This article first appeared in The Edge Financial Daily on November 15, 2018

KUALA LUMPUR: Four former Bursa Malaysia heavyweights which have seen significant declines in their share price and market capitalisation will be exiting MSCI Inc’s main global index.

Astro Malaysia Holdings Bhd, FGV Holdings Bhd, MyEG Services Bhd (MyEG) and UMW Holdings Bhd will leave the MSCI Global Standard Index, according to the latest review of global stock indices by MSCI yesterday.

Only one Malaysian company, QL Resources Bhd, will be joining the index as part of MSCI’s November 2018 semi-annual index review.

Even more Malaysian stocks will be removed from the MSCI Global Small Cap Index, while additions will include three of the departing stocks from the MSCI Global Standard Index — namely FGV, MyEG and UMW.

AEON Co (M) Bhd and Hibiscus Petroleum Bhd will also join the Small Cap Index, while 10 other companies will be removed.

Apart from QL Resources, which graduates to the global index, the departing stocks are 7-Eleven Malaysia Holdings Bhd, AirAsia X Bhd, Axis REIT, Datasonic Group Bhd, Ekovest Bhd, George Kent (Malaysia) Bhd, Pestech International Bhd, Syarikat Takaful Malaysia Keluarga Bhd and Ta Ann Holdings Bhd.

“All changes will be implemented as of the close of Nov 30, 2018,” MSCI said.

Shares in the mentioned companies reacted to the changes by MSCI. QL Resources gained 10 sen or 1.4% to close at RM7.25.

Meanwhile, FGV and MyEG lost 11.19% or 15 sen and 6.35% or eight sen to close at RM1.19 and RM1.18 respectively.

Malaysia is one of five countries that saw more securities deleted than added to the MSCI Global Standard Indexes. The others were South Korea, Taiwan, Pakistan and India.

The MSCI indices typically serve as bases for exchange traded funds when choosing which markets and stocks to invest in. Stocks are typically selected based on market capitalisation and liquidity levels.

Malaysia’s lack of prominence on the index previously had already been a weak point for stocks listed on the local stock exchange.

Overall, MSCI has added 48 securities and removed 66 securities from the Global Standard Index in its latest review. Meanwhile, its Global Small Cap Indexes saw 278 additions and 335 deletions.