Malaysian stocks, ringgit drop, politics in chaos after Dr. M resigns
Malaysia’s stocks plunged and the ringgit fell on February 24 morning on news that Prime Minister Mahathir Mohamad has tendered his resignation and there may be a realignment of the ruling coalition and change of government.
At close on February 24, the key stock index KLCI at Bursa Malaysia fell 41.14 points or 2.69 per cent to 1490.06 points below the psychological level of 1,500 for the first time this year. The ringgit lost value against the US dollar and increased in price to 4.225 ringgit per $1 over a half-day trading from 4.188 as of the end of last week.
The downward spiral due to the political turbulence is additionally fueled by global economic disruptions and uncertainty associated with the coronavirus epidemic which has reached worldwide proportions.
Analysts say that this uncertainty associated with an unstable political environment is undermining investor confidence, weakening consumer sentiment and reducing the pace of economic development.
Meanwhile, Mahathir’s resignation has thrown the Malaysian government into chaos after an extraordinary weekend in which supporters sought and failed to form a new coalition government that excluded his potential successor, Anwar Ibrahim. The whole messy affair has led to increased uncertainty about Malaysia’s political future.
Now it’s the turn of Malaysia’s king
Making the situation even more chaotic, remaining coalition party members and Anwar Ibrahim himself later on February 24 publicly announced their support for the Mahathir just as he was due to formally hand his resignation to the king at 4pm.
The king has the option to reject Mahathir’s resignation or accept him as a caretaker prime minister. He can suggest both, him and Anwar, test their support on the floor of parliament, convince both sides to test their support at the general election or he can swear Anwar in, which is the least likely option, according to observers.
It was not immediately clear whether the depleted Pakatan Harapan coalition now had the simple 112-seat majority required to maintain government, following the defection of Mahathir’s 36-seat Bersatu party and of eleven members of Anwar’s People’s Justice Party, a situation which fueled speculations over a snap election.
Few analysts are prepared to write off Mahathir, amid persistent rumours his resignation from office and his party was a shadow play to smoke out unruly members of his own party and shore up support. Many of his Bersatu MPs are tipped to rejoin the government as independents.
Malaysia’s stocks plunged and the ringgit fell on February 24 morning on news that Prime Minister Mahathir Mohamad has tendered his resignation and there may be a realignment of the ruling coalition and change of government. At close on February 24, the key stock index KLCI at Bursa Malaysia fell 41.14 points or 2.69 per cent to 1490.06 points below the psychological level of 1,500 for the first time this year. The ringgit lost value against the US dollar and increased in price to 4.225 ringgit per $1 over a half-day trading from 4.188 as of the end of last...
Malaysia’s stocks plunged and the ringgit fell on February 24 morning on news that Prime Minister Mahathir Mohamad has tendered his resignation and there may be a realignment of the ruling coalition and change of government.
At close on February 24, the key stock index KLCI at Bursa Malaysia fell 41.14 points or 2.69 per cent to 1490.06 points below the psychological level of 1,500 for the first time this year. The ringgit lost value against the US dollar and increased in price to 4.225 ringgit per $1 over a half-day trading from 4.188 as of the end of last week.
The downward spiral due to the political turbulence is additionally fueled by global economic disruptions and uncertainty associated with the coronavirus epidemic which has reached worldwide proportions.
Analysts say that this uncertainty associated with an unstable political environment is undermining investor confidence, weakening consumer sentiment and reducing the pace of economic development.
Meanwhile, Mahathir’s resignation has thrown the Malaysian government into chaos after an extraordinary weekend in which supporters sought and failed to form a new coalition government that excluded his potential successor, Anwar Ibrahim. The whole messy affair has led to increased uncertainty about Malaysia’s political future.
Now it’s the turn of Malaysia’s king
Making the situation even more chaotic, remaining coalition party members and Anwar Ibrahim himself later on February 24 publicly announced their support for the Mahathir just as he was due to formally hand his resignation to the king at 4pm.
The king has the option to reject Mahathir’s resignation or accept him as a caretaker prime minister. He can suggest both, him and Anwar, test their support on the floor of parliament, convince both sides to test their support at the general election or he can swear Anwar in, which is the least likely option, according to observers.
It was not immediately clear whether the depleted Pakatan Harapan coalition now had the simple 112-seat majority required to maintain government, following the defection of Mahathir’s 36-seat Bersatu party and of eleven members of Anwar’s People’s Justice Party, a situation which fueled speculations over a snap election.
Few analysts are prepared to write off Mahathir, amid persistent rumours his resignation from office and his party was a shadow play to smoke out unruly members of his own party and shore up support. Many of his Bersatu MPs are tipped to rejoin the government as independents.
