KUALA LUMPUR (May 13): MSCI is removing six stocks from its main country index for Malaysia following the latest review.
Axiata Group Bhd (KL:AXIATA), YTL Corporation Bhd (KL:YTL), and PETRONAS Dagangan Bhd (KL:PETDAG) are among those to be deleted, according to a statement from MSCI, which maintains the gauge. Nestlé (Malaysia) Bhd (KL:NESTLE) will also be excluded from the MSCI Malaysia Index.
QL Resources Bhd (KL:QL) and Mr DIY Group Bhd (KL:MRDIY), meanwhile, will be relegated to the small-cap index.
The indices are closely watched by fund managers and international investors. An exclusion from the indices can trigger outflows as investors sell the former constituent in their portfolios to mirror the benchmarks.
MSCI indices are rebalanced every three months on the final trading day of the quarter. MSCI will add or remove stocks based on specific criteria, such as size and liquidity, to ensure the indices stay relevant as benchmarks of the markets they represent.
Since the previous rebalancing three months ago, home improvement retailer Mr DIY has lost more than 10% of its market value while Nestlé, the locally listed unit of the Swiss food-and-beverage conglomerate, fell about 9%.
QL Resources — which sells seafood products, operates FamilyMart convenience stores and plants oil palm — declined 8% over the same period. MSCI Malaysia Index was just a tad lower over the same period.
Meanwhile, MSCI's small-cap index for Malaysia will see the exclusion of NationGate Holdings Bhd (KL:NATGATE), Sunway Healthcare Holdings Bhd (KL:SUNMED) and UEM Sunrise Bhd (KL:UEMS) while Airasia X Bhd (KL:AAX) and KLCC Property Holdings Bhd (KL:KLCC) will be added to the gauge.
All changes to the MSCI indices will be effective at the close of May 29, the index provider said. The next review has been scheduled for Aug 12.
Before the removals, Malaysia has 27 constituents that cover about 85% of the country’s equity universe in MSCI’s standard index designed to measure the performance of the large- and mid-cap stocks.
The small-cap index, meanwhile, has more than 60 stocks that make up about 14% of Bursa Malaysia at the end of April.