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Malaysia’s ATA slumps as Dyson dumps firm over labour concerns

By Mensholong Lepcha

08:33, 29 November 2021

Dyson vacuums on display in an electrical store in Malaysia
Dyson vacuums on display in an electrical store in Malaysia – Photo: Shutterstock

Malaysia-based electronics manufacturer’s, ATA IMS, stock crashed to near five-year low after British home appliance maker Dyson cut ties with the supplier over its labour practices and whistle-blower allegations.

Last week, the company confirmed receipt of contract termination notices from Dyson Operations and Dyson Manufacturing, which will be effective from 1 June.

ATA IMS’ stock plunged over 67% last week to take its decline in the month of November to nearly 80%.

Labour concerns

Reuters reported that current and former ATA employees revealed that they worked hours beyond limits under Malaysian laws and laboured on public holidays too.

A former ATA employee was beaten by the police after ATA officials reported him to a police station for sharing information about the conditions at the factories, Reuters revealed following an interview with the employee.

On Friday, ATA said it has appointed a law firm to conduct an independent review of the allegations by the former employee.

Malaysia under scrutiny

The company said, “the preliminary findings of the independent law firm indicates that the allegations may be unjustified.”

US100

15,944.10 Price
+0.450% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 22:00 (UTC)
Spread 1.8

BTC/USD

44,012.50 Price
+0.360% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

XRP/USD

0.63 Price
+1.340% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168

Gold

2,023.13 Price
+0.170% 1D Chg, %
Long position overnight fee -0.0197%
Short position overnight fee 0.0115%
Overnight fee time 22:00 (UTC)
Spread 0.50

ATA added that no issues of forced labour were found in the company in the past from inspections carried out by Malaysia’s Department of Labour and Department of Occupational Safety and Health.

Malaysia has faced criticism over the working and living conditions of migrant workers which hurt its reputation as a major global manufacturing hub.

Top Glove, Sime Darby import ban

In the past 15 months, four Malaysian companies have been added to the import ban list by US Customs officials over allegations of forced labour practices.

Glove maker Supermax was the latest to be added to the list. Palm oil producers Sime Darby and FGC Holdings are also on the list, while Top Glove was allowed to resume exports to the US in September following a year-long ban.

The world’s largest manufacturer of medical gloves, Top Glove, was dropped from three environmental, social and governance indices in June this year over forced labour allegations.

Read more: Malaysian glove maker’s shares slump after US ban

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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