The KLSE 100-stock barometer index KLCI closed today at 793.93, down 39.44 points or 4.73 per cent from Friday's close of 833.37, mainly due to local factors, especially "political risks", according to an analyst.

The analyst at [#1]klsetracker.com[/#] told malaysiakini that the release of Central Limit Order Book (Clob) International shares starting today could be a contributing factor, but it alone could not account for such a big drop of almost 5.0 percent in one day.

Today marked the first day of the staggered release of Clob shares of 112 Malaysian companies traded in Singapore that have been suspended under a Bank Negara directive since September 1998.

The decision to freeze these investments, implemented at the same time as the imposition of currency controls by the Malaysian government, was to prevent foreign capital from leaving the market and causing huge fluctuations in the KLSE during the financial crisis.

It is believed that the 170,000 investors, who are primarily Singaporeans, will now have to settle for a huge discount of their initial market investment, predicted to have totalled around RM17 billion then.

The analyst said that domestic demand appeared to be "faltering", and any market rebound is expected to be short-term and unlikely to be sustainable.

"The market is expected to remain weak, with trading in the 700-750 range in the month ahead," he added.

Another brokerage executive said that there was some "window dressing" buying-in last Friday with the ending of the last quarter, leading to a slight rise in the KLCI.

"While today's fall could be in part due to some 'technical correction' and the release of Clob shares, the decline is too drastic to be accounted for by these factors.

"There was a lot of foreign selling noted, with not much local buying support," she added.