Jittery waters in equity markets caused by Political Tsunami in Malaysia and Thailand

Malaysia and Thailand has been hit by political tsunami recently. Both Prime Ministers are being pressured to step down.

In Malaysia 2 days ago, former Deputy Prime Minister and the de-facto opposition leader Anwar Ibrahim has won the "most important" by-election in one of the parliament seats which was recently vacated by his wife to pave way for him to come back into parliament after a long absent. He won with a bigger majority than his wife did in the March general election despite the ruling BN goverment heavy machinery being deployed there.


Photo taken from Rocky's Bru

There has been calls by leaders of the ruling goverment to ask the current Prime Minister Abdullah Ahmad to step down because of this defeat. The Prime Minister is already facing challenges from veteran leaders within his own party, UMNO to replace him as the president of his party. This clearly shows strong resistance to the current goverment and the presence of very vocal Anwar Ibrahim will send the parliament into more action, and thus creating more turmoil in the house of law-makers.

Investors prefer to stay in the sidelines before taking further action. The The Kuala Lumpur Composite Index (KLCI) closesd at 8.23 points on the by-election day and continue to ease further today by shedding another 2.85 points to close at 1067.65 yesterday.

In Thailand,

Thousand of protesters stormed into seven state agencies including the Government House, as the People's Alliance for Democracy (PAD) tried to bring the government of Prime Minister Samak Sundaravej to its knees yesterday. Five core leaders from PAD were arrested for causing this uprising. (This may sound very familar to the Malaysians especially the Indians). More details here on Bangkok post. Few businesses and bank branches were closed. Protests started two months ago but this is an uprising. Are we going to see the end of Samak's rule? There is a high chance.


Photo taken from www.bangkokpost.com

The protest is expected to go on for another 2 more days and the Prime Minister has already issued warning to protestes to disperse or face legal action. Unexpectedly the benchmark SET Index rose 7.07 points yesterday (1%) to close at 675.99 points, after finding support at the 660 points level once again, two days ago.

Are these protests sign of people expecting Samak's downfall. Samak has been blamed for the economic slowdown because the Thailand economy and financial markets went downhill when he took over as Prime Minister in January this year.

In Hong Kong, real natural disaster affects businesses and the stock market. The stock market was closed 2 times this month because of high-category typhoon. However, the market has rebounded well this week. The benchmark Hang Seng Index rose 408 points (1.94%) yesterday.