Malaysia Latest: Kingmaker Parties Meet as Deadline For PM Looms

(Bloomberg) -- Kingmaker coalition Barisan Nasional is meeting this morning to decide whether it will join opposition leader Anwar Ibrahim’s reformist group or ex-premier Muhyiddin Yassin’s pro-Malay alliance as a deadline to find a new prime minister looms.

Barisan Nasional could also opt to remain in the opposition. However it has agreed to cooperate with Anwar’s coalition to form new administrations in central Pahang and Perak states in a sign the two foes are warming up to work together.

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Malaysian politics was thrown into disarray after the weekend’s snap polls led to a hung parliament. Neither Anwar’s coalition nor Muhyiddin’s alliance had enough seats for a majority and it now comes down to Barisan Nasional and a clutch of Borneo island parties.

Both politicians have consistently claimed they have the majority and King Sultan Abdullah Sultan Ahmad Shah extended a deadline for leaders to submit their choice of prime minister and alliance by another day to Tuesday 2 p.m. He did this on the request of parties who wanted more time to decide.

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(All times local)

Kingmaker Coalition to Meet Ahead of Palace Deadline (9:58 a.m.)

Barisan Nasional lawmakers along with the coalition’s supreme council are set to gather at their headquarters in Kuala Lumpur 11 a.m. That’s three hours ahead of the palace’s deadline for parties to present their plans for a new government and prime minister.

The former ruling coalition will have to decide whether it will back Anwar Ibrahim’s reformist Pakatan Harapan or Muhyiddin Yassin’s pro-Malay Perikatan Nasional alliance. There has been a push among lawmakers for BN to stay out of any government and form the opposition. The BN supreme council had already met Monday night but no decision was made at the time, according to leader Wee Ka Siong.

Police Warn TikTok Users Not to Incite Unrest (12:46 a.m.)

Malaysia’s police chief warned users of social media, including TikTok, not to misuse their platforms to spread racist content that could lead to unrest.

Since the election results, several TikTok videos have been uploaded warning of a repeat of the deadly 1969 riots between the ethnic Chinese and Malay communities. The posts were repeating a narrative pushed by pro-Malay coalitions that any government with the Democratic Action Party, the choice of most non-Malay voters, would destabilize the country.

Some in BN Want to Stay Out of Any New Government (9:48 p.m.)

Barisan Nasional election director Mohamad Hasan has joined in the calls for the former ruling coalition to stay out of any new government. Perikatan Nasional and Pakatan Harapan should combine to form the administration instead, as they received the most votes in Saturday’s polls, he said.

“We BN accept the people’s decision to reject BN. Hence we have no power to form the government,” said Mohamad on Twitter late Monday. “BN is prepared to become a responsible opposition to provide check and balance to the new government.” Mohamad is the deputy president of BN linchpin UMNO, and was among the most vocal leaders pushing for snap elections.

Islamists Try to Appease Fears on Policies on Non-Muslims (7:50 p.m.)

Parti Islam Se-Malaysia, a major partner in ex-premier Muhyiddin Yassin’s coalition, said it won’t use its position in any federal government to implement policies that pressure non-Muslims.

“Pas always respects the diversity and plurality of Malaysia, which comprises various races, customs and religions and recognizes their rights and freedoms to practice their own way of life as under the Federal Constitution,” the party said in a statement.

Gaming, Alcohol Stocks Fall on Islamic Party Malaysia Poll Gains

Anwar’s Pakatan Harapan Forges Alliance to Govern Two States (7 p.m.)

Anwar Ibrahim’s Pakatan Harapan made an alliance with Barisan Nasional to govern the central states of Pahang and Perak in a sign the rivals would replicate the cooperation on a national level.

Pakatan Harapan controls 82 seats nationwide and tying up with Barisan Nasional would allow Anwar to claim a 112 seat majority, adequate enough to form government.

Anwar used to be a part of Barisan Nasional until he was sacked in 1998 in the wake of the Asian financial crisis. He has since waged a battle against BN, particularly its linchpin United Malays National Organisation, and helped to oust it from power in 2018 elections amid the 1MDB scandal.

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Stocks Pared Declines After Hung Parliament Result (5:46 p.m.)

Malaysia’s stocks pared declines after Saturday’s election produced the country’s first-ever hung parliament and amid a broader slump in Asia.

The benchmark KLCI Index closed little changed after briefly falling as much as 1.5%. Gaming and alcohol-related stocks took a hit after the Islamic party PAS, known for pushing the sharia law, garnered the most seats at the polls. The ringgit was 0.5% lower against the dollar while the 10-year yield remained steady.

Anwar Says Awaiting Decision from Former Ruling Coalition (2:41 p.m.)

Anwar Ibrahim said he was optimistic of heading a coalition government with Barisan Nasional, and was now awaiting a formal decision from the former ruling bloc. A tie up between the two would provide Anwar the simple majority needed form a new government.

“I am extremely pleased with the pace of exchanges we had including the formal negotiations. There was virtually no conditions attached except the condition of unity, to focus on the economy,” Anwar told a press conference in Kuala Lumpur after a meeting with BN leaders. All discussions was predicated on Anwar becoming the PM candidate, the long-time opposition leader added.

Muhyiddin’s Coalition Says Has Lawmakers to Support PM Bid (2:05 p.m.)

Shortly after the palace issued the statement, Perikatan Nasional alliance said it had submitted to the king sworn declarations of more than 112 lawmakers to support him as prime minister. PN had won 73 seats of the 220 parliament seats contested on Saturday, fewer than Pakatan Harapan’s 82.

Perikatan Nasional includes the Islamist PAS, whose electoral gains caused stocks related to gaming and alcohol to slump on Monday. PAS’ rise could dent investor confidence as the party has previously called for the implementation of hardline Shariah law in the country.

King Extends Deadline by 24 Hours (1:30 p.m.)

Malaysia’s king granted party leaders another 24 hours to decide on their choice of alliance and prime minister, days after the national vote produced a hung parliament.

Party leaders have until 2 p.m. Tuesday to present to the monarch their plans on forming the new government, according to a palace statement about thirty minutes before the original deadline.

Neither Anwar’s reformist, multi-ethnic Pakatan Harapan coalition nor Muhyiddin’s pro-Malay, Islamist alliance won enough parliamentary seats to gain a majority.

Zahid Seeks Flexibility on Deadline (12:05 p.m.)

BN chief Ahmad Zahid Hamidi said that he would request for more flexibility over the 2 p.m. deadline to provide the king with its choice of prime minister. Any decision will only be made after the negotiating committee has concluded and the supreme council has provided its endorsement, said Zahid.

Zahid was addressing the media after his BN coalition met with Anwar’s PH alliance. A tie-up between the two would provide them with the simple majority needed to form a government. All but four of BN’s MPs were present at the meeting, BN’s Ahmad Maslan said separately on Twitter.

--With assistance from Anuradha Raghu and Ravil Shirodkar.

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Author: Bloomberg News