Ringgit up for second day running after Anwar’s PM appointment

THE ringgit jumped, making the currency the best performer in the region for a second day, following the appointment of Anwar Ibrahim as Malaysia’s new prime minister.

The ringgit rose by as much as 0.9 per cent against the dollar to 4.4542, its strongest level since mid-August. The currency had surged by 1.8 per cent after Anwar’s appointment on Thursday, the largest single-day gain since March 2016.

Against the Singapore dollar, the ringgit strengthened 0.6 per cent to 3.2515, adding to Thursday’s 1.2 per cent gain.

The stock benchmark index declined as much as 1.3 per cent on profit-taking after the market added close to US$19 billion in value – the largest in a single day since March 2020 – on Thursday.

Anwar’s appointment removes a key uncertainty in the market and snuffed out concerns of potentially strong influence by the conservative Parti Islam Se-Malaysia, known as PAS, the biggest party in rival Perikatan Nasional bloc.

Still, analysts said the political risk premium on Malaysian equities remained given that the “unity government” model is unchartered territory and Anwar still has to test lawmakers’ support for his leadership with a confidence vote on Dec 19.

“Until the country attains reasonable political stability, the KLCI index would likely be commanding ‘sub-optimal’ valuation,” Vincent Khoo, head of research at UOB Kay Hian, wrote in a note.

Investors will also continue to watch the announcement of the Cabinet line-up and the tabling of a revised Budget. BLOOMBERG