SE Asia Stocks-Mostly higher, S'pore dips but near 8-week high

* S'pore erases early strong gains, still near 8-week high

* Prospect of reforms by new PM helps Malaysia

* Politics holds back Thai stocks, Indonesia extends gains

By Arada Therdthammakun

BANGKOK, March 27 (Reuters) - Southeast Asian stocks mostly
ended higher on Friday amid optimism that the U.S. economy
might see better times soon, but Singapore bucked the trend due
to losses in index heavyweights such as DBS Group (DBSM.SI).

Singapore's Straits Times Index .FTSTI closed down 0.75
percent but was still up 9.3 percent on the week, hovering
around eight-week highs.

"Today we are seeing some profit-taking. Investors are
booking gains as they are not particularly convinced that
things will go in a straightforward positive trajectory," said
Gabriel Yap, senior dealing director at DMG & Partners in
Singapore.

"One month's figures can't tell you if it's a turnaround,"
he said, referring to recent positive U.S. economic data.

DBS, Southeast Asia's largest bank, touched an eight-week
high in morning trade but ended 2.06 percent lower, while
United Overseas Bank (UOBH.SI) slid 3.4 percent after hitting
its highest level since Feb. 19.

But Singapore-listed SIA Engineering (SIAE.SI) rose as much
as 7.6 percent after it said it had signed a fleet management
contract with Bahrain's Gulf Air. [nSP377420]

The MSCI index of Asia-Pacific stocks traded outside Japan
.MIAPJ0000PUS was down 0.1 percent at 1035 GMT but was still
heading for its biggest weekly rise since early November as
hopes that the global economy would not get any worse kept
investors buying riskier assets.

The Philippine index .PSI, which has outperformed the
region this year, extended a seven-day rise and closed up 2.6
percent at its highest level since Oct. 22, 2008.

Malaysian shares .KLSE snapped earlier losses to close
unchanged.

The Indonesian bourse .JKSE touched an 11-week high,
adding 3.01 percent, and Thai shares .SETI rose 0.32 percent,
but analysts said an anti-government rally in Bangkok capped
gains.

Thousands of protesters stopped Thai Prime Minister Abhisit
Vejjajiva from entering his office and vowed to continue their
siege until he stepped down. [nBKK383209]

Rises in Bangkok were led by electronics stocks, with Cal
Comp Electronics (Thailand) CCET.BK up nearly 4 percent,
Delta Electronics DELT.BK up 1.1 percent and Hana
Microelectronics HANA.BK 1.02 percent higher.

In Jakarta, Indonesia's top coal producer, Bumi Resources
(BUMI.JK), climbed 5.0 percent, and telecoms giant PT Telkom
(TLKM.JK) surged 7.04 percent, while Unilever Indonesia Tbk
(UNVR.JK) added 0.63 percent after the company reported a 22.5
percent rise in 2008 net profit. [nJAK379638]

In Kuala Lumpur, hopes that incoming leader Najib Razak
would push through economic reforms helped erase earlier 0.25
percent losses. [nKLR20292]

Malaysian palm planter Sime Darby (SIME.KL) rose 1.72
percent and shares in builder Gamuda (GAMU.KL) rose nearly 1
percent.

In Manila, Philippine Long Distance Telephone Co (TEL.PS),
the country's dominant phone company, was the top gainer,
rising 5.5 percent.

Vietnam's main index .VNI rose for a fourth day, adding
0.41 percent to a seven-week closing high.
(Additional reporting by Laurence Tan and Kash Cheong in
Singapore; Editing by Alan Raybould)