AGP Executive Report

Malaysia–Japan Economic Push: PM Anwar’s Japan visit spotlights investment, trade and high-tech cooperation, including AI, plus energy ties via Petronas’ long-term LNG supply deal with JERA. Diplomatic Capacity: DPM Zahid says newly appointed Malaysian heads of mission will be key to strengthening bilateral links and protecting Malaysia’s image abroad. Energy & LNG Deal: Reuters reports Petronas will supply JERA 2 million tonnes/year of LNG from 2028, alongside talks on fertiliser/feedstocks and critical minerals. Circular Economy Move: Cabinet decision makes recycling facilities in shopping malls mandatory, targeting 1,000+ malls by year-end to cut landfill waste and boost circular practices. Trade Compliance Crackdown: MOF leads a whole-of-government push to curb illegal foreign-run business activity and ensure imported goods meet standards. Aviation Disruption Oversight: CAAM monitors AirBorneo disruptions and reminds the airline to follow consumer protection rules. Market & Rates: BNM OPR seen staying at 2.75% in 2026 as inflation stays contained, despite Strait of Hormuz risks. Engineering Fees Call: IEM urges higher engineering consultancy fees and revised payment milestones to reflect today’s compliance and liability costs.

Energy Security: Japan and Malaysia leaders in Tokyo agreed to deepen energy security cooperation, including stable LNG supplies and fertilizer feedstock shipments, plus stronger critical mineral supply chains and maritime coordination. LNG Contract: Petronas signed a 20-year LNG supply deal with Japan’s Jera for 2 million tonnes per annum starting 2028, as Japan seeks to manage LNG crunch risks. Data Centres & Logistics: DHL Supply Chain will add 160,000 sqm of Asia Pacific warehousing for data centre logistics, with built-to-suit capacity in Malaysia and Thailand coming online over two years, alongside workforce upskilling. Engineering Fees Pressure: The Institution of Engineers Malaysia says engineering consultancy fees have risen less than 10% since 1983 and urges a 40–50% increase, better payment milestones, and quality-based procurement. Cross-Border Finance: Credit Bureau Singapore and Experian Malaysia signed an MoU for two-way, consented cross-border credit reporting to support lenders and financial inclusion across both markets. Market Watch: Bursa Malaysia’s morning session edged up, with cautious sentiment and mixed regional cues. Offshore Deal: UK’s EnQuest agreed to buy up to $833m of offshore interests in Malaysia from Petronas, expanding its Southeast Asia portfolio. Hydrogen Push (Sarawak): Sarawak launched APGH 2026 to position the state as a regional hydrogen hub and advance a resilient hydrogen ecosystem.

Tourism & Domestic Travel: Tourism Malaysia and Dorsett Hotels Malaysia kick off “Jom Cuti! Bersama Wira & Manja” with discounted stays and family perks at 13 hotels nationwide until Dec 31, aiming to keep Malaysians travelling under VM2026. Halal Economy: Negeri Sembilan doubles down on halal as a wider growth engine beyond food—spanning tourism, logistics, education and agriculture—at NICHE 2026. Rail Industry: MOSTI and MIGHT release the Malaysia Rail Industry Report 2025/2026, highlighting local engineering and maintenance capabilities and pushing a whole-ecosystem approach for rail modernisation. AI & Work: Malaysia reiterates a human-centred future of work at the ILC, stressing AI governance that protects rights and inclusion. Energy Security: Malaysia tells Japan it will provide maximum possible LNG and naphtha supply at a summit, as Tokyo seeks diversification. Cross-border Business: Bank Rakyat runs Bizmatch with Japanese and regional partners to help Malaysian firms expand abroad. 5G for MSMEs: Communications Ministry plans talks on using 5G to empower MSMEs, with coverage at 84% and a target of 98% by 2030. Food Security Law: Putrajaya pushes for a National Food Security Act to add early warning, preparedness and direct support for producers amid El Niño risks. Tech Investment Push: PM Anwar courts Japanese firms on semiconductors, AI, quantum and digital industries. Local Culture: Fahmi Fadzil urges more radio airtime for local songs across languages to strengthen Malaysia’s music ecosystem. Automotive Manufacturing: Kia Malaysia and Stellantis Malaysia sign a CKD assembly partnership in Gurun, Kedah, with production starting Q3.

Semiconductor Push: Malaysia’s E&E exports could top RM800b in 2026, with semiconductors making up ~65% of the mix, as the industry chief points to resilience despite helium price pressure from the Iran war. Data Centre & Industrial Real Estate: Sime Darby Property launched a RM1.25b shariah-compliant fund to build-to-suit-to-lease data centres plus industrial and logistics assets, with seed sites in Elmina and City of Elmina. Wage vs Productivity: Economy Minister Akmal Nasir says wage reform must come with productivity gains and industry buy-in, highlighting the Progressive Wage Policy and Akademi Dalam Industri. TVET for High-Tech Skills: Education experts urge sending TVET instructors for overseas industry attachment to strengthen AI, cryptology and green-tech training starting next month. Autonomous Driving Rules: A road safety activist calls for legal reforms after Malaysia targets Level 3 autonomous driving by 2030, warning of a liability gap in crashes. Hydrogen in Sarawak: Sarawak is recalibrating H2biscus and H2ornbill hydrogen export projects due to financing constraints, while still aiming at Japan, South Korea and Singapore. Food Trade Shock: Malaysia’s shrimp import ban is pushing Thai farmers toward the brink as Thailand seeks WTO/ASEAN escalation. Maritime Tech: Clear Robotics raised US$1.75m to expand its autonomous electric unmanned ship operations, including deployments already in Malaysia.

Malaysia-Japan Push: PM Anwar Ibrahim landed in Tokyo for a three-day MADANI Diplomacy mission, aiming to deepen ties on economy, science and tech, and energy security, with meetings and planned pacts including defence, healthcare, energy transition and higher education. ASEAN Trade Friction: Thailand plans to challenge Malaysia’s shrimp ban at the WTO/ASEAN after Malaysia suspended imports of five Thai shrimp species and tightened sea bass biosecurity, while Malaysia says it’s awaiting Thailand’s response to a shrimp-import questionnaire. Energy & Industry: Eni and Petronas launched Searah, a Southeast Asia gas joint venture spanning Indonesia and Malaysia, targeting 300,000+ boe/d initially and 500,000 boe/d within three years, with over US$20bn expected investment. AI Governance: Malaysia’s National AI Office says it wants to be a top-10 AI nation by 2030, using governance, AI safety and inclusion via seven industry-linked working groups. Logistics & Rail: Malaysia is positioning rail as an ASEAN growth engine, citing projects like Penang LRT, ECRL and Johor-Singapore RTS. Agri-Food Spotlight: Bernama won Agrobank Media Awards 2026 for agri-food reporting, including cultured meat, food security genetics and poultry vaccines. Maritime Shock: A 7.8 quake hit the southern Philippines, killing at least 35 and triggering tsunami waves—another reminder of how disruptions ripple across regional trade and supply chains.

Rail Push: Malaysia is positioning itself as an ASEAN rail leader, with Deputy Transport Minister Datuk Hasbi Habibollah pointing to the Road to Rail agenda and major builds like the Penang LRT Mutiara Line, ECRL and the Johor Bahru–Singapore RTS Link. Energy-Price Relief: Malaysia’s Crisis Management Task Force says subsidy policy is shifting toward targeted help to protect vulnerable households while keeping fiscal sustainability as West Asia-linked energy shocks strain costs. Digital Infrastructure Boom: Digital Realty officially launched Malaysia operations in Cyberjaya, targeting about 32MW of data centre capacity to boost regional connectivity. Renewables Deal: DayOne Data Centres signed landmark renewable supply agreements under CRESS with TNB Renewables and GenCo, supporting Malaysia’s push for cleaner power for data centres. Undersea Security: Malaysia joined a 17-nation GUIDE initiative to protect critical underwater energy and telecom infrastructure, reflecting rising regional security focus. Maritime/Trade Risk: Container shipping rates are spiking again amid Middle East-driven volatility, congestion and capacity tightening—bad news for exporters and importers. Aviation Skills Transfer: TAE Aerospace Malaysia is taking in the first batch of RMAF personnel for engine maintenance transition, strengthening local aerospace capability. Disaster Watch: A 7.8 quake hit the southern Philippines, killing at least 12 and injuring 200+ while triggering tsunami warnings across parts of the region, including Malaysia.

Trade & Diplomacy: Malaysia and the Netherlands are pushing closer cooperation in trade, semiconductors and water management, with MEUFTA talks moving into a new round as both sides seek “de-risking” from big-power tensions. Aviation Safety: MASSA signed an MoU with South Korea’s Braindrop to assess fire-control tech for lithium batteries and power banks, including a fire-resistant “Air-Pouch” for cabin risk mitigation. Energy Transition: The Energy Commission says Malaysia’s nuclear decision hinges on readiness across 19 safety and infrastructure areas under the IAEA milestones approach. Agri-Food & Trade Dispute: Thailand says it may raise Malaysia’s shrimp import suspension to WTO/ASEAN if bilateral talks fail, while rolling out 13 measures to protect farmers and exporters. SME Support: KUSKOP/SME Corp launched SINAR with RM205m in financing to help MSMEs expand amid global uncertainty. Tourism & Regional Growth: Sabah is drafting a long-term tourism blueprint aimed at sustainability and stronger connectivity ahead of Visit Malaysia Year and Visit Sabah Year 2027. Aviation Costs: IATA warns airline profits could halve in 2026 as jet fuel prices jump 70% amid Middle East conflict. Cross-border Water Project: Malaysia and Thailand look set to coordinate on the Sungai Golok Basin development to cut flood risks and improve water security. Business & Culture: KLIBF 2026 closed with a record 2.42m visitors, highlighting growth in Malaysia’s digital publishing ecosystem and the MADANI Book Voucher push.

SME Financing Push: KUSKOP via SME Corp Malaysia launched SINAR, a RM205m industry and business support programme with four MSME initiatives to help entrepreneurs expand and create jobs. TVET & Skills Pipeline: Malaysia-China TVET cooperation under MCIEA will fund about RM30m in scholarships, training and equipment, while KESUMA earmarked RM50m to fully roll out TVET 2.0 for future-ready talent. Sabah Tourism Blueprint: Chief Minister Hajiji said Sabah is drafting a long-term tourism blueprint to guide growth beyond past master plans, targeting Visit Malaysia 2026 and Visit Sabah 2027. Sabah Oil & Gas Momentum: Mindet Sabah will take a five-year OGSE roadmap to Cabinet, as Petronas signals heavy upstream investment plans with Sabah at the centre of long-term energy security. Energy-Data Centre Tension: A report highlights Malaysia’s data-centre boom clashing with clean-energy goals as gas-fired generation rises to power expanding capacity. Food & Downstream Value: KPKM says local white rice issues can be tackled via downstream product development, launching a new white rice snack to open export-ready value chains. Trade Disruption Watch: Analysis warns Iran-related trade route disruptions could lift energy and food costs across oil-poor Asia, stressing agriculture and power systems.

TVET Push: KESUMA will fully deploy a RM50m Skill Development Fund to scale TVET 2.0, with emerging-field training and stronger pathways into high-growth jobs. National TVET Placement: Putrajaya launched the GITC TVET Placement Centre (GTPC), Malaysia’s first integrated talent placement platform linking students, industry training and employment. Malaysia–China Skills Link: Malaysia and China’s MCIEA will fund nearly RM30m in scholarships, training and equipment, including 1,000 scholarship placements worth ~RM18m for TVET graduates. Energy Security: MKN says fuel supplies are sufficient until end-August while Petronas expands global sourcing amid West Asia conflict; Finance Minister II also flags diversified oil/coal supply to manage risk. Forensics Upgrade: KIMIA Johor’s RM22.8m extension will boost food, water and environmental forensic labs for crime and CBRNe readiness. Agri Value-Add: KPKM backs downstream rice products to address white rice market concerns, spotlighting Jati Chom Chom snack launch. Tourism & Skills: Lenggong’s GeoEntrepreneur module targets community-based tourism services, while Sarawak studies Eastern Europe cross-border development models. Retail Stability: Mydin says essential goods supply remains stable with normal planting/harvesting and adequate fertiliser inputs.

TVET Skills Push: PM Anwar will officiate National TVET Day 2026, with training for selected TVET students starting July in emerging fields like AI, crypto and energy transition—aiming to lift job readiness and wages. Energy Regulation & Security: The Energy Commission is studying an energy-sector regulatory sandbox for rollout in 2027 to test new tech and business models while protecting system stability. Forensics & Lab Capacity: KIMIA Johor’s new RM22.8m extension is set to boost Malaysia’s forensic analysis, adding Food Quality and Water/Environmental Quality labs with modern analytical tools. Local Oil & Gas Content (Sabah): Sabah and Petronas unveiled a four-point OGSE plan to expand local vendor scope categories from 63 to 135, with an OGSE 5-year roadmap headed to Cabinet support. Trade & Logistics: Thailand’s “land bridge” push could reroute cargo away from Penang, while Malaysia’s shrimp import suspension keeps talks with Thailand on hold. Court Watch: High Court voids an “Ali Baba” construction scheme, overturning a RM538,000 claim tied to unlawful procurement circumvention. Healthcare Tech: IJN introduced the TactiFlex™ Duo ablation catheter, enabling dual-energy treatment for complex heart rhythm disorders. Sports Media: Unifi TV secured rights to broadcast all 104 FIFA World Cup 2026 matches in Malaysia via season and daily passes.

Sabah Oil & Gas Localisation: Sabah’s Ministry of Industrial Development and Entrepreneurship will table the OGSE 5-Year Roadmap for Cabinet backing, aiming to boost local firms’ participation in oil & gas by strengthening skills, assets and technical capabilities—positioning Sabah as a regional hub by 2030. Malaysia Talent Processing: MIDA will launch the MIDA Expatriate System (MES) from 16 March 2026 to centralise expatriate employment approvals for manufacturing and selected services, cutting duplication and speeding processing via a single digital workflow. Undersea Security: Seventeen countries, including Malaysia, launched the GUIDE framework to safeguard critical underwater telecom and energy cables through voluntary information sharing and better incident response. Palm Oil Watch: Malaysian palm oil futures extended losses on weaker rival oils and Indonesia’s new centralised export system, though the market still logged a third straight weekly gain. Energy Transition & Grid Needs: Tenaga Nasional (TNB) stressed that regional cooperation, grid modernisation and talent development are key to scaling renewables and responsible AI adoption. AI Business Push: VCI Global plans to launch “Galactic OPC,” an AI-native business operating system with a dedicated hub and GPU-powered infrastructure to help firms build, operate and scale. Oil & Gas Output Data: DOSM reported 1Q 2026 crude oil and condensate production fell 5.5% y/y to 43 million barrels, with natural gas also down 2.1% y/y.

Energy & Industry Data: DOSM reported Malaysia’s crude oil and condensate output fell 5.5% y/y to 43m barrels in 1Q2026, with crude down 9.4% while condensate rose 3.0%; natural gas slipped 2.1% and crude/condensate export value eased to RM5.2b. Energy Transition & Power Demand: TNB says regional cooperation, talent reskilling, network modernisation and responsible AI adoption are key as electricity demand rises; ETCon26 drew 4,000+ visitors and 15 partnerships. Semiconductors & Manufacturing: PM Anwar met AT&S CEO on Kulim operations (about 2,700 workers), reiterating Malaysia’s consistent support for high-quality investment in the semiconductor value chain. Airport Infrastructure: MAHB plans RM11b capex over five years to expand and modernise airports, with a new procurement showcase to ready contractors and suppliers. Sabah Gas Investment: ConocoPhillips approved RM1.3b KBB Phase 2 to drill more wells and lift Sabah gas output for LNG and domestic supply. EV Adoption Push: Fuel price volatility is driving more Malaysians toward EVs as industry groups flag uncertainty around subsidies and running costs. Forced Labour Tariff Pressure: A former Klang MP challenges claims of “no forced labour” as US forced-labour tariff proposals loom, raising compliance risk for Malaysia-linked supply chains. Cross-border Finance: Labuan IBFC highlights rising global benchmarking momentum as cross-border finance faces tighter transparency expectations. TVET for Industry Skills: TVET Day 2026 kicks off in Putrajaya, spotlighting career pathways across sectors including advanced manufacturing, agriculture, maritime, energy and rail.

Semiconductor & Jobs: PM Anwar met AT&S CEO on Kulim operations in Kedah, highlighting ~2,700 workers and Malaysia’s role as a major IC substrates/PCB production hub. Data Centres & Energy Planning: Schneider Electric says Malaysia’s next AI data-centre push needs disciplined planning across power, cooling, water and renewables, while MIDA’s Tengku Zafrul argues data centres’ value goes beyond direct jobs through wider AI ecosystems. Energy Transition & Grid Readiness: TNB says it delivered 4.3GW of installed renewables and links RM43bil grid modernisation to rising data-centre demand. Johor Workforce Push: Johor offers premium wages for youth—fresh grads RM4,000+ and TVET RM4,000–RM5,000+—tied to JS-SEZ investor inflows. Water Infrastructure: Penang will raise water tariffs from July 1, keeping it among the lowest in Malaysia. Food Supply Shock: Malaysia’s Thai shrimp ban (five species) threatens Thai farmers’ livelihoods amid a food-safety dispute. Policy Compliance: Malaysia’s revised EP salary rules take effect from 1 June 2026 for employers hiring expatriates. Trade Headwinds: US proposes 10%–12.5% tariffs on 60 economies over forced-labour concerns, adding uncertainty for regional supply chains. Media Recognition: HAWANA 2026 honours 113 strategic partners and reaffirms media’s role in national development. Scam Crackdown: Meta, Microsoft and Coinbase joined a SEA takedown, disabling millions of scam-linked accounts and freezing crypto assets.

Energy & AI Push: Prime Minister Anwar Ibrahim launched TNB’s Energy Transition Conference 2026 (ETCon26), backing the utility to lead Malaysia’s energy transition and support AI/data-centre growth in Johor and Sarawak. Grid Stability Debate: A separate ETCon dialogue highlighted calls for nuclear as a practical complement to renewables to keep the grid stable as demand from data centres and high-tech rises. Renewables Financing Risk: Malaysia’s largest independent power producer warned “stranded” solar risk is growing as renewable tenures and capital costs don’t match project economics. Industrial Materials: Gas Malaysia marked Asia Pacific’s first methane-to-graphene deployment, positioning Malaysia as a graphene hub for industrial adoption. Trade & Compliance: India extended countervailing duties on Malaysian solar glass for five years, citing risk of renewed subsidisation and injury. US Tariff Shock: The US proposed up to 12.5% tariffs on nearly 60 economies, including Malaysia, over forced-labour enforcement gaps—raising new trade compliance pressure. Tourism Pressure: Langkawi faces rising costs and weaker arrivals, with operators warning competitiveness is being squeezed. Workplace Safety: SOCSO reported a 33.6% drop in workplace accidents in 2025.

Energy Transition & Grid Reliability: TNB’s ETCon26 push highlights how Malaysia may need nuclear as a practical baseload partner to renewables, given Peninsular RE limits, while Gas Malaysia says domestic gas supply is sufficient and flags indirect risks like higher transport costs. Industrial Decarbonisation: Gas Malaysia deployed Asia Pacific’s first LOOP system to turn methane into graphene and hydrogen-rich gas, and CCUS talks at ETCon26 stress a whole-of-nation approach plus ASEAN collaboration to scale capture. Solar & Power Market Rules: PETRA says LSS6 solar tenders are set to open this year, with new projects required to pair with BESS for grid stability; separately, India extended countervailing duties on Malaysian solar glass for five years. Trade Policy Shock: The US proposed Section 301 tariffs up to 12.5% on imports from 60 economies, including Malaysia, over forced-labour enforcement gaps—raising compliance and cost risks for exporters. Anti-Corruption & Skills: MACC launched “Maccampus” at UMT to boost integrity and anti-corruption learning, while JPPKK opened applications for polytechnic bachelor’s programmes (2026/27). Regional Business Links: Malaysia and Indonesia will prioritise supply-chain resilience at the 17th JCBC in Jakarta. Local Enforcement: Kelantan seized 45 excavators in an illegal gold mining crackdown. Fuel Prices: Malaysia’s unsubsidised RON95/RON97 and diesel prices in Peninsular fall for June 4–10 under the APM formula.

US Trade Pressure on Malaysia: The Trump administration has proposed new US tariffs of 10% or 12.5% on imports from 60 economies, including Malaysia, under a forced-labour Section 301 probe—raising fresh export-cost uncertainty for sectors like textiles and other trade-exposed industries. Energy Transition in Malaysia: Deputy Prime Minister Fadillah Yusof backed TNB’s ETCon26, stressing partnerships across government, utilities, developers and finance to move the energy transition from plans to execution. Digital Infrastructure Push: Damac Digital says its IT capacity landbank has hit 6,000MW across 13+ countries, including Malaysia, as it targets hyperscale cloud and AI demand. Consumer Credit Reform: Malaysia’s Hire Purchase (Amendment) Act 2026 took effect June 1, aiming for clearer charges and stronger consumer protection for vehicle buyers. Sabah Development Funding: Sabah welcomed an RM1.5 billion interim MA63 special grant payment and reiterated the state will work to meet MA63 provisions. Maritime/Shipping Risk: A US action disabled a VLCC linked to Iranian crude transfers that had sailed from Malaysia’s eastern outer port limits, underlining ongoing Gulf shipping volatility. Medical Tourism Demand Signals: Malaysia’s healthcare travel sector hit RM3.35b revenue and 1.84m travellers in 2025, with industry players shifting toward AI-driven demand forecasting. Rehab Tech Education: Robotimize hosted Universiti Malaya biomedical engineering students for hands-on demos of rehabilitation robotics, FES and AI-enabled care. Food Culture Branding: A Malaysian chef argues the kopitiam concept could be packaged as an exportable dining ecosystem to boost tourism and food entrepreneurship abroad.