Bursa Malaysia together with FTSE, its index partner, have integrated the KLCI with internationally accepted index calculation methodology to provide a more investable, tradable and transparently managed index.
The KLCI will be known as the FTSE Bursa Malaysia KLCI and the enhancements will take effect on Monday, 6 July 2009.
The FTSE Bursa Malaysia index calculation methodology emphasises free float and liquidity screens for a clearer representation of the market.
A smaller basket of 30 stocks makes it easier to manage and more appealing for the creation of Index Linked products to promote market liquidity.
Increasing the frequency of index calculation from every 60 seconds to every 15 seconds tracks the market pulse closely and more efficiently.
SELECTION OF FTSE BURSA MALAYSIA KLCI CONSTITUENTS
The FTSE Bursa Malaysia KLCI comprises the largest 30 companies listed in the Main Board by full market capitalisation that meet the eligibility requirements of the FTSE Bursa Malaysia Ground Rules.
The two main eligibility requirements stated in the FTSE Bursa Malaysia Ground Rules are the free float and liquidity requirements as indicated below :-
• Free Float
Each company is required to have a minimum free float of 15%. The free float excludes restricted shareholding like cross holdings, significant long term holdings by founders, their families and/or directors, restricted employee share schemes, government holdings and portfolio investments subject to a lock in clause, for the duration of that clause. A free float factor is applied to the market capitalisation of each company in accordance with the banding specified in the FTSE Bursa Malaysia Ground Rules. The factor is used to determine the attribution of the company’s market activities in the index.
• Liquidity
A liquidity screen is applied to ensure the company’s stocks are liquid enough to be traded. Companies must ensure that at least 10% of their free float adjusted shares in issue is traded in the 12 months prior to an annual index review in December.
The FTSE Bursa Malaysia KLCI comprises the largest 30 companies listed in the Main Board by full market capitalisation that meet the eligibility requirements of the FTSE Bursa Malaysia Ground Rules.
The two main eligibility requirements stated in the FTSE Bursa Malaysia Ground Rules are the free float and liquidity requirements as indicated below :-
• Free Float
Each company is required to have a minimum free float of 15%. The free float excludes restricted shareholding like cross holdings, significant long term holdings by founders, their families and/or directors, restricted employee share schemes, government holdings and portfolio investments subject to a lock in clause, for the duration of that clause. A free float factor is applied to the market capitalisation of each company in accordance with the banding specified in the FTSE Bursa Malaysia Ground Rules. The factor is used to determine the attribution of the company’s market activities in the index.
• Liquidity
A liquidity screen is applied to ensure the company’s stocks are liquid enough to be traded. Companies must ensure that at least 10% of their free float adjusted shares in issue is traded in the 12 months prior to an annual index review in December.
Any constituent changes will be implemented after close of business on the 3rd Friday in June and December.
VARIATION TO THE KUALA LUMPUR COMPOSITE INDEX FUTURES (FKLI) AND KUALA LUMPUR COMPOSITE INDEX OPTIONS (OKLI) CONTRACT SPECIFICATION
No comments:
Post a Comment