CIMB Research's top three picks are Axiata, Dialog and Malaysia Airports.
KUALA LUMPUR: CIMB Equities Research is maintaining its FBM KLCI target of 1,704 for end-2018 and 1,674 points for end-2019 as well as its top three picks which are Dialog, MPI and Westports.
It said on Friday there could be some rejigging of portfolios by funds and Exchange Traded Funds (ETF) that benchmark the performance to KLCI to reflect the changes in the KLCI constituents which come into effect on Dec 24.
Top Glove and AMMB Holdings
will replace Telekom Malaysia and KLCCP Stapled Group in the KLCI. This review is closely followed by the market as it could have an impact on KLCI index-linked products and/or funds.
“The key surprise for us was the deletion of KLCCP Stapled Group from the KLCI index.
This has led to the inclusion of AMMB Holdings as it is the second highest-ranking constituent that is not in the index (after Top Glove) which is eligible for inclusion. The removal of KLCCP Stapled Group could be because it failed the liquidity screen,” it said.
CIMB Research said based on the ground rules of the index, any existing constituent which does not turn over at least 0.04% of its shares in issue after the application of any investability weightings based on its median daily trade per month for at least eight of the twelve months prior to the semi-annual review will be removed.
For non-constituents, they need to turn over at least 0.05% of their shares (after the application of any investability weightings) based on their median daily trade per month for at least 10 of the 12 months prior to semiannual review.
The FTSE Bursa Malaysia KLCI reserve list companies are Westports, YTL Corp, Fraser and Neave, QL Resources and Lotte Chemical Titan Holdings.
The reserve list will be used in the event that one or more constituents are deleted from FTSE Bursa Malaysia KLCI, in accordance with the index ground rules, during the period up to the next semi-annual review.
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