PETALING JAYA: Malaysia’s flagship equity benchmark, the FBM KLCI, will be expanded to 50 constituents from the current 30 in its upcoming semi-annual review in December.
The 20 new constituents will be selected based on data as at Nov 23, with the final list to be announced on Dec 3, according to a joint statement by Bursa Malaysia and FTSE Russell.
The expanded FBM KLCI will be implemented in two phases, with 50% of each new constituent’s final index weight taking effect on Dec 21, 2026, followed by the remaining 50% on June 21, 2027.
For example, a stock with a 35% free float that is added to the FBM KLCI would have 50% of its final free-float weight, or 17.5%, implemented in December 2026, before reaching its full 35% free-float weight in June 2027.
The phased implementation is aimed at facilitating an orderly transition, reducing concentrated trading flows and supporting efficient portfolio rebalancing by market participants.
If a constituent added to the FBM KLCI in December as part of the phased expansion fails to meet the index eligibility requirements at the June 2027 review, it will be removed from the FBM KLCI in accordance with the FTSE Bursa Malaysia Index Series Ground Rules and index methodology.
The constituent will therefore not proceed to its full implementation weight, while its replacement will be added at its full free-float weight in the June 2027 review.
Under the new index structure, the FBM70 will also be reduced to 50 constituents from 70 and renamed the FTSE Bursa Malaysia Mid Cap Index, effective Dec 21.
The FBM100 will remain unchanged.
Bursa and FTSE Russell said the proposed enhancements received broad support during a public consultation held from March 31 to April 24.
Based on simulations using data as at end-June 2026, the expanded FBM KLCI would include representation from the technology, energy and real estate investment trust sectors for the first time, while reducing concentration in the financial services sector.
The expanded FBM KLCI would also represent about 70% of the Main Market’s capitalisation, up from about 60% currently.
Bursa Malaysia chief executive officer Datuk Fad’l Mohamed said the expanded FBM KLCI would provide a broader reflection of Malaysia’s economic landscape by increasing representation across sectors and companies.
“It will also increase the visibility of a wider range of Malaysian companies and ensure the index continues to evolve alongside the market it represents,” he noted.
FTSE Russell group head of equity and multi-assets Gerald Toledano said the changes would help ensure the benchmark remained representative, investable and aligned with the needs of domestic and international investors.
“The strong support received during the consultation process underscores the importance of maintaining benchmarks that keep pace with market developments,” he added.
The expansion marks the first change to the FBM KLCI methodology since July 2009, when the benchmark was reduced from 100 constituents to its current 30-stock composition.
FTSE Russell said there will be no price adjustment to index-linked derivative products as a result of the changes, with their opening prices on Dec 21 continuing from their respective closing prices on Dec 18.
