AGP Executive Report

Malaysia Economy Momentum: BNM and the Ministry of Economy say Malaysia’s GDP grew 6.0% in 2Q 2026, lifting 1H growth to 5.7%, backed by domestic demand, stronger E&E exports and resilient services/manufacturing. Data Centres, Cooling Tech: MPOB is nearing the final stages of a palm oil-based immersion cooling fluid, Sawit EcoTherm, aimed at cutting water and energy use in data centres. Digital Infrastructure Deals: DPS Resources and CEIG (M) ink an MoU to explore Melaka data centre and energy infrastructure, including renewable power and water systems. Grid Power Bottleneck: A report flags Asean’s grid constraints as the key risk to data-centre expansion, with Malaysia’s Johor highlighted as a fast-moving hub. ECRL Acceleration: Transport Minister Anthony Loke targets ECRL Phase 1 Kota Bharu–Gombak operations as early as December 2026, depending on testing and certification. Cargo Connectivity: Raya Airways starts scheduled cargo flights to Velana International Airport (VIA) in the Maldives, twice weekly from Penang, with most shipments expected to be transshipment. Agri Support in Sarawak: BUDI Agri-Komoditi will pay eligible Sarawak smallholders RM400/month, with 93,819 identified as eligible as of June. TVET Demand: KV vocational college applications hit 67,045 nationwide, far above capacity, reflecting strong skills-based education interest. Construction Waste Watch: Singapore’s NEA says it is checking claims that C&D waste from Singapore was disposed of in Pontian, Johor.

Malaysia Macro Outlook: Bank Negara Malaysia says no need to revise 2026 GDP growth forecast yet, after 2Q GDP rose 6.0% y/y (vs 5.8% estimate), driven by domestic demand, resilient labour and stronger E&E exports; inflation ticked to 1.9% in 2Q with limited pass-through. ECRL Rail Progress: Transport Minister Anthony Loke targets ECRL Phase 1 Kota Bharu–Gombak operations as early as December 2026, with commercial start in January 2027, as testing and commissioning ramps up. AI Readiness Push: Digital Minister Gobind Singh Deo opens AI-Ready Malaysia Summit 2026, backing AI Malaysia to shift government from reactive to proactive policy for the 2030 AI nation goal. Penang High-Tech Finance Plan: Penang eyes Pulau Jerejak as a financial hub to complement Bayan Lepas’ semiconductor ecosystem, with a new bridge expected to boost connectivity. Data Centre Build-Out: DPS Resources and CEIG ink an MoU to explore Melaka data centre and energy infrastructure, aiming for an integrated, self-sustaining ecosystem. Skills for Industry: MOE Vocational Colleges (KV) see 67,045 applications vs 19,567 capacity, with near-100% employability cited as TVET-industry alignment pays off. Trade Pressure Watch: The US flags a “shadow transshipment network” to dodge tariffs, naming Malaysia among countries playing an “important role,” with sectors like electronics and aluminium highlighted. Corporate Financing: Resintech’s Selangor hostel/retail development gets RM41m Islamic term financing, while Affin Bank reports 2Q profit down 11.1% on higher impairment allowances.

Data Centre Finance: ST Telemedia Global Data Centres (STT GDC) secured up to US$1.37b in green financing to expand its Johor campus, backing energy-efficient digital infrastructure and local capability building. Macro Watch: The ringgit closed almost flat ahead of Malaysia’s 2Q GDP release, with investors taking a wait-and-see stance after US inflation came in as expected. Telecom & Enterprise: Maxis appointed CEO Goh Seow Eng to its board, while FlexiRoam highlighted its turnaround with its first profitable year and growing global partnerships. Aviation & Shipping: AirAsia Group posted a RM527m net loss in 2Q on higher fuel costs and FX losses; meanwhile a feeder containership bound for Port Klang was reported grounded on India’s Hooghly River after losing control. Malaysia-Russia Ties: Higher education ministers agreed to finalise a 2027 Malaysia-Russia Joint Action Plan by year-end, including scholarships and new forums. Digital Safety: PPIM will run a national anti-scam awareness programme on Aug 20 to tackle digital fraud and mule accounts. Industry Policy: KKR is pushing for a higher Budget 2027 allocation and says it will also improve implementation efficiency to maximise public impact.

Malaysia-Russia Cooperation: Russia and Malaysia discussed expanding ties in space and energy, including a Russian satellite already launched for Malaysia and potential LNG/LPG collaboration, plus a push to resume direct flights and deepen digital and smart-city exchanges. Construction & Logistics: DOSM data shows construction work value up 8.8% YoY to RM47.8b in 2Q26, led by special trade and non-residential building; Penang’s Pila air cargo expansion is set to boost northern air logistics capacity. Housing Policy: REHDA Institute backs shifting affordable housing benchmarks from a fixed RM300,000 cap to income-based, location-specific targets that reflect real delivery costs. Competition Policy: MyCC and Hong Kong Competition Commission signed an MoU to strengthen cross-border competition enforcement, training and information sharing. Rubber & Jobs: Malaysia’s natural rubber output rose 31.5% in June to 26,553 tonnes, with China the top export destination; Jobstreet says job ads rose 33% YoY in H1 2026, though underemployment remains a skills-matching challenge. Tech & Industry Investment: VentureTECH invested RM28m in three Bumiputera-led tech firms spanning warehouse automation, healthcare commercialisation and digital inclusion. Market Watch: Ringgit edged to 4.0850–4.0890 per USD ahead of Malaysia’s 2Q GDP release.

Energy Awards: NUR Power won runner-up in NEA 2026’s Renewable Energy Enabler Technology category for its Pilot Battery Energy Storage System at Kulim Hi-Tech Park, highlighting grid flexibility for renewables. Energy Savings Push: NEA 2026 winners delivered RM48.82m in annual energy cost savings and 270.54GWh renewable/energy savings, cutting an estimated 9.93m tonnes of CO2. Gas Crisis Response: Bangladesh’s power and gas situation is expected to ease as LNG discharge and FSRU operations improve, with one LNG cargo delayed by Bay of Bengal weather and another terminal running at about half capacity. Agrofood Trade: MAHA 2026 will match 2,000 local agrofood exhibitors with 40 international buyers under a Hosted Buyer programme from Sept 1-3, plus an export “One Stop Centre” for standards and certification. GMO Rice Trial: Malaysia’s Agriculture Ministry says Perak’s MR219 GMO rice field trial is only a controlled test plot, not approval for commercial GMO use. Airport Security: Malaysia will table an airport security enhancement plan to Cabinet next week after a Malaysian pilot drug-smuggling case in Indonesia. Corporate Results: Vstecs 2Q net profit rose 50% to RM30.31m on stronger ICT distribution, enterprise systems and cloud services. Islamic Finance: Islamic social finance is being positioned as a mainstream tool to tackle poverty, with JAWHAR tasked to strengthen governance and professionalism of Islamic NGOs.

Rare Earth Push: Malaysia and Australia are exploring closer cooperation in rare earth elements and critical minerals, including building domestic neodymium magnet manufacturing, plus sharing know-how on processing residues and hazardous waste management. Agrofood Exports: At MAHA 2026, about 2,000 local agrofood exhibitors will be matched with 40 international buyers under a Hosted Buyer programme to boost export-ready products and market entry readiness. Airport Security Upgrade: After a Malaysian pilot’s alleged drug-smuggling arrest in Indonesia, the Home Ministry says a plan to tighten airport security will go to Cabinet next week, covering coordination, training, scanning-machine operations and logistics. GMO Rice Trial Clarification: Perak’s proposed MR219 GMO rice field trial is described as a controlled test plot only, not approval for commercial GMO use, amid calls from groups to reject it. Energy & LNG Contracting: Technip Energies won a FEED contract for Malaysia’s offshore LNG regasification terminal project in Kedah, aimed at strengthening northern gas supply resilience. AI Telco Move: U Mobile is partnering with OpenAI to embed AI across operations, customer experience, enterprise offerings and cybersecurity. Data Breach Costs: A new IBM study flags rising data breach costs across Southeast Asia, with AI making attacks faster and investigations longer. Palm Oil Watch: Malaysian palm oil futures slipped on profit-taking and weaker Dalian cues, while El Niño concerns continue to shape production expectations. Islamic Social Finance: Malaysia’s religious affairs minister says Islamic social finance can be mainstreamed to fight poverty, with JAWHAR tasked to strengthen governance and professionalism of Islamic NGOs.

Energy Transition & Grid Integration: MIDA chairman Tengku Zafrul says ASEAN’s energy shift is stuck on a “capital coordination problem”, with an estimated US$200b/yr investment gap to 2030 and calls for stronger regional fixes like the ASEAN Power Grid. Power & Efficiency: Malaysia has extended its National Energy Efficiency Action Plan (NEEAP) through 2035, targeting 11.6% lower energy demand and about US$21.5b in savings, while data-centre growth keeps electricity demand rising. AI Skills Push: The MADANI Digital Rakyat Portal was launched as a central learning hub for AI Nation 2030, using an “Awareness, Access, Adoption” approach to build digital literacy and practical AI capability. Semiconductor & Trade Links: SFAM chairman Dr David Lacey was appointed UK Honorary Consul in Penang, with a focus on tech, digital and AI ties. Healthcare Tech: Thomson Hospital Kota Damansara installed Malaysia’s first next-generation integrated surgical energy platform to support minimally invasive procedures. Food & ESG: Tropikal Life’s coconut water facility in Seeduwa received Carbon Neutral Certification. Legal/Markets: Multiple US law firms issued reminders and filings tied to First Solar securities class actions, with an Aug 24 lead-plaintiff deadline.

Digital Skills Push: Malaysia launched the Digital Rakyat Portal to help citizens build AI-ready skills via a 3A model—Awareness, Access and Adoption—positioning it as the country’s central digital learning hub. Energy Transition & Jobs: SEDA Malaysia’s 2026 Feed-in Tariff e-bidding approved 42 renewable projects (biogas, biomass, small hydro), expected to spur about RM4.3b investment and 7,738 indirect jobs, plus RM617m in demand for local gas engines and boilers. Industrial Output: DOSM said June 2026 industrial production rose 6.5% y-o-y, led by manufacturing (+7.3%) and export-oriented industries (+7.6%), with computer/electronics driving double-digit growth. Labour Market: Unemployment held at 3.0% in June 2026 (517,800 jobless), with services still the biggest employment contributor. Palm Oil Watch: Palm futures climbed as traders weighed El Niño risks; SD Guthrie expects production impacts mainly in 2027-28, while 2026 remains less affected due to lag. MSMEs Under Pressure: Lim Guan Eng says six cost-relief proposals for MSMEs were rejected, including higher e-invoicing turnover threshold and interest-free financing support. Haze Safety Moves: Sarawak ordered schools to stop outdoor activities where API exceeds 100, with continuous monitoring for students’ health. Defence Cooperation: Malaysia signalled readiness to deepen defence ties with Iran and explore an MoU, with Iran invited to LIMA 2027. Semiconductor Ambition: Siemens says Malaysia is a strong SEA semiconductor manufacturing base but still behind in moving up the value chain into chip design.

Cross-border Clean Power: Singapore’s EMA granted conditional approvals for two firms to import 900MW of electricity from Malaysia (solar plus battery storage in Johor), targeting commercial operations around 2029 and building on earlier 1GW Sarawak-linked approvals. Aviation Safety: Malaysia’s APASS 2027 (7–9 Sept 2027, Kuala Lumpur) is set to convene airlines, regulators and tech partners under “Shaping the Future of Safe Aviation.” Defence Cooperation: Malaysia is ready to deepen defence ties with Iran and hopes to finalise an MoU, with Iran also expected to participate in LIMA 2027. Logistics & Shipping: Maersk and Hapag-Lloyd restored another Gemini Cooperation route back to the trans-Suez corridor after Red Sea security reviews. Palm Oil Market: CPO futures rose to the highest in four months on strong export demand, while MPOB data showed stocks up 3.3% to 2.6m tonnes. Construction: Inta Bina won a RM115.65m main building works contract from Sime Darby Property (KL East). Housing Reform: KPKT says 1,647 sick/abandoned projects worth RM153b have been resolved and plans new housing laws (Property Development, Building Managers, Rent Tenancy) plus amendments to strata rules. EV Charging Reality Check: JomChargeX launches up to 1,200kW DC charging, but Malaysia’s current EVs may charge far slower due to vehicle voltage limits. STEM Pipeline in Penang: Economy Ministry allocates RM12m (to 2030) to train 100,000 students via STEM Talent Pilot Project. Robotics Win: Malaysia’s youth team won five medals at the Robot Challenge World Championship in Beijing.

Housing Reform: Malaysia’s housing ministry says it has resolved 1,647 “sick” and abandoned private housing projects worth RM153bil, benefiting nearly 200,000 buyers, as it rolls out National Housing Policy (DRN) 2026-2035 with data-driven planning and a new Option to Purchase mechanism expected by year-end. Legal & Governance: The same policy will see drafting/amending four housing laws, including a Property Development Act, Building Managers Act and Rent Tenancy Act, plus revisions to the Strata Management Act. Workforce & Industry: Panasonic AVC Networks KL Malaysia will retrench 541 staff in two stages (Oct 31, 2026 and Mar 31, 2027), with KESUMA and PERKESO pushing early income support, job matching and skills training. TVET for Space: MYSA says TVET should expand beyond aerospace into satellite development, testing, operations and space support systems to feed Malaysia’s growing space industry. Maritime & Defence: The Royal Malaysian Navy launched the third Littoral Mission Ship Batch 2 vessel, Tunku Osman Jewa, as Malaysia doubles down on modern maritime assets. STEM Pipeline: Penang gets RM12.3m over four years for a STEM talent programme targeting 100,000 students by 2030. Digital Trust: MCMC’s IRC 2026 warns Malaysia’s next digital decade hinges on safer, trusted AI and stronger online governance. Water Security: DID deployed 606 portable emergency pumps nationwide to prepare for El Nino impacts on irrigation and water supply. E&E & Trade: MITI will keep pushing Malaysia’s electrical and electronics sector, including semiconductor assembly/testing/packaging, with tighter export control compliance.

Royal Navy Upgrade: Türkiye’s STM launched Malaysia’s third and final 3-ship light corvette batch (Tunku-class) at Istanbul Shipyard; outfitting and testing follow, with delivery slated for 2027, boosting RMN capability and defence cooperation. Healthcare for Indigenous Communities: MOH approved RM500,000 to upgrade Kemar Health Clinic in Gerik for Orang Asli care, including a new boat storage facility, a 4WD replacement, and key emergency equipment like a video laryngoscope. Trade & Industry Pressure: Malaysia is awaiting a US response after completing the forced-labour part of talks; the excess-capacity issue in steel remains unresolved under the reciprocal trade agreement. Data Centre Cooling Innovation: MPOB unveiled Sawit EcoTherm, a palm-based immersion cooling fluid aimed at cutting water use and energy demand for Malaysian data centres. Digital Finance Opportunity: A Malaysia-focused push for Shariah-compliant digital finance is gaining traction, with calls to build institutional participation and halal crypto products. Local Business Boost via Sports: Sepang targets about RM200,000 from local traders during SUKMA Selangor 2026 by placing food and business vendors at competition venues. Food & Trade Link: JETRO says Japanese cuisine demand is lifting exports of Japanese agri and seafood products to Malaysia, with halal and income growth driving the trend.

Education Funding: Digital Minister Gobind Singh Deo says RM237.48m (2023-2026) is being channelled for maintenance, upgrades and new facilities for Tamil National Type Schools (SJKT), with the aim of strengthening learning, culture and identity. Public Finance Oversight: Economist links Lembaga Tabung Haji’s 3.5% profit distribution for FY2025 to recovery from restructuring, saying stronger governance and risk management could support higher payouts for depositors. National Pride & Transport: JAPEN@PETRONAS rolls out removable Jalur Gemilang magnetic stickers at 15 stations nationwide, while Prasarana Malaysia pledges 24-hour public transport for Putrajaya’s National Day Aug 31. Trade & Industry: Malaysia is awaiting the US response on unresolved structural steel excess capacity after forced-labour issues were finalised; US Section 301 tariffs remain in play. Palm Oil Tech for Data Centres: MPOB unveils Sawit EcoTherm, a palm-based immersion cooling fluid that cuts water use and energy demand for data centres. Aviation Safety: Tourism minister Tiong King Sing urges earlier pre-flight reporting and screening after a second officer’s drug arrest; Malaysia Aviation Group orders drug screening for all Malaysia Airlines pilots. Food & Tourism Events: Ipoh’s Jom Makan Ipoh 2026 Expo (Aug 28-30) spotlights food heritage and unity, while Sepang targets RM200,000 from local traders during SUKMA Selangor 2026. Regional Context: Analysts say ASEAN’s 59th anniversary calls for tighter internal unity and integration to protect centrality amid geopolitical and energy-trade disruptions.

Aviation Safety: Malaysia Aviation Group and AADK back mandatory drug screening for Malaysia Airlines pilots and cabin crew after an arrest in Indonesia, with cross-agency checks at key entry points. Anti-Scam Push: Malaysia logged 66,000+ online scam cases last year with losses near RM2.97b, as experts warn syndicates now use AI and social engineering. Trade & Customs: Malaysia seized a container at Port of Tanjung Pelepas suspected of goods meant for export to Israel, with AKPS checking customs and strategic-trade rules. Agri & Food Security: MAHA 2026 is set to drive agrifood innovation and commercialisation, while Perak’s agriculture needs youth reinvestment as most holders are 46+; shrimp import talks with Thailand are near a mid-August resolution. Industry & Jobs: Selangor will meet about 400 Panasonic workers next week over a planned closure, with PERKESO support and alternative employment help. Infrastructure Planning: KKR targets a bigger Budget 2027 allocation and is pushing “smart highway” upgrades via TuJu and digital tools. Digital Governance: Digital Minister Gobind says AI adoption must come with safety checks and fail-safe layers before mass rollout.

Food Security & Trade: Malaysia expects a final resolution on shrimp imports from Thailand by mid-August after temporarily suspending five shrimp species from June 1, as Agriculture and Food Security Minister Mohamad Sabu said MAHA 2026 will push innovation and wider international participation. Jobs & Manufacturing: Selangor will meet workers affected by Panasonic AVC Networks Kuala Lumpur’s closure of two product lines next week, with 400 workers potentially impacted by end-March next year, and PERKESO support on the table. Aviation Safety: Malaysia Aviation Group’s move to make drug screening compulsory for 1,260 Malaysia Airlines pilots (and cabin crew) after an arrest in Indonesia gets AADK backing under a zero-tolerance stance. Anti-Scam Push: Malaysia logged over 66,000 online scam cases last year with losses around RM2.97b, prompting renewed calls for public vigilance against AI-enabled social engineering. Digital Trust: Digital Minister Gobind Singh Deo urged safety and security assessments before deploying AI and robotics, plus verification of information before critical decisions. Corruption Probe: After the Tabung Haji RCI report, MACC remanded five individuals and investigations now focus on alleged management irregularities. Environment: TNB allocated RM800,000 to plant 40,000 mangrove saplings under My Brighter Green Initiative 2026, targeting carbon absorption and biodiversity restoration. Cyber & Compliance: WhiteGator.AI won an AI innovation award in KL for an enterprise AI suite focused on secure deployment and governance. Energy & Regional Links: Malaysia-Cambodia defence cooperation is set to expand via a defence MoU, with new areas including jungle warfare training, defence industry and AI. E-waste Enforcement: Malaysia’s full e-waste import ban is being tested by falsified shipping documents, with enforcement actions reported at Port Klang.

SME & Jobs Upskilling: SME Corp Malaysia launched its RM1.5m Next Level CEO programme to upskill 90 MSME leaders, with training, coaching and global best-practice exposure. AI & Semiconductors: Malaysia was named among the world’s top four net exporters of AI hardware, with the IMF citing strong semiconductor back-end assembly, testing and packaging output. GEAR-uP Talent Fix: PETRONAS, GLICs and GLCs outlined three approaches to tackle underemployment among graduates under GEAR-uP, including talent placement across ecosystems and stronger TVET delivery. Startup Funding: Jelawang Capital and KWAP’s Dana Perintis channelled RM588m into consumer, digital, agritech and edtech startups in 2025, supporting 130+ startups since 2020. Trade & Halal Exports: MATRADE urged Sabah entrepreneurs to join MIHAS 2026’s International Sourcing Programme via the MADANI Digital Trade platform for business matching with global buyers. Public Space & Urban Quality: KPKT will roll out the MY Public Space initiative with UN-Habitat to deliver safer, inclusive, resilient public spaces using international best practices. Transport & Aviation Safety: Malaysia Aviation Group will test all active pilots after an Indonesia drug arrest, with pilots cleared before operating flights. Energy & Shipping Shock: Reports say Iran’s crude exports at Kharg Island have halted for at least a week amid renewed US blockade, raising regional trade and biosecurity concerns.

Women in Tech Awards: Yayasan Tuanku Fauziah (YTF) launched the Women in Technology Awards 2026, with nominations open Aug 10–Sep 5 and RM30,000 (senior) plus RM15,000 (junior) prizes, aiming to boost STEM participation; winners will be honoured Oct 17. AI + Semiconductors: RHB says Malaysia is well positioned for the AI shift, citing its E&E exports (about 48% of total exports), 6.9% share of global semiconductor exports (2023), and growing higher-value semiconductor assembly/testing/packaging. Talent + TVET Reform: The GEAR-uP report says 36% of Malaysians work below qualifications, and highlights GLIC/GLC moves like ecosystem talent placement and TVET strengthening, including training outputs from programmes such as TNB’s PROTEGE and Sime Darby Industrial Academy. SME Export Push: MATRADE urges Sabah entrepreneurs to join MIHAS 2026’s International Sourcing Programme via the MADANI Digital Trade platform for matching, market intelligence and grants. Startup Funding: MoF says Jelawang Capital and KWAP’s Dana Perintis backed venture-stage startups with RM588m in 2025, supporting 130+ startups since 2020. Entrepreneur Financing Goes Digital: TEKUN Nasional now accepts financing applications online for the first time, cutting paperwork and in-person submissions. Rail + Urban Mobility: MRT Corp awarded a RM3.03bn system turnkey contract for the Mutiara Line LRT to the MRCB-Theta Edge JV for detailed railway systems design.