Spotlight back on Gas Malaysia as crude price whipsaws — Maybank IB - theedgemalaysia.com

KUALA LUMPUR, 10 AUGUST 2026 —

KUALA LUMPUR (Aug 7): Gas Malaysia Bhd has come under the spotlight once again as volatility in Brent crude oil prices resurfaces, according to Maybank Investment Bank (Maybank IB). The natural gas supplier's stock is closely watched as a direct pricing proxy to Brent crude, which has experienced significant fluctuations in recent days due to ongoing conflicts in the Middle East since March. As a result, Gas Malaysia's gas costs are expected to track Brent prices with a lag of approximately eight months.

Maybank IB has maintained its 'hold' rating on Gas Malaysia's stock, citing the uncertainty surrounding the company's future performance. The research house has also lowered its discounted cash flow-based target price (TP) to RM5.00 from RM5.50 per share, assuming lowered gas prices. However, Maybank IB notes that further upside is contingent on domestic gas prices staying higher for longer. According to the research house, every US$10 per barrel increase in crude oil price would raise its FY2027 net profit estimate by 9% and its TP by 50 sen per share. This suggests that Gas Malaysia's stock price is highly sensitive to changes in crude oil prices.

The volatility in crude oil prices has significant implications for Gas Malaysia's dividend payout. Maybank IB predicts an 80% dividend payout ratio for Gas Malaysia's forecasted financial year ending Dec 31, 2026, implying a yield of an estimated 4.5%. The group has traditionally maintained a minimum 75% dividend payout policy since its original listing in 2012. This consistent dividend payout policy has made Gas Malaysia an attractive stock for income-seeking investors. However, the uncertainty surrounding the company's future performance may affect its ability to maintain this dividend payout policy.

The research houses tracking Gas Malaysia on Bloomberg have shifted towards a more cautious stance on the stock. Only two research houses hold 'buy' calls, while none have 'sell' ratings. The 12-month average target price is RM5.42 a share, slightly higher than Maybank IB's revised target price of RM5.00. This suggests that the market is still optimistic about Gas Malaysia's long-term prospects, despite the short-term uncertainty surrounding the company's performance.

The Malaysian market is closely watching Gas Malaysia's performance, given its significance as a major natural gas supplier in the country. The company's stock price is seen as a proxy for the overall health of the energy sector in Malaysia. As such, any changes in Gas Malaysia's stock price can have a ripple effect on the broader market. The Malaysian government has also been keenly watching the developments in the energy sector, given its significance to the country's economy.

In terms of regional impact, the volatility in crude oil prices is expected to have far-reaching consequences for the energy sector in Southeast Asia. The region is a significant consumer of energy, and any changes in crude oil prices can have a significant impact on the regional economy. Gas Malaysia's performance is closely watched by investors and analysts in the region, given its significance as a major natural gas supplier. The company's ability to navigate the challenges posed by the volatile crude oil prices will be closely monitored by stakeholders in the region.

Looking ahead, Gas Malaysia's stock price is expected to remain volatile in the short term, given the uncertainty surrounding the company's future performance. However, the company's consistent dividend payout policy and its significance as a major natural gas supplier in Malaysia make it an attractive stock for long-term investors. As Maybank IB notes, further upside is contingent on domestic gas prices staying higher for longer. If crude oil prices continue to rise, Gas Malaysia's stock price is likely to benefit, given its direct pricing proxy to Brent crude. However, the company's ability to navigate the challenges posed by the volatile crude oil prices will be crucial in determining its long-term success. Details on the company's future plans and strategies are not yet available, but stakeholders will be closely watching its performance in the coming months.

Related: Maybank