KUALA LUMPUR: Hartalega Holdings Bhd and Top Glove Corp Bhd could be replaced by AMMB Holdings Bhd and QL Resources Bhd in the upcoming KLCI constituents review for December, said CGS-CIMB Securities Sdn Bhd.
In a note today, the research firm said that based on Refinitiv market data at the close of trading on Nov 1, 2022, Hartalega ranked 39th in market capitalisation, while Top Glove ranked 42nd.
"We think AMMB and QL Resources, which are ranked 28th and 29th in market capitalisation, could gain entry into the KLCI index in the upcoming review, replacing Hartalega and Top Glove.
"We estimate that AMMB’s and QL Resources’s potential KLCI weightage will be 1.9 per cent and 1.2 per cent, respectively, against Top Glove’s current 1.0 per cent and Hartalega’s 0.8 per cent,” it said.
As such, CGS-CIMB has recommended an "add” call on AMMB and QL Resources as both companies could gain investor interest due to their potential inclusions.
In addition, CGS-CIMB opined there could be short-term selling pressure on Top Glove and Hartalega if they are excluded from the KLCI.
These would also mean glove players will not be represented in the KLCI while the bank and consumer sectors will see higher weightage in the KLCI.
Meanwhile, Hap Seng Consolidated Bhd, which is ranked a higher 26th in market capitalisation, may not qualify as the CGS-CIMB calculations suggest that it has not met the liquidity test.
Global provider of benchmarks, analytics, and data solutions FTSE Russell will be using data at the close of trading on Nov 21 for the review and announce the changes to the market on Dec 1. - Bernama