KEY POINTS
  • Nomura has downgraded Malaysian shares to "underweight" from "neutral."
  • The Japanese bank said the new government's lack of "significant reform push" could lead to a worsening fiscal position and a possible downgrade in credit ratings.
  • In addition, earnings of listed companies have been disappointing and worse than their regional peers, Nomura said.

Japanese bank Nomura has downgraded Malaysian shares, saying the new government's lack of "significant reform push" could lead to a worsening fiscal position and a possible slip in credit ratings.

Nomura moved its stance on Malaysian stocks from "neutral" to "underweight," it said in a Wednesday report. The call followed a similar downgrade by Singapore bank DBS, which in a Monday report also raised concerns about potential deterioration in the country's finances.