AGP Executive Report

US-Iran De-escalation Boost: Asia stocks rallied as Trump said planned strikes on Iran were cancelled and floated a deal, lifting risk appetite while oil slid and the dollar weakened. Global Growth Watch: The World Bank cut its 2026 growth forecast to 2.5% on Iran-war fallout, warning of a deeper slowdown if energy disruptions hit markets; India is still seen as the fastest-growing major economy. India Macro Outlook: BMI (Fitch group) expects India’s FY27 growth to cool to 6.6% amid weaker investment/consumption and West Asia trade shocks. Central Banking: South Korea’s central bank governor said rates should be raised “on time” as inflation stays above target; the ECB also hiked rates for the first time in nearly three years. China Finance Pressure: Beijing’s cross-border investment clampdown is expected to weigh on Hong Kong banks, insurers and wealth managers reliant on mainland flows. Tech & Markets: Taiwan is considering tighter AI-chip export controls to China, while Japan’s BOJ is widely expected to lift rates, adding pressure to yen-denominated crypto activity. Wealth & Banking: Bank of Singapore named Lim Leong Guan to lead UHNW private banking across Middle East, South Asia and international markets from 1 July. Energy & Trade: Mongolia picked Chinese NFC to build its first large copper smelting plant, a $700m+ project aimed at 120,000 tons of refined copper annually.

AI Infrastructure Race: China plans a 2 trillion yuan ($295bn) state-directed buildout of a nationwide AI data-centre network over five years, relying on domestic chips for at least 80% of tech and linking power-grid upgrades—an explicit push to narrow the gap with US AI leaders. Global Growth Shock: The World Bank cut 2026 global growth to 2.5% (from 2.9%), warning it could fall to 1.3% if Middle East energy disruptions trigger financial stress; it flags two-thirds of economies facing downgrades. India Resilience: Despite the global hit, the World Bank still forecasts India to grow 6.6% in FY2026-27, though it expects moderation as energy and input costs rise. Central Banking & Inflation: The ECB raised rates to 2.25% from 2% as Iran-war oil shocks feed euro-area inflation, with other major central banks set to weigh next steps. Markets & FX: India’s rupee slid 50 paise to 95.75 per dollar amid West Asia tensions, a stronger dollar, and foreign fund outflows; meanwhile, India companies are rushing into short-term debt as RBI measures ease borrowing costs. Regional Deals: Malaysia and Japan agreed to deepen cooperation in semiconductors, AI and energy security, including a 20-year LNG supply pact between Petronas and JERA. Cybercrime Crackdown: Sri Lanka arrested 18 Chinese nationals over alleged online scam operations, seizing 40 phones and pointing to fraudulent US-linked company documents.

China AI Infrastructure Push: China plans about 2 trillion yuan ($295bn) over five years to build a nationwide network of interconnected AI data centres, relying on state firms and domestic tech for at least 80% of components—an explicit bid to narrow the gap with US suppliers. China Pension Market: China expands its individual pension system by letting citizens buy electronic government savings bonds via pension accounts, aiming to deepen participation as the country ages. India Banking & Markets: Citi cut its Nifty target to 26,000 from 27,000 on EPS downgrade risks tied to West Asia conflict and macro headwinds; India’s banks also see MCLR/FCNR-B rate moves and fresh funding plans. Energy Shock Theme: A regional forum said renewables can help Asia withstand oil-price spikes as Middle East tensions keep inflation risks elevated. India-Oman Trade: India’s CEPA with Oman (operationalised June 1) is expected to boost exports in textiles, gems, jewellery and marine products, with added energy-security value. Corporate/Deal Watch: Japan’s Marubeni edges toward a R2.6bn deal for South Africa’s Tiger Wheel & Tyre owner TiAuto Investments. Wealth & Fraud: US prosecutors arrested Indian-origin financier Mahender Makhijani over an alleged nearly $100m bank fraud using falsified title documents. Fertiliser Sentiment: Fertiliser stocks rose on reports of possible higher subsidy support amid West Asia supply worries. Global Finance & Climate: A new report says major banks financed $906bn in fossil fuels in 2025, with $8.7tn since Paris.

India Bonds & FX: Indian government bonds slid after a four-day rally as Middle East tensions lifted oil prices, raising inflation worries and straining external balances. Policy Push for Inflows: India also moved to attract overseas capital by exempting foreigners from taxes on government bonds and widening access to the debt market, with analysts calling it a potential game-changer for debt flows. Meta–Reliance AI Infrastructure: Meta agreed to lease a 168MW AI data centre from Reliance in Jamnagar, with operations expected in two years, as India’s AI buildout accelerates. Banking & Markets Rules: SEBI proposed changes to how asset managers disclose executive pay, shifting toward consolidated scheme-level views. China Macro & Credit Mood: Fitch kept 2026 outlook for China mainland/HK/Macao/Taiwan at neutral, citing resilience, while warning global sovereign risks from the US-Iran conflict. Japan Finance Innovation: Japan’s megabanks plan a yen-denominated stablecoin for securities trading, aiming to expand usage across brokerages. Trade & Industry: CMR Green Technologies’ IPO debut spotlighted India’s metal recycling push; separately, Japan’s Marubeni bought South Africa’s TiAuto Investments to expand automotive aftermarket reach. Regional Payments: Nepal’s foreign minister briefed parliament on India visit outcomes, including UPI–NPI cross-border remittances.

Japan-Bangladesh Finance: Japan will extend a ¥50bn (about $312m) emergency support loan to Bangladesh, co-financed with the ADB, aimed at stabilising fiscal management and securing energy supply amid West Asia shocks. Japan Inflation Watch: Japan’s wholesale prices jumped 6.3% y/y in May, the fastest in over three years, driven by higher petroleum costs—raising pressure on the BOJ’s next moves. Digital Payments Push: Japan’s three biggest banks plan to jointly issue yen-pegged stablecoins by March 2027, setting up a council to shape operational frameworks. India Energy & Markets: India launched E85 fuel (85% ethanol) to cut crude imports and support flex-fuel mobility. India Capital Flows: India’s NLC India OFS drew strong demand; retail bidding opens after oversubscription plans. AI Infrastructure Deal: Meta and Reliance are moving ahead with an AI-enabled data centre in Jamnagar (168MW initial capacity), powered by renewables. ASEAN Norms: Vietnam urged ASEAN to help shape global rules, not just follow trends, at the ASEAN Future Forum. Crypto Education: IAMBIG will host a “Cryptocurrency 101” seminar in Virginia with a former US regulator and industry leaders. China Macro: China’s May CPI edged up 1.2% y/y while PPI rose 3.9%, reflecting oil-price relief but ongoing demand weakness.

China Trade: China’s exports jumped more than 19% in May to $376.8bn and imports rose over 27%, leaving a $105.4bn surplus, with analysts pointing to AI-driven demand for chips and electronics. Crypto & Markets: China’s Strategy defended its “never-sell” bitcoin approach after speculation it sold coins, saying even a drop to $30,000 wouldn’t break its balance-sheet strategy. India Gold & Banking: India’s gold tariff hike is reviving smuggling, with dealers warning illegal imports could top 100 tons in 2026 and squeezing legitimate banks and refiners. Fintech Payments: India and Nepal launched instant cross-border payments via UPI-NPI linkage, aiming to speed remittances. Corporate Finance (India): NBFC Aye Finance plans to raise up to $15m via secured NCDs to fund MSME lending. Trade Finance (Central Asia): Georgia’s TBC secured about GEL 200m-equivalent in trade finance funding with ADB support from J.P. Morgan and European banks. Energy Security (India): India is reviving a deep-sea gas pipeline plan from Oman to Gujarat to reduce reliance on chokepoint shipping and LNG complexity. Deal Watch (China): Tencent drew over $16bn in orders for a planned dual-currency bond, signaling strong investor appetite for AI-linked tech credit. ASEAN/Regional: Cambodia’s PM highlighted peace, economic cooperation and people-centred development at the 3rd ASEAN Future Forum.

India Energy & Mobility: India launched E85 fuel in New Delhi, pushing flex-fuel passenger tech to cut crude imports and support low-carbon mobility. Industrial Policy: Commerce Minister Piyush Goyal rolled out the BHAVYA portal for Rs 33,660 crore to build 100 plug-and-play industrial parks, aiming to pull in investment and jobs. Markets & Rates: Nifty’s PE slipped below 20 as West Asia tensions and crude kept sentiment fragile; investors also watched Japan’s yen pressure and rising JGB yields ahead of a BOJ decision. Banking & ESG: UBS cut Asia ESG staff by about half in restructuring, trimming its sustainability team in Hong Kong and across the region. Capital Markets (India): Government OFS for NLC India opens with a floor price at a near-10% discount; separate corporate actions and brokerage calls kept select stocks in focus. China Trade & Energy: China’s exports rose 19.4% in May and yuan strengthened to 6.8147; LNG demand in Asia is slowly recovering after the Iran-related disruption. Pacific Green Finance: Papua New Guinea’s Green Finance Summit drew 240 delegates and secured new commitments, while Pacific communities accelerated solar training to manage high fuel costs.

SEBI Crackdown: India’s Rajesh Exports faces an interim SEBI order alleging inflated revenues and misrepresented accounts tied to its Swiss gold refiner Valcambi, with shares hitting the 5% lower circuit and fallout for retail investors and LIC’s stake. Corporate FX Stress: Moody’s flags rising offshore debt risks for Philippines conglomerate First Pacific as a stronger US dollar and peso weakness lift foreign-currency servicing costs. Crypto Macro Test: Crypto markets brace for volatility as traders weigh US CPI and liquidity tightening, with new crypto derivatives and privacy-related network updates on the calendar. China Credit/Property Fallout: China widens probes into a roughly $6.8bn bad-loan case linked to the stalled Tianjin Goldin megaproject, with former Bank of China executives under investigation. Central Bank Gold Push: China’s central bank keeps buying gold for a 19th straight month, adding reserves even as prices ease. India External Accounts: India’s current account surplus narrows to $7.1bn in Q4 FY26 as merchandise trade deficit widens, while services receipts rise. Philippines BPO AI Push: The CC-BPM sector in the Philippines is turning to generative AI to lift productivity and pricing power, targeting revenue growth to ₱2.20tn in 2026. EU Tech Protectionism Watch: Australia, Canada and Japan trade bodies warn Europe’s push for EU-made cloud/AI/chips could restrict non-EU suppliers’ market access. Energy Security Moves: Japan backs Philippines oil stockpiling and an ASEAN-wide reserve framework as Hormuz risks keep energy planning front and center.

Japan External Sector: Japan logged a 3.91tn yen ($24.4bn) current account surplus in April, driven by stronger overseas investment income and a return to goods trade surplus, even as Middle East trade and travel weakened. Markets & FX: Asia markets slid after Wall Street’s tech rout; Japan’s Nikkei fell more than 3% early, while Hong Kong and Singapore also dropped as rate-hike bets and AI rally unwind fears hit risk appetite. China Currency & Capital Flows: The yuan weakened to 6.8198 per USD; meanwhile Beijing told investors its crackdown on “illegal” outbound securities won’t force liquidation of existing offshore assets—though mainland savers are rushing to Hong Kong to reposition. India Finance & Consumer Energy: India launched E85 fuel (85% ethanol) to cut oil import dependence, with use limited to flex-fuel vehicles; separately, insurance growth stayed strong with Allianz citing +9.4% premium expansion in 2025 and rising health coverage demand. Corporate Governance: Activist investors filed a record number of shareholder proposals in Japan, pushing for more board shake-ups as regulators and the TSE press for better returns. Geopolitics With Economic Spillovers: West Asia tensions escalated after Israel struck multiple Iranian cities, lifting oil-price risk; and Marcos is expected to meet Putin at the ASEAN-Russia summit in Kazan, underscoring trade and investment agenda-setting.

Aviation Outlook: IATA cut its 2026 global airline net profit forecast to about $23bn, roughly half the prior estimate, blaming West Asia war disruptions and higher fuel costs, while still projecting record seat fill of 84% and revenue growth to $1.16tn. Trade & Finance Links: Uzbekistan’s factoring market jumped 75% y/y in Q1 2026 to 2.3tn soums, with banks driving 94% of volume; Uzbekistan also held talks with India on industrial cooperation in critical minerals, mining and nuclear energy. Central Banking & FX: China’s central bank extended gold buying for a 19th straight month, adding 320,000 ounces to 74.96m troy ounces, even as the reserve value slipped on lower prices; meanwhile Chinese banks quietly raised dollar deposit rates to cool yuan strength. India Capital & Rural Credit: LIC is in talks with RBI and SEBI to expand long-term investment options for growing annuity demand; Central Bank of India ran an agricultural loan camp in Palghar sanctioning and disbursing ₹3.33cr to 75 beneficiaries. Regional Payments: Nepal and India moved toward operationalising cross-border digital payments under a 2023 NPCI-NCHL deal, aiming to let Nepalis pay in India via the same system. Markets & Wealth: Forbes put Gautam Adani back as Asia’s richest with net worth around $89.2bn after Adani Group shares rallied.

India Growth Watch: Brokerage reports flag FY27 GDP growth moderating to ~6.5% as crude-linked input costs, geopolitical risks and a weak monsoon bite into exports and agriculture. Rupee & Policy: India’s central bank kept rates steady at 5.25% while unveiling measures to support the rupee, as forex reserves rose and markets weigh the next macro move. Capital Markets: RBI widens direct equity access for overseas investors and doubles investment limits under PIS, while SEBI clears multiple IPOs in a busy pipeline. Tech & Chips: China’s memory chipmakers CXMT and YMTC gear up for blockbuster IPOs amid AI-driven demand, while SpaceX’s IPO bars mainland China/Hong Kong orders over US export-control compliance. Cross-border Payments & Digital: India-Nepal ties get a boost with health/cultural handovers and a UPI-NPI linkage for cross-border payments. ASEAN & Regional Links: Vietnam hosts the ASEAN Future Forum as Timor-Leste deepens ASEAN integration; Cambodia praises China’s marine governance role. Infrastructure & Investment: Malaysia and China expand TVET cooperation via MCIEA with RM30m in scholarships and training. Energy & Finance: China-Egypt expands currency swap ties; US sanctions target an Iranian LPG smuggling network routed through Asia. Household Finance: India’s locker economy faces rising complaints over missing valuables and access disputes, even as demand stays strong.

India–Venezuela Energy Talks: India and Venezuela are exploring deeper oil and gas cooperation, with Indian firms looking to expand participation as Caracas seeks investment and longer-term supply arrangements. RBI Currency Update: RBI Governor Sanjay Malhotra said polymer/plastic currency notes are still under preliminary consideration, with no decision yet, while assuring adequate currency availability. China Broker Crackdown: China’s CSRC crackdown on cross-border securities business is widening, with Huasheng Securities set to suspend new mainland purchase operations and inflows from June 15, while earlier actions hit offshore brokers. AI & Semiconductors: China’s memory chip makers CXMT and YMTC are ramping up expansion and IPO plans to capitalize on AI-driven demand, intensifying competition with global rivals. India Growth & Policy: PM Modi chaired the EAC-PM meeting to sustain growth momentum amid West Asia risks, focusing on resilience, governance efficiency, and investment climate. Market/Corporate Signals: ICICI Securities kept Siemens India at a HOLD with a Rs 4,190 target; Steel Exchange India paid ₹1.53 crore debenture interest ahead of schedule. Wealth/Banking: Karnataka Bank held a third-party products conference to push fee income and customer-centric distribution. UK–India Ties: UK Foreign Secretary Yvette Cooper wrapped an India visit reviewing progress under India-UK Vision 2035, including tech security, clean energy, defense cooperation, and migration talks. Local Infrastructure: Metro Pacific Water took over as interim operator for Bulacan’s San Jose del Monte water system amid a supply crisis affecting 250,000+ residents.

India Macro: India’s FY2025-26 real GDP growth came in at 7.7% (7.8% in Q4), with manufacturing, trade and services showing double-digit momentum, even as the Middle East conflict adds uncertainty. RBI & FX: The Reserve Bank of India kept the repo rate steady at 5.25% and rolled out steps to attract foreign capital, including scrapping capital gains tax on foreign holdings of government bonds and improving dollar deposit schemes for NRIs, as it tries to stabilise the rupee. Digital Infrastructure: AirTrunk said it plans to invest about Rs 3 lakh crore and build 5GW of data centre capacity in India, a move PM Modi highlighted as key to the AI and cloud build-out. Japan Fiscal Support: Japan’s parliament approved a 3.11-trillion-yen supplementary budget to cushion higher energy costs tied to the Middle East. Energy & Exploration: Oil India reported natural gas presence in an Andaman offshore well, while also expanding seismic services empanelments with firms including Asian Energy Services and South West Pinnacle. Trade & Industry: India set a $30bn seafood export target for the next five years, pushing value-added exports and brand building. Payments & Inclusion: EPFO is using postal doorstep support to help pensioners submit digital life certificates for continued payments. Local Infrastructure: Metro Pacific Water took over interim water operations in San Jose del Monte, Bulacan, amid service issues affecting 250,000 residents.

India Policy & Markets: India’s Q4 GDP grew 7.8% (FY26 7.7%), while the RBI cut its FY27 growth forecast to 6.6% amid West Asia energy shock risks and rupee pressure; the government also exempted foreign investors and BIS from capital gains tax on government securities receipts to support foreign bond participation. RBI Enforcement: RBI fined Canara Bank Rs 41.8 lakh for KYC and account classification lapses, and penalised Puran Associates for asset classification non-compliance. Capital Flows & Tax: India moved to ease foreign investment participation via capital gains relief on govt debt and broader rupee-support measures. GIFT City Finance: India plans Variable Capital Companies at GIFT City to make fund structures more flexible and attractive to global investors. Digital Infrastructure: Blackstone-backed AirTrunk targets $30bn and 5GW+ of data centre capacity in India by 2030, betting on AI-driven demand. China Finance Regulation: China issued its first top-level roadmap to tighten oversight of private funds while steering capital to early-stage tech and curbing illegal fundraising and cross-border risks. Cross-border Trade Facilitation: Cambodia and China signed an AEO mutual recognition deal to speed customs clearance and reduce inspections. Energy & Climate Finance: ISA and the World Bank launched a Pacific SIDS solar dialogue in Bali, including a 220MW Mauritius solar-plus-storage tender to unlock bankable renewables. Geopolitics & Energy: India and Venezuela discussed deeper long-term energy cooperation as India diversifies crude imports. IPO Watch: SpaceX’s $75bn IPO excludes China and Hong Kong investors due to regulatory and compliance constraints.

RBI MPC Watch: India’s central bank is set to announce its repo rate decision, with markets focused on rupee weakness, fuel-led inflation and whether policy turns more hawkish; traders also eye FX support and possible measures to curb outflows. SEBI Crackdown: SEBI has barred Rajesh Exports’ CMD Rajesh Mehta from trading, alleging long-running financial statement manipulation tied to overseas subsidiaries. India–Venezuela Energy Push: India’s energy ministry says a technical team will visit Venezuela to expand oil and energy cooperation as crude supply risks persist. Pakistan–India Water Tension: Pakistan objects to India’s reported Chenab-Beas river-link plan, calling it a treaty violation under the Indus Waters framework. Japan FX Funding Signal: Japan’s foreign securities holdings fell sharply in May, suggesting intervention funding may have involved selling overseas assets. China Solar Pivot: Chinese solar majors are accelerating battery exports as PV growth slows and prices stay under pressure. Gold in India: Gold prices rose 4.1% in May in India despite a global dip, supported by policy shifts and currency weakness. AI Adoption Benchmark: Kazakhstan leads Central Asia on generative AI usage, helped by government policy and education investment. Japan SAF Drive: Japan is pushing “Fry to Fly” collection of used cooking oil to scale sustainable aviation fuel amid feedstock and infrastructure limits.

RBI MPC Watch: India’s central bank MPC meeting starts as crude oil, a weaker rupee and monsoon risks keep inflation in focus, with the decision due June 5. Defence Finance: India approved a major jump in field commanders’ financial powers, aiming to speed urgent procurement and boost indigenisation via a revenue route worth over ₹1.25 lakh crore. India Rates & Banking: RBI slapped a ₹14.25 lakh penalty on Nagar Sahkari Bank for NPA classification and unsecured-advance compliance lapses. SEBI Crackdown: SEBI issued an interim ex-parte order against Rajesh Exports, alleging large-scale financial misrepresentation and restraining promoter Rajesh Mehta from trading. Gold & China Liquidity: Gold rallied to $4,500 despite ETF selling, while China’s PBoC liquidity pullback is seen as cooling demand. China-Africa Trade: China fully rolled out zero tariffs for all 53 African countries with diplomatic ties, with South Africa highlighting export gains. Cross-Border Payments: BoCom Macau joined mBridge’s first cohort and processed early cross-border digital yuan and e-MOP transactions. APAC Market Mood: Asia stocks slipped on AI and rate-hike fears as oil eased amid Middle East developments. Thailand Payment Scrutiny: A viral claim says a Chinese-run Bangkok restaurant refused baht and pushed renminbi-only payment, reigniting debate on foreign-run business practices. India IPO “Cash-Out” Trend: Reuters says many foreign-backed India IPOs are structured as offer-for-sale, sending billions out rather than raising new growth capital.