Malaysian Stocks Drop on Election Concern: Kuala Lumpur Mover
Malaysian stocks fell, dragging the benchmark index to a seven-week low, and a gauge of volatility rose to a 13-month high as speculation the government will call an election soon heightened.
The FTSE Bursa Malaysia KLCI Index (FBMKLCI) lost 0.8 percent to 1,624.89 as of 12:25 p.m. local time, poised for its lowest close since Dec. 7. It was the worst performer among benchmark gauges in Asia today. The KLCI’s 10-day volatility climbed to 14.45, its highest since Dec. 8, 2011. Trading volumes were 69 percent above the 30-day average, data compiled by Bloomberg showed. Genting Bhd. (GENT), a casino and power group, dropped 3.3 percent, leading declines in the index.
“Local funds are selling again as the election is getting nearer and nearer,,” Ang Kok Heng, who helps manage the equivalent of $422 million as chief investment officer at Phillip Capital Management Sdn., said by phone in Kuala Lumpur.
There was speculation the vote would be held during school holidays at the end of March, Fiona Leong, a Kuala Lumpur-based analyst at Citigroup Inc., wrote in a note dated Jan. 23. Stock prices are likely to remain volatile until polling day, according to Leong. The KLCI index plunged 2.3 percent last week, its biggest weekly loss since May 18, on speculation the election would result in the ruling coalition losing seats.
Prime Minister Najib Razak must dissolve the nation’s parliament by April 28. Najib’s approval rating fell to the lowest level in 16 months, the Merdeka Center for Opinion Research said in a statement on Jan. 10.
Najib is having his weekly Cabinet meeting and couldn’t comment on the election timing, a government spokesperson said today.
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