May 6 (Bloomberg) -- Najib Razak was sworn in as Malaysia’s prime minister after his coalition won a mandate extending its 55-year rule, with stocks and the ringgit rallying even as Anwar Ibrahim’s opposition vowed to contest some results.
Barisan Nasional won 133 seats in the 222-member parliament in yesterday’s election. Najib’s United Malays Nasional Organisation holds 109, or 82 percent of the coalition’s seats, up from 56 percent at the last election and less than 50 percent in 1999, according to Election Commission data, as support for ethnic-Chinese component parties dwindled. Anwar’s People’s Alliance took 89 seats.
UMNO’s increased standing in the ruling coalition may reduce the risk of a challenge to Najib’s party leadership, even as he fell short of a goal to secure more than the 140 seats won by the coalition in the last election. A victory margin that proved similar to 2008 may allow him to proceed with plans to narrow the budget deficit while focusing on delivering $444 billion of infrastructure and other investments by 2020.
“UMNO leaders know what’s good for them,” said Ooi Kee Beng, deputy director of the Institute of Southeast Asian Studies in Singapore. “If they realize how weak they actually are, they would see that Najib is their greatest asset. Without Najib they would have fallen.”
The currency strengthened 1.8 percent to 2.9793 per dollar as of 5:00 p.m. in Kuala Lumpur, the biggest one-day jump since June 2010, according to data compiled by Bloomberg. The FTSE Bursa Malaysia KLCI Index, which had lagged other Southeast Asian benchmarks this year, jumped as much as 7.8 percent to a record before finishing 3.4 percent higher.
Anwar questioned the fairness of the polls, telling Bloomberg Television in a phone interview today there were documented cases of electoral fraud and calling for an independent Election Commission to investigate. The opposition disputes the outcome in 30 seats.
The alliance will hold a rally on May 8 in a stadium outside Kuala Lumpur, he said separately in an e-mailed statement. “A fight for clean and fair election remains the single most important fight that any Malaysians should relate to,” said Anwar, who added he would resign when he is confident the election process is fair.
The opposition’s options are limited aside from asserting political pressure for a commission to investigate, James Chin, a professor of political science at the Malaysian campus of Australia’s Monash University, told Bloomberg TV’s Haslinda Amin in Kuala Lumpur today. “If there is any commission to be set up, it can’t be in Malaysia because they will accuse them of being biased, so it will have to have some sort of international component,” he said.
Monitoring groups including the Coalition for Clean and Fair Elections, known as Bersih, saw an “improvement in the conduct of the election” despite a number of “major issues,” according to their preliminary report. These included the use of phantom voters, stained ballot papers, indelible ink that could be washed off and the arrest of seven poll monitors.
“We look to our courts and our legal system to protect and uphold the rights of the people in these elections,” Ambiga Sreenevasan, Bersih’s co-chairman, told reporters outside Kuala Lumpur today. Her association of non-governmental organizations isn’t planning street demonstrations but will convene a “people’s panel” to consider evidence, she said.
Election Commission chairman Abdul Aziz said yesterday the commission was “satisfied” with the voting process.
With Najib’s win, Malaysia is “likely to see a potential surge in investment,” said Wee-Khoon Chong, an Asian rates strategist in Hong Kong at Societe Generale SA. Fitch Ratings Ltd. expects “greater clarity on the government’s fiscal and economic policy program,” Andrew Colquhoun, head of Asia-Pacific Sovereigns, said by e-mail.
Idris Jala, Najib’s minister responsible for overseeing the country’s economic transformation program, said Malaysia’s pipeline of investment is “very healthy.” The country should have “very robust growth” following the election result, Jala, minister in the Prime Minister’s department in Najib’s Cabinet before the election, said in a Bloomberg Television interview with Haslinda Amin today.
Government-linked shares led the gains in the FTSE Bursa Malaysia KLCI with UEM Land Holdings Bhd. leaping as much as 17 percent and Malaysian Airline System Bhd. rising as much as 26 percent. CIMB Group Holdings Bhd., a lender headed by the prime minister’s brother Nazir Razak, advanced as much as 14 percent.
Najib attributed the coalition’s defeat in the state of Selangor and some other areas to a larger than expected swing of ethnic Chinese voters against his government. “With the Chinese tsunami we couldn’t do anything in Selangor,” he told reporters after the vote.
Ethnic Malays make up about half of the population, while Chinese account for roughly a quarter and the rest are mostly ethnic Indians or indigenous groups. After 1969 race riots, Najib’s father, Abdul Razak Hussein, implemented a system of racial preferences for Malays as the country’s second prime minister that remains in place.
The opposition Democratic Action Party, made up mostly of ethnic Chinese, boosted its seat total by a third to 38, according to Election Commission data. Anwar told reporters today he offered his position as opposition leader to DAP founder and adviser Lim Kit Siang, who declined.
The main Chinese parties in the ruling coalition won nine seats, down from 23 in the 2008 election. Barisan Nasional’s ethnic-Chinese parties now hold the fewest seats since 1969, according to Joseph Chinyong Liow, associate dean of the S. Rajaratnam School of International Studies in Singapore.
Chua Soi Lek, a former health minister, issued a statement today saying he won’t seek re-election as president of Barisan Nasional’s Malaysian Chinese Association.
“It’s not necessarily only the Chinese who have swung against the BN,” Ong Kian Ming, an opposition candidate who won in Selangor, said of Najib’s coalition. “It’s more complicated -- a lot of urban Malays have swung against the BN as well.”
The ruling coalition won nine of 12 states contested, recovering Kedah from the opposition, the Election Commission said. The opposition retained Selangor, Penang and Kelantan.
Najib is more popular than his government. According to a Merdeka Center for Opinion Research survey his approval rating was 61 percent just before the election, while the poll of 1,600 voters conducted April 28 to May 2 found 50 percent of respondents had a positive view of his ruling coalition.
He led Barisan Nasional into an election for the first time since taking over four years ago from Abdullah Ahmad Badawi, who stepped down after the coalition lost a third of its seats in 2008.
“We have to show to the world that we are a mature democracy,” Najib told reporters today in Kuala Lumpur. “Whatever happens, the decision of the people, the will of the people must be respected.”
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