Years ago, during elections, politically linked companies such as Putera Capital Bhd (which has since been de-listed), KUB Malaysia Bhd or Malaysian Resources Corp Bhd (MRCB) were always sure bets with their stocks usually surge during the election period.

Shahidan Kassim

Also viewed closely were companies linked to Umno vehicles such as Fleet Group, Hati Budi Sdn Bhd, Realmild and Altima Inc, or private companies linked to politicians such as Batu Bara Resources Sdn Bhd which is controlled by the family of the former Perlis Chief Minister, Shahidan Kassim.

Since then it has become more difficult and more discreet with Umno’s shareholding now reportedly restructured and held under a new holding company Temasek Padu Sdn Bhd.

Nevertheless there seem to be some stocks that have performed exceptionally well over the election period, and analysts and punters alike have sought these stocks out every election, looking to make a killing.

Some of the stocks being talked about

Mercury Securities head of research Edmund Tham said, “Our advice is to strictly buy when there are dips…buy property counters, CPO (crude palm oil) and construction,” he said.

He mentions three stocks for each category.

“For construction look at Naim (Holdings Bhd), Gamuda (Bhd) and WCT (Bhd), as for CPO, TDM (Bhd), IOI (Corp Bhd) and TH Plantations (Bhd). I like Mah Sing (Group Bhd), SP Setia (Bhd) and Glomac (Bhd) for development counters,” he added.

Taib Mahmud

Although he does not elaborate, Naim is 41.05 controlled by Hasmi Hasnan and Abdul Hamed Sepawi, both linked to the Sarawak chief minister Abdul Taib Mahmud. Gamuda meanwhile has the Perak royal family as the third largest shareholder with 6.21 percent.

TDM is 62.34 percent controlled by the Terengganu state, via Terengganu Inc Sdn Bhd and Perbadanan Kemajuan Iktisad Negeri Terengganu.

Glomac meanwhile is about 34 percent controlled by Mohamed Mansor Fateh Din and his son Fateh Din Iskandar Mohamed Mansor. Iskandar is an Umno strongman and was tipped to head the political party in Selangor.

Naim’s shares have gained about 35 sen or about 18.3 percent over the past month and closed on Friday at RM2.34, while TDM’s stock has strengthened 67 sen or about 20 percent and ended trading at RM4.02 last Friday. Both counters have exhibited heightened trading volume.

Over the past month, Glomac’s stock has gained about 16.3 percent, or 14 sen buoyed by higher trading volume, and ended Friday at RM1.01.

A market watcher meanwhile has his favourite election stock picks as Tebrau Teguh, Puncak Niaga Holdings Bhd and UEM Land Holdings Bhd.

Muhyiddin Yassin

Tebrau over the past month has gained more than 50 percent, and closed ended last Friday at RM1.50.

Water concessionaire Puncak Niaga’s stock meanwhile has surged 45 sen or 36 percent since early February this year, and closed at RM1.69 last Friday. Puncak is about 40 percent controlled by businessman Rozali Ismail who is closely associated with Umno.

Developer UEM Land Holdings Bhd’s stock has strengthened by 50 sen or about 20 percent since early March this year.

“Johor play is very strong…It’s the (deputy prime minister) Muhyiddin (Yassin) factor. He’s from Johor, and could be in the limelight soon,” he said.

Talk of Muhyiddin taking over from Najib has been rife for some time now, but to date the uncomfortable alliance between the two has remained.

An ally of Muhyiddin’s is also said to be businessman Syed Mokhtar Albukhary. Syed Mokhtar’s flagship MMC Corp has gained about 15 percent or 34 sen with higher trading volume than the norm.

Meanwhile UEM Land’s largest shareholder is government controlled UEM Group Bhd with 64.9 percent equity interest.

Other than UEM Land, Tebrau is also a Johor based company. Tebrau’s largest shareholder is Kumpulan Prasarana Rakyat Johor (KPRJ) with 41.15 percent as of end April last year. KPRJ is wholly owned by the Johor state government.

Gan Eng Peng

Gan Eng Peng, Head of Equities at Hwang DBS Investment Bank takes a different approach, saying that there is little downside on the market anyway.

“Investors have been anxious over the past one and a half years, many have sold. Foreign shareholding is back slightly but it’s at a 15 year low. When you piece the whole thing together….Malaysia is undervalued, so there is not much downside irrespective of the outcome of the elections,” he said.

His top picks are DiGi.Com Bhd and TimedotCom Bhd.

“We are also bullish on banks, they (banks) are largely undervalued…our funds are more cautious,” he added.

Some are more cautious

It is noteworthy that the benchmark FBM-KLCI has gained about 1.8 percent over the past month, closing at 1688.65 on Friday.

Interestingly enough, the benchmark FBM KLCI has been erratic. Since the announcement of the dissolution of parliament, the benchmark FBM KLCI has slipped 2.38 points. However just before the dissolution of parliament, the FBM KLCI tumbled 50 odd points, before clawing back to close the day largely flat— despite losers outpacing gainers by 435 to 176, while 211 counters were unchanged. The FBM Mid-Small Cap Stock index the same day shed 0.31 percent at the close of the same day.

“It certainly looks like the (FBM KL)CI is being propped up, there seems to be support from funds, maybe fund such as EPF (Employees Provident Fund), PNB (Permodalan Nasional Bhd) and (Lembaga) Tabung Haji, ” a fund manager said.

While many are looking to take advantage of the elections, there are many who are cautious, and advice investors to refrain from participating in the market.

CIMB Investment Bank’s head of research Terence Wong in a report cautions, “Investors should stay on the side-lines as election risks could weigh down the market.

“During the Sarawak state elections in 2011, there was widespread concern about the election outcome which caused selling pressure on the market. This time, the stakes are even higher, and therefore, the impact could be magnified,” he said in a report.

The flip side

While most look to make a killing, some stocks could take a beating if things don’t work out for the ruling coalition Barisan Nasional.

One counter that was specifically mentioned by opposition leader Anwar Ibrahim was SapuraKencana Petroleum Bhd which has been the beneficiary of a risk service contract from Petronas.

Anwar Ibrahim

Anwar mentioned that he would revoke SapuraKencna’s contracts, highlighting that former premier Mahathir Mohamad is an advisor to Petronas and his son Mokhzani is the second largest shareholder in the oil and gas company.

Another son of Mahathir’s Mukhriz has a 23 percent stake in Opcom Holdings Bhd.

Other casualties could be George Kent (M) Bhd and Johan Holdings companies controlled by premier Najib Abdul Razak’s golfing buddy Tan Kay Hock.

It is also likely that Syed Mokhtar’s slew of companies, DRB Hicom Bhd, MMC, Tradewinds Corp to name a few could come under fire should the opposition come to force.

Others such as the Lembaga Tabung Angkatan Tentera controlled Boustead Holdings Bhd could see a change at the helm, as Lodin Wok Kamarudin is seen as a close associate of Najib’s.