In March 2021, the World Bank Group predicted that Malaysia would likely become a high-income economy between 2024 and 2028. Putrajaya welcomed the move as a confidence booster to achieving developed country status. But for Geoffrey Williams, Professor at Malaysia University of Science and Technology, high income should not be the defining marker for economic progress. The Morning Run asked the economist what key markers policymakers should consider when assessing Malaysia’s development. Here’s what he thinks the government should prioritise: 1. Income distribution, not just income levels While income levels are an important gauge of socioeconomic progress, distribution is just as crucial. Williams says, “We don’t want to have an economy where on average income is very high, but most of our income is in the hands of a very small group of billionaires, and the mass of the population is very poor.” This could lead to inequities across social groups, especially if areas like healthcare, education, and living conditions are neglected. 2. Underemployment  “The real issue isn’t the headline figure for unemployment, the real issue is underemployment,” Williams points out.  While many Malaysians have lost their jobs, a lot have also been forced to take up semi-skilled and low-skilled jobs that don’t  guarantee a stable income. According to the latest data from the Department of Statistics Malaysia, 1.89 million people are now underemployed—that’s 37.4% of employed persons with a tertiary education. Williams also warns that if data on underemployment isn’t captured, segments of society may be excluded from social policies that address welfare and development. 3. Potential growth rate While some government forecasts are optimistic about Malaysia’s economic growth, policymakers should be wary of the underlying situation. Bank Negara recently estimated that the COVID-19 pandemic slashed the country’s potential growth rate from 4.8% to 3.5%.To address this, Williams urges the government to create more opportunities for the economy to generate growth, via new startups, business scale-ups, and new jobs that are resilient to technological change.  What other economic indicators should policymakers prioritise to strengthen Malaysia’s growth trajectory? Tweet us @BFMRadio and check out the full Morning Brief podcast below. Written by Hezril Asyraaf and edited by Lee Chwi Lynn.  

According to Jack Kouzi, Director of Strategy at VFS Group, an Australia-based wealth management firm, Grab’s going public via the special purpose acquisition company (SPAC) merger with Altimeter Growth Corp is great news for investors. Likewise, Kouzi’s take on the Coinbase IPO and the end of the regulatory saga for Alibaba are all indicative of positive trends in the market. Grab’s Growth Potential Kouzi believes that Grab’s current valuation of USD 40 billion was justified, calling the company “a Goliath of Southeast Asia, and a Goliath of Tech around the world.” As this technology giant is involved in multiple businesses like ride-sharing, food delivery, and fintech, Grab is poised for enormous growth. Kouzi singled out the mobile payment sector as a key growth area. That said, he does see downside risks to Grab, namely the narrow margins intrinsic to its business, particularly in the food delivery space, as well as the increased competition from Chinese companies. Overall though, Kouzi marked this IPO as a golden opportunity to buy Grab shares on the open market, and he also expressed confidence in the due diligence done by Altimeter. Coinbase IPO Sign of Cryptoboom Yet another exciting IPO that Kouzi weighed in on was Coinbase, valued at USD100 billion dollars, which he deemed as historic. Coinbase is the first cryptocurrency player to IPO in a major stock market and is yet another sign that cryptocurrencies are becoming mainstream. Kouzi thinks that the IPO will make cryptocurrencies more accessible to people who want to trade in the asset class. However, one point of concern he raised was the expensive fees charged by Coinbase, ranging from about 3.9% in fees and 1.8% in transactions. Kouzi cautioned that in the event of a bear run on the crypto market, this could weigh down the revenue prospects of Coinbase. Sigh of Relief for Alibaba? Commenting on another recent development in the tech sector, Kouzi believes that Alibaba’s troubles with Chinese regulators are over, following the hefty USD2.8 billion fine imposed on the tech giant. All things considered, Kouzi said the fine was fairly lenient, as it was only 4% of their 2019 domestic sales and indicated a sign of good faith from the regulator. With what is hopefully the end of the regulatory saga, Kouzi is bullish on Alibaba’s future prospects and believes now is the time to buy. The outlook for the Ant Group however is less clear, as it still needs to fulfill several other requirements imposed by the regulators, including obtaining a national banking license. Nevertheless, Kouzi viewed these changes as expected and that Ant still has the market advantage. The bigger question is who will be the next Chinese tech giant to come into the regulators crosshairs? Written by Parimala Thanabalasingam and edited by Shazana Mokhtar 

According to the Financial Times, Grab is reportedly going public on the New York Stock Exchange (NYSE) via the biggest special purpose acquisition company (SPAC) merger to date with Altimeter Capital, a US-based, tech-focused investment firm. The deal could be finalized as soon as this week, and would see the “super app” valued at USD35 billion. Varun Mittal, Global Emerging Markets FinTech Leader at Ernst and Young spoke to us about why Grab is being listed through a SPAC, and what this could mean for other Southeast Asian start-ups. 1. Why list via a SPAC? There are different ways of going public, such as through a SPAC, direct listing or traditional initial public offering (IPO), each with their own pros and cons. A SPAC listing is seen as a more expedient route, as it works with an existing listed company (also known as a “blank-cheque” company).  2. Why choose the US? Grab likely has a variety of reasons for choosing to list on the NYSE over other stock exchanges in the region. There is generally higher liquidity and more institutional investors in US markets, and it’s easier to benchmark against global models that allow them to seek higher valuation.   3. Multiplying Value How do you value a “super app” like Grab? Varun said all public companies are valued by discounted future value, i.e. observing future potential and putting a current value on it. For super apps, their value comes from the fact that they are becoming banks themselves, with all sorts of businesses networked through their services, such as advertising, merchant acquiring payment systems, and lending and insurance distribution, all of which creates a flywheel effect. 4. Risky Business Listing via a SPAC is not without its risks, but Varun views that such transactions are based on willing buyer, willing seller. Could Deliveroo, another food delivery platform which listed last week in London and flopped, be a cautionary tale for Grab given its lack of presence in the US? Varun explained that Deliveroo faced external factors, namely new UK laws that required gig companies to classify their workers as employees, which investors saw as impacting the foundation of the business. At this stage, Varun doesn’t see Grab being impacted by similar legislative trends in Southeast Asia. 5. Setting Precedent? Could Grab’s trajectory set a precedent for other unicorns in Southeast Asia like Gojek and Tokopedia? Ultimately, Varun believes that each company decides what is right for them. There are many considerations at play, including the timing, who are the cornerstone investors, and what are the lock-in options. A SPAC listing could be an option for companies with existing investors that already own a SPAC vehicle, and this could allow a faster route to an IPO. What do you think of Grab’s chances? Is it too big a risk at this point? Or are they in a perfect position to succeed? Let us know your opinions.  Written by Toby Teh and edited by Shazana Mokhtar