A national election in Malaysia resulted in the Southeast Asian nation’s first ever hung parliament, which sparked a mad dash to form a coalition government before the Monday afternoon deadline. Because of the election, both the stock market and the currency went down.
In the early going of trading on Monday, the value of the ringgit decreased against the US dollar by almost 0.8 percent before recovering to be down 0.1 percent. This occurred as markets considered the prospect of an extended period of political instability.
The primary index for Kuala Lumpur saw a drop of up to 1.5 percent.
According to Trinh Nguyen, a senior economist for Asia at Natixis in Hong Kong who spoke with Al Jazeera, “the hung parliament was largely expected but is still viewed as negative in the short term as it means that they will once again have to cobble together a coalition to rule.”
In other words, politics takes priority over everything else, and it is yet unknown who will emerge victorious and to what degree they will be able to push through the mandates. Because there is a stalemate in politics, solving important problems like consolidating the budget will be difficult. We anticipate investors will wait to make investments until there is more clarity on the route politics and policy will take.
Neither the Pakatan Harapan (PH) nor the Perikatan Nasional (PN) coalitions were able to secure the necessary 112 seats to form the government in Malaysia’s national election that took place on Saturday. As a result, the election did not produce a clear winner.
The People’s House (PH), an opposition party led by former Prime Minister Anwar Ibrahim, secured 82 seats, while the Pakatan Nasional (PN), led by former Prime Minister Muhyiddin Yassin, won 73 seats.
Anwar Ibrahim and Muhyiddin have both said that they have enough support from lawmakers in their countries to form a new government.
The King of Malaysia, Sultan Abdullah Sultan Ahmad Shah, has given the political leaders in the country until Monday at 2:00 p.m. (or 6:00 p.m. GMT) to inform the palace of their choice of government.
Since PH won a historic victory in the 2018 election, ending the 60-year rule of the Barisan Nasional coalition, Malaysia, an ethnically diverse nation made up of a Malay majority along with significant communities of ethnic Chinese and Indians, has been gripped by political instability. Malaysia is a nation that is made up of a Malay majority along with significant communities of ethnic Chinese and Indians.
In February of 2020, PH completely imploded as a consequence of political infighting, which led to the nomination of Muhyiddin as prime minister. A little more than a year after that, Muhyiddin was removed from his position, and Ismail Sabri of the BN took his place.
The COVID-19 pandemic caused the fourth-largest economy in Southeast Asia to contract to its greatest extent since the Asian financial crisis of 1998. But since then, the country has done a great job of getting over the effects of the pandemic.
The Gross Domestic Product (GDP) of the country went up by 14.2 percent from July to September, after going up by 8.9 percent in the second quarter.