Uncertainty in Malaysia
Now it seems that the General Elections may be held in March next year when the current mandate runs out. Looks like they would rather buy time and risk the Opposition accusing them of being cowards.
What with the recent spate of defections in Sabah and the late DPM Ghafar Baba's son Tamrin joining PAS, the mood seems to be that some of them want to be on the 'winning team' while it is still possible.
Personally, I'm a bit leery of that but ah well, lets see how it all pans out.
I do think it is time for a change but what that change turns out to be in the short, medium and long run is hard to predict.
I'm fairly optimistic for the long run view and possibly in the medium too. However, I predict that immediately after the result, there is going to be some upheaval.
Let's say Pakatan wins: On the whole, the ground will be happy, the elites very unhappy. So the crucial players in this case are actually the police, the army and the Royal houses. Who will they support or undermine? I have no idea. Guess it could depend on the magnitude of the shift. If it is an overwhelming win, then it should be a stable transition. If it is a borderline case, then we are all on shaky ground - one can only hope that cooler heads will prevail in this instance to do the right thing. Ampun Tuanku!
Let's say Barisan wins: Again, it depends on the size of the majority. If it is a slim majority, then the major players are the parties themselves. How they negotiate (and horse-trade) themselves out of the quagmire will be the deciding factor.
I'm not optimistic about such negotiations. It will end up being a half-baked, contentious solution as always when one leaves one's fate to politicians.
Cynical much?
No. Just a realistic view of human nature.
Now what if it is a large win for BN, back to 2/3rds majority? Most would say that this is very unlikely but what if it DOES happen? Then there would be accusations made in the media, police reports filed, Facebook & Twitter will explode and finally, possible street rallies. And this time, it wouldn't be like Bersih which was civilised (until the end, that is).
This time, the middle classes won't show up but the die-hard political supporters who are either very passionate, very angry, very invested in winning or all of the above will.
If they have nothing to lose and everything to gain, then what's to stop them from going into revolution mode? All this is hypothetical anyway and I really hope it wouldn't come to that.
So in the face of all this uncertainty, where are the risks and opportunities? I actually think there is a lot of opportunities from this situation. Because most people are ruled by their emotions. Either way, there are going to be a LOT of sudden, emotional decisions made in the markets - stocks AND properties. Well, more on stocks.
I would even venture to say that we will see large flows of funds - moving from local banks seen to 'politically connected' to either more neutral banks or foreign banks. This has happened before in the wake of the 1997 crisis, although that was an economic one, this coming election is also going to be a shock to the system any way you cut it. All this arises from the increase political consciousness and emotional linkage to this awareness that will cause major fluctuations in the market - probably in the short term only.
The only question is on time - how long and how deep the plunge go on and when will it turn around? If I knew that, I'd be an oracle and charge tens of thousands per consultation, right? hee
So what to do in this event? For myself, be prepared:
What with the recent spate of defections in Sabah and the late DPM Ghafar Baba's son Tamrin joining PAS, the mood seems to be that some of them want to be on the 'winning team' while it is still possible.
Personally, I'm a bit leery of that but ah well, lets see how it all pans out.
I do think it is time for a change but what that change turns out to be in the short, medium and long run is hard to predict.
I'm fairly optimistic for the long run view and possibly in the medium too. However, I predict that immediately after the result, there is going to be some upheaval.
Let's say Pakatan wins: On the whole, the ground will be happy, the elites very unhappy. So the crucial players in this case are actually the police, the army and the Royal houses. Who will they support or undermine? I have no idea. Guess it could depend on the magnitude of the shift. If it is an overwhelming win, then it should be a stable transition. If it is a borderline case, then we are all on shaky ground - one can only hope that cooler heads will prevail in this instance to do the right thing. Ampun Tuanku!
Let's say Barisan wins: Again, it depends on the size of the majority. If it is a slim majority, then the major players are the parties themselves. How they negotiate (and horse-trade) themselves out of the quagmire will be the deciding factor.
I'm not optimistic about such negotiations. It will end up being a half-baked, contentious solution as always when one leaves one's fate to politicians.
Cynical much?
No. Just a realistic view of human nature.
Now what if it is a large win for BN, back to 2/3rds majority? Most would say that this is very unlikely but what if it DOES happen? Then there would be accusations made in the media, police reports filed, Facebook & Twitter will explode and finally, possible street rallies. And this time, it wouldn't be like Bersih which was civilised (until the end, that is).
This time, the middle classes won't show up but the die-hard political supporters who are either very passionate, very angry, very invested in winning or all of the above will.
If they have nothing to lose and everything to gain, then what's to stop them from going into revolution mode? All this is hypothetical anyway and I really hope it wouldn't come to that.
So in the face of all this uncertainty, where are the risks and opportunities? I actually think there is a lot of opportunities from this situation. Because most people are ruled by their emotions. Either way, there are going to be a LOT of sudden, emotional decisions made in the markets - stocks AND properties. Well, more on stocks.
I would even venture to say that we will see large flows of funds - moving from local banks seen to 'politically connected' to either more neutral banks or foreign banks. This has happened before in the wake of the 1997 crisis, although that was an economic one, this coming election is also going to be a shock to the system any way you cut it. All this arises from the increase political consciousness and emotional linkage to this awareness that will cause major fluctuations in the market - probably in the short term only.
The only question is on time - how long and how deep the plunge go on and when will it turn around? If I knew that, I'd be an oracle and charge tens of thousands per consultation, right? hee
So what to do in this event? For myself, be prepared:
- Buy more bullion to add to my current stock - not overboard, of course, possible up the % holdings by a few points only
- Keep cash on the ready for plunging stocks, unit trusts and REITS (I love REITS actually) - some unrelated but good companies may be pulled down
- Keep cash on the ready for fire sale property (maybe some Datuk who now has to leave the country in a hurry! heehee) - although this is not going to be easy! There could well be an adjustment in prices, so once it looks 'sane', will go for landed property. Wish me luck! Or wishing myself luck, duh..
While all this uncertainty roils around us, we must stay focused. Nothing lasts forever, even this storm will pass in time.
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