Kuala Lumpur, Malaysia: Malaysia’s stock market and currency fell after a general election produced the Southeast Asian nation’s first hung parliament, triggering a rush to form a coalition.
The ringgit fell nearly 0.8 percent versus the US Dollar before recovering from being down 0.1 percent recently, as investors weighed the possibility of an extended period of political instability.
The benchmark index for Kuala Lumpur decreased by as much as 1.5 percent.
According to Ms. Trinh Nguyen, a Senior Economist for Asia at Natixis in Hong Kong, “The hung parliament was primarily expected but is still viewed as harmful in the short term as it means that they will once again have to cobble a coalition to rule.”
The Pakatan Harapan (P.H.) and Perikatan Nasional (P.N.) coalitions failed to secure the necessary 112 seats to form the Government in Malaysia’s national election held recently, leaving no clear winner.
Mr. Anwar Ibrahim’s P.H. gained 82 seats, while Mr. Muhyiddin Yassin’s P.N. won 73 seats.
Mr. Muhyiddin and Mr. Anwar Ibrahim have asserted that they have enough support from lawmakers to create a new government.
King Sultan Abdullah Sultan Ahmad Shah of Malaysia has given politicians a deadline until Monday, November 21, 2022, at 2:00 P.M. (06:00 GMT) to inform the palace of their preferred government.
Malaysia, an ethnically diverse nation with a Malay majority as well as prominent Chinese and Indian communities, has been gripped by political instability since P.H.’s historic victory in the 2018 election, which ended the 60-year control of the Barisan Nasional coalition.
Mr. Muhyiddin was made Prime Minister when P.H. dissolved during political disputes in February 2020. A year later, Mr. Muhyiddin was dismissed and replaced by Mr. Ismail Sabri of B.N.
The COVID-19 epidemic has caused Southeast Asia’s fourth-largest economy to experience its most significant recession since the Asian financial crisis of 1998, but it has recovered strongly since then.
After expanding 8.9 percent in the second quarter, the gross domestic product (GDP) soared 14.2 percent between July and September.
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