Politics seen keeping Malaysian stocks under pressure

KUALA LUMPUR, July 14 (Reuters) - Malaysian shares are
likely to stay under pressure on Monday amid growing political
turbulence, as police beefed up security in parts of the
capital in case of possible opposition-led street protests
against the ruling coalition.

"There is no positive news around at the moment, and the
political situation is likely to weigh on the market for now,"
said a dealer at a local brokerage house.

"As for today, I think the market would be very dead with
not much trade," he said.

The government has been trying to quell growing public and
opposition discontent after a series of political scandals and
a steep rise in fuel prices, leading to fears about the
country's political and economic outlook.

On Monday morning, police was blocking roads leading to the
parliament and security personnel was deployed in some areas,
as authorities prepared for a mass gathering outside parliament
called by the opposition, which demands a parliamentary debate
on a motion of no-confidence in the government.

"It's not a situation that investors would want to see,"
said another dealer.

"The sentiment is obviously pretty weak," she said.

On Friday, the prime minister's pledge to retire in 2010
gave temporary relief to a market battered by political
uncertainties.

The benchmark Kuala Lumpur Composite Index .KLSE closed
1.3 percent higher at 1,150.39 points on Friday. The July
futures index KLIN8 put the index at 1,142.0 points.

But renewed protests and a darkening outlook for the global
economy would continue to weigh on investors' minds, analysts
said.

Going forward, they said blue chip stocks dumped in the
recent sell-off such as plantation giant Sime Darby (SIME.KL)
could attract investors looking to pick up beaten down shares,
and support the market at lower levels.

Here are news stories and factors that may affect the
Malaysian stock market on Monday. ---------------MARKET SNAP
SHOT AT 23:53 GMT ------------------
INSTRUMENT LAST PCT CHG NET CHG S&P 500
.SPX 1,239.49 -1.11 -13.900 USD/JPY
JPY= 106.51 0.4 0.420 10-YR US TSY YLD
US10YT=RR 4.012 -- 0.041 SPOT GOLD
XAU= $965.00 0.13 1.300 US CRUDE
CLc1 $143.44 -1.13 -1.640 DOW JONES
.DJI 11100.54 -1.14 -128.48 ASIA ADRS
.BKAS 144.26 - 1.21 -1.76
-------------------------------------------------------------
> Malaysia beefs up security in case of protest [ID:nKLR91248]
> EU temporarily bans Malaysian fish imports-paper
[ID:nKLR95116] > Malaysia cuts gas prices for industrial users
[ID:nKLR203942] > Malaysia PM-in-waiting faces rocky road to
power[ID:nKLR165150] > Malaysia May factory output rise at
9-mth low [ID:nKLR33276] > Malaysia PM to keep promise to
retire in 2010 [ID:nKLR44311] > Malaysia cracks down on
corruption at immigration[ID:nKLR40929] > SE Asian
Stocks-Higher on Fannie, Freddie report [.SO] > Dollar
up, bonds fall on US help for Fannie, Freddie [USD/] >
Prices fall as GSEs bailout talks stir supply fears [US/]
> Gold hits 4-month high on record oil, weak dollar
[GOL/] > NYMEX crude falls over $2 as U.S. dollar recovers
[O/R] > US STOCKS-Futures, dollar gain after Fed, Treasury
statement[.N]

MALAYSIA MULLS DISTRIBUTION BODY FOR SUBSIDISED
GOODS-REPORT

-Malaysia may set up a body to distribute subsidised goods
throughout the country to ensure sufficient supplies and help
stabilise prices, Domestic Trade Minister Shahrir Abdul Samad
was quoted as saying on Saturday by Bernama news agency.

(Reporting by Faisal Aziz; Editing by Tomasz Janowski)