Is Supermax poised to replace KLCCP as FBM KLCI component stock?

SUPERMAX Corp Bhd seems to be in the running as a candidate for the next FBM KLCI constituent stock judging from its favourable market capitalisation data.

Based on share prices as of Nov 23, Supermax has risen to the 24th position, hence qualified for inclusion into the benchmark index, according to CGS-CIMB Research.

The next FBM KLCI review is slated for Dec 3 with the changes coming into effect on Dec 21. However, the review is expected to use the market cap data at the close of Nov 23’s trading being four weeks prior to the review effective date.

“Our analysis reveals that Supermax will likely be included in the FBM KLCI index for the first time, replacing KLCCP Stapled Securities Bhd which is ranked the lowest among the current 30 FBM KLCI constituents by market cap as of end Nov 23,” wrote analyst/head of research Ivy Ng Lee Fang in a strategy note.

The FTSE Bursa Malaysia index ground rules stipulate that (i) a security would be inserted into the FBM KLCI during the periodic review if its market cap has risen to the 24th position or above, and (ii) a security would be deleted at the periodic review if it has fallen to the 36th position or below.

Apart from market cap rankings, another two criteria that companies need to meet for inclusion into the FBM KLCI are (i) free float of 15% and above and (ii) liquidity.

Meanwhile, Kenanga Research also expects KLCCP Stapled Securities to be edged out by virtue of it being the smallest market cap constituent.

“The changes would see the rubber glove sector’s weight increase from 11.7% currently to about 14.3% and the FBM KLCI FY2021E earnings per share enhanced marginally by about 2.4%.,” noted the research house.

At 9.15am, Supermax was down 3 sen or 0.37% to RM8.13 with 1.76 million shares traded, thus valuing the company at RM22.12 bil while KLCCP Stapled Securities has yet to see any trading at RM7.71. – Nov 24, 2020

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