AMMB Holdings Bhd and QL Resources Bhd have both made inroads into the FBM KLCI index as new constituents to replace two of Malaysia’s Big-Four glove makers Top Glove Corp Bhd and Hartalega Holdings Bhd.
This follows the sharp fall in Top Glove and Hartalega’s share prices over the past six months due to glove oversupply issues.
Part of the semi-annual review exercise, CGS-CIMB Research said the changes were in line with its preview note dated Nov 21 of the event.
“All constituent changes will be effective on Dec 19 (Monday),” head of research Ivy Ng Lee Fang pointed out in a strategy note. “This review is closely followed as it could have an impact on the FBM KLCI index-linked products and/or funds.”
Time dotCom Bhd and Fraser & Neave Holdings Bhd will replace AMMB and QL’s positions in the FBM KLCI reserve list alongside Westports Holdings Bhd, Malaysia Airports Holdings Bhd and Gamuda Bhd which retain their spots in the list.
The reserve list will be used in the event that one or more constituents are deleted from the benchmark index in accordance with the index’s ground rules during the period leading up to the next semi-annual review.
Elsewhere, Affin Bank Bhd, Berjaya Food Bhd, Dayang Enterprise Holdings Bhd, Hartalega, Heineken Malaysia Bhd, Hextar Global Bhd, Hong Leong Capital Bhd, PMB Technology Bhd, Top Glove, Uchi Technologies Bhd and United Plantations Bhd will be added to the FTSE Bursa Malaysia Mid 70 index (FBM70) following the latest review.
These companies will be replacing AEON Co (M) Bhd, AMMB, Carlsberg Brewery Malaysia Bhd, Dufu Technology Corp Bhd, Genting Plantations Bhd, GHL Systems Bhd, Leong Hup International Bhd, QL Resources, Sports Toto Bhd, Sunway and UMW Holdings Bhd.”
“We anticipate some re-jigging by fund managers given the changes in the FBM KLCI, FBM70 and FBM Hijrah Shariah lists, benefitting AMMB, QL Resources, Inari Amerton Bhd, Malaysia Airports and Press Metal Aluminium Holdings Bhd,” reckoned CGS-CIMB Research.
“(At the same time), this poses potential selling pressure on Hartalega, Top Glove, Genting Plantations Bhd, PPB Group Bhd and Sunway Bhd.”
All-in-all, the research house reiterated its FBM KLCI target of 1,602 points for end-2022F and its top three picks which are Genting Malaysia Bhd, Mr DIY Group (M) Bhd and RHB Bank Bhd. – Dec 2, 2022