• Of 1,000 Malaysian respondents surveyed by FT Confidential Research in the fourth quarter, 71.5 per cent held a negative view of Malaysian prime minister Najib Razak’s recent performance in office.
  • We expect Mr Najib to lead his Barisan Nasional (BN) coalition to victory in the next general election, but his low approval rating raises the risk of a leadership challenge within his United Malays National Organisation (Umno). We believe Ahmad Zahid Hamidi, deputy prime minister and Umno acting deputy president, is the frontrunner to replace Mr Najib in the event of such a contest.

In our fourth-quarter survey, only 5.6 per cent of Malaysian respondents said they either “highly approve” or “approve” of Mr Najib’s performance over the last quarter. This is a fall of 1.4 percentage points quarter on quarter. Most respondents — 71.5 per cent — expressed some degree of disapproval of Mr Najib’s leadership (see chart).

Rising risk of leadership challenge

We are convinced that Mr Najib will guide BN to victory in the next general election, with the opposition too disorganised to mount an effective challenge. The election could be held as early as the third quarter of this year, but will definitely be before an Umno party poll slated for mid-2018. Umno is the largest party in the BN coalition.

However, the expected victory does not guarantee political continuity in Malaysia. We think Mr Najib’s low approval rating raises the risk of a leadership challenge after the general election, especially if he fails to improve on BN’s 2013 election seat count.

The risk will be greatest in mid-2018, when Umno must hold a triennial party poll. This vote was due to take place in late 2016, but amid the 1Malaysia Development Berhad (1MDB) corruption scandal, Umno agreed in June 2015 to postpone it by 18 months — the maximum delay allowed under the party constitution.