KUALA LUMPUR: Brace for a volatile day when Malaysia's stock market reopens Monday after a three-day break that saw the opposition party win office for the first time in six decades.

Malaysia's FTSE Bursa Malaysia KLCI Index was shut for three days last week as Tun Dr Mahathir Mohamad led an alliance to unexpectedly beat the ruling Barisan Nasional coalition. In his first remarks as prime minister of Malaysia, Dr Mahathir said he'd lead a business-friendly administration and find ways to boost the nation's equity market.

Even so, market watchers expect equities to fall across the board, with government-linked companies, benchmark index stocks and infrastructure companies taking the brunt of a potential selloff.

iShares MSCI Malaysia ETF, the biggest exchange-traded fund holding Malaysian stocks, fell 6.2 per cent this week. The FTSE Bursa Malaysia KLCI Index has corrected by 2.6 per cent after it reached a record on April 19.

Affin Hwang Asset Management Bhd is expecting a decline of as much as 8 per cent in the first few days of trading post-election, while CGS-CIMB Securities lowered its end-2018 target for the benchmark index.

UOB Kay Hian Holdings Ltd and Nomura Holdings Inc are reviewing their views on the main measure and equities. On the flip side, Malayan Banking Bhd has expressed optimism for financial markets following the election.

Setting aside the main gauge's potential move, here are the stocks to watch:

Construction

With Dr Mahathir's campaign promise to review all infrastructure projects including the East Coast Rail Link project, keep an eye on Gamuda Bhd, IJM Corp, Malaysian Resources Corp and George Kent Malaysia Bhd.

Political Ties

Companies with ties to either former Prime Minister Datuk Seri Najib Razak's Barisan Nasional party or Dr Mahathir's Pakatan Harapan might also get some trading interest.

* Family ties: CIMB Bank Bhd (chaired by Najib's brother Nazir Razak), Opcom Holdings Bhd's chief executive officer Mokhzani Mahathir is Mahathir's son, Eden Inc Bhd and Thriven Global Bhd chairman Fakhri Yassin Mahiaddin is the son of Muhyiddin Yassin whom Mahathir named home affairs minister Saturday.

* Government services providers: My E.G. Services Bhd, Datasonic Group Bhd.

* DRB-Hicom Bhd sold a stake in national carmaker Proton Holdings Bhd last year to China's Geely Automobile Holdings Ltd. Mahathir was opposed to giving foreign investors control over Proton.

* Felda Global Ventures Bhd, the world's largest palm oil producer and a vital cog in Malaysian politics

* Media companies: Utusan Melayu (M) Bhd, Media Prima Bhd and Star Media Group Bhd. Utusan and Star Media are owned by United Malays National Organisation and the Malaysian Chinese Association.

* Destini Bhd, a defense services contractor owned by Rozabil Rozamujib Abdul Rahman, a member of the United Malays National Organisation, a party in the outgoing ruling coalition

* KUB Malaysia Bhd: Majority shareholder Anchorscape Sdn Bhd's director Abdul Rahman Mohd Redza is the incumbent state assemblyman who won the Linggi seat in the state of Negeri Sembilan

Consumer Consumption

Mahathir's campaign pledge to nullify the nation's current goods and services tax, fuel subsidies and minimum wage realignment could benefit the consumer sector, according to Gan Eng Peng, director of equities strategy and advisory at Affin Hwang Asset Management.

Stocks to watch include Nestle Malaysia Bhd, Dutch Lady Milk Industries Bhd, Fraser & Neave Holdings Bhd, Heineken Malaysia Bhd, Carlsberg Brewery Malaysia Bhd, Padini Holdings Bhd.

Export Oriented

Any impact on the ringgit will affect export-driven companies with products from rubber gloves to technology. Pay attention to semiconductor manufacturers Inari Amertron Bhd, Vitrox Corp Bhd, Unisem (M) Bhd, Malaysian Pacific Industries Bhd, Globetronics Technology Bhd; glove manufacturers Top Glove Bhd, Hartalega Holdings Bhd.

Flying Under The Radar

AirAsia Bhd founder Tan Sri Tony Fernandes's open support for former prime minister Najib Razak's Barisan Nasional coalition could impact the company's shares, according to Vincent Khoo, an analyst at UOB Kay Hian. - Bloomberg