Malaysian Market Strategy - Radical change to the KLCI structure
* The KLCI index, followed by most domestic fund managers, will be
reduced from 100 stocks to 30 stocks on 6 July.
* US$83 bn worth of domestic funds are benchmarked to the KLCI, thus
changes in weightings and components could impact stock prices.
* We know most of the index components, but it will be 'reviewed' on
11 June, which could result in some changes, due to recent significant
changes in market capitalisations.
* Clear beneficiaries: BCHB, Public Bank, Resorts World, YTL Power
and Parkson, assuming no changes.
* Losers: Property, construction, hotel and tech stocks will not be
featured in the new index.
* Following the 11 June revision, possible new joiners are IJM,
Gamuda and SP Setia, which have high free floats.
* Potential drop-outs following the 11 June revision could include
borderline FBM30 components, such as MAS, RHB Capital and Petronas
Dagangan.
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