PETALING JAYA: Telekom Malaysia Bhd (TM) has been booted out of the FBM KLCI for the first time since its listing following a huge fall in the market capitalisation of the telecoms company.
Joining TM in losing its spot on the FBM KLCI is KLCC Property Holdings Bhd. The counters that replace the two stocks are AMMB Holdings Bhd and Top Glove Corp Bhd .
FTSE Russell and Bursa Malaysia announced the changes that made up the constituents of the benchmark index following a semi-annual review of the FBM Index Series.
“Top Glove and AMMB Holdings will replace KLCC Prop & REITs – Stapled Sec and TM in the index. Part of the FTSE Bursa Malaysia Index Series, the FBM KLCI is widely used by investors as the primary benchmark for the Malaysian market, including derivatives through FBM KLCI Futures, FBM KLCI Options,” it said.
“The benchmarks are also tracked by a number of index-linked financial products, such as exchange traded funds.”
TM’s omission from the group of constituent stocks that comprise the FBM KLCI has been widely expected.
The telco company has been plagued by a number of competitive issues and recently announced its first quarterly loss in 10 years that was brought about by a massive provisioning exercise that wiped out around RM1bil from its balance sheet.
The provisions saw TM post a net loss of RM175.6mil for the third quarter ended Sept 30.
The company saw a near 60% plunge in its market capitalisation since the start of the year from RM23.67bil to RM9.7bil. Following the resignation of Datuk Seri Mohammed Shazalli Ramly as its CEO, TM has since had two interim CEOs. TM appointed Imri Mokhtar as its acting CEO effective Nov 16 following the departure of Datuk Bazlan Osman who replaced Shazalli.
Bursa Malaysia in a statement said the FBM KLCI reserve list, comprising the five highest ranking non-constituents of the index by market capitalisation, will be used in the event that one or more constituents are deleted from the FBM KLCI in accordance with the index ground rules during the period up to the next semi-annual review.
The reserve list are Westports Holdings, YTL Corp, Fraser & Neave Holdings, QL Resources and Lotte Chemical Titan Holding.
It added that the new additions for the FBM Mid 70 Index are TM, UMW Holdings, Carlsberg Brewery Malaysia , Aeon (M), Boustead Plantations , Hibiscus Petroleum and Matrix Concepts Holdings.
“As a result, Top Glove, AMMB Holdings, Gas Malaysia, Hong Leong Industries, MMC, TA Global and Ta Ann Holdings will be deleted from the FBM Mid 70 Index,” it said.
For the FBM Hijrah Shariah Index, the statement said the new additions are Petronas Dagangan, UMW Holdings and Serba Dinamik Holdings. As a result, Top Glove, IOI Properties Group and Sapura Energy will be deleted from the FBM Hijrah Shariah Index.
All constituent changes take effect at the start of business on Dec 24 and the next review will take place in June 2019, Bursa Malaysia said.