9:33 am - Market seen lower ahead of fuel subsidy plan

Malaysian Stocks-Market seen lower ahead of fuel subsidy plan KUALA LUMPUR, June 4 (Reuters) - Malaysian shares are expected to ease on Wednesday, ahead of the announcement of a new fuel subsidy plan, which is expected to result in higher pump prices in August. The government said on Tuesday it would scrap fuel price controls in August in a move that could double Asia's second-cheapest pump prices and stoke inflation already at 15-month highs. "Investors are cautious as details about the new subsidy scheme are sketchy," said an analyst at a domestic brokerage. The government will flesh out plans on Wednesday to overhaul a fuel subsidy system that eats up a third of the budget of Asia's largest net oil exporter. Price controls could be replaced by quotas or cash handouts, the domestic trade minister said. A fuel hike could also stoke public anger against Prime Minister Abdullah Ahmad Badawi at a time when he is trying to arrest a slide in public support against the government and fend off a challenge to his leadership. Dominant power distributor Tenaga Nasional Bhd (TENA.KL), might be in focus on Wednesday after the company confirmed it was in talks with leisure group Genting Bhd (GENT.KL) to acquire the latter's energy assets, dealers said. On Tuesday, the Kuala Lumpur Composite Index (.KLSE) fell 1 percent to 1,257.6 points. The June futures index (KLIM8) put the index at 1,253 points. Here are news stories and factors that may affect the stock market on Wednesday.

STOCK DOWNGRADE BY GOLDMAN SACHS - In a climate of falling global markets, the local bourse suffered yet another downgrade, this time from Goldman Sachs, which named Malaysian stocks least favoured in South-East Asia on concerns over political volatility, the Star newspaper reported. (Reporting by Soo Ai Peng; Editing by Faisal Aziz and Anshuman