Malaysia’s Developers, Banks to Gain After Vote: Southeast Asia

Malaysia’s property companies and banks including UEM Land Holdings Bhd. (ULHB), CIMB Group Holdings Bhd. (CIMB) and IJM Corp. (IJM) are set to benefit as Prime Minister Najib Razak’s election victory may spur more infrastructure spending. 

Companies that have government ties including Astro Malaysia Holdings Bhd. (ASTRO) and SapuraKencana Petroleum Bhd. (SAKP) may also gain from the poll outcome, according to a report by Bank of America Corp.’s Merrill Lynch unit. CIMB (CIMB), the nation’s second- biggest bank by market value, is headed by Najib’s brother Nazir Razak.

The premier’s ruling Barisan Nasional coalition won 133 seats in the 222-member parliament at the May 5 polls, giving him the mandate to deliver on $444 billion of infrastructure and other investment plans by 2020. The Malaysian stock gauge and currency surged the most in Asia yesterday following the election results, with the benchmark FTSE Bursa Malaysia KLCI Index (FBMKLCI) rising to a record.

“Najib and his government can push through the reforms and pump in the fiscal infrastructure,” David Poh, Singapore-based regional head of portfolio-management solutions at the private banking unit of Societe Generale SA, which manages the equivalent of $113 billion. “The whole economic growth is going to be positive.”

Idris Jala, who oversees the country’s economic transformation, said Malaysia’s pipeline of investment is “very healthy.” The country should have “very robust growth” following the elections, Jala, minister in the Prime Minister’s department in Najib’s Cabinet before the election, said in a Bloomberg Television interview with Haslinda Amin.