Kuala Lumpur Skyline
Kuala Lumpur Skyline

Japanese bank Nomura has downgraded Malaysian shares, saying the new government’s lack of “significant reform push” could lead to a worsening fiscal position and a possible slip in credit ratings reports CNBC.

Nomura move follows a similar downgrade by Singapore bank DBS.

Malaysia’s financial position has been on a downward spiral since the surprise win by the Pakatan Harapan government. The coalition that won claiming misappropriations by the previous Barisan Nasional government hasn’t been able to inspire investor confidence due to its constant blame shifting to its predecessor.

Nomura reports suggests that “there hasn’t been a significant reform push” by the Mahathir led government. Nomura also critiqued the “populist move” in removing the Goods and Services Tax  (GST) – Malaysia has been the only country in the world to remove GST after two years of implementation.

Rating agency Moody said it would consider downgrading Malaysia’s sovereign rating if financial prospect weaken.

Prime Minister Mahathir has been dismissive of sovereign rating causing distress among investors as compared to his predecessor Najib Razak who was seen as investor friendly.

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