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SUNWAY PYRAMID’S OASIS TO BOOST TENANT DIVERSITY AND FOOTFALL IN Q4 2024

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Kuala Lumpur, 10 July 2024 – Sunway Pyramid, Malaysia’s prominent retail destination, is set to unveil Oasis, its reconfigured retail space, by Q4 this year. 

Spanning over 250,000 sq ft across four levels from the Orange Atrium to the Blue Atrium, Oasis is a pivotal component of Sunway Pyramid’s enhancement initiative to attract a diverse array of high-yielding tenants and increase footfall.

Positioned to be a cornerstone of renowned retail, the reconfiguration will accommodate approximately 100 tenants, including esteemed brands such as H&M Home, Art Toys Cafe by MILOLO and MUJI Flagship Store & Café, expanding the mall’s tenant portfolio to 1,000 in total.

In a strategic move announced last year, Sunway Pyramid appointed Jaya Grocer as the anchor tenant for the redeveloped space, aiming to elevate asset yield through increased rents per square foot. 

Presently, the prominent supermarket chain is located at level B2, and will soon relocate to a larger, permanent space with a brand-new concept at LG2.

“With the upcoming unveiling of Oasis, we are making a critical advancement in our ongoing mission to elevate Sunway Pyramid’s retail experience,” said Jason Chin, Senior General Manager of Sunway Pyramid. 

“This strategic enhancement not only broadens our tenant mix with leading brands but also positions us to attract higher footfall and drive sustained growth. By reconfiguring this substantial space, we are ensuring that Sunway Pyramid remains at the forefront of Malaysia’s retail landscape, delivering unparalleled value to both our tenants and visitors.”

With Oasis’ projected NLA of 2 million sq ft, the reconfigured space is set to contribute significantly to Sunway Pyramid’s overall revenue and underscores the mall’s ongoing evolution to be Malaysia’s leading retail destination.

In addition to Oasis, Sunway Pyramid has several other developments to enhance customer experience. 

Since 2022, the mall has implemented Malaysia’s first internet-of-toilet (IoT) system, aimed at enhancing toilet facilities into a smart system for both customers and supervisors.

Building on this innovation, the latest smart toilet addition with a modern neo-Egyptian theme, located behind Crème De La Crème, will serve as a model for future installations across the mall. 

Key innovations for the smart toilet include: 

  • A traffic light system indicating cubicle occupancy
  • Squat pans with rear and frontal bidet functions
  • Low-level exhausts in urinals and cubicles to eliminate odours
  • Ammonia sensors that trigger housekeeping when high levels are detected
  • A backend system for detecting and rectifying faults
  • An emergency alert button for immediate assistance 

The toilets will also be equipped with a family room, catering to parents with children and individuals with disabilities.

Other enhancement initiatives include the mall’s all-in-one interactive self-service kiosk with easy-to-use interface, enhanced Sunway Malls App with features such as Easy Navigation, Deals & Events and Match N Munch, all-new escalators located in between the Blue to Orange Atriums that seamlessly connect from LG2 to F Floors as well as Electric Vehicle and Hybrid charging stations at CP2 Preferred Parking and B1 Preferred Parking.

Another enhancement initiative is the Terrace, an outdoor space adjacent to Oasis slated for completion by Q2 2025. 

This upcoming addition will offer a refreshing, nature-inspired environment and accommodate additional high-yielding tenants.

These redevelopments support Sunway Pyramid’s goal to become the premier retail destination in the nation. 

For more information about all of Sunway Pyramid’s latest enhancement initiative, visit www.sunwaypyramid.com or stay tuned to Sunway Pyramid’s social media pages for more updates. 

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PAN PACIFIC SERVICED SUITES KUALA LUMPUR WINS LUXURY LIFESTYLE AWARD FOR BEST LUXURY SERVICED SUITES IN MALAYSIA FOR THE SECOND CONSECUTIVE YEAR

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Kuala Lumpur, Malaysia, 5 July 2024 – Pan Pacific Serviced Suites Kuala Lumpur, a premier choice for luxurious urban living in the prime Bukit Bintang area, is proud to announce that it has once again been recognized with the Luxury Lifestyle Award for the Best Luxury Serviced Suites in Malaysia for 2024. This marks the second consecutive year that the establishment has received this prestigious accolade, highlighting its commitment to delivering unmatched luxury and exceptional service to its esteemed guests.

spacious suites, perfect for both short and long-term stays. Guests can choose from one or two-bedroom suites with fully equipped kitchens and modern amenities to ensure a sophisticated living experience, including premium Balmain Paris toiletries and en-suite bathrooms with rejuvenating rain showers.

On the topmost level 25, guests can enjoy an array of exclusive facilities. The Living Room, a plush lounge, offers a meeting room, a pool table, a foosball table, and other recreational amenities. The Pacific Lounge serves breakfast and provides all-day coffee, tea, and juices. Additionally, guests can stay active at the TechnoGym fitness center and relax at the rooftop pool, which boasts breathtaking panoramic views of Kuala Lumpur’s skyline.

A direct connection to the PARKROYAL COLLECTION Kuala Lumpur grants guests exclusive access to outstanding dining and spa services.  The central location of Pan Pacific Serviced Suites Kuala Lumpur ensures convenient access to the city’s major attractions, shopping districts, and business hubs.

Luxury Lifestyle Awards is a global entity dedicated to selecting, recognising, celebrating, and promoting the finest luxury goods and services worldwide. The organisation employs a rigorous selection process, involving extensive online desk market research using publicly available data to maintain transparency and credibility. They consider factual information, referrals, recommendations, and publicly available materials, including company data, media sources, trade associations, market research platforms, social media, industry experts, and market data. The Luxury Lifestyle Awards research teams apply industry-specific criteria to identify top companies across various categories, including reputation, credibility, brand awareness, luxury experience, excellence, and personalization – TSI

TOP GLOVE DELIVERS SIGNIFICANTLY IMPROVED 3QFY2024 PERFORMANCE

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Shah Alam, Wednesday, 19 June 2024 Top Glove Corporation Bhd or “Top Glove” today announced its financial results for the Third Quarter ended 31 May 2024 (3QFY2024), emerging from a protracted period of industry wide glove demand/supply imbalance, to deliver a substantially stronger performance as it moves closer to breakeven.

For 3QFY2024, the Group registered Sales Revenue of RM637 million, an increase of 16% quarter on quarter and 20% year on year. Its operational losses reduced to RM34 million in 3QFY2024 from a loss of RM59 million in 2QFY2024, representing a 42% improvement. Meanwhile, Sales Volume which had been growing since 4QFY2023 continued its upward trend, rising 13% versus 2QFY2024, reflecting the Group’s steady recovery. The Group also achieved a Profit After Tax of RM62 million, up 255% compared with the preceding quarter and 152% higher than the corresponding quarter in FY2023. The improved profitability factors in gains from the disposal of excess land.

On a 9 months basis, for 9MFY2024, the Group posted Sales Revenue of RM1.68 billion, marginally lower compared with 9MFY2023; while recording a significantly narrower Loss After Tax of RM26 million, a 94% improvement versus 9MFY2023.

Raw material prices for 3QFY2024 were on an uptrend quarter on quarter, with the average natural latex concentrate price up by 20% to RM6.77/kg, while the average nitrile latex price rose 16% to USD0.89/kg.

The Group’s more robust performance was driven primarily by stronger glove demand as customers replenished their glove inventories having cleared excess stocks. The resultant higher utilisation coupled with ongoing quality and cost optimisation measures also positively impacted the bottom line. Although raw material costs escalated in 3QFY2024, the Group successfully reduced its cost of production through multiple improvement initiatives. Moreover, with growing glove demand, the Group was able to share out some of the cost increases with customers through upward revisions in

average selling prices (ASPs). In addition, the sale of excess land served to strengthen the Group’s profit and cash flow position, in line with a key objective of the Top Glove Turnaround Plan (T6).

Mr Lim Cheong Guan, Managing Director of Top Glove remarked, “We are pleased to have seen a return to black this quarter as the glove industry turns a corner. This is largely attributed to improving glove demand as customers’ orders resume, alongside intensive efforts to level up our quality and cost efficiency, as well as gains from the sale of excess land. We remain deeply appreciative of our colleagues whose good efforts and commitment have been instrumental in accelerating our recovery.”

Reflecting its enduring commitment to sustainability, Top Glove garnered a highly commendable score in its ESG Risk Rating by Sustainalytics, ranking number 1 out of 643 companies in the Healthcare industry, number 1 out of 58 companies in the Medical sub industry and number 91 out of 16,215 companies across all industries, on a global scale as at 19 June 2024. Headquartered in Amsterdam, Sustainalytics is a leading independent environmental, social and corporate governance (ESG) research, ratings and analytics firm which rates the sustainability of listed companies based on their ESG performance.

Moreover, Top Glove remains committed to ensuring it fully meets the new obligations under the European Union Deforestation Regulation (EUDR), which come into effect on 30 December 2024. The Group’s compliance journey is on track and progressing well, with the first batch of EUDR compatible natural rubber gloves targeted to ship by July 2024.

Additionally, Top Glove was honoured with the Platinum Trusted Brand Award in the Hygiene/Disposable Gloves category at the consumer vote-based Reader’s Digest Malaysian Trusted Brand 2024 awards, for the second consecutive year. The Company outperformed its competitors significantly by 25% in terms of total votes, achieving the highest average score across 6 key attributes: trustworthiness and credibility, quality, value, understanding of customer needs, innovation, and social responsibility.

As of 18 June 2024, Top Glove was also included in Fortune magazine’s prestigious inaugural Southeast Asia 500 list, which ranks the largest companies in the region by their FY2023 revenue.

Towards a more sustained recovery for both the glove industry and Malaysian economy, the Group also hopes for more clarity and consistency with regard to the implementation of foreign worker policy, which will enable corporates to better plan worker intake in line with manpower requirements.

Poised for a Comeback: Brighter Days Ahead

Supported by consistent improvements in its performance from quarter to quarter, Top Glove remains optimistic about industry prospects. As the industry recovers, the Group foresees the upward momentum will accelerate for Malaysian glove manufacturers with the high number of foreign

manufacturers’ gloves being included on the U.S. Food and Drug Administration (FDA)’s import alert list. Top Glove also anticipates amplified business opportunities in the U.S. market following the U.S. government’s impending imposition of steeply increased tariffs on medical gloves from China, making it unfeasible for Chinese glove manufacturers to continue exporting to the U.S. Customers from the

U.S. are expected to start moving away from outsourcing orders to China ahead of year 2026 when tariffs take effect, and Top Glove as a major glove exporter to the U.S. is optimally positioned to capture more market share from the potential trade diversion.

Mr Lim said, “Top Glove has successfully navigated a highly challenging business environment to deliver considerably diminished operational losses in 3QFY2024. Our efforts resulted in a stronger foundation and more refined operational strategies. We have emerged stronger, leaner and more efficient; and are well placed to reclaim our market share and regain our leadership position.”

###

About Top Glove Corporation Bhd

Top Glove Corporation Bhd is listed on the Bursa Malaysia Stock Exchange Main Board and Singapore Exchange Mainboard. It is also one of the component stocks of the FBM Top 100 Index, FBM Emas Index, FBM Hijrah Syariah Index, FBM Emas Syariah Index and the Dow Jones Sustainability Indices (DJSI) for Emerging Markets. Top Glove has an established corporate culture and good business direction of producing consistently high-quality, cost-efficient gloves. Top Glove has over 2,000 customers worldwide and exports to more than 195 countries.

 

Summary of key information:

 

As at 19 June 2024
Number of Factories 48 factories (41 in Malaysia, 5 in Thailand, 1 in China and 1 in Vietnam) comprising:

  • 37 glove factories
  • 2 latex concentrate plants
  • 3 chemical factories
  • 1 gamma sterilisation factory
  • 1 glove former factory
  • 2 packaging material factories
  • 1 dental dam factory
  • 1 face mask factory
Number of Marketing Offices 7 (Malaysia, USA, Germany, Brazil, China, Thailand and Vietnam)
Number of Glove Production Lines 788
Glove Production Capacity 95 billion pieces per annum
Number of Employees 11,000

 

ECB starts to ease, but how far can interest rates fall?

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June 2024

Azad Zangana, Senior European Economist & Strategist 

While back-to-back cuts are unlikely, there is plenty of room for the European Central Bank to surprise cautious investors, according to Azad Zangana, Senior European Economist & Strategist at Schroders.

The European Central Bank (ECB) has announced that its three main policy interest rates will be lowered by 25 basis points – the first cut in rates in almost five years. The move was unanimously expected by economists and almost fully priced by financial markets following strong hints of imminent easing by members of the Governing Council.

Attention now turns to the future pace of easing which remains uncertain. An above-consensus rise in May’s Harmonised Index of Consumer Prices (HICP) inflation rate to 2.6% year-on-year had raised questions as to whether the ECB would cut at all. The unexpected print also clearly influenced the press conference communication following the decision.

ECB staff projections for the headline annual inflation rate were raised for this year from 2.3% to 2.5%, and from 2% to 2.2% for 2025. However, the projections for 2026 remained unchanged at 1.9%, suggesting ongoing confidence that policy will return inflation to target. Indeed, during the press conference, ECB president Christine Lagarde explained that staff expect inflation to fluctuate above target for the rest of this year and into next year, before returning to the 2% target in the second half of 2025.

Lagarde stated that while interest rates have been lowered, they remain restrictive, and will need to fall much further before they are considered to be neutral. This suggests that interest rates are likely to be lowered further over the rest of this year, even if inflation remains somewhat elevated.

Lagarde also explained that the main cause for the persistence in inflation was a catch-up effect of wages to past price increases. This catch-up is now causing services companies to increase their prices. We can see this in the higher rates of services inflation compared to goods and the headline measure (see chart 1, below). Lagarde also mentioned that early indicators suggest wage growth is now stabilising. Meanwhile, data showing that companies are not passing on the full cost of wage increases (at the detriment of profits), suggests that inflation is likely to moderate.

If the ECB is confident that the economy is on the right track, how fast can interest rates fall?

Polling conducted by Reuters before the decision shows that the consensus amongst economists is for the ECB to cut rates twice more (quarter-point cuts) by the end of this year, and three times in 2025. However, investors appear to be more cautious. Pricing based on forwards of overnight index swaps (OIS) show that less than one more cut is priced for the second half of this year, and only two cuts for next year (see chart 2, below).

By contrast, Schroders’ forecast is more optimistic, with three more cuts forecast this year, and two the next. This suggests some upside for both European fixed income markets (lower yields mean higher prices) and equity markets, which would be supported by higher economic growth, and lower discount rates.

SC’s FIKRA ACE Seeks Fintech Startups to Enhance Islamic Capital Market

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Kuala Lumpur, 11 July 2024

The Securities Commission Malaysia (SC) is inviting applications for the second cohort of its FIKRA ACE Accelerator programme, part of the FIKRA ACE initiative.

Launched in 2023, FIKRA ACE¹ is a three-year initiative aimed at advancing the Islamic Capital Market (ICM) through innovative Islamic fintech solutions. The programme comprises an Accelerator, Circle and Excel components.

Following the success of the first cohort² last year, the SC is now inviting applications for its 2024 cohort. FIKRA Accelerator provides a platform for startups to develop innovative solutions, from ideation to minimum-viable product. The eight-week structured programme consists of workshops, mentorship, networking activities, and funding facilitation.

The Accelerator programme is expected to start in August. It is opened to individuals or companies with less than three years market presence. Applications are open to both local and international applicants.

The Malaysia Digital Economy Corporation (MDEC) is the strategic local ecosystem partner for the programme. MDEC will continue to support startups participating in the programme with the infrastructure, resources, and market knowledge to scale their businesses more effectively.

The SC will also collaborate with the Islamic Development Bank as the global ecosystem partner, to help enrich contents of the programme with international insights and perspectives.

Those interested are encouraged to register from today until 31 July 2024 at https://www.sc.com.my/fikra-ace/accelerator.

¹ FIKRA was launched in 2021 as part of the SC’s initiative to enhance the ICM ecosystem. In continuation, the SC is now organizing FIKRA ACE, a three-year initiative to facilitate the development of Islamic fintech through a structured approach.
² The two previous winners were Global Psytech, which focused on building a credibility scoring system for Islamic finance, social finance, and financial inclusion as well as Pewarisan, a fintech startup providing solutions for Islamic inheritance planning.

For more information on the FIKRA ACE Accelerator programme, please visit https://www.sc.com.my/fikra. For inquiries, please write in to fikraace@seccom.com.my.

CITADEL GROUP AND GAMBIT GROUP FORGE ALLIANCE: STREAMLINING DIGITAL AND TRADITIONAL ASSET MANAGEMENT IN MALAYSIA

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KUALA LUMPUR, 9 JULY 2024 – In a landmark move poised to reshape the landscape of financial services, Citadel Group and Gambit Group have inked a Memorandum of Understanding (MOU) to collaborate and offer innovative solutions to their respective clients and partners.

The collaboration between these two industry leaders marks a significant step forward in bridging the gap between traditional and digital finance realms. With Citadel Group specializing in fiat currency trustee services and Gambit Group renowned for its expertise in digital currency trustee solutions, the partnership sets the stage for a seamless integration of traditional and digital asset management services.

Gambit Custody, a subsidiary under Gambit Group, licensed in principle under the Securities Commission Malaysia (SC) as the second company of its kind, specializes in safeguarding digital assets such as cryptocurrencies, bitcoin, and ethereum. Meanwhile, Citadel Group, with its track record of five years of excellence since its establishment in 2019, offers Islamic-compliant wealth products and services catering to diverse clients’ needs.

Speaking about the partnership, Dato’ Jeff S. Medina, Citadel Chairman and Group CEO commented, “We are excited to join forces with Gambit Group in this strategic partnership, which will innovate vast options for our clients by not only enhancing our fiat currency trustee services but also offering robust solutions in the realm of digital currency trustee. This collaboration exemplifies our commitment to staying at the forefront of the evolving financial landscape and delivering comprehensive wealth management solutions tailored to our clients’ diverse needs.”

Under the terms of the MOU, Citadel Group’s clients will have the opportunity to appoint Gambit Custody for their digital asset custody needs, while Gambit Reserve Berhad’s clients will benefit from Citadel Group’s expertise in handling fiat currency trustee services for redeemable preference shares (RPS). This collaboration aims to provide clients with a comprehensive suite of wealth management solutions that encompass both traditional and digital assets.

Gambit Group CEO, Datuk Clifford Hii added, “The synergy between Gambit Group and Citadel Group presents a unique opportunity to cater to the evolving needs of our clients in the rapidly changing financial landscape. Together, we are well-positioned to deliver seamless, integrated solutions that drive enduring financial success.”

As Citadel Group celebrates its fifth year of establishment, this partnership with Gambit Group marks a pivotal moment in its journey towards international expansion by 2025, solidifying its position as a leader in the wealth management industry.

END

Theta clinches Smart City Contract from Ampang Jaya Municipal Council (MPAJ)

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KUALA LUMPUR, 11 JULY 2024 – Theta Edge Berhad (“Theta”), a leading innovator in technology and telecommunication solutions, through its subsidiary, Theta Telecoms Sdn Bhd has secured a request for proposal (RFP) contract from Ampang Jaya Municipal Council (MPAJ) for the provision of supplying and maintaining cutting-edge Internet of Things (IOT) technology as part of the city’s Smart Business Initiative, for a concession period of 20 years under the Private Public Partnership (“PPP”). Under this project, Theta will invest RM673.8 million to develop IOT for Smart Economy in Ampang Jaya.

The contract entered is the result of the collaborative efforts between Theta’s Private Public Partnership initiative and MPAJ. The project financing will be managed by Theta via local financial institution(s). MPAJ as a statutory body will facilitate the licensing requirements as well as the digitization process of council administration through revenue sharing.

The Smart Business Initiative is a revolutionary project aimed at transforming Ampang Jaya into a model smart city, leveraging advanced technology to improve business operations, enhance public services, and drive sustainable growth. Theta will work closely with MPAJ to assess and identify the best smart city solutions to transform Ampang Jaya into an integrated digital district and providing state-of-the-art technology solutions that meet the evolving needs of modern urban environments.

This joint commitment signifies a major step toward MPAJs “Smart City Framework” which is a visionary plan developed in January 2022 to transform Ampang Jaya into a smart city with a focus on Smart Infrastructure, Smart Economy, Smart Community, Smart

Environment, and Smart Governance. As the selected provider of connectivity and digital

solutions for this endeavour, Theta will oversee the coordination and implementation of the smart city related solutions and technologies. The collaboration is part of Theta’s endeavour in supporting the nation’s smart cities aspirations and improving urban living across the country.

Datuk Nuraslina Zainal Abidin, Theta Group CEO said, “Theta has always been at the forefront of enabling innovation. This contract with MPAJ is a clear testament to our expertise in IOT technology and our dedication to fostering urban living through smart innovations. We are dedicated to fully support MPAJ in their journey towards becoming full-fledged smart city, as well as help improve overall efficiency in their operations, and services to their communities as well as the creation of a more efficient business ecosystem.”

MPAJ’s Yang Dipertua Dr. Ani binti Ahmad highlighted that the collaboration between MPAJ and Theta would leverage each other’s expertise, fostering cooperation in devising the optimal strategy for implementing a smart city to ensure that MPAJ effectively addresses the community’s needs in Ampang Jaya.

“Ampang Jaya will evolve as technology advances. However, achieving the status of a fully smart city might take some time, perhaps around 10 to 15 more years”, she added.

This initiative proves MPAJs determination to transform into a smart city, in line with the State Government’s desire to drive Selangor into a Smart State by 2025. Theta is confident that the efforts to be implemented under the Smart City initiative will result in a positive impact on the ecosystem in an inclusive manner, not only to the socio-economy but the environment. Additionally, we believe that it aligns with Ampang Jaya’s broader goals of sustainability and technological advancement – TSI

inDrive Expands Financing with General Catalyst to US$300 Million to Fuel Growth and Innovation

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inDrive, a prominent global mobility and urban services platform headquartered in Mountain View, California, USA, has announced a significant expansion in its financing partnership with venture capital firm General Catalyst, securing an additional US$150 million to bring the total funding to US$300 million. This extension, which may be further prolonged for another year, provides inDrive with enhanced financial flexibility to bolster growth initiatives, invest in product enhancements, diversify service offerings and penetrate new markets.

This financing milestone follows a prosperous year for inDrive, marked by a remarkable 54% surge in net revenue throughout 2023. The company’s consistent growth trajectory and strategic utilisation of adaptable financing mechanisms underscore its commitment to sustainable scalability.

Dmitry Sedov, Chief Financial Officer at inDrive, emphasised the significance of this financial backing, stating, “Securing this financing from General Catalyst empowers us to continue our rapid growth and innovation while maintaining a strong financial position and financial flexibility. This financial structure is designed to support our ambitious plans without introducing additional risk to our operations.”

Pranav Singhvi, Managing Director of General Catalyst, echoed this sentiment, expressing enthusiasm for supporting inDrive’s expansion into new markets. He said, “As long-time partners of inDrive, we are excited to help them continue to scale their growth and set the company up for success as they enter new markets. We are enthusiastic about supporting a business with a robust mission that positively impacts communities globally.”

The inDrive app has been downloaded over 200 million times and was the second most downloaded mobility app in both 2022 and 2023. In addition to ride-hailing, inDrive provides an expanding list of urban services, including intercity transportation, freight delivery, task assistance, courier, and B2B delivery. Last year, inDrive successfully navigated regulatory requirements in Malaysia, obtaining the business mediation license (LPP) from the Land Public Transport Agency (APAD). The company announced that it had resolved all matters concerning the LPP, essential for the official operation of ride-hailing services in Malaysia.

Operating in 749 cities across 46 countries, inDrive supports local communities through its peer-to-peer pricing model and community empowerment programmes, which advance education, sports, arts and sciences, gender equality, and other vital initiatives.

With this fresh injection of funds, inDrive is primed for further expansion in 2024. The strategic financial support will facilitate the expansion of service offerings and the reinforcement of its global presence, all while upholding its core mission of challenging social injustice and promoting equitable access to mobility services.

 

Investment Strategies for a Rosy Portfolio

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As the financial landscape of 2024 unfolds with global uncertainties, explore strategic investment insights for building a resilient portfolio in the face of market volatility and opportunities.

As we embark on the journey through 2024, investors are met with a landscape brimming with both opportunities and challenges. With a record number of elections globally, including the pivotal November US elections, and a backdrop of geopolitical tensions and lingering pandemic concerns, the year ahead promises to be one of volatility. However, amid this uncertainty, there are strategies investors can employ to build resilient portfolios and capitalise on market opportunities.

Strategic Asset Allocation
One of the cornerstones of building a resilient portfolio is strategic asset allocation. This involves distributing investments across different asset classes, such as equities, bonds, cash and cash equivalents, property and alternative investments, in a manner that aligns with one’s risk tolerance, investment goals and time horizon.

In 2024, amid the potential for geopolitical tensions and economic uncertainty, diversification across asset classes will become even more crucial. By spreading investments across various assets, investors can mitigate the impact of any single event or market downturn on their overall portfolio. For instance, while stocks may offer growth potential, fixed income can provide stability during times of market volatility, while alternative investments with a negative correlation to equities can help reduce overall portfolio risk and volatility.

Smart Diversification
Diversification within asset classes is equally important. Within the stock portion of a portfolio, for example, investors should consider diversifying across sectors, industries and geographic regions. This can help reduce the risk of concentrated exposure to any one sector or region-specific event.
Furthermore, alternative investments such as real estate, commodities and cryptocurrencies can offer additional diversification benefits. These assets often have low correlations with traditional stocks and bonds, providing a hedge against market downturns and inflationary pressures.

Ringgit Cost Averaging
In times of market volatility, emotions can run high, leading investors to make impulsive decisions that may not align with their long-term goals. Ringgit cost averaging (RCA) offers a disciplined approach to investing that can help mitigate the impact of market fluctuations.

With RCA, investors commit to investing a fixed amount of money at regular intervals, regardless of market conditions. This strategy allows investors to buy more when prices are low and fewer when prices are high, ultimately lowering the average cost over time.

Investing Beyond Borders
Investors are encouraged to venture beyond their home country for investment opportunities, recognising the risks associated with concentrating investments in a single region. Global diversification provides access to a broader range of opportunities, potentially capitalising on faster-growing economies and emerging industries.

This approach also serves as a risk management strategy, helping to mitigate the impact of currency fluctuations and geopolitical events that may affect a specific market.

In 2024, promising investment prospects can be found in countries such as the United States, Japan, Taiwan and South Korea. The United States stands out for its diverse economy, innovative companies, and robust financial market, making it a crucial element in many global investment portfolios.

Japan, despite facing economic challenges and an ageing population, remains a leader in technology and manufacturing, with opportunities in sectors like robotics, healthcare, and renewable energy. Taiwan and South Korea, home to world-leading technology firms, particularly in semiconductors, present appealing growth opportunities.

Diversifying across these geographies enables investors to tap into diverse industries, currencies, and economic cycles, enhancing portfolio resilience and potentially boosting returns.

Riding the Commodities Wave
In 2024, commodities are likely to shine, driven by a confluence of factors including supply chain disruptions, inflationary pressures and increased demand from emerging markets. The stage is set for a commodities supercycle, with metals, energies and agriculture expected to lead the charge.
Investors can capitalise on this trend by allocating a portion of their portfolios to commodities or commodity-related assets. These assets can serve as a hedge against inflation and provide diversification benefits during periods of market uncertainty.

Unlocking Crypto Potential
The crypto market continues to evolve rapidly, presenting both opportunities and risks for investors. The approval of spot bitcoin ETFs in January 2024 by the US Securities and Exchange Commission (SEC) marks a significant milestone for the industry, signalling growing acceptance and mainstream adoption.
Additionally, the Bitcoin halving event, which occurs approximately every four years and reduces the rate at which new bitcoins are created, has historically been associated with price appreciation. While cryptocurrencies remain volatile and speculative assets, they can offer diversification benefits for investors with a high-risk tolerance and a long-term investment horizon.

Another new development in Malaysia is staking approval by Malaysia’s Securities Commission (SC), allowing crypto using a proof-of-stake concept like Ethereum to be staked and being rewarded with additional crypto for helping to validate the blockchain.

Tapping into REITs
Real Estate Investment Trusts (REITs) have faced headwinds in recent years due to factors such as interest rate hikes and stagnating market prices. However, for investors with a long-term perspective, REITs can still play a valuable role in a diversified portfolio, offering steady dividends while looking forward to the next property market recovery cycle.

REITs offer exposure to income-generating real estate assets such as commercial properties, residential complexes and infrastructure projects, including logistic hubs and data centres. Despite short-term challenges, REITs can provide stable cash flows, inflation protection and potential capital appreciation over the long term.

Building a resilient investment portfolio requires careful planning, diversification and a disciplined approach to investing. By following these strategies and staying attuned to market trends, investors can navigate the opportunities and challenges of 2024 with confidence and build a foundation for long-term financial success.

ABOUT THE WRITER
Stephen Yong is an Executive Director at Wealth Vantage Advisory, driving strategic growth. He also actively promotes financial literacy to help Malaysians simplify and grow towards financial freedom.

Evaluating Bitcoin as a Store of Value in 2024

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Examine Bitcoin’s evolution, factors influencing its role as ‘digital gold’, and the key narratives shaping its trajectory in 2024.

In 2023, Bitcoin displayed a remarkable rebound, surging more than 150% in value from US$16,000 to over US$42,000, significantly outperforming traditional investments like gold (+13%) and the S&P 500 (+25%). Its resurgence not only increased its crypto market dominance to over 50% of the total crypto market cap, but also marked a significant shift in investor sentiment.

Then again, given its volatile nature, many wonder if Bitcoin can truly serve as a reliable store of value over time.

In this analysis, we’ll dive deep into Bitcoin’s journey, from its evolution to the dynamics shaping it as an asset class, its performance history and what it might mean for you as an investor.

The Bitcoin Evolution

The origins of Bitcoin trace back to a nine-page document published by an anonymous person or entity known as Satoshi Nakamoto, which outlined the concept of a new digital currency that would operate independently of centralised authorities such as banks and governments. Key to its subsequent design is a limited supply of 21 million coins and immutability, with its unparalleled adoption rate distinguishing it from other cryptocurrencies and protecting against inflation and monetary debasement in the fiat world.

Over time, perceptions of Bitcoin as an asset class have evolved across the bull cycles in 2013, 2017 and 2021, with surges of 20-100x at each cycle followed by 75-90% drawdowns, turning it into a sought-after investment despite its early-stage volatility. As interest surged, so did scrutiny and challenges, but such fluctuations are natural for an innovation that’s only 15 years old.

Recently, the perspective on cryptocurrencies, particularly Bitcoin, has shifted significantly, with Blackrock CEO Larry Fink likening them to ‘digitalised gold’. In a July 2023 Fox Business interview, Fink described Bitcoin as ‘an international asset’, suggesting it could serve as an investment similar to gold, offering protection against the economic difficulties of any given country.

This marks a notable change from Fink’s 2017 stance, where he criticised Bitcoin’s association with money laundering, showcasing a significant shift in the financial community’s view towards Bitcoin and its legitimacy as an asset class.

Factors Influencing Bitcoin’s Maturation

Bitcoin’s impressive rally throughout 2023 can be attributed to three main factors. Initially, the cryptocurrency was undervalued following the collapse of FTX in late 2022. Then, events like the US debt ceiling standoff in January 2023 and failures among US regional banks in March 2023 highlighted Bitcoin’s appeal as a safe-haven asset.

Further momentum was gained in the second half of 2023 when financial giants such as BlackRock, Invesco, and Franklin Templeton submitted applications for spot Bitcoin ETFs, bolstering the narrative of Bitcoin as a ‘store of value’, which were granted regulatory approval on 10 January 2024, allowing investors easier access to the cryptocurrency. This move has not only lent credibility to cryptocurrencies but also positioned them as a viable emerging asset class.

While there might be a shift towards even riskier crypto assets in the coming year, it’s anticipated that institutional support for Bitcoin will remain strong, at least through the first half of 2024. Bitcoin has notably outperformed traditional assets in the latter half of 2023, and this trend is expected to carry on into 2024.

Looking Ahead: Where Will Bitcoin’s Price Go?
Beyond the usual fluctuations, Bitcoin’s price trajectory in 2024 is subject to several structural narratives. The first would be the potential for growing institutional adoption, especially after the landmark decision by the US Securities and Exchange Commission to approve 11 spot Bitcoin ETFs in the US.

In the wake of the SEC’s decision, though, Bitcoin was once again a victim of ‘sell-the-news’. BTC fell from a launch-day high of US$49,200 to a low of near US$38,500, though it has since moderately recovered back to its 2023 levels of US$42,500 in the weeks after the ETF launches. Standard Chartered Bank expects that these ETFs could result in up to US$100 billion of new inflows into the space. Naturally, their year-end price target for Bitcoin is also a lofty one at US$100,000.

The second would be the price action surrounding the Bitcoin halving event in mid-April 2024, which will reduce the reward for mining new Bitcoins from 6.25 BTC to 3.125 BTC. Halving has a structural impact in Bitcoin price by systematically reducing the number of Bitcoins that miners receive from mining new blocks, which leads to a halving of selling pressure in this segment of the Bitcoin ecosystem. Pre-halving also leads to short-term selling pressure as Bitcoin miners sell a bit more aggressively to buffer their coffers for more challenging times ahead.

Lastly, macroeconomic factors should also play a role. The risk of higher rates for longer is currently not well priced by the market, which expects the US Federal Reserve to cut rates by 125 basis points in 2024 (vs. the Fed’s own projection of 75 basis points). This should introduce a bit more volatility into prices in the short term, especially if geopolitical risks escalate. Given that it is also an election year in the US, one could reasonably expect that financial conditions will eventually shift to become looser. Asset price performance tends to be backloaded during election years, and Bitcoin could follow this trend.

All in all, further consolidation in Bitcoin’s price looks likely in the near term, with the potential for a new YTD low to be reached. The sell-the-news story in Bitcoin does have legs due to structural reasons, such as outflows from the Grayscale Bitcoin Trust ETF (GBTC) and pre-halving sell pressure from miners. As we cross through the halving and into the May-October presidential year seasonality, we would expect price action to take a more bullish turn, barring unforeseen events. If the previous three Bitcoin cycles are any indication, we will see an all-time high in Bitcoin in the coming one or two years.

Strategies for Incorporating Bitcoin into Investment Portfolios
For investors looking to navigate the Bitcoin market, unsurprisingly, traditional investment principles can be considered, namely:

1. Diversification
Bitcoin should form one part of a diversified portfolio, balanced with other asset classes, to manage risk more effectively.

According to Modern Portfolio Theory, which has been both theoretically and empirically supported over the past 15 years with Bitcoin, incorporating a high-risk, high-return, uncorrelated asset like Bitcoin can significantly enhance the risk-adjusted returns of portfolios, whether they are conservative or aggressive in nature.

The uncorrelated nature of Bitcoin has proven to (mind-blowingly) reduce volatility in conservative portfolios with somewhere between a 1-2% allocation and with the expected increase in expected return.

2. Risk Assessment
Given Bitcoin’s volatility, investors must carefully evaluate their risk tolerance and investment horizon. This evaluation will help determine the suitable allocation in their portfolio, which may range from low single-digit percentages for conservative investors to up to 10% or slightly more for those with a more aggressive investment strategy.

3. Regular Review and Rebalancing
The cryptocurrency market’s dynamic nature requires investors to conduct regular portfolio reviews and rebalancing, ideally on a quarterly basis. This practice ensures that the portfolio maintains the desired risk-return profile over time. Additionally, it enables investors to adhere to the investment mantra of ‘buy low, sell high’, which is equally applicable to cryptocurrencies.

ABOUT THE WRITER
Hann Liew is the founder and CEO of Halogen Capital.