INARI Amerton Bhd, one of Malaysia’s largest listed semiconductor companies, could potentially replace Hap Seng Consolidated Bhd in the upcoming FBM KLCI semi-annual review slated to take effect on Dec 20.
According to CGS-CIMB Research, Hap Seng is unlikely to meet the liquidity criteria as it is unable to meet the median daily trade per month of ≥ 0.04% for eight out of 12 months.
“Our analysis suggests that Hap Seng has only met this criterion in six out of the past 11 months,” observed head of research Ivy Ng Lee Fang in a strategic note.
“As such, it could be removed from the FBM KLCI index in the upcoming review, and be replaced by the highest market cap ranking company that is presently not included in the index as at Nov 22.”
As at yesterday’s (Nov 16) closing price, Inari is the frontrunner to be included in the FBM KLCI index in the next review as it is the highest market ranking company among the non-FBM KLCI constituents with a market cap of RM15.1 bil followed by Westports Holdings Bhd whose market cap is 4% lower at RM14.5 bil.
“This would be the first time a technology company is represented in the benchmark index and that could help catalyst Inari’s share price,” opined CGS-CIMB Research.
FTSE Russell is due to announce the results of its upcoming semi-annual review of FTSE Bursa Malaysia Index Series on Dec 2 with the review based on market capitalisation data at the close of Nov 22 trading.
All constituent changes pursuant to the review will take effect on Dec 20 (Monday).
“This review is followed closely by the market as it could have an impact on the FBM KLCI index-linked products like FTSE 30 ETF and FBM KLCI index-linked funds,” noted CGS-CIMB Research.
“Current FBM KLCI constituents account for about 57% of the total market capitalisation as at Nov 16’s closing.”
At 12.13pm, Inari was up 3 sen or 0.73% at RM4.13 with 15.62 million shares traded, thus valuing the company at RM15.24 bil. – Nov 17, 2021
