KUALA LUMPUR (Nov 21): Gaming and brewery-related stocks succumbed to heavy selling in early morning trading on Bursa Malaysia amid uncertainties over the country’s policies ahead for their respective businesses.
Carlsberg Brewery Malaysia Bhd was also among the top losers, declining by 4.9% or RM1.14 to RM22.06.
Meanwhile, numbers forecast operator (NFO) Magnum Bhd fell to a five-year low of RM1.35, after shedding 14 sen or 9.4%.
Sports Toto Bhd plunged 15 sen or 8.57% to RM1.60.
Casino operator Genting Malaysia Bhd dropped sharply by 19 sen to a two-year low of RM2.53, while its parent company Genting Bhd fell by 6% or 29 sen to RM4.21, the lowest in five months.
The 15th general election ended in a hung Parliament with Pakatan Harapan and Perikatan Nasional (PN) emerging as the two likely contenders for the driver’s seat in Putrajaya.
TA Securities Sdn Bhd said in a research report on Monday that assuming PN forms a Government, most government policies will be continued, but risk persists.
The research outfit noted that it might take a while for confidence to return, especially among foreign investors, who have just turned net buyers this year after being net sellers between 2018 and 2021, mainly due to the uncertain domestic politics.
“Gaming and brewery stocks can face heavy selling pressure, while foreign selling of blue chips exerts more downside pressure on the FBM KLCI this week if investors perceive that a non-centrist government has taken charge,” TA Securities said.
It added that although no such restrictions were mentioned in the coalition’s manifesto, breweries may take a hit as there may be a possibility of limitations on beer sales or curbs on nightclubs and other entertainment outlets, the report added.
Meanwhile, casino and NFOs face the possibility that their gaming and operating licences could be suspended or terminated.
“This can be evidenced from the threat of banning NFOs after PN formed the state government in Kedah and Datuk Seri Haji Muhammad Sanusi from PAS was appointed as the menteri besar in 2020.
TA Securities opined that Genting, Genting Malaysia, Sports Toto and Magnum are potential losers after the GE15 in terms of policy risks.
The research outfit added that investors are expected to adopt a “sell first and watch” mentality in the immediate term until the dust settles.