Skip to content

Stocks rally as Malaysian PM election ends

Reformist leader Anwar Ibrahim was sworn in as the tenth prime minister of Malaysia on Thursday evening local time, capping the most closely fought general election in the country’s history.
No single party or political coalition achieved a majority in Malaysia’s general election held last Saturday. Anwar’s People’s Justice Party won a total of 82 seats, far short of the 112 seats needed to take control of parliament. The parties were never able to form a majority coalition, eventually forcing Malaysia’s King Abdullah to personally come down and consult with the parties and appoint Anwar as prime minister.

In a statement, the palace said that His Majesty the King reminded the parties that no winning party has achieved a complete victory and no losing party has suffered a complete defeat. The people should not have to suffer the consequences of endless political turmoil and the country now needs a stable government to drive the economy and national development.

With the news of Anwar’s inauguration, Malaysia’s KLCI index rose 4% on Thursday, marking the biggest one-day gain in nearly two years. On the individual stock front, stocks in sectors such as beer and beverages and gaming generally surged. The Malaysian ringgit/USD rose nearly 2% at one point on Thursday, also the biggest one-day gain since 2015.

For investors, Anwar’s appointment dispelled the biggest doubts that the conservative National Alliance could turn the country into an Islamic state. The main economic promises on Anwar’s side are to fight inflation and revive the country’s small businesses.

Vishnu Varathan, chief of economics and strategy at Mizuho Bank Singapore, explained that the clarification of leadership uncertainty is a relief, especially with someone as charismatic and committed to bridging differences as Anwar to form the government. Hopefully, he will bring a shift to Malaysian politics, rather than just building a fragile balance.

Like most of the world, Malaysia’s economy remains in a weak rebound. However, analysts generally believe that as the ruling coalition becomes clearer, complemented by more aggressive policy support, investor sentiment for Malaysia will also turn sharply positive.

Published inInvestment Information

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Skip to toolbar