EMERGING MARKETS-Malaysian stocks, ringgit slip as political tension weighs

Credit: REUTERS/THOMAS WHITE

Malaysian stocks stumbled on Monday as political uncertainty in the Southeast Asian nation grew after the king rejected a request by the prime minister to declare a state of emergency in response to the coronavirus crisis.

Graphic: World FX rates http://tmsnrt.rs/2egbfVh

Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3lKhL5I

Ringgit dips 0.2%, Malaysian stocks off nearly 0.8%

Emergency request rejection spares economic crisis - Mizuho

Taiwan dollar at two-week high, up 1.1%

Oct 26 (Reuters) - Malaysian stocks stumbled on Monday as political uncertainty in the Southeast Asian nation grew after the king rejected a request by the prime minister to declare a state of emergency in response to the coronavirus crisis.

Broader Asian stocks and currencies were subdued, as a surge in coronavirus cases in the United States and Europe threatened hopes for a global economic recovery, adding to uncertainty posed by the looming U.S. presidential election.

Malaysian King Al-Sultan Abdullah's rejection on Sunday of the request for the emergency on Sunday is a major setback for Prime Minister Muhyiddin Yassin, who is facing a leadership challenge from an opposition leader and infighting within his ruling coalition.

The king's rejection has arguably spared the country a deeper political and consequent economic crisis, analysts at Mizuho wrote, noting that the emergency request could be construed as a backdoor for the prime minister to retain control.

"The real danger is that a state of emergency, if construed as an undemocratic tool to out-manoeuvre, will inadvertently exacerbate the PM's political woes, potentially plunging Malaysia into deeper political uncertainty." The ringgit MYR= shed more than 0.2% against the dollar to stand at a near four-week low, extending losses of around 0.3% sustained on Friday after talk of the state of emergency request first surfaced.

The Malaysian stock index .KLSE slipped 0.8% to its lowest since Sept. 11, with glove maker Top Glove Corp TPGC.KL the biggest loser, down 2.5%.

Malaysia has seen a resurgence in coronavirus cases recently, just as businesses and workers try to recover from the economic blow of pandemic-led lockdowns.

Thai shares .SETI struggled to hold on to gains and the baht THB=TH dipped slightly after a holiday-extended weekend, as protests demanding the resignation of Prime Minister Prayuth Chan-ocha continued.

Shares had recovered slightly on Thursday after an emergency decree aimed at ending months of protests against Chan-ocha's government and the monarchy was revoked, after it brought tens of thousands of people on to Bangkok's streets.

Taiwan's dollar TWD=TP was among the most sought after currencies in the session, gaining more than 1.1% to touch a two-week high.

The currency is the region's top performer so far this year with a 5.2% gain, as the work-from-home shift fuelled demand for the country's key chip and semiconductor exports, offering a buffer to the economic blow from the pandemic.

HIGHLIGHTS

** Top gainers on the Jakarta stock index .JKSE include Provident Agro Tbk PT PALM.JK, up 21.94%, and Sky Energy Indonesia Tbk PT JSKY.JK, up 20.69%

** In the Philippines, top index gainers were DMCI Holdings Inc DMC.PS, up 3.29%, and Puregold Price Club Inc PGOLD.PS, up 2.82%

** Indonesian 10-year benchmark yields fell 1.8 basis points to 6.6%​​, while 3-year benchmark yields eased 3.2 basis points to 5.23%​​

Asia stock indexes and currencies at 0448 GMT

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

-0.21

+3.53

.N225

-0.15

-0.74

China

CNY=CFXS

+0.01

+4.15

.SSEC

-0.72

6.70

India

INR=IN

-0.12

-3.16

.NSEI

-0.24

-2.19

Indonesia

IDR=

+0.03

-5.22

.JKSE

0.71

-18.27

Malaysia

MYR=

-0.22

-1.80

.KLSE

-0.52

-6.41

Philippines

PHP=

+0.06

+4.71

.PSI

0.14

-16.91

S.Korea

KRW=KFTC

+0.39

+2.47

.KS11

-0.29

7.11

Singapore

SGD=

-0.12

-1.07

.STI

-0.10

-21.34

Taiwan

TWD=TP

+1.06

+5.21

.TWII

0.18

7.70

Thailand

THB=TH

-0.03

-4.38

.SETI

-0.09

-23.25

(Reporting by Rashmi Ashok in Bengaluru; Editing by Muralikumar Anantharaman)

((Rashmi.Ashok@thomsonreuters.com; +918061822604;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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