FBM KLCI: Gamuda set to join as Genting Malaysia faces possible exit

KUALA LUMPUR: Gamuda Bhd is expected to be added to the FBM KLCI in the upcoming semi-annual review of the benchmark index, which is set for Dec 23.

“After two years (five consecutive semi-annual reviews) in the FBM KLCI reserve list, it seems likely for Gamuda to be elevated into the barometer index,” MIDF Research said in a report.

The report highlighted that since the review on 24 June 2024, Gamuda’s share price has increased by 19% to RM7.59 as of Sept 13, placing it 24th in terms of market capitalisation.

“As long as it remains at the 25th spot and above by the cut-off date, an inclusion into the index is rather certain as Gamuda meets both the free float and liquidity requirements.

“Gamuda’s previous entry into the FBM KLCI was more than a decade ago on Sept 20, 2010, replacing Tanjong that was taken private. Gamuda was removed from the index in the Dec-11 review alongside MISC to make way for Bumi Armada and AirAsia,” MIDF said.

As of Friday, Genting Malaysia has dropped to 36th place in terms of market capitalisation.

If it maintains this position by the cut-off date for the upcoming review, it will need to be removed from the index according to the established rules. This could open the door for Gamuda’s potential inclusion.

Meanwhile, MIDF said 99 Speed Mart, which last traded at RM1.88 on Friday, commands a market capitalisation of RM15.79bil, ranking it 33rd. The mini-market chain operator likely be included in the reserve list in the upcoming review

MIDF explained that 99 Speed Mart does not qualify for fast entry as a new issue into the FBM Index series according to the current rules.

The rules allow for fast entry inclusion of a new issue if its full market capitalisation represents 2% or more of the total market capitalisation of the FBM EMAS Index.

“At its IPO price of RM1.65, 99 Speed Mart’s market cap was only 0.8% of the entire FBM Emas, thus not qualifying for fast entry. The last time there was a fast entrant into the FBM KLCI was in Aug-12 when IHH Healthcare was listed,” it said.

“For it to ascend into the FBM KLCI by Dec-24, its share price must climb to RM2.41, if everything else remains status quo. As a comparison, Mr DIY Group, which was listed on Oct 26, 2020, at RM1.60, entered the FBM KLCI during the Jun-21 review after its share price rose 2.4x to RM3.89 (before the one-for-two bonus issue in Jun-22),” MIDF said.