Market Impact: New Malaysian PM names, cabinet and ministers

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Market Impact: New Malaysian PM names, cabinet and ministers

Read expert commentary from RHB Asset Management Pte Ltd on how Malaysia's new government is already taking shape after its landmark victory at the polls.

Published on 16 May 2018

Following Pakatan Harapan’s (PH) victory against the incumbent Barisan Nasional (BN) in the 14th Malaysia General elections, Malaysia’s new prime minister Tun Dr Mahathir Mohamad on Saturday (12 May) unveiled three ministers for his Cabinet. The three ministers announced are Lim Guan Eng as Finance Minister, Mohamad Sabu as Defense Minister and Tan Sri Muhyiddin Yassin as Home Minister.

The remaining seven Cabinet ministers were not announced on Saturday and are expected to be decided next week after each of Pakatan Harapan’s four component parties – Parti Keadilan Rakyat (PKR), Democratic Action Party (DAP), Parti Pribumi Bersatu Malaysia (PPBM) and Parti Amanah Negara (Amanah) – submits three names for consideration.

In addition, Tun Mahathir also announced the formation of a “Council of Elders” to advise the new PH government on matters pertaining to economic and financial matters during the transition of power period. The Council of Elders is headed by Tun Daim Zainuddin and includes Tan Sri Zeti Akhtar Aziz, Tan Sri Mohd Hassan Marican, Tan Sri Robert Kuok and Professor Jomo Kwame Sundaram.

Our View

Malaysian election, malaysia, election, voting

In our view, market reaction to the appointment of these three Cabinet ministers and inaugural Council of Elders is likely to be positive.

The recently appointed Ministers are deemed as senior positions as they hold very important portfolios. We are confident of the capabilities of the individuals appointed given their diverse prior experience in managing the country and economy.

Additionally, the Cabinet appointments have representation from all four key party components of Pakatan Harapan i.e. PKR, DAP, Amanah and PPBM. PKR’s key representation is Datuk Seri Dr Wan Azizah Wan Ismail as Deputy Prime Minister. These are senior ministers who also double hat as leaders at the highest level of their respective component parties.

The announcement of the Council of Elders which comprises five prominent figures in their respective fields came as a surprise. We believe the set up of the Council is very positive to the market. The Council is expected to help the government shape policies and programmes in order to fulfil PH’s 100-day promise to the people. This may boost investors’ confidence in the Malaysian economy as the government is seen to be prioritising the progress of the nation’s well-being.

These 5 distinguished individuals are prominent Malaysians and are also respected domestically and globally. Daim, Zeti and Jomo Kwame are key appointments who are Malaysian economy and finance experts. Robert Kuok, Malaysia’s richest billionaire and a strong captain in running a successful conglomerate, will probably be tasked to manage the relationship with the Chinese government. Hassan Marican’s experience, formerly being president and chief executive of Petronas (which is Malaysia’s sole Fortune 500 company), would be invaluable to Malaysia’s oil & gas industry. Oil is a major contributor to GDP for Malaysia.

“10 Promises in 100 Days”

Malaysian election, malaysia, election, voting

PH’s “10 Promises in 100 Days” pledge outlines what it sets to do once it is voted into government:

  1. To abolish the Goods and Services Tax (GST)
  2. To reintroduce fuel subsidies
  3. To eliminate unnecessary debts that were forced on FELDA settlers
  4. To introduce the Employees Provident Fund (EPF) scheme for housewives
  5. To standardise the monthly minimum wages of employees across the whole country
  6. To ease the burden of National Higher Education Fund Corporation (PTPTN) loan borrowers
  7. To set up a Royal Commissions of Inquiry into scandal-ridden institutions
  8. To restore Sabah and Sarawak’s autonomous rights, as enshrined in the Malaysia Agreement 1963 (MA63)
  9. To introduce ‘Skim Peduli Sihat’, a RM500 healthcare monetary assistance for B40 households
  10. To review all mega projects.

Council of Elders

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Brief profiles of the three Cabinet ministers and the Council of Elders below:

FINANCE MINISTER LIM GUAN ENG, 57
A fierce critic of former prime minister Najib Razak, the father of four has been chief minister of Penang since 2008 and has led the Chinese-majority Democratic Action Party (DAP) since 2004 as secretary-general. An accountant by training, he has been credited with Penang’s transformation into a vibrant tourism and industrial hub.

DEFENCE MINISTER MOHAMAD SABU, 63
The president of Parti Amanah Negara began his political career at the Malaysian Islamic Youth Movement (Abim) in 1975, before joining the Parti Islam Se-Malaysia (PAS) in 1981. He held various posts in PAS, including as PAS deputy president from 2013 to 2015, before breaking away to form PAS-splinter party Amanah.

HOME MINISTER MUHYIDDIN YASSIN, 70
The president of Parti Pribumi Bersatu Malaysia was sacked from the Malaysian Cabinet in 2015 after disagreements with then Prime Minister Najib Razak over the fund misappropriation scandal at 1Malaysia Development Berhad (1MDB) and later dismissed as Umno’s deputy president. He was the chief minister of Johor for nearly a decade from 1986-1995.

TUN DAIM ZAINUDDIN, 80
Often referred to as the “Oracle” because of his accurate prediction of the outcomes of previous elections, he created ripples when he declared his backing for the opposition at the last hour. Mr Daim served as finance minister twice during Dr Mahathir’s 22-year premiership.

TAN SRI ZETI AKHTAR AZIZ, 70
She became the first female Bank Negara Malaysia governor when Dr Mahathir picked her in 2000, after she served a two-year stint as acting governor amid a controversial move to peg the ringgit to stem capital outflows. The central bank under her had urged criminal proceedings against state fund 1Malaysia Development Berhad (1MDB), before slapping a fine of an undisclosed amount on 1MDB, days before she left the position.

TAN SRI HASSAN MARICAN, 65
He was the president and chief executive of Malaysia’s state oil firm Petronas from 1995 until his retirement in 2010. He is chairman of Sembcorp Marine, Singapore Power, Pavilion Energy, Pavilion Gas and Lan Ting Holdings and holds directorships in Sarawak Energy, Lambert Energy Advisory and MH Marican Advisory. He is also a senior international adviser at Temasek International Advisers.

TAN SRI ROBERT KUOK, 94
The Hong Kong-based tycoon is Malaysia’s richest man with an estimated worth of US$15.4 billion. Forbes attributed Kuok’s wealth to his ownership of the Kuok Group, which has interests in the property and commodities sector. In his memoirs released late last year, he implicitly criticised Malaysia’s affirmative action policy to help Malays and other bumiputera races in education and business.

PROFESSOR JOMO KWAME SUNDARAM, 65
The prominent economist was Assistant Director-General and Coordinator for Economic and Social Development in the Food and Agriculture Organization of the United Nations, and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought. He now holds the Tun Hussein Onn Chair in International Studies at the Institute of Strategic and International Studies, Malaysia.

THE BOTTOM LINE

To conclude, the appointments of the ministers and the Council of Elders is the good start for the new government administration as it comprises people with good track record in their respective fields.

This article was reproduced with the approval of RHB Asset Management Pte Ltd.

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