Shares ease on Malaysia's election results

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STI drops 0.31% as traders dither after incumbent BN government fails to return to power

The unexpected election results across the Causeway left traders here dithering yesterday, even as analysts warned of looming ringgit volatility.

Singapore's benchmark Straits Times Index (STI) wobbled around an intra-day average of 3,544.55. A late afternoon sell-off eventually pushed it down on the previous day by 10.95 points, or 0.31 per cent, to 3,537.59.

The bourse's trade of 1.57 billion shares - worth $1.16 billion in all - saw losers beat gainers 193 to 189.

All day long, the talk of the town was the watershed vote on the other side of the Causeway. Opposition coalition Pakatan Harapan, led by former premier Mahathir Mohamad, swept parliamentary and state polls to wrest power from the grip of the long-ruling Barisan Nasional alliance.

While Dr Mahathir plans to keep the Malaysian exchange shut for the rest of the week, Singapore had no such holiday - and traders are wary of the developing political situation.

Mr Eli Lee, Bank of Singapore head of investment strategy, said: "At a time of growing pressure on emerging market currencies and bonds, the situation in Malaysia bears careful watching for potential knock-on effects, particularly as rising rates and geopolitical uncertainties remain live in the backdrop."

Mr Kelvin Tay, regional chief investment officer at UBS Global Wealth Management, said the election result "is likely to lead to a period of volatility in ringgit-denominated assets due to heightened political uncertainty", adding: "Singapore companies with sizeable Malaysian exposure may be negatively affected in the short term."

Singapore's two biggest healthcare equipment and services stocks hold listings in Malaysia, where they have a significant business footprint. Shares were thinly traded yesterday in IHH Healthcare, which ended flat at $2.03, and manufacturer Top Glove, which slipped by $0.03, or 0.92 per cent, to $3.25.

Wilmar International, touted as one of the largest oil palm plantation owners in Malaysia, shed $0.04, or 1.23 per cent, to $3.21, and Jardine Cycle & Carriage, with motor interests there, lost $0.97, or 2.86 per cent, to $32.91. Their gloomy showing did not help the STI, which was already sinking under telcos' weight.

Singtel dipped $0.02, or 0.57 per cent, at $3.52, and StarHub shed $0.03, or 1.35 per cent, to $2.19.

But Catalist-listed gold miner CNMC Goldmine Holdings put on half a cent, or 1.82 per cent, to $0.28. Its flagship project is in Kelantan, which was successfully defended by Islamic opposition party Parti Islam SeMalaysia.

Energy stocks retained some goodwill from the recent rise in oil prices, which climbed on hopes of curbs in Iranian output.

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