KUALA LUMPUR: The election results from key states especially industrial-based Selangor and Penang underline issues that the unity government must overcome, an analyst said.
The results also may not affect Bursa Malaysia and the ringgit much, according to Universiti Kuala Lumpur's Business School economic analyst Dr Aimi Zulhazmi Abdul Rashid.
"Selangor and Penang in particular have a more balanced race composition. The election outcome definitely underlines the economic issues that the unity government must overcome especially 'bread and butter' issues," Aimi said.
He said Malaysia needs to restructure its economy, adding that it also needs stability at the helm to maneuver its transformation.
"Nonetheless, the federal and state elections are two separate ballgames and we shouldn't be overanalysing the state election outcomes.
"(However) at least it put a lot of issues which are in grey to clearer position, like what are the people evaluation of the government and what must be done to overcome them," he added.
Aimi does not expect the state election results to affect the stock market and the ringgit too much.
"Bursa Malaysia and the ringgit performance are very much influenced by the macroeconomics and external events.
"The announcement of Malaysia's gross domestic product for the second quarter of 2023 by Bank Negara Malaysia by end of next week may have some marginal impact on the ringgit and Bursa performance."
Global events like slower than anticipated China economy and the US Federal Reserve's relentless intention to increase interest rates are very much in the picture, he added.
A nail-biting contest to stamp their superiority over who would gain control over six states ended in a 3-3 stalemate, with Pakatan Harapan (PH) retaining Penang, Selangor and Negri Sembilan and Perikatan Nasional keeping Kelantan, Terengganu and Kedah.
PN, however, came out of the fight the bigger winners, completely sweeping Terengganu, expanding its dominance in Kedah and Kelantan, and making inroads in Penang and Selangor.
