Malaysian shares ended half a percent higher on Thursday, led by casino and power firm Genting and budget carrier AirAsia which jumped to its highest close since listing. Dealers said foreign investors showed some interest in AirAsia after oil had its biggest one-day price fall in three years, easing worries over fuel costs, while smaller investors were inspired by Wall Street's overnight rally. Asia's only major listed budget airline, AirAsia's initial public offer was priced below its indicative price of 1.51 ringgit as investors worried about competition and fuel costs.
AirAsia gave up some of its early gains but still finished at 1.64 ringgit, a 9.3 percent rise for the day.
Malaysia's key stock market index, the Kuala Lumpur Composite Index, rose 0.58 percent to 919.97 points. The index had opened at 920.57, the highest since June 2000. Gains in Genting and top lender Malayan Banking lifted the main market benchmark.
Genting extended its rise to 19.50 ringgit for a gain of 5.4 percent while Maybank added nearly one percent to 11.90 ringgit.
Overall market volume was 685 million shares worth 1.31 billion ringgit ($345 million), as gaining stocks beat decliners 431 to 334.
Richard Cohen, a senior vice-president of CIMB Securities Sdn, said he felt the market's performance had firm technical foundations and that buying on rumours of a ringgit revaluation was no longer the market's main driver.
"It's a rare situation to have a market that's got great technicals and reasonable fundamentals at a 4-1/2-year high, yet is reasonably valued and also defensive," he said.
Malaysia's stock market is trading at 13-14 times forecast earnings for next year, on a par with the Singapore market but at a discount to the Hong Kong, New Zealand and Australian markets.
The Kuala Lumpur Composite Index has climbed nearly 10 percent since the beginning of August, fuelled in part by the talk of a possible revaluation of the ringgit, which has been fixed at 3.8 to the US dollar for six years.
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