KUALA LUMPUR (Jan 7): Many in corporate Malaysia are looking at Padiberas Nasional Bhd’s (Bernas) after Prime Minister Datuk Seri Anwar Ibrahim said that he had reprimanded businessman Tan Sri Syed Mokhtar Albukhary who wholly owns the company, which has a monopoly on rice imports.

While some felt that the talk of breaking Bernas’ monopoly is just a political ploy, others say that there is more at play, and highlight Bernas's financials and hefty dividend payments.   

Bernas has been doing well financially, and in financial year 2020 (FY2020) paid a whopping RM670.02 million in dividends, a windfall by any standard. The company could also pay out a final dividend of RM111.87 million for FY2021, pending board approvals.   

While it has been highly successful judging by its profits, has Bernas played its role in helping improve the welfare of paddy farmers, who supply 70% of the country’s rice consumption?

This week’s cover story in The Edge also looks at Bernas’ history, and how it came about.

In the second cover story, we look at the investment landscape in 2023.

Global markets appeared to be jittery in the first week of 2023 on concerns over a potential recession in the US, high cost of living, and tighter monetary policy. Although China’s reopening after a three-year lockdown could offer some respite after a brutal 2022, that has yet to be tested.

In the past week, the FBM KLCI fell 0.27%, while Indonesia’s Jakarta Composite Index plunged 2.85%, and Thailand’s SET was down 0.29%, in line with the weakness in US markets, which saw the Dow Jones Industrial Average fall 0.66%, S&P 500 down 0.74%, and the Nasdaq 1.2% lower.

Last year, global stock markets were heavily battered amid fears of the US Federal Reserve’s monetary tightening to tame stubborn inflation. The move resulted in higher borrowing costs for businesses and consumers, while investors stayed away from riskier assets, including stocks.

While the Fed has signalled a more modest rate hike for the year in comparison to the massive increases in 2022, investor sentiment in the stock market has not seen much improvement.

How will these factors affect the local bourse’s performance this year? The KLCI is already trading a price-earnings ratio below its five-year average, suggesting that the bad news has been priced in.

Is it safe to get back into the stock market? What stocks should investors consider in 2023?

Read the story in the Jan 9 issue of The Edge Malaysia weekly.

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