This article first appeared in Capital, The Edge Malaysia Weekly on April 6, 2026 - April 12, 2026

EQUITIES have been on a roller-coaster ride since the US and Israel attacked Iran on Feb 28, with movements of stocks largely following the news flow of the day.

In the first three months of the year, the benchmark FBM KLCI climbed to a high of 1,771.25 points on Jan 27, before paring its gains and falling to a low of 1,674.17 on March 9. It has since recouped some of the losses from March 9 and ended the quarter at 1,690.36 points, bringing the benchmark’s 1Q gains to only 0.61%.

Commodity-linked sectoral indices surged in March after the onset of the Iran war, making them the best performers for the quarter and far outpacing the benchmark’s meagre gains.

The biggest gainer for 1Q was the Bursa Malaysia Plantation Index, outperforming the KLCI by a total 7.31%, followed by the Bursa Malaysia Industrial Products & Services Index’s 4.74% outperformance and the Bursa Malaysia Energy Index, which outpaced the KLCI by 3.33% (see chart).

Meanwhile, the biggest laggard was the Bursa Malaysia Construction Index, which underperformed the KLCI by 14.87% in 1Q. Trailing behind it was the Bursa Malaysia Telecommunications & Media Index, which underperformed the benchmark by 10.64%.

The plantation sector, one of the best-performing sectoral indices in 2025, saw its gains further lifted by the Iran war — as reflected in the index’s advances in March, just after the war broke out.

The sector’s surge towards end-2025 was driven mostly by firmer crude palm oil (CPO) prices, resilient export demand and expectations of stable margins in 2026. Meanwhile, the climb in 1Q this year can be attributed to rising crude oil prices — which CPO price tends to track.

“The ongoing Iran conflict has emerged as a major catalyst for CPO prices, primarily through its impact on the global energy markets, biodiesel economics and supply chain disruption,” says PublicInvest Research in a report dated April 1.

The research house notes that as crude oil prices have surged more than 50% amid supply disruptions in the Strait of Hormuz, the palm oil-gasoil spread has widened to a three-year high.

PublicInvest has raised its CPO price forecast for 2026/27 to RM4,400 per tonne, reflecting tighter supply dynamics and heightened geopolitical risks.

Since the start of the conflict, CPO prices have gained 19% to a year-to-date ave­rage of RM4,188 per tonne as oil prices spiked.

Indonesia just recently announced that it plans to accelerate the rollout of the 50% biodiesel blend (B50) on July 1, as part of efforts to reduce reliance on fossil fuels and ease fiscal pressure as crude oil prices soar. At the same time, the US has also finalised and increased its renewable fuel requirements for 2026/27, which has pushed soybean oil prices.

Analysts believe such factors could further lift demand for CPO, which should in turn push prices higher.

The biggest gainer on the plantation index was MHC Plantations Bhd (KL:MHC), which saw an increase of 44.55% in 1Q, closing at RM1.62 last Tuesday, equivalent to a market cap of RM312 million.

Notably, Ta Ann Holdings Bhd (KL:TAANN), was second on the list with a gain of 33.13% in 1Q, closing at RM5.43 last Tuesday. The group, which is in the oil palm, timber and reforestation business, saw its net profit for 4Q ended Dec 31, 2025, more than tripling to RM48.01 million against revenue of RM590.1 million.

It holds net cash of RM385.7 million and offers one of the highest dividend yields among listed planters at 7.5%. For FY2025, it declared a 40 sen dividend per share, up five sen from the previous year.

This was followed by small-cap Harn Len Corp Bhd (KL:HARNLEN) and TDM Bhd (KL:TDM), which gained 29.4% and 25.7% respectively in the first three months of 2026.

As for the super large-cap plantation companies, United Plantations Bhd (KL:UTDPLT) led the gains, rising 13.1% during the period. Next came Kuala Lumpur Kepong Bhd (KL:KLK) and IOI Corp Bhd (KL:IOICORP), which racked up gains of 9.71% and 6.97% respectively, while SD Guthrie Bhd (KL:SDG)  advanced 5.6% during the quarter.

Of the four super large-caps in the plantations sector, United Plantations, with a market cap of RM21.15 billion, has the highest dividend yield at 3.4%. It closed at RM34 last Tuesday.

CGS International Securities, which has a CPO price forecast of RM4,500 per tonne for 2026, says in its sector report on April 1 that production in 2H2026 could undershoot market expectations, owing to softer fresh fruit bunch (FFB) yields, the impact of land handed over to Indonesia’s Forestry Task Force and potential El Niño risks, which it sees as the next key catalysts for CPO prices.

Meanwhile, in its April 2 report, RHB Research recommends that investors adopt a “tactically positive” trading view for the sector, as it believes planters should benefit as long as the Middle East conflict persists — in view of the higher leverage that CPO prices have on earnings.

A check among eight research houses showed that five had “overweight” calls on the sector while three held “neutral” calls. The sector’s average price-earnings ratio stands at 16.17 times, still below its average PER of 19 times in 2024.

The Bursa Malaysia Industrial Product & Services Index, which has more than 200 constituent members, rose 5.35% in 1Q. In March alone, it gained 7% to reach 182.9 points last Tuesday.

Not surprisingly, the index’s gains were lifted by super-big cap constituent PETRONAS Chemicals Group Bhd (KL:PCHEM) (PetChem), which rebounded strongly from its earlier prolonged slump in 2025 as its shares gained 68.78% in the quarter, closing at RM6.07 last Tuesday.

The petrochemicals group has been touted as a big beneficiary of the Iran war, as the closure of the Strait of Hormuz also pushed up the prices of naphtha, a key petrochemical feedstock.

Analysts note that PetChem’s advantage lies in sourcing its gas feedstock domestically, avoiding reliance on Middle Eastern supply and thereby insulating it from war-related disruptions. The stock has also been supported by tighter feedstock supply, which underpins product pricing and supports margin expansion.

PetChem had been loss-making over the last four consecutive quarters as product prices fell across the industry from a global glut. In FY2025, the petrochemical group recorded a net loss of RM2.14 billion against revenue of RM27.48 billion.

CGS International Securities made an upward revision of its earnings forecast for the group on March 24, projecting a net profit of RM2.16 billion for FY2026 against an earlier forecast of RM1.5 billion. It has an “add” call on the stock, with a target price of RM6.58.

Meanwhile, in an April 1 report, MBSB Research upgraded its call on PetChem to a “buy” from a “neutral” previously. At the same time, it more than doubled the target price on the stock from RM3.01 previously to RM6.60, based on its FY2026 earnings and pegged to a +1 standard deviation of its five-year historical PE multiple of 38.8 times.

“A broader and more sustained conflict would likely exert continued upward pressure not only on feedstock prices but also across petrochemical derivatives as supply disruptions persist and production costs adjust accordingly,” it says.

The energy sector’s biggest gainer in 1Q is Hengyuan Refining Co Bhd (KL:HENGYUAN), whose share price surged 80.6% to close at RM1.40 last Tuesday, bringing its market capitalisation to RM840 million.

The refinery’s shares had been on a downward trend in the seven months prior to the rally in March. It has been loss-making for the last four consecutive years, with a net loss of RM260.24 million in FY2025 against revenue of RM13.16 billion.

Hibiscus Petroleum Bhd (KL:HIBISCS) also made huge advances in 1Q, increasing 52.12% as it closed at RM2.26 last Tuesday, giving it a market cap of RM1.67 billion.

In an initiation report, AmInvestment Bank projects a 10% year-on-year increase in Hibiscus’ FY2026 earnings, thanks to its low-cost portfolio with an average operating expenditure of US$21 to US$23 per barrel of oil equivalent and stronger sales of 4.7 million boe in 2HFY2026. “Hibiscus is on track to reach its upgraded sales volume of nine to 9.4 million boe,” it notes.

It says Hibiscus could dish out an attractive dividend, as management has guided for a 10 sen dividend if the FY2026 average realised oil price exceeds US$75 per barrel, with a 1HFY2026 dividend per share of four sen already declared.

“We believe this threshold is achievable, with 1HFY2026 realised prices at US$72 per barrel, implying an attractive forward dividend yield of about 4.5%,” it said.

The Energy Index’s biggest constituent — Dialog Group Bhd (KL:DIALOG), which has a market cap above RM12 billion — ended 1Q with a 30.36% gain, closing at RM2.19 last Tuesday.

Maybank Investment Bank (IB) Research has lifted its target price on Dialog to RM2.28 from RM2.21 to reflect higher oil price assumptions, while maintaining a “buy” call on the stock.

The research house says that beyond its upstream exposure, which benefits from higher oil prices, it favours Dialog for its recurring income base and stable cash flows from its midstream tank terminal assets.

With crude oil prices above US$100 per barrel, Maybank IB Research believes Dialog is likely to be a prime beneficiary of elevated oil prices, which should be reflected in a stronger 2HFY2026 financial performance, given the group’s two producing upstream assets — a 50%-owned joint venture with Pan Orient Energy (Siam) Ltd in Thailand; and a 20% stake in a production sharing contract for the D35/J4/D21 fields in Sarawak.

Maybank IB Research forecasts Dialog’s FY2026 net profit to double to RM606 million from RM303.83 million in FY2025.

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