Revamp of the National Trust Fund

 

Kumpulan Wang Amanah Negara (National Trust Fund) or Kwan has now RM22.4 billion in funds. Not many know that we had a plan for a sovereign wealth fund since 1988. It was resource-based - to be funded from depleting resources such as oil and other natural products. Amazingly and tragically, it was flawed from the start when it was to be set up with voluntary contributions from national oil company Petronas and other bodies. Only Petronas contributed, with RM13.5 billion up to 2021 and a further RM3 billion in 2023. 

The fund has achieved little since its inception 38 years ago, losing much in lost opportunities because the contributions, being voluntary, have not been much on a relative basis. Although a respectable return of six percent per year was achieved, the small contributions did not make the fund a heavyweight. On top of that, poor controls and the use of emergency regulations to tap into the fund depleted it even further. 

A comparison with Norway, which began extracting oil and gas in 1971, following discoveries in 1969, is illustrative of our own missed opportunities to preserve the proceeds from the sale of depleting resources for future generations. When oil contributed substantially to the economy, Norway set up a sovereign fund in 1990. 

Malaysia set up Kwan two years earlier in 1988 under the Dr Mahathir Mohamad administration, but as with many other such projects, such as the national car and heavy industries, it suffered from lack of follow-through and misplaced strategies.

While Norway’s Government Pension Fund Global received huge mandatory contributions, mainly state net revenue from oil and gas, Kwan’s only voluntary contributor was Petronas, which is 100 percent owned by the government. 

The Norwegian fund is 357 times larger than ours now. Norway’s output of oil, gas, and condensate in May was around 1.9 million barrels of oil equivalent per day. Malaysia’s output is very similar, with Petronas announcing in January that it aimed to sustain production at about two million barrels of oil equivalent per day. That’s a very stark and sorry representation of our situation. It could have been tremendously positive if we managed revenue from depleting resources well, by first allocating enough money into the fund. 

While the revamp of the fund with safeguards on withdrawal is welcome, it is rather late and has caused us trillions of ringgits. The new contributions set, although mandatory, may still be too little to make a real difference in the future. 

The new annual contributions are:

 

·         - at least 0.1 percent of the federal government’s projected annual revenue. This is estimated to be RM343 billion for 2026. So the contribution to Kwan should be RM343 million. 

·         - at least two percent of the dividend the government receives from Petronas. The government expects to receive RM20 billion in dividends from the national oil company in 2026. Contribution to Kwan should be RM400 million. 

·        - at least two percent of export duties collected on depleting natural resources, including crude oil, minerals, and iron ore. The Statistics Department estimates the export value of crude petroleum and condensates to be about RM25 billion. At 10 percent, the export duty is RM2.5 billion. Two percent of that is RM50 million. 

Total contributions to Kwan should come to just under RM800 million a year. Meanwhile, the Employees Provident Fund received contributions of RM120 billion in 2025, 150 times what Kwan is to get. 

The new act strictly ring-fences dipping into the coffers by the government. Annual withdrawals are legally capped at a maximum of 50 percent of long-term real returns, implying capital can’t be touched. Usage is restricted strictly to three national development pillars: education, healthcare, and climate change mitigation. Any change requires a parliamentary vote. 

It may be too little too late, but at least it is a change in the right direction. 

Reference:

COMMENT | Revamp of national trust fund is very late, but welcome, P Gunasegaram, Malaysiakini, 21 July 2026   

 

Managing or Leading?

 

How does it feel for a global CEO to walk into a board meeting with a big decision to make? Only that after ninety minutes there is still no decision.

 

The board discussed it thoroughly. Every perspective was heard. The room took careful note of the intended way forward.  Without endorsing it, the CEO managed the meeting perfectly. Nothing had moved.

 

Why does this happen? The process isn’t the problem. The agenda was clear. Supporting data was adequate. The discussion was structured and civil and thorough. But there is a problem. Below the structure and civility, the CEO didn’t check what message had landed. Those listening didn’t speak out compellingly for or against the proposal. The result?  Fog instead of clarity. Because something was happening beneath the discussion that wasn’t revealed through the discussion.

 

A senior partner protecting a position they had held publicly for three years. A regional leader whose firm would bear a disproportionate cost of the decision going one way. A board chair managing the temperature of the room rather than prioritising the direction of the organisation. This remained hidden. All of it was felt. By not intervening to raise these unspoken points, the conversation remained opaque.

 

The CEO managed to avoid disagreement rather than create a compelling endorsement of the proposal. Leading and managing a room are different. Managing prioritises everyone is comfortable. Leading prioritises moving something forward. Your board doesn’t need better management.

 

It needs someone courageous enough to hear the answers to the difficult questions and get things moving!

 

Reference:

Chris Rawden’s Post on LinkedIn

 

2H2026 Outlook (by MARC Ratings Berhad)

 

The US continues to outperform most advanced economies. This is supported by artificial intelligence (AI)-led investment, resilient domestic demand and structural advantages. Meanwhile, China remains on track to achieve its revised growth target despite persistent weakness in domestic demand. This is supported by resilient exports and policy shifts towards industrial upgrading and advanced manufacturing. 

Following stellar 1H2026 gross domestic product (GDP) data, MARC Ratings has upgraded its full-year GDP forecast to 5.1% from 4.4% for Malaysia. Global geopolitical uncertainties have effectively catalysed growth drivers in Malaysia, accelerating supply-chain investments and infrastructure development. Record-high inward tourism, and hydrocarbon exports are other factors. These tailwinds complement ongoing strength in foreign direct investment (FDI). In addition, the semiconductor and AI investment upcycle, and resilient private consumption contribute to the positivity.

 

Source: https://de.wikipedia.org 

MARC Ratings expects the ringgit to trade within the 4.00–4.15 USDMYR range by end-2026, revised from the prior forecast of 3.98–4.07 USDMYR. Record-high exports and sustained FDI inflows should continue to provide support to the currency. The ringgit was broadly stable in 1H2026 and ranked as the second-best performing currency among major Asian peers in 1H2026 (trailing only the Chinese yuan). 

Malaysia is expected to continue attracting foreign bond inflows in 2H2026, supported by stable domestic fundamentals and ongoing institutional reforms. However, a more hawkish Fed outlook may moderate the pace of inflows. On the monetary policy front, MARC Ratings’ baseline expectation is for the Overnight Policy Rate (OPR) to remain unchanged. However, ongoing geopolitical risks could keep oil prices elevated and pressure inflation. 

Across ASEAN+3, inflationary pressures, tighter monetary policy expectations and a weaker sovereign credit outlook in selected markets weighed on bond market performance during 1H2026. Indonesia recorded the largest increase in its 10-year yield (+104.9bps), followed by the Philippines (+83.9 bps) and South Korea (+70.6 bps), while China's 10-year government bond yield declined by 11.4 bps amid subdued inflation and a dovish monetary policy outlook. Most regional yields are expected to remain biased upwards in 2H2026 as central banks maintain a cautious stance and investors continue to monitor volatile inflation dynamics and sovereign credit developments. 

Investors and FDIs have serious problems in planning short or medium-term investments. The Straits of Hormuz and the Red Sea carry the possibilities of uncertain, volatile environment. The U.S. especially has to extricate itself from the quagmire of never-ending wars. But Trump has no clue or solutions. So, be cautious in these uncertain times. 

Reference;

MARC Ratings Berhad, Press Announcement, 2H2026 Outlook: Navigating Higher Global Rates, 20 July 2026

RCI (on Tabung Haji): Cause and Solutions

The Royal Commission of Inquiry into Tabung Haji (TH) implicated senior officers in multiple misconduct cases and they had their penalties repeatedly watered down on appeal, with all five involved still employed at TH or its subsidiaries as of 2022. 

The RCI report, submitted to the Yang di-Pertuan Agong on Aug 30, 2022, and declassified now, said the pattern extended across police reports, internal disciplinary proceedings, referrals to the Malaysian Anti-Corruption Commission (MACC), and ongoing court and arbitration cases – with authorities and TH management alike taking too long, and often too little action, relative to the scale of the wrongdoing uncovered.

 

 

Source: https://en.wikipedia.org

 

The report said TH’s disciplinary committee charged five senior officers – group chief financial officer, chief operating officer, senior general manager, chief human resources officer and legal adviser – over four clusters of misconduct.

 

These included the sale of TH’s stake in PT TH Indo Plantations (THIP), a RM22.12 million Yayasan Tabung Haji contribution made without required ministerial approval, the disputed 2017 hibah declaration, and submission of false claims to TH’s payment unit.

 

It said while TH’s disciplinary committee initially imposed dismissal for the THIP and hibah cases and demotion for the Yayasan Tabung Haji case, an appeals committee later reduced nearly every penalty. Only one demotion, over the false claims case, was upheld on appeal. The report noted that all five officers remained with TH as of the report’s conclusion, several having moved into senior positions at subsidiaries, including TH Hotel & Residence, TH Plantations, and TH Properties.

 

The RCI also criticised the pace of TH’s internal disciplinary process, noting that one case took 19 months from an officer’s written response to a final decision, another took 15 months, and a third took 10 months. Separately, TH management filed four police reports between November 2018 and January 2019, according to the report. Two remain unresolved years later – one over the 2012 sale of TH’s 95% stake in THIP to Indonesia’s PT Borneo Pacific for about US$910 million, alleging misrepresentation and concealment; and another over Trurich Resources’ US$58 million purchase of palm oil plantations in Kalimantan between 2008 and 2009, alleging manipulated land-suitability reports. Both investigations have been held up pending cooperation from Indonesian authorities. A third report, over alleged misuse of Yayasan Tabung Haji funds, has been referred to the Attorney-General’s Chambers. A fourth, over the disputed 2017 hibah declaration, has also been completed by police and referred to the AG’s Chambers for a decision on prosecution.

 

The commission said authorities must act firmly and promptly on every police report or complaint lodged. It said six matters have been referred to MACC and remain under investigation, including alleged corruption in TH Plantation’s purchase of Ladang Weida Bhd, alleged abuse of power in the leasing of two restaurants at TH’s headquarters and KL Sentral, alleged corruption by a former chief operating officer over renovation works, alleged document falsification involving rubber seedling supplies in Sandakan, and alleged misconduct at two TH Properties subsidiaries.

 

The RCI was established in 2021 to investigate TH’s management, operations and asset-related issues between 2014 and 2020, following concerns over its governance and financial position.

 The RCI points fingers at three main things:

 

1. Political Interference: Too many politicians were sitting on the board of LTH, which led to bad decisions, risky investments, and self-interests.

2. A Weak Law: The current law (Act 535) gives the Minister almost unlimited power to hire and fire people without needing a real reason.

3.  No Financial Expertise: Board members were hired just for being "Muslim Malaysians," not because they actually knew anything about banking, finance, or investments.

 

The RCI gave a checklist of solutions:

 

· Ban Politicians: They want a total ban on active politicians being board members.

· Get Real Auditors: Stop using the National Audit Department (JAN) to check LTH's books; hire private financial firms instead.

· Stop Creative Accounting: LTH must stop using fake valuation methods and be forced to show their real audited financial losses.

· Split the Roles: Separate the "Hajj management" side from the "Investment" side into different departments so they don't mess up each other's money.

· Forensic Audits: They specifically named 13 failed subsidiaries (like TH Properties and FGV Berhad) that need special forensic audits to investigate where the millions of Ringgit actually went.

 

The question is why is PMX moving after almost 4 years? What about other leakages? Why are some people with DNAA in his cabinet? Has Tabung Haji fixed its mess? And what’s the progress to-date?

 

Reference:

Penalties against 5 senior TH officers watered down, says RCI report, Jason Thomas, FMT,
29 July 2026

 

 

The Movie Called “Tabung Haji”

 

There is something almost cinematic about the story of Tabung Haji [or TH]. Not very long ago, Malaysians were told about financial weaknesses serious enough to raise uncomfortable questions about TH. Today, PMX speaks of a Tabung Haji that has since recovered. If institutions were patients, Tabung Haji would be the fellow who once entered the ICU surrounded by worried relatives and has now walked back into the Mamak stall for a teh tarik. 

That recovery deserves recognition. An institution entrusted with the savings and pilgrimage aspirations of millions of Muslims cannot be allowed to collapse. Stabilising Tabung Haji was therefore not merely an accounting exercise; it was a matter of national confidence, religious responsibility and social stability. When people deposit money into Tabung Haji, they are not simply putting cash into another investment account. For many working-class Muslims, those savings represent years of sacrifice and the hope that one day they will be able to fulfil the fifth pillar of Islam.

 

Source: https://commons.wikimedia.org 

But institutional recovery creates another question, and this one cannot be answered with financial statements alone. If Tabung Haji is strong enough today for Malaysians to hear the truth about what went wrong yesterday, why did they have to wait years to hear it? 

The government's explanation deserves to be considered fairly. PMX has argued that releasing the report earlier, when Tabung Haji was still rebuilding itself, could have undermined depositor confidence and potentially triggered withdrawals. Anyone who remembers how quickly financial panic can spread should not dismiss that concern casually. Banks and financial institutions survive partly on confidence, and confidence is a peculiar creature: it can take decades to build and a weekend of WhatsApp messages to destroy. 

So yes, governments sometimes have legitimate responsibilities to manage sensitive information carefully during financial crises. But careful management of information is not the same thing as indefinite secrecy. That distinction matters enormously. 

A democracy cannot operate on the principle that citizens should only be told uncomfortable truths after the government believes they are (emotionally or financially) ready to hear them. Once that door opens, every embarrassing report can potentially be delayed under some variation of the same argument: markets may react, confidence may fall, institutions may suffer, people may misunderstand. Then transparency becomes conditional. And conditional transparency is a dangerous habit. 

One of the strongest observations emerging from public reaction to this controversy is remarkably simple: accountability itself creates confidence. Several Malaysians have questioned why an official report should be withheld until improvements are completed, arguing that the normal purpose of disclosure is precisely to identify failures publicly and then explain what corrective measures will follow. That argument deserves serious consideration.

Transparency does not mean announcing problems and abandoning institutions to panic. Responsible transparency means telling people what went wrong while simultaneously explaining the safeguards being introduced to prevent recurrence. It means saying: this was the weakness, this was the loss, this was the governance failure, these were the people or structures responsible according to the evidence, and this is what we have done about it. 

The report itself is not the destination. Accountability is. Malaysians have become familiar with Royal Commissions, task forces, special committees, investigations and thick reports produced after major controversies. The public reaction surrounding Tabung Haji reflects an obvious fatigue: people increasingly ask whether reports ultimately produce consequences. Some commenters put it crudely money disappears, reports are written, nobody is charged, and eventually everybody moves on. Others ask what purpose an RCI serves if its findings remain hidden or its recommendations are not followed. 

That cynicism should worry Putrajaya more than angry Facebook comments. Once citizens begin believing investigations are ceremonial rather than consequential, institutional legitimacy begins to erode. 

This does not mean every person criticised in an RCI report must automatically be prosecuted. That would itself violate due process. An RCI is not a criminal court, and adverse findings do not magically become criminal convictions. Evidence must be examined by the relevant enforcement agencies, prosecutors must independently determine whether charges are justified, and accused persons retain their right to defend themselves. 

However, some members of the public are already asking why a report completed years ago is returning to prominence around an election period. Did coalition sensitivities contribute to the delay? These are allegations and political interpretations, not established facts. But their existence tells us something important about the depth of Malaysia's trust deficit. We can talk more over a teh tarik? 

Reference:

Saved by Secrecy? The Bitter Truth Behind Tabung Haji’s Golden Turnaround, Annan Vaithegi, Opinion, Newswav,29 Jul 2026

The McKinsey Growth Pyramid

 

Every CEO wants growth. But very few know which lever to pull. The McKinsey Growth Pyramid breaks growth into seven clear pathways, from lowest risk to boldest move. Here’s how it applies to scaling a £2m–£15m business.

1. Sell more to existing customers

The easiest, safest path. Increase frequency, improve value, upsell. They already trust you.

 

2. Find new customers for your existing products

Same offer. New audiences. Often a positioning or marketing problem, not a product problem.

 

3. Add new products or services

Extend what you already do. Solve more of your customers’ problems and increase wallet share.

 

4. Change how you deliver

Subscriptions. Online delivery. Partnerships. Sometimes the biggest growth comes from changing the delivery model, not the offer.

 

5. Expand into new geographies

Take what works here and repeat it somewhere else. You’re not reinventing the wheel, just widening the road.

 

6. Change the industry structure

Acquisitions, alliances, strategic partnerships. One move can unlock scale years faster than organic growth.

 

7. Enter new markets or business models

The boldest move. High potential. High risk. The step you only take once the fundamentals are strong.

When you treat growth as a choice not a hope everything becomes clearer. Before you rush to build something new, ask yourself:

- Which growth path makes sense for right now?

- What is the lowest-risk move with the highest return?

- Do we have the capacity to support the next step?

Most businesses don’t fail to grow because of lack of ambition. They fail because they pursue the wrong type of growth at the wrong time. Be deliberate. Pick your path. That’s how you scale with control, not chaos.

Reference:

Tom Griffiths’ post on LinkedIn

Data Centres in Malaysia Require US$20bil in Funding!

 

Data centres in Malaysia are estimated to require over US$20 billion (US$1=RM4.09) in funding for powered shells and equipment over the next three years. This is based on the estimated capacity addition of around two gigawatts (GW), according to S&P Global Ratings.

Powered shells and equipment include the facility shell, power and cooling infrastructure, and networking and storage equipment. S&P Global Ratings said the funding quantum runs higher when chips are included – possibly one to four times the cost of the powered shell, depending on the type of chips used. S&P Global Ratings said data centre projects in Malaysia are therefore reaching an inflection point.

Source: https://wikilabs.asia

They may be able to depend mostly on bank loans and equity but will need to explore alternative capital sources soon. S&P Global Ratings (S&P) also said Malaysia’s cost competitiveness has eroded, with power costs now slightly above average versus Southeast Asian peers. Construction costs remain average against other key data centre markets in this region. However, Malaysia’s strategic location remains its largest advantage according to S&P. 

S&P expects Malaysia to overcome the execution challenges to become one of Southeast Asia’s largest data centre hubs, nearly tripling capacity by 2030. Proximity to Singapore, strong connectivity and growing power and water capacity should keep Malaysia competitive despite rising costs and tighter approvals. 

That’s good news for banks but ultimately it will be shareholders, business model and repayment capacity of those data centres that will determine whether financing moves forward. 

Reference:

Data centres in M’sia estimated to need US$20bil funding over next 3 years, Bernama/FMT, 20 July 2026