General Election 2008 - KLSE Moving Into An Uncharted Territory

The electoral shock of tsunami-scale of the 12th GE vibrating throughout Malaysia instantly sent KLSE (Bursa Malaysia) heading towards an uncharted territory.

With the two thirds majority in the parliament denied and a loss of ruling power in four states (Penang, Selangor, Perlis and Kedah ), a big chunk of BN's base has been sliced away, leaving its foothold shaky and most awkward.

The implications for the first ever political shake-up are profound, giving rise immediately to a lot of uncertainty in the front.

As such, KLSE reacted strongly with a big slump on March 10. The frenzy sell-down reflected the jitters in the market in the aftermath of the political tsunami. The choppy scenario is widely expected to persist with no certainty.

In short, KLSE is now quite directionless, moving into an uncharted territory with immense uncertainty lying ahead.

The most reasonable reaction by the foreign funds to the local political quake is to sideline first to avoid a lock-in.

Although the magnitude of impact from the political tension on KLSE cannot be reasonably ascertained at this juncture, the market sentiment is definitely depressed for the time being.

Caution is the word of the day if you wish to surf in this uncharted territory!