Mainstream
A change in fortune
Doreenn Leong | 20 Jul 2018 00:30
Studies have shown that shares of companies enjoying a political nexus seldom provide handsome gains for investors.

So, if a fund manager is mandated to deliver returns over a short timeframe, staying away from politically-linked stocks is a good way to boost risk-adjusted returns. Investors who bet on listed companies linked to the previous ruling party Barisan Nasional saw a reversal in their fortunes following the shock win by the Pakatan Harapan coalition in the 14th general election (GE14).

Among the adversely affected stocks were Destini Bhd, George Kent (M) Bhd, MyEG Services Bhd, KUB Malaysia Bhd and Malaysian Resources Corp Bhd. On the other hand, there were also stocks that became bullish due to perceived links with personalities in Pakatan Harapan such as Opcom Holdings Bhd, Thriven Global Bhd, Eden Inc Bhd and Alliance Bank (M) Bhd.

For the adversely affected companies, it led to talk of some of them changing ownership.


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