CEO Morning Brief 15-February-2023
CEO Morning Brief 15-February-2023
CEO Morning Brief 15-February-2023
c o m
I ss u e 5 2 2 / 2 0 2 3
ceoMorningBrief
US INFLATION STAYS ELEVATED, ADDING PRESSURE
FOR MORE US FED HIKES p13
W E D N E S DAY, F E B RUA R Y 1 5 , 2 0 2 3 w w w. t h e e d g e m a r k e t s. c o m
ISSUE 522/2023
CEOMorningBrief HOME: Lynas’ Malaysian rare earths plant faces part closure as regulator keeps curbs p5
Some minority shareholders prefer Time dotCom not to sell stake in data center business p6
Jakel Capital CEO appointed as Cypark director p10
WORLD: Ueda nominated for central bank head as BOJ-favoured ‘outsider’ p14
Ford cutting 3,800 jobs as EV shift shrinks German, UK workforce p17
MACC to focus on
larger-scale graft cases
as corruption now
systemic, says PM
Report on Page 2.
W E D N E S D AY F E B R U A RY 1 5 , 2 0 2 3 2 THEEDGE CEO MORNING BRIEF
H O M E
BERNAMA
H O M E
H O M E
KUALA LUMPUR (Feb 14): The Malay and technology processes for high-per
sian Investment Development Authority MIDA-approved formance computing solutions.
(MIDA) approved total foreign direct in 3. Ferrotec Holdings Corp announced an
vestment (FDI) of RM392.9 billion between FDI at RM392.9 bil investment of over RM500 million for the
2018 and 2021, of which RM300.5 billion construction of new manufacturing facil
or 76.5% had been realised as at end-2021. for 2018-2021, says ities in the Kulim Hi-Tech Park, Kedah,
“The Ministry of International Trade for electro-mechanical assembly work
and Industry (MITI) will not just focus on deputy minister and fabrication of advanced materials
increasing the value of approved FDI, but for semiconductor equipment.
also intensify the strategy to realise FDI, 4. Smart Glove Holdings Bhd, which pro
which will translate into economic activities BY CHESTER TAY duces various types of medical gloves
that deliver positive impact on the country,” theedgemarkets.com from nitrile, natural rubber, polychlo
said Deputy Minister Liew Chin Tong in roprene and other synthetic rubber, ex
the Dewan Rakyat on Tuesday (Feb 14). going economic situation,” he said, adding panded its production capacity with in
Liew was responding to Titiwangsa that the official data for approved FDI in vestment amounting to RM2 billion.
Member of Parliament Datuk Seri Johari 2022 will only be finalised by end-March
Abdul Ghani, who asked MITI to state the this year. Projects in 2021:
amount of FDI realised each year versus the Liew also listed some of the high-profile 1. Risen Solar with RM42.2 billion invest
amount of investment approved by MIDA projects approved below: ment for design development activities
for 2018 to 2022. and manufacturing of solar modules and
Of the total FDI approved between 2018 Projects in January-September 2022: cells.
and 2021, RM350.6 billion were under the 1. Samsung SDI Energy Malaysia Sdn 2. RM30 billion investment approved for
manufacturing sector, followed by RM42.3 Bhd’s establishment of an electric vehi Intel Electronics.
billion under the services sector, said the cle battery cell manufacturing facility in 3. RM8.5 billion investment approved for
Iskandar Puteri MP. Malaysia, with a combined investment AT&S, an Austrian company, for design
The DAP lawmaker also said the main of RM7 billion in two phases, where the development and manufacturing of in
FDI projects realised under the manufac first phase involves RM1 billion invest tegrated circuit substrate at the Kulim
turing sector were within the electrical and ment, followed by the remaining RM6 Hi-Tech Park, Kedah.
electronic industries, while the major drivers billion in the second phase. 4. SK Nexilis announced its first overseas
for realising FDI in the services sector in 2. TF-AMD Microelectronics Sdn Bhd production base in Sabah, with approved
2018-2021 were sub-sectors like the estab announced plans to expand its manu investment of RM4.29 billion.
lishment of principal hubs, support services facturing facilities at the Batu Kawan 5. Infineon Technologies (Malaysia)’s
and healthcare services. Industrial Park in Penang, with capital RM3.25 billion investment in Melaka.
“Normally, execution of these projects expenditure of almost RM2 billion, ex 6. TaiyoYuden’s RM680 million investment
takes one-to-two years to be realised de pecting to create over 3,000 jobs in fields for production of multilayer ceramic ca
pending on the project’s scale and the on like semiconductor engineering, design pacitors in Sarawak.
H O M E
Lynas’ Malaysian
activities that will produce radioactive construction timeline for Lynas’ cracking
waste in Malaysia after July 2023,” Ma and leaching facility in central Australia,
as regulator
Agency reviews found the plant to be low Malaysia from its Mount Weld operations
risk and compliant with relevant regula in Central Australia where it is building the
keeps curbs
tions, Lynas noted. processing plant in the town of Kalgoorlie
The decision raises the prospect of to add capacity and mitigate Malaysia’s
an interruption to supply of neodymium regulatory risk.
and praseodymium (NdPr), which are “After the market fully digests this
used in magnets as crucial components BY MELANIE BURTON, ROZANNA LATIFF news, we see investor focus return to
of everything from iPhones to weapons & ROUSHNI NAIR the significant long-term value LYC of
systems, later this year. Reuters fers, its strategic asset base and market
“After 10 years of safe operation in Ma leading position (ex China) in the NdPr
laysia we are disappointed that the con market,” Canaccord said, maintaining its
ditions that were applied to our 2020 op buy rating.
BENGALURU (Feb 14): India’s state- HAL is targeting export sales of 25 bil
India’s HAL
owned Hindustan Aeronautics Ltd is in lion Indian rupees (US$302.15 million)
talks with at least four countries to sell its over the next few years, its director of op
in talks on
light-combat aircraft, though it faces an up erations Jayadeva EP told Reuters.
hill battle to win the contract in Malaysia, the India has been one of the world’s biggest
exports, faces
fighter jet for an order of around 16 planes, in the global arms export market.
and Argentina, Egypt and Botswana have Prime Minister Narendra Modi on
Malaysia setback
also expressed interest, HAL chairman and Monday set out ambitions to more than
managing director CB Ananthakrishnan triple the value of annual defence exports
told reporters at a conference during Aero to US$5 billion over the next two years,
India, the country’s biggest aviation event. and his government has been making dip
He said in Malaysia, there had been BY KRISHN KAUSHIK lomatic efforts to export the Tejas.
a “slight setback” amid stiff competition Reuters The Indian government in 2021 gave
with a Korean rival. a US$6 billion contract to HAL for 83 of
“We have not received anything in black the locally produced Tejas jets for delivery
and white, but we are hearing that Koreans starting around 2023 — four decades
will get the order,” Ananthakrishnan said. after the design began in 1983.
“Notwithstanding that, still we are making out The Tejas has been beset by design and
attempts to push through our product.” other challenges, and was once rejected by
HAL is also in talks with the Philip the Indian Navy as too heavy.
pines to sell its light-combat helicopters, HAL plans to use the General Elec
he added. tric-manufactured 414 engine on a sec
“There is a lot of interest generated in ond generation of light-combat aircraft,
the global aerospace market. Sooner or later, Ananthakrishnan said, adding that it was
REUTERS
we will have a breakthrough order,” he said. in talks to produce those engines in India.
w e d n e s d ay f e b r u a ry 1 5 , 2 0 2 3 6 TheEdge CEO morning brief
h o m e
DNeX’s largest
shareholder
sells stake to
exit Theta Edge
by justin lim
theedgemarkets.com
Some minority
The Edge that TDC can leverage its bal-
ance sheet to pay dividends and under-
shareholders
take organic and inorganic expansion of
its data center business in the ASEAN re-
prefer Time
gion, including the option to form partner-
ships and joint ventures with global data
dotCom not to
center players, without divesting AIMS
and de-consolidating its high growth data
center business
ing able to exercise your rights as a share-
holder. And if a minority shareholder has
concerns, he/she should ask the relevant KUALA LUMPUR (Feb 14): Da-
questions at the EGM and hold the Board gang NeXchange Bhd (DneX)’s
by Priyatharisiny Vasu accountable,” Minority Shareholder Watch largest shareholder Arcadia Acres
theedgemarkets.com Group’s (MSWG) CEO Devanesan Ev- Sdn Bhd has ceased to be a substan-
anson commented when contacted by tial shareholder in Theta Edge Bhd.
KUALA LUMPUR (Feb 14): TIME dot- The Edge. Arcadia disposed of its entire
Com Bhd’s board will be seeking share- However he added it is important to ap- 16.53% stake in Theta Edge, com-
holders’ approval at its EGM on Wednes- preciate that there may not be unanimous prising 19.5 million shares, on Tues-
day (Feb 15) to sell its major stake in its views among the minority shareholders. day (Feb 14), according to a bourse
data center business to US infrastructure “Some may see value in the transaction filing.
investor DigitalBridge Group for RM2 bil- while some may not. What is important is The disposal consideration for the
lion cash. they act according to their honest beliefs. shares was not disclosed. Based on
The proposal is to pave the way to form The law provides rights to shareholders Theta Edge’s closing price of 70 sen
a partnership with DigitalBridge to further and they should use these rights if they on Tuesday, the 19.5 million shares
grow capital-intensive data center business, feel truly aggrieved,” he said. would be worth RM13.65 million.
in which TDC will be holding a smaller Pulau Kapas Ventures Sdn Bhd is the Arcadia had emerged as the sec-
30% stake. largest shareholder in TDC with 28.91% ond largest shareholder of Theta
Furthermore, the stake sale will help shareholding, followed by Khazanah Na- Edge after it acquired a 30.31%
unlock the value of TDC’s data center sional Bhd at 10.65%, Kumpulan Wang stake (32.5 million shares) in the IT
business. TDC intends to allocate RM1 Persaraan Diperbadankan (KWAP) has systems integration and telecommu-
billion for dividend. This will translate into 5.79%, and AIA Bhd has 5.32%. The top nication engineering services group
a dividend per share of 54 sen based on four shareholders collectively hold 50.67% on March 31, 2021.
issued share capital of 1.8 billion shares. stake in TDC. Arcadia subsequently trimmed its
However, some minority shareholders For the third quarter ended Sept 30, stake to 18.18% in October last year
are resisting the proposal. 2022, TDC’s net profit increased by via the disposal of some 13 million
To recap, TDC will sell 49% of the 18.1% to RM118.74 million compared Theta Edge shares.
ordinary shares and 100% of the irre- with RM100.54 posted in the same pe- A separate filing showed that the
deemable convertible preference shares riod in 2021. tranche was sold to Threadstone
in AIMS Data Centre Holding, and 21% Quarterly revenue increased 17.53% Capital Sdn Bhd.
of the ordinary shares in AIMS Data Cen- to RM407.57 million against RM346.76 Currently, Lembaga Tabung Haji
tre (Thailand) Ltd, according to the com- in 3Q21 driven by growth in retail and remains as the largest shareholder in
pany’s filing with Bursa Malaysia on Nov wholesale segment as well as continued Theta Edge, with a 30% stake com-
22 last year. healthy demand for its data and data center prising 32.18 million shares.
Some minorities raised concerns that offerings. Theta Edge’s share price has
upon divestment of AIMS, TDC will In the past year TDC’s share price has been on a downtrend since it hit
de-consolidate the high growth data center climbed 32% to RM5.30, and since the its peak of RM2.19 on Oct 8, 2021.
segment and thus the company may be announcement of the proposed divestment The stock closed up 0.5 sen or
losing a positive catalyst for its share price the share price has gained 8.18%. 0.72% at 70 sen on Tuesday, giv-
to appreciate. At Tuesday’s close TDC shares were un- ing the group a market capitalisation
A minority shareholder, who declined changed at RM5.30, giving the company of RM83 million.
to be named, wrote in a statement sent to a market capitalization of RM9.74 billion.
w e d n e s d ay f e b r u a ry 1 5 , 2 0 2 3 7 TheEdge CEO morning brief
h o m e
h o m e
Betamek
KUALA LUMPUR (Feb 14): Betamek that Perodua, its major customer, contin-
Bhd has secured contracts worth RM123.5 ues to see rising demand for its vehicles.
bags Perodua
million to supply various electronics parts “Our partnership with Perodua spans
for a new Perodua model. over two decades, and we are delighted to
contracts worth
In a statement on Tuesday (Feb 14), the continue our relationship by supplying our
electronics manufacturing services (EMS) latest technology for the company’s latest
RM123.5 mil
provider said its unit Betamek Electronics vehicle models,” he added.
(M) Sdn Bhd on Monday received the let- As of January 2023, Perodua had
ter of appointment from Perusahaan Oto- 220,000 outstanding bookings to be ful-
mobil Kedua Sdn Bhd (Perodua). filled.
It said the supply of these parts com- by surin murugiah The car manufacturer recently an-
menced in the fourth quarter of the fi- theedgemarkets.com nounced that it is looking to maximise its
nancial year ending March 31, 2023 production to 330,000 units and sales to
(4QFY2023), and is for a duration of six 314,000 units this year, underpinned by
years. outstanding orders carried forward from
The contracts are expected to contrib- last year as well as continued demand for
ute positively to earnings of the group its vehicles so far this year.
over a six-year period, commencing from The production target is 14.2% high-
FY2023, it said. er than Perodua’s 2022 tally of 289,054
Betamek managing director Mirzan vehicles produced, while the sales target
Mahathir said the company, which pro- is 11.3% higher than the 282,019 units
vides one-stop EMS solutions to automo- sold last year.
tive makers, is optimistic that demand for Betamek shares settled up 5.5 sen or
its vehicle audiovisual products and vehicle 10.28% at 59 sen, giving it a market cap-
accessories will continue to grow, given italisation of RM265.5 million.
MR DIY posts
KUALA LUMPUR (Feb 14): MR DIY FY2022 to 2.4 sen, compared with 2.95
Group (M) Bhd reported a marginal in- sen for FY2021.
declares lower
(4QFY2022), from RM134.55 million a RM472.95 million, from RM431.83 million
year earlier, on the back of a higher revenue. in FY2021. Full-year revenue rose 18.15%
interim dividend
Quarterly revenue rose 9.27% to to RM3.99 billion from RM3.37 billion.
RM1.07 billion from RM975.39 million The group said that given persistent
in 4QFY2021, driven by positive sales con- cost pressures, its price adjustments to
tributions from new stores, which grew its core product offering have led to the
20% year-on-year from 900 stores to 1,080 by justin lim improvement in gross profit margins in
stores, leading to a 15.2% increase in total theedgemarkets.com 4QFY2022 compared to earlier in the year.
transactions to 38.1 million. “We have been fortunate to have de-
However, profit after tax was impact- 26.8%, led by higher staff costs, utility ex- livered continuous growth with revenue
ed by one-off prosperity corporate tax penses, and the depreciation of right-of-use reaching the RM4 billion mark on the
of RM10.2 million on subsidiaries with assets, which largely corresponded with an strength of consistent quarterly and annual
chargeable income above RM100 million, increase in the number of stores from con- performances,” said MR DIY chief exec-
the home improvement retailer said in a tinued business expansion, the group said. utive officer Adrian Ong in a statement.
filing with Bursa Malaysia. MR DIY declared an interim dividend He added that the group is optimistic
Profitability was also dragged by higher of 0.6 sen — compared with 0.9 sen paid a about its prospects going forward, given
administrative and other operating expens- year ago — to be paid on March 24, with the positive post-pandemic sentiment.
es. Administrative expenses rose 34.2% March 2 as the ex-date. “The more favourable freight environ-
while other operating expenses increased This brings the total dividend for ment and the strengthening of the Ma-
laysian ringgit against both the US dollar
and Chinese renminbi also favour a better
performance. [However] there are still con-
cerns on the impact on household income
given rising interest rate and increases in
cost of living,” he said.
Ong said the group has targeted to open
another 180 new stores in 2023, to bring
the nationwide total to over 1,200.
Shares in MR DIY closed two sen or
1.13% lower at RM1.75 on Tuesday (Feb
14), giving the group a market capitalisa-
tion of RM16.51 billion. Over the past one
year, the counter has depreciated 29.7%
from RM2.49.
w e d n e s d ay f e b r u a ry 1 5 , 2 0 2 3 9 TheEdge CEO morning brief
w e d n e s d ay f e b r u a ry 1 5 , 2 0 2 3 10 TheEdge CEO morning brief
h o m e
appointed as
The emergence of the investment arm by izzul ikram
of textile trading and property developer theedgemarkets.com
Cypark director
Jakel Group as a shareholder of Cypark
led to Cypark’s share price more than dou- KUALA LUMPUR (Feb 14): Anzo
bling in value. This prompted an unusual Holdings Bhd, which has been clas-
market activity query by Bursa Malaysia. sified as an affected listed issuer, has
by syafiqah salim Meanwhile, Cypark on Tuesday also ap- been granted a further extension un-
theedgemarkets.com pointed Mohd Adzahar Abdul Wahid as an til April 30 to submit its regularisa-
independent and non-executive director. tion plan to the relevant authorities.
KUALA LUMPUR (Feb 14): Cypark Re- He was a former director of Symphony The extension is subject to the ap-
sources Bhd has appointed J Muhammad House, Kencana Petroleum Bhd, Sapura pointment of a principal adviser by
Ashraf Muhammad Amir as its non-inde- Kencana Petroleum Bhd, Edra Global En- the loss-making integrated contractor
pendent and non-executive director, effec- ergy Bhd and TH Plantations Bhd. and timber service provider by March.
tive Tuesday (Feb 14). Cypark shares dropped 10 sen or 8.77% In the meantime, trading in Anzo
Muhammad Ashraf, 36, is the group to RM1.04 on Tuesday, valuing the renew- shares will be suspended from Feb
chief investment officer of Jakel group of able energy firm at RM804.03 million. 21, the group said in a bourse filing.
Bursa Securities said Anzo faced
delisting if it fails to submit its reg-
ularisation plan within the extended
Top Builders
KUALA LUMPUR (Feb 14): Bursa Secu- timeframe, or fails to obtain approval
rities has granted Practice Note 17 (PN17) and implement the plan within a time-
granted six-
company Top Builders Capital Bhd a six- frame stipulated by the authorities.
month extension to submit its regularisa- Last year, Anzo was granted a six-
month extension
tion plan to regulatory authorities. month extension to submit its regular-
According to a Bursa Malaysia filing on isation plan, from April 10 to Oct 31.
to submit
Tuesday (Feb 14), the new deadline for the On Oct 31, the group applied for
piling and engineering group to submit its a further six-month extension until
regularisation plan
regularisation plan to the Securities Com- April 30 this year to submit the plan.
mission Malaysia (SC) or Bursa Securities Anzo was classified as an affected
has been extended to June 29, 2023. listed issuer in October 2019, after
On Jan 3 the group had requested a its revenue on a consolidated basis
three-month extension from Dec 29, 2022. by izzul ikram represented 5% or less than its share
On Dec 1 last year, the company said theedgemarkets.com capital based on the unaudited fi-
it was still in the midst of formulating a nancial statements for the financial
regularisation plan to address its financial However, its unaudited financial state- year ended July 31, 2019.
condition. ments for FY2022 also showed that its cur- More recently, the group reported
Top Builders fell into PN17 status in rent liabilities exceeded its current assets a higher net loss of RM27.71 million
June 2020, when the group’s external au- by RM108.55 million. for the year ended Sept 30, 2022, com-
ditor KPMG PLT expressed doubts over Top Builders previously posted three pared with RM24.33 million a year pri-
the company’s ability to continue as a going consecutive financial years of net losses — or, while revenue declined to RM23.03
concern as its current liabilities exceeded RM239.1 million in FY2021, RM144.35 million from RM29.96 million.
its current assets by RM21.6 million. million in FY2019 and RM26.93 million The FY2022 revenue of RM23.03
At the same time, the company’s equity in FY2018. million represented 14.71% of its
on a consolidated basis was less than 25% On Dec 30, 2020, the group had share capital of RM156.57 million
of its share capital. changed its financial year end from Dec for that year. Anzo has been in the
More recently, Top Builders’ unaudit- 31 to June 30. red since FY2013.
ed financial results for the financial year Trading of Top Builders shares has been Shares in Anzo finished half a
ended June 30, 2022 (FY2022) indicat- suspended since Nov 8 last year pending sen or 33.33% higher at two sen on
ed it had returned to the black with a net the submission of its FY2021 annual re- Tuesday (Feb 14), giving the group
profit of RM150.39 million on the back port. The counter last traded at two sen, a market capitalisation of RM22.32
of an approved scheme of arrangement. giving the group a market capitalisation million.
Revenue stood at RM19.63 million. of RM14.1 million.
w e d n e s d ay f e b r u a ry 1 5 , 2 0 2 3 11 TheEdge CEO morning brief
h o m e
h o m e
news In brief
w o r l d
US inflation stays
WASHINGTON (Feb 14): US consumer losing steam, and the strength of the labour
prices rose briskly at the start of the year, a market continues to pose upside risks to
elevated, adding
sign of persistent inflationary pressures that wage growth and service prices.
could push the Federal Reserve to raise The details of the report showed shelter
US Fed hikes
The overall consumer price index half of the rise. Used car prices — a key
climbed 0.5% in January, the most in three driver of disinflation in recent months —
months and bolstered by energy and shelter fell for a seventh month. Energy prices rose
costs, according to data out Tuesday from for the first time in three months. Shelter
the Bureau of Labor Statistics.The measure by Reade Pickert, Augusta Saraiva costs, which are the biggest services com-
was up 6.4% from a year earlier. Excluding & Chris Middleton ponent and make up about a third of the
food and energy, the so-called core CPI ad- Bloomberg overall CPI index, rose 0.7% last month.
vanced 0.4% last month and was up 5.6% Owners’ equivalent rent and rent of prima-
from a year earlier. Economists see the gauge ing consumer resilience, underscore the ry residence increased by the same amount,
as a better indicator of underlying inflation durability of the economy — and price while hotel stays also climbed.
than the headline measure. pressures — despite aggressive Fed policy. Because of the way the housing met-
The median estimates in a Bloomberg The data support officials’ recent asser- rics are calculated, there’s a significant lag
survey of economists called for a 0.5% tions that they need to hike rates further between real-time price changes and the
monthly advance in the CPI and a 0.4% and keep them elevated for some time, government statistics.
gain in the core measure. Both annual and possibly to a higher peak level than The January report incorporated new
measures came in higher than expected. previously expected. weights for the consumer basket to try to
US stock futures erased gains and The path to stable prices will likely be more accurately capture Americans’ spend-
Treasury yields rose after the report. both long and bumpy. The goods disin- ing habits.The shelter components are now
The figures, when paired with January’s flation that has driven the slide in overall a larger share of the overall index, while
blowout jobs report and signs of endur- inflation in recent months appears to be used cars make up a smaller portion.
SINGAPORE (Feb 14): Singapore is plan- that adult Singaporeans would receive as
Singapore sees
ning yet another year of a slim budget defi- the GST is raised, including an addition-
cit, emphasising how it will fund protec- al S$300 for all Singaporean households
another year of
tion for the most vulnerable households next January when the rate is increased
and businesses against persistent inflation. to 9% as planned, from 8% now, Wong
budget gap as
The city-state aims to narrow the short- said. Among measures to help especially
fall to 0.1% of gross domestic product in the younger families, the government would
inflation bites
year starting April from a revised 0.3% gap adjust existing child subsidies to target the
this year, Deputy Prime Minister Lawrence most vulnerable, and boost the “baby bo-
Wong said in his annual budget speech to nus cash gift” by S$3,000 for all eligible
Parliament on Tuesday (Feb 14). It will do Singaporean children born from today.
so by boosting revenue by 7.1%, including by Faris Mokhtar, Michelle Jamrisko Just as the government has looked to pre-
raising taxes on high-value property trans- & Low De Wei pare households and businesses for a change
actions, and lowering expenditure by 2.6%. Bloomberg in spending plans in the post-pandemic era —
The S$104-billion (US$78.4-billion) coming on the heels of a further loosening in
spending plan is meant to nudge residents its mask mandate — the revenue side of the
further into a post-Covid reality, while seek- budget also required some careful balance.
ing to blunt near-term cost-of-living pres- In addition to leaning on an increase in
sures. Headline inflation that’s still seen the GST rate, the government is planning
running hot at 6.5% is complicating policy higher taxes on some property transactions
as the trade-reliant Singapore also stares that would affect 15% of homes, and lux-
down a gloomy global growth outlook. ury cars and tobacco.
In order to help Singaporeans absorb high- Singapore also intends to raise its effec-
er costs, Wong said the government would tive tax rate for multinational enterprises to
increase subsidies by S$3 billion to lower-in- 15% from 2025, in line with the so-called
Bloomberg
come households to defray the higher goods BEPS 2.0 global agreement to increase
and services tax (GST), as well as inflation. Deputy Prime Minister Lawrence Wong the floor rate.
Wong said he expects price-growth to remain
high at least through the first-half of the year. future generations of Singaporeans.”
“Other governments spent more dur- “So we will continue to uphold our Read also:
ing this pandemic too. But they largely practice of fiscal prudence and the prin-
financed their additional spending by bor- ciples that underpin the protection of our Singapore to raise effective corporate tax
rowing, which will eventually have to be reserves,” including keeping plans to raise to 15% from 2025
repaid by future generations,” Wong said. the GST rate further, Wong said, in what
“In contrast, our reserves allowed Singa- he had previously described as his “Val-
pore to respond quickly without falling entine’s Day present” to Singaporeans. Singapore to double paternity leave, raise
into debt, or burdening either current or The government would boost the aid cash gifts for babies
w e d n e s d ay f e b r u a ry 1 5 , 2 0 2 3 14 TheEdge CEO morning brief
w o r l d
w o r l d
mega Qatari
to finalising a deal to buy liquefied natural potential buyers and they would be an-
gas (LNG) from QatarEnergy over nearly nounced when agreements are reached.
LNG deal
30 years from the Middle Eastern exporter’s State-controlled CNPC, China’s top gas
massive North Field expansion project, three importer, last year also stepped up gas im-
people with knowledge of the matter said. ports from Russia, by pipeline and tanker,
If sealed, this would be the second such snapping up supply that was no longer go-
deal between major LNG exporter Qatar by Chen Aizhu & Marwa Rashad ing to Europe due to sanctions amid Mos-
and the world’s No 2 LNG buyer, as Bei- Reuters cow’s war on Ukraine.
jing looks to beef up gas supply and diversify Chinese customs data showed the coun-
its sources in a drive to replace coal and cut na’s energy policy on supply diversification. try’s imports of Qatari LNG surged 75%
carbon emissions. Therefore the deal will eventually strengthen last year from 2021 to 15.7 million tonnes,
CNPC’s talks follow a deal announced the energy giant’s competitiveness. making up a quarter of the nation’s total
last November by China’s Sinopec, in which Sinopec said in November the gas pur- imports, while China’s total LNG imports
QatarEnergy agreed to supply 4 million chase agreement was part of an “integrated shrank nearly 20%.
tonnes of LNG annually for 27 years, the partnership”, which indicated the Chinese In contrast, imports from Australia and
longest duration LNG supply contract ever firm could be considering acquiring a stake in the United States dropped 30% and 77%
signed by Qatar. Qatar’s North Field expansion export facility. respectively from 2021, to 21.9 million
“CNPC has agreed on the major terms The two companies have yet to announce tonnes and 2.09 million tonnes.
with Qatar in a deal that will be very similar any stake investment. QatarEnergy last year signed five deals
to Sinopec’s,” said a Beijing-based state-oil As Beijing’s ties with the United States with international majors for the North
official who declined to be named as he is and Australia — Qatar’s two biggest LNG Field project, a two-phase expansion plan
not authorised to speak to the media. export rivals — are strained, Chinese national that will boost Qatar’s liquefaction capac-
CNPC declined to comment. QatarEner- energy firms increasingly see Qatar as a safer ity to 126 million tonnes per year by 2027
gy did not respond to a request for comment. target for resource investment. from 77 million tonnes.
“This is a good move for CNPC, securing Sinopec and CNPC would not opt for Each of the five majors — TotalEner-
additional long term supply from a reliable such long-duration supply contracts unless gies, ExxonMobil, ConocoPhillips, ENI
and well positioned partner. This will fur- they were also hoping to acquire small stakes and Shell — signed a joint-venture agree-
ther insulate from market volatility, diversify in the North Field expansion export facility, ment with QatarEnergy that includes an
supply while optimising between the state a second Beijing-based state gas official said. equity investment in liquefaction export
owned units,” said Toby Copson, global head QatarEnergy has maintained a 75% stake facilities.
of trading at Trident LNG. overall in the North Field expansion, that
Wei Xiong, analyst at Rystad Energy, said will cost at least $30 billion, and could give
although CNPC dominates China’s piped gas up to a 5% stake to some buyers, QatarEn- Read also: China’s wind and solar now
imports, it still needs other import options to ergy Chief Executive Officer Saad al-Kaabi almost enough to power every home —
mitigate any potential risk, in line with Chi- has said. govt data
Countries warn
BRUSSELS (Feb 13): Denmark, Germany, attempt to limit price spikes.
the Netherlands, Estonia, Finland, Luxem- The seven countries said in their letter that
EU against ‘crisis
bourg and Latvia have warned Brussels not schemes to do this — like contracts for dif-
to rush into major changes to the European ference (CfDs) — could play a role but they
mode’ overhaul of
Union’s electricity market in response to the should be voluntary, focus on new renewable
energy crisis, calling instead for limited tweaks generation, and still “react” to the market.
energy market
to the system. Electricity industry lobbying group Eu-
The European Commission is drafting a relectric has also warned against making
revamp of EU electricity market rules, with CfDs mandatory, which it says could un-
the aim of better cushioning consumer bills dermine competition in the power market
from fossil fuel price spikes and avoiding a by Kate Abnett and deter investors.
repeat of the surge in electricity prices trig- Reuters In their letter, the seven countries backed
gered last year by cuts to Russian gas supply. an idea already mooted by the Commission
The seven countries, led by Denmark, must ensure the market still functions and to make it easier for consumers to choose
said in a letter that Europe’s existing market incentivises massive investment in renewable between fluctuating and fixed-price power
design has fostered years of lower electricity energy, they said. contracts.
prices, helped expand renewable energy, and “Any reform going beyond targeted ad- But they pushed back on another Com-
ensured enough power was produced to meet justments to the existing framework should mission suggestion to extend a temporary EU
demand and avoid shortages. be underpinned by an in-depth impact as- measure which claws back windfall revenue
“We must resist the temptation to kill the sessment and should not be adopted in crisis from non-gas generators.
golden goose, that our single market for elec- mode,” said the letter to the Commission, “That could compromise investors’ confi-
tricity has been in the last decade,” said Lars which was seen by Reuters. dence in the needed investments,” the coun-
Aagaard, Denmark’s energy minister. Other countries, including Spain and tries said in the letter, citing EU estimates that
The countries said there was some room France, are seeking deeper reform. Spain hundreds of billions of euros in renewable
for improvement, particularly in light of soar- has proposed a shift to more long-term, energy investments are needed annually to
ing power costs last year. But any changes fixed-price contracts for power plants, to help countries quit Russian fossil fuels.
w e d n e s d ay f e b r u a ry 1 5 , 2 0 2 3 16 TheEdge CEO morning brief
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Adani’s flagship
MUMBAI (Feb 14): Gautam Adani’s flagship Some other earnings highlights:
firm swung to a profit and pledged to lower
swings to profit
leverage, as the Indian billionaire tries to win • It produced 2.5 million tonnes of coal
back investor confidence after a bruising re- from Carmichael mine in Australia and
battle
Adani Enterprises Ltd, based in the ty- quarter, while shipments were flat.
coon’s home city of Ahmedabad in western • Its portfolio of eight airports across In-
India, posted a net income of 8.2 billion dia saw a 40% jump in passenger move-
rupees (US$99.1 million) for the quarter ments to 20.3 million people, compared
ended Dec 31, it said in a filing on Tuesday, by PR Sanjai, Atul Prakash, to the same quarter last year.
compared with a loss of 116.3 million rupees Katrina Nicholas & Rajesh Kumar Singh • Data Center in Chennai, the only oper-
in the same period last year. There weren’t Bloomberg ational one so far, will increase capacity
enough brokerages tracking the company to 33 megawatts, while those in Noida,
to derive an average profit forecast. weathered a brutal past few weeks that saw Hyderabad and Mumbai are underway.
Revenue surged 42% across business- its US$2.5 billion share sale shelved and its • Land acquisition is going on for data cen-
es to 266.1 billion rupees, the filing said. stock plunge after US-based Hindenburg tres that will come up in Navi Mumbai,
Integrated resource management, which Research accused it of accounting fraud Visakhapatnam, Pune and Hyderabad.
mostly consists of coal trading, is the big- and stock manipulation in a Jan 24 report.
gest topline contributor and saw a 38% Despite the ports-to-power conglom- The Adani Group is said to have halved
jump to 175.9 billion rupees, boosted by erate denying the allegations, it triggered its revenue growth target and delayed capi-
an increase in volumes and higher prices. a massive selloff. Hindenburg said in its tal spending plans, Bloomberg News report-
Revenue from mining, airports and new report that it had taken a short position ed earlier this week, citing people familiar
energy also more than doubled in the De- in Adani’s companies through US-traded with the matter. The Indian tycoon has
cember quarter. Total costs climbed 37% bonds and non-Indian-traded derivatives. gone into damage-control mode and is
to 261.7 billion rupees. seeking to rebuild investor, as well as lender,
Shares rose almost 2%, paring this Temporary volatility confidence in the robustness of his empire.
year’s decline to 55%. “The current market volatility is temporary,” The conglomerate said on Feb 6 that
The earnings will be a tailwind for Adani Chairman Adani said in the earnings state- founders’ prepaid loans worth US$1.11 bil-
Enterprises, which has a motley mix of ment. “As a classical incubator with a vision lion to release pledged shares across three
businesses spanning coal mining, airports, of long-term value creation, Adani Enterpris- Adani firms. The ports unit has announced
data centres, digital services and metals. es will continue to work with the twin ob- plans to repay some debt in the year starting
Known for incubating new Adani business- jectives of moderate leverage and looking at April, while the conglomerate plans to prepay
es that are then spun off, the company has strategic opportunities to expand and grow.” a US$500 million bridge loan due next month.
(Feb 14): Dabur India Ltd, a major consum- “Southeast Asia is where we are not present,
er goods maker controlled by the billionaire Dabur weighs our competitors are all present in Southeast
Burman family, is scouting for acquisitions
at home and in Southeast Asia as it works acquisitions to Asia,” Malhotra said. “The immediate envi-
ronment is very volatile with currencies playing
to establish its presence in a new overseas
market amid heated domestic competition.
expand across India, havoc, I think once this settles down, then we
might look at some inorganic opportunity.”
On the back of its US$71 million purchase
of spice producer Badshah Masala Pvt Ltd in
Southeast Asia While Reserve Bank of India governor
Shaktikanta Das said last week that de-
October, the 139-year-old firm, which sells mand in rural India was showing signs of
traditional Ayurvedic medicine and herbal by Chris Kay improvement, Malhotra said inflation —
products including toothpaste and shampoo, Bloomberg above the central bank’s target of 6% for
is evaluating other targets in health, food and much of the past year — continues to be
personal care in those markets, chief execu- Tata Consumer Products Ltd is looking to “pinching the business big time.”
tive officer Mohit Malhotra said. bulk up its portfolio through acquisitions. His concerns echo those expressed by
“There are a lot of opportunities,” Mal- Last year, Hindustan Unilever Ltd pur- Sanjiv Mehta, the CEO of Unilever’s Indi-
hotra, 53, said in an interview at Dabur’s chased wellness brand Zywie Ventures Pvt and an arm, who last month warned that vol-
headquarters in the New Delhi satellite a minority stake in health supplement maker umes in rural India still have a “long way
city of Ghaziabad. “The valuations as rela- Nutritionalab Pvt, while Adani Wilmar Ltd to go” before fully recovering.
tive to what they were in the past have be- made acquisitions including the Kohinoor Dabur’s earnings have likewise been im-
come more reasonable now.” He declined ready-made curries and rice label from Mc- pacted, with net income falling 5.4% in the
to name any brands or firms on his radar. Cormick Switzerland. At home, Dabur has last quarter, missing analyst estimates as its
The expansion comes as Dabur faces also been struggling with elevated inflation that costs rose and operating margin declined.
intensifying competition from deep-pock- has eaten into the spending power of Indians, The company’s shares have retreated 5.2%
eted rivals — including global consumer particularly in the country’s rural hinterland, so far this year.
titan Unilever plc — which are swooping where the company makes half its sales. “The business environment in India
in on upstart Indian brands. Powerful In- continues to be pretty challenging,” Mal-
dian conglomerates led by two of Asia’s ‘Very volatile’ hotra said. “The next quarter is also going
richest men, Mukesh Ambani and Gau- Dabur, which already sells products in more to be pretty tough, so we don’t see inflation
tam Adani, also have ambitious plans to than 120 countries, is also looking at deals actually getting tame — but next year going
scale up in the household retail space, while to help gain a foothold in Southeast Asia. forward things will become a little better.”
w e d n e s d ay f e b r u a ry 1 5 , 2 0 2 3 17 TheEdge CEO morning brief
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(Feb 14): Ford Motor Co will dismiss some 7,000 direct employees, making diesel engines
11% of its workforce in Europe in the latest Ford cutting 3,800 at Dagenham and transmissions at the Hale-
sign of industrial disruption caused by the wood facility. It also has an engineering center
automotive sector’s shift to electric vehicles. jobs as EV shift at Dunton in Essex. The company intends
Of the total 3,800 jobs to go, workers in to make the reductions through voluntary
Germany and the UK will be hardest-hit with shrinks German, agreements, it said Tuesday.
about 2,300 and 1,300 positions to be elim- The US manufacturer’s confirmation of
inated respectively over the next three years, UK workforce further cuts at its European business add to a
Ford said Tuesday. Germany’s IG Metall last lengthy period of decline in the region.Years
month estimated estimated around 3,200 of restructuring have seen the sale or closure
people would lose their jobs. by William Wilkes of a number of factories amid broad job cuts.
“Paving the way to a sustainably profitable Bloomberg Its passenger car market share last year was
future for Ford in Europe requires broad- 4.4% with sales totaling just over 510,000
based actions and changes in the way we de- ment teams. The company is also trimming cars, according to the European Automobile
velop, build and sell Ford vehicles,” Martin jobs in the US as Chief Executive Officer Jim Manufacturers’ Association.
Sander, general manager of Ford’s electric-ve- Farley targets US$3 billion in annualized sav- Next in line is Ford’s plant at Saarlouis,
hicle business in Europe, said in a statement. ings while investing more than US$50 billion Germany, where 4,600 workers make Fo-
“This will impact the organizational structure, in EVs through 2026. cus compact cars. The automaker will cease
talent, and skills we will need in the future.” The company, with about 173,000 em- making the model by 2025 with no plans to
Ford is shifting its model lineup in Europe ployees globally, had some 35,000 positions produce other vehicles there after that. The
to battery-only by 2035 and has previously in Europe as of the end of last year, with company is in talks with potential buyers of
said that the reduced complexity of electric Cologne its biggest plant with some 14,000 the plant, including China’s BYD Co, ac-
cars would lead to smaller product-develop- workers. In the UK, the company has some cording to people familiar with the matter.
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WASHINGTON (Feb 13): Officials from Chi- Officials hope to resolve China’s concerns
na, India, Saudi Arabia and Group of Seven na- China, US to about cutoff dates to protect new financing
tions will participate in a first virtual meeting of from debt restructuring by the end of the
a new sovereign debt roundtable on Friday, the participate in first year, one of the sources said.
International Monetary Fund said on Monday, G7, International Monetary Fund and
confirming an earlier Reuters report. meeting of new World Bank officials have long pushed for fast-
The roundtable will also include officials er and broader efforts to deliver debt relief to
from countries that have requested debt treat- debt roundtable heavily indebted nations to avoid cuts in social
ments under the Group of 20 common frame- services that they fear could tip off social unrest.
work — Ethiopia, Zambia and Ghana — as well on Feb 17 USTreasury Secretary JanetYellen and other
as middle-income countries such as Sri Lanka, G7 officials see China, now the world’s largest
Suriname and Ecuador, which have faced their sovereign creditor, as the main stumbling block
own debt crises, three sources had earlier said. by Andrea Shalal for quicker work on debt treatments.They are
The meeting will be co-chaired by the IMF, Reuters also pushing for agreement by G20 members
the World Bank and India, the current leader of on expanding the common framework to in-
the Group of 20, and comes a week before G20 clude middle-income countries.
finance officials are due to gather in Bengaluru, The meeting will be Eric LeCompte, executive director of the
India, from Feb 23-25. An in-person meeting co-chaired by the IMF, Jubilee USA Network, a coalition of reli-
of the roundtable expected on Feb 25 and a gious, development and advocacy groups,
formal launch is planned at the IMF-World
the World Bank and said support for the matter was growing
Bank spring meetings in April. India, the current leader among other countries. But China’s oppo-
Brazil, which will lead the G20 next year, of the Group of 20. sition — and that of Russia — remained
is also taking part, one of the sources said. significant a “stumbling block”, he said.
An IMF spokesperson confirmed the first “The majority of countries support expand-
roundtable meeting would take place on Fri- participants — the Institute of Internation- ing these policies to middle-income countries,
day, and said more details would be released al Finance (IIF), the International Capital but China is the biggest challenge,” LeCompte
in the near future. Markets Association and two private-sector said, adding that Europe had gone through a
“The objective is to bring together key financial institutions that have asked not to similar period of reluctance on debt relief in
stakeholders involved in sovereign debt re- be identified, one of the sources said. the 1990s, but eventually came around.
structuring, from traditional creditors from Creation of the body comes amid grow- Also on the agenda will be China’s re-
advanced economies, to new creditors like ing frustration about the slow pace of dis- peated calls for World Bank and other mul-
China, Saudi Arabia, India, as well as the cussions on debt relief for Zambia, which tilateral development banks to participate in
private sector and debt countries to address first requested help two years ago. Organ- debt reductions — a proposal firmly rejected
the current shortcomings,” they said. isers say the roundtable could help resolve by US officials, who argue that those lend-
The roundtable will include the Paris issues in principle and will not focus on ers already offer highly concessional loans
Club of official creditors and private sector Zambia or other individual cases. and grants to countries in crisis.
WELLINGTON (Feb 14): New Zealand de- Authorities have evacuated beach settle-
clared a national state of emergency for only ments and are still asking people to leave home
the third time in its history on Tuesday as Cy- New Zealand as rivers continue to swell and the tide rises.
clone Gabrielle caused widespread flooding, Roads are closed, mobile phone services are
landslides and huge ocean swells, forcing evac- declares national down and some towns are cut off.
uations and stranding people on rooftops. Hipkins said it was too early to say how
“It has been a big night for New Zealanders emergency as many people had been displaced or injured.
across the country, but particularly in the up- No deaths have been confirmed.
per North Island...a lot of families displaced, Cyclone Gabrielle Parliament will sit briefly Tuesday after-
a lot of homes without power, extensive dam- noon but will then be adjourned until Feb
age done across the country,” Prime Min- wreaks havoc 21 because of the cyclone.
ister Chris Hipkins told reporters after the Local media are publishing photographs
declaration. and video of people sitting on top of buildings
Gabrielle is 100km east of Auckland, near by Lucy Craymer & Renju Jose surrounded by flood water, of houses swept
the east coast of the country’s North Island Reuters to the bottom of hills by landslides and of
and is expected to move east-southeast, rough- roads under water.
ly parallel to the coast. A volunteer firefighter remained inside a
Kieran McAnulty, minister of emergency house that had slid down a hill in a beachside
management, said that while New Zealand town, the national fire and emergency service
was now through the worst of the storm, more said. Another had been rescued and was in
rain and high winds were expected. critical condition in hospital, it said.
The country was suffering from extensive A New Zealand navy warship is heading to
flooding, landslides and damage to roads and a yacht that turned on its emergency beacon
infrastructure, he added. this morning off the east coast.
Severe weather would extend to the up- New Zealand declared national emergen-
per South Island as the cyclone moved, the reuters cies after an earthquake in 2011 and when
weather forecaster said. the Covid-19 pandemic hit in 2020.
w e d n e s d ay f e b r u a ry 1 5 , 2 0 2 3 19 TheEdge CEO morning brief
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onto world’s
to sustain the wealth his family has accumu- Piero first emerged as a billionaire in
lated over the past seven decades building 2015 following the New York initial pub-
Amazon will
(Feb 14): A tech advocacy group has urged verse killer acquisition,” which is a merger
the European Commission to investigate where a company buys something it could
hoover up
and block Amazon.com Inc’s proposed have developed on its own to the detriment
US$1.65 billion deal to buy robot vacuum of innovation.
home data in
firm iRobot Corp. “We’re working cooperatively with the
Foxglove, a London-based nonprofit, relevant regulators in their review of the
advocacy group
the tech giant’s purchase of the maker of the on the Foxglove letter.
Roomba robot vacuum maker, according to The iRobot deal, announced in August,
warns
a letter seen by Bloomberg News. It signed is already facing an in-depth review by the
the letter jointly with organizations SOMO, Federal Trade Commission in the US that
Open Markets Institute, and the Balanced could extend the antitrust review by months
Economy Project. or years.
“Amazon already monitors our doorsteps by Katharine Gemmell The deal drew an investor lawsuit against
and listens in on our dinner conversations, Bloomberg iRobot in Delaware. Senator Elizabeth War-
and the proposed merger will put Amazon ren and other Democratic lawmakers have
inside our living rooms,” the letter said. “It asked the FTC to reject the deal, Axios re-
will deepen Amazon’s retail and consumer ported in September, citing a statement
data moats, bolster its vast ecosystem and from Warren.
market dominance, and cause harm to con- The FTC, which is also examining Am-
sumers and competition in ways that can- azon’s US$3.5 billion acquisition of 1Life
not necessarily be fully conceived of today.” Healthcare Inc, is preparing a potential anti-
Seattle-based Amazon’s planned acqui- trust case against Amazon, although the al-
sition of iRobot is facing increasing scrutiny legations and timeline for filing a complaint
from regulators, investors and politicians are not yet set, Bloomberg reported earlier
as the ecommerce giant seeks more inter- this month, citing unidentified people fa-
net-connected devices in people’s homes, Among its concerns, Foxglove is worried miliar with the probe.
where it already offers the Ring doorbell that iRobot’s technologies collect granular Foxglove has previously taken on Meta
and Alexa smart speaker. data on users’ homes, which could provide Platforms Inc’s Facebook and Palantir Tech-
The criticism comes as Amazon may a goldmine of domestic data for Amazon nologies Inc. It wrote a similar letter about
face an antitrust lawsuit in the US as soon and even create home maps. Foxglove also iRobot to the UK’s Competition and Mar-
as this spring. said the deal could result in a so called “re- kets Authority in November.
W E D N E S D AY F E B R U A RY 1 5 , 2 0 2 3 20 THEEDGE CEO MORNING BRIEF
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M A R K E T S
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