Friday, July 4, 2008

Malaysian Opposition Plans Rally; Stocks Fall on Political Risk

Malaysian Opposition Plans Rally; Stocks Fall on Political Risk

By Manirajan Ramasamy and Ranjeetha Pakiam

July 4 (Bloomberg) -- Malaysia's opposition said it would hold a peaceful mass rally on July 6, one week after their leader Anwar Ibrahim was accused of homosexual relations with a 23-year-old male aide, allegations he says were fabricated.

``We are expecting about 200,000 people,'' Shamsul Iskandar Mohd Akin, youth chief of Anwar's People's Justice Party, said in an interview. The rally, originally intended to protest against higher fuel prices, will also ``inform people'' about the latest political developments, he said.

Malaysia's benchmark stock index slumped to its lowest in more than a year today, the ringgit dropped to a five-month low and three-year government bonds fell for a ninth week, their longest losing streak since at least 1998, as political tension, slower growth and higher inflation worried investors. Anwar, who has said he can topple the government by September, has accused Deputy Prime Minister Najib Razak of conspiring to frame him for sodomy.

While Najib said yesterday he had met the opposition leader's accuser, he otherwise denied involvement. Najib himself also rejected allegations he had an affair with a woman before she was killed two years ago.

``You have a difficult external environment and you have politics: not a very nice combination,'' said David Ng, who helps manage about $1 billion as a portfolio manager at Hwang-DBS Asset Management Sdn. in Kuala Lumpur. ``Foreigners have been the main sellers and locals have started to join in.''

New Rally Location

The police said they will allow the rally after organizers agreed to move it to a stadium outside the capital city.

``Since they have taken my offer to move from the original open space venue to an enclosed place, we will allow it,'' Khalid Abu Bakar, Selangor's police chief said in a phone interview today. ``If they follow the rules, they can gather there peacefully.''

Malaysian police in the past week confirmed investigations of Najib and Anwar. Both have called the claims against them fabrications intended to destroy their political careers.

``We call on Malaysians who support the movement for a more just and transparent government to join this Sunday's peaceful gathering,'' Anwar said in a joint statement today with the leaders of the two other parties in his alliance which made record gains in March elections. ``We also call upon Malaysians not to be influenced by outside provocation.''

Anwar has accused Najib of involvement in trumping up false sodomy charges against him, and yesterday held a press conference with a private investigator who alleged the deputy premier had an affair with Altantuya Shaariibuu, a Mongolian interpreter who was 28 years old when she was killed in a bombing in 2006.

The private investigator retracted his allegation today and replaced his lawyer, Americk Singh Siddhu, who told reporters he's not convinced that was done of ``his own free will.''

Anwar and Najib are vying to become Malaysia's next leader. Prime Minister Abdullah Ahmad Badawi, rejecting calls to resign, has said he'll hand power to Najib sometime after the ruling party's annual meeting in December. Anwar has predicted that he'll woo enough lawmakers to topple the government before then.

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