Stocks in Malaysia fell in early Monday trade as the government announced a nationwide “total lockdown” to curb the rapidly rising daily Covid-19 infections in the country.
The benchmark FTSE Bursa Malaysia KLCI Index fell around 1.5% at the open before settling around 1.1% — underperforming most Asia-Pacific markets.
Malaysia has been struggling to control a surge in Covid infections. Last week, the country reported five-consecutive days of record increases in coronavirus cases, taking cumulative infections to more than 565,500 cases with 2,729 deaths as of Sunday, health ministry data showed.
Prime Minister Muhyiddin Yassin announced Friday after market close that the country will enter a two-week lockdown starting Tuesday.
During the period, individuals are generally only allowed to leave their homes to buy essential items or seek medical services. For companies, those offering essential services will remain open while certain segments of the manufacturing sectors can operate with a reduced capacity.
Brian Tan, an economist at Barclays Bank in Singapore, estimated that the measures will cost the Malaysian economy between 0.5 to 1 percentage point every two weeks.
Tan wrote in a Monday note that he has lowered Malaysia’s 2021 growth forecast from 6.5% to 5.5% — below the central bank’s projection range of 6% to 7.5%.