On the FBM KLCI constituents watch list, Maybank IB says Inari may be out and likely replacement be Malaysian Airports The semicon company’s market capitalisation has slipped to no.41 in size as of 11 May 2023 market close. Maybank IB adds the stock could drop out as a FBM KLCI constituent if its ranking is at No.36 or below, at the close of trading on the upcoming constituent review date, estimated 22 May.
The FTSE Bursa Malaysia KLCI (FBM KLCI) constituents are due for a review, using share prices as of 22 May close, the house estimates, based on the FTSE Bursa Malaysia Index Series, Ground Rules. The constituent change, if any, will take place after the market closes on the 3rd Friday in June, i.e. 16 Jun, and would be effective Monday, 19 Jun.
Based on share prices as of 11 May close, Inari’s ranking in full market capitalisation has fallen to No.41. Staying at or below No.36 come 22 May will render the stock dropping off as an FBM KLCI constituent. Replacing it will be the highest-ranked non-constituent by market cap, provided that the stock meets the liquidity test. Non-constituent, KLCCP, ranks No.28 in full market cap as of 11 May, followed by Malaysia Airports at No.30, Westports at No.31, and Hap Seng at No.32 (Fig.3).
However, KLCCP, Westports and Hap Seng do not meet the liquidity test, based on the house’s estimates.
If Malaysia Airports features as an FBM KLCI constituent Maybank IB estimates its KLCI weight to be 1.7% vs. Inari’s present weight of 1.4%. If Inari exits, the Technology sector would no longer be represented on the KLCI. Four sectors currently dominate the KLCI: Financial Institutions (41%), Telco (11.2%), Utility (9.9%) and Plantation
