Bursa Malaysia's Chief Executive Officer, Dato' Yusli Mohamed Yusoff said, "The improved benchmark index for the Malaysian market will be in line with globally accepted standards that place importance on tradability, investability and transparency - three important criteria used by investors to evaluate a market's attractiveness. This enhancement is important to ensure that the index remains representative in measuring the pulse of the Malaysian market while maintaining linked-standards to the global economy; so as to build our market's quality and relevance in the global arena."
Paul Hoff, Managing Director, Asia Pacific for FTSE Group said, "We are pleased to be working with Bursa Malaysia again as they enhance their market access through the adoption of a free float weighted large cap benchmark. This development should be well received by both domestic and global investors."
Dato' Yusli added that aligning the bourse to a globally recognised name like FTSE brings instant recognition and credibility amongst international investors, which in turn will open more doors of opportunities beyond the Malaysian and regional shores. He also said that the enhanced index will stimulate creation of and investment into Exchange Traded Funds, structured products and other index-linked products in multi markets, giving investors more investment options.
The FTSE Bursa Malaysia KLCI will comprise of the largest 30 companies listed on Bursa Malaysia's Main Board based on investable market capitalisation. It will be free-float adjusted and liquidity-screened to give investors a highly investable and tradable index which remains characteristic of the underlying market. The index will be calculated by FTSE according to transparent, publicly available rules and overseen by a committee of independent market practitioners who will review the index twice a year in June and December.
The improved index will closely track the pulse of the Malaysian market as the index will adopt a higher speed of calculation of every 15 seconds in comparison to 60 seconds currently.
The index value will remain unchanged and will adopt the KLCI index closing value on Friday, 3 July 2009. Exchange traded products currently tracking the KLCI and FTSE Bursa Malaysia Large 30 Index will move into the FTSE Bursa Malaysia KLCI.
With the conversion taking place on 6 July 2009, the half-yearly review on the current KLCI will be discontinued with immediate effect. Upon completion of the transition, the FTSE Bursa Malaysia KLCI will be reviewed in accordance with the FTSE Bursa Malaysia Ground Rules.
Arising from the transition of the KLCI to the FTSE Bursa Malaysia KLCI on 6 July 2009, the contract specifications for the Kuala Lumpur Composite Index Futures (FKLI) and Kuala Lumpur Composite Index Options (OKLI), as stipulated in the Rules of Bursa Malaysia Derivatives Berhad, will be varied with effect from 1 February 2009. These variations apply to FKLI and OKLI open positions that have been created prior to 6 July 2009 and remain open after 6 July 2009. These contracts will be subjected to the transition of the index calculation methodologies from the existing KLCI rules to the FTSE Bursa Malaysia methodology.
For more information on FTSE Bursa Malaysia KLCI, please visit http://www.bursamalaysia.com/website/bm/market_information/fbm_klci.html or www.ftse.com/bursamalaysia .
