Brace for a volatile day when Malaysia’s stock market reopens Monday after a three-day break that saw the opposition party win office for the first time in six decades.
Malaysia’s FTSE Bursa Malaysia KLCI Index was shut for three days as Mahathir Mohamad led an alliance to unexpectedly beat the ruling Barisan Nasional coalition. In his first remarks as prime minister of Malaysia, Mahathir said he’d lead a business-friendly administration and find ways to boost the nation’s equity market.
Even so, market watchers expect equities to fall across the board, with government-linked companies, benchmark index stocks and infrastructure companies taking the brunt of a potential selloff. iShares MSCI Malaysia ETF, the biggest exchange-traded fund holding Malaysian stocks, fell 6.2 percent this week. The FTSE Bursa Malaysia KLCI Index has corrected by 2.6 percent after it reached a record on April 19.
Affin Hwang Asset Management Bhd. is expecting a decline of as much as 8 percent in the first few days of trading post-election, while CGS-CIMB Securities lowered its end-2018 target for the benchmark index. UOB Kay Hian Holdings Ltd. and Nomura Holdings Inc. are reviewing their views on the main measure and equities.
On the flip side, Malayan Banking Bhd. has expressed optimism for financial markets following the election.
With Mahathir’s campaign promise to review all infrastructure projects including the East Coast Rail Link project, keep an eye on Gamuda Bhd., IJM Corp., Malaysian Resources Corp. and George Kent Malaysia Bhd.