ANALYSTS' VIEW: Malaysia's ruling coalition suffers upset

KUALA LUMPUR (Reuters) - Malaysia's opposition handed the ruling Barisan Nasional (National Front) coalition the biggest upset in its history after Saturday's elections, putting the premier's political future at risk and raising security fears.

Barisan retained a parliamentary majority, according to the election commission, but could put in its worst performance since 1969, when polls were followed by race riots and a state of emergency.

The election commission said the ruling coalition lost four states across the northern part of the peninsula and the opposition was claiming victory in a fifth state.

Indicative of the scale of the debacle, the chief of the Malaysian Indian Congress, a key component of the National Front, lost the seat he had held for 34 years.

Following are views of political analysts and politicians on Malaysia's watershed general elections.

SANI HAMID, DIRECTOR OF SOVEREIGN RATINGS, STANDARD AND

POOR'S

"In my point of view there is no immediate effect on the sovereign rating, but the focus will actually be on two fronts, one is a decision-making process, i.e. what is the impact from the loss of the two-thirds majority on parliament?

"If that is going to lead a more difficult push to pass legislation, especially those measures that relate to the economy, one can imagine that if the government wants to raise oil prices, the other parties could create some opposition and the process would be more protracted.

"Secondly, the opposition states, Kedah and Penang, are key states in the northern corridor story, so how this is going to impact those states with regard to investment and public funds will have to be seen as well."

MALAYSIAN OPPOSITION LEADER ANWAR IBRAHIM:

"All Malaysians regardless of race, culture and religion are a nation of one. The people have expressed in no uncertain terms that they want accountability, transparency and the rule of law. Today unity, consensus and mutual respect thrives. Tomorrow we will start building a brighter future. This is a new dawn."

TIM CONDON, HEAD OF ASIA RESEARCH, ING:

"This is probably not good news for the equity market or the ringgit. I think the consensus was that the BN coalition would soldier on and have a sufficient majority to push through their spending programs and the development of their corridors (economic development zones) ... but this puts in doubt that they will even be able to implement their spending programs. There really was no feel-good factor before (the election) and this really reduces the likelihood that there will be one in the near future."

BRIDGET WELSH, POLITICAL ANALYST, JOHNS HOPKINS UNIVERSITY:

"It was a phenomenal shift. They lost up to potentially four state governments. I think the PM will potentially have to resign. This is unprecedented. The only other time this happened was in 1969 and that's why everybody is very nervous now because of the uncertainty."