Malaysian stocks are expected to remain lower as investors remain jittery about the global economy and continuing political uncertainty in the country, analysts said Friday. Stephen Soo, analyst at local brokerage TA Securities, told AFP the ongoing problems in the American market would not have a direct impact on Malaysia but there would be spill-over effects.
Investors were concerned about the ongoing political turmoil in the country after opposition leader Anwar Ibrahim on Thursday called for an emergency session of parliament to hold a no-confidence vote against Prime Minister Abdullah Ahmad Badawi, he said.
"Investors are waiting to see what happens when Anwar's deadline of September 23 expires although Abdullah has already said he will not convene an emergency session," Soo said.
Anwar promised to use the special sitting to prove his claim he has the support of enough government defectors to topple Abdullah's Barisan Nasional ruling coalition. He said he would name the defectors at the session, which he hoped would be held no later than September 23. The next parliament session is only due to begin on October 13. Anwar needs the support of 30 government lawmakers to take control of the 222-seat parliament.
"Market sentiment has been badly affected by the ongoing political situation and any rally seen is expected to be capped so there is not much upside," he said. "Investors will remain cautious as more will be keen to sell at present levels," Soo added.
"The uncertainty in the global markets and local politics have combined to create a very worrying situation," he said. Soo said the bourse would trade within the 980-1,020 points range.
For the trading week ended September 19, the composite index dropped 18.33 points or 1.8 percent to 1,025.70. Daily average volume rose to 496.75 million shares valued at 973 million ringgit (278 million dollars) from 351 million shares worth 791.26 million ringgit a week ago.