Shares in firms linked to the chief minister of Sarawak state fell today following media reports that 77-year-old Taib Mahmud is poised to step down after more than three decades in charge of the resource-rich region.
Taib (left), who holds sway over some of the world's largest tracts of rainforest and whose family-owned firms routinely win state infrastructure jobs, is expected to announce a timeline for his resignation at a party meeting this weekend, local media said.
Officials from his party, which is allied with Malaysia's long-ruling coalition, have declined to comment on the speculation.
Taib, who became Sarawak chief minister in 1981, routinely denies accusations by non-government organisations that he has amassed up to $20 billion in personal wealth through corrupt practices.
His resignation could cast doubts over his $100 billion plan to harness the state's rivers into 12 dams by 2020 and transform it into an energy hub that can power huge smelters and light up the rest of Borneo island.
Sarawak cement-to-property conglomerate Cahya Mata Sarawak, owned about 40 percent by Taib's family, fell 3.9 percent on Thursday to trade at 6.95 ringgit ($2.09) a share. The stock is down 5.4 percent this week. Last year, Cahya Mata Sarawak shares more than doubled in value.
"We need a little more clarity right now. It is a knee-jerk reaction to all the speculation in the media and trading volumes are on the light side, hence the sharp drop in the counters," said a fund manager who owns Sarawak-linked shares.
State news agency Bernama cited officials from Taib's party as saying the chief minister would hold meetings with his party members and ruling coalition allies over the weekend and was expected to make an "important announcement".
Sarawak-focused property developer Naim Holdings Bhd , run by Taib's cousin, slid 2.9 percent. Both Naim and Cahya underperformed the broader market, which inched up 0.2 percent in lacklustre post Lunar New Year holiday trade.
Taib is expected to take up a ceremonial role as Sarawak governor, media reported, although some analysts said Taib will continue to have effective control of the state that contributes about 5-6 percent of Malaysia's economy.
Timber companies that benefit from logging licenses awarded by Taib held their ground in trade on Thursday. Ta Ann Holdings , WTK Holdings and Jaya Tiasa all rose more than 1 percent after inching lower the previous day.