Malaysian shares set to open higher

MALAYSIAN shares are expected to open higher after Prime Minister Datuk Seri Najib Razak named a new Cabinet described as “market friendly”, and after US stocks ended the holiday-shortened week sharply higher.

Najib named a slimmed down Cabinet on Thursday that was largely untainted by corruption and staked his government’s survival on pushing through economic reforms. “The market should view this as a positive move.

Near term, sentiment remains buoyant with the market expecting more friendly policies to be rolled out to revive a slowing economy,” said Teoh Su Yin, strategist at Deutsche Bank’s Malaysia office.

But Najib inherits a weak economy, a fractured ruling coalition party and a voter base that has become increasingly skeptical about the government’s ability to deliver.
“His first 100 days in the office will be closely watched by all,” she said. Teoh does not expect the appointment of Ahmad Husni Hanadzlah as Second Finance Minister to significantly alter the transformation process of government-linked companies (GLCs), although it could prompt greater scrutiny of the underperforming GLCs.

“We consider the near term rally as an opportunity to trim high-beta names going into the summer,” said Teoh. Deutsche Bank is recommending investors to sell shares of Kuala Lumpur Kepong, AMMB, SP Setia and Bursa Malaysia. Trading may be subdued due to the closure of major Asian markets for Good Friday, a Christian holiday. - Reuters