Govt Measures To Safeguard Fuel, Supply Chains Support Production Activities -- Apex Securities
KUALA LUMPUR, June 11 (Bernama) -- Government measures to safeguard fuel and supply chains could support production activities in the near term, said Apex Securities Bhd.
In a research note, the brokerage firm said existing inventory buffers, supplier diversification efforts and government initiatives to safeguard fuel and supply chains should help cushion the impact of potential disruptions.
“Our channel checks indicate that supply disruption risks remain manageable for now, with no signs of broad-based disruptions across key sectors,” it said.
Citing the manufacturing purchasing managers index (PMI) surveys, which point to ongoing inventory accumulation, Bank Negara Malaysia (BNM) highlighted in its latest first-quarter 2026 (1Q2026) Quarterly Bulletin that businesses are holding an average of three to four months of inventory.
"Firms have also diversified suppliers and export destinations, reducing reliance on any single supply source," Apex Securities said.
It maintained its 2026 gross domestic product (GDP) growth forecast at 4.7 per cent year-on-year, with the expectation that the West Asia conflict should gradually ease in the third quarter of 2026 (3Q2026), broadly consistent with BNM’s baseline scenario of a temporary closure of the Strait of Hormuz until the end of August.
“Given signs of near-term supply chain resilience, we do not expect the current conflict to materially disrupt domestic production activities or derail the broader growth momentum,” it said.
It said growth should also be supported by resilient exports of electrical and electronic (E&E) products and information and communications technology (ICT)-related services, as well as steady domestic demand.
Existing policy support measures, including the continuation of targeted RON95 and diesel subsidies, as well as income-related support measures such as Sumbangan Asas Rahmah (SARA), a targeted aid programme, Sumbangan Tunai Rahmah (STR) and Jualan Rahmah, should continue to underpin household spending.
“Following the stronger-than-expected 1Q2026 GDP print, growth is likely to sustain in the coming quarters,” it noted.
Meanwhile, the firm highlighted that the recent increase in fuel prices has inevitably raised fiscal costs.
According to the government, Malaysia's fuel subsidy bill peaked at RM7.5 billion in April before moderating to RM3.5 billion in May.
“Our back-of-the-envelope estimates suggest the additional fiscal burden could amount to RM18 billion, or 0.8 per cent of GDP, should elevated energy prices persist.
“Nonetheless, we do not see material risks to Malaysia’s fiscal position, partly supported by the implementation of targeted fuel subsidy reforms over the past few years,” it said.
In addition, the government has reaffirmed its commitment to cost rationalisation across ministries. That said, Apex Securities cautioned that higher subsidy costs could result in expenditure reprioritisation under the 13th Malaysia Plan, although it expects only minimal impact on the broader public investment pipeline.
“Overall, we expect Malaysia's sovereign credit profile to remain intact,” it added.
-- BERNAMA