* Turnout at record low
* Election is fifth since mid-2006
* Stock index rises to 6-week high
* Mass protests before vote
By Sylvia Westall
KUWAIT, Dec 2 (Reuters) - Kuwaitis elected a new parliament that is expected to be more cooperative with the government than its predecessor after an opposition boycott of the poll and protests that divided the Gulf Arab state.
The election was the second this year in the oil-rich state, where a series of assemblies have collapsed due to a long-running power struggle between the elected parliament and the cabinet, in which the ruling family holds top posts.
Turnout was 40.3 percent for the poll on Saturday, according to initial figures cited by the Information Ministry, the lowest since and including the first general election held in 1963. Participation in the past three elections was about 60 percent.
The opposition refused to stand in the election, saying a new voting system introduced by the ruling emir would prevent its candidates winning the majority they secured in the last vote in February.
Kuwait's stock index rallied early on Sunday as investors showed confidence the government would be able to follow through on plans to develop the economy now the opposition was out of the National Assembly.
The political turmoil has held up economic reforms and investment, including a 30 billion dinar ($108 billion) development plan aimed at diversifying the heavily oil-reliant economy and attracting foreign investment.
"It is a pro-government parliament. Now the government can do all the things it wanted to, which it said it was prevented from doing. The question now is, will it do it?" said Kuwait University professor of political science Shafeeq Ghabra.
"While it has a parliament that does not oppose it, there is a population which is on the opposition's side," he said, referring to the turnout and protests. "The formula has got more complicated."
More than half of the candidates elected were new to the 50-seat parliament. Shi'ite candidates won about a third of seats, Kuwaiti media reported. Shi'ite MPs have tended to be more supportive of the government than the opposition in the past. Female candidates were elected to three seats.
"The election result is the foundation for a new start of development and cooperation between the legislative and executive powers to advance Kuwait and all its people," Information Minister Sheikh Mohammad al-Mubarak al-Sabah said.
The election was divisive due to the change to voting rules announced six weeks ago by emir Sheikh Sabah al-Ahmad al-Sabah, which cut the number of votes per citizen to one from four.
Tens of thousands marched on Friday in what organisers said was the largest protest in Kuwaiti history, to urge people to shun the ballot box in protest at the reform which they said would skew the outcome in favour of pro-government candidates.
The opposition, which includes Islamists, tribal politicians, liberals and leftists, won two-thirds of seats in the National Assembly 10 months ago and formed a bloc that put pressure on the government, forcing two ministers from office. That parliament was dissolved after a June court ruling.
The government said opposition lawmakers used parliament to settle scores rather than helping pass laws needed for economic development. Opposition politicians accused the government of mismanagement and called for an elected cabinet.
Political parties are banned and the affiliations of many of those who stood in the election were unclear, although analysts said the fact they ran in the poll meant they were likely to be more sympathetic to the government than the opposition.
Kuwait, a U.S. ally, has the most open political system among the Gulf Arab states with a parliament that has legislative powers and the ability to scrutinise ministers.
But the emir's Al-Sabah family, which has ruled for 250 years, holds the main government portfolios and Sheikh Sabah has the final say in state matters.