This article first appeared in Capital, The Edge Malaysia Weekly on June 1, 2026 - June 7, 2026

A broad rally across commodities from crude oil and gold to aluminium and crude palm oil (CPO), driven by geopolitical tensions, supply disruptions and electrification-related demand, is reshaping the outlook for Bursa Malaysia-listed companies.

While upstream commodity producers are benefiting from stronger selling prices and cash flow, downstream sectors exposed to energy, transport and raw material costs face mounting margin pressure if elevated prices persist into 2027.

BIMB Securities director of research Mohd Redza Abdul Rahman tells The Edge that the current multi-commodity rally is a “dual-edged sword for corporate Malaysia, where upstream producers enjoy immediate earnings and cash-flow expansion while downstream processors and manufacturers grapple with margin compression from rising feedstock and transport costs”.

The impact is visible across four major commodity segments — energy, precious metals, base and industrial metals, as well as agriculture and fertilisers.

The energy segment has become the most immediate driver of the global commodities rally.

According to the World Bank, global energy prices are projected to rise by about 24% in 2026, mainly due to escalating tensions in the Middle East and concerns over supply disruptions involving the Strait of Hormuz, a critical shipping route carrying roughly one-fifth of global oil and liquefied natural gas trade.

On Bursa, the primary beneficiary of the sector is upstream producer Hibiscus Petroleum Bhd (KL:HIBISCS), whose earnings directly reflect the stronger oil prices.

The price of Brent crude oil, which hit a record high of US$114.44 on May 5, fell by about 15.6% to the US$96.65 level on May 22 amid expectations of peace signals between the US and Iran, as well as the reopening of the Strait of Hormuz. However, at the time of writing, a peace deal remains out of reach as the US and Iran have resumed fighting amid a fragile ceasefire.

Research houses have been increasingly bullish on Hibiscus Petroleum following the recent surge in oil prices linked to the US-­Israeli war against Iran. CGS International in a May 25 report raised its financial year ending June 30, 2026 (FY2026) to FY2028 earnings forecasts for Hibiscus Petroleum materially, citing higher oil and gas selling price assumptions, coupled with higher deferred tax incomes for FY2026, as well as stronger expected production growth from projects in Brunei, Anasuria in the UK and North Sabah.

Because of the expected leap in Hibiscus Petroleum’s earnings as well as the sales and production volume for some of its projects, the research house also projected FY2027 dividend per share (DPS) of 20 sen (yield: 9.5%), more than doubling FY2025’s DPS of 9 sen (yield: 4.3%).

CGS International has maintained its “add” call on the stock but raised its target price (TP) to RM2.85 from RM2.59 previously on the earnings projections. Similarly, AmInvestment Bank and MBSB Research maintain their “buy” calls on the stock with TPs of RM2.60 and RM2.55 respectively.

BIMB Securities Research expects Brent crude oil to average about US$95 per barrel in 2026, supported by structurally tight inventories despite expectations that some shut-in supply could gradually return by the second half of the year.

The consensus is that if elevated oil prices persist, the larger rerating may eventually extend to offshore service providers such as Dayang Enterprise Holdings Bhd (KL:DAYANG) and Velesto Energy Bhd (KL:VELESTO), as well as floating production storage and offloading (FPSO) operators such as Yinson Holdings Bhd (KL:YINSON) and Bumi Armada Bhd (KL:ARMADA).

Infrastructure-linked outfits such as Dialog Group Bhd (KL:DIALOG) and Wasco Bhd (KL:WASCO) could also benefit from stronger project activity and higher demand for energy logistics infrastructure.

MISC Bhd (KL:MISC), an energy shipping and maritime group, has also emerged as a near-term beneficiary of the Strait of Hormuz disruption. Kenanga Research raised its FY2026-FY2027 earnings forecasts and TP to RM9 from RM8.69 on stronger petroleum tanker rates, although it cautioned that rates could normalise as tensions ease and more vessels enter the market from 2027.

Meanwhile, energy-intensive sectors such as steel, cement, chemicals, gloves, airlines and logistics operators face mounting operating-cost pressure if oil prices remain elevated. Companies potentially exposed include steel players Ann Joo Resources Bhd (KL:ANNJOO) and Malaysia Steel Works (KL) Bhd (KL:MASTEEL), cement producers such as Malayan Cement Bhd (KL:MCEMENT), glove makers including Top Glove Corp Bhd (KL:TOPGLOV) and Hartalega Holdings Bhd (KL:HARTA), as well as airline and aviation-related operators such as Capital A Bhd (KL:CAPITALA).

Precious metals have emerged as among the strongest-performing commodities in this cycle, led by gold, which surged more than 65% in 2025 and ended the year at US$4,319.37. This year, bullion fell 19% from its high of US$5,417.21 on Jan 28 to trade at the US$4,390 a troy ounce level last Thursday.

A Reuters poll in February projected that gold prices would average a record US$4,746.50 an ounce in 2026, with some year-end forecasts by the likes of JP Morgan, UBS and Goldman Sachs ranging as high as US$5,400 to US$6,300 amid continued central-bank buying, geopolitical uncertainty and de-dollarisation trends.

In a May 21 report, BMI, a unit of Fitch Solutions, however, stands by its “neutral” stance on the precious metal, maintaining its 2026 gold price forecast at an annual average of US$4,600 an ounce as it “expects prices to face further downside as elevated oil prices linked to the US-Iran conflict reinforce a more hawkish US Federal Reserve policy stance”.

BIMB Securities Research, however, maintains its 2026 gold price forecast of US$5,400 per ounce.

According to the World Gold Council, gold is transitioning from a “cyclical safe-haven trade into a more structural reserve asset” as central banks diversify away from the US dollar.

Meanwhile, silver has also rallied strongly alongside gold, jumping 63% to a YTD high of US$116.70 per troy ounce on Jan 28. It currently trades at US$73 an ounce.

Reuters’ February survey showed analysts raising their 2026 silver price forecasts to an average of US$79.50 an ounce, up sharply from previous projections, supported by tightening supply conditions and rising industrial demand from solar panels, electrification and green-energy technologies.

On Bursa, direct exposure to precious metals remains limited, with Sabah-based gold miner AuMas Resources Bhd (KL:AUMAS) emerging as the clearest direct proxy for stronger gold prices, while jewellery retailers such as Poh Kong Holdings Bhd (KL:POHKONG) and Tomei Consolidated Bhd (KL:TOMEI) may also benefit from inventory gains and higher average selling prices, as could pawnbrokers Pappajack Bhd (KL:PPJACK), Evergreen Max Cash Capital Bhd (KL:EMCC) and Well Chip Group Bhd (KL:WELLCHIP).

While not all base metals are at record highs, prices remain high due to persistent supply constraints and long-term demand from artificial intelligence (AI) infrastructure, power grid upgrades, electric vehicles and renewable energy infrastructure.

Among Bursa-linked beneficiaries, aluminium producer Press Metal Aluminium Holdings Bhd (KL:PMETAL) and tin miner Malaysia Smelting Corp Bhd (KL:MSC) stand out as beneficiaries due to their price sensitivity, reflecting strong demand.

Research houses have reiterated “buy” calls on Press Metal, with RHB Research raising its TP on the stock to RM10.50 from RM8.50 previously as it expects aluminium markets to remain structurally undersupplied amid disruptions involving Middle Eastern smelters and shipping routes, supporting elevated aluminium prices over the medium term.

“[This] will be the impetus for higher FY2026-FY2027 earnings,” says RHB Research, revising its FY2026-FY2027 London Metal Exchange (LME) price assumption to US$3,150-US$3,250 per tonne (from US$2,850-US$2,950).

“LME aluminium prices are now at US$3,500-US$3,600 per tonne (from US$3,100-US$3,200 per tonne prior to the Middle East conflict) bringing the year-to-date average to US$3,275 per tonne. Note that current prices are already largely higher than the 2022 levels, during the Russia-Ukraine war,” RHB Research writes in its May 25 report.

MSC has emerged as another notable proxy for the base metals rally after posting a more than five-fold jump in 1QFY2026 net profit to RM42.9 million, driven mainly by higher average tin prices of RM193,100 per tonne versus RM142,000 a year earlier.

Following the stronger-than-expected results, PublicInvest Research raised MSC’s FY2026-FY2028 earnings forecasts by an average of 15.9% and increased the group’s TP to RM3.10 from RM2.60, citing persistent global tin supply deficits and resilient demand from semiconductors, AI hardware and data-centre infrastructure. Besides PublicInvest Research’s “outperform” call on the stock, which closed at RM2.15 last Thursday, UOB Kay Hian ascribed a “hold” call with a higher TP of RM2.01, from RM1.89, to reflect stronger earnings expectations driven by elevated tin prices and higher-margin tin reserve monetisation.

Meanwhile, cable manufacturers Southern Cable Group Bhd (KL:SCGBHD), Master Tec Group Bhd (KL:MTEC) and other construction services and materials providers like MN Holdings Bhd (KL:MNHLDG) and CBH Engineering Holding Bhd (KL:CBHB) could benefit from rising investment in grid upgrades and data-centre infrastructure.

However, rising metal prices could pressure downstream sectors such as construction companies, property developers, appliance makers and automotive suppliers as steel, aluminium and copper costs rise, tightening margins.

Notably, property developers have cautioned that Malaysia may see moderate property project delays and rising construction costs with protracted geopolitical tensions in the Middle East.

The ongoing Iran conflict has emerged as a major catalyst for CPO prices, primarily through its impact on global energy markets, biodiesel economics and supply chain disruptions. Oil prices have surged more than 65% as a result of supply disruptions arising from the closure of the Strait of Hormuz, which have also pushed the palm oil-gas oil spread to a three-year high. The uncertainties arising from the Middle East conflict have driven CPO futures to a 16-month high of RM4,903 per tonne. YTD, CPO prices average at about RM4,224 per tonne.

High CPO prices and hefty fertiliser costs will see Malaysian and Indonesian planters hold back their replanting plans and cut fertiliser applications. According to the World Bank, fertiliser prices are projected to increase by 31% in 2026, driven by a 60% jump in urea prices.

As such, attention is on major plantation groups such as SD Guthrie Bhd (KL:SDG), Kuala Lumpur Kepong Bhd (KL:KLK) and IOI Corp Bhd (KL:IOICORP) as elevated CPO prices continue to support earnings and cash flow.

“Upstream plantation players continue to benefit directly from elevated CPO prices, although higher fertiliser costs — particularly nitrogen-based fertilisers derived from natural gas — could gradually erode margins if sustained over a prolonged period,” warns  BIMB Securities Research’s Redza.

Research houses including CIMB Securities, Hong Leong Investment Bank (HLIB Research) and PublicInvest Research remain constructive on the sector, stating that elevated CPO prices could continue supporting plantation earnings and cash flow into 2026.

HLIB Research recently maintained its 2026 CPO price assumption at RM4,200 per tonne, while CIMB Securities also expects prices to remain supported above RM4,000 per tonne amid slowing output growth and tightening balances.

The plantation sector has also received an additional boost from Indonesia’s latest export governance measures and its commitment to implementing the B50 biodiesel programme from July.

Experts believe the Iran conflict has strengthened biodiesel economics due to higher crude oil prices, while concerns over potential export disruptions and slower supply growth in Indonesia could further support global CPO prices.

Against this backdrop, CGS International in a May 26 report maintained its “outperform” call on the Asean plantation sector. It has a “buy” call on SD Guthrie with a TP of RM7.40 for its potential upside from non-core asset monetisation, as well as its venture into industrial parks and renewable energy. The research house also has “add” calls on Ta Ann Holdings Bhd (KL:TAANN) (maintained TP: RM6.85), Hap Seng Plantations Holdings Bhd (KL:HSPLANT) (TP: RM3.35) and KLK, upgrading the latter’s TP to RM25.65 from RM20.65 previously on projected better upstream earnings visibility in 2HFY2026.

BIMB Securities Research also favours SD Guthrie for its exposure to industrial-park land monetisation and renewable energy ventures, which the research house believes could unlock additional asset value beyond the group’s core plantation earnings.

Analysts caution that the sustainability of the rally ultimately depends on geopolitics, global growth and monetary policy.

For investors, the challenge is not just about identifying which commodity prices are rising, but also which companies are truly benefiting from the rally and which are suffering from higher costs.

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