KUALA LUMPUR, March 12 — Bursa Malaysia is the sole stock exchange in the region that fell in aggregate in the year to date, according to a Bloomberg report.

When the Singapore Exchange has risen by four per cent this year and the Indonesia Stock Exchange is up three per cent, the FBM KLCI instead lost over one per cent so far.

According to business analysts who spoke to Bloomberg, Malaysia’s market doldrums are set to remain for as long as investors are not certain about the direction and policies of the country’s first new government in six decades,

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“It keeps coming back to where the country is going to go, it’s kind of on the government to lead the way,” Jalil Rasheed, a Singapore-based investment director at Invesco Asset Management, told Bloomberg.

“Anybody who is taking a long-term view in Malaysia over the next five to 10 years needs to be quite patient for the next two to three years.”

Matters were exacerbated by unimpressive full-year and quarterly reports from Malaysian blue chips such as Axiata and Nestle, which underperformed.

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Such results have weighed on share earnings in Malaysia, which were less than half the returns that investors saw in Singapore and less than a fifth from Indonesia.

Morgan Stanley’s South-east Asia strategist Sean Gardiner also said the dismal performance was unlikely to improve in the near future.

“We would need to see jitters coming back to emerging markets so that investors appreciate Malaysia’s defensive nature,” Gardiner was quoted as saying.

The federal government has gone on a charm offensive to convince investors to return to Malaysia after many withdrew as a precaution ahead of last year’s general election.

Malaysia has also gone on an anti-corruption campaign in a bid to drive home the message that the country was aiming to maximise the efficiency of federal spending and improve tax compliance.

However, RHB Bank’s head of regional equity research Alexander Chia said investors were likely to wait and see if such efforts bear fruit and how these will affect the larger market.

“Clearly there is a lot of execution risk, implementation risk and obviously a lot of political risks,” Chia told Bloomberg.

Adding to the uncertainty is the Pakatan Harapan government’s pledge for a mid-term transition from Prime Minister Tun Dr Mahathir Mohamad to his former deputy, Datuk Seri Anwar Ibrahim.

The ruling coalition has presented this as happening in two years but there is no formal arrangement for such a time frame, either within the pact or between the two men.

While both leaders have publicly reaffirmed their faith in one another to honour their agreement, signs of political manoeuvring can be seen between their individual camps.

Regional fund manager Alan Richardson said investors were growing weary with the drawn out intrigues that roiled markets without any tangible benefits.

He also noted a worrying return to polarising communal politics in Malaysia.

“It’s difficult to have a positive outlook when there is political infighting and weak outlook on growth from fiscal tightening,” Richardson said.