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Impending Election Unnerves Malaysia's Stock Market, Retail Sector
Source: http://www.channelnewsasia.com/stories/southeastasia/view/1249519/1/.html
Source Date: Wednesday, January 23, 2013
Focus: Electronic and Mobile Government
Country: Malaysia
Created: Jan 22, 2013

KUALA LUMPUR : The impending general election in Malaysia is starting to unnerve some sectors of the economy.

The stock market turned jittery at the start of the week, in reaction to Prime Minister Najib Razak's announcement that he would soon announce the polling date.

Even the retail sector is starting to feel the heat, as consumers tighten their purse strings.

The KLCI fell as much as 3 per cent in the first two days of trading, after Prime Minister Razak said, over the weekend, that he would soon announce the date for Malaysia's much-anticipated general election.

The ruling Barisan Nasional coalition, already grappling with a slowing economy, faces its most difficult polls to date.

Tengku Adnan Tengku Mansor, UMNO Secretary General said: "...people are worried...in case Barisan Nasional does not win, that is why...yesterday it was 40 points, today, this morning it was 30 points. People are jittery, people are scared."

Even retailers are feeling the heat. They said consumers are spending less despite the festive period, when traditionally Malaysian households loosen their purse strings and spend more on themselves and their children. Now, many are holding back their spending, especially on big ticket items, till after the general election.

Andrew Brien, CEO of KLCC SURIA, said: "We think this year will be a little bit tamer. GDP-wise...the country is on track. However, with an election looming, there is a little bit of nervousness, I think, with the consumers, because people...have got other things on their mind."

Retailers believe that consumers will start spending again after the 13th general election, which must be held by April.

The on-going disbursement of cash aid to millions of Malaysian households earning less than US$1,000 a month could also help to spur spending.

Retailers have given a conservative growth estimate of between 5 per cent and 6 per cent in 2013, in line with the country's economic growth forecast, which they said is not bad at all, compared to almost zero growth in Europe and the US.

- CNA/ms
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