Analyst: Malaysian dividend stocks may be a defensive choice in the midst of the Middle East conflict.

Kenanga IB analysts led by Peter Kong stated in a report that despite the ongoing uncertainty in the Middle East, Malaysian dividend stocks are expected to remain resilient, supported by strong cash flow, stable profits, and low volatility. The conflict has altered expectations for the timing of a US rate cut and slightly raised Malaysia's inflation outlook for 2026, putting pressure on returns. Kenanga expects the inflation rate for 2026 to increase slightly from 1.9% to 2.1%. The firm favors companies driven by domestic demand, such as TIME dotCom, Public Bank, Mr. D.I.Y., Lien Chang Group, Sunway Construction, and Paramount. For industries heavily impacted by external factors, Kenanga favors oil and gas companies including Dayang Enterprise and MISC, as well as plantation companies like PPB and TA Ann, which may benefit from rising commodity prices despite increased volatility.