nouvelles

Malaysian ringgit, stocks under pressure amid political uncertainty as deadline extended to form govt

Malaysian ringgit, stocks under pressure amid political uncertainty as deadline extended to form govt

SINGAPORE – Malaysia’s stocks and the ringgit remained under pressure on Monday after the King’s decision to grant rival party leaders a one-day extension to form the next government amid uncertainty over how the ongoing horse-trading will pan out.

After diving sharply at the opening bell on Monday morning – following a general election that delivered the nation’s first-ever hung Parliament – markets regained some composure in the afternoon as news of the deadline extension spread.

The benchmark Kuala Lumpur Composite Index (KLCI) had slid 1.5 per cent in early trading to a session low of 1,427.75 before recovering some of its ground to stand at 1,437.55, down 0.8 per cent, at 2.38pm.

The ringgit, which had tumbled almost 0.8 per cent to 4.5872 against the US dollar, its steepest drop in seven months. recovered half of its losses to trade at 4.5712 at 2.53pm, down 0.4 per cent.

Against the Singapore dollar, the ringgit recouped all its earlier losses to trade a tad up at 3.342, after earlier weakening as much as 0.47 per cent to 3.3329.

In the latest development, which came around noon, Sultan Abdullah Ahmad Shah gave party leaders and heads of coalitions a one-day extension of the deadline to propose their prime minister candidate. So they have until 2 pm on Tuesday to do so.

This comes after a surprise morning meeting between Pakatan Harapan (PH) chief Anwar Ibrahim and his Barisan Nasional (BN) counterpart Zahid Hamidi, which has yet to produce Malaysia’s next government, with Mr Zahid saying his alliance’s supreme council has not decided who to back.

Despite the market recovery, Malaysian stocks remained mostly red across the board amid uncertainty over the outcome of talks.

Analysts in Kuala Lumpur said the market was jittery about the prospect for various sectors under different coalition permutations.

Malacca Securities, in a morning note, said some of the “sin sector” stocks could come under pressure if the Perikatan Nasional (PN) coalition – whose biggest component is the Islamist Parti Islam SeMalaysia – manages to cobble together a coalition. Stocks such as Genting, beermaker Heineken and Carlsberg Brewery were down.

Maybank Securities. said investors will likely go on risk-off mode amid uncertainties brought on by the elections. Meanwhile, the fall in commodity prices may also drag oil and gas-linked and plantation stocks lower.

To form a government, a party has to have a minimum of 112 parliamentary seats. Mr Anwar’s PH has 82 seats while PN – led by former prime minister Muhyiddin Yassin – has 73 seats. Both are scrambling to get smaller parties to join with them to cross the 112-seat line.

#Malaysian #ringgit #stocks #pressure #political #uncertainty #deadline #extended #form #govt

Related Articles

Leave a Reply

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

Back to top button