This article first appeared in Capital, The Edge Malaysia Weekly on March 16, 2026 - March 22, 2026

DEFENSIVE strategies are back in play on the stock market with dividend yield stocks being of main interest to investors, given the uncertainties stemming from the Middle East conflict. The war, which began in late February when the US and Israel launched an attack on Iran, has now spread to other countries in the region.

Investors are gravitating towards stocks with a consistent dividend payout track record, partly also because of the lack of market catalysts after a relatively good start to the year. The FBM KLCI, which tracks the 30 top companies on Bursa Malaysia based on market capitalisation, had gained 2.17% for the year up to Feb 27.

The war in the Middle East prompted a sell-off, wiping out earlier gains and sending the index down 2.47% from Feb 27 to as low as 1,647.17 points on March 9. It had, however, largely recovered to close at 1,711.01 points last Thursday. On a year-to-date basis, the index is marginally lower by 0.33%.

Amid uncertainties wrought by the war, The Edge has compiled a list of the top 30 companies on Bursa Malaysia ranked by dividend yields. The data shows that yields vary widely across sectors, ranging from 6.77% to as high as 9.86%, significantly surpassing the FBM KLCI’s overall 2.3% gain in 2025.

Interestingly, none of the banks made it to the list. As their share prices rose significantly over the past year, their dividend yields were compressed.

Among the companies at the top of the list are consumer sector players such as British American Tobacco (M) Bhd (KL:BAT) with a whopping 9.89% dividend yield, followed closely by furniture manufacturer Poh Huat Resources Holdings Bhd (KL:POHUAT) with 9.25%, based on their closing price last Wednesday. (See table.)

BAT posted its strongest quarterly result in seven years, for the fourth quarter ended Dec 31, 2025 (4QFY2025), on the back of a surge in shipment volumes as retailers built up stock ahead of an adjustment in cigarette prices.

For the quarter, BAT declared dividend per share of 39 sen, bringing total DPS for FY2025 to 63.5 sen compared to 59 sen for FY2024. Net profit for that quarter more than doubled to RM121.2 million from RM48.97 million a year earlier, while revenue jumped 45.2% to RM947.98 million from RM653.03 million.

Retail prices of BAT Malaysia’s cigarette brands, which include Dunhill, Benson & Hedges, Peter Stuyvesant, KYO, Rothmans and Luckies, were increased in November last year following a two-sen-per-stick excise duty hike announced under Budget 2026.

As for Poh Huat, the group has consistently paid dividends of about seven sen to nine sen per share since 2020, except in FY2021 when it distributed five sen per share.

Despite its net profit halving in the financial year ended Oct 31, 2025 (FY2025), the group still declared a dividend of eight sen per share.

For FY2025, Poh Huat’s net profit fell to RM13.28 million from RM29.36 million a year earlier, mainly due to lower orders and shipments of office furniture from its Malaysian and Vietnamese operations.

Poh Huat warned of a tough outlook as the US investigation into furniture imports makes it hard to predict or plan ahead, while rising costs due to tariffs add to the problem.

Another consumer product player that made it in the top 30 is DXN Holdings Bhd (KL:DXN), which yielded 7.29% at 48 sen a share.

After years in the doldrums, more oil and gas (O&G) companies have emerged as top dividend payers, with Velesto Energy Bhd (KL:VELESTO) ranking in the top three on Bursa.

The upstream O&G player began paying dividends in the financial year ended Dec 31, 2023 (FY2023). In FY2025, Velesto declared its highest dividend to date of three sen per share. Based on its last trading price of 33.5 sen last Wednesday, the counter provided a 8.96% dividend yield.

The group is currently in the midst of selling one of its jack-up drilling rigs, Naga 3, for a total cash consideration of US$63 million (RM258.4 million) as part of a fleet optimisation exercise.

Velesto says the proposed disposal is expected to result in a pro forma gain of RM17.1 million, after accounting for estimated expenses, contingencies and taxes.

Other O&G counters that made it to the top 30, despite the recent interest in O&G counters as a result of the Middle East conflict, are Dayang Enterprise Holdings Bhd (KL:DAYANG) and Deleum Bhd (KL:DELEUM) at 7.61% and 6.94% respectively. Renewed interest notwithstanding, it is worth noting that most O&G counters are still trading at a single-digit price-earnings ratio (PER).

Of the 40 O&G-linked companies screened by The Edge, close to half of the dividend payers declared higher dividends in the latest financial period under review, compared to a year earlier.

Wasco Bhd (KL:WASCO), Carimin Petroleum Bhd (KL:CARIMIN), Hibiscus Petroleum Bhd (KL:HIBISCS) and Pantech Group Holdings Bhd (KL:PANTECH) continued to pay healthy dividends in the latest reporting period.

Those that have not declared dividends in the current reporting period include Uzma Bhd (KL:UZMA), T7 Global Bhd (KL:T7GLOBAL), Steel Hawk Bhd (KL:HAWK) and Malaysia Marine and Heavy Engineering Holdings Bhd (KL:MHB).

An O&G executive projects “a good year” for the O&G companies in 2026 as national oil company Petroliam Nasional Bhd (PETRONAS) is lining up more exploration drilling targets, especially offshore Peninsular Malaysia.

“Vessel players and maintenance, construction and modification services players could benefit from increasing demand as PETRONAS shifts its capex to Peninsular Malaysia and Sabah,” the executive who declined to be named says.

In late February, PETRONAS said it was shifting its spending on exploration activities to Peninsular Malaysia amid the ongoing legal dispute with the Sarawak state government.

Aside from O&G counters, commodity-linked stocks are also coming into focus as the escalating Middle East tensions drive sharp gains in crude oil and aluminium, according to Maybank Investment Bank (Maybank IB).

The research house notes that crude prices have surged nearly 46% in just two weeks — the steepest climb since the post-Covid-19 period — while aluminium has extended its bullish run, creating potential upside for related counters despite broader market volatility.

Maybank IB says the conflict could provide trading opportunities in companies such as PETRONAS Chemicals Group Bhd (KL:PCHEM) and Press Metal Aluminium Holdings Bhd (KL:PMETAL) while elevated freight rates could provide an upside to Westports Holdings Bhd (KL:WPRTS).

“In the meantime, as long as the conflict prevails, there could be trading opportunities in PETRONAS Chemicals (higher average selling prices) and Press Metal (wider spreads).

“The Middle East-related disruptions could keep effective vessel capacity tight due to route diversions, [and cause] delayed network normalisation for the Suez Canal transit and higher bunker costs. These factors are supportive of elevated freight rates, particularly on Asia-Europe lanes,” it says in a note on March 11, adding that this could provide an upside to Westports.

The firm advises selective positioning in commodities and dividend yield plays, adding that Malaysia’s domestic sectors should remain resilient even as near-term uncertainty persists.

While the immediate beneficiaries of higher oil prices have been energy stocks, TA Securities Research suggests that the spillover effects on the Malaysian plantation sector are being overlooked.

“Historically, stronger crude oil prices tend to support palm oil prices through improved biodiesel economics, as higher diesel prices enhance the attractiveness of biodiesel blending. At the same time, rising freight costs could improve palm oil’s relative competitiveness against other vegetable oils, particularly soybean oil shipments from the US and South America, which involve longer shipping distances to key Asian consuming markets,” it says in a report dated March 9.

It points out that since the escalation of tensions in the Middle East, plantation stocks on Bursa have traded largely sideways with only mild volatility. Its sensitivity analysis suggests that every RM100 increase per tonne in crude palm oil (CPO) prices could lift sector earnings by around 3%.

“As such, the recent consolidation in plantation stocks may present an opportunity for investors to gradually accumulate positions ahead of a potential improvement in CPO price dynamics.”

The research house has upgraded its call on the plantation sector to “overweight” from “neutral” as the risk-reward profile for the sector has improved. It has upgraded SD Guthrie Bhd (KL:SDG) to a target price of RM6.03, IOI Corp Bhd (KL:IOICORP) to RM4.53 and Kim Loong Resources Bhd (KL:KMLOONG) to RM2.63.

Maybank IB highlights that banks and real estate investment trusts (REITs) have maintained consistent dividend payouts of 5% to 6%.

It says between January and February 2026, the banking counters saw a strong increase in their share price and maintained a solid uptrend, which helped the FBM KLCI achieve its multi-year breakout.

Looking across the banking sector, the research house says RHB Bank Bhd (KL:RHBBANK) appears to be the most resilient among the banks, trading above its 50-day simple moving average (SMA) despite recent weakness.

As for REITs, it should be noted that the sector has been a safe haven for investors since last year, serving as a hedge against external shocks. It also emerged as one of the top-performing sectors in 2025.

Several counters such as UOA REIT (KL:UOAREIT), Sentral REIT (KL:SENTRAL), Amfirst REIT (KL:AMFIRST), KIP REIT (KL:KIPREIT) and IGB REIT (KL:IGBREIT) made it to the top 30, offering yields of 7.99%, 7.72%, 7.50%, 7.43% and 6.77% respectively — superior to the already-impressive dividend of 6.15% paid by the Employees Provident Fund for 2025.

Maybank IB has maintained its year-end 2026 FBM KLCI target of 1,780, with a bear case of 1,550 should geopolitical risks weigh more heavily on global growth. “We remain bullish on Malaysian equities and stay focused on domestic-centric sectors and stocks, led by banks, consumer, construction, healthcare and renewable energy.” 

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