☕️ Raya so far: Heatwave, fireworks fire, expensive oil

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

890,000ha – That’s the allocation for the Annual Allowable Cut in Permanent Reserved Forests for the 13th Malaysia Plan. This is a decrease from the 1,165,300ha allocation during the 12th Malaysia Plan. The lower allocation is also a show of commitment by the government to sustainability, according to Natural Resources and Environmental Sustainability Minister Arthur Joseph Kurup. He said the reduction is a strategic step to balance economic needs and forest preservation that will have a positive impact on forest conservation efforts, while still ensuring a stable, continuous supply of timber to the industry. The forestry and agriculture sectors contributed RM6 bil to Malaysia’s GDP in 2025.

260 sq m – That’s the size of a green space (~2.8k sq feet if you are wondering) capable of cooling a surrounding area in Singapore by up to five degrees Celsius. A report by researchers from the National University of Singapore showed that a microforest can lower temperatures within two metres of its edges, despite its compact footprint. The study started collecting data on the CDL MicroForest project in Feb 2025, with the results published on Mar 20 this year. The green space was also found to support greater biodiversity, with increased bird activity and a growing number of species observed over time. Microforests are dense, small-scale green spaces designed to mimic the layered structure of natural tropical forests using native plants. The CDL MicroForest was also expanded to twice its original size earlier this year following the findings.

53% – That’s the percentage of women who reported a higher frequency of physical, verbal, sexual, or emotional abuse in India’s seven heat-prone states. This led researchers to identify extreme heat as a source of household tensions, escalating risks for women. The study polled more than 3,300 women across 15 districts in the states of Andhra Pradesh, Karnataka, Kerala, Maharashtra, Rajasthan, Tamil Nadu and Uttar Pradesh. The study defined a highly heat-vulnerable district as one hit by extreme and frequent heat waves with limited capacity to cope. Summers in India can reach temperatures exceeding 45 degrees Celsius, depending on the location. Read the full report here.

3. IN MALAYSIA 🇲🇾

REIT shake-up rattles market
Tax shift resets investor expectations: Malaysia has officially removed the preferential withholding tax for real estate investment trusts, a move that will change how REIT income is taxed from 2026. Previously, most non-corporate investors benefited from a concessionary 10% rate, but the new framework now taxes resident individuals based on their personal income rates, with no withholding tax. Foreign investors face a higher 30% tax on chargeable income, while non-resident corporations are taxed at 24%. The government says the REIT sector has matured and no longer requires special fiscal support. The change does not affect earnings directly, but it does influence post-tax returns, especially for foreign investors and those sensitive to taxation. Analysts point out that while yields are slightly impacted, they remain relatively attractive, estimated between 4.7% and 6%, compared with roughly 3.5% for 10-year government bonds. This keeps REITs competitive for domestic investors.
Learn: What is withholding tax?

Market reaction sends REITs lower: Following the announcement, Bursa Malaysia REIT Index (tracking 30 REITs with market cap of about RM62 bil) fell 3.45% on Mar 19, 2026, reaching its lowest level in nearly three months. Major counters, including Pavilion REIT, IGB REIT, and Axis REIT, led the slide as investors repositioned portfolios. Analysts warn that after-tax yields have declined for foreign investors, which could prompt some outflows and place short-term pressure on valuations. Despite the initial market reaction, domestic funds could help stabilise the sector since dividend income is already exempt at the fund level. Investors are now expected to focus on REITs with strong distribution growth, clear rental upside, and solid acquisition pipelines to maintain sustainable returns under the new rules.

Note: Since it’s a tax issue and not an earnings/performance issue, falling price is good news for investors (subject to your tax bracket). Yield and price are inverse - lower the price, all else equal, the higher the yield (i.e. returns). #notfinancialadvice.

Fire and heat spark safety warning
Fireworks frenzy sparks nationwide safety alarm: Fire incidents at premises selling firecrackers and fireworks have risen dramatically, jumping from 19 cases in 2024 to 113 in 2025, according to the Fire and Rescue Department. Johor recorded the highest number with 32, followed by Terengganu with 29 and Perak with 23. So far in 2026, seven cases have been reported, including two each in Johor and Penang, and one each in Kedah, Kuala Lumpur, and Melaka. Recent incidents include a stall destroyed in Taman Pekaka, Nibong Tebal, Penang on Mar 22, and a storage cabin fire in Kampung Gong Limau, Terengganu on Mar 13.

Housing and Local Government Minister Nga Kor Ming has ordered a review of standard operating procedures, including the mandatory use of fire extinguishers and the creation of buffer zones between stalls and nearby structures. Fire and Rescue Department Director-General Nor Hisham Mohammad reminded the public to remain vigilant, buy fireworks from licensed sellers, supervise children, and avoid using them near flammable materials. Users are also advised to light firecrackers in open areas, keep water or fire extinguishers nearby, and soak used remnants before disposal to prevent accidents.

Heatwave hits 14 areas as temperatures soar: Alongside the fire incidents, MetMalaysia has issued heatwave alerts for 14 areas in Peninsular Malaysia, including Perlis, parts of Kedah, Hulu Perak, Kuala Kangsar in Perak, Jerantut in Pahang, and Rembau in Negeri Sembilan - KL too, no escape . Level One alerts indicate daily maximum temperatures between 35 and 37°C for three consecutive days. Padang Terap in Kedah is under a Level Two alert, with temperatures expected to reach 37 to 40°C.

Shorts

1. Oil prices bite as Hormuz supply flows tighten
   PM Anwar Ibrahim explained that Malaysia is affected by rising global oil prices despite being an oil producer, as the country imports more crude than it exports and nearly 50% of its supply passes through the Strait of Hormuz. Tightening global supply has driven prices higher, prompting government fuel subsidies to jump from around RM700 mil to RM3.2 bil in less than a week. These subsidies shield consumers and traders from full market costs, with the government maintaining a focus on protecting public welfare amid continued international volatility.
   For the period 19 Mar to 25 Mar 2026, fuel prices as follows: RON95 unsubsidised (RM3.27), RON97 (RM4.55), diesel (RM4.72 Pen. Malaysia, RM2.15 East Malaysia).

2. Negeri di bawah bayu eyes Malaysia’s first wind energy project
   Sabah Energy Corporation plans to develop Malaysia’s first commercial 100 MW wind energy project in Kudat, aiming to boost the state’s grid capacity and reduce reliance on fossil fuels. Expected to start this year, the project forms part of Sabah’s strategy to lead the nation’s clean energy transition and achieve 40% renewable energy in the state’s power mix by 2030, rising to 80% by 2050. The state also offers investment opportunities across hydro, solar, and wind projects, with technical expertise and financial stability required for timely delivery.

3. Penang expands air links to China
   From Mar 31, Penang will operate its first direct flight to Qingdao, China, with Qingdao Airlines. The route strengthens tourism, trade, and cultural ties, connecting Penang to Northeast China cities including Harbin, Changchun, and Dalian. Qingdao Jiaodong International Airport also serves as a hub, linking Penang to other Northeast Asia destinations such as Seoul, Osaka, and Nagoya, providing new opportunities for trade and travel.

4. AROUND THE WORLD 🌎

A wider war?
Turkey warns of Gulf "countermeasures" should Iran’s attacks continue
Gulf countries have issued their “last warnings” to Iran, according to Turkish Foreign Minister Hakan Fidan. The group of countries questioned why Iran was attacking them and said they may be forced to retaliate if the attacks continue. Fidan claimed that Iran had attacked not only military bases but also civilian infrastructure and economic targets.

Iran developing system to approve ships in the Strait of Hormuz
Meanwhile, Iran is developing a new vetting and registration system for ships transiting the Strait of Hormuz, in a bid to shift to a “selective” blockade of the waterway. Maritime news and analysis service Lloyd’s List reported that several countries are in direct talks with Tehran to allow transit through the Strait, including Malaysia. So far, ships have been approved on a case-by-case basis. This follows a statement by Iranian Foreign Minister Abbas Araghchi that the Strait was “open, but closed to Iran’s enemies”, signalling a de-escalation from Iran’s previous stance of targeting any ship trying to transit the waterway.

No timeframe on Iran war, says Hegseth
US Secretary of War Pete Hegseth has warned that there is “no timeframe for ending” the Iran war. This follows the Pentagon seeking an additional USD200 bil (RM787.9 bil) to fund the war. Hegseth also said the amount could change, as it “obviously takes money to kill bad guys”. Hegseth assured the press that the US was “very much on track” and that US President Donald Trump would be the one to decide when to stop.

Trump recently ordered the Department of War to postpone planned strikes on Iran’s power grid, which led to oil prices dropping and stocks rising. The order follows what Trump called “good and productive” conversations between Iran and the US. Turkey, Egypt, and Pakistan are also reportedly mediating between the two countries. Israel is likely to follow Washington in suspending any targeting of Iran’s energy infrastructure.

Taiwan rejects China's energy security reunification offer
Taipei has rejected China’s offer of energy security under Beijing’s rule, an expected response given Taiwan’s long-standing stance against being governed by China. This comes amid the energy crisis brought on by the Iranian blockade of the Strait of Hormuz, through which Taiwan receives a third of the liquefied natural gas it buys from Qatar. Taiwan’s Deputy Economy Minister Ho Chin-tsang told lawmakers in Parliament that the offer is part of “cognitive warfare” or Beijing’s ongoing psychological pressure on the island.

Tech money

Grab strikes USD600 mil deal for Foodpanda's Taiwan business
The ride-hailing giant agreed to buy Delivery Hero’s Foodpanda operations in Taiwan for USD600 mil (RM2.36 bil) in a deal that marks its first foray outside its Southeast Asian stronghold. The acquisition, paid for in cash, will allow Grab to expand into 21 cities in Taiwan, which has a population of about 23 mil people. This follows Delivery Hero’s failed attempt to sell its Taiwan operations to Uber last year, as the island’s antitrust regulators rejected the deal, which was valued at USD950 mil. Grab is sticking to its 2026 adjusted EBITDA guidance of between USD700 mil and USD720 mil, and aims to complete the migration of users, merchants, and drivers to the Grab app by early 2027.

Thiel-backed USD2 bil AI cow-collar startup in talks for fundraising
Halter, the New Zealand-based company which makes AI-powered collars for cows, is reportedly in talks to raise a new funding round that would double its valuation to more than USD2 bil (RM7.88 bil). The size of the funding round has not been determined yet, as strong investor interest means the deal is heavily oversubscribed. Calling their tech Cowgorithm, the startup’s technology is designed to create a virtual fence for cattle and enables farmers to monitor the animals’ locations and health indicators through an app. The collars, which are solar-powered, connect to farmers’ phones to allow them to manage pastures remotely. Notably, Thiel is also behind Palantir, which recently got a USD10 bil Pentagon contract to run AI inside the military - surveillance tech comes to cow.

In other bovine-related AI news, Cargill, one of North America’s largest beef processors, has developed an AI-powered computer vision system called CarVe that spots tiny flecks of meat left clinging to bone and fat as cattle carcasses are processed. Early trials show that the system allowed meat packers to recover up to an average of 0.5% more meat from each animal, which translates to about USD200 mil (RM787.9 mil) of beef at current wholesale prices. This comes as US beef prices hover near record highs after years of drought prompted ranchers to thin their herds. The US national herd numbered 86.2 mil as of Jan 1, 2026. The US produces more than 27 bil pounds (12.25 bil kg) of beef each year.

Shorts:

1. Labubu movie coming soon
   Pop Mart is betting that a cinematic storyline can revive interest in the collectible toy following waning investor enthusiasm and slowing sales growth. The project will involve English director and screenwriter Paul King, known for movies such as Paddington and Wonka, as well as Lung Ka-sing, the Hong Kong-born artist who created the Labubu character. The movie is planned as a hybrid of live action and computer-generated imagery and remains in early development, with no financial details or a release timeline disclosed.

2. Sports app reveals aircraft carrier's location
   A French officer reportedly revealed the location of the French aircraft carrier Charles de Gaulle after logging a 35-minute run on the Strava sports app while exercising on the deck of the ship. He was using a smartwatch to record his run and upload the activity to the app, which created a map showing his location. The vessel, part of a carrier strike group recently deployed to the Mediterranean, was said to have been northwest of Cyprus, about 100km from the Turkish coast.

5. FOR YOUR EYES 📺

1. In a way, luck can be manufactured by increasing the probability of it. “The harder I work, the luckier I get” - Samuel Goldwyn, the man behind MGM.

2. Always wondered about this decades-long abandoned building smack right in the middle of KL. Not so lucky for them, unfortunately.

3. Islamic reggae, perfect for the festive season. Selamat Hari Raya, Malaysia! The artist’s Spotify here.