The shares of casino and resort operator Genting Malaysia have plunged by as much as 11 per cent — the greatest in two years, Bloomberg reported.
The drop is part of a wider slump in stocks related to alcohol and gambling across the country, in the wake of electorate gains made by Malaysia's Islamist party, Parti Islam Se-Malaysia (PAS).
Shares of Genting Malaysia's parent company, Genting, fell by about 10 per cent, while those of lottery equipment supplier Sports Toto are set to reach their lowest level since 1993.
Meanwhile, the shares of Brewer Heineken Malaysia fell by about 5.2 per cent, while those of Carlsberg Brewery Malaysia dropped by 4.9 per cent, according to The Edge Markets.
Greater risk of pressure on alcohol and gambling companies with PAS gains
PAS won 49 out of 222 seats in Malaysia's Parliament, a major increase from the previous three elections, when it only won 18 to 23 seats, CNA reported.
It is part of the Perikatan Nasional (PN) coalition led by former Malaysian Prime Minister Muhyiddin Yassin.
A senior fellow at the Singapore Institute of International Affairs, Oh Ei Sun, was quoted by Bloomberg as saying that this means PAS will be in a position to control "a lot" of policy generation and output, should Muhyiddin's coalition form the next government.
Analysts also expect increased scrutiny on sin companies in such a scenario, given PAS' record of cracking down on gambling and beer festivals.
Malaysian stock broker, TA Securities, was quoted by The Edge Market as saying that while the PN coalition did not mention such restrictions in its manifesto, alcohol breweries may face possible limitations, while nightclubs could face potential curbs.
PAS has cracked down on gambling before
In 2021, the Malaysian state of Kedah banned all 4D lottery shops.
The ban was issued by the state's chief minister, Muhammad Sanusi, who is a member of PAS.
PAS also issued a statement in September 2017, in which it alleged that the Better Beer Festival in Kuala Lumpur would turn the city into the biggest "centre of vice" in Asia.
A week after its statement, Kuala Lumpur City Hall officials said that the festival was cancelled due to the "political sensitivity" surrounding the event.
More on Malaysia's GE15
Top left photo via LowyatNet/Twitter, right photo via PAS/Facebook