Politically‐linked counters are biggest gainers; ringgit touches a 10‐ month high.

With the election overhang removed and the incumbent Barisan Nasional (BN) government retaining power, Malaysia's stock market powered to a high of 1,826 points or 7.8 per cent at the opening of trade but eased later to close 3.4 per cent up. The ringgit also strengthened to a 10‐month high of 2.9920 to the greenback.
Volume was higher than usual at 1.9 billion shares worth nearly RM5 billion (S$2 billion) being traded. More than 800 stocks gained and there were only 90 losers,reflecting the up beat mood.

Analysts expect the market to re‐rate and to gradually narrow the gap with regional markets in the months ahead. A number of them have upgraded year‐end targetsto around the 1,815 level. They are however more divided about subsidy rationalization and the implementation of a goods and services tax (GST). Those less
optimistic about the pace anticipate a further delay "given the smaller BN win"  ‐ 133 Parliamentary seats from 140 in 2008  ‐ and Umno elections later this year. The United Malays National Organisation is the dominant party in BN.

Among the top stock gainers yesterday were counters perceived to be politically‐linked and which had lagged in the run‐up to the elections. They included CIMB (10 per cent), SapuraKencana Petroleum (13 per cent), UEM Land (13 per cent), Gamuda (9 per cent), DRB‐Hicom (7 per cent) and Felda Global Ventures (5 per cent).

AmResearch described the election outcome as "the best compromise for the equity market" with BN maintaining the mandate to ensure policy continuity while opposition Pakatan Rakyat's increased representation provides better checks and balances.

It expects the initial buying wave to be liquidity‐driven by the redeployment of institutional monies on the sidelines to increase equity exposure and to benefit big‐cap proxies such as CIMB, Tenaga, Axiata and SimeDarby.

Source: AmFraser