KUALA LUMPUR,— Uncertainty over Pakatan Harapan’s (PH) plan for Tun Dr Mahathir Mohamad to hand over the prime minister’s post to Datuk Seri Anwar Ibrahim is turning investors cautious.
Both leaders have repeatedly stressed that the transition agreement will be honoured but there is still no specific deadline for when it must happen.
According to The Straits Times (ST), investors have been further unsettled by a perceived power struggle within PKR, the pact’s largest party, that is believed to be over the prime minister’s post.
“Most investors are already factoring in some risk that it might not be Anwar who becomes the next prime minister, so it won’t come as a complete shock,” Hasif Murad, investment manager at Aberdeen Standard Investments, was quoted as saying.
Political uncertainty over the prime minister’s post could also dissuade foreign funds that have been trickling back to Malaysia on the belief that the ruling coalition was finding its footing.
To mitigate, Invesco Singapore investment director Jalil Rasheed told The ST that funds are choosing to put their money in firms that are less susceptible to political and regulatory volatility.
The experience of watching the local markets weather the unexpected general election outcome last year has also bolstered investors’ confidence in Malaysia barring any significant policy upheaval.
“We invest in companies that are less prone to political risks, where policies and regulations are more free market than in the hands of political leaders,” he was quoted as saying.
A sex video scandal targeting Economic Affairs Minister Datuk Seri Azmin Ali forced PKR’s factionalism into the public sphere after Anwar suggested his deputy should resign if the videos are proven genuine.
The row had threatened to erupt into open conflict but has since subsided to levels that investors believe will not derail the PH transition plan.