☕️ Tencent's USD259 billion investment portfolio

After AmBank and Deloitte 1MDB settlement, MoF is going after KPMG. Jay-Z's music streaming service, Tidal to be acquired by Square. Beware-no such thing as vaccine agents representing the government.

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1. MARKET SUMMARY


2. NUMBERS AT A GLANCE

RM14.1 billion — approved manufacturing investments in Penang in 2020, 75% were made up of FDI.

2.5 billion — the average number of heartbeats a human has over a lifetime.

USD6.7 billion - the value of the stock options granted to Ant Financial’s 16,000+ employees, if valued at the planned IPO price in November. That is an average of USD418k per employee.


3. COVID-19 SUMMARY


4. IN MALAYSIA 🇲🇾

  1. Overnight Policy Rate (OPR) remains at 1.75% after Bank Negara Malaysia’s monetary policy committee meeting yesterday. The central bank didn’t see the need to lower OPR as leader indicators point to improvements in external demand and continued consumer spending.

  2. Khazanah’s 2020 profit falls 61% to RM2.9 billion against the backdrop of a challenging economy. The sovereign wealth fund declared a dividend of RM2 billion to the government of Malaysia.

    Khazanah is no longer the sole shareholder of our national treasure, Malaysia Aviation Group Bhd after the debt-restructuring exercise where some creditors opted for debt-to-equity conversion.

  3. Senior minister for security Ismail Sabri Yaakob warns the public against vaccine agents. Only the Science, Technology and Innovation Ministry and the Health Ministry are authorised to manage the National Covid-19 Immunisation Programme (PICK).

    By the way, you can now view your vaccination registration status in the latest update as shown by KJ.

  4. The Attorney-General’s Chambers (AGC) objected the leave for judicial review sought by Anwar Ibrahim to challenge Tan Sri Muhyiddin Yassin’s move to advise the Yang di-Pertuan Agong Sultan Abdullah Sultan Ahmad Shah to suspend Parliament during the emergency period.

    Meanwhile, Umno veteran Tengku Razaleigh Hamzah says the King must ensure that Parliament is convened within six month of its last meeting as stipuldated in the Federal Constitution. How long can the current administration hold the fort?

  5. After settling with Goldman Sachs, AmBank and Deloitte for the 1MDB fiasco, the Ministry of Finance is looking to do the same with audit firm KPMG and law firm Wong & Partners. KPMG entered into the picture after the termination of E&Y which didn’t complete the audited accounts for FY10.

    Wong & Partners represented 1MDB in the first US$1 billion joint venture transaction with PetroSaudi as well as the subsequent dealings in the Murabahah notes.


5. AROUND THE WORLD 🌎

  1. Square, the payment processing company, has announced it will be acquiring a majority stake in Jay-Z’s music streaming platform, Tidal for USD297 mil in a mix of stock and cash. Jay-Z previously bought Tidal in 2015 for USD56 mil and over the years have struggled to go up against Spotify and Apple Music. Not too bad a return for Jay-Z despite the traction. Tidal’s platform has 70 million songs and 250,000 videos. 

    It has been a good 2 weeks for Jay-Z, with LVMH, the luxury conglomerate, announced last week that it will acquire 50% of Jay-Z’s Champagne brand, Armand de Brignac. 

  2. SpaceX successfully landed its 16-storey tall Starship prototype for the first time after flying as high as 6.2 miles. Though the landing was a success, it blew up a few minutes after landing turning it into a fireball. 

  1. An ETF that invests in companies based on hype measurement on social media has been launched. The Van Eck Vectors Social Sentiment ETF (aka BUZZ) selects 75 stocks with the most bullish social media sentiment and at least USD5 billion market cap.

    How does one measure ‘hype’? Instead of being meme-driven, the ETF leverages natural language algorithms to examine whether comments captured are positive, negative or neutral and ranks each stock based on the degree of positive sentiment and the breadth of discussion. How reliable this hype measurement is still up in the air. The index BUZZ has been built on that measures social media hype has only been live since Dec 2015. Since inception, it is up +215% vs S&P 500 +113%.

  2. Tencent, the Chinese tech giant, has been referred to ‘half-seriously’ as China’s best venture capital fund. It has invested in more than 800 companies across various industries such as gaming, social media, entertainment and even electric vehicles. It is estimated that Tencent’s listed and unlisted investments are worth approximately USD259 bil. Based on its latest earnings report, its investments in listed companies excluding its subsidiaries is worth USD138 bil, 10x from 4 years earlier.

    Some of the bigger names that are backed by Tencent include Sea (owner of Shopee), Meituan, JD.com, Nio (EV maker), Spotify and Snap. Its most recent success is Kuaishou, the TikTok competitor in China, which went listing and is worth USD171 bil. Tencent’s stake is worth USD30 bil. It first invested in Kuaishou back in Jul 2014 at a valuation of just USD61 mil.

    Compared to Alibaba, its main rival, Alibaba tends to take controlling stakes in businesses. Alibaba’s investment portfolio excluding Ant Financial is a lot smaller than Tencent, at about USD26 bil.

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