26/05/2026

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TUESDAY | MAY 26, 2026

‘Johor a cost-efficient data centre alternative to S’pore’

KUALA LUMPUR: Banks in Malaysia and some Asia-Pacific (APAC) economies will be less impacted by higher energy prices, according to Moody’s Ratings. This is due to their economies’ diversification and resilience, significant oil reserves, diversified energy mixes, and strong govern ment balance sheets, said the credit rating agency in a report yesterday. It noted that Malaysia (A3 stable) is a net oil and gas exporter, hence its economy and banks will benefit from a positive terms-of-trade shock and higher corporate earnings in the energy sector. “Several governments are continuing or introducing mea sures to cushion the impact of high energy costs on borrowers and the economy. Fuel subsidies or price caps, such as in India, Thailand, Vietnam, Indonesia and Malaysia, help to limit the pass through of the oil price increase to consumers and small and medium enterprises. KUALA Malaysia, particularly Johor, has positioned itself as a cost-efficient alternative to Singapore for data centre investments, owing to its relatively abundant land, availability of power infrastructure, and attractive invest ment incentives. Moody’s Ratings, in a report yesterday, said Johor’s appeal to hyperscalers is enhanced by its geographical proximity to Singapore and the ability to leverage the republic’s robust international connections. “With around 897 megawatts of installed capacity and a significant development pipeline, Johor is increasingly integrated into Singapore linked deployment strategies to serve regional demand. “Johor has successfully capi talised on regional capacity con straints to position itself as a key destination for hyperscalers,” it said. It added that this is evidenced by significant investment commit ments from Microsoft and Oracle, alongside the launch of new cloud regions in Johor over the past year, building on ByteDance’s earlier deployment in the state. Moody’s Ratings noted that Singapore remains the region’s largest and most mature hub for data centres, with an estimated one gigawatt (GW) of installed capacity, underpinned by its role as a regional connectivity gateway with extensive submarine cable links and a stable regulatory framework. “However, capacity expansion has become more constrained because of land and power limit ations, as well as sustainability requirements, prompting operators and hyperscalers to adopt a hub and-spoke model, where Singapore functions as a core interconnection and control node, while additional LUMPUR:

“By preserving borrowers’ near-term repayment capacity, this reduces nonperforming loan formation at banks,” it said. Moody’s Ratings said monetary authorities also stand ready to provide targeted liquidity support to banks, if needed. It said sustained high energy prices due to a prolonged West Asia conflict would impact Apac banks’ credit profiles, via their loan portfolios and financial channels. Higher energy costs expose banks through consumers, malls, and SMEs, as they will negatively affect households’ purchasing power and SMEs’ cash flows, increasing asset quality risks. Other impact channels include financial markets, capital flows and remittances, with many economies facing pressure to raise interest rates to curb inflation and currency weakness, potentially increasing banks’ funding costs, tightening liquidity and affecting remittance-dependent countries such as the Philippines and Bangladesh. – Bernama capacity is developed in sur rounding markets,” it explained. Additionally, Moody’s Ratings said Malaysia, one of the fastest growing data centre markets in South and Southeast Asia, has benefited from available power and transmission infrastructure, sup ported by its solid power reserve margin, enabling rapid scaling of data centre capacity. The credit rating agency noted that despite Peninsular Malaysia’s solid power reserve margin of around 25% at present, it will need to carry out substantial investments planned for both power generation and grid upgrades over the coming years. This will be necessary to support further growth in data centre demand, given the large pipeline of data centre o Credit rating agency cites abundant land, availability of power infrastructure, and attractive investment incentives

Moody’s says power demand from data centres is already significant and increasing. – AFPPIC

Data centres already accounted for 4% of total power consumption in 2025 and were a key driver of demand growth. Their share of consumption will continue to climb as existing projects ramp up, even before accounting for additional project connections, it added. – Bernama

“The total power supply com mitted to data centres will exceed 7GW – around 25% of current generation capacity in Peninsular Malaysia – if all data centres that have executed energy supply agreements with the local utility company are ultimately developed to their full capacity,” it said.

projects announced relative to the size of its power market. “Failure to deliver on these power sector initiatives will likely constrain Malaysia’s ability to support further growth in data centre development, as power demand from data centres is already significant and increasing.

M’sian banks seen less impacted by energy shock

Local institutions extend net buying streak to six weeks KUALA LUMPUR: Local institutions extended their net buying streak on Bursa Malaysia to a sixth consecutive week, recording net inflows of RM572.9 million last week, according to MBSB Investment Bank Bhd. The bank said foreign institutions were net sellers on all five trading days during the week. Meanwhile, the top three sectors for foreign outflows were consumer products and services (RM347.4 million), utilities (RM214.7 million), and healthcare (RM180.7 million). “The only market to record net foreign inflows was Taiwan, while outflows were led by South Korea, followed by India, Vietnam, Malaysia, Thailand, Indonesia and the Philippines,” MBSB said. – Bernama Perak’s China trade mission nets RM1.6b commitments The investment bank said retailers also extended their net buying streak to two consecutive weeks, with inflows of RM339.7 million. Foreign institutions, meanwhile, extended their net selling streak to two consecutive weeks, posting net outflows of RM912.6 million. “The largest outflow was recorded on Wednesday at RM329.2 million, followed by Tuesday (RM256.5 million), Thursday (RM156.5 million), Monday (RM106.3 million) and Friday (RM64.2 million),” it said. It added that foreign inflows were recorded only in three sectors: technology (RM79.2 million), trans port and logistics (RM57.0 million), and energy (RM1.3 million). Across eight Asian markets, foreign investors extended their net selling streak to two consecutive weeks.

IPOH: The Perak state government trade and investment mission to China has opened up new pros pects and commitments worth more than RM1.6 billion. The May 17-24 mission involves digital technology, artificial intel ligence (AI), data centre, green energy, automotive and future industries sectors. In a statement, Perak Menteri Besar Datuk Seri Saarani Mohamad said this has strengthened efforts to attract quality investments to

and smart industry ecosystems,” he said. Saarani said the project de velopment is subject to approval by the Data Centre Task Force (DCTF). This is to evaluate, coordinate, and monitor data centre development in Malaysia in a more organised, strategic, and sustainable manner, he added. The DCTF is a coordination platform jointly chaired by the Digital and Investment, Trade and Industry Ministers. – Bernama

generate spillover effects, create high-skilled job opportunities, and support the direction of the Perak Sejahtera 2030 development agenda. “A main outcome of this mission is a RM1 billion investment commit ment to develop the NexQuantum AI Digital Park @ SVTP, following working visits to Ennoconn head quarters in Kunshan and the Jiading Big Data Centre in Shanghai to observe developments in AI, data centres, digital infrastructure, economic