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EMERGING MARKETS-Malaysian stocks, ringgit slip as political tension weighs

Published 26-10-2020, 10:50 am
© Reuters.
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* Graphic: World FX rates http://tmsnrt.rs/2egbfVh

* Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3lKhL5I

* Ringgit dips 0.2%, Malaysian stocks off nearly 0.8%

* Emergency request rejection spares economic crisis - Mizuho

* Taiwan dollar at two-week high, up 1.1%

Oct 26 (Reuters) - Malaysian stocks stumbled on Monday as political uncertainty in the Southeast Asian nation grew after the king rejected a request by the prime minister to declare a state of emergency in response to the coronavirus crisis.

Broader Asian stocks and currencies were subdued, as a surge in coronavirus cases in the United States and Europe threatened hopes for a global economic recovery, adding to uncertainty posed by the looming U.S. presidential election. King Al-Sultan Abdullah's rejection on Sunday of the request for the emergency on Sunday is a major setback for Prime Minister Muhyiddin Yassin, who is facing a leadership challenge from an opposition leader and infighting within his ruling coalition. king's rejection has arguably spared the country a deeper political and consequent economic crisis, analysts at Mizuho wrote, noting that the emergency request could be construed as a backdoor for the prime minister to retain control.

"The real danger is that a state of emergency, if construed as an undemocratic tool to out-manoeuvre, will inadvertently exacerbate the PM's political woes, potentially plunging Malaysia into deeper political uncertainty."

The ringgit MYR= shed more than 0.2% against the dollar to stand at a near four-week low, extending losses of around 0.3% sustained on Friday after talk of the state of emergency request first surfaced.

The Malaysian stock index .KLSE slipped 0.8% to its lowest since Sept. 11, with glove maker Top Glove Corp TPGC.KL the biggest loser, down 2.5%.

Malaysia has seen a resurgence in coronavirus cases recently, just as businesses and workers try to recover from the economic blow of pandemic-led lockdowns.

Thai shares .SETI struggled to hold on to gains and the baht THB=TH dipped slightly after a holiday-extended weekend, as protests demanding the resignation of Prime Minister Prayuth Chan-ocha continued. had recovered slightly on Thursday after an emergency decree aimed at ending months of protests against Chan-ocha's government and the monarchy was revoked, after it brought tens of thousands of people on to Bangkok's streets. dollar TWD=TP was among the most sought after currencies in the session, gaining more than 1.1% to touch a two-week high.

The currency is the region's top performer so far this year with a 5.2% gain, as the work-from-home shift fuelled demand for the country's key chip and semiconductor exports, offering a buffer to the economic blow from the pandemic.

HIGHLIGHTS

** Top gainers on the Jakarta stock index .JKSE include Provident Agro Tbk PT PALM.JK , up 21.94%, and Sky Energy Indonesia Tbk PT JSKY.JK , up 20.69%

** In the Philippines, top index gainers were DMCI Holdings Inc DMC.PS , up 3.29%, and Puregold Price Club Inc PGOLD.PS , up 2.82%

** Indonesian 10-year benchmark yields fell 1.8 basis points to 6.6%​​, while 3-year benchmark yields eased 3.2 basis points to 5.23%​​

Asia stock indexes and

currencies at 0448 GMT

COUNTRY FX RIC

FX

FX

INDEX STOCK STOCK

DAILY YTD %

S S YTD

%

DAILY

%

%

Japan

JPY=

-0.21 +3.53 .N225 -0.15 -0.74 China

.SSEC -0.72 6.70

S>

India

INR=IN -0.12 -3.16 .NSEI -0.24 -2.19 Indones IDR=

+0.03 -5.22 .JKSE

0.71 -18.2 ia

7 Malaysi MYR=

-0.22 -1.80 .KLSE -0.52 -6.41 a

Philipp PHP=

+0.06 +4.71 .PSI

0.14 -16.9 ines

1 S.Korea .KS11 -0.29 7.11

C>

Singapo SGD=

-0.12 -1.07 .STI

-0.10 -21.3 re

4 Taiwan

TWD=TP +1.06 +5.21 .TWII

0.18 7.70 Thailan THB=TH -0.03 -4.38 .SETI -0.09 -23.2 d

5

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