PRESS DIGEST - Malaysia - Jan 7

Following are the main stories in Malaysian newspapers. Reuters has not verified these stories and does not vouch for their accuracy.

ALL NEWSPAPERS

-- The Kuala Terengganu parliamentary by-election on January 17 will see a three-cornered fight between Barisan Nasional (National Front), Parti Islam se-Malaysia (PAS) and an independent candidate.

THE STAR (www.thestar.com.my)

-- Sime Darby Bhd (SIME.KL) has called off its bid to buy a majority stake in the National Heart Institute (Institut Jantung Negara), the company said.

-- Despite the government's assurance that banks have ample liquidity and the ability to lend, companies - including small and medium enterprises (SMEs) - are facing mounting pressure by the day to obtain financing, SMI Association of Malaysia Fund Raising Bureau Chairman, Steven Lim said.

BUSINESS TIMES (www.btimes.com.my)

-- Malaysia will sell a record amount of bonds this year to fund economic stimulus spending and may offer its first foreign-currency bonds since 2002, CIMB Investment Bank Bhd said.

THE NEW STRAITS TIMES (www.nst.con.my)

-- Barisan Nasional (National Front) is confident of winning the Kuala Terengganu by-election based on its track record of serving the people, Deputy Prime Minister and Deputy Barisan Nasional Chairman, Najib Razak said.

THE EDGE FINANCIAL DAILY (www.theedgedaily.com)

-- Plantation giant Sime Darby Bhd (SIME.KL) has withdrawn its bid to privatise the National Heart Institute (Institut Jantung Negara), a move that effectively relieves the cabinet from reversing its earlier approval of the proposal.

-- The two new appointees to the board of Star Publications (M) Bhd (STAR.KL) are likely to be made executive directors under the reorganisation of the media company's board, sources said.

THE MALAYSIAN RESERVE (www.themalaysianreserve.com)

-- Banks and economists are expecting Bank Negara Malaysia to reduce the overnight policy rate (OPR) by another 25 basis points to three percent at its monetary policy meeting this month in view of the worsening global economic conditions, banking sources said.

THE SUN (www.sun2surf.com)

-- The pump price of petrol is not expected to be reduced further in the near future from the current 1.80 ringgit per litre, Domestic Trade and Consumer Affairs Minister Shahrir Abdul Samad said.

-- Sime Darby Bhd (SIME.KL) stands to be a prime beneficiary of Peninsular Malaysia's long-term urbanisation process as evidenced by the plan to build a 1,200ha new low-cost carrier terminal (LCCT) for AirAsia (AIRA.KL) at its Labu estate, OSK Research Sdn Bhd said.

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