KUALA LUMPUR (Jan 15): Consumer stocks have the largest sector representation on Bursa Malaysia’s newly launched financial performance-based indices, highlighting companies with strong financial fundamentals across profitability, capital structure, and earnings quality.
The Bursa Malaysia Quality 50 Index (BMQ) and its Islamic counterpart, the Bursa Malaysia Quality 50 Shariah Index (BMQ-S), feature 50 Malaysian-listed companies spanning multiple sectors and market capitalisations.
In the indices, consumer stocks account for 24.8% of BMQ and 18.6% of BMQ-S. Technology and plantations also rank among the top sectors for both indices.
Leading constituents by weightage include Westports Holdings Bhd (KL:WPRTS), United Plantations Bhd (KL:UTDPLT), and Fraser & Neave Holdings Bhd (KL:F&N). The indices also highlight under RM1 billion market capitalisation companies like Infomina Bhd (KL:INFOM), AutoCount Dotcom Bhd (KL:ADB) and Cloudpoint Technology Bhd (KL:CLOUDPT) to attract investor attention.
The indices have strong cumulative growth, showing that companies with high-quality fundamentals (profitability, capital structure, earnings quality) tend to deliver solid returns over years, even if short-term performance dips.
BMQ saw cumulative returns of 86.6% over a 10-year period, while BMQ-S was up 93.9% over the same period.
The total market capitalisation of the indices stands at RM151.2 billion for BMQ and RM149.2 billion for BMQ-S, with constituent sizes ranging from RM298.8 million to RM19.4 billion. Companies included are from the Main and ACE Markets but are not part of the main KLCI benchmark.
Other requirements include a minimum market capitalisation of RM300 million and a trade velocity (liquidity metric) of at least 10% over the past 12 months. The indices’ composition will be reviewed twice a year.
Unlike conventional benchmarks that focus on market capitalisation, the new indices launched on Monday measure quality, using profitability (return on equity), capital structure (debt-to-equity ratio), and earnings quality (operating cash flow relative to net profit).