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KUALA LUMPUR (Oct 12): Supermax Corporation Bhd and Kossan Rubber Industries Bhd will likely appear as the components of FTSE Bursa Malaysia KLCI (FBM KLCI) in their next review following the increase in market capitalization of both glove manufacturers.
Maybank Investment Bank Bhd (Maybank IB), in a note, said that Supermax and Kossan were now the 20th and 24th largest stocks on the Malaysian stock exchange.
“The potential changes clearly reflect a new COVID-19 landscape in which the glove sector is expected to post above-normal demand-driven gains and games (casinos) to fall victim to the pandemic.
“If Supermax and Kossan replace Genting Malaysia Bhd (GENM) and Genting Bhd (GENT), we estimate that Supermax’s weight in the KLCI will be 3.09% and Kossan 1.89%,” he said.
The next review of the FBM KLCI components is expected to be in November / December 2020, using share prices based on the market close on November 23.
Maybank IB said that the constituent changes will be implemented after the market closes on the third Friday in December, which is the 18th and would go into effect on Monday, December 21, 2020.
He said the weight of the glove sector at the KLCI would rise to an estimated 19.8% from 15.2% today, while games (casinos) would likely come out.
This compares with mid-April 2020, where the weight of the glove sector was estimated at approximately 5.2%.
On the weight of the game in the KLCI, GENM presented a weight of 1.22%, while GENT reached 1.55%.
Currently, the four largest sectors in the KLCI with a combined weight of 66% are banks (28.4%), gloves (15.2%), utilities (11.8%) and telecommunications (10.6%) .
“If Supermax and Kossan appear in the next constituent review, these four sectors would represent approximately 70% of the total weight: banks (27.7%), gloves (19.8%), utilities (11.6%), telecommunications (10.3%), ”he added.
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