GE13: ‘A win for BN is a win for Malaysia’

KUALA LUMPUR: A strong mandate for the Barisan Nasional will be good news for the country as Prime Minister Datuk Seri Najib Tun Razak will be able to push through the reforms needed to lift the economy to the next stage of development, say experts.

Credit Suisse analysts said there would likely be a relief rally should the current government win.

“The Economic Transformation Programme (ETP) can charge ahead in full steam, driven by Pemandu (Performance Delivery Unit), which tells us the pipeline for private investments in 2013 continues to be robust,” the investment house said in a recent report.

It said the market expected Barisan to remain in power, albeit with a lesser majority.

Credit Suisse, however, added that the quality of Barisan's win was crucially important as a slim majority could signal political uncertainties.

“If Barisan wins by a slim majority, the stock market might worry over an internal leadership challenge or possible horse-trading,” the company said.

It added that Barisan seats in the peninsular versus those in Sabah and Sarawak would determine how much horse-trading would happen.

“If Barisan's hold in the peninsular is strong, then the bargaining power of the Sabah and Sarawak politicians will be significantly reduced.

“On the other hand, if a Barisan win in the peninsular is weak or if Barisan loses to Pakatan Rakyat, this spells a period of further uncertainties, as horse-trading may break out,” it said.

The company said Najib's standing in Umno would depend on the number party seats he delivered.

“The bigger, the better. Najib's power base could be strengthened if he delivers more Umno seats,” said the investment house.

“A big win in terms of Umno seats would signal leadership stability within the party.

“Again, we believe the number of Umno seats will likely increase, at the expense of other Barisan coalition parties,” it said.

In 2008, Umno won 79 parliamentary seats, representing 36% of the Dewan Rakyat, while its coalition partners won 61 seats, taking the total to 63%.

Following a potential win by Barisan, Credit Suisse said the ringgit should become stronger.

Stocks that could positively benefit from Barisan's win include that of CIMB Group Holdings Bhd, Gamuda Bhd, IJM Corp Bhd, Genting Bhd, Genting Malaysia Bhd, Bumi Armada Bhd, Tenaga Nasional Bhd, UEM Land Holdings Bhd and IJM Land Bhd.

Meanwhile, Bloomberg reported that several brokerages including CLSA Asia-Pacific Markets and RHB Investment Bank Bhd have warned of a market sell-off if the Opposition takes control, citing concerns over government stability and changes to investment projects approved under Najib.

Year-to-date, Malaysia's stock exchange FTSE Bursa Malaysia KLCI has been the worst performer in South-East Asia, due to the election overhang and the switch to higher beta markets.

However, due to the under-performing Malaysian market, analysts see value starting to emerge.

“We believe if there is a knee-jerk downward revision post-GE13. This would be a good opportunity to accumulate well-managed Malaysian stocks,” Credit Suisse said.

The investment house said it would highlight DiGi.Com Bhd, Astro Malaysia Holdings Bhd and Genting Plantations Bhd, as their fundamentals remain strong although they have been under-performing year-to-date.

(Source: The Star Online)