Malaysian Stocks Tumble as Volatility Jumps Before Election

Photographer: Lam Yik Fei/Bloomberg

The Bursa Malaysia Bhd. headquarters stands in Kuala Lumpur. Close

The Bursa Malaysia Bhd. headquarters stands in Kuala Lumpur.

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Photographer: Lam Yik Fei/Bloomberg

The Bursa Malaysia Bhd. headquarters stands in Kuala Lumpur.

Malaysian stocks fell the most in almost three months as price swings in the nation’s benchmark index jumped before national elections on May 5.

The FTSE Bursa Malaysia KLCI Index (FBMKLCI) sank 1.1 percent at the 5 p.m. close in Kuala Lumpur, the biggest decline since Feb. 6. The measure’s 30-day volatility advanced to 7.6, the highest level since March 5. Trading volumes were 46 percent above the 30-day average, data compiled by Bloomberg show.

Prime Minister Najib Razak’s 13-party Barisan Nasional coalition, which won the 2008 national vote by its slimmest margin, faces a resurgent opposition alliance led by former deputy prime minister Anwar Ibrahim. Najib said last month a win by a fractious opposition could bring “catastrophic ruin.”

“It’s going to be the closest election Malaysia has ever seen since its independence,” Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, told Bloomberg TV’s John Dawson today.

Malaysia’s ruling coalition and opposition were “evenly tied” in a survey by Merdeka Center for Opinion Research conducted between April 28 and May 2, according to an e-mailed statement today. Forty two percent of voters agreed that opposition group People’s Alliance should be given a chance to govern, while 41 percent said only Barisan Nasional can rule, the survey showed.

Shares of Genting Bhd. (GENT) led declines in the Malaysian benchmark index. Genting, a casino and power group, sank 4.9 percent. Kuala Lumpur Kepong Bhd. (KLK) dropped 3 percent and Felda Global Ventures Holdings Bhd. (FGV) lost 2.8 percent.

To contact the reporter on this story: Gan Yen Kuan in Kuala Lumpur at ykgan@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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