SUPERMAX Corp Bhd – one of the Big Four glove stocks on Bursa Malaysia – is poised to make its debut as a constituent of the 30 FBM KLCI stocks on Dec 21 in a fashionable manner.
Kenanga Research expects the counter to boast a weightage of circa 2.7%, dislodging its predecessor, KLCC Property Holdings Bhd which is currently weighted at 0.66%.
“This is based on today’s closing prices with the assumption that Supermax’s index shares to be represented in the FBM KLCI is similar to the current number of 1.62 billion represented in the FBM100,” head of research Koh Huat Soon pointed out in a strategic note.
More broadly, the rubber glove sector is estimated to make up 13.47% in the FBM KLCI weightage with the entrance of Supermax based on current prices, up from 10.99%. At present, the sector is represented by two constituents, namely Top Glove Corporation Bhd and Hartalega Holdings Bhd.
Elsewhere, Supermax’s entry should likely increase the FBM KLCI’s financial year 2021 earnings per share (EPS) as its earnings contribution is expected to exceed that of KLCC Property.
“After accounting for the dilutive impact of a higher divisor, we estimate the rebalancing would still potentially enhance EPS by around 2%,” projected Koh.
On the entry of Unisem Bhd into the FBM70 and FBM EMAS Shariah, Kenanga Research opined that this is a case of re-entry into the FBM Index series on passing the liquidity test during this review round.
“On the contrary, we believe that liquidity issues were the reasons Sunway Construction Group Bhd, Pantech Group Holdings Bhd and Uzma Bhd were dropped from the series,” justified the research house.
“Due to diminished market capitalisations, AEON Co (M) Bhd, Eco World Development Group Bhd and Kerjaya Prospek Group Bhd were moved from FBM70 to FBM Small Cap Index.” – Dec 4, 2020
