(Bloomberg) -- The biggest exchange-traded fund holding Malaysian stocks slumped the most in almost 2 1/2 years as volume surged amid a surprise election victory by the country’s opposition alliance.
The iShares MSCI Malaysia ETF, known as EWM, dropped 6 percent to $32.40, the lowest since December, as trading volume jumped to $144 million, about six times the average daily turnover in the past year. Local markets are expected to be closed Thursday and Friday after the government declared public holidays.
Former Malaysian Prime Minister Mahathir Mohamad’s stunning victory ended the six-decade rule of Prime Minister Najib Razak’s party. It also halted the ruling coalition’s 61-year grip on reign, a monumental shift in a nation that hasn’t seen a transfer of power since independence in 1957. Investors were expecting a win for Najib.
“Above-average trading volumes could point to investors re-positioning from an allocation perspective due to uncertainty around the political landscape,” said Jonathan Molchan, a money manager and head of U.S. product development at Horizons ETFs.
©2018 Bloomberg L.P.
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