Late buying support of KLCI stocks cushions impact of Cabinet’s resignation

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KUALA LUMPUR: Late buying support for key stocks Petronas Dagangan, Sime Plantation and Tenaga Nasional helped cushion the impact of the resignation of Tan Sri Muhyiddin Yassin and his Cabinet, though he will remain caretaker prime minister.

The FBM KLCI managed to erase some of the earlier losses when it fell to an intra-day low of 1,493.6 ahead of his announcement.

However, due to the Covid-19 pandemic and that healthcare facilities in the country were in a worrying situation, the King believed holding the 15th General Election would not be the best option for the welfare and safety of the rakyat. Meanwhile, UOB Kay Hian Malaysia Research expected only a mild reaction from the already depressed market as the KLCI is trading at its assessed trough valuation.

Moody's Investors Service said although a period of political uncertainty may occur in Malaysia given the resignation of Muhyiddin, it expects the country’s credible and effective institutions to limit the impact on its macroeconomic policies and credit profile as demonstrated over past episodes of abrupt political change.

 

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