Malaysian Investors Should Seek Defensive Stocks Amid Mideast Tensions — Market Talk

Malaysian investors should consider defensive stocks as escalating tensions in the Middle East raise the risk of higher oil prices, inflation and market volatility, says Imran Yassin Yusof at MBSB Research. A sustained disruption to the Strait of Hormuz could push crude oil prices to US$100-US$120 a barrel, creating stagflationary pressures and weighing on global growth, he says in a note. REITs, utilities, healthcare and consumer staples are preferred for their stable earnings and dividend profiles, he says. Any de-escalation in the conflict could trigger relief rallies in lagging cyclical stocks, he adds. Axis Real Estate Investment Trust, Tenaga Nasional and Mr. D.I.Y. Group (M) are among his preferred picks to navigate the current situation.(yingxian.wong@wsj.com)