Malaysian stock market crashes after poll results

March 10th, 2008 - 4:40 pm ICT by admin  

Kuala Lumpur, March 10 (DPA) Malaysian shares plummeted 10.03 percent Monday, forcing a temporary closure of the market for an hour due to panic-selling following the results of the country’s general elections over the weekend. The Kuala Lumpur Composite Index hit 116.32 points, triggering a shutdown of the entire market in a circuit-breaker system implemented to protect the market.

There were major losses in all sectors, primarily in finance.

The market was closed at 3 p.m. and reopened an hour later when the index continued to drop.

Analysts attributed the plunge to investor uncertainty following the election results which saw the ruling National Front coalition returning to power but being denied a two-thirds majority, the first time since 1969.

Prime Minister Abdullah Ahmad Badawi has denied talk of his resignation following the election, which also saw the ruling coalition lose control of four more states to the opposition.

Traders predicted that the market would continue on a downward trend throughout the week.

“There was panic-selling and foreign buyers were dumping everything in response to the news,” said a broker at a local investment institution.

“Investors believe Abdullah will be forced to step down soon, and all his development projects will then be stopped,” he said.

“Right now, investors are all waiting to see what is going to happen next in the government, and in the meantime, they are taking their money out of the country.”

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