KUALA LUMPUR – Political continuity in Malaysia in the form of an electoral victory for ruling party Umno will benefit the local stock market, Credit Suisse Malaysia’s head of equities Stephen Hagger has said.
He said investors’ fear of political risk is expected to subside and that would be a possible catalyst for the stock market, predicting that the ruling party would likely win big in the upcoming general election.
“And so it seems likely in the general elections which seems to be called in February or March next year that PM Najib will deliver at least a big victory for Umno, if not two-third majority,” he said during his presentation yesterday at the Rehda Institute CEO Series conference, referring to Datuk Seri Najib Razak who also chairs the ruling Barisan Nasional coalition.
Among other things, Hagger cited a fractured federal opposition helmed by Tun Dr Mahathir Mohamad ― a former prime minister and also former Umno president. Dr Mahathir now chairs both federal Opposition Pakatan Harapan and new Opposition party Parti Pribumi Bersatu Malaysia.
“And the reasons for that I think, the Opposition while popular in urban areas have not really dealt a killer blow.
“And if you look at elections worldwide, you’ll be surprised, it’s always been an anti-establishment party that has won. And having Dr Mahathir at the head of the Opposition is far from anti-establishment, he is the establishment.
“The persuasion of PAS to join the fold has divided the Opposition which will favour Umno,” he added.
“But a lot can happen between now and then but broadly markets don’t like surprises. And continuation of the present leadership for better or worse, will be seen as positive for the market,” the Credit Suisse Malaysia managing director concluded.
“What is good for the country in the long-term may not be good for the stock market. All markets like stability,” he said earlier.
The 14th general election must be held by next August, but can be called anytime earlier.
– Malay Mail