As expected, Malaysia Stock Market nose-dives in early trading on Monday taking the cue from last Friday’s Dow Jones almost 250 points losses. Couple with uninteresting budget revealed last Friday by Prime Minister Abdullah Badawi, investors couldn’t find any reason to buy in big ways. Mostly are waiting on side-line waiting to see if either U.S. market will behaves or the government will announce additional goodies.

This week is expected to be a debate week for Malaysian corporate figures as well as politicians to further market how responsible the budget was and don’t be surprise to hear more flowerish languages frontpaging the government-controlled media. As data showing the first monthly drop in payrolls in four years stoked fears on Wall Street that the economy was headed into recession, the Malaysia government is finding it hard to please the stocks investors that the country is not affected by crisis in U.S.

While the government officials were busy preparing for the next topic of budget-tale for publishing in the central of capital, clash was reportedly occurred hundreds of miles away at oil-rich northeastern state of Terengganu on Saturday night. The news of the clash was blackout from government-controlled media (until today, Monday) even though it was widely published on blogs and opposition websites. Malaysiakini was one of the blogs which reported how police used live bullets on crowds.

The riot was sparked when police ordered the crowd of 500 people gathering at Jalan Sultan Mahmud, close to Batu Burok, to disperse peacefully at 10pm. Seven people were injured, two with gunshot wounds, when opposition supporters clashed with police – reported theStar. It was claimed that despite five verbal warnings, the crowd became aggressive and verbally abused the Federal Reserve Unit personnel and later hurling stones, homemade bombs and Molotov cocktails at police.

Police retaliated with tear gas and water cannons and in the melee, shots were fired injuring two opposition supporters, aged 21 and 38. The two have been hospitalised. One is in serious condition with a neck injury at the Kubang Kerian Hospital in Kelantan. State news agency Bernama said that 23 people had been detained and that seven, including four policemen, were injured.

However rumor has it that a policeman or FRU officer who infiltrated into the crowds as plainclothes officer was discovered and attacked with stones by a group of people before the officer whipped his gun – and all hell breaks loose. Nevertheless this is the first case of Malaysian police fired “live rounds” to quell a riot, in a country that require police approval or permit to stage rallies but often rejected despite numerous application by opposition parties. Strangely the ruling party will never get rejected by the police whenever it needs to hold rallies.

“It was police who attacked the civilians … It was a peaceful rally … Police set up all the road blocks around the area with water cannons … Then suddenly in the middle of the night they started using water cannons on people” said Kamarudin Jaffar, a leader of Islamist party Parti Islam SeMalaysia (PAS), saying the rally had been staged by PAS, other parties and non-government bodies to call for free and fair elections.

The riot which gained international coverage including Reuters is another sign of rising social tensions in Malaysia as the nation moves into election mode. Opposition parties in Malaysia might be split along racial lines but are united in complaining that the electoral system is rigged against them with years of claims of phantom voters – deadman found to be voting.

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September 10th, 2007 by financetwitter

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