Mr DIY to swap places with Supermax as new FBM KLCI constituent?

MR DIY Group (M) Bhd and Supermax Corp Bhd are on the watch list of the forthcoming FBM KLCI constituent review with the former in a position to replace the latter as the new component stock of the benchmark index.

Its strong share price performance (+153%) since its listing on Oct 26 last year has led to Mr DIY’s market capitalisation rising to No.20 in rank based on its April 15 close.

“Conversely, Supermax’s ranking has slipped to No.33,” rationalised Maybank IB Research head Wong Chew Hann in a FBM KLCI constituents review note.

“Mr DIY could feature as a FBM KLCI constituent if its ranking stays at or above 25, booting out Supermax.”

Currently, Mr DIY has a “hold” rating under the research house’s rating universe while Supermax is not rated.

Maybank IB Research expects the FBM KLCI constituents to undergo a review process based on share prices at the market close on May 24 (Monday) as per the FTSE Bursa Malaysia Index Series Ground Rules (updated April 2021.

‘The constituent change will take place after the market closes on the third Friday in June (ie June 18 and would be effective on the following Monday (June 21),” suggested Wong.

“If Mr DIY’s ranking sustains at or above 25 come May 24, the stock could feature as a FBM KLCI constituent, replacing the lowest rank existing constituent, Supermax (No.33).”

Apart from Mr DIY and Supermax, Wong does not expect other changes among the constituents of the benchmark index “unless their market value changes substantially over the next one month plus”.

“If Mr DIY features as a FBM KLCI constituent replacing Supermax, we estimate its KLCI weight to be 1.5% (Supermax’s present weight is 1.6%) based on data on April 15’s market close,” projected Maybank IB Research.

“This is based on Mr DIY’s market cap (adjusted for free float) being 0.95 times that of Supermax. The gloves sector’s weight on the KLCI would be lower at 8.5% from 10.1%.”

At 9.48am, Mr DIY was up 6 sen or 1.5% at RM4.06 with 580,100 shares traded, thus valuing the company at RM25.48 bil, while Supermax was up 11 sen or 2.07% at RM5.42 with 21.8 million shares exchanged hands, thus giving the company a market cap of RM14.75 mil. – April 19, 2021

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