant to be taken private.
This follows LTAT’s agreement with
Boustead Holdings to acquire 739.2 mil-
overseas projects, as overseas revenue
tripled to RM2.1 billion.
The group’s construction and
proper ty ear nings g rew 35% to
RM195 million in 1QFY2024, com-
pared with 1QFY2023’s earnings of
RM145 million.
On a quarterly basis, the group’s net
profit came in 23% lower against the
RM252 million reported in the imme-
diate preceding quarter (4QFY2023),
mainly due to lumpy property earnings
in 4QFY2023.
Gamuda declared a single-tier inter-
im dividend of six sen per share, to be
paid at a later date.
Read the full story
showcasing the group’s strong delivery
track record in the region and solidifying
its role as a key player in the city-state’s
transportation infrastructure development.
This is also Gamuda’s second railway
project in Singapore, after the Defu station
and tunnels, and its third infrastructure
project after the Gali Batu multi-storey
bus depot.
Shares in Gamuda closed one sen or
0.23% lower at RM 4.41 on Wednesday,
giving the group a market capitalisation of
RM11.9 billion. However, the stock has
risen 21.11% year to date.
lion shares or a 33% stake in BPlant, after
a RM1.15 billion takeover bid by KLK fell
through in October.
The Finance Ministry had agreed to pro-
vide a government guarantee for LTAT to
take out a RM2 billion loan to undertake
the general offer.
KLK first announced on Aug 24 that
it planned to acquire the 33% stake for
RM1.15 billion or RM1.55 per share, and
would extend a mandatory general offer with
plans to increase its stake to 65%.
LTAT and Boustead Holdings, mean-
while, would own the remaining 35%, with
BPlant being taken private.
Opposition leaders claimed that the
deal did not fit with the government’s aim
of achieving Bumiputera corporate equity
target of 30% by 2025, as underlined in the
12th Malaysia Plan.
Meanwhile, Boustead Holdings, which
was privatised by LTAT earlier this year,
needs RM800 million to meet its debt ob-
ligations.
 t h u r s d ay d e c e m b e r 7 , 2 0 2 3
KUALA LUMPUR (Dec 6): Property de-
veloper IOI Properties Group Bhd plans
to acquire five-star hotel W Kuala Lumpur
(W KL) in Jalan Ampang, KL for RM270
million, cash, from property group Tropi-
cana Corp Bhd.
IOI Properties, via its indirect subsidi-
aries IOI PFCC Hotel Sdn Bhd and Flora
Development Sdn Bhd, has signed a sale
and purchase agreement with Tropica-
na’s unit, Tropicana Residences Sdn Bhd
(TRSB), for the proposed acquisition, ac-
cording to Tropicana’s filing on Wednesday.
The acquisition came on the heels of a
major asset buy by IOI Properties’ chief
executive and major shareholder LeeYeow
Seng last month. The tycoon, via his pri-
vate firm Shenton 101, emerged on Nov
1 as the sole bidder to redevelop Singa-
pore’s Shenton House for S$538 million
(about RM1.87 billion). Built in the 1970s,
Shenton House is one of the oldest build-
ings in Singapore’s Raffles Place central
business district.
W KL is a 25-storey hotel with 150
rooms. As at Dec 31, 2022, its audited
net book value was RM265.135 million.
According to Tropicana, the group’s
original cost of investment in W KL is
RM364.01 million, comprising the pur-
chase consideration of about RM43.45
million for the land, which was complet-
ed in year 2010, as well as year-to-date
development costs amounting to around
RM320.56 million as at Oct 31 this year.
Tropicana said the disposal of W KL rep-
resents an opportunity for the group to im-
mediately unlock the value of its investment
asset, as the disposal consideration translates
KUALA LUMPUR (Dec 6): Sime Darby
Bhd will issue an unconditional mandato-
ry takeover offer to acquire the remaining
38.82% stake it does not own in UMW
Holdings Bhd for a cash price of RM5.00 per
share, it said in a statement on Wednesday.
This follows the group’s conditional share
purchase agreement with Permodalan Na-
sional Bhd (PNB) on Aug 24, 2023, to ac-
quire 714.81 million shares or a 61.18%
stake in UMW, making Sime Darby the
largest shareholder in the automotive group.
Accordingly, the group has made no ad-
justment to the offer price at RM5 per share
as of the date of the notice on Wednesday,
but obligated to reduce the offer price by
the amount equivalent to the net distribu-
tion per offer share with UMW, in the case
of the holder exceeding the offer’s timeline.
At RM5, UMW is valued at RM5.84
billion, with the 38.82% stake valued at
RM2.27 billion.
4 TheEdge CEO morning brief
h o m e
and thereby strengthen its cash flow posi-
tion,” said Tropicana, which is controlled
by its founder, group executive vice-chair-
man and major shareholder Tan Sri Danny
Tan Chee Sing.
Of the disposal proceeds, RM105 mil-
lion will be channelled to fully repay W
KL’s existing bank borrowings, while an-
other RM164.86 million will be allocat-
ed for partial repayment of the group’s
existing bank borrowings, Tropicana said.
As of Sept 30 this year, Tropicana’s to-
tal borrowings stood at RM3.26 billion,
of which RM2.162 billion was long-term
loans, while the remaining RM1.098 bil-
IOI Properties
lion was short-term loans.
Tropicana said the proposed disposal,
to buy W Kuala
expected to be completed by the first quar-
ter of next year, would enhance the group’s
Lumpur hotel
net assets in the future, as the disposal
proceeds will be used to partially repay its
from Tropicana
bank borrowings, which will subsequently
improve the company’s gearing.
for RM270 mil
Tropicana more than halved its net loss
to RM10.34 million in the third quarter
cash
ended Sept 30, 2023 (3QFY2023) from
RM26.27 million a year earlier, on com-
pletion of its disposal of two parcels of
freehold development land in Kajang and
by Sulhi Khalid Genting Highlands, as well as a continu-
theedgemalaysia.com ous cost rationalisation exercise to reduce
overall expenses.
to a price per key of approximately RM1.8 Shares in Tropicana settled one sen or
million. The deal is expected to provide the 0.82% higher at RM1.23 on Wednesday,
group an estimated net pro forma gain on giving the group a market capitalisation
disposal of RM7.41 million. of RM2.83 billion.
“Upon completion of the proposed dis- Shares in IOI Properties settled two sen
posal, Tropicana Group is able to improve or 1.17% lower at RM1.69, valuing the
its financial performance and realise a gain, company at RM9.31 billion.
the outcome of its extraordinary general
Sime Darby to meeting on Nov 16.
Shareholders who participated in the
make takeover voting represented 26% of Sime Darby’s
total share capital of 6.82 billion shares,
offer for remaining with PNB — which has a 47.25% interest,
and 15.5%-shareholder Employees Prov-
stake in UMW ident Fund (EPF), abstained from voting.
The takeover, which is expected to see
Holdings UMW delisted from Bursa Malaysia, will
create a behemoth industrial and motor
group, with presence in various markets
by Luqman Amin in Asia-Pacific.
theedgemalaysia.com Sime Darby, which is known for its lux-
ury marques such as BMW, Jaguar, Land
At the closing price of RM4.94 on Rover and Porsche, will add mass market
Wednesday, the group boasts a market cap- brands under UMW, such as Toyota, Lexus
italisation of RM5.77 billion. and Perodua, to its stable.
The UMW takeover has already received
a majority support from Sime Darby’s share-
holders, with 1,159 shareholders or 1.78 bil- Read also: UMW signs RM50 mil deal
lion shares in favour of the deal, based on with IOI Corp
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3 5 THEEDGE CEO MORNING BRIEF

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 T H U R S D AY D E C E M B E R 7 , 2 0 2 3 6 THEEDGE CEO MORNING BRIEF

H O M E

Eddie Ong buys

KUALA LUMPUR (Dec 6): Agrochemi- acted at 65 sen apiece.
cal businessman Datuk Eddie Ong Choo The largest block amounted to 101.1

into Hektar REIT,

Meng has emerged as a substantial share- million shares, changing hands at 89 sen,
holder in Hektar Real Estate Investment while the volume of the remaining three

says no plan to
Trust (Hektar REIT), after acquiring a transactions at the same price totalled
28.462% stake, or 143.9 million shares, 42.8 million shares.

merge with KIP

in the company. When contacted by The Edge, Ong said
Ong is no stranger to the investing he bought into Hektar REIT because of

REIT for now

community, given his interests in various
local listed firms.
Notably, Ong is also a major share-
holder in listed companies such as Hextar
Global Bhd, KIP REIT, Hextar Health-
care Bhd (Rubberex Corp (M) Bhd),
Hextar Industries Bhd (formerly known
as SCH Group Bhd), Hextar Technolo-
gies Solutions Bhd (formerly known as
Complete Logistic Services Bhd), Hextar
Capital Bhd (formerly known as Opcom
Holdings Bhd), as well as Classic Scenic
Bhd and Perak Transit Bhd.
In a bourse filing on Wednesday, Hek-
tar REIT said Ong acquired 42.8 mil-
lion shares or an 8.465% direct inter-
est in the company. He also deemed
interest in the company via Hextar
Rubber Sdn Bhd with 101.1 million
shares or a 19.997% stake. Both
blocks were bought on Mon-
day via direct business
transactions.
Bloomberg data
showed that the trans-
action cost 89 sen
per share, translat-
ing into RM128.07 THE EDGE FILE PHOTO
BY JUSTIN LIM
theedgemalaysia.com
million for an about 29% stake in Hek-
tar REIT.
The transaction price is higher than
Hektar REIT’s closing price of 63 sen
on Wednesday — after it closed up 0.5
sen or 0.8%.
At 63 sen, Hektar REIT
is valued at RM319 mil-
lion. The counter is cur-
rently trading at a histori-
cal price-earnings ratio of
4.71 times.
According to Bloomberg
data, there were five tranch-
es of off-market transac-
tions on Monday. Four
of them were priced at
89 sen per share while
the remaining block
of 10.56 million
shares was trans-
its long-term value.
Ong, however, acknowledges that at
the moment, there are no synergies to be
derived between KIP REIT and Hektar
REIT.
“There is no plan for us to merge KIP
REIT and Hektar REIT. Both of them
will operate separately,” he said.
Ong owns a 20.875% indirect inter-
est in KIP REIT and a 0.859% indirect
stake in the REIT. Its investment port-
folio includes AEON Mall Kinta City as
well as the KIP Malls in Selangor, Johor,
Melaka and Negeri Sembilan.
In an exclusive interview with The Edge
in October, Hektar REIT executive di-
rector and CEO Johari Shukri Jamil said
the group was diversifying its portfolio
to include the education and industrial
sectors as it adapts to changing market
dynamics.
Hektar REIT is the country’s first list-
ed retail-focused REIT. Its property port-
folio includes Subang Parade, Mahkota
Parade, Wetex Parade and Kulim Central.
Read the full story

MSM anticipates
KUALA LUMPUR (Dec 6): MSM Ma- MSM and other sugar producers had been
laysia Holdings Bhd expects a better finan- engaging with the government over the issue.

a more
cial year in the year ending Dec 31, 2024 The ceiling price was set by the govern-
(FY2024). ment, and had remained unchanged with-

prosperous
Group chief executive officer Syed Feizal out subsidies over the last 10 years, he said.
Syed Mohammad said the sugar refiner is Amid high input costs due to increases

financial year
taking steps to reduce its losses, while the in raw sugar cost, high freight and natural
industry is anticipated to turn around soon. gas costs, as well as a weakened ringgit, the

in 2024
“Last year was challenging, with all the
input costs of what I would like to call a
perfect storm.
“Of course, we are unable to adjust cer-
tain prices. It requires time to adjust.We are
making adjustments now,” he told reporters
after the launch of MSM’s latest addition to
the Gula Perai line-up, called Gula Super.
MSM reported a reduced net loss of
RM36.06 million for the third quarter end-
ed Sept 30, 2023 (3QFY2023), compared
with RM73 million for 3QFY2022, attribut-
able to an enhanced margin resulting from a
higher average selling price, reduced freight
costs, and improved capacity utilisation.
For 3QFY2023, MSM’s revenue surged
to RM806.72 million, up from RM668.13
million for the same period last year.
On the ceiling price, Syed Feizal said
local sugar industry remained resilient, Syed
Feizal noted, adding that together, the in-
dustry had subsidised RM500 million for
sugar last year.
Bernama On Gula Super, he said, MSM targets to
produce 10,000 tonnes of the new product
MSMSUGAR.COM per month.
The production of Gula Super has been
rising from the start of its launch at 1,000
tonnes in May to between 5,000 and 6,000
tonnes per month currently.
Read the full story
Read also: MSM poised for potential
bullish breakout, says Rakuten Trade
T H U R S D AY D E C E M B E R 7 , 2 0 2 3 7 THEEDGE CEO MORNING BRIEF
 t h u r s d ay d e c e m b e r 7 , 2 0 2 3 8 TheEdge CEO morning brief

h o m e

KUALA LUMPUR (Dec 6): Hiap Teck
Ventures Bhd will fork out RM53.24
million under its steel manufacturing
joint-venture (JV)’s RM195 million rights
issue, which is to fund the JV’s capital ex-
penditure, in particular a hot rolling mill.
In a bourse filing on Wednesday, Hiap
Teck said it will subscribe to 54.6 mil-
lion new shares in Eastern Steel Sdn Bhd
(ESSB) at 97.5 sen apiece under the JV’s
rights issue of 200 million shares. Hiap
Teck will fund the subscription amount
via internally generated funds and/or ex-
ternal borrowings.
A share subscription agreement has
been inked between Hiap Teck — which
owns 27.3% in the ESSB — and the oth-
er JV partners — Shanxi Jianlong Indus-
try Co Ltd and Chinaco Investment Pte
Ltd, who own 68.8% and 3.9% stakes in
the JV respectively — as well as Jianlong
Holdings Sdn Bhd (JHSB).
JHSB, Shanxi’s sister company by way
of sharing Beijing Jianlong Heavy Industry
Group Co Ltd as a parent, is to subscribe
to Shanxi’s entitlement of 137.6 million
shares for RM134.16 million.
Meanwhile, Chinaco is to subscribe
to 7.8 million shares for RM7.61 million.
will maintain their stakes in the JV: HiapTeck
Hiap Teck to spend with a 27.3% stake, Shanxi and JHSB with
63.3% and 5.5% respectively (an aggregate
RM53.2 mil under of 68.8%), and Chinaco with 3.9%.
The RM200 million cash raised from the
steel-making JV’s exercise will be used by ESSB for capital ex-
penditure, including the planned hot rolling
cash call mill, as well as working capital requirements.
ESSB is a steel product manufacturer
with a production capacity of 2.7 million
by Izzul Ikram metric tonnes (MT) per annum of steel
theedgemalaysia.com slabs and billets — raised from 700,000
MT previously, with the addition of a new
Patrick Goh/the edge 1,380 m3 blast furnace in August.
“ESSB is in the [process] of construct-
ing a new 1,450 mm hot rolling mill, which
will have an annual rolling capacity of 2.58
million MT of hot rolled coil (HRC) upon
its targeted completion in September
2024,” it added.
It was previously reported that this
comes under ESSB’s RM5.5 billion Phase
The Eastern Steel Sdn Bhd branch at Kemaman, 2 expansion, where RM4 billion has been
Terengganu, as seen on Nov 8, 2023. invested into the new blast furnace, while
another RM1.5 billion is to go toward the
Hiap Teck said the proposed share sub- hot rolling mill.
scription is expected to be completed by Shares in Hiap Teck ended unchanged at
end-December. 43.5 sen on Wednesday, giving the group a
Post share subscription, the shareholders market capitalisation of RM751.81 million.

KUALA LUMPUR (Dec 6): MyEG Lodg-
ing (NC) Sdn Bhd, a subsidiary of e-govern-
ment service provider MyEG Services Bhd,
has signed a 30-year lease agreement with
Penang Development Corp (PDC) to de-
velop a foreign workers’ village project worth
RM108 million.
The lease agreement, valued at RM20.4
million, grants MyEG Lodging the rights to
build and operate the workers’ village and
related facilities on an 8.39-acre (3.40-hec-
tare) land parcel in Batu Kawan Industri-
al Park 3, Seberang Perai Selatan, Penang.
The project, with an estimated develop-
ment cost of RM108 million, is set to com-
mence development following the approval
for all necessary designs and plans by the
relevant authorities.
The agreement was signed by MyEG
non-independent non-executive director
Datuk Mohd Jimmy Wong Abdullah and
PDC chief executive officer Datuk Aziz
Bakar, witnessed by Penang Chief Minis-
ter Chow Kon Yeow.
In a statement on Wednesday, MyEG
said MyEG Lodging successfully secured
in April the workers’ village project tender
from PDC, the Penang government’s chief
development agency.
The primary objective of the project is
to provide foreign workers’ accommodation
solutions to the private sector, especially for
small and medium enterprises (SMEs).
The workers’ village will offer medi-
MyEG inks deal
with PDC to
develop RM108 mil
foreign workers’
village
by Choy Nyen Yiau
theedgemalaysia.com
(From left) Penang Development Corp deputy
chief executive officer (operation) Roslan Hassan
and CEO Datuk Aziz Bakar, Penang Chief Minister
Chow Kon Yeow, as well as MyEG Services
Bhd non-independent non-executive director
Datuk Mohd Jimmy Wong Abdullah and general
manager (regional) Wong Thean Chye.
um-density residences capable of housing
at least 8,000 foreign workers, and is expect-
ed to be completed by the fourth quarter of
2025, according to MyEG.
Wong said MyEG is honoured to support
the cause, as the group fully understands its
significance and impact.
“To us, the MyEG-PDC workers’ village
is more than a housing project; it is a com-
prehensive solution addressing the challenges
faced by our foreign labour workforce.
“By providing a safe, comfortable, and
affordable living environment, together with
PDC, we are helping to enhance the quality
of life for thousands of workers, while also
fostering a sense of community and belong-
ing,” he added.
Meanwhile, Aziz said working on this pro-
ject with MyEG Lodging signifies a substan-
tial step in alleviating housing and security
concerns of Penangites with a focus on sus-
tainable development.
“The establishment of this workers’ vil-
lage is a strategic move towards attracting
more businesses and investors to the Batu
Kawan Industrial Park, especially SMEs
from labour-intensive industries.
“Moreover, this initiative aligns well
with the objectives outlined in the Penang
Vision 2030, bringing us closer to fulfilling
the long-term goal of transforming Penang
into a family-focused, green, and smart state
that fosters inclusivity and equitable society,
and enhances the quality of life,” he added.
 231120_YTL Group_The Edge Malaysia_ESG Awards 2023_CEO Morning Brief_V2_FA.pdf 1 20/11/2023 4:48 PM

T H U R S D AY D E C E M B E R 7 , 2 0 2 3 9 THEEDGE CEO MORNING BRIEF

CM

MY

CY

CMY

K
 t h u r s d ay d e c e m b e r 7 , 2 0 2 3
KUALA LUMPUR (Dec 6): Malaysia’s
tourism sector is anticipated to fully recov-
er by next year, with the number of tour-
ist arrivals seen surpassing pre-Covid-19
levels, driven by better flight connectivity
and increased visitors from China and In-
dia, said Tourism Malaysia deputy director
general (promotion) Datuk Musa Yusof.
Speaking at the Bursa Malaysia-HLIB
Stratum Focus Series XVI (16th) event ti-
tled “Tourism:Welcoming A New Dawn” on
Wednesday, Musa cited revenge travel in the
post-pandemic era, which reflects a surge in
tourist activity as individuals explore multi-
ple destinations for their holidays.
“More eco-friendly infrastructure and
sustainable options are also increasingly
sought after among tourists, who are more
often than not, business travellers seeking
leisure time, and recently after the pan-
demic, digital nomads who can ‘work from
anywhere’,” he said.
Following a remarkable increase to 14.4
million tourist arrivals in the first nine
months of 2023, Malaysia has revised its
full-year forecast upwards by 18.63% to
19.1 million, up from its initial forecast of
16.1 million, said Musa.
“We hope the 2024 [tourist arrivals] fig-
ure will be higher than pre-Covid-19 levels,”
Musa said without disclosing the forecasts.
“We will head towards the third phase
of our strategic plan: Strengthen & Boost,
which will also be the year where we gear
up for the upcoming Visit Malaysia Year
PUTRAJAYA (Dec 6): The govern-
ment’s initiative for digital identification
— dubbed MyDigital ID — is expected
to be made available for the general pub-
lic by July next year, according to Mimos
Bhd chief techno-venture Dr Saat Shukri
Embong.
Saat said MyDigital ID will be rolled
out in four phases, starting with Cabinet
members, followed by civil servants, gov-
ernment beneficiaries like subsidies receiv-
ers, and finally to the general public.
“We are rolling out this way because we
want to ensure there are use cases avail-
able before the general public come on-
board,” he told reporters here at a briefing
on Wednesday.
Saat also said that MyDigital ID can
be used for verification to receive targeted
subsidies, but stressed that the government
has not made a decision on this yet.
“Target subsidy distribution is one of
the use cases, but that is beyond us; it is
up to the government on whether to use
it (MyDigital ID) in rationalising subsi-
dies,” he added.
In terms of registration, Saat said it
can be done through physical verification,
10 TheEdge CEO morning brief
h o m e
2026, a benchmark that is hoped to bring
Malaysia’s 2024
us even further than our pre-pandemic
success”.
tourist arrivals
In 2019, Malaysia recorded 26.1 million
international visitors, before dropping by
expected to
83.4% to 4.33 million in 2020 — the year
when the Covid-19 outbreak first emerged.
surpass pre-
The following year, in 2021, the number
plummeted further to a mere 130,000.
Covid-19 levels
With the announcement of Malaysia’s
transition from the Covid-19 phase to the
— Tourism
endemic phase by the previous government
under Datuk Seri Ismail Sabri Yaakob’s
Malaysia
administration, tourist arrivals rebounded
to 10.1 million in 2022.
According to Musa, Tourism Malay-
sia will continue to foster smart partner-
by Syafiqah Salim & Cheryl Tan ships and collaborations with both local
theedgemalaysia.com and international industry players to fur-
Zahid Izzani/TheEdge ther boost demand for Malaysia’s tourism
offerings.
He said, focus on targeted and fast
conversion markets will be heightened for
more effective marketing as well as the de-
velopment of niche products and services,
such as Muslim-friendly tourism, medical
tourism, sports and the Malaysia My Sec-
ond Home (MM2H) programme.
Read the full story
Read also: Malaysians top list of tourists
Datuk Musa Yusof.
flocking to Thailand as Chinese miss target
MyDigital ID to
Saat said the government is streamlining
more of its services under a single portal
be made available
to allow easier access by the public, espe-
cially with this new digital identification.
to public by July
He emphasised that MyDigital ID is
not meant to replace the existing MyKad
2024, says Mimos
system, but merely an extension for ease
of accessing government services going
forward.
“I was told that there are more than
by Chester Tay 1,700 government services currently, and
theedgemalaysia.com with MyDigital ID, we understand that
more services will be made available and
whereby Mimos can verify through iden- [it] is expected to have over 2,000 ser-
tification card and thumbprint at various vices. Currently, you will have to remem-
government premises currently. ber all the username and password. With
For online registration, Saat said users MyDigital ID, you will have access to all
will be restricted from performing finan- of them without the need of username and
cial-related activities, until they are phys- password, because your identity is already
ically verified. verified through our app,” he said.
“A user can perform online registra-
tion, use the digital ID to make a med-
ical appointment at a government hos- Read the full story
pital or clinic, and finally make physical
presence at the clinic, where the clinic
personnel can physically verify them. Read also: Less than 4% left to achieve
So, it can be done that way as well,” he 5G network coverage target of 80%
explained. — Fahmi
 t h u r s d ay d e c e m b e r 7 , 2 0 2 3
PUTRAJAYA (Dec 6): A total of 6.5 mil-
lion eMadani credit assistance applications
have been approved and credited to recipi-
ents, involving an allocation of RM650 mil-
lion thus far, according to Deputy Finance
Minister I Datuk Seri Ahmad Maslan.
Speaking to reporters while conducting
a survey of eMadani credit redemption at
a supermarket on Wednesday, Ahmad said
that another 1.8 million applications are
still in the approval process, which will take
one to five days.
“A huge number of people have applied
in these three days, even though we are
open until Feb 20, 2024, and [the credit]
can be cashed in until Feb 29 next year.
“However, those who feel that they are
eligible but have failed in their applications
can appeal,” he said, adding that applica-
tions on all other e-wallet service provider
applications will be rejected after one failed
on the first application.
He said that those who failed could appeal
through several platforms, including sending
an email to emadani@treasury.gov.my, or
calling (03) 8882 4565 or (1800) 88 2747.
The four e-wallet service providers are
ShopeePay, Maybank’s MAE,Touch ‘n Go
eWallet, and Petronas’ Setel.
Meanwhile, Ahmad Maslan said that
KUALA LUMPUR (Dec 6): CGS-CIMB
Securities has maintained “underweight”
for glovemakers
on the rubber gloves sector and said the
diminishing pricing power of Malaysian
glovemakers due to regional competition
may lead to lower long-term margins.
relative to current
In a note on Dec 5, the research house
said though it expects the industry to turn
valuations, says
profitable by CY25F, the net profit out-
look looks unexciting relative to current
valuations.
CGS-CIMB has “hold” calls on Su-
permax Corp Bhd and Kossan Rubber
Industries Bhd while keeping its “reduce”
ratings on Hartalega Holdings Bhd and
Top Glove Corp Bhd.
The research house highlighted three
key negative observations in the glove in-
dustry that may persist over the next 12-18
months: 1) the Malaysian glovemakers are
still being undercut by US$3-4 (RM14.02-
18.69) per 1,000 pieces, given the lower
cost structure of regional players in China
and Thailand, prolonging the challenges in
passing on cost escalations, 2) profitability,
measured by Ebitda per 1,000 pcs, may
settle at a new normal given the eroding
pricing power, and 3) elevated glove inven-
tories following pandemic-led stockpiling
is limiting strong upside to volume growth
in the near term.
“This could cap the improvement in in-
dustry utilisation rates, in our view,” it said.
11 TheEdge CEO morning brief
h o m e
Shahrill Basri/
The Edge
one of the reasons for individuals failing
to apply, or not being included in the eli-
gibility group, is that they did not submit
their tax return forms for assessment year
2022 within the stipulated period.
This is because eligibility is identified
using the 2022 assessment year tax return
if the applicant is not a Rahmah Cash As-
sistance recipient, he added.
“If they make a tax declaration and are still
ineligible, there is a possibility of discrepancies
between the e-wallet platforms and Inland
Revenue Board records, and they can appeal.
Ahmad Maslan:
“For example, individuals who are un-
able to apply also include university stu-
6.5 mil eMadani
dents, because they have received eBe-
liaRahmah,” he said, adding that issues
applications
related to eMadani applications faced by
the public will be brought to the post-Cab-
approved,
inet meeting of the Ministry of Finance.
Meanwhile, he said that the strict condi-
RM650 mil
tions set for the eMadani are part of efforts
to help micro, small and medium enterprises.
credited
“We want to help the people by de-
veloping the local economy, and not big
companies, for example, for toll payments
and so on,” he said.
Bernama eMadani credit registration and claims,
open on Monday, will benefit 10 million peo-
ple, involving an allocation of RM1 billion.
Profit outlook
CGS-CIMB estimates the Big 4 (Top
Glove, Kossan, Supermax and Hartalega)
to swing from aggregate losses of RM456
million in CY23F to a modest profit of
unexciting
RM21 million in CY24F, growing to a
RM568 milllion net profit in CY25F.
“We estimate the Ebitda per 1,000 pcs
of local glovemakers to recover to 85-95%
of their respective pre-pandemic averages
by CY25F.
CGS-CIMB
“We also expect some variations to the
recovery in utilisation rates, led by Hartale-
ga as it has undergone the largest capacity
cut. We believe Top Glove and Supermax
by Surin Murugiah may still have plenty of excess capacity to
theedgemalaysia.com shed, hence their utilisation rates could
recover more slowly,” it said.
ROEs may not recover to pre-pandemic levels, even by 2025F
80%
70%
60%
50%
40%
30%
20%
10%
0%
-10% Hartalega Kossan Top Glove Supermax
-20%
2016 2017 2018 2019 2020 2021 2022 2023F 2024F 2025F
Sources: CGS-CIMB Research estimates, company reports
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3
RHB IB upgrades
transportation sector
to ‘overweight’;
MAHB and Tasco
top picks
BY SURIN MURUGIAH
theedgemalaysia.com
KUALA LUMPUR (Dec 6): RHB In-
vestment Bank Research has upgraded
the transportation sector to “overweight”,
and said of the five companies under its
coverage that had reported results, three
came in line, while two fell below estimates.
In a sector update on Wednesday, the re-
search house said the sector upgrade is un-
derpinned by positive macroeconomic and
sectorial indicators, namely emerging signs
of a recovery in China, further pickup in
tourism activities, and stronger momentum
in trade activities.
RHB IB said Westports Holdings Bhd’s
core earnings for the third quarter ended
Sept 30, 2023 (3QFY2023) were within
house expectations, remaining relatively sta-
ble quarter-on-quarter (q-o-q), but reflecting
a 30% year-on-year (y-o-y) improvement.
Meanwhile, it said that Malaysia Air-
ports Holdings Bhd (MAHB) is regaining
momentum in both its aeronautical and
non-aeronautical segments.
It said the stronger y-o-y performance was
not a surprise, given the promising growth
in both passenger traffic and recovery rates.
However, it said that earnings contract-
KUALA LUMPUR (Dec 6):TA Securities
has maintained its “buy” rating on Able
Global Bhd, a manufacturer and trader
of food products, with an unchanged tar-
get price of RM1.55 per share, based on
the sum-of-parts valuation method, as it
believes the group’s growth momentum
is sustainable, riding on normalised input
costs and a diverse pool of suppliers.
In a note on Wednesday, TA Securi-
ties said demand for Able Global’s filled
milk products is escalating in the US mar-
ket, where the company made its maiden
exports in July 2023, due to inflationary
pressure and lower price point product
offerings.
The group’s export approval for full
cream dairy products to Mexico is still in
the pipeline, but it is cautiously optimis-
tic about obtaining the licence early in the
second half of calendar year 2024.
12 THEEDGE CEO MORNING BRIEF
H O M E
ed 11% q-o-q, due to the provision for
doubtful debt for MYAirline, higher de-
preciation, and increased user fees, in tan-
dem with the increase in passenger traffic.
“Its retail segment revenue also increased
2.6 times y-o-y, attributed to an improved
passenger mix, higher retail spending per tick-
et of RM304 (versus 2QFY2023: RM290),
and higher royalties,” the research house said.
RHB IB said the confluence of reduced
freight rates and subdued demand contin-
ued to erode margins of the freight-for-
warding business. It said the sluggish quar-
terly performance was in tandem with the
weak trade date printed, as well as softer
global economic and trading activities.
“For logistics players under RHB IB’s
coverage, FM Global Logistics Holdings
Bhd’s results for the first quarter ended Sept
30, 2023 were in line, but recorded a 21.6%
y-o-y drop, while Tasco Bhd’s earnings for
the second quarter ended Sept 30, 2023
were below expectations, both due to soft-
er freight-forwarding business volumes and
slower-than-expected warehouse activities.
“Nevertheless, we expect Tasco to record
a much better performance for the second
half ending March 30, 2024, from maiden
contributions of new warehouses, which
should fetch wider margins compared to its
current rented warehouse,” RHB IB said.
“Our sector upgrade is justified, based
on the positive macroeconomic and sectoral
indicators.
“RHB Economics expects trade momen-
tum to strengthen beyond the fourth quarter
of 2023, supported by the resilience of US
and regional economies, a global technology
cycle rebound, and early signs of a recovery
in China. Note that US/Asean/China con-
stitute about 11%/28%/13% of Malaysia’s
total exports,” RHB IB said.
TA Securities
keeps ‘buy’
on Able Global
BY LUQMAN AMIN
theedgemalaysia.com
“In the absence of clarity of the time-
line for the approval, the company has
been actively engaging with local con-
sultants in Mexico, amid the submission
of necessary documents to the Mexico’s
authority after the initial query,” TA Se-
curities said.
Read the full story
WWW.PENTAMASTER.COM.MY
Phillip Capital
starts coverage
of Pentamaster,
target price
at RM5.65
BY SURIN MURUGIAH
theedgemalaysia.com
KUALA LUMPUR (Dec 6): Phillip
Capital has initiated coverage of Pen-
tamaster Corp Bhd with a “buy” rat-
ing at RM4.56, and a target price of
RM5.65, based on a target 35 times
price-earnings (P/E) multiple on es-
timated earnings per share for the
financial year ending Dec 31, 2024
(FY2024).
In a note on Wednesday, the re-
search house said that trading at for-
ward 28 times P/E, it sees opportuni-
ties on the back of positive views on
the rising electric vehicle adoption
trend, semiconductor sector recov-
ery, and growing opportunities in
the medical segment.
Phillip Capital said Pentamaster
had consistently generated positive
operating cash flows since FY2019,
and had invested in capital expend-
iture with little borrowings.
The research house said the ma-
jority of the company’s cash outflow
can be attributed to dividend pay-
ments, with a yield of less than 1.0%.
It said while there is no official
dividend policy, Pentamaster had
distributed around 10% of its annual
profit after tax for the past two years.
“We project a similar payout mov-
ing forward. Pentamaster has been
able to demonstrate a stable cash
flow, and generate a positive free
cash flow in most years.
“Key downside risks include pro-
longed market recovery and any un-
foreseen customer order delays,” it
said.
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3 13 THEEDGE CEO MORNING BRIEF

H O M E

NEWS IN BRIEF

Heitech Padu secures RM37 mil

Boustead Heavy Industries announces RM417 mil debt settlement plan contract
KUALA LUMPUR (Dec 6): Boustead Heavy Industries Corp Bhd (BHIC) has proposed to KUALA LUMPUR (Dec 6): Heitech
undertake a partial debt settlement with three banks totalling RM183.26 million and the Padu Bhd has secured a contract worth
full settlement of its RM234 million debt with Boustead Holdings Bhd (BHB). Payment RM37.01 million to provide end-to-end
will be made by the cut-off date of Dec 31 that was agreed to by the parties, BHIC told services for the hospital information
Bursa Malaysia on Wednesday. It said the partial debt settlement with the banks — system (HIS) at Sultan Ismail Hospital
Affin Bank Bhd, MBSB Bank Bhd and AmBank Islamic Bhd — will be made through a in Johor Bahru. In a filing with Bursa
combination of cash and the issuance of new ordinary shares and “Class A” redeemable Malaysia on Wednesday, the global ICT
convertible preference shares, both conventional (RCPS A) and Islamic (RCPS-i A), at a systems and technology service provider
price of 57 sen per share. Meanwhile, the RM234 million debt with BHB will be settled said the 36-month contract will commence
through the issuance of new BHIC shares, “Class B” redeemable convertible preference on Dec 18. The services provided by
shares (RCPS B) and “Class C” redeemable preference shares (RPS C), also at 57 sen per the group will encompass the supply,
share. — by Sulhi Khalid installation, development, configuration,
testing and commissioning of HIS
Read the full story hardware, software and systems.
— by Choy Nyen Yiau

LB Aluminium’s 2Q profit falls 65% Comintel proposes 1-for-10 rights

KUALA LUMPUR (Dec 5): LB Aluminium
Bhd saw its net profit fell 64.59% to RM4.37
million for the second quarter ended Oct 31,
2023 (2QFY2024), from RM12.35 million
a year before, due to lower contribution
from the aluminium segment. Earnings per
share dropped to 1.01 sen for 2QFY2024,
from 2.84 sen previously. Quarterly revenue,
however, increased by 7.56% to RM221.67
million, from RM206.09 million previously.
Its aluminium segment’s profit before
tax declined by 76.6% to RM4.12 million,
from RM17.59 million previously, due to a
decrease in both revenue and margins.
— by Justin Lim
Read the full story
Sapura Industrial’s profit falls 26%
on deferred tax provision
KUALA LUMPUR (Dec 6): Sapura Industrial
Bhd’s net profit fell 25.68% to RM1.89
million in the third quarter ending Oct
31, 2023 (3QFY2024), compared to
RM2.55 million a year ago, mainly due to
the provision for deferred tax liabilities.
Quarterly revenue rose 9.12% to RM77.08
million from RM70.64 million in the previous
year’s corresponding period, in line with
improvement in volume due to the delivery of
carried-over bookings made during the sales
tax exemption period. — by Choy Nyen Yiau
Read the full story
issue, private placement to raise
RM90 mil
KUALA LUMPUR (Dec 6): Comintel Corp
Bhd, which completed its regularisation plan
last year, has proposed a rights issue exercise
followed by a private placement to raise
approximately RM90 million for acquisition
of construction equipment and working
capital purposes. The group is proposing a
one-for-10 rights issue of 45.25 million shares
at 80 sen apiece to raise RM36.2 million. It is
also proposing the private placement of 45.25
million shares, representing 9.09% of the
enlarged share base post-rights issue, to raise
approximately RM53.85 million, based on an
illustrative placement price of RM1.19 per
share. — by Adam Aziz
Read the full story
Malaysia and UAE to complete
bilateral trade talks by 1Q2024,
says Zafrul
KUALA LUMPUR (Dec 6): Talks
between Malaysia and the United
Arab Emirates (UAE) concerning a
comprehensive economic partnership
agreement between the two nations
will be completed by the first quarter
of 2024 (1Q2024), said the Ministry of
Investment, Trade and Industry (Miti).
“We hope to complete our trade talks
with the UAE. Our comprehensive
partnership agreement will, god willing,
be signed in February or 1Q2024,” said
Miti Minister Tengku Datuk Seri Zafrul
Abdul Aziz during a press conference
at his ministry’s report card briefing on
Wednesday. — by Izzul Ikram
Read the full story
MPI ceases leadframe manufacturing
after 49 years
KUALA LUMPUR (Dec 6): Malaysian
Pacific Industries Bhd (MPI) said it will
cease its leadframes manufacturing
operations under Dynacraft Industries
Sdn Bhd by end-January next year. MPI,
part of the Hong Leong Group, said
the cessation “is made after a careful
business strategy review”. Set up in
1974, Dynacraft Industries is “one of the
largest manufacturers of leadframes in
the region” with a manufacturing facility
in Penang, MPI’s annual report showed.
Leadframes, a thin layer of metal which
forms semiconductor device assembly,
are used in a broad range of electronic
products, such as computers, automotive
components and telecommunications, the
report said. — by Adam Aziz
Read also:
MVV Industrial Park project in Negeri
Sembilan to achieve RM2.8 bil GDV
Former BNM forex dept director
appointed CSH Alliance chairman
’Embarrassment to the state’, says
Johor MB after hours-long blackout hit
Causeway checkpoint
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3
Zahid shuts down
talk of Umno-
PAS alliance
Bernama
PUTRAJAYA (Dec 6): Umno does not in-
tend to re-establish political cooperation
with PAS.
In fact, Umno president Datuk Seri Dr
Ahmad Zahid Hamidi said the party has
not heard rumours or received any pro-
posal regarding this.
“We hope they would never try to dupe
Umno again... as for now, Allah has not
opened our hearts to re-establish a politi-
cal cooperation with them.
“So, they should just stop daydream-
KUALA LUMPUR (Dec 6): A Dewan
Negara member on Wednesday urged that
Malaysia explore a new way to increase
national income via carbon credit sales as
a new potential source.
Senator Jaziri Alkaf Abdillah Suffian
said Malaysia might stand to reap billions
of ringgit from the carbon credit potential.
“As mentioned by the Malaysian Tim-
ber Council, this country has 18.27 million
hectares of forest area. The value of carbon
credits in 2023 is estimated at between
US$40 and US$80 per tonne (RM186.90
to RM373.80).
“By taking a conservative value of
US$20, the revenue from the sales of these
carbon credits can increase national in-
come by RM432.8 billion every year.
“Within two years, we can pay off the
national debt [from such revenue],” he said
while debating the Supply Bill 2024 for
the second reading in the Dewan Negara
on Wednesday.
He also urged the government to work
14 THEEDGE CEO MORNING BRIEF
H O M E
ing,” he said in response to PAS deputy
president Datuk Seri Tuan Ibrahim Tuan
Man’s remarks that PAS is open to working
with Umno again despite the bitter feud
between both parties.
Tuan Ibrahim also reportedly said
that any cooperation with Umno must be
through the Perikatan Nasional platform,
which also includes Bersatu.
Speaking to reporters after witnessing
the presentation of donations to the Hu-
manitarian Trust Fund for the People of
Palestine (AAKRP) here on Wednesday,
Zahid also called on Umno supreme coun-
cil member Isham Jalil to attend and share
his views on the results of the Kemaman
parliamentary by-election at Umno’s su-
preme council meeting later.
He said Isham has been absent from Um-
no’s supreme council meeting three times.
“Hopefully, he will have the courage to
come tonight,” he said.
Isham was reported to have said that
Umno’s defeat in the Kemaman by-election
was due to some Umno members being
lackeys of DAP.
In the by-election last Saturday, the PAS-
led Terengganu government maintained its
status quo in Kemaman with Datuk Seri Dr
Ahmad Samsuri winning the parliamentary
seat with a 37,220-vote majority.
He garnered 64,998 votes, defeating Ba-
risan Nasional (BN) candidate Gen (Rtd)
Tan Sri Raja Mohamed Affandi Raja Mo-
hamed Noor, who obtained 27,778 votes.
The by-election was held following the
Terengganu Election Court’s decision on
Sept 26 to nullify PAS candidate Che Alias
Hamid’s victory in the 15th General Election.
Govt urged to
explore carbon
credit sales as
new income
source
Bernama
with other tropical countries such as Laos,
Bolivia, Cameroon, Mexico, Papua New
Guinea and Venezuela.
“We should be considered the ‘lungs’
of the world, where more than half of our
country’s territory is rainforest, with 27%
of it being permanent forest reserves.
“I hope and believe this is an opportu-
nity for the country to find a more effec-
tive alternative source of income,” he said.
WIKIPEDIA.ORG
Pahang govt
acquiring site for
Pulau Tioman airport
upgrading project
Bernama
KUANTAN (Dec 6): The Pahang gov-
ernment, through the State Economic
Planning Division, is in the process of
acquiring the site for the Pulau Tiom-
an Airport upgrading project, which in-
volves extending the runway from 850
metres to 1.3 kilometres.
State Public Works, Transport,
Health and Local Government Com-
mittee chairman Datuk Mohammad
Fakhruddin Mohd Ariff told the state
assembly that the federal government
had approved an allocation of RM47
million for the project.
He was responding to a question
from Datuk Mohd Johari Hussain
(BN-Tioman) on the status of the Ti-
oman Island airport project.
To a supplementary question from
Johari on whether the Pulai Tioman Ai-
port was ready to receive private planes
and direct international flights, he said
a study on the matter was being con-
ducted by consultants.
Meanwhile, Pahang Unity, Tourism
and Culture Committee chairman Le-
ongYu Man said the state government is
gathering information to determine the
exact location in Kuantan mentioned
in the anime Jujutsu Kaisen series, as
went viral on social media.
“We are making efforts to contact
the Japanese side and get approval from
the creator of the anime to determine
the exact location, so that there will be
a place for anime fans to ‘check in’ and
become a new attraction for anime fans
all over the world,” she said.
She said this in response to a ques-
tion from Rosli Abdul Jabar (PN-Tan-
jung Lumpur) regarding the state gov-
ernment’s plans to upgrade Pantai Anak
Air and to turn the Pantai Tanjung Lum-
pur Beach into a tourist destination.
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3
THE EDGE FILE PHOTO
Despite
withdrawal
of application
for 1MDB
docs, MACC
investigations
against lawyers,
firms continue
BY TARANI PALANI
theedgemalaysia.com
KUALA LUMPUR (Dec 6): The Malay-
sian Anti-Corruption Commission (MAC-
C)’s investigations on two lawyers and their
firms over alleged bribery and money laun-
dering in the Malaysian government’s set-
tlements with Goldman Sachs and Am-
Bank over 1Malaysia Development Bhd
(1MDB) is still ongoing.
Deputy public prosecutor (DPP) Ma-
hadi Abdul Jumaat said this in court on
Wednesday during a brief mention regard-
ing the graft busters’ withdrawal of its le-
gal action compelling lawyers Rosli Dahl-
an, Chetan Jethwani and their respective
firms to produce documents to assist in
investigations.
“As stated in the letter to court on Nov
29, where we informed the court we do not
intend to continue with this application.
We are present today to officially inform
the court of this, and for the application
to be struck off.
“Although the application is withdrawn,
the investigations are still ongoing. The
investigations are still ongoing but at this
stage we don’t require the documents from
the respondents,” Mahadi said during pro-
ceedings before two separate High Court
judges Muniandy Kannyappan and Datuk
Muhammad Jamil Hussin.
Mahadi also added that the prosecution
does not have to reveal at what stage the
15 THEEDGE CEO MORNING BRIEF
H O M E
investigation is at the moment.
Both High Courts stuck out the an-
ti-graft body’s application on Wednesday.
During proceedings before Muham-
mad Jamil who presided over Chetan
and his firm Messrs Chethan Jethwani,
the lawyer wanted it on record that the
withdrawal means that MACC is not
taking any privileged documents from
his firm, which represented Goldman
Sachs in the August 2021 agreement.
Subsequently, the investment bank
also withdrew its application to intervene
in the matter. Lawyer Krishna Dallumah
said that the US-based bank still asserts
its rights to the privileged documents.
Teh See Khoon appeared for Chetan
and his firm on Monday. Meanwhile,
Shaarvin Raaj Selva Kumar also ap-
peared for Goldman.
During proceedings before Muni-
andy who presided over Rosli and Rosli
Dahlan Saravana Partnership’s (RDS)
case, the High Court judge struck out
the application and ordered for the cause
papers including affidavits to not be ac-
cessible by third parties.
The court also struck out the legal
action against Rosli.
RDS who was represented by M Pu-
ravalen had asked for one of MACC’s
affidavits in support of the application
to be struck out as there were averments
made against the 17-partner firm which
could be damaging.
Rosli had earlier applied for the ap-
plication against him to be struck out,
saying that it was wrong to single him
out when the documents sought were
in the firm’s possession.
Harvinderjit Singh, appearing for
Rosli, argued that the legal action against
his client ought to be struck out as there
was no reason for him to be named in
the first place.
In a statement, Rosli again repeated
that the application was done to “smear
his reputation”.
“From the beginning of this episode,
I have stated that the MACC’s actions
against my firm and I are scandalous,
frivolous, vexatious, libelous and funda-
mentally flawed. It is obvious that the
MACC has decided to discontinue a
proceeding that they had initiated un-
wittingly to their own detriment and to
the prejudice of the country.
“All these shenanigans against my
firm and I must stop. There is still much
to be done to recover the losses from the
1MDB scandal,” he said.
Read also: Rosli Dahlan: MACC had
to withdraw vexatious and fundamen-
tally flawed application
Court prohibits
Sanusi from repeating
comments pending
defamation suit by
Vincent Tan
BY HAFIZ YATIM
theedgemalaysia.com
SHAH ALAM (Dec 6): The High Court
here on Wednesday granted a permanent
injunction sought by Berjaya Land Bhd
(BLand) and Berjaya Group founder Tan
Sri Vincent Tan against Kedah Menteri
Besar Datuk Seri Muhammad Sanusi Md
Nor, which prohibits the PAS politician
from repeating his comments with regard
to the Selangor Maritime Gateway project
until the disposal of the defamation suit
against him.
The order was granted by Judicial Com-
missioner Choong Yeow Choy, after hear-
ing submissions from Chuar Kia Lin and
Lew Wei Shing, who appeared for the ty-
coon and BLand. Mohd Faizi Che Abu and
MohdYusfarizalYussoff represented Sanusi.
Chuar confirmed the outcome of the
proceedings when contacted by The Edge.
The ex-parte injunction was initially
granted on Aug 17, when the business-
man and BLand had filed the suit against
Sanusi for his comments.
The inter-partes injunction hearing was
supposed to be heard earlier, but this was
deferred, and the decision was made on
Wednesday.
Chuar added that Choong fixed Dec
21 for case management by e-review to
comply with pre-trial directions.
Tan and BLand filed the defamation suit
against Sanusi on Aug 8, where the com-
pany and businessman are seeking general
damages, compensatory damages, aggra-
vated damages and exemplary damages.
They also sought an injunction to refrain
Sanusi or his agents from making similar
remarks in the future until the disposal of
the suit.
They claimed that Sanusi’s comments
had “pervaded and permeated into Tan’s
family circle, further aggravating the mental
trauma suffered by him and his family”.
They also said that Sanusi’s comments
are vindictive and malicious.
Tan, through his lawyers, claimed that
Sanusi’s alleged defamatory comments
imply that Tan is a corrupt person, a cor-
rupt businessman, and a crony to Selangor
Menteri Besar Datuk Seri Amirudin Shari.
Read the full story
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3 16 THEEDGE CEO MORNING BRIEF

W O R L D

DUBAI (Dec 5): US special climate en- produce more energy than is required to

US envoy
voy John Kerry launched on Tuesday an make them happen.
international engagement plan to boost There are also regulatory, construction

Kerry launches
nuclear fusion, saying the emissions-free and siting hurdles in creating new fleets of
technology could become a vital tool in power plants to replace parts of existing

international
the fight against climate change. energy systems.
Kerry said the plan involved 35 nations Britain and the United States on Nov 8,

nuclear fusion
and would focus on research and develop- signed a cooperation agreement on fusion.
ment, supply chain issues, and regulation Other countries pursuing fusion include

plan at COP28
and safety.
“There is potential in fusion to revolu-
tionise our world,” Kerry told the COP28
climate summit in Dubai.
Fusion, which powers the sun and other
stars, can be replicated on Earth with heat
and pressure using lasers or magnets to
smash two light atoms into a denser one,
releasing large amounts of energy.
The nascent technology could have an
important advantage over today’s nuclear
fission plants by producing huge amounts
of unlimited power without long-lasting
radioactive waste.
But there are big hurdles to fusion’s
producing commercial electricity. For one,
scientists have so far only achieved scat-
REUTERS
tered instances where fusion experiments
Australia, China, Germany and Japan.
In August, scientists using laser beams
at a US national lab in California repeat-
ed a fusion breakthrough called ignition,
BY VALERIE VOLCOVICI where for an instant, the amount of energy
Reuters coming from the fusion reaction surpassed
that concentrated on the target.
Scientists estimated, however, that the
net energy output of that experiment was
only about 0.5% of the energy that went
John Kerry into firing up the lasers.
Of the two main types of fusion, one
uses lasers to concentrate energy on a gold
pellet containing hydrogen.
The other uses powerful magnets to
trap plasma, or gaseous hydrogen heated
to about 100 million degrees Fahrenheit
(55 million degrees Celsius).

Former PM
LONDON (Dec 6): Former British prime prefer to see people die in large numbers
minister Boris Johnson said on Wednesday than order a second lockdown.

Boris Johnson
he was deeply sorry for the loss of life during Aamer Anwar, the solicitor representing
the Covid-19 pandemic and accepted he had Scottish bereaved Covid families, said John-

apologises for
made mistakes, but struggled to say specif- son oversaw “a deadly culture of impuni-
ically what he could have done differently. ty, incompetence” and treating people like

pain and suffering

Johnson said he took personal responsi- “toxic waste”.
bility for all decisions that were made and Although Johnson has given evidence to

he understood the public’s anger after the
inquiry heard testimony of government in-
competence, backstabbing and misogyny as
it battled the biggest health crisis in decades.
The hearing was disrupted by protesters,
who were warned, and in some cases or-
dered to leave, by the inquiry’s chairwoman.
“Can I say that I understand the feel-
ings of the victims and their families, and
I am deeply sorry for the pain and the loss
and the suffering of those victims and their
families,” Johnson said.
“Were there things we could have done
differently? Unquestionably. But I would
struggle to itemise them before you now
in a hierarchy.”
Johnson, prime minister for three years
between 2019 and 2022, resigned in dis-
grace after a series of scandals including
reports that he, and other officials, had
been present at alcohol-fuelled gatherings
in Downing Street during 2020 and 2021
when most people in Britain were forced
to stay at home.
The inquiry has already heard damaging
testimony about Johnson’s handling of the
crisis, including his reluctance to lock down,
and how he was confused by the science.
during pandemic
BY ANDREW MACASKILL & MUVIJA M
Reuters
Johnson was said to have asked at one
point if blowing a hair-dryer up his nose could
kill the virus and suggested he should be in-
jected with Covid on TV to calm public fears.
Johnson faces two days of questioning
in what are likely to be the most emotion-
ally charged sessions of the official inves-
tigation so far into why Britain ended up
with one of the world’s highest death tolls
during the pandemic.
Covid-19 killed more than 230,000
people in Britain and infected many mil-
lions more.
‘Let people die’
Johnson arrived at the inquiry in the dark,
more than three hours before the hear-
ing began, avoiding the families of some
of those who died from Covid-19, and
who had wanted to confront Johnson over
claims that he told colleagues he would
parliament before about how he managed
the pandemic, he is expected to provide
the most detailed public account about
his decision making in 12 hours of ques-
tioning over two days.
The inquiry has seen evidence from the
government’s former chief scientific adviser,
Patrick Vallance, who wrote in his diary in
Oct 2020 that Johnson wanted to let the virus
spread rather than order another lockdown.
Other senior advisers including Dom-
inic Cummings and Eddie Lister claim
Johnson also said “let the bodies pile high”.
Johnson has denied making those
comments.
Testimonies in recent weeks have de-
scribed how Johnson struggled to make
decisions at key moments in the crisis,
including when to impose curbs on the
public’s movements.
In private messages seen by the inquiry,
Simon Case, Britain’s most senior civil serv-
ant, claimed that his boss changed strategic
direction every day and was unable to lead.
Read also: US Navy patrol plane flies over
sensitive Taiwan Strait
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3
China seeks to
contain fallout
from Moody’s
bearish bond
outlook
Bloomberg
(Dec 6): China sought to nip any hit to in-
vestor sentiment in the bud after a bearish
credit outlook on debt threatened to exac-
erbate concerns over the financial health of
the world’s second-largest economy.
One day after Moody’s Investors Ser-
vice cut its outlook for Chinese sovereign
bonds to negative, the central bank dialed
up its support for the yuan a notch and
state media published a handful of articles
citing experts who denounced Moody’s
understanding of China’s economy. The
finance ministry had earlier insisted the
nation’s growth will be resilient.
The multi-pronged defense of China’s
debt status and financial system under-
scored how critical it is for Beijing to re-
assure investors and convince them the
nation’s bond and asset markets are worth
returning to. Foreigners remain extremely
pessimistic about the ability for policymak-
ers to turn around a years-long proper-
ty slump and prevent the economy from
stagnating, making the Moody’s cut yet
another thorn in the government’s side.
“If they have been quite ambivalent to the
actions by Moody’s yesterday, I think inves-
tors might start questioning if fiscal sustain-
ability is top of mind for authorities,” said
Louise Loo, lead economist at Oxford Eco-
nomics Ltd. She said the fact that China was
“quite indignant” about the cut “suggests to
us that issues that were raised by Moody’s
were quite top of mind for policymakers.”
“I think investors want to see that,” Loo
added.
China’s stocks and the yuan have both un-
derperformed against peers in the region as
the economy’s performance has disappointed.
Confidence among businesses and house-
holds remains weak and various efforts to
bolster the property sector haven’t really tak-
en root. Foreign investment has plummeted.
17 THEEDGE CEO MORNING BRIEF
W O R L D
A widening yield differential with the
US as the People’s Bank of China cut pol-
icy rates and the Federal Reserve raised
them has also weighed on sentiment: For-
eign investors have been selling yuan-de-
nominated bonds at a record pace to buy
notes with higher yields elsewhere.
The Moody’s announcement, mean-
while, put a spotlight on China’s debt is-
sues. While the agency retained a long-
term rating of A1 on the nation’s sovereign
bonds, it cited the usage of fiscal stimulus to
support debt-laden local governments and
the spiraling property downturn as risks.
The pushback from China generally
followed a theme: Moody’s just doesn’t
know this economy.
The multi-pronged
defense of China’s debt
status and financial system
underscored how critical
it is for Beijing to reassure
investors and convince
them the nation’s bond
and asset markets are
worth returning to.
“The rating agency’s understanding of how
the Chinese economy works and how the Chi-
nese government functions is not deep enough
and does not reflect the reality,” Feng Qiaobin,
a deputy director of macroeconomic research
at a department under the State Council, was
quoted as saying in one state-backed newspa-
per. She told the publication that the cut was
based on outdated information.
State broadcaster China Central Television
echoed that criticism in a report published
on Wednesday, saying the change was based
on “misjudgments” over the nation’s growth
potential and government debt issues. Citing
experts, the report said Moody’s and oth-
er global ratings agencies have historically
been overly harsh toward emerging markets.
BLOOMBERG
Moody’s changes
Hong Kong’s
outlook to
negative from
stable
BY GURSIMRAN KAUR
Reuters
(Dec 6): Moody’s onWednesday down-
graded its outlook on Hong Kong to
negative from stable, a day after cutting
China’s credit outlook citing costs to
bail out local governments and state
firms or to control its property crisis.
The downgrade in Hong Kong’s
outlook reflects an assessment of
tight political, institutional, econom-
ic and financial links between Hong
Kong and China, Moody’s said.
Hong Kong dismissed the deci-
sion on those grounds.
“We disagree with its decision to
change Hong Kong’s credit outlook
to “negative,” it said in a statement,
adding the ties with China were “a
source of strength for long-term de-
velopment.”
The ratings agency affirmed
Hong Kong’s Aa3 ratings, reflect-
ing credit strengths such as a wealthy
and competitive economy, fiscal and
external buffers and a track record of
effective monetary and fiscal policy.
Following imposition of a Nation-
al Security Law in 2020 and chang-
es to Hong Kong’s electoral system,
Moody’s said it “expects further ero-
sion of the (city’s) autonomy of po-
litical, institutional and economic
decisions to continue incrementally”.
It said a weakening trend in
mainland China would affect Hong
Kong’s economy, while “weaker
growth in Hong Kong could erode
the government’s fiscal buffers.”
The ratings agency separately
also lowered the outlook on Ma-
cau to negative from stable.
Last month, Hong Kong’s gov-
ernment revised down the full-year
economic growth forecast to 3.2%
from an earlier estimate of a 4.0%
to 5.0% range.
Read also: PBOC steps up yuan
support via fixing after Moody’s out-
look cut
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3
(Dec 6):Treasury Secretary JanetYellen said
US lawmakers hold Ukraine’s fate in their
hands as they block $61 billion in fresh fund-
ing requested by the Biden administration
for the embattled East European country.
“This is a dire situation and we can hold
ourselves responsible for Ukraine’s defeat
if we don’t manage to get this funding to
Ukraine,”Yellen told reporters as she trav-
eled to Mexico City Tuesday.
The Treasury chief said Kyiv, as it holds
off Russian forces, is channeling all its tax
revenue into its military defense. But keep-
ing its schools and hospitals open and oth-
er services operating depends crucially on
US funding, she said. The White House has
said current US funding will run out by the
end of the year.
Republicans have insisted they will only
agree to the new aid package if Democrats
and the White House make major con-
cessions on immigration policy to curb a
surge in migrant crossings at the US bor-
der with Mexico.
Ukrainian President Volodymyr Zelen-
skiy on Tuesday canceled plans to address
the US Senate via videoconference as ne-
gotiations stalled.
The US has already delivered tens of
billions in military and non-military assis-
tance to Ukraine since the Russian invasion
in February 2022.
“It’s essential to our allies who are pro-
viding, quite frankly, overall more generous
funding than we are,” Yellen said. “We’re
doing a lot, they’re doing even more than
(Dec 6): Sanjay Shah, a hedge-fund trad-
er accused of defrauding the Danish state
of US$1.3 billion (RM6.07 billion) in the
Cum-Ex trading scam, will be handed over
to Denmark to face criminal charges just
over a year after he was arrested in Dubai.
“Shah was extradited to Denmark’s secu-
rity mission, according to legal procedures,”
state-run WAM news agency reported on
Wednesday. The move was “based upon a
decision by the Court of Cassation in Dubai,
and the resolution by the Minister of Justice,
who approved the extradition.”
Shah’s Danish defence lawyers said in a
statement they’ve been informed by local
sources in Dubai that Shah is expected
to arrive in Denmark later on Wednesday.
“The extradition process has been slow,
opaque and haphazard,” the lawyers, Kaare
Pihlmann and Mikael Skjodt, said. “We are re-
lieved that the uncertainty is now over and that
Sanjay Shah is finally on his way to Denmark.”
Danish prosecutors allege Shah oversaw
the Cum-Ex trading scam involving a global
network of bankers, lawyers and agents who
earned vast sums of money from Denmark’s
tax authority by using a loophole on divi-
18 THEEDGE CEO MORNING BRIEF
W O R L D
REUTERS
Yellen appeals
to Congress
as Republicans
block fresh aid
to Ukraine
BY CHRISTOPHER CONDON
Bloomberg
“This is a dire situation and we can hold ourselves responsible for Ukraine’s defeat if we don’t
manage to get this funding to Ukraine,” Yellen told reporters.
we’re doing and Ukraine is just running “It doesn’t seem at all like it’s requiring
out of money.” higher unemployment.”
Former Treasury Secretary Lawrence
‘Eating their words’ Summers was the most prominent among
The Treasury chief was on her way to Mex- many economists who dismissed the pos-
ico to discuss trade ties and increased coop- sibility the US could escape high inflation
eration with authorities there aimed at fight- without a serious uptick in joblessness. In
ing the illicit supply of fentanyl into the US. July 2022 he said unemployment would
In comments on the US economic out- have to rise beyond 5% for inflation to
look, Yellen took at swipe at economists reach the Federal Reserve’s 2% target.
who predicted only a recession would tame The Fed’s preferred gauge of price pres-
inflation and criticized her for continu- sures, the PCE price index, fell to 3% in
ally saying she saw a path to a so-called the 12 months through October. Unem-
soft landing. ployment, meanwhile, has ticked up in re-
“Economists who’ve said it’s going to cent months, driven in part by would-be
require very high unemployment to get workers coming off the sidelines to seek
this done are eating their words,” she said. jobs, but remained below 4%.
Hedge fund
dend payouts to reap duplicate tax refunds.
Shah’s trial in Denmark has already
trader Shah
been delayed three times because he hadn’t
been extradited on time. While the case
extradited to
is now scheduled to begin in January, it’s
likely to be further postponed as his law-
Denmark a year
yers need three to six months to prepare,
Pihlmann told Bloomberg by phone.
after arrest
Shah, who was arrested in 2022, has
consistently maintained his innocence.
Denmark and the United Arab Emirates
(UAE) signed an extradition deal in March
BY ADVEITH NAIR & SANNE WASS last year, with Shah’s handover being one
Bloomberg of the main purposes.
BLOOMBERG
Read the full story
Read also:
El-Erian says Fed risks losing control of
messaging on US rates
‘No bears left’ is worrying refrain coming
from Wall Street
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3
BRUSSELS/STOCKHOLM/LONDON
(Dec 6): European Union ambitions to
take a lead in landmark rules for artificial
intelligence hang in the balance as member
states and lawmakers meet on Wednesday
to try to hammer out a deal on biometric
surveillance and how to regulate systems
like ChatGPT.
If agreed, the EU’s first-of-a-kind AI
Act, which was proposed by the European
Commission two years ago, could serve as
the benchmark for countries seeking an al-
ternative to the US’ light-touch approach
and China’s interim rules.
Talks between EU members and law-
makers will start at 1400 GMT and are
expected to run into the early hours of
Thursday, with the most likely outcome
a provisional deal on principles but not
crucial details, five people directly involved
said.
A final deal would then need to be
agreed before legislation could be put in
place, which could pave the way towards
it becoming law before European parlia-
mentary elections in June.
(Dec 6):Traders are ramping up bets on the
extent of monetary easing from the Euro-
pean Central Bank (ECB) in 2024 as poli-
cymakers signal they’ve probably tightened
enough to bring inflation back to target.
Markets fully priced in six quarter-point
rate cuts by the ECB in 2024 for the first
time, a move that would take the key rate
down 150 basis points (bps) to 2.5%.
There’s also an almost 90% chance of the
easing cycle starting in the first quarter of
next year, a scenario that was barely con-
templated just three weeks ago.
While policymakers are still warning of
the threat posed by inflation, they’ve also in-
creasingly acknowledged that further hikes
above 4% will likely not be needed. Isabel
Schnabel, regarded as one of the govern-
ing council’s most hawkish members, said
in a recent interview with Reuters that the
decline in inflation has been “remarkable”
and “encouraging”.
“The European economy has been stead-
ily deteriorating over the past 12 months as
financial conditions have tightened,” said
Gareth Isaac, head of multi sector portfolio
management at Invesco. He expects labour
markets soften next year, “providing the
ECB with the cover to begin cutting rates
sharply as inflation falls back to target”.
ECB Governing Council member Mar-
tins Kazaks, cited by Econostream Media
on Wednesday, said while there’s no need
to cut rate cuts in the first half of 2024, the
policy decision might change if the “balance
of risks for price stability shifts”. Last week
Francois Villeroy de Galhau — considered
19 THEEDGE CEO MORNING BRIEF
W O R L D
Disputed landmark
AI rules face
crunch EU talks
BY FOO YUN CHEE, SUPANTHA MUKHERJEE
& MARTIN COULTER
Reuters
But without a deal, the AI Act is likely to
be shelved due to a lack of time, resulting
in the 27-member bloc losing its first-mov-
er advantage in regulating the technology.
Alexandra van Huffelen, Dutch minister
for digitalisation, told Reuters it was critical
the EU finds a compromise, particularly
on generative AI, by the end of the year.
“The world is watching us: citizens,
stakeholders, NGOs and the private sector
want us to agree on a meaningful piece of
legislation regarding AI, including GPAI,”
she said referring to general purpose AI
systems, which have a wide range of uses.
Traders see ECB
cutting rates by
150bps through
2024
BY ALICE GLEDHILL
Bloomberg
BLOOMBERG
Markets fully priced in six quarter-point rate cuts
by the European Central Bank in 2024 for the first
time, a move that would take the key rate down
150 basis points to 2.5%.
a centrist — said “barring any shock, rate
hikes are now over,” and raised the prospect
of cuts next year.
The slew of ECB comments acknowl-
edging the progress in the fight against infla-
tion comes days after data showed euro-area
consumer prices grew less than expected
in November, by 2.4% year-on-year from
Demands
The proposed AI rules face conflicting
EU demands.
The two biggest are over the use of
AI in biometric surveillance and foun-
dation models, the generative AI such as
Microsoft backed OpenAI which trains
on large sets of data to perform vari-
ous tasks.
EU lawmakers want to ban the use of
AI in biometric surveillance, while gov-
ernments want an exception for national
security, defence and military purposes.
A late proposal by France, Germany
and Italy to let makers of generative AI
models self-regulate added more uncer-
tainty.
EU ambassadors and lawmakers held
separate preparatory meetings last week,
but differences remain which could make
it difficult to clinch a deal, said the peo-
ple involved in the talks, who declined to
be named because they are confidential.
An official from one major EU coun-
try said whatever the meeting’s outcome,
there will still be a lot more work to do.
5.3% in August. That’s closer to the ECB’s
2% target than at any point since mid-2021.
At the same, economic data shows fur-
ther signs of weakness. German factory or-
ders unexpectedly fell in October, highlight-
ing how manufacturing in Europe’s largest
economy remains stuck in a rut.
If traders are right, the ECB will be the
first among major central banks to cut rates
next year, and will deliver the most aggres-
sive easing cycle.
The US Federal Reserve is expected to
deliver its first move in May and lower rates
by 125bps. In the UK, markets are currently
pricing three Bank of England quarter-point
cuts starting in June, and a 40% chance of
a fourth move. A month ago, just two cuts
were priced.
Rates markets in Australia have switched
from betting on another hike by mid-2024
to pricing in a better than 75% chance for
a cut by then. And even New Zealand’s
central bank — which last week said it may
need to hike rates next year — is now seen
as a strong chance to reduce its benchmark
by May.
The view that the ECB and other ma-
jor central banks will have to ease mone-
tary conditions to support their economies
next year has boosted bonds. The yield on
10-year German bonds has dropped about
80bps to 2.23% over the past two months,
the lowest level since May.
Read also: Banks mask lending to polluters
with PR greenwash, ECB blog says
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3
McKinsey sees
AI adding up to
US$340 bil to
Wall St profit
BY AISHA S GANI
Bloomberg
(Dec 6): Banks using generative artificial
intelligence (AI) tools could boost their
earnings by as much as US$340 billion
(RM1.59 trillion) annually through in-
creased productivity, according to consult-
ants hoping to help the industry adapt in
this fast-moving area.
This would amount to a 9% to 15%
increase in operating profits, according to
a McKinsey Global Institute report pub-
lished on Tuesday. Corporate and retail
banks have the most to gain, the authors
claimed.
Generative AI was popularised last year
when OpenAI’s ChatGPT tool launched,
offering users sentences, summaries or even
poetry based on simple prompts.The tech-
nology is trained on vast quantities of ex-
isting material that is used to generate its
responses.
Tools like this could eventually take over
repetitive tasks from most human workers,
according to McKinsey’s research on 63
use cases across industries.While the initial
efficiencies are set to be within companies
— and the time frame for adoption is un-
clear — the finance sector can expect the
SAN FRANCISCO (Dec 6): Alphabet on
Wednesday introduced its most advanced
artificial intelligence model, a technology
capable of crunching different forms of in-
formation such as video, audio and text.
Called Gemini, the Google owner’s high-
ly anticipated AI model is capable of more
sophisticated reasoning and understanding
information with a greater degree of nu-
ance than Google’s prior technology, the
company said.
“This new era of models represents one
of the biggest science and engineering efforts
we’ve undertaken as a company,” Alphabet
CEO Sundar Pichai wrote in a blog post.
Since the launch of OpenAI’s ChatGPT
roughly a year ago, Google has been racing
to produce AI software that rivals what the
Microsoft-backed company has introduced.
Google added a portion of the new Gem-
ini model technology to its AI assistant Bard
on Wednesday, and said it planned to re-
lease its most advanced version of Gemini
20 THEEDGE CEO MORNING BRIEF
W O R L D
Sales and marketing, software engineering, and call centre roles are among those most likely to be
affected, said senior McKinsey partner Jared Moon. As many as 70% of business activities will have
automated parts, which will leave only ‘a very small proportion’ of jobs untouched, Moon added.
AI shift in the future “to be a lot more on
the customer-facing side”, McKinsey senior
partner Gokhan Sari said in an interview.
Sales and marketing, software engi-
neering, and call centre roles are among
those most likely to be affected, said senior
McKinsey partner Jared Moon. As many as
70% of business activities will have auto-
mated parts, which will leave only “a very
small proportion” of jobs untouched, Moon
added.
“They’re taking the productivity gains to
implement code faster, write better content
for clients, freeing up time to spend with
customers,” he said.While he’s not yet seen
companies using AI to “materially reduce
the workforce”, over time “the jury is still
out” on job losses.
Wall Street has already dived into AI
as a way to overhaul its working practices
Alphabet unveils
long-awaited
Gemini AI model
BY MAX A CHERNEY & STEPHEN NELLIS
Reuters
through Bard early next year.
Alphabet said it is making three versions
of Gemini, each of which is designed to
use a different amount of processing pow-
er. The most powerful version is designed
to run in data centers, and the smallest
will run efficiently on mobile devices, the
company said.
Gemini is the largest AI model that the
company’s Google DeepMind AI unit has
helped make, but it is “significantly” cheaper
to serve to users than the company’s prior,
BLOOMBERG
and potentially cut costs. Goldman Sachs
Group Inc is using an AI-based tool to au-
tomate the labour-intensive elements of
coding, TheWall Street Journal has report-
ed. Citigroup Inc has used generative AI
to analyse more than 1,000 pages of new
capital rules. Derivatives trading, fraud de-
tection and even performance reviews are
among banks’ other experiments.
So far, the speed of technological change
since ChatGPT launched has left firms
with the challenge of finding skills in emerg-
ing areas, such as prompt engineering and
model tuning. According to Moon, compa-
nies are training their existing data science
teams to specialise in generative AI.
“This creates a catalyst for more firms
to invest in AI, and there’s even more value
in AI. So banks will need more AI talent,”
Moon said.
larger models, DeepMind vice president
(product) Eli Collins told reporters.
“So it’s not just more capable, it’s also
far more efficient,” Collins said. The latest
model still requires a substantial amount
of computing power to train, but Google is
improving on its process, he added.
Alphabet also announced a new genera-
tion of its custom-built AI chips, or tensor
processing units (TPUs). The Cloud TPU
v5p is designed to train large AI models,
and is stitched together in pods of 8,960
chips.
The new version of its customer proces-
sors can train large language models near-
ly three times as fast as prior generations.
The new chips are available for developers
in “preview” as of Wednesday, the compa-
ny said.
Read also: China Fund beating 98% of
peers spurns AI trade on risks
 t h u r s d ay d e c e m b e r 7 , 2 0 2 3
Tax income in
OECD countries
falls in 2022 amid
energy crisis
by Matteo Allievi
Reuters
(Dec 6): Tax raised by governments in
OECD countries as a proportion of GDP
fell in 2022 for only the third time since
the global financial crisis, the Paris-based
organisation said on Wednesday.
In its annual revenue statistics report
the Organisation for Economic Cooper-
ation and Development showed that the
average tax to Gross Domestic Product
(GDP) ratio across OECD countries
fell by 0.15 percentage points last year
to 34.0%.
Since 2008, the only other declines
were in recorded in 2017 and 2019, at
0.6 and 0.1 percentage points respectively.
Revenue from excise taxes fell as a
share of GDP in 2022 in 34 of the 36
countries for which preliminary data is
available, the report said.
In some European countries, these
declines were due to sharp increases in
energy prices, which led to lower de-
mand and in many a reduction in energy
taxes, the OECD said.
Oil prices were volatile in 2022,
boosted as the war in Ukraine tight-
ened supplies and then sliding on weak-
er demand from top importer China
and worries of an economic contraction.
Revenue from value-added tax (VAT)
also decreased as a share of GDP in
19 countries, partly as a result of gov-
ernment policies to cushion consum-
ers against high food and energy prices.
The fall in revenue from excise taxes
was partly offset by growth in corporate
income taxes, which rose as a share of
GDP in more than three-quarters of
OECD countries as profits increased,
especially in the energy and agricultural
sectors, the study found.
France had the highest tax-to-GDP
ratio (46.1%) in 2022, followed by Nor-
way (44.3%), while Mexico had the low-
est (16.9%).
Denmark recorded the largest fall in
its tax-to-GDP ratio between 2021 and
2022 (-5.5%) as revenue from income
taxes and from taxes on goods and ser-
vices dropped.
The largest increase was in Korea
(2.2%), helped by higher corporate in-
come tax and value added tax.
21 TheEdge CEO morning brief
w o r l d
Bitcoin trades
near US$44,000
after longest win
streak since May
by Sunil Jagtiani
Bloomberg
(Dec 6): Bitcoin traded close to US$44,000
(RM204,480) after notching its longest win-
ning streak since May, a rally driven in part
by expectations of looser monetary policy.
The largest digital asset climbed for six
days through Tuesday, advancing roughly
16% to as high as US$44,491 before giv-
ing up some gains. Its 2023 rebound from
last year’s crypto rout now stands at 163%.
Bitcoin is up almost 80% since
mid-September, a rally that saw it take
out the US$30,000 and US$40,000 levels
in quick succession. Along with wagers that
the Federal Reserve may start cutting in-
terest rates next year, its rise has also been
fueled by speculation that the US may be
close to allowing its first spot bitcoin ex-
change-traded funds.
BlackRock Inc filed with the Securities
and Exchange Commission in June to launch
such a product, suggesting crypto could soon
gain wider appeal as an asset class.
“Surely the ETF story is well and truly
priced?” said Tony Sycamore, a market an-
alyst at IG Australia Pty. The recent high
volatility and “jet-fuelled” move up in bit-
coin is instead a reminder that crypto is
“more responsive to a Fed pivot and policy
than other asset classes,” he said.
For now, bitcoin momentum is overshad-
owing any concerns that the surge is at risk of
becoming too stretched. Smaller virtual cur-
rencies such as Avalanche and meme-crowd
favorite Dogecoin have also been advancing.
‘Kimchi premium’
The bullish overall mood is evident across
a range of countries. Bitcoin on South Ko-
rea’s Upbit and Bithumb exchanges at one
point was trading about 4% above the pre-
vailing global price on Wednesday, a return
of the so-called “kimchi premium” that
made headlines during the pandemic-era
bull run in digital assets.
In Abu Dhabi, crypto mining hardware
retailer Phoenix Group Plc jumped 35%
on its debut on Tuesday. The firm is the
first crypto-related listing in the Middle
East. In El Salvador, Nayib Bukele said in
a posting on X this week that the nation’s
bitcoin investments had turned profitable.
He’s running for reelection after stepping
down as president last week.
Another prop for sentiment is the so-
called bitcoin halving due next year, which
will cut in half the amount of tokens that
Bitcoin miners receive as reward for their
work. The quadrennial event is part of the
process of capping bitcoin supply at 21
million tokens. The coin hit records after
the last three halvings.
“Both micro and macro factors are cur-
rently lining up for Bitcoin,” said Zach Pan-
dl, managing director of research at crypto
fund provider Grayscale Investments LLC.
Bitcoin traded at US$44,004 at
10:07am in London. It peaked at close to
US$69,000 in November 2021.
Read also:
World Bank’s Banga calls for record
replenishment of fund for poorest
countries
UK coping with higher rates for now but
risks lie ahead — BOE
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3
BAT writes
down US$31.5 bil
from value of US
cigarette brands
BY EMMA RUMNEY
Reuters
LONDON (Dec 6): British American To-
bacco said it would take a hit of around
US$31.5 billion (RM147.1 billion) as it
writes down the value of some US ciga-
rette brands, acknowledging on Wednes-
day that its traditional market has no long
term future.
BAT’s move comes as ever stricter reg-
ulation and growing awareness of health
risks squeeze tobacco companies’ tradi-
tional business, driving declines in ciga-
rette volumes in some markets.
The maker of Lucky Strike and Dun-
hill cigarettes also pointed to economic
challenges in the US, where some infla-
tion-weary consumers are downgrading
to cheaper brands, and the rise of illicit
disposable vapes putting pressure on its
US cigarette division.
These factors contributed to the around
£25 billion non-cash adjusting impair-
ment charge relating to some US cigarette
brands, BAT said. Its Newport, Camel, Pall
Mall and Natural American Spirit brands
(Dec 6): McDonald’s is planning to
open about 10,000 restaurants globally
by 2027 and more than double revenue
from its loyalty programme, the company
said on Wednesday, as it invests heavily to
automate processes and speed up service
at its stores.
The expansion plans it laid out would
take its restaurant count to about 50,000
in over 100 countries and mark the fast-
est period of growth in the company’s
history, McDonald’s said ahead of its
investor day.
The company also said that it planned
to increase the user base of its loyalty
programme to 250 million customers
by 2027, putting it on track to deliver
US$45 billion (RM210 billion) in an-
nual sales.
The programme currently has 150
million active users, who generate over
US$20 billion in system-wide sales.
Shares of the company were down
marginally in volatile premarket trading.
McDonald’s has doubled down on its
marketing strategies over the past several
22 THEEDGE CEO MORNING BRIEF
W O R L D
were affected, a spokesperson added.
It was assessing the brands’ “carrying
value and useful economic lives over an es-
timated period of 30 years,” BAT chief ex-
ecutive Tadeu Marroco said in a statement.
It added that it would start amortising
the value of its remaining US combustibles
brands in 2024 in its first acknowledge-
ment that their value would, over time,
reduce.
BAT’s shares fell more than 8% in early
trade to 4-1/2 year lows, wiping about £4
billion of the company’s value.
Imperial Brands shares were down more
than 2%.
Like rivals, BAT has been investing
heavily in smoking alternatives like vapes.
On Wednesday, it added a new ambi-
tion to generate 50% of its revenues from
non-combustibles by 2025 and said it now
expects its business from such “new cate-
gories” to break even in 2023, a year ahead
of its current projection.
James Edwardes Jones, analyst at RBC
Capital Markets, welcomed the ambition
given the US charge and a “grim” out-
look for BAT.
“Goodness, that’s a big number,” he
said of the charge, adding it exemplifies
the “perils of the industry” and sends less
confident signals about the outlook for cig-
arettes.
BAT said full-year revenue growth
would likely be at the lower end of its 3-5%
range. It also expected low single-dig-
it growth in revenue and adjusted profit
from operations in 2024.
McDonald’s
plans to add
about 10,000 new
stores by 2027,
double loyalty
programme sales
BY DEBORAH SOPHIA
Reuters
REUTERS
Twitch to shut
down in South
Korea due to
high costs
BY GNANESHWAR RAJAN
Reuters
(Dec 6): Amazon’s streaming unit
Twitch on Tuesday said it will shut down
operations in South Korea in February
next year, due to high operating costs
and network fees.
“Twitch has been operating in Ko-
rea at a significant loss, and unfortu-
nately there is no pathway forward for
our business to run more sustainably
in that country,” chief executive officer
Dan Clancy said in a blog.
Network fees in South Korea are still
10 times more expensive than in most
other countries, he said, adding that the
company spent significant effort work-
ing to reduce operating costs to remain
in business.
Twitch had laid off more than 400 em-
ployees in March after its user and rev-
enue growth did not meet expectations.
Read also: Nissan to buy engines, gear-
boxes from Renault-Geely venture
years, including piloting its “Best Burg-
er” initiative to improve the quality of
its burgers.
The initiative — which the company
scaled to 70 markets recently — will be
deployed to nearly all markets by 2026,
it said.
For 2024, McDonald’s expects near-
ly 2% growth in system-wide sales, on a
constant currency basis, compared with
the 1.5% growth it expects for 2023. Op-
erating margins next year are estimated
to be in the mid-to-high 40% range.
It also partnered with Alphabet’s
Google Cloud to deploy artificial intel-
ligence (AI) solutions to its restaurants
worldwide. That would include automat-
ing processes to help deliver hotter, fresh-
er food to customers faster.
Although US consumer spending
has been pressured, McDonald’s has
remained largely unaffected due to its
affordable menu items and aggressive
promotions. McDonald’s topped esti-
mates for sales and profit in the quarter
ended September.
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3
Bank of Japan
deputy chief
hints that end
of world’s last
negative interest
rate regime
may be closer
BY TORU FU JIOKA
Bloomberg
(Dec 6): Bank of Japan (BOJ) deputy gov-
ernor Ryozo Himino signalled that the
central bank is inching closer to putting
an end to the world’s last negative inter-
est rate regime by laying out a hypothesis
for what might happen if indeed rates go
positive.
While Himino reiterated a standard
pledge to continue with monetary easing
until the BOJ achieves its goal of sustain-
able inflation with wage increases, he then
outlined the various potential impacts that
would follow an exit from large-scale stim-
ulus partly by examining what happened
when rates went negative.
“Today, I would like to offer one per-
spective by looking at what happened to
TOKYO (Dec 6): Rakuten Group said on
Wednesday it plans to sell a large stake in
Rakuten Bank to overseas investors, its lat-
est fundraising effort as the Japanese com-
pany grapples with heavy debt and losses
at its mobile network unit.
The planned sale of 25.5 million shares
is equivalent to just under 15% of the on-
line bank, according to LSEG data.
The shares will be priced at between
¥2,400 and ¥2,500 each, according to a
source, comprising a discount of 8.7%-
12.3% on Wednesday’s closing price of
¥2,738 and raising a maximum of ¥63.8
billion (RM2 billion).
The e-commerce and financial servic-
es group said it would use the proceeds
to repay bonds early as it was committed
to reducing interest-bearing debt. Hit by
spiralling costs to build out its mobile
network, it has almost ¥800 billion in
bond redemptions due before the end
of 2025.
23 THEEDGE CEO MORNING BRIEF
W O R L D
BLOOMBERG
net interest income for relevant sectors
in the past during the transition from a
state with positive interest rates to a state
without them,” Himino said in a speech
on Wednesday to local business leaders in
Oita, southwestern Japan.
Himino indicated that the first rate hike
since 2007 might not be as harmful as
some have feared. Himino said households
would probably benefit from improved net
income if rates moved to positive territo-
ry, and the impact on the corporate sector
would likely be limited. He also said the
financial system is resilient enough to cope
with that transition.
The comments were the clearest sign
so far from the BOJ’s leadership that au-
Japan’s Rakuten
to raise up to
US$433 mil with
further sale of
bank unit
BY ANTON BRIDGE
Reuters
REUTERS
thorities are considering what the impact
would be if they ended negative rates.
The views will likely reinforce expecta-
tions among BOJ watchers that the bank
will end negative rates by the middle of
next year.
Himino appeared intent on soothing
any jitters among Japanese over the pros-
pects of ending the BOJ’s massive stimulus
programme, which included taking rates
negative in early 2016.
If it’s done properly, “there would be
a sufficient possibility of achieving a pos-
itive outcome from the exit, since a wide
range of households and firms would ben-
efit from the virtuous cycle between wages
and prices”, Himino said.
Financial institutions might face unreal-
ised losses on holdings of long-term bonds,
but they’d also have the opportunity to
raise their investment yields by replacing
the bonds they hold with new ones, he said.
Japan’s regional banks called on the BOJ
to scrap its negative interest rate when ex-
ecutives met with central bank officials last
month, people familiar with the matter
told Bloomberg.
Speaking to reporters later the same
day, Himino stopped short of indicating
a possible time frame for starting the exit,
saying there is no preset schedule for that
process, and the bank will carefully as-
sess economic conditions before embark-
ing upon it.
At one point, market players were bet-
ting the negative rate policy would end in
April. Overnight-indexed swaps now es-
timate the policy will end in July. Swaps
show cumulative rate hikes of 21 basis
points by the end of next year.
The unit’s troubles have also resulted in
Rakuten logging 13 consecutive quarters
of operating losses.
Since 2021, Rakuten has issued new
shares to strategic investors and the public,
twice sold down its holding in its securities
arm Rakuten Securities, and listed Raku-
ten Bank in April of this year.
The listing raised ¥72 billion and re-
duced Rakuten’s holding in the bank to
63.3%.
The price of the shares will be deter-
mined after a book building period be-
tween Dec 6 and 7, Rakuten Bank said in
a separate statement.
Analysts predict Rakuten may soon
seek to list its credit card business Raku-
ten Card, which includes the group’s lu-
crative points and payments system.
Read also: Japan’s Kishida cancels year-
end parties on funding scandal
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3
Wanda’s
billionaire
founder sells
film unit as debt
pressure builds
BY SHIRLEY ZHAO
Bloomberg
BLOOMBERG
(Dec 6): Dalian Wanda Group Co’s found-
er Wang Jianlin is planning to sell the rest
of the firm’s film unit as the troubled Chi-
nese conglomerate faces increasing debt
repayment pressure.
The billionaire plans to transfer his
51% stake in Beijing Wanda Investment
Co, which controls Wanda Film Hold-
ing Co, to a subsidiary of China Ruyi
Holdings Ltd, according to a Shenzhen
Stock Exchange filing on Wednesday.
That will give Ruyi full ownership af-
ter its July purchase of 49% of Beijing
Wanda Investment for 2.3 billion yuan
(RM1.51 billion).
The filing didn’t disclose details on
BEIJING (Dec 6): China will establish a
back-up coal production system by 2027
to stabilise prices and secure coal supply,
the state planner said on Wednesday, even
as it aims to start phasing down coal use
in the second half of this decade.
Draft rules for the new system did not
give details on exactly how the reserve
would work, but said the aim was to have
300 million metric tonnes of “dispatch-
able” annual coal production by 2030,
equivalent to 7% of its 2022 production.
China is the world’s top coal consum-
er and producer. Last year, it produced a
record 4.5 billion metric tonnes.
Beijing set a goal in 2021 to have coal re-
serves equivalent to 15% of its annual con-
sumption stocked at mines, ports, power
24 THEEDGE CEO MORNING BRIEF
W O R L D
the value of the purchase. China Ruyi’s
Hong Kong-listed shares jumped as much
as 9.6% before trading 2.8% higher by
3.23pm local time. Wanda Film’s shares
remain halted.
An exit from the film business, one
of Wanda’s core operations, brings to an
end Wang’s ambitions of turning his firm
into a rival of Walt Disney Co. The group
has been in decline for years after the
stock-market bubble burst in 2015 and
China cracked down on excessive debt-
fuelled expansion by some local firms.
It’s been forced to shed a raft of as-
sets that once brought it clout, including a
stake in Spanish soccer club Atletico Ma-
drid and the world’s largest cinema chain
AMC Entertainment Holdings Inc. And
Wang’s personal fortune has dived from
a peak of US$46.1 billion in mid-2015 to
US$6.2 billion.
China’s latest economic slowdown and
property market crisis has deepened the
company’s woes. Investors last month
rejected Wanda’s proposal to extend the
deadline for the repayment of 30 billion
yuan plus interest if its mall unit fails
to list shares by the end of this year. Its
property arm only recently managed to
obtain consent from creditors to push
back the maturity date for a US$600
million dollar bond.
Wanda Film operates more than 800
movie theatres across China as well as
Australian cinema chain Hoyts Group.
It’s also invested in the production of
some successful Chinese films including
TheWandering Earth II and No More Bets,
the country’s second- and third-highest
grossing titles this year, according finan-
cial results for the three months through
September.
Read the full story
China to set up
coal production
reserve to
stabilise prices
BY COLLEEN HOWE & ANDREW HAYLEY
Reuters
plants and some designated storage areas.
The new system will build on these
stockpiles by ensuring that a certain
amount of production capacity is ready
to be mined when needed.
Italy tells China
it will exit Belt
and Road
investment pact
BY ALESSANDRA MIGLIACCIO &
FLAVIA ROTONDI
Bloomberg
(Dec 6): The Italian government
has told China it plans to exit the
massive Belt and Road Initiative in-
vestment programme which Rome
signed up to in 2019, according to
Foreign Minister Antonio Tajani.
The pact “has not produced the
desired effects” and is no longer
“a priority,” Tajani said at a Rome
event hosted by newswire Adnkronos.
Countries not part of the pact “have
had better results.”
Italy’s participation was due to
expire on March 22 and Italy had to
decide by the end of the year wheth-
er it would renew Chinese President
Xi Jinping’s signature programme.
Prime Minister Giorgia Meloni has
for months been preparing the ground
diplomatically to put an end to the
programme, which Italy was the only
Group of Seven country to join.The in-
frastructure programme was launched
by Xi a decade ago to boost economic
ties and expand the influence of the
world’s second-biggest economy.
Italy, like much of Europe, has
been caught in the middle as ten-
sions escalate between Washington
and Beijing, and that’s been com-
pounded by China’s support for
Russia since it invaded Ukraine.
European countries are strug-
gling to balance a desire to engage
with China on trade and investment
while pushing back against claims
of economic coercion and human
rights concerns, as well as risks asso-
ciated with becoming too dependent
on supplies from China.
The government intends to con-
tinue to strengthen bilateral relations
between the two countries,Tajani said.
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3
(Dec 6): ByteDance Ltd, the parent of so-
cial video phenom TikTok, is offering to
buy back up to US$5 billion (RM23.36
billion) from investors, according to people
familiar with the matter.
The new offer, earlier reported by
the South China Morning Post, is pitched
at US$160 per share, the same level as
ByteDance offered to employees in No-
vember, the people said, asking not to be
named discussing a private matter. It’s at
a valuation roughly 11% lower than the
price ByteDance offered to investors in
2022, which would still place it among the
40 most valuable public companies in the
world, and third in China behind Tencent
Holdings Ltd and Kweichow Moutai Co.
The Beijing-based internet company
has ascended to become one of China’s
internet leaders, alongside Tencent and Al-
ibaba Group Holding Ltd, leveraging the
popularity of its social video services to ex-
pand into e-commerce and other spheres.
Its ventures into gaming and virtual reality,
however, have proven unsuccessful, and
the company has begun winding down ef-
forts outside its core business, which is led
by TikTok and its Chinese twin Douyin.
ByteDance has long been the world’s
most valuable start-up, but plans for a
splashy initial public offering have been
hit by a series of setbacks, from a crack-
down on internet firms at home in China
to elevated scrutiny in key markets over-
seas. India, once TikTok’s biggest market by
number of users, banned the app as part of
REUTERS
Bank staff shows US$100 bills at AYA
Bank's money changer in Yangon. The state
media reported on Wednesday the Central
Bank of Myanmar will allow banks and
licensed dealers to decide their own rates.
25 THEEDGE CEO MORNING BRIEF
W O R L D
ByteDance
offers investors
a buy-back
at US$268 bil
valuation
BY ZHEPING HUANG & JANE ZHANG
Bloomberg
a sweeping expulsion of Chinese software
in 2020. TikTok’s US operations have also
been the subject of fierce criticism by politi-
cians in Washington, who see it as a potential
national security threat. In Indonesia, Tik-
Tok was forced to suspend its burgeoning
e-commerce business, and is now working
Myanmar central
bank to let
market decide
own forex rates
Reuters
(Dec 6): Myanmar’s central bank will no
longer set exchange rates for foreign cur-
rencies and will allow banks and licensed
dealers to decide their own rates, state me-
dia reported on Wednesday, in a rare easing
of some of its tight controls.
The report gave no reason for Tuesday’s
decision by the Central Bank of Myanmar
(CBM) and no notice of the policy change
was posted on the CBM’s website. Calls to the
CBM went unanswered early on Wednesday.
With Myanmar’s economy in tatters in
the aftermath of a 2021 coup, financial
authorities have been trying to exert more
control over foreign currencies to suppress
BLOOMBERG
on a tie-up with local partner GoTo Group.
Domestic rivals in China have had var-
ying degrees of success recovering from
the crackdown and the economic fallout
from Covid Zero policies. Tencent’s stock
is today up 5% from a year ago, having
returned to growth and adapted to By-
teDance’s challenge with the expansion of
its WeChat video service. Temu-operator
PDD Holdings Inc has dethroned Aliba-
ba as China’s most valuable e-commerce
company for the first time, as its elder rival
grapples with a tumultuous reorganisation.
ByteDance occupies a unique position
in having some of the most downloaded
apps in both the US and China, with its
revenue surging 30% to surpass US$80
billion in 2022. Its successful roll-out of
TikTok Shop and on-demand services in
China have made the withdrawal from the
games business less of an issue than it oth-
erwise may have been.
demand, while cracking down on black-
market trading, with the licences of more
than 140 non-compliant money changers
revoked this year.
Under military rule, there has been a
move from a managed floating exchange
rate system towards reliance on adminis-
trative controls, including rules on firms
to surrender foreign exchange and report
currency trades.
Exporters have been required to convert
dollar earnings into kyat at the official rate set
by the central bank, which in August ordered
ministries and local governments not to use
foreign currencies for domestic transactions,
to ease pressure on the kyat currency.
The World Bank in a report in June said
Myanmar’s economy was showing some
signs of stabilisation, but was constrained
by weak investment and businesses were
struggling with rising costs and difficulties
sourcing materials and getting access to
foreign currency.
Read also: Australian economy surpris-
ingly slows as rates damp spending
 T H U R S D AY D E C E M B E R 7 , 2 0 2 3 26 THEEDGE CEO MORNING BRIEF

M A R K E T S

CPO RM 3,719.00-62.00 OIL US$ 76.52-0.68 RM/USD 4.6683 RM/SGD 3.4822 RM/AUD 3.0691 RM/GBP 5.8827 RM/EUR 5.0373

Top 20 active stocks

NAME VOLUME CHANGE CLOSE YTD MARKET
(MIL) (RM) CHANGE CAP
(%) (RM MIL)
VELESTO ENERGY BHD 105.8 -0.015 0.205 36.67 1,684.2
WIDAD GROUP BHD 72.5 0.005 0.470 9.30 1,455.3
BINA PURI HOLDINGS BHD 66.8 0.005 0.070 75.00 235.9
SARAWAK CONSOLIDATED 65.0 0.015 0.795 448.28 509.0
LEFORM BHD 58.2 0.010 0.350 69.57 518.4
RENEUCO BHD 52.0 0.015 0.230 -36.99 165.7
TOP GLOVE CORP BHD 39.5 -0.015 0.825 -8.84 6,606.7
ZELAN BHD 38.1 0.010 0.060 -14.29 50.7
KPJ HEALTHCARE BHD 33.2 0.010 1.340 32.67 5,848.2
TANCO HOLDINGS BHD 30.2 0.005 0.565 68.66 1,135.5 World equity indices
KNM GROUP BHD 28.7 0.000 0.095 90.00 384.2 CLOSE CHANGE CHANGE CLOSE CHANGE CHANGE
DAGANG NEXCHANGE BHD 25.0 -0.010 0.400 -21.57 1,262.5 (%) (%)
MQ TECHNOLOGY BHD 24.4 0.005 0.030 -40.00 44.1 DJIA * 36,124.56 -79.88 -0.22 INDONESIA 7,087.40 -13.46 -0.19
YTL POWER INTERNATIONAL BHD 22.1 0.010 2.260 216.08 18,310.9 S&P 500 * 4,567.18 -2.60 -0.06 JAPAN 33,445.90 670.08 2.04
KEY ASIC BHD 21.9 0.000 0.070 7.69 97.9 NASDAQ 100 * 15,877.71 38.04 0.24 KOREA 2,495.38 1.10 0.04
PANDA ECO SYSTEM BHD 20.7 -0.010 0.195 - 130.9 FTSE 100 * 7,489.84 23.51 0.31 PHILIPPINES 6,305.85 -3.10 -0.05
SAPURA ENERGY BHD 19.4 0.000 0.040 14.29 639.2 AUSTRALIA 7,178.35 116.80 1.65 SINGAPORE 3,087.24 10.08 0.33
YTL CORP BHD 18.1 0.010 1.540 165.52 16,885.2 CHINA 2,968.93 -3.36 -0.11 TAIWAN 17,360.72 32.71 0.19
REACH ENERGY BHD 18.0 0.005 0.040 -11.11 85.2 HONG KONG 16,463.26 135.40 0.83 THAILAND 1,389.55 6.01 0.43
MESTRON HOLDINGS BHD 17.4 0.015 0.455 1.11 453.5 INDIA 69,653.73 357.59 0.52 VIETNAM 1,126.43 10.46 0.94
Data as compiled on Dec 6, 2023 Source: Bloomberg Data as compiled on Dec 6, 2023 * Based on previous day’s closing Source: Bloomberg

Top gainers (ranked by %) Top losers (ranked by %)

NAME CLOSE CHANGE VOLUME YTD MARKET NAME CLOSE CHANGE VOLUME YTD MARKET
(%) (‘000) CHANGE CAP (%) (‘000) CHANGE CAP
(%) (RM MIL) (%) (RM MIL)
FINTEC GLOBAL BHD 0.010 100.00 1,496.1 0.00 59.2 PEGASUS HEIGHTS BHD 0.005 -50.00 1,726.0 -50.00 54.1
LAMBO GROUP BHD 0.020 33.33 69.2 -63.64 30.8 EUROSPAN HOLDINGS BHD 1.110 -28.39 1.0 -1.77 49.3
G3 GLOBAL BHD 0.025 25.00 362.6 -16.67 94.3 XIDELANG HOLDINGS LTD 0.020 -20.00 2,840.3 -20.00 42.3
HONG SENG CONSOLIDATED BHD 0.025 25.00 3,434.1 -88.64 127.7 NEXGRAM HOLDINGS BHD 0.025 -16.67 46.5 -64.29 16.2
WAJA KONSORTIUM BHD 0.055 22.22 2,788.9 -38.89 61.3 SMTRACK BHD 0.035 -12.50 1,856.5 -30.00 42.8
CME GROUP BHD 0.030 20.00 1.0 0.00 31.0 PDZ HOLDINGS BHD 0.040 -11.11 498.6 0.00 23.3
ZELAN BHD 0.060 20.00 38,056.9 -14.29 50.7 WMG HOLDINGS BHD 0.090 -10.00 13.5 -5.26 40.0
MQ TECHNOLOGY BHD 0.030 20.00 24,414.7 -40.00 44.1 HB GLOBAL LTD 0.090 -10.00 1,674.4 -47.06 70.4
BSL CORP BHD 0.035 16.67 503.3 -48.22 67.6 FITTERS DIVERSIFIED BHD 0.045 -10.00 2,375.0 -35.71 105.4
SEALINK INTERNATIONAL BHD 0.175 16.67 8,235.1 75.00 87.5 ADVANCE INFORMATION 0.145 -9.38 902.0 8.70 15.6
XOX NETWORKS BHD 0.035 16.67 4,759.8 16.67 39.7 KIA LIM BHD 0.500 -8.26 663.5 53.85 31.0
SOUTHERN STEEL BHD 0.705 16.53 1,899.9 20.51 420.4 PAN MALAYSIA HOLDINGS BHD 0.060 -7.69 63.7 -14.29 55.7
REACH ENERGY BHD 0.040 14.29 17,996.7 -11.11 85.2 DIGISTAR CORP BHD 0.060 -7.69 45.0 -14.29 27.9
INDUSTRONICS BHD 0.040 14.29 2,919.0 -46.67 28.3 SARAWAK CABLE BHD 0.065 -7.14 2,879.5 0.00 25.9
EG INDUSTRIES BHD 1.680 12.75 6,295.2 211.11 756.4 PERTAMA DIGITAL BHD 2.560 -6.91 8,561.0 45.45 1,121.8
PROGRESSIVE IMPACT CORP BHD 0.090 12.50 736.1 -65.38 59.0 LANDMARKS BHD 0.205 -6.82 1,425.9 5.13 137.7
SAPURA RESOURCES BHD 0.395 11.27 3.2 16.18 55.1 VELESTO ENERGY BHD 0.205 -6.82 105,789.1 36.67 1,684.2
INFRAHARTA HOLDINGS BHD 0.100 11.11 10.5 -20.00 38.4 ARB BHD 0.075 -6.25 1,898.3 -40.00 92.7
SALCON BHD 0.265 10.42 7,794.1 18.10 268.3 ASIA POLY HOLDINGS BHD 0.080 -5.88 350.0 -27.27 76.7
SEREMBAN ENGINEERING BHD 0.750 10.29 0.5 -33.04 59.8 MATANG BHD 0.085 -5.56 125.0 0.00 203.1
Data as compiled on Dec 6, 2023 Source: Bloomberg Data as compiled on Dec 6, 2023 Source: Bloomberg

Top gainers (ranked by RM) Top losers (ranked by RM)

NAME CLOSE CHANGE VOLUME YTD MARKET NAME CLOSE CHANGE VOLUME YTD MARKET
(RM) (‘000) CHANGE CAP (RM) (‘000) CHANGE CAP
(%) (RM MIL) (%) (RM MIL)
RAPID SYNERGY BHD 28.700 0.700 391.4 79.82 3,067.9 NESTLE MALAYSIA BHD 114.300 -0.700 113.0 -18.36 26,803.4
EG INDUSTRIES BHD 1.680 0.190 6,295.2 211.11 756.4 EUROSPAN HOLDINGS BHD 1.110 -0.440 1.0 -1.77 49.3
KOTRA INDUSTRIES BHD 4.790 0.140 53.8 -27.42 710.4 FRASER & NEAVE HOLDINGS BHD 27.260 -0.380 71.2 26.32 9,998.4
CARLSBERG BREWERY MALAYSIA 19.120 0.140 166.3 -16.43 5,845.9 HEXTARTECHNOLOGIES SOLUTIONS 22.280 -0.320 8.2 30.60 2,866.3
PIE INDUSTRIAL BHD 3.290 0.110 311.3 27.31 1,263.5 MALAYSIAN PACIFIC INDUSTRIES 26.700 -0.280 25.4 -7.16 5,310.5
SOUTHERN STEEL BHD 0.705 0.100 1,899.9 20.51 420.4 HONG LEONG BANK BHD 19.000 -0.220 501.3 -7.59 41,186.6
UNITED PLANTATIONS BHD 16.860 0.100 527.2 15.14 6,993.3 PERTAMA DIGITAL BHD 2.560 -0.190 8,561.0 45.45 1,121.8
D&O GREEN TECHNOLOGIES BHD 3.600 0.090 1,573.3 -15.89 4,457.8 HEINEKEN MALAYSIA BHD 21.100 -0.180 566.2 -16.27 6,374.3
SFP TECH HOLDINGS BHD 0.950 0.080 5,880.3 58.33 2,280.0 IMASPRO CORP BHD 4.980 -0.160 1,511.8 -14.87 398.4
HUME CEMENT INDUSTRIES BHD 2.250 0.080 1,069.2 139.36 1,394.9 ALLIANZ MALAYSIA BHD 18.160 -0.160 23.6 28.25 3,231.9
MCE HOLDINGS BHD 2.010 0.080 1,187.1 48.89 124.2 SAM ENGINEERING & EQUIPMENT 4.030 -0.120 562.5 -18.26 2,182.6
WELLCALL HOLDINGS BHD 1.770 0.070 2,461.0 56.64 880.6 NEW HOONG FATT HOLDINGS BHD 3.360 -0.110 20.1 17.07 277.8
SEREMBAN ENGINEERING BHD 0.750 0.070 0.5 -33.04 59.8 CHIN HIN GROUP BHD 3.550 -0.080 663.4 9.91 6,281.4
JF TECHNOLOGY BHD 0.980 0.060 2,906.5 20.99 908.5 HARTALEGA HOLDINGS BHD 2.370 -0.080 6,839.7 39.41 8,089.4
MEGA FIRST CORP BHD 3.590 0.060 966.7 8.13 3,384.5 KELINGTON GROUP BHD 1.880 -0.070 4,818.5 37.23 1,212.2
NATIONGATE HOLDINGS BHD 1.400 0.060 6,723.6 - 2,903.5 DUTCH LADY MILK INDUSTRIES BHD 22.280 -0.070 7.3 -26.32 1,425.9
PETRONAS DAGANGAN BHD 22.660 0.060 342.7 -0.82 22,511.7 PADINI HOLDINGS BHD 3.540 -0.060 452.5 6.09 2,329.0
ABLE GLOBAL BHD 1.400 0.060 2,422.5 3.70 430.6 PANASONIC MANUFACTURING 17.940 -0.060 10.2 -21.66 1,089.8
CB INDUSTRIAL PRODUCT 1.260 0.050 757.7 14.55 596.4 BURSA MALAYSIA BHD 6.750 -0.060 84.9 1.50 5,462.8
ORIENTAL FOOD INDUSTRIES 1.690 0.050 387.3 26.12 405.6 GREATECH TECHNOLOGY BHD 4.580 -0.060 438.3 -5.37 5,744.2
Data as compiled on Dec 6, 2023 Source: Bloomberg Data as compiled on Dec 6, 2023 Source: Bloomberg