The stunning election upset across the Causeway has sparked nervousness in the market. What are the concerns? Is this an opportunity for investors?

SINGAPORE (May 14): For avid market watchers, the first sign that Dr Mahathir Mohamad’s Pakatan Harapan (PH) coalition was on its way to dislodging Barisan Nasional (BN) might have been the soaring price of shares in Opcom Holdings. The Bursa Malaysia-listed seller of fibre-optic cables is 23.3%-owned by Mahathir’s son Mukhriz; another son Mokhzani is the company’s chairman and CEO. Its stock began rising in early May. On May 8, the eve of Malaysia’s 14th general election, it climbed sharply and ended the day nearly 36% higher.

Within a few hours of the polls’ closing on May 9, it became clear that Mahathir’s stock — figuratively speaking — was on the rise. But the prospect of Mahathir and his coalition of opposition parties’ taking power from BN’s scandal-ridden leader Najib Razak evidently made global investors nervous. As Malaysians cheered on PH late into the night and the wee hours of May 10, the largest US-listed exchange-traded fund holding Malaysian stocks was sinking. By the end of the trading day in the US, the iShares MSCI Malaysia ETF had fallen more than 6%. Meanwhile, the Malaysian ringgit weakened nearly 2% in offshore trading, via non-deliverable forward contracts.

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