Any benefits to Malaysia's markets from the sale of assets by the country's troubled economic development fund may be limited to the currency, with analysts remaining downbeat on stocks.
Assets in Malaysia have been battered by the political scandal over the deeply indebted 1Malaysia Development Berhad (1MDB).
Launched in 2008, 1MDB, one of Prime Minister Razak Najib's pet projects, has been in the limelight for months amid allegations of financial fraud. The fund is currently undergoing a "rationalization" program, launched in May, to reduce its debt of more than $11 billion by selling assets.
But analysts were generally positive on the deal, seeing it as a sign that the scandal might begin to wind down.
"1MDB is at the center of a political scandal that, with falling oil prices, has weighed on Malaysian financial asset prices," Tim Condon, head of research for Asia at ING Financial, said in a note Tuesday. "We expect investors will see the (power asset sale) news as a hopeful sign of light at the end of the 1MDB scandal tunnel and will ignore the loss to the Treasury."