KUALA LUMPUR, May 10 — The biggest exchange-traded fund holding Malaysian stocks staged its biggest slump 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 per cent to US$32.40, the lowest since December, as trading volume jumped to US$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 Tun Dr Mahathir Mohamad’s stunning victory ended the six-decade rule of Prime Minister Datuk Seri 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 US product development at Horizons ETFs. — Bloomberg