KUALA LUMPUR (Nov 25): Gamuda Bhd (KL:GAMUDA), whose share price has more than doubled year-to-date (YTD), is among companies analysts are expecting to be included in the FTSE Bursa Malaysia KLCI in the upcoming December review of the index. This comes after the counter’s surge up to 16th spot on the list of Bursa Malaysia’s largest companies as of Nov 25, from 29th during the previous semi-annual review on June 6.

Another company that is likely to be included in the top 30 largest stocks index is 99 Speed Mart Retail Holdings Bhd (KL:99SMART), whose share price has gained 44.85% as of Nov 25, from its initial public offering (IPO) on Sept 9.

As of Nov 25, 99 Speed Mart is the 25th largest company by market capitalisation on Bursa Malaysia, leading to views by analysts that the company could be included as part of the FBM KLCI following the upcoming semi-annual review.

The FBM KLCI components are set for its next semi-annual review on Dec 5 that is based on companies' market capitalisation data at the close of Nov 25. According to reports, the results of the Dec 5 review will take effect between Dec 20 and Dec 23.

According to the ground rules of the FTSE Bursa Malaysia Index Series, a security would be added to the benchmark index if its market cap ranking among eligible securities rises to 25th or higher, while one would be removed from the list if its ranking drops to 36th or lower.

Based on the criteria of having a market capitalisation rank of 25th and above, 99 Speed Mart would be included on the KLCI list. However, some analysts have opined that the counter could be placed on the KLCI reserve list first.

“While there is no rule (pertaining to the inclusion of companies which are just listed less than a year before the semi-annual review), I think there is a tendency that FTSE Russell will put newly-listed companies under ‘probation’,” said one analyst The Edge spoke to.

Looking back at the semi-annual review of the FBM KLCI on Dec 3, 2020, Mr DIY Group (M) Bhd (KL:MRDIY) was first included in the reserve list of the benchmark index after it was listed on Oct 26, 2020. The counter was included in the FBM KLCI in the June 6, 2021 review.

However, 99 Speed Mart’s market capitalisation of RM19.99 billion, as of November 25, puts it squarely on 25th spot on the FBM KLCI, which should see it become eligible for inclusion into the benchmark index.

Two other eligibility requirements are: a minimum free float of 15%, and a certain liquidity level that differs between existing constituent and non-constituent.

The Edge looks at how the components have changed since the last review on June 6, 2024.

On the reserve list of the FBM KLCI, Gamuda’s share price surge and market capitalisation rank should mean that the group is included as part of the benchmark index this time round.

Between June 6 and Nov 25, Gamuda’s shares have gained RM3.16 or 52.83% to RM9.13, from RM5.97. This saw the construction giant’s market cap gain RM9 billion to RM25.76 billion, which saw its ranking jump to 16th from 29th previously.

Analysts were almost certain that Gamuda would be added as a new member of the FBM KLCI. The group was previously a constituent of the benchmark index between Sept 20, 2010 and Dec 19, 2011.

Other companies on the FBM KLCI reserve list whose market capitalisation are in the top 30 are AMMB Holdings Bhd (KL:AMBANK), at 27th place, and Malaysia Airports Holdings Bhd (MAHB) (KL:AIRPORT), ranked 28th.

However, MAHB, whose share price rise can be attributed to the privatisation offer by the Khazanah Nasional Bhd, Employees Provident Fund (EPF), Abu Dhabi Investment Authority and Global Infrastructure Partners, is unlikely to be included in the KLCI list, as it will be taken private soon.

Four KLCI constituents have come off the top-30 list, namely Petronas Dagangan Bhd (KL:PETDAG) at 31st place, Sime Darby Bhd (KL:SIME) at 32nd, Genting Bhd (KL:GENTING) at 34th and Genting Malaysia Bhd (KL:GENM) at 37th.

Aside from Petronas Dagangan, which has seen its shares drop about 3.87% since June 6, the rest have seen their share prices drop more than 10%.

Of the three, GenM has fallen the most — 18.45% since June 6 — followed by its parent company Genting, which has seen its share price decline 17.51% since the last KLCI semi-annual review in June. Meanwhile, Sime Darby’s market capitalisation decreased 14.47% during the period.

 GenM and Genting have been KLCI components since the adoption of FTSE Bursa Malaysia KLCI from July 6, 2009.

Judging from the ground rules of the FBM KLCI Index series, GenM should be removed from the list due to it falling to 37th place among the largest companies on Bursa Malaysia, from 32nd spot previously.

Meanwhile, since 99 Speed Mart’s market capitalisation is the 16th largest, another company might have to be removed from the top 30 list. This makes Genting’s position, at the 34th, seem precarious.

Among KLCI constituents which saw their share price drop the most since June 6 include YTL Corporation Bhd (KL:YTL), YTL Power International Bhd (KL:YTLPOWR), Petronas Chemicals Group Bhd (PetChem) (KL:PCHEM) and Nestle (Malaysia) Bhd (KL:NESTLE).

Between June 6 and Nov 25, YTL’s shares have fallen RM1.69 or 47.75% to RM1.85, from RM3.54, slashing its market capitalisation by RM19.28 billion to RM20.53 billion.

Meanwhile, its subsidiary YTL Power’s share price has dropped 38.52% or RM1.92 to RM3.06, from RM4.98 — equivalent to a RM16 billion loss in market cap.

The market capitalisation ranking of YTL and YTL Power has fallen to 24th and 17th places, respectively, from 10th and 11th during the last KLCI semi-annual review.

 PetChem was the third biggest loser among KLCI constituents during the period under review, with its share price having declined by 27.55% or RM1.83 since June 6 to RM4.80. It has lost RM15.51 billion worth of market capitalisation.

Nestle, whose shares have fallen 23.09% — equivalent to RM6.99 billion worth in market capitalisation — saw its market capitalisation ranking drop to 21st place from 15th previously.

Judging from the ground rules of the FBM KLCI Index Series, none of the biggest losers would be excluded from the list, as they remain among the top 25 largest companies listed on Bursa Malaysia.     

Lastly, newly minted KLCI component Sunway saw its share price rally another 40.11% from its admission date of June 6. It was the third best gainer among Malaysia’s big caps, as its market capitalisation increased RM8.51 billion to RM28.79 billion, representing the 14th largest market capitalisation.