KUALA LUMPUR, March 10 — RHB Investment Bank Bhd (RHB IB) said Malaysia’s energy sector remains a defensive play should geopolitical tensions persist, potentially triggering a market risk-off mode.
In a note, the investment bank said that big-cap (large market capitalisation) utilities such as Tenaga Nasional Bhd (TNB) and Petronas Gas Bhd (PTG) have minimal exposure to non-domestic risks.
The main non-domestic risks are fuel costs, non-domestic operations, regulated fuel costs, and forex, while regulated frameworks provide stable earnings with 4-5 per cent dividend yields, it said.
RHB IB said that in addition, it sees YTL Power International Bhd (YTLP) as a potential beneficiary of an increase in gas prices, resulting in higher spark spreads.
“Meanwhile, the cost pass-through mechanism for TNB and PTG’s regulated business ensures that cost fluctuations will have a neutral impact on their earnings.
“We would lean towards TNB, YTLP and PTG in a risk-off environment,” it said.
Meanwhile, Hong Leong Investment Bank Bhd said TNB is well insulated against geopolitical tensions.
It said TNB is well-positioned for a stronger financial year 2026 (FY2026)-FY2027 earnings, supported by robust electricity demand driven by Malaysia’s resilient economic growth and the rapid expansion of data centres.
“Earnings visibility is also further strengthened by an expanding regulated asset base, underpinned by accelerated contingent capital expenditure of RM3.7 billion in FY2026 and RM7.6 billion in FY2027 following the finalisation of its new return mechanism,” it said.
At 10.30 am, shares of TNB climbed 20 sen to RM14.04 with 1.05 million shares traded, PTG shares gained 30 sen to RM17.48 with 45,800 shares traded, and YTLP advanced 12 sen to RM2.71 with 2.62 million shares traded.
