Some companies to benefit from index constituent changes — CGS-CIMB

KUALA LUMPUR (Dec 7): The changes to the FBM KLCI, FBM Mid 70 index (FBM70), and FBM Hijrah Shariah index lists announced are expected to result in some rejigging by fund managers, which may be a boon to certain companies, said CGS-CIMB Research.

In a note today, the research house said the changes in FBM KLCI index constituents, effective Dec 21, were in line with its preview note on the event.

It said this would potentially benefit Supermax Corp Bhd, Mr DIY Group (M) Bhd, Heineken Malaysia Bhd, YTL Power International Bhd, Unisem (M) Bhd, UWC Bhd, ATA IMS Bhd, Duopharma Biotech Bhd, Petronas Dagangan Bhd (PetDag), and Inari Amertron Bhd.

However, CGS-CIMB said it may pose potential selling pressure on Sunway Construction Group Bhd (SunCon), Kerjaya Prospek Group Bhd, AEON Co (M) Bhd, Velesto Energy Bhd, Petron Malaysia Refining & Marketing Bhd, Hengyuan Refining Co Bhd, Eco World International Bhd, Serba Dinamik Holdings Bhd, and FGV Holdings Bhd.

CGS-CIMB maintains its FBM KLCI target of 1,628 points for end-2020 and its top three picks, which are Inari, Public Bank Bhd, and Telekom Malaysia Bhd.

Following its semi-annual review recently, FTSE Russell announced that KLCCP Stapled Group (comprising KLCC Property Holdings and KLCC Real Estate Investment Trust) would be replaced by Supermax as a constituent of the FBM KLCI.

ATA IMS, Duopharma Biotech, Heineken Malaysia, KLCCP Stapled, Mr DIY, Unisem, UWC, and YTL Power International will be added to the FBM70.

Meanwhile, AEON Co, Eco World International, Hengyuan Refining, Kerjaya Prospek, Petron Malaysia, SunCon, Supermax and Velesto Energy will be removed from the index.

As for the FBM Hijrah Shariah index, it will see the addition of Inari and PetDag while FGV and Serba Dinamik will be removed.