AGP Executive Report

Markets: Asian shares tumbled after hotter US inflation revived rate-hike fears and deepened concerns about AI financing. South Korea’s Kospi fell 5.6%, while Japan’s Nikkei lost 1.3%, as chip stocks extended their slide. Shipping and Energy: A Singapore-registered container ship sank after being hit in the Strait of Hormuz; all 21 crew members were evacuated safely. The attack added to regional shipping risks and pushed oil prices higher. China Trade: Foreign trade grew 18.8% in the first nine months of 2026, with imports rising faster than exports as demand for technology products and other goods strengthened. High-tech firms also attracted more foreign investment. Economic Outlook: Singapore held monetary policy as growth moderated, while the IMF warned of slow growth across Asia—adding to concerns about the region’s resilience amid global shocks.

Regional Diplomacy: Leaders from China, India, Russia, Türkiye and other countries gather in Baku for the CICA summit, as tensions and competition over trade routes test cooperation across Asia. Economic Outlook: The IMF sees global growth at 3.1% in 2026, but warns conflict will drive contractions in parts of the Middle East and Central Asia. India remains a bright spot, with its growth forecast raised to 7%. China Trade: China’s trade surplus reached US$938 billion in the first nine months of the year, sharpening scrutiny of its exports amid global pressure. AI and Technology: Anthropic is opening a Singapore office and will work with the government to assess AI safety, while IBM and India’s MeitY Startup Hub are partnering to help deep-tech ventures scale. Energy Security: Southeast Asian countries are accelerating plans for a connected clean-power grid, but weak infrastructure remains a hurdle as the region seeks greater resilience.

Economic Shock: The IMF now expects West and Central Asia’s economy to contract 0.3% in 2026, reversing an earlier growth forecast as the Iran war disrupts oil exports and shipping through the Strait of Hormuz. Market Jolt: Asian shares fell sharply as fresh competition fears hit chipmakers: South Korea’s Kospi dropped more than 5%, with Samsung and SK Hynix among the hardest hit. Financial Risks: The IMF says struggling “zombie” companies account for 21.4% of corporate debt across 10 Asian economies, up from less than 10% in 2008. China Payments: Visa won preliminary approval to prepare a domestic card-clearing business in China, though it still needs an operating licence to process transactions. Philippines Digital Policy: New ICT Secretary Robert Joseph Montes de Claro says he will review the department’s projects, budgets and procurement, including amid scrutiny of alleged ghost Wi-Fi projects.

Regional Diplomacy: Donald Trump said he may meet North Korean leader Kim Jong Un during his November Asia trip, but no plans are confirmed and Pyongyang’s missile tests complicate prospects. Malaysia’s Transport Push: A Kuala Lumpur expo next week will bring industry leaders together to discuss autonomous mobility, electric vehicles, AI and regional connectivity. Malaysia also plans to add AI to its toll system when it is fully operational. Investment and Energy: Yingde Gases has opened a major industrial-gas plant near Kuala Lumpur and plans further investment in Malaysia and Southeast Asia. Separately, Tata Power and Imperial College London will explore cooperation on energy storage, grid flexibility and AI. Growth and Resilience: The IMF says AI investment is supporting global growth, with Asian economies set to benefit, but warns the technology could disrupt jobs and deepen divides. Climate-resilience investment remains scarce as heat and flooding take a growing toll.

Diplomacy: Donald Trump says he may meet North Korean leader Kim Jong Un during his November Asia trip, which includes the ASEAN summit in Manila and APEC in Shenzhen. AI Financing: Tencent is weighing a bond sale of at least $4.5 billion to fund its AI push, as investors grow more cautious about the cost of building infrastructure. Growth and Jobs: The IMF says AI investment is helping keep global growth near 3%, with Asian economies among the potential beneficiaries, but warns the technology could disrupt jobs and widen economic divides. Regional Ties: Central Asian leaders are seeking to turn political trust into joint investment, infrastructure and technology projects, with Azerbaijan broadening the region’s links. Digital Infrastructure: Batam residents say data-centre expansion is worsening water shortages; authorities have told new projects to build desalination plants. Pakistan Outlook: Finance Minister Muhammad Aurangzeb forecasts growth above 4% this fiscal year despite high oil prices and says the government plans to privatise five to six state-owned firms.

Malaysia’s Wage Plan: The government has agreed to raise the minimum wage to RM2,000 from June 2027, with large firms starting first and some smaller businesses temporarily exempt to ease the burden. Industry and Investment: Malaysia and Jordan are exploring semiconductor and technical-training cooperation, while Malaysia also plans to diversify beyond chips. Vietnam’s record $50.36 billion in registered FDI is prompting calls for more technology transfer and stronger links to local businesses. Pakistan’s Reforms: Finance Minister Muhammad Aurangzeb used meetings in Bangkok to discuss structural reforms, export-led growth and climate resilience with the UN’s regional commission. AI and Growth: The IMF says AI investment is helping keep global growth near 3%, with Asian hardware suppliers among the beneficiaries; it also warns the gains could widen regional divides and disrupt jobs. Energy Pressures: Disrupted LNG shipments through the Strait of Hormuz are intensifying competition for gas cargoes, adding pressure to Asian energy security. Central Asia’s Markets: Uzbekistan’s $1.95 billion investment-fund listing in London will test whether international investors see the region as a credible destination.

Markets: Asian shares were cautious on Monday as investors awaited earnings, with South Korean stocks down 1.1%. Brent crude fell 1.1% to US$103.50 a barrel after recent Gulf attacks heightened supply concerns. Energy: Philippine President Ferdinand Marcos renewed his call for nuclear power as electricity costs rise, while Southeast Asia’s energy transition faces a shortage of early-stage funding. Progress on the Asean Power Grid could encourage investment, but clearer rules are needed to make projects viable. Business: Revolut plans to invest nearly S$350 million in Singapore over five years and expand its local workforce to more than 300. Connectivity: Bangladesh has become South Asia’s first market to launch Starlink satellite-to-mobile service, extending access beyond conventional network coverage. Pacific economies: The ADB and Australia committed US$12.85 million to help Pacific governments improve business rules and access to finance for small firms.

India’s Election Tensions: Protests are expected to continue after thousands were detained over disputed voter-list revisions; India’s Supreme Court called the detentions illegal. Food and Trade: Global food prices hit a four-year high in September, with shipping disruptions and extreme weather raising risks for import-dependent countries. AI Boom, Local Costs: Google’s planned $15 billion data centre in Andhra Pradesh faces local opposition over pressure on water and power supplies, environmental damage and limited jobs. Investment: Bangladesh’s prime minister invited Japan’s Marubeni to invest in IT, AI, fertiliser and energy, including a proposed data centre and second fertiliser plant. Regional Security: Taiwan plans a record US$34.5 billion defence budget for 2027, saying stronger deterrence is needed to prevent conflict with China.

Regional Connectivity: Cambodia’s Hun Manet heads to Azerbaijan, Türkiye and Kazakhstan next week, including for a CICA summit focused on Asian connectivity, digitalisation and growth. Separately, Kazakhstan wants Central Asian trade to rise from about US$13 billion to US$20 billion, backed by logistics hubs and transport corridors. Energy Security: The Iran conflict has exposed Southeast Asia’s reliance on imported fuel, accelerating calls for renewables even as cheap coal remains attractive while LNG prices stay high. Singapore Jobs: ST Engineering has opened a S$170 million aircraft maintenance facility at Changi, with more than 500 jobs planned and drones, AI and robots aimed at boosting productivity. Trade and Growth: UNCTAD says Asia is set to contribute 60% of global growth this year as world trade hits a record US$35 trillion, though developing economies face barriers to strategic industries. Malaysia Budget: Prime Minister Anwar Ibrahim says Budget 2027 will maintain fiscal discipline while directing savings toward cost-of-living relief, particularly for lower-income households.

Malaysia’s Budget: Kuala Lumpur plans to narrow its fiscal deficit to 3.3% of GDP in 2027, while directing savings from tighter spending controls toward households and key services. India’s Growth: The World Bank lifted its FY2027 growth forecast to 7.1%, citing resilient demand despite global uncertainty. Trade Ties: Bangladesh says Prime Minister Tarique Rahman’s planned Japan visit will focus on investment, trade and development partnerships. Regional Connectivity: A new Türkiye-EU-backed railway section is set to boost freight capacity on the Middle Corridor linking Europe with Central Asia. Smart Transport: Singapore’s SMRT and China’s PCI Technology have formed a venture to pursue rail and mobility projects across Southeast Asia.

Malaysia’s Budget: Prime Minister Anwar proposed a 459.8 billion ringgit ($144 billion) budget for 2027, including a minimum-wage rise to 2,000 ringgit and expanded tax relief as living costs mount. South Korea’s Chip Boom: Semiconductor exports helped drive the country’s current-account surplus to $46.1 billion in August, though the industry’s job gains are weakening. Regional Outlook: UNCTAD expects global growth to slow to 2.6% in 2026, while Asia is projected to contribute 59% of the total; India is forecast to grow 7.3%. Central Asia Connectivity: Leaders from five Central Asian states and Azerbaijan agreed to prioritize east-west and north-south trade corridors at their first expanded summit. India’s Regional Ambitions: US sanctions continue to stall India’s use of Iran’s Chabahar port, complicating plans to build trade links to Afghanistan and Central Asia.

Tech Demand: Apple reportedly cut iPhone 18 Pro component orders by 15% to 20% after a $100 price increase, as consumers weigh higher costs and chip shortages. Growth Outlook: UNCTAD expects global growth to slow to 2.6% this year, but says Asia will generate 59% of it; India’s economy is forecast to grow 7.3% in FY2027, driven by domestic demand and infrastructure. Markets and Energy: Asian shares mostly rose as oil prices eased, though recent swings reflect energy-supply fears and worries about AI spending. Saudi Arabia and the UAE are backing an initiative to strengthen Asian oil security. Regional Ties: Central Asian and Azerbaijani foreign ministers advanced plans for an October 8 leaders’ meeting, with cooperation spanning trade, energy, transport and digital technology. Supply Chains: Chinese companies are building integrated production networks across Southeast Asia, using different markets for sourcing, manufacturing and assembly while targeting local consumers.

Energy Shock: Tanker attacks near the Strait of Hormuz pushed Brent above US$100 a barrel and Gulf–East Asia shipping rates higher, raising costs and supply risks for Asia. Countries across the region are accelerating oil stockpiles and renewable energy plans. AI Investment: Nvidia-backed Australian data-centre operator Firmus scrapped its planned US$5 billion IPO after weak demand, highlighting investor caution over AI valuations and expansion plans. It will seek private funding instead. Regional Links: Pakistan and Bahrain agreed to fast-track a Pakistan–GCC free-trade deal, while India and Singapore are exploring a major power link through Southeast Asia. Tourism: Sri Lanka ranked among the 10 fastest-improving tourism economies in the World Economic Forum’s 2026 index, as emerging Asia-Pacific destinations gain ground. AI Governance: Singapore’s central bank issued new guidance holding banks accountable for risks from third-party AI systems.

Markets and Inflation: Asian shares were broadly weaker as oil topped $104 a barrel, reviving inflation worries. India’s central bank raised its policy rate by 25 basis points to 5.5% and signalled further tightening; Malaysia’s inflation is also forecast to rise next year as businesses pass on higher costs. Trade and Growth: The WTO lifted its 2026 global goods-trade forecast to 3.9%, citing a 67% surge in semiconductor and AI-related trade. It expects Asia to lead regional growth at 4.3%. Regional Deals: The UAE and Thailand concluded negotiations on a trade and investment pact, while India and the EU are aiming to sign their free-trade agreement in December, with it potentially taking effect by mid-2027. AI Adoption: About 70% of Indian firms now treat AI as a strategic priority, but security, compliance and infrastructure concerns are slowing wider deployment.

Energy Risks: The IMF warns high oil prices and constrained fuel supplies could persist into 2027, with Asia among the regions hardest hit. Oil remains near US$100 a barrel, adding pressure to inflation and growth. India’s Rates: The Reserve Bank of India raised its repo rate by 25 basis points to 5.5% and shifted to “calibrated tightening,” while lifting its FY27 growth forecast to 7.1%. Companies expect limited immediate impact but flagged crude and rupee risks. Thailand’s Debt: Household debt has reached an 18-year high, squeezing spending and complicating growth plans as Bangkok prepares to host IMF and World Bank meetings. China-ASEAN Trade: Two-way trade rose 20.6% to 5.95 trillion yuan in the first eight months of 2026. A planned upgrade to the free-trade framework aims to deepen supply-chain, digital and green-industry ties. Pakistan Financing: An IMF staff-level deal could unlock US$1.21 billion, pending board approval, as the country remains reliant on external funding and vulnerable to energy-price volatility.

Energy Shock: The IMF warned that high energy prices could persist into 2027, even if the Gulf war ends soon. Oil is near US$100 a barrel, while fuel and gas supply constraints threaten inflation and growth across Asia. Markets: Asian shares fell as oil prices and bond yields climbed, with New Zealand stocks also pressured by fuel costs and higher interest-rate expectations. China Spending: Golden Week travel surged, but early figures point to cautious spending: passenger traffic rose just 0.1% over the first four days, as consumers watched their budgets. Productivity: Asia’s hourly labour-productivity growth slowed to an average 2.5% in 2019–24, down from 2.9% in the previous four years, according to a new regional databook. Connectivity: Penang International Airport won a regional award for efficiency and its role in supporting trade and tourism. It handled four million passenger movements in the first half of 2026, with expansion planned to serve the state’s manufacturing ambitions.