AGP Executive Report

Cybersecurity: Vietnam ranked seventh in Asia-Pacific and 20th globally for cyber threats affecting Microsoft customers in the first half of 2026. Microsoft warned that AI is accelerating attacks and digital identities remain a key entry point. Markets and Energy: Asian stocks came under pressure as doubts over AI spending and rising oil prices unsettled investors, while higher tanker costs are squeezing Asian refiners’ margins. Trade: India and Germany discussed expanding trade and industrial cooperation through the proposed India–EU free-trade agreement. Clean Energy: Singapore’s EDB and Energy Impact Partners deepened a partnership to help energy and decarbonisation technologies develop and scale in Singapore. Bhutan’s Economy: The Asian Development Bank approved US$17.42 million to support Bhutan’s anti-crisis plan, aimed at easing pressure on households and protecting jobs and essential services.

Markets: Asian shares were mixed Friday as technology stocks clawed back some losses, with Hong Kong and Shanghai rising while Tokyo slipped. Investors remain wary of heavy AI spending and oil above $100 a barrel. Haze Accountability: Singapore’s environment agency has sought information from 10 companies, including Wilmar and Asia Pulp & Paper, on Indonesian land concessions and measures to prevent or fight fires. AI Infrastructure: A regional finance forum warned that Asia-Pacific may need trillions of dollars for AI data centres, alongside major investment in power, water and workforce capacity. Typhoon Disruption: Typhoon Champi prompted hundreds of flight cancellations across East Asia and widespread closures in Taiwan. Regional Security: China’s carrier Liaoning sailed into the western Pacific for training, part of a growing pattern of deployments near Taiwan, Japan and the Philippines.

Markets: Asian shares slid as doubts over AI spending hit technology stocks, sending investors into bonds and cutting expectations of further US rate hikes. Oil climbed to about $114 a barrel as Middle East tensions threatened energy supplies. Regional Growth: Southeast Asia’s digital economy is forecast to grow 17% to $368 billion in 2026, with AI driving much of the expansion even as consumer spending cools. Climate Risks: The ADB warned coastal flooding could cause up to $199 billion in annual Asia-Pacific damage by 2050, while the UN cautioned a powerful El Niño could bring wider economic shocks. Pakistan Outlook: The IMF expects Pakistan’s economy to contract 1.3% in 2026, alongside downturns across parts of the Middle East and North Africa amid war-related disruption. Trade and Diplomacy: India and Poland agreed to deepen defence, space and nuclear-energy ties, aiming to double bilateral trade by 2030. A possible US-China-Russia summit at next month’s APEC meeting has also raised concerns that major powers could sideline smaller countries’ interests. Competition: Taiwan’s regulator blocked Grab’s proposed purchase of Foodpanda’s local delivery business, halting a major deal in the region’s fast-growing online market.

Market jitters: Hong Kong’s Hang Seng fell 3.1% as worries over AI spending triggered a broader Asian tech selloff. Malaysia’s tech demand: Synology reported strong double-digit sales growth, nearing triple-digit, as government and healthcare organisations seek more data storage. India–Poland ties: Narendra Modi and Donald Tusk agreed to deepen cooperation in defence, space, nuclear energy and critical minerals, while India backed peace efforts in Ukraine and West Asia. Regional business: Taiwan’s regulator blocked Grab’s planned Foodpanda acquisition, dealing a setback to the delivery giant’s expansion. ASEAN connectivity: Malaysia’s transport minister urged stronger regional links and more efficient freight movement to cut trade barriers and reinforce supply chains. Climate risks: The UN warned a potentially record-strength El Niño could bring extreme weather and economic shocks, with vulnerable communities facing the greatest risks. India–Russia trade: A Kazan business forum signed 26 cooperation agreements; bilateral trade reached US$38 billion in the first half of 2026, though energy still dominates.

Markets: Asian shares opened mixed on Thursday as the US tech rally faded: South Korea’s Kospi and Japan’s Nikkei slipped, while Taiwan’s TAIEX rose. India’s markets are watching the Jio Platforms IPO and rising inflation concerns. Regional Finance: APEC finance ministers in Hong Kong agreed on measures to support digital infrastructure financing and wider financial access, setting priorities ahead of next month’s leaders’ summit. Chip Supply Chains: Merck opened a South Korean plant to make materials for advanced memory chips, citing the possibility that semiconductor-material demand could double within five years. Digital Economy: Southeast Asia’s digital economy is forecast to grow 17% to US$368 billion this year, with AI helping drive expansion. Climate Risks: The UN warned El Niño could bring damaging heat, droughts and floods across Asia and the Pacific, while the ADB estimates coastal flooding could cause up to US$739 billion in regional damage by 2100.

Competition: Taiwan’s regulator blocked Grab’s $600 million purchase of Foodpanda’s local delivery business, saying the deal’s benefits did not outweigh harm to competition. Regional economy: APEC finance ministers meeting in Hong Kong warned that persistent global imbalances threaten growth and stability, as China urged economies to unlock AI’s potential. Southeast Asia’s digital economy is forecast to grow 17% to $368 billion this year, powered in part by AI. AI and business: The IMF says Asia is gaining across the AI supply chain, while OpenAI is extending ChatGPT advertising to markets including Cambodia, Bangladesh and Pakistan. Cross-border investment: Thailand’s AIS plans to buy an indirect 24% stake in Lao Telecom for about US$43 million, expanding its regional reach. Climate risk: The Asian Development Bank warns coastal flood damage across Asia-Pacific could reach US$739 billion by 2100, underscoring the scale of investment needed to protect ports and communities.

Trade & Technology: Canton Fair’s first phase drew 189,000 buyers from 214 countries, up 13.3% on the spring session, with strong interest in Chinese automation, electronics, electric vehicles and smart mobility. Asia’s New Consumers: Asia is projected to add 702 million middle-class adults by 2036, driving much of emerging markets’ online spending growth. Yet only one in five adults in emerging markets is expected to hold a credit card, creating opportunities for alternative payment services. Energy Diplomacy: India’s S Jaishankar and US Secretary of State Marco Rubio discussed energy security, trade, technology and defence, as Washington said only a few issues remain before a trade deal is finalised. Jaishankar and his UAE counterpart also called for dialogue amid West Asia tensions. China’s Economy: Growth accelerated to 4.5% in the third quarter, lifted by exports, while weak domestic demand remains a concern.

Trade & Diplomacy: The US and Uzbekistan announced 54 agreements worth US$12 billion as Washington seeks deeper trade and investment ties across Central Asia. China’s Economy: Growth accelerated to 4.5% in the third quarter, driven by exports, while weak domestic demand remains a concern. Markets: Asian shares stayed under pressure as higher oil prices and bond yields outweighed a rebound in US tech stocks. Regional Investment: Cybersecurity firm Horizon3 is establishing its ASEAN headquarters in Singapore, while Malaysia plans airport capacity upgrades to support rising traffic. Energy Cooperation: Singapore and Sweden agreed to explore work on hydrogen, ammonia and regional power links. APEC: Finance ministers meeting in Hong Kong are discussing household support, digital infrastructure funding and inclusive finance ahead of November’s leaders’ summit.

China’s Economy: GDP grew 4.5% in the third quarter, beating forecasts, but export-led growth is exposing a weakness: domestic demand remains soft and reliance on overseas buyers is deepening. Central Asia Ties: US Secretary of State Marco Rubio is pursuing trade and investment partnerships across Central Asia, with critical minerals, infrastructure and technology on the agenda. South Korea Rates: The Bank of Korea is expected to hold its key rate at 3% on Thursday, though economists see a possible hike in November as strong chip exports and energy costs keep inflation risks alive. Energy Security: India’s heavy dependence on imported oil is renewing calls to strengthen domestic capabilities and diversify supply chains as West Asia disruptions raise costs. AI Governance: Indonesia says it will set its own pace for AI development, weighing innovation against workforce readiness, energy needs and public welfare.

APEC Preparations: Shenzhen is upgrading border crossings and airport checks ahead of China’s Nov. 18–19 leaders’ meeting, aiming to ease travel for delegates and visitors. Central Asia Ties: US Secretary of State Marco Rubio met counterparts from five Central Asian nations in Uzbekistan, pitching closer trade and investment ties as Washington, Beijing and Moscow vie for influence in the resource-rich region. Ukraine Diplomacy: The Kremlin says a Trump-Putin-Xi meeting on the war could be discussed at the APEC summit, but no plans or agenda have been agreed; Kyiv warns a meeting without Ukraine could prolong the conflict. Cybersecurity: Singapore will host Horizon3’s ASEAN headquarters and regional centre of excellence, with backing from EDBI and SG Growth Capital as the firm responds to rising AI-driven cyber threats. Transport Innovation: Malaysia’s Transport Expo Asia, opening Tuesday, will focus on biometric passenger processing and ways to cut emissions through cleaner aviation and marine fuels.

Markets: Asian shares slipped as concerns over the cost of the AI boom weighed on tech stocks, while lower oil prices offered some support; investors are watching China’s latest growth figures. Regional outlook: The IMF lifted Hong Kong’s 2026 growth forecast to 3.8%, while warning that conflict and high energy prices are widening economic divides across the region. Trade and diplomacy: US Secretary of State Marco Rubio opened talks in Uzbekistan with Central Asian leaders, backed by more than 200 business executives, before heading to India to pursue trade and investment ties. Energy security: APEC finance ministers meet in Hong Kong as Australia seeks stronger regional trade links and fuel security amid high oil prices and disruption to shipping. Climate and health: Indonesian wildfires continue to blanket parts of Southeast Asia with toxic haze, driving a surge in demand for oxygen supplies and air purifiers. The IOM warns climate impacts could force up to 40.5 million people in South Asia from their homes by 2050. Transport innovation: Sri Lanka plans to begin South Asia’s first passenger drone service as early as late October, with Colombo Port City named as the launch point.

Regional Haze: Indonesian wildfires have blanketed parts of Southeast Asia in toxic smoke, prompting school closures and respiratory-health concerns. Demand for oxygen equipment and air purifiers is rising, while the regional weather centre has issued its highest-level alert. Growth and Jobs: Indonesia is turning to digital investment and higher-value exports to target 6% growth in 2027. In the Philippines, the World Bank says sustaining growth will require a shift from capital investment to stronger productivity. Trade and Diplomacy: China and Uzbekistan pledged to deepen trade, infrastructure and technology ties during Premier Li Qiang’s visit, while US Secretary of State Marco Rubio is due to meet Central Asian counterparts in Samarkand as Washington seeks stronger economic links. Economic Outlook: IMF meetings in Bangkok highlighted mounting risks from conflict, energy disruption, debt and inflation; the Fund also says stronger social safety nets could lift household consumption across emerging Asia.

AI and Markets: Asia’s AI hardware stocks are under pressure as a US tech selloff and higher financing costs raise doubts about spending on data centres and chips. A Goldman Sachs basket of regional AI hardware shares fell 11% last week, despite TSMC’s upbeat outlook. Economic Outlook: IMF chief Kristalina Georgieva said meetings in Bangkok reflected both optimism about Asia’s dynamism and concern over inflation, debt, conflict and AI risks. Digital Divide: Some 1.2 billion people in developing Asia-Pacific remain offline, even though most live within 4G coverage; affordability, digital skills and security concerns are among the barriers. Central Asia: US Secretary of State Marco Rubio is leading 200 business leaders to Uzbekistan to deepen commercial ties, particularly in energy, as Washington seeks a larger role in a region long influenced by Russia and China. Digital Infrastructure: Malaysia’s submarine cables carry most international data, but a legal analysis warns the country’s decades-old law may not adequately protect them as it pursues data-centre growth.

Energy and Inflation: The IMF warns a prolonged Middle East conflict could keep fuel prices high, squeezing growth and raising inflation risks across Asia, including India. Growth: India has posted five straight years of growth above 7%, with major forecasters raising projections; China’s modest rebound remains fragile amid weak household spending and a prolonged property slump. Markets and AI: Indian IT shares had their strongest week in 18 years as investors shifted away from AI-linked stocks. But the AI race may hinge on access to power and data centres, not just chips. Southeast Asia: Indonesia’s fires have triggered the region’s highest haze alert, disrupting daily life and threatening businesses. In the Philippines, food affordability remains the public’s top concern, especially among lower-income households. Regional Trade: Kazakhstan and Cambodia are exploring stronger links in trade, agriculture, transport and AI, including possible connections between Central and Southeast Asian routes.

Markets: Asia-focused hedge funds were among the hardest hit as investors unwound AI bets, questioning whether heavy data-centre spending can pay off amid high borrowing costs. Cost of Living: Food prices are the top concern for 35% of Filipinos surveyed, rising to 55% among the poorest households. Separately, the OECD says energy costs are driving renewed inflation pressure, with higher fuel and fertiliser prices feeding into food costs. Haze: Indonesian fires are choking parts of Southeast Asia; Malaysian businesses report weaker sales and mounting costs, while dry conditions could prolong the disruption. Health Security: A five-year initiative worth up to US$650 million aims to expand vaccine manufacturing in Southeast Asia and reduce reliance on imported shots. Trade Ties: Pakistan and Malaysia are seeking deeper trade and investment links, with Islamabad inviting Malaysian companies to explore opportunities.

IMF Warning: At meetings in Bangkok, IMF chief Kristalina Georgieva urged cooperation as Middle East conflict, high energy costs, debt and rapid AI advances threaten growth and widen inequalities. India’s Economy: The IMF expects India to grow 7% in 2026 and overtake Japan as the world’s fourth-largest economy in 2027, but warned a prolonged energy shock could fuel inflation. Bangladesh Loan Talks: Dhaka is seeking a fresh US$4.5 billion IMF package as fuel costs and economic pressures mount; negotiations are continuing. Indonesia’s Fires: Four people died fighting Java’s blazes as toxic haze spread across Southeast Asia. Singapore’s prime minister vowed to pursue legal action against companies responsible. Climate Displacement: The UN migration agency warns as many as 40.5 million people in South Asia could be forced to move by 2050 as climate change threatens homes and livelihoods. Cambodia–Thailand Tensions: Cambodian Prime Minister Hun Manet called for dialogue to resolve border disputes, as bilateral talks remain frozen.