PRESS DIGEST - Malaysia - Jan 7

Following are the main stories in Malaysian newspapers. Reuters has not verified these stories and does not vouch for their accuracy.

ALL NEWSPAPERS

-- The Kuala Terengganu parliamentary by-election on January 17 will see a three-cornered fight between Barisan Nasional (National Front), Parti Islam se-Malaysia (PAS) and an independent candidate.

THE STAR (www.thestar.com.my)

-- Sime Darby Bhd (SIME.KL: Quote, Profile, Research) has called off its bid to buy a majority stake in the National Heart Institute (Institut Jantung Negara), the company said.

-- Despite the government's assurance that banks have ample liquidity and the ability to lend, companies - including small and medium enterprises (SMEs) - are facing mounting pressure by the day to obtain financing, SMI Association of Malaysia Fund Raising Bureau Chairman, Steven Lim said.

BUSINESS TIMES (www.btimes.com.my)

-- Malaysia will sell a record amount of bonds this year to fund economic stimulus spending and may offer its first foreign-currency bonds since 2002, CIMB Investment Bank Bhd said.

THE NEW STRAITS TIMES (www.nst.con.my)