KUALA LUMPUR: The work towards expanding the FTSE Bursa Malaysia KLCI Index (FBM KLCI) beyond its current 30 constituents will help reduce the banking sector's weighting in the benchmark index, said Employees Provident Fund (EPF) chief investment officer Mohamad Hafiz Kassim.
"There were some consultations on expanding the definition of the FBM KLCI beyond the top 30, which is truly welcomed. This will broaden the index beyond the banking sector. There will be less pressure on you (the banks) to deliver the numbers," he said during the plenary session titled "Ringgit and Financial Market: Perspective on Current Trends" at the Sasana Symposium 2026 today.
Mohamad Hafiz said banks currently account for about 40 per cent of the FBM KLCI. Currently, four banking stocks, namely Maybank, CIMB Group
, Public Bank and AMMB Holdings, are among the index's top 10 constituents.
In April this year, FTSE Russell proposed reviewing the index methodology to improve market representation and strengthen sector diversification, ensuring the FBM KLCI and FBM70 remain relevant and effective benchmarks for the Malaysian market. Among the proposals is expanding the FBM KLCI from 30 to 50 constituents, alongside an optional 10 per cent company-level capping mechanism to reduce concentration risk.
Proposed changes to the FBM KLCI and the FBM70, if approved, are intended to be effective on either Dec 21, 2026 or June 21, 2027, contingent upon the outcome of the market consultation. - Bernama
