8:58 pm - Good news for FKLI futures

Malaysian shares close higher on late buying spurred by election hopes - UPDATE (Updating to add analyst comments, share prices) . KUALA LUMPUR (Thomson Financial) - Malaysian shares closed higher Tuesday, buoyed by late-day buying amid expectations that a general election will be called soon. The overnight advance on Wall Street and improving sentiment in regional markets provided further support. The Kuala Lumpur Composite Index (KLCI) was up 10.14 points or 0.7 percent at 1,417.52. The FTSE Bursa Malaysia 30-large cap index gained 66.60 points or 0.7 percent to 9,296.86, and the FTSE Bursa Malaysia second board index advanced 53.65 points or 0.8 percent to 6,638.70. Advancers led decliners 458 to 294, with 232 stocks unchanged and 407 untraded. Trading volume was 843 million shares valued at 1.6 billion ringgit. "Expectations that elections will be held soon and the continued strength of palm oil prices have contributed to the local market's recent resilience," said Wee Kim Hong, head of research at M&A Securities. "Trading volume has been pretty thin for quite some time and this suggests that the local market will be able to withstand external shocks as any selling wouldn't be very heavy, too," Wee said. The analyst holds a more cautious view of the Malaysian bourse's medium- to longer-term outlook, saying he is worried that the market's current upward momentum may lose steam post-election. "Investors probably should consider taking the opportunity to reduce their exposure to the stock market given that the outlook for the US remains unclear for now," he said. "The market remained an underperformer today compared to regional markets like Singapore,'' said Lee Cheng Hooi, technical analyst at MIMB Investment Bank, referring to recent low volumes of trade. "I think there is a sense among the local funds that the market is overbought.'' Lee said he expects the market to be generally quiet tomorrow but may move "a touch higher.'' Plantation and mining stocks led gainers at the close. IOI Corp, the second largest plantation stock on the local bourse by market value, gained 25 sen or 3.3 percent to close at 7.75 ringgit and Kuala Lumpur Kepong, one of the largest plantation companies by planted area, rose 20 sen or 1.1 percent to 18.10 ringgit. Sime Darby, the world's largest listed palm oil company, closed flat at 11.90 ringgit after rising to 12.10 ringgit. Sime, which also has interests in the oil and gas, heavy engineering and automotive industries, said it is expecting stronger earnings growth from its oil and gas division following new ventures in transportation and installation services. Oil and gas-related stock Boustead Heavy Industries Corp Bhd (BHIC) was sharply higher after the Malaysian shipbuilder said it won three contracts worth a total of 62.6 million dollars. The stock rallied 35 sen or 5.6 percent to 6.65 ringgit. Shell Malaysia added 20 sen or 1.8 percent to 11.50 ringgit. State-controlled Telekom Malaysia advanced 20 sen or 1.8 percent to 11.60 ringgit, Malaysia's largest bank Maybank added 10 sen at 12.10 ringgit while national power utility Tenaga dropped 5 sen or 9.20 ringgit. Pay-TV operator Astro was down after investors took profits, closing 4 sen or 1.0 percent lower at 4.04 ringgt. Astro's share price has risen 12 percent over the past month on growing speculation that Malaysian billionaire Ananda Krishnan may make a buyout offer for the company after it reported a string of losses from its Indonesian venture. Ananda controls Astro via an unlisted entity, Usaha Tegas. The ringgit closed at 3.2360/2380 while the three-month rates were at 3.61/62 and overnight rates stood at 3.48/51. (1 US dollar = 3.23 ringgit) johnkb.tan@thomson.com