KUALA LUMPUR: Malaysia's stock market skyrockets to its strongest gain in more than two years and the ringgit jumps to under 4.500 against the US dollar on optimism over Datuk Seri Anwar Ibrahim's appointment as the new Prime Minister.
Bursa's benchmark FBM KLCI, which ended the morning session more than 28 points or two per cent higher prior to news of the appointment, continued its surge immediately after trading resumed in the afternoon.
The index closed the day 4.04 per cent or 58.38 points higher to 1,501.88, its strongest gain in a single day since March 2020, while the ringgit strengthened to 4.4915 against the greenback as at 5pm, and set for its best showing since 2015.
Following a meeting between the nation's rulers, the Palace announced just before 2pm on Thursday that Yang di-Pertuan Agong Al-Sultan Abdullah Ri'ayatuddin Al-Mustafa Billah Shah had consented to the appointment of Anwar as Malaysia's 10th Prime Minister.
Analysts said sentiment had been growing since morning as FBM KLCI increased by 13.55 points to 1,457.05 from 1,443.5 on Wednesday, thanks to renewed buying interest, especially in the banking stocks.
Rakuten Trade Sdn Bhd vice president of equity research Thong Pak Leng said the end of political impasse and subsequently formation of a new government would definitely be positive for the economy.
"We expect the ringgit to strengthen a bit, but due to external factors such as continuous interest hikes in the US, we are still not sure yet," he told the New Straits Times.
Putra Business School associate professor Dr Ahmed Razman Abdul Latiff said investors would appreciate the certainty and stability coming from this appointment and this would bode well with the economic prospect for this year and beyond.
"There is going to be an upward movement for Bursa Malaysia in the short run. Nevertheless, the ringgit will probably still be subjected to external factors rather than because of this appointment.
"His (Anwar's) immediate economic policy is to speed up the presentation and approval of 2023 Budget by next month," Ahmed Razman added.
Analysts said sentiment had been growing since morning as FBM KLCI increased by 13.55 points to 1,457.05 from 1,443.5 on Wednesday, thanks to renewed buying interest, especially in the banking stocks.
At lunch break, the benchmark soared two per cent or 28.94 points to 1,471.
Once trading for the afternoon session started, FBM KLCI almost immediately extended its gains by more than 10 points (and some 40 points overall) to 1,483.84.
At 3pm, the index climbed further to 1,488.10 points to gain 44.6 points at that point.
The ringgit extended its positive run against the US dollar in early trade today, improving further to the 4.55 level on expectations of softer US inflation and less aggressive US Federal Reserve rate hikes, said an analyst.
The local note then shot up 1.75 per cent to 4.4950 from Wednesday's close of 4.5725.
SPI Asset Management managing director Stephen Innes said the steadier crude oil prices earlier this week had also provided support for the local note.