MALAYSIA'S government said it's in talks with Walt Disney Co and other theme-park operators for a resort to compete with a Universal Studios development in neighboring Singapore.

The discussions with Disney, the second-biggest US media company, and other possible investors are "preliminary," said Mohd Asuki Abas, a spokesman for Malaysia's sovereign wealth fund, Khazanah Nasional Bhd. He didn't name the other parties.

The park would help Malaysia complete a southern development zone that includes homes, offices and a marina, said Bloomberg News. Almost 18 months after opening the project to investors, the government is seeking an operator before a Singapore casino and fun-park opens in 2010.

"Hopefully, in middle of next year or this year, we'll make an announcement," said Ikmal Hijaz Hashim, chief executive officer of Iskandar Regional Development Authority, the government body overseeing the development. Disney is among the "likely" investors in the zone and a theme park will "create momentum" for the project, he said.

The Malaysian resort is central to the Nusajaya City development, the nation's largest property project. Nusajaya is tucked between a mangrove swamp and a forest of oil palms in the southern state of Johor, over a causeway from Singapore.

Shares of UEM World Bhd, owner of the property company leading the Nusajaya development, rose as much as 4.6 percent to 3.22 ringgit (US$1) at lunchtime trading yesterday.