Price swings in the benchmark index of Malaysia has increased to a 1-month high figure as the Prime Minister of this Asian country, Najib Razak decided to dissolve the parliament for conducting the 13th general election in the country. The 30-day volatility of the FTSE Bursa Malaysia KLCI increased to 7.5, its highest value since 5th March. The stock index increased by 0.1% and is currently at 1685.40. It recovered the losses of 3.1% that it experienced at one point of time. As far as trading volumes are concerned, the same was 69% higher than the 30-day average. The announcement of dissolving the parliament was done through the national television.
Incidentally, the 13 party coalition of Najib named as Barisan Nasional (It means National Front in English), came back to power after the 2008 national vote where it won by the slimmest margin. The coalition currently faces a resurgent opposition alliance which is led by the Former Deputy Prime Minister, Anwar Ibrahim. In February, the approval rating of Najib went down to 61% from a value of 63% in last December, according to a survey conducted between 23rd January and 6th February.
According to the economist of Mizuho Corporate Bank Ltd., Vishnu Varathan, the dissolution of parliament doesn’t take away the uncertainty in terms of how much of the majority the Government can hold on to and how the policies will be affected because of election results.
Najib’s ruling coalition has been in power since Malaysia got independence from UK in 1957. According to Malaysian law, the election should be held within 60 days of dissolving the parliament. The Election Commission will be meeting within a few days for coming up with a date for the poll, as confirmed by the spokesman Sabri Said.
Barisan National has control over 137 seats in the 222 seated Malaysian Parliament, Malays Nasional Organisation being the biggest party of all.
Brian Tan and Wei Zheng Kit, two Analysts from Citigroup Inc., stated that the upcoming election is likely to become the closest in the history of the country. The voter demographics are shifting with each passing day and the voter turnout is expected to be high as well.
British American Tobacco Malaysia Bhd. increased by 1.9% marking the biggest gain in the KLCI Index. On the other hand, Hong Leong Financial Group Bhd. added 1.2%.