Malaysia Airports in danger of KLCI exclusion

According to a Bursa Malaysia filing, MAHB is disputing and challenging the claims by Segi Astana, having appointed a law firm in Malaysia to represent and assist the group in the arbitration proceedings.

KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) is in danger of being dropped from the 30-stock FBM KLCI after the decline in share price and its market capitalisation falling to the 34th spot on Thursday.

Maybank Investment Bank Research said on Friday weak market conditions and multiple concerns had caused MAHB’s share price to fall 19% year-to-date.

“The stock could drop off as a KLCI constituent if its ranking slips further to no. 36 (or below). 

“Replacing it could be Westports, F&N or YTL Corp. MAHB is a buy in our coverage list; Westports (TP: RM3.65) is a Hold: F&N and YTL Corp are not rated,” it said. 

The research house said the KLCI constituents are due for a review, using share prices as at market close on May 27. 

The constituent change/s will be implemented after the market closes on the third Friday in June which is June 21 and would take effect on Monday, June 24.
 
Maybank Research said based on share prices on Thursday's market close, MAHB has fallen in rank in full market capitalisation, to 34; its ranking was 35 for the most part of this week and last. 

If MAHB's market rank slips to, or falls below 36 on May 27, the stock could exit as a  KLCI constituent, to be replaced by the highest rank non-existing constituent.

The potentials are Westports (30 based on Thursday), F&N (31) and YTL Corp (32). 

While KLCCP (Hold, TP RM7.85) had exited in the Nov 2018 review, it ranked higher at  28 on Thursday), it has yet to meet the liquidity test to be restored as a constituent, we estimate. 

“There is still another one month plus to go before the actual constituent review, and the market capitalisation ranking could continue to change,” Maybank Research said.