Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

RM 1,000

Written by Li-Ann Chin, associate 
Edited by Adam Shaw, associate partner
2 September 2020

Good morning,

With a total of 9,306 cases and 125 deaths, Malaysia has done a relatively good job in containing the coronavirus, especially when you consider its proximity to ‘ground zero’ of Covid-19.  

However, it has not been without sacrifice. In a bid to control and reduce community transmission rates, the Malaysian government sought to implement a six-week lockdown that saw the country’s GDP contract by two percent and the economy lose RM 2.4 billion (£434 million) each day for the duration. Seven thousand military personnel were deployed nationwide to assist the local police in enforcing the lockdown and international and domestic travel were both banned. Dissenters would either be arrested or made to pay a fine, warned Datuk Seri Ismail Sabri Yaakob, the defence minister. 

And indeed, a total of 26,636 individuals were arrested for various offences between March 18 to June 20 this year, with 10,875 people fined. Of the sheer number apprehended, several stories stand out. 

A young couple were caught during a midnight rendezvous and jailed for seven days, a single mother was arrested for conversing with three friends on her way back from the local convenience store, and most recently, a teenager was filmed in tears after he was fined a hefty RM 1,000 (£180) for temporarily pulling his mask down. Income inequality is vast in Malaysia and while RM 1,000 would be nothing for some, for others it is a month’s salary. 

Meanwhile, Khairuddin Aman Razali, the plantation, industries and commodities minister, has recently come under fire for reportedly failing to undergo the mandatory 14-day quarantine following a trip to Turkey last month. Amid calls for a voluntary resignation, his penalty of RM 1,000 has only served to infuriate citizens further. After all, a fine of RM 1,000 for a cabinet minister amounts to nothing more than pocket change. Six days before the official verdict, a restauranteur was sentenced to jail for five months for a similar offence.

I had previously refrained from flying home for fear of having to quarantine in a designated government facility. Perhaps all I need to do is set aside a RM 1,000.  

News

Nicola Sturgeon has revived plans for a bill on a second Scottish independence referendum, pledging to publish draft legislation for a new vote before next May’s elections. Previous plans had been put on hold in March because of the pandemic.

Restrictions on visiting other households are being reintroduced in Glasgow, West Dunbartonshire and East Renfrewshire following a rise in COVID-19 cases. These restrictions will last for a fortnight but will be reviewed after a week. 

After almost six months, millions of pupils in England are returning to school after the unprecedented shutdown during the coronavirus pandemic. It is not clear how many parents intend to send their children back, but attendance has been made compulsory.

The Trump administration has barred landlords from evicting non-paying tenants until the end of year. The move reflects mounting fears in Washington that millions of Americans could struggle to make rent in the coming weeks, particularly those who lost a vital source of income because of the expiration of emergency unemployment benefits. (£) 

Business and economy

The German parliament has announced that it is to hold a full inquiry into the collapse of Wirecard, as opposition MPs claim that authorities were more focused on protecting a ‘tech superstar’ instead of properly investigating the financial irregularities at the company. This decision ensures that the Wirecard affair will dominate German politics in the lead-up to next year’s elections, potentially casting a shadow over Angela Merkel’s final months in power. (£) 

Milos Vystrcil, president of the Czech senate, has drawn ire from Beijing following his speech before Taiwan’s parliament in which he declared himself as a Taiwanese, in a pointed reference to John F Kennedy’s Ich bin ein Berliner speech in Germany at the height of the cold war. His remarks were greeted with a standing ovation by Taiwan’s lawmakers. This is the latest instance of politicians in various countries taking a harder line against an increasingly powerful and assertive China.

According to the British Retail Consortium, shop prices fell in August as retailers continued to offer discounts in a bid to entice shoppers back to the high streets. Prices fell by 1.6% last month, driven by a decline in non-food prices which were down 3.4%.

Columns of note

In the Financial Times, Gideon Rachman draws parallels between the Shinzo Abe era and the Xi Jinping era, noting that the difficult task of strengthening Japan, namely, to cope with the increasingly powerful and authoritarian China, is one that Mr Abe’s successor must continue to navigate. Modern Chinese nationalism is suffused with anti-Japanese sentiment and any appeasement of Beijing would eventually come at a heavy price in Japanese freedom. (£) 

Amid agonising over ‘blended learning’ models and the need for face masks in schools, Rosa Prince argues in The Telegraph that the consequences of another year of disrupted learning could be disastrous and education is the most important gift that children can be given. Children belong in school and if that means wearing a mask for five hours, so be it. 

Cartoon source:The Minneapolis Star-Tribune, U.S.

Markets

What happened yesterday?

Tech companies drove gains in U.S stocks as investors snapped up the likes of Zoom, while West Texas Intermediate crude oil rose 1.1% to $43.05 a barrel.

As of 11:31 New York time, the S&P 500 Index had risen 0.3%, while the MSCI Asia Pacific Index increased 0.4%. FTSE 100, however, closed down more than 101 points at 5,826 on the first day back after the long August weekend, as stronger sterling and a poor performance from banking and energy stocks weighed on the benchmark.

In terms of bonds, Britain’s 10-year yield fell one basis point to 0.30% and Germany’s fell two basis points to –0.42%.

Gold strengthened 0.3% to $1,974.38 an ounce and copper fell 1.1% to $3.028 a pound. 

And in company news:

Tesla has announced that it intends to raise $5 billion by selling shares, as it capitalises on the six-fold surge in its share price this year, as it reportedly requires more capital to invest in a new product pipeline that includes the “Cybertruck” pick-up model and a semi haulage truck. (£)

Google has confirmed that it will be increasing the price of advertising on its platforms in the UK starting November 2020, due to UK’s Digital Services Tax. The fee will apply to all adverts served in the UK across both Google Ads and YouTube.

Unilever has pledged to invest £1 billion in eliminating fuel-based ingredients from its cleaning products by 2030. The company’s ‘clean future’ initiative aims to develop renewable or recycled alternatives as part of the company’s mission to eliminate carbon emissions from its products by 2039. 

 

What’s happening today?

Finals
Accrol Gp
Arcontech Group
Barratt Developments
Creightons
Mattioli 

Interims
Concurrent Technologies
Johnson Service
Tissue Regenix Group
Uniphar Plc
Woodbois 

AGMs
Abdn.nw.dwn
Global Yachting Group 
Design Group
Latham Timber
Polar Capital Technology Trust
Velocys
Yellow Cake Plc 

UK economic announcements
(00:01) BRC Shop Price Index
(09:30) PMI Construction 

Int. economic announcements
(07:00) Retail Sales (GER)
(10:00) Producer Price Index (EU)
(12:00) MBA Mortgage Applications (US)
(15:00) Factory Orders (US) 
(15:30) Crude Oil Inventory 

Source: Financial Times

did you know

Because nostalgia was first described by Swiss soldiers, some physicians in the 17th century thought it was caused by the eardrum and brain damage from the constant clanging of Alpine cowbells.

Source: @Qikipedia 

Parliamentary highlights

House of Commons

Oral evidence 

Northern Ireland Affairs Committee – Addressing the Legacy of Northern Ireland’s past: The UK Government’s New Proposals 
Work and Pensions Committee – Universal Credit: the wait for a first payment 
Education committee – The impact of COVID-19 on education and children’s services 
Transport Committee – Young and novice drivers 
Treasury Committee – Economic impact of coronavirus 
International Trade Committee – Defence sector exports 
Women and Equalities Committee – Unequal impact? Coronavirus, disability and access to services 

House of Lords 

Oral questions  
Progress on a trade deal between the UK and the EU in respect of non-financial services – The Earl of Clancarty 
Public investment in carbon intensive sectors in comparison to the level of investment and the amounts available to the Green Investment Fund – Baroness Jones of Moulsecoomb  
Tackling childhood obesity – Lord Dubs 
Payment scheme eligibility criteria for people self-isolating and unable to work from home in COVID-19 high incidence areas – Baroness Sherlock 

Legislation 
Medicines and Medical Devices Bill – Second reading – Lord Bethell 

Orders and regulations 
Industrial Training Levy (Engineering Construction Industry Training Board) Order 2020 – Baroness Berridge 
Equivalence Determinations for Financial Services (Amendment etc.) (EU Exit) Regulations 2020 – Lord Agnew of Oulton 
Immigration (Persons Designated under Sanctions Regulations) (EU Exit) Regulations 2020 – Baroness Williams of Trafford 
Investigatory Powers (Communications Data) (Relevant Public Authorities and Designated Senior Officers) Regulations 2020 – Baroness Williams of Trafford 
Functions of the Investigatory Powers Commissioner (Oversight of the Data Access Agreement between the United Kingdom and the United States of America and of functions exercisable under the Crime (Overseas Production Orders) Act 2019) Regulations 2020 – Baroness Williams of Trafford 

Virtual meeting 
High Speed Rail (West Midlands – Crewe) Bill Select Committee (Lords) – Private Meeting 

Immigration Bill 
Constitution Committee – Private Meeting 

Scottish Parliament 

Ministerial Statement  
United Nations Convention on the Rights of the Child (Incorporation) (Scotland) Bill – A Revolution in Children’s Rights 

Scottish Government Debate 
Scottish Government’s Programme for Government 2020-21 

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