Markets remain cautious after the results of the parliamentary elections in Southeast Asia’s history.
Malaysia’s stock market and currencies fell after the Southeast Asian nation’s election to form a permanent parliament in Southeast Asia, sparking a scramble for a deal before Monday afternoon.
The ringgit fell about 0.8 percent against the US dollar in early trade on Monday, as markets weighed the possibility of prolonged political instability.
Benchmark Bursa Malaysia fell more than 1 percent.
“The hung parliament was widely expected but it looks like a mistake in the short term because it means they will have to form a coalition to govern,” Trinh Nguyen, Asia economist at Natixis in Hong Kong, said. Al Jazeera.
“In a way, politics takes precedence over everything else, and it is not yet clear who will win and how far they will go. Big issues such as economic integration will be difficult because there is a political crisis. We expect investors to stop investing until there is certainty about politics and policies.”
Malaysia’s national election on Saturday did not produce a clear winner, with neither Pakatan Harapan (PH) nor Perikatan Nasional (PN) winning the 112 seats needed to form a government.
PH, led by opposition Anwar Ibrahim, won 82 seats, while PN, led by former Prime Minister Muhyiddin Yassin, won 73 seats.
Both Anwar Ibrahim and Muhyiddin said they have enough support among MPs to form a new government.
Malaysia’s King Sultan Abdullah Sultan Ahmad Shah has given politicians a deadline of 2pm on Monday to inform the palace of their proposed government.
Malaysia, a multi-racial nation with a Malay majority as well as ethnic Chinese and Indian communities, has been plagued by political instability since PH won the 2018 general election, ending Barisan’s 60-year rule. Nasional. agreement.
PH collapsed amid political controversy in February 2020, leading to Muhyiddin’s election as Prime Minister. Muhyiddin was also pushed out a little over a year later and replaced by BN’s Ismail Sabri.
Southeast Asia’s fourth-largest economy has bounced back strongly from the COVID-19 pandemic after suffering the worst since the 1998 Asian financial crisis.
Gross Domestic Product (GDP) rose 14.2 percent in the July-September period, after growing 8.9 percent in the second quarter.