Analyst: Amid Middle East conflict, Malaysian dividend stocks may be a defensive choice

Gelonghui, March 24th｜According to a report by analysts led by Peter Kong at Kenanga IB, backed by strong cash flow, stable profitability, and low volatility, Malaysia’s dividend stocks are expected to remain resilient amid ongoing uncertainty in the Middle East. The conflict has altered expectations for the timing of US rate cuts and has slightly raised Malaysia’s inflation outlook for 2026, putting pressure on returns. Kenanga expects the 2026 inflation rate to rise slightly from 1.9% to 2.1%. The bank favors companies driven by domestic demand, such as TIME dotCom, Public Bank, Mr. D.I.Y., CIMB Group, Sunway Construction, and Paramount. For sectors more affected by external factors, Kenanga prefers oil and gas companies like Dayang Enterprise and MISC, as well as plantation companies such as PPB and TA Ann. Despite heightened volatility, these companies could benefit from rising commodity prices.