KUALA LUMPUR: RHB Research believes the ongoing market volatility caused by the Russian invasion of Ukraine could be a buying opportunity for investors, although there remains concern over inflationary pressures.

       "A limited incursion only into eastern Ukraine could contain the geopolitical fall out and limit the loss of face on both sides.

       "In such a scenario, the ongoing market volatility could be an opportunity to accumulate," it said in a report.

       However, it noted that the longer the Ukraine invasion persists, the more fuel it will add to commodity prices.

       "This now requires a re-examination of our plantation sector view but dovetails well with our 'overweight' call on the oil and gas and basic materials sectors," it said.

       Noting that the Ukraine crisis is a significant inflationary event, RHB said it would present the US Federal Reserve with a dilemma over how aggressive it can act to tame inflation without triggering a recession.

       The broker expects a shift to defensive sectors including consumer, healthcare, utilities, basic materials, REITs and resilient high-dividend-yielding stocks.

       Meanwhile, it said Malaysia has limited trade and business ties to Russia and Ukraine and offers a partial short-term hedge to investors given the importance of oil and gas and CPO to the domestic economy.

       It added that the surging aluminium prices bode well for Press Metal as the supply deficit worsens.

       Over the near term, RHB expects volatility to spike as risk-off is the default knee-jerk investor reaction until there is better clarity on the extent of the crisis.

       While the research firm does not expects Russia to be an occupying force amid a hostile Ukrainian populace and risk extensive Western economic sanctions, it said a prolonged crisis could endanger global recovery.