PM's return fails to protect market against fall
The return home of Prime Minister Dr Mahathir Mohamad today failed to prevent a drop in share prices on the Kuala Lumpur Stock Exchange.
Dealers said prices fell in response to profit taking and overnight losses on Wall Street, while Mahathir, who confirmed that he will step down next October, did not announce any market-moving news.
"What the PM said is largely expected. The overall market is down because the Dow was down quite a bit last night and people are in a very cautious mood," a dealer with a local brokerage said.
Another institutional dealer said the market rose Tuesday on window-dressing by state-linked investment funds ahead of Mahathir's return "and the market needed to correct today".
The KLSE composite index closed 4.01 points or 0.53 percent lower at 739.35 after falling more than one percent in the morning session.
The stock market was hit by sharp falls last week amid confusion over Mahathir's resignation plans, but steadied after his party announced that he would stay on until October next year before handing over to Deputy Prime Minister Abdullah Ahamad Badawi.
Abdullah said this week that the market response had been "very encouraging".
"I am very happy. It just proves that what the prime minister had in mind to ensure a smooth transition has been accepted well," Abdullah told reporters.
No power struggle
Mahathir had left the country for a holiday in Europe on July 23, the day after announcing his wish to resign, and had not spoken publicly since.
There had been concern that his departure after 21 years in power could have a negative effect on an economy he is credited with transforming from a regional backwater into the mainstream of Asian development.
Apart from being prime minister, he also holds the finance ministry portfolio.
On his return Wednesday, Mahathir said he would play no further role in government after stepping down in October next year and pledged full support for Abdullah.
He said that in the 16-month transition period, he would ensure that all government policies remained in place and that there would be no power struggle within the party.
"There will no difference in policies and I will give my full support to Abdullah and my colleagues. I am confident we can work well in the interest of the party and nation," he said.
"I obtained an agreement that there will be no power struggle and other unpleasant things in the party."
Earlier, Mahathir was garlanded with flowers after stepping off a government jet at the Royal Malaysian Air Force Base outside the capital Kuala Lumpur, where thousands of supporters held banners reading "Dr M We love you" and "Welcome home hero of our homeland". -AFP
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