Follow us on Telegram for the latest updates: https://t.me/mothershipsg

Malaysia voted in its first-ever hung parliament following its 15th General Election (GE15) and the ramifications have been characterised by Bloomberg as "extending the political crisis in an economy on a fragile rebound".

No majority

There was no clear winner after the election as none of the coalitions won an outright majority in the 222-seat parliament.

The three main national coalitions fell short of securing the required 112 seats to form the government.

The result was surprising, nonetheless.

Veteran opposition leader Anwar Ibrahim’s reformist Pakatan Harapan (PH) coalition won 82 parliamentary seats in the elections, the biggest haul among the competing blocs.

Meanwhile, former prime minister Muhyiddin Yassin claimed he has enough support to make a bid for the premiership.

Ramifications

The Malaysian currency was the worst performer in Asia on Monday, Nov. 21.

The ringgit weakened 0.45 per cent against the Singapore dollar to 3.332, following a rebound from a low of 3.42 in early November.

This still marked a year-to-date drop of 7.3 per cent.

The ringgit performed worse against the U.S. dollar, as it dropped 0.6 per cent to 4.5837 following the election results.

Most of Malaysia’s gaming and alcohol-related stocks fell following the Islamic party Parti Islam Se-Malaysia (PAS) gaining far more seats than expected in the elections, according to Bloomberg.

PAS, a component party of the newly formed PN, had taken 49 seats out of the 222 available, the most number of seats won by a single party.

In the previous election in 2018, it won only 18 seats.

PH and PAS are on the opposite ends of the political spectrum.

PN's chairman is Yassin.

What analysts are saying

A slew of analysts have weighed in on the Malaysia election result, according to The Straits Times.

They are of the view that the election result could not get any worse from a policy-making standpoint.

The gaming, brewery and tobacco shares are likely to take a hit in a Yassin-led coalition, owing to PAS's presence, with analysts citing regulatory risks in these industries.

The fundamental investment thesis toward Malaysia is still quite clear, irrespective of the coalition, one analyst explained.

There are three sectors to focus on, which include commodities, as Malaysia is a leading producer of rubber, palm oil, and tin.

Investors are also likely to stick to a wait-and-see approach as the power vacuum gets filled and a coalition government emerges.

In the short-term, say, one year, there could be volatility.

Top photo via Mahathir Mohamad Facebook