BURSA Malaysia is expected to adopt a cautious “wait-and-see” attitude in the lead-up to polling day of the 15th General Election (GE15).
This is given GE15’s exceptionally-elevated outcome unpredictability, the latter exacerbated by fragmented alliances on both sides which will likely lead to multi-cornered fights, in addition to the over 40% jump in registered voters since GE14 to over 21 million, according to Maybank IB Research.
The latter stems from Undi 18’s lowering of the minimum voting age to 18 and the automatic voter registration which was fully implemented in January 2022.
“At the time of writing, GE15 is expected to be a fight of three main political blocks, namely UMNO-led Barisan Nasional (BN), Bersatu-led Perikatan Nasional (PN) and Datuk Seri Anwar Ibrahim-led Pakatan Harapan (PH),” shared chief economist Suhaimi Ilias and head of research Wong Chew Hann in a strategy note.
“The fractious ruling coalition and fragmented opposition coalitions/parties point to multi-corner contests up for grabs in GE15, unlike the head-on fights between BN and PH in GE14.”
This eventually makes the outcome of GE15 harder to predict although UMNO-led BN tends to be seen as a “beneficiary” of multi-cornered contest as opposed to a straight one-on-one fight.
All-in-all, Maybank IB Research outlined four ‘plausible’ outcomes for GE15:
- Scenario 1: UMNO-led BN wins the most number of the 222 Parliament seats but well short of a simple majority of 112, necessitating it to team up with Sarawak’s GPS and PAS – and possibly Bersatu-led PN – to form a simple majority government.
While there could be a jostling for senior/key ministerial posts – and even the restoration of deputy PM post that has been absent during Tan Sri Muhyiddin Yasin and Datuk Seri Ismail Sabri Yaakob’s terms as PM – there should be some semblance of continuity and stability in the subsequent weeks after GE15, especially with the Anti-Party Hopping Law in force (since Oct 5).
The risk to such an outcome is political party/parties in the alliance pulling out en-bloc.
- Scenario 2: UMNO-led BN plus Sarawak GPS secure better than simple majority although could still be short of two-thirds majority win of 148 parliamentary seats.
Under this scenario, the jostling for senior/key ministerial posts (and even deputy PM post) could be relatively less (vs Scenario 1) with the ministerial positions and Cabinet composition to reflect that of the respective alliance/party’s shares of seats in the Lower House of Parliament.
Also under this scenario, there could be more development allocation from the Federal Government to Sabah and Sarawak as well as further progress in granting “autonomy” for the two states.
- Scenario 3: Anwar-led PH on its own – or in some form of a bigger Opposition alliance – wins a simple or potentially “strong, formidable, convincing” majority.
Under this scenario, a key thing to watch is whether PH will discard or tone down some of its policies in its GE14 election manifesto which had negatively affected investors’ confidence when it came into power, eg cancellation/review of major infra projects; “breaking up” and/or exerting more influence/control over public listed monopolies (including abolishing highway tolls).
- Scenario 4: “Uncharted waters” with a totally new – rather than the tried and tested – coalition Government. For example, the potential scenario of the previously – even currently – “unthinkable” alliance between the likes of UMNO, DAP and PKR, for example, cannot be ruled out.
No guessing on policy changes and impact of such a scenario. It will be a period of uncertainty but discovery for everyone including the economy and the market. – Oct 12, 2022
