KUALA LUMPUR (May 27): CGS-CIMB Research expects Telekom Malaysia Bhd (TM) and QL Resources Bhd to be added as FBM KLCI constituents when FTSE Russell announces the results of its upcoming semi-annual review of the FTSE Bursa Malaysia Index Series on June 4.
In a strategy note on May 22, the research house said AMMB Holdings Bhd and Malaysia Airports Holdings Bhd (MAHB) may be replaced by TM and QL Resources.
It said based on the share prices at the end of May 22, TM had risen to the 24th position, hence qualified to be included into the index, while AMMB and MAHB had fallen to the 37th position and 40th position respectively, which meant they will be deleted from the index.
CGS-CIMB said the rules specify that should a greater number of companies qualify to be deleted from an index than those that qualify to be included, then the highest-ranking constituents presently not in the index, which also meet the liquidity criteria, will be included.
“Based on this, our analysis reveals that QL Resources will be included in the FBM KLCI index for the first time as our analysis suggests KLCCP does not meet the liquidity criteria,” it said.
The research house said the high ratio of companies missing earnings and trade uncertainties, coupled with political uncertainties, were key obstacles in the way of KLCI rallies.
As at 9.39am today, TM had gained 0.71% or three sen to RM4.26 with a capitalisation of RM16.04 billion, while QL Resources was unchanged at RM8.47 with a capitalisation of RM13.74 billion.