Malaysian stocks turned positive to close 0.2 per cent higher yesterday (Monday) after opening nearly 3 per cent lower as markets opened for the first time since Mahathir Mohamad’s opposition election win last week.
Mahathir has announced that he was leading a major crackdown on the previous administration.
Volatility was expected after the fall of the coalition that had ruled Malaysia since independence in 1957.
Buying in Malaysia was led by government-backed funds, sources said. State-run funds are key players in Malaysia’s financial markets and often support government-backed stocks or the whole market during major selling pressure.
“We believe any market selldown may be brief and offer accumulation opportunities,” said Bernard Ching of AllianceDBS Research of Kuala Lumpur.
Mahathir said the attorney general has been told to take a holiday pending an investigation of his role in allegedly covering up the 1MDB corruption scandal involving former prime minister Najib Razak.
The head of the treasury has been relieved of his duties. US investigators say Najib and his team stole US$4.5 billion from the state-run investment fund. Najib subsequently sacked critics, including the previous attorney general and a deputy prime minister, and gagged the media.
The new attorney general, Mohamed Apandi Ali, soon cleared Najib of any wrongdoing in early 2016, saying the money was a donation from the Saudi royals.
Mahathir said the solicitor general would take over in Apandi’s absence. Apandi would not be suspended until an investigation had been conducted, the new-old prime minister said.
“There have been a lot of complaints against the AG but no formal reports. On that basis, we give him a holiday … once investigations are carried out, then we can suspend him and prevent him from leaving the country,” the 92-year-old told a news conference.
The treasury chief Mohamad Irwan Serigar Abdullah, who is also 1MDB’s chairman, “will not be allowed to carry out his duties as treasurer general or any matters relating to the finance ministry”, it was later announced.
Mahathir, who originally became prime minister in 1981, has warned that Najib will “face the consequences” if found guilty.
Over the weekend, Mahathir prevented Najib and his unpopular wife from flying to Indonesia, adding that several other important figures in the previous administration were on a travel blacklist.
The Malaysian Anti-Corruption Commission’s former investigations and intelligence chief lodged complaints alleging that Najib used his position to block any probe into 1MDB and other cases.
1MDB, which has enormous debts, has sold its assets to Chinese interests and is due to be shut down.
Mahathir said the authorities “roughly know” where Low Taek Jho is. Low was named as a central figure who allegedly orchestrated the ransacking of 1MDB.
The 1MDB-linked yacht, Equanimity. Picture credit: Wikimedia