☕️ State of Malaysian Economy - Feverish

Declining Malaysian economy, 30,000 companies shut down, and CPO windfall for oil palm producers and government

The Coffee Break

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1. MARKET SUMMARY

2. COVID-19 SUMMARY

3. IN MALAYSIA

  1. Reuters poll showed Malaysian economy likely to have contracted by -3.2% in Q3. We are just at the beginning of the worst, given how Covid-19 worsened after the Sabah state election and the subsequent X-MCOs imposed around the country. 

  1. To add, since the beginning of the outbreak until September, 30,000 companies have shut down. Expect for further deterioration in our economy’s health.

  1. Crude Palm Oil (CPO) at 8.5 year high. If you own palm oil stocks, you are definitely wondering why isn’t this reflected in the stock prices. Will the palm oil party please start?

  1. Perhaps, the Government will be the one throwing a party due to rise in CPO prices. RM348mil is expected to be raised from the palm oil Windfall Profit Levy in 2020 vs RM256k in 2019. That is….a 1,359x increase, 

In Peninsular, 3% levy is imposed on palm oil prices exceeding RM2.5k / tonne
In East Malaysia, 1.5% levy is imposed on palm prices exceeding RM3.0k / tonne.

  1. Just yesterday Topglove bought back RM69.9mil of its shares. Today, again yet another RM69.9mil spent once more on share buybacks. This brings the total of share buybacks to more than RM500mil since Sep20. 

4. AROUND THE WORLD

  1. USD28 billion - the potential fine Amazon is on the hook for due to its anti-competitive behaviour. The European Commission is filing formal charges against Amazon for breaching its antitrust laws. 

Amazon sells its own products, but also allows other vendors to sell competing products on its platform, essentially functioning  as a marketplace. The insights and data gain from these competing vendors, Amazon is alleged to have used it to its own advantage. In this case, Amazon is the referee and also the player, in their own game. 

  1. People of Singapore, people of Hong Kong  - pack your bags and you can now lift off and travel, but to Singapore and Hong Kong only. 

A travel bubble is being established to facilitate quarantine-free and all-purpose travel. Though, Covid-19 test has to be taken 72 hours prior to departure and travelers must have no travel history outside of HK and SG within the past 14 days of departure.

  1. If you see yourself spending more time listening to podcasts, you are contributing to the following deals. 

Few days ago, Apple and Sony, amongst the four companies eyeing to acquire a podcast network, Wondery for USD300-400mil with an estimated 8 million audience a month. Now, Spotify announced its acquisition of Megaphone, a podcast hosting and ad company for USD235mil, continuing its buying spree of podcast related companies. 

  1. US Federal Reserve warned that asset prices could collapse if the pandemic isn’t effectively contained. Fair and legitimate concern, but how did asset prices get to such sky-high valuation to make it a systemic risk in the first place? Through the Fed’s own doing of quantitative easing or in simpler words, printing money.

Since Sep 2019, Fed Reserve has pumped USD9tril (that’s with a t). In 2020 alone, the Fed has created 22% of all the USD issued since the birth of US!

  1. First, the Trump camp claimed election fraud with little to substantiate. Now, they accused Pfizer of withholding  the announcement to after Election Day of its early success in its Covid-19 vaccine trial results, with the younger Trump, Donald Trump Jr claiming the timing to be ‘nefarious’. Everyone is at fault, but not Trump & Co. themselves in losing this election.

Source: brrr.money

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