PETALING JAYA: Investors are getting nervous about Malaysia.
In the offshore market, the ringgit exchange rate against the US dollar tumbled on Wednesday to its lowest level this year as early tally points to an election setback for Barisan Nasional.
While Pakatan Harapan leader Tun Mahathir had claimed victory, the official results are less certain with the Election Commission saying that they need more time to announce the winner.
“International markets are watching Malaysia quite nervously,” Oanda APAC head of trading Stephen Innes said.
“Unfortunately for Malaysia, the emerging markets as a whole are also going through a capitulation now because of the stronger US dollar,” he added.
The one-month non-deliverable forward contract for US dollar/ringgit fell to 4.042 on Wednesday, down 1.4% from Tuesday. In the onshore market, the ringgit was last traded at 3.9497 against the US dollar on Tuesday.
Financial markets in Malaysia are expected to resume trade on Thursday after a one day public holiday in conjunction with the country’s 14th general election.
“Investors would need time to digest and see the transition. As long as there is a smooth transition, investors are alright,” Philips Capital Asset Management chief investment officer Ang Kok Heng said.
“Generally all businesses and investors want to see stability. Both sides are pro-business and pro-development. So there is no issue of who takes over,” he said.