PERCEIVED political leanings appear to have influenced the movement of share prices on the bursa Malaysia, the Straits Times reports.

Stock in companies linked to leaders in the new Pakatan Harapan government have dramatically risen, while those associated with former prime minister Najib Razak have plunged in the trading after the May 9 elections. 

This points to politics as usual in Malaysia Inc, where investors spend more time analysing political allegiance rather than company books, said ST columnist Vikram Khanna.

Political patronage in business is so pervasive in Malaysia that it is second only to Russia in The Economist’s crony capitalism index published in 2016. The index found that 13% of Malaysia GDP is controlled by crony companies, and nearly all of its billionaires have benefitted from it.

This network has become more formalised in recent years. Research by University of Malaya academic Dr Terence Gomez estimating tht Minster of Finance Inc controlling about 68,000 companies and 40% of the assets traded on Bursa.

At the centre of this vast network is the minister of finance, who has also been the prime minister in the past three governments – Najib, Abduallh Badawi and Dr Mahathir Mohamad (in his first stint as PM).

The finance minister also appoints the board of directors and key executive positions in these government-linked companies.  This indirectly gives the PM influence over the awarding of contracts and concessions. 

This led to past prime ministers wielding vast power over the fate of thousands of companies without much legislative oversight and checks.

The new PH government had pledged in its manifesto that the prime minister would no longer hold other cabinet portfolios, particularly finance.

PH leaders have also denounced crony capitalism and have promised to be more transparent the awarding of government contracts. – May 23, 2018.