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FTSE Group (FTSE), the award-winning global index provider, and Bursa Malaysia Berhad (Bursa Malaysia) have announced that AirAsia and Bumi Armada will replace Gamuda and MISC in the FTSE Bursa Malaysia KLCI following the semi-annual review of the FTSE Bursa Malaysia Index Series today.
The index series is reviewed semi-annually by the independent FTSE Bursa Malaysia Index Advisory Committee. The committee is made up of leading market professionals who ensure the index review fully complies with a set of highly transparent and publicly available index rules.
As part of the FTSE Bursa Malaysia Index Series, the FTSE Bursa Malaysia KLCI is widely used by investors as the primary benchmark for the Malaysian market, and forms the basis of a wide range of investment products, including the FTSE Bursa Malaysia KLCI ETF, FTSE Bursa Malaysia KLCI Futures (FKLI), FTSE Bursa Malaysia KLCI Options (OKLI) and other index-linked financial products.
The FTSE Bursa Malaysia KLCI reserve list, comprising the five highest ranking non-constituents of the index by market capitalisation, will be (in order of full market capitalisation) UEM Land Holdings, IJM Corporation, SP Setia, Malaysia Airport Holdings and Fraser & Neave Holdings. Companies in the reserve list will replace constituents that become ineligible as a result of corporate actions, before the next review.
All constituent changes take effect at the start of business on 19 December 2011 and the next review will take place on 7 June 2012.
This review sees the FTSE Bursa Malaysia Index Series experiencing a higher turnover level than in previous reviews. This is due to the implementation of a new and enhanced liquidity rule. The new rule is based on the median of the daily turnover of a stock (expressed as a percentage of its shares in issue and adjusted for its free float weighting) over the course of a month. The old rule was based on the total turnover for a month (expressed as a percentage of shares in issue and adjusted for free float weighting). The new rule is in line with the FTSE Global Equity Index Series which further aligns the series to global standards whilst continuing to provide an accurate representation of the true investability of companies in the FTSE Bursa Malaysia Index Series. A report explaining the new liquidity rule, its impact and benefits, is available at www.ftse.com/bursamalaysia.
Separately, PLUS Expressways will be removed from the FTSE Bursa Malaysia KLCI due to its suspension and delisting. It will be replaced by UEM Land Holdings, the highest ranking stock in the reserve list as at the close of business on 8 December 2011. This change will take effect at the start of business on 13 December 2011.
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