News From Bloomberg.

July 16 (Bloomberg) -- Malaysian opposition leader Anwar
Ibrahim was arrested following accusations he had sex with a
male aide, 10 years after he was jailed for a similar charge
that was later quashed. Stocks and the ringgit extended declines.

Anwar, 60, was detained near his home in Kuala Lumpur by 20
masked officers, his office said. He wasn't given a reason for
the arrest, according to his lawyer Sankara Nair. Police are due
to hold a press conference later in the capital.

The former deputy prime minister denies the accusations and
says the current case is fabricated to destroy his plan to
topple Premier Abdullah Ahmad Badawi in two months. A decade ago,
Anwar's detention triggered street riots and today's arrest will
generate more popular support for his cause, analysts said.

``This will certainly increase sympathy for him,'' said
Ibrahim Suffian, director of the Merdeka Center, an independent
research institute near Kuala Lumpur. ``If he stays in jail and
some kind of charge is introduced, we'll be resetting the clock
back to 1998. This may well be the single action that tips
people over to Anwar.''
The People's Justice Party, which Anwar advises, and its
two allies won control of five of Malaysia's 13 states in the
March 8 elections. That denied the ruling coalition, which has
ruled for five decades, its two-thirds majority in Parliament.
Anwar was jailed for six years for corruption and sodomy
until Malaysia's highest court overturned the sodomy conviction
and released him in 2004.

Sinking Stocks

His party today called for supporters to rally calmly at
the police station where the former minister was planning to
give a statement. His wife, daughter and about 10 opposition
lawmakers gathered at the building after the arrest, which took
place shortly before 1 p.m. local time.

Investors have sold Malaysian stocks since the elections,
driving down the benchmark index 23 percent this year. That's
worse than the performances of the indexes in neighboring
Thailand, Indonesia and Singapore.

The Kuala Lumpur Composite index extended declines after
the arrest to its lowest in 16 months, losing 0.6 percent.
The Malaysian ringgit was the region's worst performer today,
weakening 0.2 percent to 3.2270 against the U.S. dollar.
Some money managers called on Abdullah's National Front
coalition to explain today's developments.

Health Threat

``The government should address the nation,'' said Scott
Lim, who helps manage the equivalent of $620 million as chief
investment officer at CMS Asset Management Sdn. in Kuala Lumpur.
``Instability following the March 8 election has all been very,
very negative.''

The investigation into Anwar's aide's accusation comes
under a section of Malaysia's penal code listing the offence  

``All that the people want to know now is whether Anwar
sodomized or not,'' Mukhriz Mahathir, lawmaker for the National
Front coalition, said in Parliament, triggering shouts from
opposition members of Parliament. He called for the DNA evidence
from human tissue to be produced.

About 65 percent of Malaysians consider the allegations to
be politically motivated, while 11 percent believe Anwar is
guilty, according to a survey of 1,000 people conducted July 14
by the Merdeka Center, Ibrahim said.

Anwar, who was confined temporarily to a wheelchair by the
police beating he received in 1998, may be in danger again, said
his wife, Wan Azizah Wan Ismail.

`I Feel Apprehensive'

``I feel apprehensive because my husband is, 10 years down
the road, not that well,'' she told reporters today after
speaking to Anwar by phone following the arrest. ``He has a bad
back, he's had surgery, and from the brief conversation, he said
they were not gentle.''

Anwar has filed a defamation suit against his accuser and
claims the 23-year-old former aide conspired with the government.
The manner of the arrest, one hour before Anwar had agreed
to meet police, drew criticism from his party and others in the
opposition alliance.

``Can't they conduct their investigations in a proper
manner?'' Azmin Ali, vice president of People's Justice Party,
told reporters at Parliament. ``The police should not test the
patience of the citizens. Do they want a repeat of the `98
riots?''
Anwar should be immediately released since he was willing
to cooperate with the investigation, Lim Guan Eng, head of the
opposition Democratic Action Party, said in an e-mailed
statement.

Malaysia's top policeman, Musa Hassan, didn't reply to a
message left on his phone seeking an explanation for the arrest.