New method to keep up with global standards

WHILE traditional market capitalisation-weighted index methodology used by the KL Composite Index (KLCI) is widely accepted and understood by investors, areas for improvement were also considered.

Among the most frequently cited requirement from investors is the need to identify tradability and investability of constituents. Investors did not have on hand the information if the shares held by the country’s benchmark index big-cap constituents could be bought or sold at any time. This concern takes precedence among global investors when volatility becomes a common characteristic of the market.