Jan. 15 (Bloomberg) -- Malaysia's stock index rose, headed for a record close. Sime Darby Bhd. led gains by plantation companies after palm oil prices surged to a high.

Malayan Banking Bhd. advanced after Morgan Stanley raised its rating on the country's No. 1 lender. Tenaga Nasional Bhd., the nation's largest power producer, climbed before its first quarter earnings results today.

The Kuala Lumpur Composite Index advanced 10.27, or 0.7 percent, to 1,5117.31 at 9:35 a.m. local time, surpassing the record close of 1,516.22 on Jan. 11. The smaller FTSE Bursa Malaysia Second Board Index added 0.2 percent to 6,899.91. The FTSE Bursa Malaysia Emas Index gained 0.9 percent to 10,341.96.

Sime, the world's largest listed palm oil producer, rose 20 sen, or 1.6 percent, to 13.10 ringgit. IOI Corp., the No. 2 rival, climbed 15 sen, or 1.8 percent, to 8.50 ringgit. Kuala Lumpur Kepong Bhd., Malaysia's third-biggest planter, added 30 sen, or 1.6 percent, to 18.70 ringgit.

Malaysia's palm oil futures yesterday had the biggest gain in 11 weeks to a record on concern tight global supplies of vegetable oils may further deplete inventories of the commodity.

Palm oil for March delivery rose 134 ringgit, or 4.1 percent, to 3,414 ringgit ($1,048) a ton on the Malaysia Derivatives Exchange yesterday, the most since Oct. 29.

Malayan Banking, or Maybank, advanced 10 sen, or 0.8 percent, to 12.90 ringgit after Morgan Stanley raised its rating on the bank to ``equal-weight'' from ``underweight,'' and boosted its earnings forecast for fiscal 2008 and 2009. It lifted its share estimate to 13.30 ringgit from 12 ringgit, the report said today.

Tenaga climbed 30 sen, or 3 percent, to 10.20 ringgit before its first quarter earnings report due after the market closes. CIMB Research Sdn. said in a note yesterday Tenaga has hedged 81 percent of its fiscal 2008 coal requirements to mitigate surging prices.

To contact the reporter on this story: Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net.

Last Updated: January 14, 2008 20:46 EST