RHB Research said that the ongoing market volatility could be an opportunity to accumulate and in the near-term expect a shift to defensive sectors – consumer, healthcare, utilities, basic materials REITs, and resilient high dividend-yielding stocks
Malaysia has limited trade and business ties to Russia and Ukraine and offers a partial short-term hedge to investors given the importance of oil & gas and CPO to the domestic economy. Surging aluminium prices bode well for Press Metal as the supply deficit worsens.
The research house said that its 2022 strategy report that highlighted investment themes that include a trading-oriented market, rotation into value sectors on the back of a looming recovery, and centered around a core defensive posture, has played out relatively well thus far.
RHB said that while Ukraine was not a part of our base-case assumptions, the longer the crisis persists, the more fuel it will add to commodity prices which now requires a re-examination of our plantation sector view but dovetails well with our OVERWEIGHT call on the oil & gas and basic materials sectors.
However, it said an ill-advised advancement by Russian forces into greater Ukraine involving substantial loss of civilian life, escalation of sanctions, and involvement of NATO forces would be a worse-case scenario