KUALA LUMPUR, July 21 (Reuters) - Malaysian stocks are set 
for a rebound on Monday, after ending at a new 16-month low last 
week, but gains will be capped by political uncertainties and 
expectations of higher inflation data this week, dealers said. 
    Investors are likely to pick up plantation stocks such as IOI 
Corp <IOIB.KL> and Sime Darby <SIME.KL> as crude palm oil prices 
are expected to stage a recovery following a sell-off last week. 
    "The technical rebound will see investors tip-toeing back to 
pick up bargains in plantations and energy market sectors," said 
an analyst with an investment bank. 
    "Crude oil prices have somewhat found their footing and it's 
best to buy before the commodity complexes start rising again," 
she added. 
    One dealer said expectations of higher inflation data this 
week will sap some trading interest. 
    "Some market players expect the central bank to raise 
interest rates this week by 25 basis points but since inflation 
of the cost-push rather than demand-pull variety, this may not 
happen, which adds to the uncertainty" he said. 
    The central bank earlier this month said Malaysian annual 
inflation probably topped 6 percent in June, a 26-year high. 
Inflation data for June is due on Wednesday. The central bank 
will hold its next regular monetary policy meeting on Friday. 
    The broader market is also unlikely to gain any respite from 
the long-drawn out political saga involving Malaysian opposition 
figure Anwar Ibrahim who faces mounting pressure to provide a DNA 
sample to prove his innocence in a sodomy allegation. 
    "Although the political uncertainties have been priced into 
the market, the risk for a further sell-off remains very strong 
and real, as the independence of the police and legal 
institutions comes into question in this case," said another 
dealer. 
    Anwar feared his DNA sample could be tampered with to provide 
credence to the sodomy allegation, which his supporters have 
called a high-level conspiracy to quash the opposition's rise. 
    The benchmark Kuala Lumpur Composite Index <.KLSE> fell 1.44 
percent to 1,105.04 points on Friday. 
    The July futures index <KLIN8> put the index at 1,095.0 
points. 
    Here are news stories and factors that may affect the 
Malaysian stock market on Monday. 
-------------------MARKET SNAPSHOT @ 00:10 GMT ------------- 
------------------------------------------------------------ 
                   INSTRUMENT      LAST    PCT CHG NET CHG 
S&P 500               <.SPX>    1,260.68     0.03%   0.360 
USD/JPY               <JPY=>      106.92    -0.01%  -0.010 
10-YR US TSY YLD   <US10YT=RR>     4.097      --     0.008 
SPOT GOLD             <XAU=>     $958.10     0.40%   3.800 
US CRUDE              <CLc1>     $129.71     0.64%   0.830 
DOW JONES             <.DJI>    11496.57     0.44%   49.91 
ASIA ADRS            <.BKAS>      144.38    -1.05%   -1.53 
------------------------------------------------------------- 
> Ranhill JV wins Indian water deal               [ID:nKLR164389] 
> Anwar gives alibi, faces pressure on DNA         [ID:nSP158379] 
> FACTBOX-Malaysia political scenarios             [ID:nKLR49266] 
> Palm oil slips to 2-mth low on weaker crude     [ID:nKLR133355] 
> Asian palm oil eases 1 pct on slow exports      [ID:nKLR291636] 
> SE Asian Stocks-Lower on week, Thais at 18-mth low        [.SO] 
> US STOCKS-Techs sink on Google, Microsoft miss the mark    [.N] 
> Oil falls, down 13 pc from peak on Iran, demand           [O/R] 
> FOREX-Dollar boosted by Citi results, sentiment shaky    [USD/] 
> Bonds fall for 3rd day on easing credit concerns          [US/] 
> Gold ends lower as global market fears lessen            [GOL/] 
  (Reporting by Niluksi Koswanage, Editing by Jacqueline Wong) 
  (([email protected]; +603 2333 8035; Reuters 
Messaging: [email protected])) 
Keywords: MALAYSIA MARKETS STOCKS