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 HARTALEGA 4Q NET PROFIT RISES 12% TO RM1.12B ON HIGHER
SALES AND LOWER COSTS; DECLARES 17.7 SEN DIVIDEND p6
W E D N E S DAY, M AY 5 , 2 0 2 1 w w w. t h e e d g e m a r k e t s. c o m
ISSUE 179/2021

CEOMorningBrief
HOME: AstraZeneca: MoH gives assurance of immediate treatment if blood clots occur p2
Malaysia Airlines owner Malaysia Aviation Group aims to break even by 2023 through
Long Term Business Plan 2.0 — CEO p7
US proposes G-7 coordination to counter China’s economic might p16

MCO 3.0 in six Selangor districts,

but economic activities allowed
Report on Page 3.

Economist calls
for windfall tax
on industries that
benefit from Covid-19
Report on Page 4.
 W E D N E S D AY M AY 5 , 2 0 2 1
the edge ceo morning brief
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PUTRAJAYA (May 4): The Ministry of
Health (MoH) will constantly monitor the
incidence of blood clots with the administra-
tion of the AstraZeneca Covid-19 vaccine and
gives an assurance of immediate treatment in
the event of such an incident occurring, said
Health Minister Datuk Seri Dr Adham Baba.
“The occurrence of blood clots is very
rare, and the administration of this vac-
cine has taken into account its benefits
in preventing Covid-19 infection, which
outweighs the risks from vaccination,” he
said in a statement today.
Malaysia received 268,800 doses of the
AstraZeneca Covid-19 vaccine through
the COVAX Facility on April 24, and the
vaccine will be administered to members
of the public from tomorrow.
The AstraZeneca vaccination is open to
268,000 individuals on a “first-come-first-
served” basis for Kuala Lumpur and Selan-
gor residents, and the first appointment slot
for the vaccination will be held tomorrow at
the designated vaccination centres (PPV).
The PPV include Universiti Malaya (UM),
Universiti Kebangsaan Malaysia (UKM), the
Covid-19: New cases climb to 3,120 with 23 deaths; actives soar to 31,516
BY SYAFIQAH SALIM
theedgemarkets.com
KUALA LUMPUR (May 4): Malaysia re-
ported 3,120 new Covid-19 infections today,
pushing the number of active cases in the
country to 31,516. This is the third straight
day that active cases have stayed above the
30,000 mark, the Ministry of Health said.
Also reported were 23 more deaths,
the highest in two months. Six of the new
deaths each were reported in Kelantan and
Selangor, four in Sarawak, two in Johor, two
in Sabah and one each in Kedah, Perak
and Melaka. All the deceased were Ma-
laysians, aged between 37 and 85 years.
These raised the Covid-19 death toll to
1,574. The highest daily deaths recorded
so far was 25, on Feb 18.
2 THEEDGE CEO MORNING BRIEF
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chief commercial officer . Sharon Teh
(266980-X) chief operating officer . Lim Shiew Yuin
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H O M E
Other symptoms include unusual head-
AstraZeneca: MoH aches accompanied by blurred vision; nau-
sea and vomiting; difficulty speaking; weak-
gives assurance ness; drowsiness or seizures; small spots
on the skin; bruising or bleeding and diffi-
of immediate culty breathing; chest pain; swelling in the
legs or persistent abdominal pain, he said.
treatment if blood Adham said medical practitioners treat-
ing cases of AstraZeneca vaccine recipients
clots occur should investigate whether the individuals
had received the vaccine within 30 days
before symptoms began.
Bernama The medical practitioners will also need to
do further examination to confirm whether
Kuala LumpurWorldTrade Centre and Shah the symptoms shown are due to blood clots.
Alam Ideal Convention Centre (IDCC). “Relevant examinations including blood
Adham said that the AstraZeneca vaccine and radiology examinations should be carried
recipients are advised to constantly monitor out as soon as possible. Immediate treatment
their health, and seek immediate treatment if should be given if the test results show that
they experience symptoms within four days blood clotting has actually occurred,” he said.
to four weeks after being inoculated. Haematologists should be contacted im-
He said immediate treatment should be mediately for advice, and medical prac-
sought if there are symptoms such as a severe titioners should also prepare an adverse
headache that does not go away with pain- event following immunisation (AEFI) re-
killers or gets worse, and if the headache gets port to the National Pharmaceutical Reg-
worse when lying down or while bending over. ulatory Agency (NPRA), he said.
Malaysia’s coronavirus curve showing nascent signs of upward climb
6000 Daily new cases 7-day moving average
5000
4000
3,120
3000
3,169
2000
1000
0
Sept 1, 2020 May 4, 2021
Of today's new cases, 3,114 were local Sarawak (620) and Kuala Lumpur (408).
transmissions while six were imported, said Noor Hisham also said 2,334 Covid-19
Health director-general Tan Sri Dr Noor patients were discharged today, raising to-
Hisham Abdullah in a statement. And Sel- tal recoveries to 387,542, or 92.1% of total
angor topped the list again with the highest infections, which now stands at 420,632
Covid-19 daily infections, at 675, followed by with the latest additions.
 W E D N E S D AY M AY 5 , 2 0 2 1
MCO 3.0 in six Selangor districts,
but economic activities allowed
BY AHMAD NAQIB IDRIS
theedgemarkets.com
KUALA LUMPUR (May 4): Six districts
in Selangor — covering areas such as Pet-
aling Jaya, Shah Alam, Subang Jaya, Klang,
Puchong, Kajang, Cheras, Ampang and
Rawang — will be put under the Move-
ment Control Order (MCO) from May
6 to 17 due to the surge in new Covid-19
cases there.
Social activities are disallowed under the
new measures, but most economic activi-
ties will not be affected, said Senior Minister
(Security) Datuk Seri Ismail Sabri Yaakob.
He said the standard operating proce-
dures (SOPs) to be enforced in the six dis-
tricts — Hulu Langat, Petaling, Gombak,
Klang, Kuala Langat and Sepang — will
be the same as those enforced in other
MCO areas such as Kelantan and the five
districts in Kedah.
“Grocery and convenience stores as well
as shops selling daily necessities are al-
lowed to operate between 6am and 10pm.
Petrol stations are also allowed to operate
between 6am and 10pm,” Ismail Sabri told
a press conference today.
He added that dining premises will be
allowed to operate between 6am and mid-
night in the six districts.They will, however,
not allowed to accept dine-in orders un-
der the National Security Council’s (NSC)
guidelines on MCO.
Daily markets, including night and
morning markets, will be allowed to op-
erate between 6am and 2pm, while Ram-
adan bazaars are still allowed to operate
in line with strict SOPs.
However, Ismail Sabri said the state
government has the power to cease Ram-
adan bazaars, if need be.
According to the NSC website, areas un-
der MCO only allow movement of people for
the purpose of buying daily necessities, med-
ical services and official government work.
Crossing districts and state borders is not
allowed without permission from the police.
Sports and recreational activities that do
not involve physical touch are allowed, as
long as the proper SOPs are followed, namely
adhering to physical distancing requirements
and being carried out in open and closed
spaces for the purpose of exercise and health.
Economic activities in MCO areas are
allowed to continue, but social activities are
not allowed.
Ismail Sabri said work-from-home direc-
tives will be announced by the government
3 THEEDGE CEO MORNING BRIEF
H O M E
and the Ministry of
International Trade
and Industry soon.
He said the remaining
three districts in Selangor
— Kuala Selangor, Sabak
Bernam and Hulu Selangor —
remain under Conditional Move-
ment Control Order (CMCO).
Hari Raya Aidilfitri SOPs
The minister also announced
SOPs relating to the upcom-
ing Hari Raya Aidilfitri.
Hari Raya prayers are al-
lowed at mosques and suraus
in MCO, CMCO, and Recovery
Movement Control Order (RMCO)
areas, he said, although the final decision
lies with the religious authority of each state.
However, the feasts following the prayers
at the mosques are not allowed for MCO
areas.
Visiting relatives is allowed in MCO are-
as, but only on the first day of Aidilfitri with Gombak: Gombak, Rawang, Ampang,
guests not exceeding 15 people at one time, Setapak, Ulu Klang, Selayang, Kundang,
while in CMCO areas, it is allowed for the Kuang, Batu Caves, Sungai Buloh, Kam-
first three days of Aidilfitri with guests lim- pung Sungai Pusu
ited to up to 25 people at any given time. Kuala Langat: Bandar Saujana Pu-
On the other hand, visiting graves is not tra, Banting, Batu, Jugra, Teluk Datok,
allowed in MCO areas, but allowed for Morib, Tanjung Sepat, Teluk Panglima
CMCO and RMCO areas, being limited to Garang
six people per lot not exceeding 30 minutes. Sepang: Pekan Sepang, Dengkil, Sun-
gai Pelek, Cyberjaya, Salak Tinggi, KLIA
Areas affected by MCO
The major areas in the six districts placed
under the MCO are as follows (certain areas Read also:
within each district overlap with one another):
Hulu Langat: Kajang, Ampang, Inter-district, inter-state travels
Cheras, Bangi, Semenyih, Beranang, Ban- allowed for those going for Covid-19
dar Baru Bangi, Bandar Tun Hussein Onn, vaccination Click here
Balakong, Taman Sri Nanding
Petaling: Petaling Jaya, Puchong,
Subang Jaya, Damansara, Shah Alam, Covid-19: Govt to list premises at
Bukit Raja, Kota Raja, Bandar Sri Da- risk under HIDE system from May 7
mansara, Country Heights, Puchong, Pu- Click here
chong Jaya, Puchong Perdana, Serdang
Klang: Kapar, Shah Alam, Meru,
Bandar Baru Klang, Bukit Kemuning, 589,951 individuals have received both
Pandamaran, Port Klang, Telok Mene- doses of Covid-19 vaccine as at May 3
gun, Glenmarie Cove, Batu 4 — Dr Adham Click here
 W E D N E S D AY M AY 5 , 2 0 2 1
KUALA LUMPUR (May 4): The gov-
ernment should consider implementing a
windfall tax on industries that benefit great-
ly from the Covid-19 crisis, according to
Khazanah Research Institute senior advi-
sor Professor Dr Jomo Kwame Sundaram.
“This is precisely the time when you
must reform taxes as you have it (wind-
fall tax) all the time amid extraordinarily
high petroleum prices or palm oil prices.
“Why not for other types of industries?”
the prominent economist said at a panel
discussion held in conjunction with the
World Bank Group’s webinar titled “Aim-
ing High: Promoting Inclusion and Financ-
ing Shared Prosperity” today.
Asked when is the right time to reintro-
duce the goods and services tax (GST),
Jomo opined that now is the best time to
introduce taxes that do not generate reve-
nue immediately as many have been badly
impacted by the Covid-19 pandemic.
“As far as tax reforms are concerned,
in a situation like this, it is the best time
to introduce taxes which do not generate
revenue immediately.
“You do not generate revenue from tax-
es in the middle of a crisis,” he said.
The Ministry of Finance (MoF) told
Dewan Negara in December last year that
the government had no plans to impose a
windfall profit levy on rubber glove manu-
facturers which had been enjoying super-
normal profits from higher demand and
selling price of rubber gloves worldwide,
nor on other businesses that had profited
greatly due to the pandemic.
KUALA LUMPUR (May 4): Perusa-
haan Otomobil Kedua Sdn Bhd (Per-
odua) sold an estimated 20,339 vehi-
cles in April this year, down 16.5% from
the 24,431 units it sold in the previous
month, no thanks to the semiconductor
shortage that is affecting multiple indus-
tries globally.
“Despite the global semiconductor
chip shortage, Perodua managed to
produce 20,278 vehicles in April 2021,
pushing our year-to-date (YTD) pro-
duction to 80,661 units,” said Perodua
president and chief executive officer
(CEO) Datuk Zainal Abidin Ahmad in
a statement.
Perodua’s April sales figure brought
its YTD sales tally to 78,304 vehicles, up
74% over the 45,034 units sold in the
first four months of 2020, which were hit
by the country’s first nationwide move-
ment control order (MCO).
“The chip shortage is our top priority
at present and we are deploying all our
resources to deal with it, including work-
ing closely with the government and our
4 THEEDGE CEO MORNING BRIEF
H O M E
Economist calls
for windfall tax
on industries
that benefit from
Covid-19
Bernama
Responding to the same question, Insti-
tute of Malaysian and International Stud-
ies research fellow Dr Muhammed Abdul
Khalid pointed out that policymakers tend
to ignore the imposition of capital gains tax
when it comes to the issue of tax reform.
“Taxes must be fair ... and we never talk
about the urgency of imposing capital gains
tax, maybe because it is going to affect the
very well-off in Malaysia,” he said.
Nevertheless, Muhammed said, the
most important thing is to ensure good
governance and to make sure taxpayers’
money is used well by the authorities.
Meanwhile, touching on the current
taxation framework, Bank Negara Malay-
sia (BNM) assistant governor Dr Norha-
na Endut noted that the government’s tax
collection capacity had not kept pace with
the economic growth.
“Malaysia’s tax policy, or tax to gross
domestic product (GDP) ratio, has been
on a steady decline over the medium
Perodua’s April
vehicle sales
down 16.5% from
March on chip
shortage
BY SYAFIQAH SALIM
theedgemarkets.com
business partners for viable solutions.
“Perodua remains committed towards
timely deliveries, aided by our economies
of scale. We thank our valued custom-
ers very much for their patience. We are
doing all we can to deliver as many cars
as possible before the expected expiry
of the government’s sales tax exemption
at end-June,” said Zainal.
For now, Perodua is maintaining its
2021 sales target of 240,000 units — up
BERNAMA
term. It fell to 12% in 2019 from 15.6%
in 2012,” she said.
Norhana noted that Malaysia’s individ-
ual income tax also continued to come
from a narrow pool of taxpayers.
For instance, she said that in 2018,
among a labour force of 15 million peo-
ple, only 2.5 million were taxpayers.
“With this, expanding the tax base
should be a priority over the medium
term,” she said, adding that existing tax
incentives and exemptions should be re-
viewed on a regular basis as some of them
are outdated and ineffective.
On plans to introduce new taxes,
Norhana said the new taxes should be ef-
ficient, simple, fair and progressive with an
effective rechannelling mechanism, as well
as enhance productivity of the economy.
9% from the 220,163 units it sold in
2020 — which is expected to lead to a
record purchase of RM6.5 billion worth
of locally sourced components this year.
Perodua is also targeting a production
of 272,000 units this year (up 23% from
2020’s 220,968 units) and 2.4 million
service intakes (up 20% from 2020’s two
million service intakes).
Back to its April sales for this year, the
company noted that the newly launched
Ativa made up 4,624 units or over 22%
of the figure, which lifted total Ativa
units registered since the model’s March
3 launch to nearly 9,000.
Demand for the model remained
strong, Perodua said, with average book-
ings of about 290 units daily.
“The waiting period for the Ativa is
currently between two and four months,
depending on the desired colour and var-
iant. We advise our valued customers to
speak to our authorised sales advisers for
accurate and up-to-date delivery times
of various variant-colour combinations
of the Ativa,” said Zainal.
W E D N E S D AY M AY 5 , 2 0 2 1 5 THEEDGE CEO MORNING BRIEF
 W E D N E S D AY M AY 5 , 2 0 2 1
Hartalega 4Q net profit rises 12% to
RM1.12b on higher sales and lower costs;
declares 17.7 sen dividend
KUALA LUMPUR (May 4): Hartalega
Holdings Bhd saw its net profit for the
fourth quarter ended March 31, 2021
(4QFY21) grew 11.73% to RM1.12 bil-
lion from RM1 billion in the immediate
preceding quarter due to higher sales rev-
enue and lower operation costs, offset by
higher raw material price.
The group’s earnings per share in-
creased to 32.75 sen from 29.31 sen in
3QFY21, according to its filing with the
local bourse today.
Meanwhile, revenue rose 8% to RM2.3
billion from RM2.12 billion in the preced-
ing quarter.
Hartalega said the higher sales revenue
was attributable to the increase in average
selling price as well as sales volume for
the quarter.
“This was partly offset by the volume
reduction due to challenges faced on
shipment availability caused by the glob-
al container shortages as well as temporary
shutdown of certain production lines as a
preventive measure and safety precaution
in dealing with Covid-19 cases,” it said.
On a year-on-year basis, the glove mak-
er’s net profit skyrocketed from RM114.42
million, while revenue also jumped from
RM778.24 million a year ago.
In a separate statement, the group de-
clared a third interim single tier dividend
of 17.7 sen for the full financial year ended
March 31, 2021 (FY21), with the enti-
tlement date on May 24 and payment on
June 9, bringing total dividends for the
year to 31.2 sen per share.
In contrast, Hartalega declared a div-
idend of 2.05 sen per share in 4QFY20,
Hartalega Holdings Bhd’s quarterly net profit
Net profit (RM mil/bil)
1200
1000
800
600
400
200 94.06 103.87 121.27
0 At noon break, Hartalega had ris-
1Q 2Q 3Q
FY2020
Source: Bursa Malaysia
6 THEEDGE CEO MORNING BRIEF
H O M E
BY SYAFIQAH SALIM
theedgemarkets.com
and total dividends for FY20 amounted
to 7.55 sen per share.
For FY21, the company’s net profit
soared to RM2.89 billion from RM433.62
million in the previous year. Full-year rev-
enue climbed 129% to RM6.7 billion from
RM2.92 billion.
On its prospects, Hartalega will contin-
ue to expand its capacity in NGC, Sepang
in line with the growing rubber glove de-
mand globally.
“To date, six out of 10 lines in Plant 7
have been commissioned. Upon full com-
missioning, Plant 7 will have an annual
installed capacity of 2.7 billion pieces.
“In addition, construction for the up-
coming expansion, NGC 1.5, is currently
underway and the group targets to com-
mission the first line by December 2021.
NGC 1.5 expansion plans include four
1.119 bil
1.001 bil
544.96
219.72
114.42
4Q 1Q 2Q 3Q 4Q
FY2021
additional production plants which will
contribute 19 billion pieces to the annual
installed capacity.
“With these expansion plans in place,
the group’s annual installed capacity is ex-
pected to increase to 63 billion pieces over
the next two to three years,” said the group.
During the quarter, it said it has entered
into a sales and purchase agreement for the
acquisition of approximately 250 acres of
land in Bukit Kayu Hitam, Kedah.
“The acquisition marks Hartalega’s lat-
est phase of growth, with an investment of
RM7 billion to build 16 new manufactur-
ing facilities over the next 20 years. Cou-
pled with the earlier investment in Sepang
(60 acres) and Banting (95 acres), these
acquisitions will enable the group to re-
alise its growth plans towards 95 billion
pieces by 2027.
“Moving forward, the group remains
optimistic of the longer-term prospects un-
derpinned by growing demand for rubber
gloves and ongoing expansion plans,” Har-
talega added.
Meanwhile, in a separate statement, its
chief executive officer Kuan Mun Leong
said demand for medical supplies includ-
ing nitrile gloves is expected to remain el-
evated, owing to a resurgence of Covid-19
cases in India, South America, the Middle
East and Southeast Asia, despite vaccina-
tion programmes having begun.
“Heightened demand growth will fur-
ther be driven by the structural step-up in
demand, on the back of increased glove us-
age from emerging markets with low glove
consumption per capita and increased hy-
giene awareness, establishing a new base-
line for the industry.
“Against this backdrop, we are com-
mitted to fulfilling our critical role in the
healthcare value chain by continuing to
deliver our high-quality gloves to safeguard
frontliners across the globe. As we ensure
operational continuity, we have put in place
stringent Covid-19 preventive measures to
protect our employees and the community.
To further support Malaysia’s fight against
the pandemic, we also contributed RM90
million to the government’s Covid-19 fund
in February 2021,” he said.
en 4.61% or 46 sen to RM10.44, giving
the company a market capitalisation of
RM35.78 billion.
 W E D N E S D AY M AY 5 , 2 0 2 1
KUALA LUMPUR (May 4): Malaysia
Airlines Bhd’s parent Malaysia Aviation
Group (MAG) aims to break even by 2023
through its Long Term Business Plan 2.0
as the group contends with the Covid-19
pandemic’s impact on the global aviation
sector, MAG group chief executive officer
Captain Izham Ismail said today.
Izham said the domestic travel market
needs reform to be sustainable as condi-
tions are expected to worsen post-Covid-19
pandemic.
“Airlines’ average fares have not been
tracking inflation year-on-year and this has
created an unsustainable situation for the
domestic market.
“The seats are [in] oversupply [situa-
tion], resulting [in] price wars which have
created a race to the bottom for all players,”
he said during a virtual press conference on
MAG’s business update.
He said airfares for the domestic market
are not driven purely by cost, but also by
overcapacity in the market.
Izham said MAG will continue to serve
the domestic travel market and that MAG
hopes policymakers will reform the market
while balancing customers’ needs.
Khazanah Nasional Bhd — Malaysia’s
sovereign wealth fund — via MAG owns
100% of Malaysia Airlines.
Khazanah said in a statement on March
4 it continues to provide full support and
close cooperation in the comprehensive ef-
forts to ensure the national carrier’s sustain-
ability post-Covid-19 pandemic.
“On Feb 22, 2021, the High Court of
Malaysia Aviation Group says it ‘never had’
M&A conversations with AirAsia amid Covid-19
KUALA LUMPUR (May 4): Malaysia
Airlines Bhd’s parent Malaysia Aviation
Group (MAG) claimed today it never
had merger and acquisition (M&A) talks
with budget airline AirAsia Group Bhd
as the aviation sector contended with the
impact of the global Covid-19 pandem-
ic-driven movement restriction policies,
which brought the industry to its knees.
MAG group chief executive officer
Captain Izham Ismail claimed today
MAG “never had such conversations”
with AirAsia Group.
“If I speak for myself personally, if I
am able to restructure the organisation,
why would I go and throw ourselves to
another organisation which is trying to
survive.
“It will take a big toll on the original
culture of the organisation,” Izham said
today during a virtual press conference
7 THEEDGE CEO MORNING BRIEF
H O M E
Malaysia Airlines
owner Malaysia
Aviation Group
aims to break
even by 2023
through Long
Term Business
Plan 2.0 — CEO
BY ADAM AZIZ & SULHI KHALID
theedgemarkets.com
Justice of England and Wales sanctioned
a scheme of agreement between MAG’s
leasing entity, MAB Leasing Ltd, and the
majority of MAG’s aircraft operating les-
sors, following unanimous support from
the lessors.
“This represents an important compo-
nent of the wider restructuring exercise
which will achieve a reduction in MAG’s
liabilities of over RM15 billion. Moving
forward, MAG will focus on working
closely with the government and stake-
holders on restarting air travel and pro-
moting industry recovery, as well as con-
tinuing cash conservation while capturing
demand recovery as part of its internal
BY ADAM AZIZ & SULHI KHALID
theedgemarkets.com
on MAG’s business update.
As part of MAG’s long-term business
plan aspiration, Izham said the group is
committed to delivering healthy return
on investments in 2021 through a holistic
capital allocation framework to ensure
sound investment decisions for the group.
“We will also engage with policymak-
ers to establish a comprehensive aviation
market regulation framework that pro-
motes healthy and sustainable competi-
tion,” Izham said.
Khazanah Nasional Bhd — Malaysia’s
sovereign wealth fund — via MAG owns
100% of Malaysia Airlines.
Khazanah said in a statement on
March 4 it continues to provide full sup-
port and close cooperation in the com-
restructuring,” Khazanah said.
Today, Izham said MAG believes the avi-
ation industry will benefit from government
interventions which will ensure longer-term
sustainability of Malaysia Airlines.
Citing examples, he said Malaysia has
spearheaded bilateral discussions on trav-
el corridors with suitable countries to help
resuscitate air travel which has been con-
tending with the impact of global Covid-19
pandemic-driven movement restriction pol-
icies to curb the outbreak.
He said MAG is looking forward to the
pent-up demand in the travel market, be-
sides factors including Covid-19 vaccina-
tion progress and government interventions
involving reciprocal green lanes between
countries to rebuild consumer confidence
in the travel market as pandemic concerns
linger.
“The biggest challenge now is top line
and revenue, under the very weak market
environment that we are facing.
“[One of the restructuring’s objectives]
is to ensure that MAG has sufficient cash
balance over the next five years, especially
for the next 12 to 18 months [during which]
the market is expected to remain unstable
and, to a certain extent, unpredictable.
“That [volatility] has made our for-
ward-planning and forecasting a challenge,”
Izham said.
Read also: Malaysia Aviation Group de-
nies mandating Goldman Sachs to guide
its long-term business plan Click here
prehensive efforts to ensure the nation-
al carrier’s sustainability post-Covid-19
pandemic.
“On Feb 22, 2021, the High Court of
Justice of England and Wales sanctioned
a scheme of agreement between MAG’s
leasing entity, MAB Leasing Ltd, and the
majority of MAG’s aircraft operating les-
sors, following unanimous support from
the lessors.
“This represents an important compo-
nent of the wider restructuring exercise
which will achieve a reduction in MAG’s
liabilities of over RM15 billion. Moving
forward, MAG will focus on working
closely with the government and stake-
holders on restarting air travel and pro-
moting industry recovery, as well as con-
tinuing cash conservation while capturing
demand recovery as part of its internal
restructuring,” Khazanah said.
 W E D N E S D AY M AY 5 , 2 0 2 1
H O M E
Can-One gets
KUALA LUMPUR (May 4): Can-One
Bhd has received a notice of uncondi-
takeover offer
tional mandatory takeover offer from
major shareholder Eller Axis Sdn Bhd
from major
to acquire the remaining shares in Can-
One not owned by Eller Axis and the ul-
shareholder at
timate offeror Yeoh Jin Hoe for RM2.50
per share.
RM2.50 per share
According to the notice of the offer from
UOB Kay Hian sent on behalf of Eller
Axis, which Can-One filed with Bursa Ma-
laysia today, Eller Axis inked an uncondi-
tional share sale agreement with Genkho BY WONG EE LIN
Candoz Sdn Bhd today to acquire 40.24 theedgemarkets.com
million shares or 20.94% in the metal-can
manufacturer at RM2.50 per share or
RM100.6 million in total, cash.
Prior to the acquisition, Yeoh, the
major shareholder of Eller Axis, held
7.51 million shares in Can-One, repre-
senting a 3.91% stake, while Eller Axis
had 45.59 million Can-One shares or
23.73%. The shareholding of the per-
sons acting in concert (PACs) with the
offeror stood at 23.06 million (11.99%).
With the 20.94% stake buy, the col-
lective equity interest held by the of-
feror and PACs increased to 60.57%,
prompting this mandatory offer. The
joint offerors, however, intend to main-
YTL Corp’s
KUALA LUMPUR (May 4):YTL Corp
Bhd’s subsidiary YTL Cement (Hong
unit divests
Kong) Ltd has finalised the dispos-
al of its 100% equity interest in Zhe-
cement
jiang Hangzhou Dama Cement Co Ltd
(Dama Cement).
business in
Dama Cement, which owns a cement
plant in the Lin’an district of the Zhe-
China
jiang Province in China, primarily man-
ufactures and sells ordinary portland
cement, clinker and related products.
In a statement, YTL Corp said its
98%-owned YTL Cement invested in BY JUSTIN LIM
Dama Cement in 2007, and has seen ag- theedgemarkets.com
gregate returns of about CNY1.3 billion
(RM827 million) and profits of about
RM250 million from it since.YTL Corp,
however, did not disclose the disposal
price for Dama Cement.
YTL group executive chairman Tan
Sri Francis Yeoh Sock Ping said now is
an ideal time for the company to make
an exit from the Chinese investment,
given its current “highly attractive val-
uation”.
“Through our investment in Chi-
na, the largest cement producer in the
world, we have been able to enhance
our existing capabilities and build on
our knowledge of the industry. Learning
from its advanced technology, opera-
tional knowhow, procurement, logistics
and distribution systems, this exit is part
8 THEEDGE CEO MORNING BRIEF
tain the listing status of Can-One on
Bursa Malaysia.
The offer price of RM2.50 per share
represents a 20.26% discount to Can-
One’s three-month volume weighted
average market price up until May 3 of
RM3.1352. It is also a 15.82% discount
to Can-One’s last transacted price of
RM2.97 (May 3), prior to the trading
suspension of its shares today to make
way for this announcement.
Ultimate offeror Yeoh is also a non-in-
dependent non-executive director of Can-
One. He was managing director (MD) of
the company but relinquished the position
on July 11, 2012 when he was appointed
group MD of Kian Joo Can Factory Bhd,
a wholly-owned subsidiary of Can-One.
He is also currently the group MD
of Box-Pak (Malaysia) Bhd, and the ex-
ecutive director of Alcom Group Bhd.
The trading of Can-One’s shares will
resume tomorrow. At the last traded price
of RM2.97 apiece, Can-One has a market
capitalisation of RM570.69 million. Over
the past year, the counter has climbed
18.3% from RM2.51. The stock hit a one-
and-a-half-year high of RM3.55 on March
18 this year before gradually falling to
below the RM3-level.
of our strategy to concentrate on achiev-
ing a similar position of leadership in
our key domestic, export and regional
markets,” said Sock Ping.
The disposal is well-aligned with the
group’s focus on establishing itself as
an industry leader in the regional ce-
ment market, said YTL Cement group
managing director Datuk Seri Michael
Yeoh Sock Siong.
“Dama was our first substantial foray
into China’s cement industry, a major
supplier in Hangzhou. The vital insight
and knowledge that we have gained will
be used in our plans to expand our op-
erations within Southeast Asia,” he said.
YTL Corp’s cement business is un-
dertaken through YTL Cement, oper-
ating in Malaysia, Singapore, Vietnam
and Myanmar.
YTL Cement expanded its Malaysian
operations in 2019 with the RM1.63
billion acquisition of a 51% stake in
Lafarge Malaysia Bhd -- now known as
Malayan Cement Bhd. Following the
acquisition and a mandatory general of-
fer extended for the rest of the shares it
does not own, YTL Cement now holds
76.98% in Malayan Cement.
YTL Corp’s shares closed unchanged
at 70.5 sen today, bringing it a market
value of RM7.79 billion after 2.46 mil-
lion shares.
 W E D N E S D AY M AY 5 , 2 0 2 1
BNM seen
holding key rate
amid spike in
Covid-19 cases
— poll
BY JOSEPH SIPALAN
Reuters
KUALA LUMPUR (May 4): Malaysia’s
central bank is expected to leave its key
interest rate at a record low on Thursday
to help support the economy’s recovery as
coronavirus cases rise, even as it has bene-
fited from strong external demand.
All 13 economists polled by Reuters saw
Bank Negara Malaysia (BNM) keeping its
overnight policy rate at a historic low of
1.75% on Thursday. The central bank had
cut its benchmark rate by a total of 125
basis points last year.
“We think BNM is more focused on
the vaccination programme’s ability to
secure the recovery in the medium term,
especially given fears that further rate cuts
could exacerbate financial stability risks,”
KUALA LUMPUR (May 4): Velesto En-
ergy Bhd said it is investigating yesterday’s
worksite incident involving one of its rigs,
and is evaluating its options.
“The rig is covered by insurance and
recovery efforts are ongoing and moni-
tored,” the group said in a bourse filing.
Velesto said the incident involving the
Velesto Naga 7 rig occurred at the worksite
due to rapid penetration into the forma-
tion, whilst operating in offshore Sarawak
for a client. “The rig tilted and subsequent-
ly (today), Velesto Naga 7 submerged at
the location. Drilling activities have not
commenced and no well has been drilled,”
the group added.
Velesto said all on-board personnel are
safe on the rescue vessels, and that most
have been transferred to Miri, while the
remaining personnel are in the process of
being transferred. “The company extends
gratitude to all involved in the evacuation
operation after the incident and the on-
going recovery efforts, including our cli-
ent and all relevant authorities,” it added.
Naga 7 rig incident to delay Velesto
earnings turnaround — Maybank IB
Maybank Investment Bank Research has
cut Velesto Energy Bhd’s FY21 to FY23
earnings by 58% to 144% due to the op-
9 THEEDGE CEO MORNING BRIEF
H O M E
Barclays said in a research note.
“However, BNM is unlikely to embark
on a path of policy normalisation either, as
travel activity remains substantially below
pre-pandemic levels.”
Barclays said it expected rates to remain
steady this year and only rise in 2022.
Malaysia’s economy saw its biggest full-
year contraction in over two decades last
year as it imposed strict coronavirus curbs
for most of 2020. Policymakers are now
having to balance buoyant exports with
concerns that a spike in coronavirus cases
could derail the recovery.
The economy shrank 5.6% last year —
its worst performance since the Asian Fi-
nancial Crisis. Exports surged 31% year-
Velesto probing
rig incident,
recovery efforts
ongoing
BY TAN SIEW MUNG
theedgemarkets.com
erational setback on its Naga 7 rig.
Its analyst Liaw Thong Jung said in a
note today he also downgraded Velesto to
“sell” from “buy”, and cut its target price
by 63% to 11 sen from 30 sen, following
the earnings revision.
“Our revision in earnings and change in
MOHD SUHAIMI MOHAMED YUSUF/THE EDGE
on-year in March, its quickest pace in
nearly four years.
Analysts say the pace of recovery will
also depend on how the coronavirus situ-
ation develops.
While its coronavirus vaccination pro-
gramme is well under way, Malaysia is fac-
ing a fresh spike in coronavirus cases and
has reported more than 415,000 infections
in total so far, the third highest infection
rate in the region behind Indonesia and
the Philippines.
As of Sunday, over 905,000 people have
received at least one vaccine dose since
the Southeast Asian nation launched its
national vaccination programme in Feb-
ruary, according to health ministry figures.
view reflect the uncertainty over the rig’s
long-term availability at this juncture. At
this juncture, we think Velesto is unlikely
to return to profitability until FY23. The
Naga 7 incident, in our view, has delayed
its earnings turnaround by another year,”
he said.
According to Liaw, Velesto had recent-
ly secured an US$8 million contract from
ConocoPhillips for the charter of Naga 7
to drill up to three wells offshore Sarawak
from the second quarter of 2021. Howev-
er, following this incident, he cut Velesto
earnings to take into account the lower
utilisation realised from the Naga 7 impact.
“Our model now conservatively assumes
zero utilisation for Naga 7 from May 2021
to 2023, pending updates on the rig’s oper-
ability. Our revised jack-up (JU) utilization
is now at 52%/63%/68% for FY21/22/23
respectively (vs. 62%/74%/80% previous-
ly). That said, we posit that it is still pre-
mature to fully write-off Naga 7 for now,”
he said.
He also lowered Velesto’s target price,
valuing it at a lower 0.7 times enterprise
value/replacement value of US$90 million
on this unforeseen setback.
Velesto’s share price closed unchanged
at 16 sen today, valuing the group at
RM1.31 billion.
 W E D N E S D AY M AY 5 , 2 0 2 1
KUALA LUMPUR (May 4): The Dis-
ney+ Hotstar streaming platform, a collab-
oration between Astro Malaysia Holdings
Bhd and The Walt Disney Company, will
be launched in Malaysia on June 1.
This confirms a report by theedgemar-
kets.com yesterday that Disney+ is coming
to Malaysia via its own streaming platform
and also through working relationships
with platforms such as Astro.
In statements today, the companies said
viewers can enjoy content from several pro-
viders including Disney, Pixar, Marvel, Star
Wars, the National Geographic as well as a
wide array of general entertainment series
and films for young adult audiences, and
home-grown and Asian hits through the
streaming service.
Consumers can subscribe directly to
Disney+ Hotstar for RM54.90 for three
months, or through special packages with
Astro, for access to an extensive collection
of content.
Meanwhile, Astro said the streaming
service is working towards making it avail-
able via its Ultra and Ulti connected boxes
later this year.
Disney+ Hotstar will be available to its
Movies Pack customers for an addition-
al RM5 per month, while its non-Movies
Pack customers may access the streaming
service via other bundles, said Astro. From
today onwards, customers can sign up for
the Movies Pack bundle that comes with
Disney+ Hotstar.
General manager of Walt Disney for
Taiwan, Hong Kong and Southeast Asia
David Shin said this collaboration with As-
tro marks an important milestone for the
group as it continues expanding its foot-
print in Southeast Asia to bring its compel-
KUALA LUMPUR (May 4): Fraser &
Neave Holdings Bhd’s (F&N) net profit
grew 1.3% to RM103.51 million for its
second quarter ended March 31, 2021
(2QFY21) from RM102.17 million a year
earlier, amid higher sales from a favoura-
ble product mix, as well as more prudent
advertising and promotion (A&P) spend.
Quarterly revenue rose 8.6% to RM1.09
billion from RM1.01, its bourse filing to-
day showed.The group declared an interim
dividend of 27 sen per share for the finan-
cial year ending Sept 30, 2021 (FY21),
payable on June 16.
F&N attributed the higher sales to the
recovery in the domestic market, double
digit growth in exports fuelled by growth
in the Middle East and Africa markets, and
maiden contribution from the Sri Nona
Companies.This was despite subdued Chi-
nese NewYear festivities due to Movement
Control Order (MCO 2.0) restrictions in
10 THEEDGE CEO MORNING BRIEF
H O M E
Astro and Walt
Disney team up
to launch Disney+
Hotstar streaming
service in Malaysia
on June 1
BY SYAFIQAH SALIM &
ARJUNA CHANDRAN SHANKAR
theedgemarkets.com
ling entertainment offerings to consumers
in the region.
“Malaysians are not only connected, but
also extremely tech-savvy and they repre-
sent some of Disney’s biggest fans in the
region. We are tremendously excited to be
able to deliver a wide array of content for
everyone of all ages through our world-
class platform, covering the best from Dis-
ney’s brands across a multitude of genres,”
he said in a statement today.
Meanwhile, Astro group chief execu-
tive officer (CEO) Henry Tan said: “We
are delighted to aggregate the best of the
best to be the undisputed entertainment
destination for Malaysians. Our customers
deserve great entertainment and the addi-
tion of Disney+ Hotstar with our much-
loved hits, local signatures and unparalleled
sports would delight them.
“This is a great start to an action-packed
year where we will be aggregating subscrip-
tion-based video-on-demand (SVOD)
F&N sees
marginal profit
growth in 2Q
despite MCO 2.0,
declares 27 sen
dividend
BY WONG EE LIN
theedgemarkets.com
Malaysia, as there was positive momentum
in on-premise demand after the easing of
restrictions in early March.
Additionally, Food & Beverages Thailand
(F&B Thailand) registered 4.3% revenue
streaming services, giving our customers the
widest variety of entertainment to choose
from, value and convenience,” he added.
According to a CNA report last week,
The Walt Disney Company said it is “con-
solidating its Media Networks business pri-
marily in Southeast Asia and Hong Kong” as
part of the company’s “global effort to pivot
towards a direct-to-consumer-first model
and further grow” its streaming services.
Since its launch in November 2019, Dis-
ney+ has signed up more than 100 million
subscribers for its streaming platform and
steadily expanded the geographical cover-
age of its services to 59 countries around
the world, including North America, Eu-
rope, Asia-Pacific and Latin America.
Meanwhile, Astro also has arrange-
ments with other streaming players, name-
ly the US’ HBO GO and China’s iQIYI.
Other than Disney+ originals such as
The Mandalorian and High School Musical:
The Musical: The Series, Marvel Studios’
WandaVision, The Falcon and The Winter
Soldier and Loki, Disney+ Hotstar has also
entered into a series of multi-year agree-
ments with leading Malaysian studios to
support the local film community.
These multi-year agreements mean that
Disney+ Hotstar will exclusively offer Ma-
laysian movies that will skip theatres and
launch straight on the streaming service,
such as J2: J Retribusi, the explosive ac-
tion-packed sequel to the blockbuster J
Revolusi, Zombitopia, Ejen Ali The Movie 2
as well as top-rated local prime-time dra-
ma series.
As of 11.15am today, shares in Astro
were 0.98% or a sen higher at RM1.03,
valuing it at RM5.37 billion, with 1.37
million shares done so far.
growth in 2QFY21 at RM525.8 million
amid a recovery in domestic economic ac-
tivities, especially among hawkers, restau-
rant/café operators and cash-and-carry
channels. “Exports from Thailand also grew
from greater demand overseas, which helped
mitigate the slower offtake in Indochina mar-
kets due to stronger Thai Baht (which led to
higher price in trade) and escalating Cov-
id-19 cases in the region,” said F&N.
For the first six months of FY21, its
net profit rose 4.2% to RM240.32 mil-
lion from RM230.54 million a year ago,
while revenue rose 2.8% to RM2.17 billion
from RM2.12 billion. Higher earnings for
the period were due to investment tax in-
centives at the Thai subsidiary, said F&N.
On prospects, the group remains cautious
of the local and global uncertainties, as the
Covid-19 pandemic situation remains fluid
and uncertain, said F&N Chief Executive
Officer Lim Yew Hoe in a statement.
 W E D N E S D AY M AY 5 , 2 0 2 1
KLCCP Stapled Group’s 1Q net profit
falls 17.39% to RM146.13m, dragged
by retail and hotel segments
KUALA LUMPUR (May 4): KLCCP
Stapled Group’s net profit for the first
quarter ended March 31, 2021 (1QFY21)
fell 17.39% to RM146.13 million from
RM176.88 million a year ago, as the
pandemic dragged the group’s retail and
hotel segments. Revenue for the group,
comprising KLCC Property Holdings Bhd
and KLCC Real Estate Investment Trust
(KLCC REIT), fell 20.37% to RM282.37
million from RM354.59 million, its bourse
filing showed. The group declared a
dividend of seven sen per stapled security
for 1QFY21. The group’s office segment
— comprising the Petronas Twin Towers,
Menara 3 Petronas, Menara ExxonMobil
and Menara Dayabumi — remained stable
as they are backed by triple net leases
(TNLs) and long-term, locked-in leases. But
its retail segment — represented by Suria
KLCC and the retail podium of Menara 3
Petronas — saw delayed recovery with
the reimposition of the movement control
order (MCO 2.0) from Jan 13 to March
4, 2021. The same was true for its hotel
segment with Mandarin Oriental. The
group anticipates the national Covid-19
vaccination programme to foster market
recovery, but foresees the year to likely be
challenging as the pandemic persists. — by
Tan Siew Mung/theedgemarkets.com
CIMB Bank to issue HK$610m bond
KUALA LUMPUR (May 4): CIMB Group
Holdings Bhd’s indirect 99.99%-owned
CIMB Bank Bhd will issue tomorrow a
HK$610 million (about RM323.42 million)
bond under CIMB Bank’s proposed debt
scheme of up to US$5 billion (about
RM20.59 billion), said CIMB Investment
Bank Bhd, which is facilitating the debt
scheme. The medium term note (MTN)
programme pays an annual interest rate
of 0.88% and will mature on May 5, 2024.
CIMB Investment Bank did not say how
CIMB Bank plans to use proceeds from
the bond issue. The HK$610 million bond
will be listed on Bursa Malaysia but not
quoted for trading under the exempt
regime, according to CIMB Investment
Bank’s filing yesterday with Bank Negara
Malaysia’s (BNM) Fully Automated System
for Issuing/Tendering (FAST) website.
Dealers for the bond are The Hongkong
and Shanghai Banking Corp Ltd (HSBC)
and CIMB Bank’s Labuan offshore branch.
“The notes are expected to be rated A3 by
Moody’s,” CIMB Investment Bank added. —
by Tristan Dielenberg/theedgemarkets.com
11 THEEDGE CEO MORNING BRIEF
H O M E
NEWS IN BRIEF
S P Setia to establish sukuk programme
worth up to RM3b
KUALA LUMPUR (May 4): S P Setia Bhd
plans to set up an Islamic medium term
note programme of up to RM3 billion in
nominal value. The property developer today
lodged the Sukuk Wakalah Programme
with the Securities Commission Malaysia.
The programme allows for the issuance
of rated and senior unsecured sukuk from
time to time, subject to a total outstanding
amount not exceeding RM3 billion at any refinance earlier borrowings undertaken to
point in time, S P Setia said in a bourse filing. fund this project. HSBC Amanah Malaysia
Malaysian Rating Corporation Bhd (MARC) Berhad is the principal adviser, joint lead
has assigned a preliminary rating of AA-IS arranger, joint lead manager and shariah
with a stable outlook to the programme. adviser for the programme. S P Setia shares
Proceeds from the sukuk will largely be used closed unchanged at RM1.02 today, giving
to fund capital injection into the group’s joint- the group a market capitalisation of RM4.14
venture Battersea Power Station project and billion. — by Justin Lim/theedgemarkets.com
Mah Sing buys KL land for RM618m Rohas Tecnic
mixed development secures RM37m
KUALA LUMPUR (May 4): Mah Sing Group transmission
Bhd is buying a plot about two hectare in size tower job
in Tempat Jalan Genting Kelang, Setapak KUALA LUMPUR
here for a proposed RM618 million mixed (May 4): Rohas
development comprising residential and Tecnic Bhd
retail components. In a bourse filing, Mah has secured a
Sing said its Nova Century Development transmission line
Sdn Bhd has inked a conditional sale and fabrication job with
purchase agreement with seller Teratai an estimated value
Constructors Sdn Bhd to acquire the of RM37 million. The group said in a filing its
leasehold industrial land with the address has accepted an order from Larsen & Toubro
Lot 27, Jalan Usahawan 5, Kawasan Ltd (L&T) for the fabrication of 500 kilovolt
Perindustrian Ringan. “The group will be (KV) Overhead Transmission Towers for the
applying with the relevant authorities for the transmission line connecting a 1,200MW
conversion of land use,” Mah Sing said, adding power generation plant in Pulau Indah to
the proposed development for the site is the Olak Lempit main intake substation. The
M Astra, which comprises two blocks of transmission line is about 37km long and
serviced suites and some retail lots. The land the project comprises the fabrication and
is predominantly flat and currently houses supply of lattice towers, it said. The 12-month
the Sri Utama International School Kuala project, which started last month, will set a
Lumpur. It intends to fund the purchase and new record for the tallest transmission lattice
development via a combination of internal tower in Malaysia as it needs to be about
funds and bank borrowings.The proposed 140 meters in height to cross above existing
acquisition is expected to be completed transmission lines from Pulau Indah to Olak
in the fourth quarter of 2021. — by Arjuna Lempit on the mainland. — by Tan Siew Mung/
Chandran Shankar/theedgemarkets.com theedgemarkets.com
Tomei’s 1Q net profit triples y-o-y as Malaysians buy more gold jewellery
KUALA LUMPUR (May 4): Tomei Consolidated Bhd’s net profit for the first quarter
ended March 31, 2021 (1QFY21) jumped more than three times year-on-year (y-o-y)
to RM13.76 million, from RM4 million, on higher revenue. Quarterly revenue almost
doubled to RM244.15 million from RM127.8 million a year before, mainly due to an
increase in consumers’ demand, particularly for yellow gold jewellery. On a quarter-on-
quarter basis, Tomei’s net profit also increased by 17.88% from RM11.67 million while
revenue was up 45.47% from RM167.84 million, also due to better consumers’ demand.
On prospects, the group said it will remain vigilant and take necessary measures to
ensure that it achieves a reasonable level of profitability for the year. — by Justin Lim/
theedgemarkets.com
 W E D N E S D AY M AY 5 , 2 0 2 1
Will a rising tide lift all boats?
T
hese are the popular opinions
and beliefs among Malaysians
who participated in our 2019
joint World Bank-University of
Malaya qualitative study on living stand-
ards in Malaysia.The Kuala Lumpur sky-
line is emblematic of a modern, rich city,
but closer to the ground, a conversation
with the Grab car driver tells a different
story of how most Malaysians struggle in
their daily lives.
Even before the pandemic, there was a
growing sense among the rakyat that the
headline successes of Malaysia’s economy
were not translating into real improve-
ments in their daily lives. A previous study
done by the World Bank on Malaysia’s
cost of living challenges showed that many
households need dual incomes and some
even multiple jobs to make ends meet,
suggesting that most people were not bet-
ter off despite rapid economic growth in
past decades.
Our latest report, Aiming High: Nav-
igating the Next Stage of Malaysia’s De-
velopment, argues that while Malaysia is
expected to reach the important mile-
stone of becoming a high-income econ-
omy within the next 3–7 years, the bigger
challenge is for the country to ensure that
as the nation prospers, so do its citizens.
Over the past 30 years, only 33 coun-
tries have made the transition to high-in-
come status, and in many ways, Malaysia
is approaching the transition from a weak-
12 THEEDGE CEO MORNING BRIEF
H O M E
BY KENNETH SIMLER, SHAKIRA TEH
SHARIFUDDIN & ZAINAB ALI AHMAD
The World Bank
...In the past, a total
income of RM800–
RM1,000 could support
six people or more.
Nowadays, you can
barely support three
people, and even that is
a nightmare... Malaysia
has developed, but
the rakyat [people]
has been left behind
because incomes have
not increased.”
er position than its predecessors. Com-
pared to those countries, Malaysia is ap-
proaching the high-income transition with
higher inequality, limited social spending,
and a shrinking fiscal space. A high-income
country status that is not matched by ele-
vated economic security and greater overall
well-being for all Malaysians would be an
achievement only on paper, and certainly
not a meaningful one.
High inequality in Malaysia
One must then ask, what is the driving force
behind these less optimistic sentiments? It
is worth noting that while the country has
achieved great progress in poverty reduc-
tion and economic inclusion since 1970,
growth has become less inclusive in recent
years.There are many factors contributing
to the perception that growth has not bene-
fited all citizens equitably, including slower
income growth especially among younger
and lower-skilled workers, inequitable ac-
cess to quality education, and inadequate
social safety nets, particularly for the poor
and vulnerable. At about 0.7 percent of
GDP, Malaysia’s spending on social safety
nets is much lower than almost all countries
that have graduated to high-income status
since 2000, which generally spend about
1.5–3.4 percent of GDP.
Of course, while the most straight-
forward and obvious solution would be
for the government to increase its social
spending, in reality, this is much easier
said than done. The government’s large
commitments to operating expenditures
such as salaries, pensions, and debt ser-
vice payments constrains its ability to al-
locate more for social spending as well as
spending on development. As such, this
severely limits the potential role of fiscal
policy as a redistributive tool to promote
shared prosperity and greater equality
among all Malaysians.
CO N TI N U ES O N PAG E 13
REUTERS
 W E D N E S D AY M AY 5 , 2 0 2 1
KUALA LUMPUR (May 4): Former
prime minister Datuk Seri Najib Razak
has made another appeal at the appellate
court against the High Court’s decision
to dismiss his application to disqualify
appointed prosecutor Datuk Seri Gopal
Sri Ram from leading the prosecution in
the ongoing 1Malaysia Development Bhd
(1MDB) audit report tampering trial.
This was confirmed by deputy public
prosecutor Ahmad Akram Gharib, who told
theedgemarkets.com that the petition of ap-
peal was filed by Najib’s lawyers yesterday.
“The next case management date will
be on June 1,” he said, following case man-
agement for the appeal before Court of Ap-
peal senior deputy registrar Mohd Khairi
Haron earlier today.
On Feb 15, High Court Judge Justice
Mohamed Zaini Mazlan had rejected the
application made by Najib to recuse the for-
mer federal court judge from leading the
prosecution team in the 1MDB audit tam-
pering trial.
In his judgement, Justice Mohamed
Zaini said Najib’s claim that Sri Ram was
biased against him was “without basis and
misplaced”.
The claim of biasedness stemmed from
the “revelation” made by former attor-
ney-general (AG) Tan Sri Mohamed Apan-
di Ali in June last year, which was later filed
as an affidavit in support of the recusal ap-
plication, that Sri Ram was sent to see him
FROM PAG E 12
Limited effectiveness of social spending
But it is not just about spending more. It
is also about spending smarter. For social
spending to be effective, it has to be target-
ed to the right groups and at a meaning-
ful amount. In Malaysia, nearly everyone
in the bottom 20 percent (B20) income
group receives some form of social assis-
tance, but they enjoy only 29.5 percent
of the total program benefits. In contrast,
a large share of social transfers ends up
in the M40 (37.2 percent) and the T20
(9.5 percent) households. Moreover, cer-
tain types of social spending, such as the
blanket fuel subsidy, also disproportion-
ately benefit higher-income households.
A study done by Bank Negara Malaysia
(BNM) back in 2014 estimated that the
B20 households only receive 4 percent of
the fuel subsidy, while the T20 receive 42
percent. In other words, for every Ringgit
that the government spends on fuel subsi-
dies, only 4 cents goes to the lower income
households, thus increasing inequalities
rather than reducing them.
More generally, Malaysia’s spending in
social sectors has been shown to be inef-
13 THEEDGE CEO MORNING BRIEF
H O M E
Najib files
fresh appeal to
recuse Sri Ram
from leading
prosecution in
1MDB audit
tampering trial
BY EMIR ZAINUL
theedgemarkets.com
in January 2018 by former prime minister
Tun Dr Mahathir Mohamad to persuade
him to arrest then prime minister Najib.
The judge also found that there was
no evidence to support the applicant’s al-
legation that Sri Ram was involved in in-
itial investigations into making the case
against Najib and, as such, the accusation
remained “purely hypothetical”.
It is worth noting that Najib had already
made numerous attempts to remove Sri
Ram as the lead prosecutor in all the trials
involving him but to no avail.
His application was first dismissed by
High Court Judge Justice Collin Lawrence
ficient, including expenditure on critical
areas such as education. Malaysia spends
a large share of the national budget on ed-
ucation, yet learning outcomes have con-
sistently fallen below expectations.
Malaysia’s shrinking fiscal space
For there to be money to spend, the gov-
ernment needs to ramp up its revenue
collection. Since 2012, Malaysia’s reve-
nue collection as a percentage of GDP
has been on a persistent decline, and this
has squeezed the government’s ability to
provide the high-quality public services
and social safety nets that the expanding
middle-class increasingly expects. In 2019,
Malaysia’s revenue collection stood at 17.4
percent of GDP, well below the average
figure for upper-middle-income countries
(28 percent) and high-income countries
(36 percent). The government severely un-
der-collects in key revenue areas such as
personal income and consumption taxes,
in part from an expansive system of tax de-
ductions and exemptions across all income
levels. Not only that, with the exception of
the real property gains tax, Malaysia does
very little to tax capital gains and there is
no wealth tax in place. Globally, there has
Sequerah, who is now presiding over the
1MDB-Tanore trial, and the decision was
upheld by both the Court of Appeal and
the Federal Court.
High Court Judge Justice Datuk Seri
Mariana Yahya also rejected a separate
judicial review application to remove Sri
Ram made by both Najib and his lead de-
fence counsel Tan Sri Muhammad Shafee
Abdullah, who is also facing four money
laundering charges involving up to RM9.5
million alleged to be funds from Najib.
The decision is currently being appealed
against in the Court of Appeal.
In the 1MDB audit tampering trial, Na-
jib was charged with abusing his power as
the prime minister and finance minister,
for allegedly ordering changes made to the
1MDB audit report prepared by the Nation-
al Audit Department before it was finalised
and tabled to the parliament’s Public Ac-
counts Committee, so as to avoid any civil
action or criminal prosecution against him.
The charge was filed under Section
23(1) of the Malaysian Anti-Corruption
Commission (MACC) Act 2009. If con-
victed, he can be fined at least RM10,000
or five times the amount of gratification
involved, and jailed up to 20 years.
Former 1MDB president Arul Kanda
Kandasamy, meanwhile, has been charged
with abetting Najib under Section 28(1)
of the same Act, an offence that carries the
same punishment if found guilty.
been a greater call in recent times, espe-
cially since the COVID-19 pandemic, for
governments to include wealth taxes as
part of their revenue frameworks.
It is clear that the tax framework in Ma-
laysia can and should be made more pro-
gressive. Beyond the mechanics of the frame-
work itself, efforts to raise public awareness
and to inform the rakyat about taxes and
the corresponding benefits of government
spending should be instituted. Responding
to the 2020 World Values Survey on whether
it is an “essential characteristic of a democracy
that governments tax the rich and subsidize the
poor”, unlike in many other countries, most
Malaysians had an indifferent view. Con-
currently, Malaysia needs serious efforts to
improve its accountability and transparency
to raise the rakyat’s confidence in the tax
and spending framework.
This principle of an enhanced social
contract is synthesized in our report. The
state acts to meet the needs of the popu-
lation credibly and effectively, and in ex-
change, the rakyat must be empowered to
exercise their rights and duties as citizens
of the country. It is time for Malaysia to
aim high and ensure that the rising tide
lifts all boats.
 W E D N E S D AY M AY 5 , 2 0 2 1
High Court orders Jho Low’s right-hand
man ‘Fat Eric’ to pay RM68m in tax arrears
KUALA LUMPUR (May 4): The High
Court here had today ordered Eric Tan
Kim Loong, who is also known as “Fat
Eric”, to pay almost RM68 million in tax
arrears from 2010 to 2013 to the Malaysian
government following legal action against
Tan by the Inland Revenue Board (IRB).
According to the judgment sighted by
theedgemarkets.com, Tan is ordered to pay
RM67,996,891.87 inclusive of annual in-
terest. He was also ordered to pay costs
amounting to RM2,000.
It was reported that Tan is 1Malaysia
Development Bhd (1MDB) scandal al-
leged mastermind Low Taek Jho’s right-
hand man. Low is popularly known as
Jho Low.
Today, High Court Deputy Registrar
Farah Shuhada Ramli meted out the judg-
ment after the High Court had allowed an
application from IRB lawyers for a judg-
ment in default of appearance.
As a result of Tan’s absence, the High
court issued a certificate of non-appear-
ance before it meted out the judgment
against him.
Tan has been at large since 2018 and
did not send any legal representation for
this case.
Farah said Tan is also required to pay
5% interest a year starting today for every
year he does not pay the RM67.9 million
in tax arrears to the government.
Under the law, a judgment in default
of appearance or representation is when
a defendant fails to appear in court and
14 THEEDGE CEO MORNING BRIEF
H O M E
BY TIMOTHY ACHARIAM
theedgemarkets.com
fails to send legal representation despite
being served with court orders.
The certificate of non-appearance,
which was also sighted by theedgemarkets.
com, revealed that a notice to appear in
court was stuck at his registered address
in Taman Pusat Kepong on March 29 this
year.The lawyers had also advertised this in
a local newspaper on March 31 this year.
Tan owes the government RM2.706
million for 2010, RM22.09 million for
2011, RM35.479 million for 2012 and
RM1.538 million for 2013 through no-
tices issued on Sept 30, 2020.
The notices were sent to his last known
address on Nov 24 last year and there has
been no reply.
“As the defendant had failed to pay
the amount owed as stipulated in the no-
tice under Section 103 of the Income Tax
Act 1967, a 10% surcharge is imposed
on the unpaid amount resulting in the
additional charges of RM270,602.18
(2010), RM2,209,094.99 (2011),
RM3,547,991.14 and RM153,847.30
are imposed,” IRB’s statement of claim
against Tan read.
“The Malaysian government is entitled
to get the unpaid assessment taxes that are
owed and the additional charges.”
theedgemarkets.com has reached out to
lawyers from IRB for comment and is
awaiting their response.
Tan’s involvement in 1MDB
It was previously reported that Tan, a con-
fidante of missing businessman Jho Low,
had given his statement to the Malaysian
Anti-Corruption Commission (MACC)
in 2015, where he claimed that he did not
know the US$681 million “donation” re-
cipient was former prime minister Datuk
Seri Najib Razak.
He claimed that he was the alleged ben-
eficial owner of several companies which
funnelled billions of ringgit to Najib’s per-
sonal accounts from 2011 to 2015.
The evidence was revealed during
the SRC International Sdn Bhd trial last
March, when it was revealed MACC in-
vestigating officer Mohd Hafaz Nazar pur-
portedly recorded Tan’s statement in the
palace of King Abdullah Abdulaziz in Ri-
yadh on Nov 29, 2015.
Tan was purportedly appointed a nom-
inee of the late King Abdullah Abdulaziz
Al Saud, Prince Faisal, Prince Saud and
other members of the royal family via a
letter dated Aug 3, 2009.
On June 12, 2018, the MACC revealed
Tan as the purported signatory of numer-
ous bank accounts overseas through which
billions of ringgit that originated from
1MDB were laundered.
One of the accounts was for Tanore Fi-
nance at Falcon Bank in Singapore, through
which an alleged US$681 million were
moved to and from Najib’s AmBank account.
The authorities had issued warrants of
arrest on both Low and Tan.
 W E D N E S D AY M AY 5 , 2 0 2 1
KUALA LUMPUR (May 4): Tun Dr
Mahathir Mohamad has already respond-
ed to a letter of demand (LOD) issued by
former inspector-general of police (IGP)
Tan Sri Khalid Abu Bakar that accused
the former premier of defamation over his
claim that there was a leak in the 1Ma-
laysia Development Bhd (1MDB) task
force in 2015, which the senior politician
apparently attributed to Khalid.
Dr Mahathir’s lawyer Mior Nor Haidir
Suhaimi of Messrs Haidir & Co told th-
eedgemarkets.com that the former pre-
mier had already filed his response to
the LOD.
“Tun will issue a statement soon,” he
said, adding that more information will
come later.
The former premier then went to
Twitter this afternoon, where he con-
firmed that he had received the LOD
from Khalid, and wrote that he would
see Khalid in court. “I’ve instructed my
lawyers to respond to it. I will see him
in court,” the former premier said on his
official Twitter page.
MACC will
only investigate
party-hoppers if
money is involved
Bernama
KUALA LUMPUR (May 4): The Ma-
laysian Anti-Corruption Commission
(MACC) will only investigate politicians
who switched parties if money was in-
volved said MACC Chief Commissioner
Datuk Seri Azam Baki.
Azam said politicians were free to
jump parties as there are no laws that
prohibit them from doing so as an-
15 THEEDGE CEO MORNING BRIEF
H O M E
Dr M to former
IGP Khalid over
defamation
claims: I’ll see
you in court
BY HAFIZ YATIM
theedgemarkets.com
ti-hopping laws do not exist.
“This is also not an offence. The
MACC will only investigate on any evi-
dence of money offerings such as when
trying to gain support,” he told reporters
at the strategic cooperation programme
between MACC and the National De-
partment for Culture and Arts here today.
On April 30, former inspector-gener-
al of Police Tan Sri Abdul Hamid Bador
urged the commission to investigate pol-
iticians who switched parties which he
claimed involved elements of corruption.
On Abdul Hamid’s call to conduct an
investigation into the interference with
the police force by a minister, Azam said
it was beyond MACC’s jurisdiction to
conduct such investigations.
“This involves the internal issues of
the security forces involved, so let the
police solve it themselves,” he said.
Several media reports said Khalid is
seeking RM10 million from Dr Mahathir
for defamation, following the former pre-
mier’s allegations last month.
According to the alleged defamatory
statement by Dr Mahathir, the fourth and
seventh prime minister of Malaysia, there
was a delay in taking action earlier against
former prime minister Datuk Seri Najib
Razak because Khalid leaked information
on the progress of the investigation from
the task force.
Khalid sent the LOD, dated April 22,
through Messrs Gunaseharan & Linda,
seeking an apology within seven days.
The former IGP has also denied Dr
Mahathir’s allegations, which he de-
scribed as untrue, defamatory and had
tarnished his reputation.
Khalid also asked Dr Mahathir to with-
draw his statement, which had been pub-
lished on several news portals, as it affects his
reputation as a former IGP. He also sought
an open apology to be published on the
former premier’s social media accounts on
Facebook, Instagram and other platforms.
Project cartel:
MACC
monitoring govt
departments
Bernama
KUALA LUMPUR (May 4):The Malaysian
Anti-Corruption Commission (MACC) is
monitoring several government departments
suspected of being involved in a cartel mo-
nopolising the bulk of government contracts.
MACC chief commissioner Datuk Seri
Azam Baki said the monitoring with the
cooperation of the Ministry of Finance
(MoF) would scrutinise any procurement
process made by the departments.
“So far, there are no findings because
monitoring is being carried out and we view
the project cartel case seriously,” he told re-
porters after attending the National Depart-
ment for Culture and Arts (JKKN) strategic
cooperation programme here today.
Meanwhile, Azam said the investiga-
tion paper over alleged abuse of power in
Prasarana Malaysia Bhd had been sub-
mitted to the Attorney-General’s Cham-
bers (AGC) two weeks ago.
“We submitted the investigation pa-
per two weeks ago and are still waiting
for their (the AGC’s) decision for any
further action,” he said.
 W E D N E S D AY M AY 5 , 2 0 2 1
LONDON/WASHINGTON (May 4):The
Group of Seven nations is considering a
US proposal to counter what the White
House sees as China’s economic coercion.
A paper was circulated ahead of a two-
day meeting of G-7 foreign ministers in
London, according to officials who de-
clined to be identified as the talks are pri-
vate. A discussion about China on Tuesday
was led by US Secretary of State Antony
Blinken, who was also expected to raise
allegations of forced labor in the Xinjiang
region.
The US wants a consultation mecha-
nism that would involve the G-7 — as well
as other key stakeholders — to ensure a
coordinated response to China’s moves
and with the aim of boosting the resilience
of G-7 nations, according to a diplomat.
The initiative coincides with a hard-
ening of Germany, Italy, and France —
the three European Union countries that
participate in the G-7 — as they begin
to align with the US administration in its
US trade gap
widened to fresh
record of US$74.4
bil in March
BY E RIC MARTIN, KRISTY SCHEUBLE
& SOPHIE CARONELLO
Bloomberg
WASHINGTON (May 4): The US trade
deficit widened to a new record in March, as
the value of imports surged to a fresh high.
The gap in trade of goods and servic-
es expanded to US$74.4 billion in March
from a revised US$70.5 billion in February,
according to Commerce Department data
released Tuesday. That matched a median
estimate in a Bloomberg survey of economists.
Imports rose 6.3% to a record US$274.5
billion, while exports climbed 6.6% to a
more than one-year high to US$200 billion.
Demand from American consumers
stuck at home during Covid-19 has been
sending US imports to highs. Ports have
been overwhelmed after the sudden stop-
page of trade at the start of the pandemic
last year and then the rush of purchasing that
followed, even as exports remain sluggish.
Container issues
Freight rates soared after the trade boom
late last year caught container producers off
guard, sending them scrambling to meet a
surge in demand.
16 THEEDGE CEO MORNING BRIEF
W O R L D
US proposes G-7
coordination to
counter China’s
economic might
BY ALBERTO NARDELLI, NICK WADHAMS,
JOHN FOLLAIN & KITTY DONALDSON
Bloomberg
standoff with China. The US is still a fair
bit more hawkish than the EU when it
comes to Beijing.
The State department declined to com-
ment.
As host of the G-7, the UK seeks to
strike a balance on China, calling out its
alleged human rights abuses while keep-
ing the door open to areas of cooperation
such as on climate change. The challenge
The blockage of the Suez Canal by a
massive container ship upended global trade
in March caused further trade complica-
tions, stranding some 90 bulk carriers and
causing a rethinking of typical routes.
Automakers have cut production after
a surge in orders for items such as smart-
phones,TVs and computers left less capac-
ity for a stronger-than-expected rebound
in vehicle demand. President Joe Biden is
proposing US$50 billion for semiconduc-
tor manufacturing and research as part of
a push to address the shortage.
Carmakers are pushing for a portion of
the money to be reserved for vehicle-grade
chips, warning of a potential 1.3 million
shortfall in car and light-duty truck pro-
duction in the US this year, if their industry
isn’t given priority.
for Boris Johnson’s government is to avoid
framing the G-7 as anti-China under his
presidency.
The UK has left the EU and wants to
strike trade deals of its own around the
world, including with the US and India.
European nations are also seeking to walk
a fine like between holding China to ac-
count on its human-rights record, while
not alienating a key economic partner.
Also on the agenda is a proposal to set
up a group called “Friends of Hong Kong”
to share information and concerns about
the former British colony, according to a
diplomat familiar with the matter. China
last year imposed a sweeping national se-
curity law on Hong Kong last year in the
wake of anti-government protests in 2019.
Other issues under discussion include
Myanmar, Russia, Ukraine and an agree-
ment on a rapid response mechanism to
counter disinformation that is expected to
be adopted as an annex to the final joint
statement.
Digging deeper
The value of automotive-vehicle imports
advanced 7.3% to US$30.2 billion. Vehi-
cle exports increased 7.2% to US$12.8
billion.
With lumber prices reaching fresh
records amid a construction boom and
housing shortage in the US, the value of
imports of the building material surged
to a record US$1.29 billion in March.
The merchandise-trade deficit rose to
an all-time high of US$91.6 billion, while
the nation’s surplus in services trade eased
to US$17.1 billion, the lowest since Au-
gust since 2012.
The US goods shortfall with China
widened in March to US$36.9 billion on a
seasonally adjusted basis, the widest since
December 2018.
 W E D N E S D AY M AY 5 , 2 0 2 1
LONDON (May 4):The Organization of Pe-
troleum Exporting Countries (OPEC) kept
crude production steady in April, ahead of a
planned revival of supplies scheduled to be-
gin this month.
OPEC pumped an average of 25.27 mil-
lion barrels a day last month, about 50,000
a day less than in March, according to a
Bloomberg survey. A setback for Libyan ex-
ports was largely offset by further increases
from Iran.
The group and its allies — which slashed
production when the pandemic struck last
year — are gradually restoring about a quar-
ter of their halted supplies over the next three
months, to satisfy a recovery in global de-
mand. They will phase in just over two mil-
lion barrels a day through to July, beginning
with 600,000 a day this month.
World fuel consumption is on the mend
from the blow inflicted by coronavirus de-
spite the latest outbreak in India, led by a
vigorous recovery in China and the US Wall
Street banks such as Citigroup Inc expect
global demand to be back above pre-virus
levels this summer.
Still, the survey showed OPEC maintained
its discipline while waiting for the demand
rebound to kick in. Saudi Arabia, the group’s
DUBAI (May 4): State-run oil producer Sau-
di Aramco beat analysts’ forecasts on Tuesday
with a 30% rise in first-quarter net profit and
maintained its dividend payout, helped by
strong oil prices.
Earnings by global energy companies such
as Exxon Mobil have climbed on the back of
rising crude prices, which are up by about
a third this year, as fuel demand recovers
from the pandemic and as a global surplus
of crude shrinks.
“Given the positive signs for energy de-
mand in 2021, there are more reasons to be
optimistic that better days are coming,” Amin
Nasser, chief executive of the world’s top oil
exporter, said in a statement.
“And while some headwinds still remain,
we are well positioned to meet the world’s
growing energy needs as economies start to
recover,” he said.
Net income rose to US$21.7 billion for
the quarter to March 31 from US$16.7 bil-
lion a year earlier. Aramco was expected to
post a net profit of US$19.48 billion, accord-
ing to an average of estimates by five analysts.
Aramco, which listed in 2019 with the sale
of a 1.7% stake mainly to the Saudi public
and regional institutions, said earnings were
boosted by stronger crude prices and high-
er refining and chemicals margins, helping
offset lower production.
The OPEC+ group, the alliance that
groups the Organization of the Petroleum
Exporting Countries, Russia, and several
17 THEEDGE CEO MORNING BRIEF
W O R L D
OPEC keeps
crude production
steady before
planned increases
BY GRANT SMITH & JULIAN LEE
Bloomberg
biggest member, continued to make extra
cutbacks in April, pumping 8.11 million bar-
rels a day.
The figures are based on ship-tracking
data, information from officials, and estimates
from consultants including Rystad Energy AS,
JBC Energy GmbH, and Petro-Logistics SA.
Exceptions
The biggest fluctuations in April were seen in
OPEC members exempt from the agreement
to restrain output.
Libya, which has managed to revive pro-
duction since late last year following a truce
in its internal conflict, suffered a slight set-
back. Its output retreated by 80,000 barrels
Saudi Aramco
beats quarterly
profit forecast,
maintains
dividend
BY HADEEL AL SAYEGH, SAEED AZHAR
& ALEXANDER CORNWELL
Reuters
other producers, has cut output to support
prices but agreed on a plan in April to start
gradually easing those curbs from May 1.
Aramco, which reduced its output as part
of that pact and as a result of Saudi Ara-
bia’s additional voluntary production cuts,
said global demand for petroleum products
was recovering from its lows in 2020 but re-
mained below pre-pandemic levels.
Aramco declared a dividend of US$18.8
billion for the first quarter, to be paid in the
second quarter, in line with company guid-
ance of a US$75 billion dividend for this year.
“Aramco’s dividend commitment is al-
ready pretty ambitious, particularly given
the continued volatility in the market,” said
Dmitry Marinchenko, oil and gas analyst at
Fitch Ratings.
a day to 1.14 million a day as a budget dis-
pute threatened attempts to fix war-damaged
infrastructure.
However, by the end of the month its state
oil firm allocated cash to resolve technical
problems, and restrictions that had been im-
posed on an eastern port were lifted.
The disruption in Libya was in any case
largely compensated by a further increase
in Iran’s output. The country added 60,000
barrels a day to reach 2.41 million a day, the
highest level in two years.
The Islamic republic has bolstered output
by roughly 20% since the end of last year as
buyers in China gain confidence and while it
resumes diplomatic relations with US Pres-
ident Joe Biden after the acute crackdown
pursued by his predecessor.
Iran and the US are making progress with
negotiations to revive a nuclear accord which,
if successful, could remove American sanc-
tions on Tehran’s oil sales and boost output
by a further 1.5 million barrels a day.
If an agreement is reached, the extra sup-
plies could pose an issue for Saudi Arabia
and other OPEC+ members as they seek to
drain the remnants of the glut that arose last
year. The 23-nation alliance is next due to
meet on June 1.
Aramco would possibly prefer to keep
dividends stable, particularly in light of
some uncertainty around the Shareek or
Partner programme by the Saudi govern-
ment, he said.
The programme encourages Saudi com-
panies including Aramco to lead private sec-
tor investments in the domestic economy.
HSBC, in an equity note to clients, said
the move could restrict headroom to boost
dividends in the next few years.
Aramco’s average total hydrocarbon pro-
duction came in at 11.5 million barrels per
day of oil equivalent in the first quarter of
2021. That included 8.6 million barrels per
day of crude oil.
Saudi Crown Prince Mohammed bin
Salman has said more Aramco shares could
be sold in the next year or two, including
to international investors. He has said the
kingdom is in talks to sell 1% to a leading
global energy company.
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Click here
 W E D N E S D AY M AY 5 , 2 0 2 1
IATA: Aircargo
demand
reaches zenith
in March
Bernama
KUALA LUMPUR (May 4): The Inter-
national Air Transport Association (IATA)
reported that global demand for air cargo
in March 2021 continued to outperform
pre-Covid-19 levels (March 2019), with
demand up by 4.4%.
The association said the demand in
March reached the highest level recorded
since the data for global air cargo markets
series began in 1990.
Singapore’s
Changi, world’s
best airport,
markets debut
bond
BY AMEYA KARVE
Bloomberg
SINGAPORE (May 4): Singapore’s airport,
considered the world’s best flight hub, has
started marketing its maiden bond, seeking
to raise funds as regional peers prepare for a
possible improvement in the travel industry
due to vaccine rollouts.
Changi Airport Group Singapore Pte
Ltd looks to raise as much as S$500 million
(US$375 million) from its 10-year Singa-
pore dollar offering and the final price guid-
ance for the securities is 1.88%, according
to a person familiar with the matter. It was
voted the world’s best airport in May 2020
for an eighth consecutive year, according
to a ranking by air transport rating firm
Skytrax.
Changi’s first bond sale would follow last
week’s US-dollar offering from South Ko-
rea’s Incheon International Airport Corp and
Hong Kong’s Airport Authority note sale in
US currency earlier this year.Those debt deals
met with soaring investor demand: Incheon’s
US$300 million note received over sixfold
bids from bond buyers, while Airport Au-
thority’s orders were more than five times
its issue size of US$1.5 billion.
18 THEEDGE CEO MORNING BRIEF
W O R L D
IATA director-general Willie Walsh said
air cargo continues to be the bright spot for
aviation and airlines are taking all measures
to find the needed capacity.
According to IATA, a month-on-month
demand increase with volumes up 0.4% in
March over February 2021 levels. Howev-
er, the growth was slower than the previ-
ous month, which saw demand increasing
by 9.2% compared with February 2019.
Meanwhile, the association said new
export orders are among the underlying
economic conditions that remain support-
ive for air cargo.
“Besides export orders, delivery times for
manufactured goods are increasing which
normally indicates increased demand for
air cargo in efforts to reduce shipping time.
“Global trade rose 0.3% in February
— the ninth consecutive monthly increase
and the longest continuous growth in more
than two decades — is also supporting de-
mand for air cargo,” it said.
Singapore’s Changi, world’s best airport,
markets debut bond
Like airports around the world, Changi
has been battered by Covid-19 causing air
travel to tumble. The firm said in January it
registered 11.8 million passengers in 2020,
an 83% slump from a year earlier.
Moody’s Investors Service said Changi’s
cash buffer remains strong despite a dip in its
holdings recently to nearly S$1.9 billion by the
end of 2020.The cash balance and additional
liquidity will be more than sufficient to cover
its likely capital expenditure needs of about
S$900 million over the next 12 months and
debt prepayment of around S$300 million in
2021, Ray Tay, a Singapore-based senior vice
president at Moody’s, said in a note.
Read also:
Lufthansa CEO pitches US$6.6b capital
increase to investors
“Deutsche Lufthansa AG asked
shareholders for permission to raise 5.5
billion euros (US$6.6. billion) in fresh
capital, calling it a necessary step to repair
the stricken carrier’s balance sheet after the
coronavirus pandemic punctured a decades-
long boom in air travel.”
Click here
Infineon expects
2.5 million
‘lost cars’ due to
chip shortage
BY GILES TURNER & DEBBY WU
Bloomberg
(May 4): German semiconductor
manufacturer Infineon Technologies
AG said about 2.5 million cars won’t
be produced in the first half of 2021
due to ongoing supply chain shortages.
Infineon is a major supplier to au-
tomakers, who have been struggling
to obtain chips after cutting back or-
ders due to the pandemic. Now, with
demand for both consumer-electron-
ics companies and cars roaring back,
companies like Infineon are ramping
up supply.
“There are roughly 1.5 million cars
not being built in the first quarter, and
1 million vehicles not being built in
the second,” Chief Marketing Officer
Helmut Gassel said in a call with an-
alysts on Tuesday. “That’s, we think,
the best estimate that currently exists.”
Infineon posted its results Tuesday,
which were boosted by strong demand,
but it warned of continued bottlenecks
in a manufacturing supply chain that’s
running at “full speed.”
“The semiconductor market is
booming,” said Reinhard Ploss, chief
executive officer of Infineon. However,
he added that there are “bottlenecks in
those segments where we depend on
chips supplied by foundries, especially
in the case of automotive microcon-
trollers and IoT products.”
On Monday, Intel’s CEO said the
global semiconductor shortage roil-
ing a wide range of industries like-
ly won’t be resolved for a few more
years. Ford Motor Co. said Monday
it will halt production at its German
plants for several weeks due to a lack
of semiconductors.
The shortages as meant strong
earnings for major suppliers. Last
week rival STMicroelectronics NV
reported strong demand for automo-
tive and power products in the first
quarter.
STMicro’s CEO Jean-Marc Chery
said automotive demand “rebounded
from Q4 2020 much faster than antic-
ipated and it has caused supply chain
constraints across the entire semicon-
ductor industry.”
 W E D N E S D AY M AY 5 , 2 0 2 1
UK factory
activity expands
at fastest rate
since 1994 — PMI
BY DAVID MILLIKEN
Reuters
LONDON (May 4): British manufacturing
activity grew at the fastest pace in almost
27 years last month, amid supply chain
delays and shortages of raw materials, as
businesses tried to make up for ground lost
during the coronavirus pandemic.
The IHS Markit/CIPS Purchasing
Managers’ Index (PMI) for manufactur-
ing activity rose to 60.9 in April from 58.9
in March, slightly above an earlier flash
estimate of 60.7 and its highest reading
since July 1994.
New orders rose at the fastest pace since
November 2013, and two-thirds of busi-
nesses expect production to be higher in
a year’s time.
But the index was also lifted by length-
ening delivery times and rising costs of
OSLO (May 4): Norway’s Telenor wrote off
the value of its Myanmar operation in light
of the country’s deteriorating security and
human rights situation, plunging the group
into a first-quarter (1Q) loss and sending its
shares lower on Tuesday.
While it will continue to operate in Myan-
mar, Telenor’s mobile business in the Asian
country, where it has had a presence since
2014, remains severely restricted following
the military’s seizing of power in a Feb 1 coup.
The new regime imposed network restric-
tions for all operators, and on March 15 or-
dered a nationwide shutdown of mobile data
that has since cut Telenor’s subscription and
traffic revenues in the country in half, the
company said.
However, it still added some two million
users in Myanmar during the quarter as call
volumes rose, increasing its local customer
base to 18.2 million.
While Telenor saw an “irregular, uncer-
tain, and deeply concerning situation” with
“limited prospects of improvement going for-
ward”, Telenor would stay in Myanmar for
now, chief executive officer Sigve Brekke said.
Telenor fully impaired Telenor Myanmar
in its 1Q accounts, booking a loss of 6.5 bil-
lion crowns (US$783 million) and remov-
ing the operation from its overall corporate
outlook for 2021.
As a result of the write-down, the Telenor
group’s net earnings slumped to a loss of 3.9
19 THEEDGE CEO MORNING BRIEF
W O R L D
raw materials — factors which sometimes
indicate an imminent pick-up but which
are currently hampering growth.
“The sector remained beset by sup-
ply-chain delays and input shortages ...
which contributed to increased purchasing
costs and record selling price inflation,”
IHS Markit said.
Price pressures are on the radar of the
Bank of England as it finalises new fore-
casts and policy decisions ahead of their
release on Thursday, though the central
bank is likely to look through price rises
caused by short-term disruptions.
A narrower measure of manufacturing
output alone showed weaker growth than
the broader activity index. Output grew
faster in August when many manufactur-
ers had not long reopened after Britain’s
first lockdown.
Britain’s economy shrank by almost
10% last year — the biggest fall in output
in more than 300 years — and even with
rapid growth this year it may take until
2022 for it to regain its pre-crisis size, a
slower rebound than the United States.
Manufacturers are still dealing with the
knock-on impact of Covid-19 disruptions
which have increased shipping costs and
led to shortages of key components such
as microchips used for car electronics.
Telenor posts 1Q
loss after writing
off Myanmar
business
following coup
BY VICTORIA KLESTY & TERJE SOLSVIK
Reuters
REUTERS
billion Norwegian crowns in 1Q from a year-
ago profit of 698 million crowns.
Telenor reiterated full-year guidance for
overall organic revenue and earnings to re-
main unchanged year-on-year from 2020,
excluding the Myanmar impact. It repeated
that capital expenditure would amount to
between 15% and 16% of sales.
Ford, BMW lead
US$130 mln
investing round
in solid-state
battery startup
BY BEN KLAYMAN
Reuters
(May 4): Ford Motor Co and BMW
AG are leading a US$130 million fund-
ing round in a solid-state battery start-
up, Solid Power, as carmakers push to
lower the cost of electric vehicles by in-
vesting in the development of affordable
but powerful rechargeable batteries, the
companies said on Monday.
The Series B investment round,
which includes venture capital firm Volta
Energy Technologies, allows Solid Pow-
er to expand in-house manufacturing
capabilities and positions the battery
maker to eventually supply future EVs,
possibly by the end of the decade ac-
cording to BMW battery cell technology
chief Peter Lamp. Solid Power declined
to say at what level the funding round
values the company.
Carmakers are racing to develop EVs
amid tightening CO2 emission stand-
ards in Europe and China.
Solid-state battery technology involves
a high-capacity energy storage device that
improves on lithium-ion batteries, replac-
ing the liquid or gel-form electrolyte with
a solid, conductive material. Among other
benefits, the new technology offers more
energy density and better safety due to
a lack of flammable components. Solid
Power has said its technology can deliver
50% more energy density than current
lithium-ion batteries.
However, solid-state battery technol-
ogy is more expensive than lithium-ion
cell technology. It also must prove it
can operate and remain durable in the
real world, and must increase its scale
to meet industry demand.
Monday’s announcement marks the
second investment in Solid Power for
Ford and Volta Energy. Both participat-
ed in the $26 million Series A round in
2018 that included Hyundai Motor Co
and Samsung Electronics.
Following the latest investments,
Ford and BMW will own equal, uni-
dentified stakes in Solid Power, which
was established in 2012 as a spinout
from the University of Colorado Boul-
der, Campbell said.
 W E D N E S D AY M AY 5 , 2 0 2 1 20 THEEDGE CEO MORNING BRIEF

W O R L D

Foreigners digitalisation,” said Menon, adding that

the pipeline of local tech graduates wasn’t

needed to fill enough to fill the vacancies.

The city-state, an Asian base for many

Singapore tech multi-nationals and banks, is home to glob-

al companies such as Facebook and Alpha-

jobs crunch, says bet’s Google, while ByteDance and Zoom

are hiring aggressively in the country of

central banker 5.7 million people.

BY ANSHUMAN DAGA
Reuters
SINGAPORE (May 4): A boom in tech-
nology jobs across all sectors in Singapore
and a shortage of tech workers means the
country will have to rely on foreigners to
fill the gap, Ravi Menon, the managing
director of the Monetary Authority of Sin-
gapore said on Tuesday.
Singapore is emerging as a regional tech
hub but headhunters say it faces a severe
talent crunch as more firms move in. This
is partly because of government policies
to tighten foreign hiring to offset falling
Singaporean employment amid the coro-
navirus pandemic.
Singaporeans make up just over one-
third of the estimated 25,000 tech work-
force in the local financial sector, Menon
Singapore is emerging
as a regional tech
hub but headhunters
say it faces a severe
talent crunch as
more firms move in.
said during a webinar on job opportunities
in the financial services and tech jobs in
the industry.
“The competition for tech talent is
economy-wide as more sectors embark on
The large mismatch between demand
and supply of tech workers meant that “we
have to continue to depend on foreigners
to fill the growing vacancies for technology
jobs over the next few years,” Menon said.
“If we tighten this inflow excessively, it
will impair not just the competitiveness of
our financial centre but dampen the pros-
pects for creating good jobs in the future,
especially for Singaporeans,” he said.
Singapore also needs to build a strong
pipeline of local tech talent by involving
financial institutions, individuals and the
government, the central banker said.
The Singapore government has im-
posed tighter immigration curbs but also
said it must remain open to overseas talent.
Effective this year, Singapore rolled out
a new work visa for foreign executives of
tech firms.
The country’s total employment in
2020 shrank the most in more than two
decades.

(May 4): Blackstone Group Inc expects de-
mand for residential apartments to be resil-
ient in some parts of Asia as millennials are
renting their homes rather than buying them.
Housing markets in major cities in Aus-
tralia, China and Japan are booming, spurred
by low interest rates and improving senti-
ment among investors who believe the worst
of the pandemic is likely over. Retention and
renewal rates for apartments have been top-
ping expectations, according to Alan Miyas-
aki, head of Asia real estate acquisitions.
“We are big fans of multifamily residen-
tial,” he said in an interview in Singapore
last week, referring to apartment buildings.
“In Asia, in terms of existing stock, we have
a lot in Japan but we are seeing upcoming
markets in places like Australia and China
and we are spending time there.”
High property prices in major Asian cit-
ies have also made home ownership more
difficult for younger generations, boosting
demand for rental apartments. For instance,
a several-fold surge in home prices in China
over the last decade has made markets such
as Shenzhen less affordable than London.
Beyond apartments, Blackstone con-
tinues to focus on commercial property
opportunities linked to the technology,
logistics and life sciences sectors in Asia,
especially in India, according to Miyasa-
Blackstone bets on
Asia apartments
as millennials
stuck renting
BY ELFFIE CHEW
Bloomberg
ki. The private equity firm is already the
largest commercial real estate owner in the
country, with about US$9 billion invested
in office space, shopping malls and hotels.
In China, the New York-based buyout
firm completed the acquisition of a major-
ity stake in a Guangzhou urban logistics
park, the largest in the Greater Bay Area,
for US$1.1 billion earlier this year. Last
month, Blackstone announced the pur-
chase of the Sandcrawler, an eight-story
office building in Singapore whose design
was inspired by the Star Wars movies.
Even though Blackstone inked a deal
in April to divest a portfolio of warehous-
es and logistics properties in Australia for
A$3.8 billion (US$2.9 billion), Miyasaki
said they will continue to invest in similar
assets as well as high-quality properties
that provide strong returns.
Blackstone has eight offices in Asia, and
the Singapore-based executive pointed to
the firm’s presence across the region as an
advantage in terms of scouting opportu-
nities during the coronavirus pandemic.
With Australia’s borders closed, for ex-
ample, Miyasaki relied on his team there
for the local perspective.
“Covid exposed a number of issues
out there,” Miyasaki said. “We have al-
ways thought having people on the ground
was important but during Covid, it became
absolutely critical.”
Read also: EU plans quicker invest-
ments in big projects from hydrogen to
5G Click here
 W E D N E S D AY M AY 5 , 2 0 2 1
Australia probe of China port signals
trouble for Beijing
CANBERRA/SYDNEY (May 4): Five years
ago, Australia’s defence chief dismissed worries
over a Chinese company leasing a port used
by US Marines as “simply absurd”. Now the
government in Canberra is weighing whether
to force a sale due to national security concerns.
Defence Minister Peter Dutton confirmed
over the weekend that his department would
advise the government on what to do with the
port. Asked whether the government would
consider forced divestiture, he told the Sydney
Morning Herald that officials would consider
the national interest.
The decision risks further hurting Chi-
na-Australia ties, which have plummeted since
Prime Minister Scott Morrison called for an
independent investigation into the coronavirus
origin and strengthened defence ties with the
US, India, and Japan. It will also have ramifi-
cations far beyond Australia as the US pushes
countries to avoid cutting deals with Chinese
companies on strategic infrastructure invest-
ments, from ports to undersea cables to 5G
networks.
While Australia has cited national security
to block Chinese companies like Huawei Tech-
nologies Co, scrapping an existing deal would
be unprecedented in the modern era, according
to Hans Hendrischke, a professor of Chinese
business and management at the University of
Sydney. He noted that China is turning more
towards venture capital in developed markets
as direct investment becomes untenable.
“It’s an escalation that’s part of the decou-
pling process that’s happening globally connect-
ed with Chinese companies — and long-term,
major infrastructure investments,” Hendrischke
said of Australia’s decision. “There has been
pressure on Australia to revoke that deal be-
cause it’s seen to clash with US interests.”
‘Economic coercion’
Back in 2015, when the Northern Territory
government sold a 99-year lease for the Port
of Darwin to Chinese firm Landbridge Group
for A$506 million (US$391 million), Austral-
ian officials played down any criticism. Den-
nis Richardson, who was then secretary of the
Defence Department, rejected concerns the
People’s Liberation Army could gain access
to the port as “alarmist nonsense”.
“The notion that Landbridge is leasing Dar-
win somehow or other as part of a broader
strategic play by China and this gives the PLA
navy access to Darwin is simply absurd,” Rich-
ardson told lawmakers in Canberra at the time.
He said there was no chance of China spying
on US-Australian communications because
naval vessels go silent in any commercial port.
21 THEEDGE CEO MORNING BRIEF
W O R L D
BY JASON SCOTT & MICHAEL HEATH
Bloomberg
BLOOMBERG
Peter Dutton
Dennis Richardson, then
secretary of the Defence
Department, rejected concerns
the People’s Liberation Army
could gain access to the port
as “alarmist nonsense”.
In a sign of how rapidly times have changed,
Australia’s Home Affairs Secretary Michael
Pezzullo last week told his staff that “in a world
of perpetual tension and dread, the drums of
war beat”. While he did not directly mention
China, he said free nations were watching “wor-
ryingly the militarisation of issues that we had,
until recent years, thought unlikely to be cat-
alysts for war”.
China has sought to blame Australia for the
downturn in ties while accusing Morrison’s
government of “economic coercion”. Asked
last week about speculation Australia would
move to scrap the Darwin lease, Chinese For-
eign Ministry spokesmanWangWenbin said his
government would “firmly safeguard the legiti-
mate rights and interests of Chinese businesses
investing and operating overseas”.
“We hope the Australian side will look at
bilateral cooperation in an objective and ration-
al light and stop disrupting normal exchange
and cooperation with China,” Wang told re-
porters in Beijing.
Should Morrison’s government decide to
revoke the port deal, it will “most definitely”
happen as it has a constitutional right to over-
ride laws made in the Northern Territory, as
well as additional powers in relation to defence
matters, said Donald Rothwell, a professor of
international law at the Australian National
University.
“The major issues if the Commonwealth
seeks to revoke the arrangement would be
the commercial legal consequences,” includ-
ing penalties or compensation, Rothwell said.
While the Port of Darwin’s commercial ar-
rangements are not in the public domain, the
matter could be settled quickly depending on
the position of the federal government, he said.
Investment plunges
Economic ties between the nations have tak-
en a hit in recent years. China’s trade reprisals
at Australia have hit a range of commodities
from coal to beef to barley and lobster, while
Chinese investment Down Under plunged
to about A$1 billion last year from a peak of
A$16.5 billion in 2016, according to Austral-
ian National University research.
Even so, the proportion of Australian ex-
ports to China climbed to 43% by the end of
2020 even as the relationship unravelled thanks
to the relentless rise in iron ore prices as Chi-
na’s early emergence from Covid-19 spurred
demand for the steelmaking ingredient. Major
producers have struggled to keep pace with
demand from Chinese steel mills, pushing the
price to US$193 a ton in April, just shy of its
2010 record.
Although China was the top buyer of Aus-
tralian wine before the tariffs, accounting for
40% of shipments, strong European sales
have helped counter the slump. The key dan-
ger ahead relates to international education
and tourism, which are currently in stasis due
to closure of international borders: China ac-
counts for more than a third of foreign students
in Australia and Chinese tourists account for
15% of visitors.
Despite the hit to some sectors of the econ-
omy, Australia’s tough stance on China is likely
to play well with voters, according to Natasha
Kassam, a former Australian diplomat who
is the director of the Lowy Institute’s public
opinion and foreign policy programme.
“It would be very significant and send a
strong message in terms of future Chinese in-
vestment,” she said when asked about the ram-
ifications of a forced sale of the Darwin port
lease. “Australia was probably thinking a year
ago it could reach a new settling point with
China, but that’s proven elusive.”
Read also:
China calls for ‘basic etiquette’ after
Philippine outburst
“China urged the Philippines on Tuesday to
observe “basic etiquette” and eschew megaphone
diplomacy after the southeast Asian nation’s
foreign minister used an expletive-laced Twitter
message to demand that China’s vessels leave
disputed waters.”
Click here
 W E D N E S D AY M AY 5 , 2 0 2 1
Bill and Melinda Gates to divorce
with US$146b at stake
(May 4): Bill and Melinda Gates, who for
decades have overseen one of history’s great-
est fortunes and philanthropic operations,
said they plan to divorce.
The announcement Monday that the
couple is splitting after 27 years of marriage
has the power to ripple through the tech-
nology industry, a vast portfolio of business
and real estate holdings and into the realms
of global health, climate change policy and
social issues including equality for women.
The pair, who command an estimated
$146 billion, according to the Bloomberg
Billionaires Index, made no public hint of
their financial plans, though they empha-
sized that they will cooperate on continuing
their philanthropy.
“After a great deal of thought and a lot
of work on our relationship, we have made
the decision to end our marriage,” the two
said in a brief statement posted on Twitter.
“We have raised three incredible children
and built a foundation that works all over the
world to enable all people to lead healthy,
productive lives.”
Bill Gates, the 65-year-old co-founder
of Microsoft Corp., ranks as the world’s
fourth-richest person. Melinda Gates, 56,
is a former Microsoft manager who’s gained
international prominence co-running the
Bill & Melinda Gates Foundation. It’s al-
ready given away more than $50 billion.
They will remain co-chairs and trustees
of the foundation, a spokesperson for the
organization wrote in an emailed statement.
“No changes to their roles or the organi-
zation are planned,” according to the state-
ment. “They will continue to work together
to shape and approve foundation strategies,
advocate for the foundation’s issues, and set
the organization’s overall direction.”
The couple filed for divorce in King
County on Monday, an online search of
court dockets shows.They have a separation
agreement, according to a copy of a divorce
petition posted by the website TMZ, which
doesn’t elaborate on the terms. It calls their
marriage “irretrievably broken.”
It’s the second bombshell divorce among
the uppermost ranks of the world’s richest
people in recent years, following the 2019
separation announcement of Jeff Bezos and
MacKenzie Scott.
That split, which divided the couple’s
stake in Amazon.com Inc., immediately
made MacKenzie one of the world’s rich-
est people. In the months that followed, she
became one of the most influential philan-
thropists in the world, giving away billions
22 THEEDGE CEO MORNING BRIEF
W O R L D
BY DINA BASS, SOPHIE ALEXANDER
& DEVON PENDLETON
Bloomberg
of dollars to often overlooked causes among
billionaire donors.
But for Bill and Melinda Gates, separat-
ing assets potentially poses a bigger challenge
than dividing the Bezos fortune, which was
largely concentrated in Amazon stock.
Bill Gates’s net worth originated with
Microsoft but shares of the software-maker
now probably make up less than 20% of his
assets. He’s shifted much of his stake into
the Bill & Melinda Gates Foundation over
the years and his exact stake hasn’t been
disclosed since he left Microsoft’s board
last year.
Gates’s biggest asset is Cascade Invest-
ment, a holding company he created with
the proceeds of Microsoft stock sales and
dividends that’s run by Michael Larson.
Through Cascade, Gates has interests in
real estate, energy and hospitality as well
as stakes in dozens of public companies,
including Canadian National Railway and
Deere & Co.
Monica Mazzei, a divorce attorney and a
partner at Sideman & Bancroft LLP in San
Francisco, said the big question concerning
the couple’s foundation and family office is
to what extent they plan on working together
going forward.
“Even in the most amicable divorces I’ve
seen, the preference has been to split the
foundation in two so that there’s more au-
tonomy and less intermingling,” she said.
The same principle applies to family offices,
where the investments could be divvied up
into two separate pots.
‘Challenging stretch’
Washington law may offer some clues to
how they divide their assets. As a commu-
nity property state, anything acquired during
a marriage is considered equally owned by
both partners, but that doesn’t necessarily
mean the fortune would be split in half.
“It is not a mandatory 50-50,” said Janet
George, a family lawyer in Washington with
the firm McKinley Irvin. “The courts can
award more or less, depending on what is
just and equitable.”The public might never
find out how they split the fortune, because
it can be hidden behind private contracts,
she said.
Washington mandates a 90-day cooling
off period from the day a couple initially
files for divorce before the process can be
finalized by a judge. The couple’s divorce
filing — listing Melinda as the petitioner and
Bill as joining, with both of them signing —
asks the court to dissolve their marriage on
a date noted in their separation agreement.
“It’s been a challenging stretch of time
for our whole family,” their eldest daughter,
Jennifer, wrote on Instagram.
Their youngest child is 18.
Becoming philanthropists
The pair met in NewYork in the 1980s, early
into Melinda’s time at Microsoft.
When deciding whether to marry, Bill
made a pro-and-con list on a whiteboard
— Melinda related how she walked into his
bedroom to find him tabulating various fac-
tors in the Netflix documentary series “In-
side Bill’s Brain.”
The couple’s philanthropy has always
been deeply rooted in their relationship
and marriage. The day before they wed
in Hawaii, Bill’s mother, Mary, who had
been trying to convince him to dramatically
increase his charity, gave Melinda a letter
which closed with the words “From those
to whom much is given, much is expected.”
Mary Gates died several months later.
But it was on a trip to Africa during their
engagement that the couple decided they
would become serious philanthropists.
“We fell in love with everything we saw
but it’s really not at all trite to say that we
really fell in love with the people,” Melin-
da said at a Salesforce event in 2016. “It
just started us on this series of questions of
sort of saying to ourselves, ‘What is going
on here?’”
Later on in the trip, the couple filled out
a marriage questionnaire to make sure they
had the same values. That’s when they de-
cided “the vast majority of resources from
Microsoft would go back to society,” Melin-
da said. “It was an easy discussion. We just
thought it would be later in our lives when
we got to do it.”
 W E D N E S D AY M AY 5 , 2 0 2 1
Chanel N°5 is 100 today
The world’s most iconic perfume made its debut on this day in 1921
W
ith five being a number
that held symbolic impor-
tance, Gabrielle “Coco”
Chanel chose May 5, 1921,
to launch her new perfume, Chanel N°5,
at her rue Cambon boutique in Paris. It
was a fragrance that would go on to revo-
lutionise the perfume industry and create
new firsts for the celebrated avant-garde
designer.
Born into poverty in the French coun-
tryside to a clothing peddler and a laun-
drywoman, Chanel was sent to live in a
convent at the age of 11 with her two sis-
ters after the death of their mother. It was
at the convent that she learnt to sew.
Stepping into her twenties, Chanel
became associated with several wealthy
men and quickly established herself on
the fashion scene. It was
one of her lovers who
helped set up her first bou-
tique. In time, Chanel be-
came a sought-after cou-
turier, drawing accolades
for her trend-setting un-
conventional designs and
fame for her high-profile
dalliances and larger-than-
life persona.
N°5 Parfum, 1921
23 THEEDGE CEO MORNING BRIEF
L E I S U R E
PHOTOS BY CHANEL
‘Scent of a woman’
It was while vacationing with Russian no-
bleman Grand Duke Dmitri Pavlovich
in the South of France that she met the
French-Russian perfumer Ernest Beaux. At
a time when perfumes were based purely on
the scent of a single flower, Chanel went on
to challenge Beaux to create “an artificial
fragrance like a dress, something crafted. I
don’t want rose or lily of the valley, I want
a composed fragrance”.
Working in his laboratory in Grasse
on the French Riviera, the renowned per-
fumer concocted a bouquet of 80 scents
(combining notes of May rose, jasmine,
ylang-ylang and sandalwood, among oth-
ers). Legend says that Beaux’s assis-
tant accidentally added high levels
of aldehydes — chemicals used to
make a scent last longer
but which were used
sparingly by perfumers
of the time — to one of
the samples presented to
Chanel.
Another famous sto-
ry has it that Chanel
was shown 10 samples,
labelled 1 to 5 and 20 to
24. She was drawn to the
fifth sample — the one
that contained a large
amount of aldehydes. It was said that the
couturier later told Beaux that the concoc-
tion “was what I was waiting for … a wom-
an’s perfume, with the scent of a woman”.
The “accident” would go on to create a
groundbreaking new category of fragrance
that would pave the way to a modern era in
perfumery.The number five being her lucky
number, the fragrance was simply named
Chanel N°5 and it debuted along with her
new clothing collection on May 5, 1921.
It was the first fragrance to be created by
a fashion designer and Chanel, a woman
ahead of her time, broke tradition by nam-
ing the scent after her own name, ushering
perfumery into unchartered waters.
The glamour of N°5
N°5, with its groundbreaking abstract
scent profile, is said to be a mirror image
of Gabrielle Chanel’s irreverent personal-
ity, in fragrance form. It is a combination
of Chanel’s disregard for rules, a pioneer-
ing spirit and the unflappable confidence
in the persona she had created for herself
that has made N°5 the enduring, inimitable
icon it is today.
Gabrielle Chanel shot by François Kollar in
a campaign for Chanel N°5 that appeared in
Harper’s Bazaar, US, 1937
Decades before product ambassadors be-
came a ubiquitous marketing tool, Chanel
was the first woman to become the face of
her own fragrance in 1937, posing for pho-
tographer François Kollar, for a N°5 adver-
tisement that appeared in Harper’s Bazaar
in the US. Marilyn Monroe famously re-
vealed in 1952 that she wore nothing but
“a few drops of N°5 to bed”, augmenting
the scent’s celebrity status.
CO N TI N UES O N N EX T PAGE
 W E D N E S D AY M AY 5 , 2 0 2 1
Lauren Hutton, photographed by
Richard Avedon, 1968
FROM PRE V I OUS PAG E
The appointment of Jacques Helleu as
artistic director for Chanel Fragrances in
the 1960s initiated the era of brand am-
bassadors as we it know today, casting
some of the world’s most beautiful faces
during the golden era of big-budget ad-
vertising campaigns. Throughout the dec-
ades, A-listers the likes of Ali MacGraw,
Lauren Hutton, Catherine Deneuve, Car-
ole Bouquet and Nicole Kidman have ap-
peared in N°5 advertising visuals, shot
by famous lensmen such as Richard Ave-
don, Patrick Demarchelier and Dominique
Issermann, and filmed under the guidance
of renowned directors like Helmut New-
ton, Ridley Scott and Baz Luhrmann. In
2020, acclaimed actress Marion Cotillard
became the latest face of N°5, with her
allure affirming that the perfume, in spite
of its century-long legacy, remains con-
temporary and in step with the psyche of
the modern woman.
Five interpretations of N°5
Since the time Beaux created the House
of Chanel’s iconic scent, there have been
three perfumers — Henri Robert, Jacques
N°5 Parfum, 1924
24 THEEDGE CEO MORNING BRIEF
L E I S U R E
Carole Bouquet, photographed by
Michel Comte, 1987
Polge and now Olivier Polge — tasked with
guarding N°5’s secret formula. “Preserv-
ing N°5 requires my constant attention,”
attests Olivier, in-house perfumer-creator
since 2015. It is his responsibility to oversee
the sourcing of the raw materials that go
into the iconic fragrance and ensure that
their quality is maintained.
Apart from preserving the original Par-
fum, the house’s perfumers — with the
exception of Henri Robert — have each
worked alongside Chanel’s Laboratory of
Fragrance Creation and Development to
create various interpretations of N°5.There
are currently five iterations of the fragrance
that showcase its different facets and per-
sonalities:
N°5 Parfum (1921)
As Chanel’s début fragrance, N°5 Parfum
defined the house’s olfactive style and set
the standard for its tradition of excellence
and expertise in perfumery.
N°5 Eau de Toilette (1924)
Beaux created the first variation of N°5, a
Marion Cotillard photographed by
Steven Meisel, 2020
lighter version of the original, three years
after Parfum. It presented a revolutionary
spray that introduced a new way of wear-
ing fragrance.
N°5 Eau de Parfum (1986)
Responding to changing trends, Jacques
created Eau de Parfum to revive the sen-
suality of Beaux’s original fragrance, with
an updated rich floral-aldehydic bouquet.
N°5 Eau
Première,
2008
N°5 Eau Première (2008)
Jacques released an airy and luminous in-
terpretation of N°5, incorporating white
musks and aldehydes developed by Chanel
from citrus essences.
N°5 L’Eau (2016)
Olivier created N°5 L’Eau, a fresh floral
eau de toilette that opens with a citrus ac-
cord — lemon, mandarin and orange —
and then combines with rose, jasmine and
ylang-ylang in the middle and cedarwood
at the base.
 W E D N E S D AY M AY 5 , 2 0 2 1
M A R K E T S
CPO RM 4,042.00-19.00 OIL US$ 68.791.23 RM/USD 4.1213 RM/SGD 3.0868 RM/AUD 3.1813 RM/GBP 5.7183 RM/EUR 4.9487
Top 20 active stocks
NAME VOLUME CHANGE CLOSE YTD MARKET
(MIL) (RM) CHANGE CAP
(%) (RM MIL)
FOCUS DYNAMICS GROUP BHD 708.0 -0.010 0.105 -83.85 668.9
VELESTO ENERGY BHD 335.1 0.000 0.160 14.29 1314.5
VORTEX CONSOLIDATED BHD 203.6 -0.010 0.130 -33.14 86.5
TDM BHD 194.2 0.025 0.330 -7.04 568.6
BERJAYA CORP BHD 193.9 0.045 0.365 92.11 1837.0
LKL INTERNATIONAL BHD 148.3 -0.010 0.375 -59.02 193.0
LION INDUSTRIES CORP BHD 134.1 0.090 0.930 34.78 633.2
TANCO HOLDINGS BHD 109.1 0.005 0.090 80.00 127.7
RIMBUNAN SAWIT BHD 97.5 0.015 0.290 3.57 592.1
HIAP TECK VENTURE BHD 93.5 -0.005 0.660 43.48 922.5
PA RESOURCES BHD 90.8 0.035 0.575 64.29 686.7
SASBADI HOLDINGS BHD 89.8 0.005 0.230 53.33 96.4
MINDA GLOBAL BHD 87.2 -0.005 0.160 166.67 211.5
UCREST BHD 86.4 -0.025 0.385 148.39 235.9
NOVA MSC BHD 82.0 -0.010 0.130 44.44 148.1
MELEWAR INDUSTRIAL GROUP BHD 80.1 0.020 0.740 35.78 266.0
CAREPLUS GROUP BHD 75.7 -0.120 2.780 35.96 1529.2
DAGANG NEXCHANGE BHD 73.0 -0.020 0.680 202.22 1609.9
AT SYSTEMATIZATION BHD 71.9 -0.005 0.100 -45.95 422.9
KEY ASIC BHD 68.1 -0.015 0.170 112.50 201.4
Data as compiled on May 4, 2021 Source: Bloomberg
Top gainers (ranked by %)
NAME CLOSE CHANGE VOLUME YTD MARKET
(%) (‘000) CHANGE CAP
(%) (RM MIL)
MTOUCHE TECHNOLOGY BHD 0.245 96.00 29430.1 -28.13 147.6
GOLDEN PHAROS BHD 0.580 45.00 62145.6 136.73 80.0
GOPENG BHD 1.130 35.33 3943.2 69.92 304.0
PRICEWORTH INTERNATIONAL BHD 0.020 33.33 7532.7 -33.33 90.1
TRANSOCEAN HOLDINGS BHD 6.200 19.69 3880.4 684.81 279.6
SIN HENG CHAN MALAYA BHD 0.735 15.75 824.2 58.06 96.9
WATTA HOLDINGS BHD 0.850 14.09 559.4 53.15 71.8
BERJAYA CORP BHD 0.365 14.06 193941.2 92.11 1837.0
GOLDEN LAND BHD 0.440 12.82 179.8 2.33 94.4
ACME HOLDINGS BHD 0.330 11.86 15216.6 -29.03 98.7
MNC WIRELESS BHD 0.050 11.11 3965.1 11.11 87.9
SCOMI ENERGY SERVICES BHD 0.100 11.11 477.7 5.26 46.8
UNITED U-LI CORP BHD 1.420 10.94 7782.5 15.45 309.3
EONMETALL GROUP BHD 0.775 10.71 8079.2 8.39 157.9
LION INDUSTRIES CORP BHD 0.930 10.71 134123.3 34.78 633.2
K-ONE TECHNOLOGY BHD 0.320 10.34 34300.5 -11.11 261.1
CME GROUP BHD 0.055 10.00 423.1 -8.33 48.4
MALAYSIA STEEL WORKS KL BHD 0.825 10.00 66198.6 22.22 372.5
SHIN YANG SHIPPING CORP BHD 0.455 9.64 51177.9 42.19 531.4
SC ESTATE BUILDER BHD 0.115 9.52 47820.6 91.67 119.4
Data as compiled on May 4, 2021 Source: Bloomberg
Top gainers (ranked by RM)
NAME CLOSE CHANGE VOLUME YTD MARKET
(RM) (‘000) CHANGE CAP
(%) (RM MIL)
TRANSOCEAN HOLDINGS BHD 6.200 1.020 3880.4 684.81 279.6
HENGYUAN REFINING CO BHD 5.600 0.340 2140.5 -6.51 1680.0
GOPENG BHD 1.130 0.295 3943.2 69.92 304.0
PANASONIC MANUFACTURING 31.500 0.240 1.7 2.27 1913.5
SARAWAK OIL PALMS BHD 4.050 0.220 484.3 1.25 2314.6
RAPID SYNERGY BHD 8.390 0.210 17.6 27.12 896.9
LOTTE CHEMICAL TITAN HOLDING 3.390 0.180 17177.9 22.38 7705.4
GOLDEN PHAROS BHD 0.580 0.180 62145.6 136.73 80.0
ALLIANZ MALAYSIA BHD 13.380 0.180 47.9 -9.47 2370.5
UNITED MALACCA BHD 5.250 0.150 72.4 2.94 1101.3
PETRON MALAYSIA REFINING 4.670 0.140 85.6 -11.05 1260.9
UNITED U-LI CORP BHD 1.420 0.140 7782.5 15.45 309.3
HAP SENG CONSOLIDATED BHD 8.040 0.140 125.9 -6.51 20016.9
TA ANN HOLDINGS BHD 3.000 0.130 992.4 -0.99 1321.4
MTOUCHE TECHNOLOGY BHD 0.245 0.120 29430.1 -28.13 147.6
BATU KAWAN BHD 18.720 0.120 18.1 4.58 7409.3
SARAWAK PLANTATION BHD 2.510 0.110 795.2 11.56 700.4
WATTA HOLDINGS BHD 0.850 0.105 559.4 53.15 71.8
SIN HENG CHAN MALAYA BHD 0.735 0.100 824.2 58.06 96.9
UNISEM M BHD 7.900 0.100 344.9 27.83 6318.4
Data as compiled on May 4, 2021 Source: Bloomberg
25 THEEDGE CEO MORNING BRIEF
1,588.25
World equity indices
CLOSE CHANGE CHANGE CLOSE CHANGE CHANGE
(%) (%)
DOW JONES 34,113.23 238.38 0.70 INDONESIA 5,963.82 11.22 0.19
S&P 500 4,192.66 11.49 0.27 JAPAN 28,812.63 -241.34 -0.83
NASDAQ 100 13,799.72 -61.04 -0.44 KOREA 3,147.37 20.17 0.64
FTSE 100 7,017.30 47.49 0.68 PHILIPPINES 6,359.15 -10.13 -0.16
AUSTRALIA 7,067.85 39.06 0.56 SINGAPORE 3,179.13 -5.63 -0.18
CHINA 3,446.86 -28.05 -0.81 TAIWAN 16,933.78 -288.57 -1.68
HONG KONG 28,557.14 199.60 0.70 THAILAND 1,583.13 -7.33 -0.46
INDIA 48,253.51 -465.01 -0.95 VIETNAM 1,242.20 2.81 0.23
Data as compiled on May 4, 2021 Source: Bloomberg
Top losers (ranked by %)
NAME CLOSE CHANGE VOLUME YTD MARKET
(%) (‘000) CHANGE CAP
(%) (RM MIL)
LAMBO GROUP BHD 0.020 -20.00 19118.4 -33.33 99.8
PASUKHAS GROUP BHD 0.020 -20.00 1416.9 -71.43 33.1
TALAM TRANSFORM BHD 0.025 -16.67 1293.2 -16.67 107.4
FSBM HOLDINGS BHD 0.110 -15.38 17.0 10.00 15.5
MACPIE BHD 0.090 -10.00 33661.1 -62.11 85.2
TIEN WAH PRESS HOLDINGS BHD 0.930 -9.71 49.8 1.64 134.6
DATAPREP HOLDINGS BHD 1.500 -9.64 24166.6 733.33 931.4
COMPLETE LOGISTIC SERVICES BHD 1.400 -9.09 2225.7 100.00 180.1
FOCUS DYNAMICS GROUP BHD 0.105 -8.70 707991.6 -83.85 668.9
METRONIC GLOBAL BHD 0.055 -8.33 5527.8 -45.00 91.7
IDEAL UNITED BINTANG 0.955 -8.17 13.3 -11.57 444.8
MERIDIAN BHD 0.170 -8.11 4808.4 -60.00 105.3
KEY ASIC BHD 0.170 -8.11 68065.8 112.50 201.4
STELLA HOLDINGS BHD 1.080 -7.69 702.7 33.33 72.4
EKA NOODLES BHD 0.060 -7.69 811.4 -14.29 18.7
MALPAC HOLDINGS BHD 1.230 -7.52 155.1 70.83 92.3
QES GROUP BHD 0.625 -7.41 36703.6 111.86 521.3
SEALINK INTERNATIONAL BHD 0.440 -7.37 23306.8 131.58 220.0
IMPIANA HOTELS BHD 0.065 -7.14 1434.9 -18.75 69.6
NOVA MSC BHD 0.13 -7.14 81996.8 44.44 148.1
Data as compiled on May 4, 2021 Source: Bloomberg
Top losers (ranked by RM)
NAME CLOSE CHANGE VOLUME YTD MARKET
(RM) (‘000) CHANGE CAP
(%) (RM MIL)
VITROX CORP BHD 15.740 -0.260 57.6 7.07 7432.0
PENTAMASTER CORP BHD 5.400 -0.260 2636.7 6.93 3846.5
HEINEKEN MALAYSIA BHD 25.520 -0.200 47.7 10.86 7709.5
NESTLE MALAYSIA BHD 135.800 -0.200 19.0 -2.23 31845.1
DATAPREP HOLDINGS BHD 1.500 -0.160 24166.6 733.33 931.4
CENTRAL GLOBAL BHD 2.320 -0.150 11562.6 553.52 208.8
COMPLETE LOGISTIC SERVICES BHD 1.400 -0.140 2225.7 100.00 180.1
LPI CAPITAL BHD 13.660 -0.120 85.4 -0.44 5441.9
CAREPLUS GROUP BHD 2.780 -0.120 75676.1 35.96 1529.2
GREATECH TECHNOLOGY BHD 5.730 -0.120 2382.9 25.93 7174.0
CARLSBERG BREWERY MALAYSIA 22.440 -0.120 78.2 -3.44 6861.0
SARAWAK CONSOLIDATED 1.550 -0.110 13690.0 9.15 760.4
REVENUE GROUP BHD 2.090 -0.110 4381.6 65.87 931.5
PARAGON UNION BHD 1.720 -0.100 281.0 156.72 111.3
MALPAC HOLDINGS BHD 1.230 -0.100 155.1 70.83 92.3
AEON CREDIT SERVICE M BHD 12.120 -0.100 62.7 1.00 3094.3
IPMUDA BHD 1.380 -0.100 11.5 72.50 140.0
UWC BHD 5.850 -0.100 1091.7 19.39 6438.7
TIEN WAH PRESS HOLDINGS BHD 0.930 -0.100 49.8 1.64 134.6
MEGA FIRST CORP BHD 7.15 -0.09 226.3 3.62 3386.8
Data as compiled on May 4, 2021 Source: Bloomberg