KUALA LUMPUR, June 24 (Bernama) — Bursa Malaysia on Wednesday reminded the market that its benchmark index, the Kuala Lumpur Composite Index (KLCI) will adopt FTSE’s global index methodology and will be renamed as FTSE Bursa Malaysia KLCI, starting July 6.
The FTSE Bursa Malaysia KLCI will be free-float adjusted and liquidity-screened to give investors an investable and tradable index which will remain characteristic of the underlying market.
Constituents of the FTSE Bursa Malaysia KLCI will be made up of Bursa Malaysia’s 30 largest eligible Main Board companies initially, the stock exhange operator said in a statement Wednesday.
The computation will be based on investable market capitalisation.
The calculation of FTSE Bursa Malaysia KLCI will be on a 15 second basis compared with 60 seconds adopted by KLCI currently.
This improvement in speed of index calculation will essentially benefit the investors as they will be able to closely track the pulse of trading activities, Bursa Malaysia said.
It said the opening index value on July 6 will be based on the KLCI closing value on Friday, July 3.
For example, if the KLCI closes on Friday, July 3, at 1,000 points, the index will open on Monday, July 6 at 1,000 points.
The computation of the index will then be based on the 30 constituents, it said.
Subsequently with the transition, the existing FTSE Bursa Malaysia Large 30 Index will be retired on July 6.
Following the transition, the FTSE Bursa Malaysia 100 Index will be known as the FTSE Bursa Malaysia Top 100 and its features will remain unchanged.
Financial products using the FTSE Bursa Malaysia Large 30 Index or KLCI, such as the FBM30etf, Kuala Lumpur Composite Index Futures (FKLI) and the Kuala Lumpur Composite Index Options (OKLI) will adopt the FTSE Bursa Malaysia KLCI as its underlying index with effect from July 6, it added.
As part of the FTSE Bursa Malaysia Index Series, the FTSE Bursa Malaysia KLCI will be reviewed every June and December by an independent index committee for compliance to the Ground Rules of FTSE Bursa Malaysia index series.
– BERNAMA