Malaysia's PRU15 is over and it delivered a hung Parliament as expected by many experts in the field and now, all eyes are on the formation of a new government.
The Perikatan Nasional has take bold steps to take the lead in the formation of a new government and is pushing the agenda of an alliance with the parties from Sabah and Sarawak as the King Makers.
Commenting on the momentous event that has gripped the entire nation since last night, a RHB analyst says, the fact that no parties are able to form a government on their own, there will be a period of uncertainty, one that we are witnessing today.
New Malaysian Government
"In line with market expectations, from what we observed coming into General Elections (GE15), no single coalition party is in a position to form the government and there will be a period of uncertainty until a coalition government is formed.
"Regardless of the outcome, we view that ‘people-oriented’ measures and gradual fiscal consolidation would remain top priorities for the new government," says the analyst.
The Bank also says that it sees no change in its GDP growth forecast of 7.0%.
"We maintain our 2022 GDP growth forecast of 7.0% YoY (with the balance of risks tilted towards a print of 7.5-8.5%), followed by 4.5% in 2023. Our 4Q22 USDMYR trading range of 4.60-4.70, followed by 4.70-4.80 in 1H23, is maintained. Our 1H23 average MGS10YR yield forecast of 4.00-4.30 is maintained," the analyst says.