Malaysia Hot Stocks-Market drop seen halted by poll, planters

KUALA LUMPUR, Feb 15 (Reuters) - Malaysian shares are
likely to fall on Friday, weighed down by declines in Wall
Street, but renewed buying interest fuelled by the early
general elections and surging commodity prices could curb
losses, dealers said.

Investors are expected to focus on big caps such as Telekom
Malaysia (TLMM.KL), Tenaga Nasional (TENA.KL) and Maybank
(MBBM.KL).

"The market will come down overall because of the Dow but
there might be some activities by the locals to try to hold the
market up so it doesn't fall too much, given that elections are
around the corner," an analyst with a foreign brokerage said.

Malaysia's elections will be held on March 8, the Election
Commission said on Thursday. Though elections are not due until
May 2009, the government wants a fresh five-year mandate before
the economy begins to slow and inflation picks up.

Palm oil producer IOI Corp (IOIB.KL) will be in focus after
it reported on Thursday a 52 percent rise in quarterly profit
on the back of surging crude palm oil prices, a dealer said.

Other planters such as Sime Darby (SIME.KL) and Kuala
Lumpur Kepong (KLKK.KL) will be supportive, he added.

"Palm oil prices are hitting record highs almost every
week, which boosts the earnings of these plantation firms and
foreign buyers have been streaming in," said another analyst.

"But these firms are among the heavily foreign-owned stocks
and if foreigners want to sell and make a profit, these are the
ones to pick," he added. "It will weigh on the market in
future."

Malaysian crude palm oil futures jumped to a new high on
Thursday on surging global demand amid renewed buying interest
from China, the world's largest vegetable oil consumer.
[ID:nKLR203954]

The benchmark Kuala Lumpur Composite Index .KLSE settled
up 0.9 percent at 1,436.10 points on Thursday, supported by
gains in plantation firm Sime Darby (SIME.KL) and lender
Malaysian Banking (MBBM.KL).

The February and March futures contracts KLIG8 KLIH8
put the index at 1,441 and 1,439 respectively.

U.S. stocks dropped on Thursday as the credit crunch
surfaced unexpectedly in the municipal bond market and after
the Federal Reserve chairman said that he sees sluggish
economic growth ahead.

Stocks ended a three-day string of gains as the Dow Jones
industrial average .DJI fell 175.09 points, or 1.39 percent,
to 12,377.15. The Standard & Poor's 500 Index .SPX was down
18.34 points, or 1.34 percent, at 1,348.87. The Nasdaq
Composite Index .IXIC dropped 41.39 points, or 1.74 percent,
at 2,332.54.
(Reporting by Niluksi Koswanage; Editing by Clarence
Fernandez)