SINGAPORE - THE election setback suffered by Malaysian Prime Minister Abdullah Ahmad Badawi's ruling coalition is not likely to affect ties with Singapore, the city-state's foreign minister said on Monday.

The Barisan National (BN) coalition was mauled in Saturday's election, losing its crucial two-thirds majority in parliament and conceding four states to the resurgent opposition, which now controls five of Malaysia's 13 states.

'What BN has been able to achieve is still a solid majority ... I don't think it will affect political stability there and it should not affect bilateral relations,' Singapore Foreign Minister George Yeo said in remarks broadcast by radio station 938 Live.

'Our bilateral relations are very good and getting better and I see no reason why it should not get better after the elections,' he said.

Mr Yeo said he expected the two neighbours to continue working together in areas of common interest such as the Iskandar Development Region (IDR) business hub project in Malaysia's southern Johor state bordering Singapore.

The embattled Malaysian leader was sworn in Monday for a second term as prime minister, having earlier rejected calls to quit after presiding over the ruling coalition's worst ever election results. -- AFP