FTSE and Bursa Malaysia introduce new sector indices and refine ground rules on free-float

FTSE and Bursa Malaysia introduce new sector indices and refine ground rules on free-float

03/10/2011

FTSE Group (“FTSE”) and Bursa Malaysia Berhad (“Bursa Malaysia”) today announced the launch of a new set of Industry, Supersector and Sector indices to complement the existing FTSE Bursa Malaysia Index Series. The new FTSE Bursa Malaysia EMAS Industry indices are designed to provide investors with a comprehensive set of tools for in-depth analysis of the Malaysian stock market.

In conjunction with this extension of the existing FTSE Bursa Malaysia Index Series, the free-float methodology for the FTSE Bursa Malaysia Index Series has been reviewed and enhanced, to ensure the indices continue to provide the most accurate reflection of the Malaysian equity market opportunity.

 New Sector Indices

The new set of 10 Industry, 19 Supersector and 39 Sector indices can be used to execute investment strategies and to create index-linked financial products based on sector-specific criteria. As a result, investors will gain deeper granularity and better understanding of the sectors, including those that are driving market performance. Designed using the Industry Classification Benchmark (ICB), adopted as a global standard in stock, sector and industry classification, the indices will also enable investors to make attribution and cross border comparison between sectors and industries in Malaysia and other countries.

The new FTSE Bursa Malaysia EMAS Industry indices form part of the FTSE Bursa Malaysia EMAS universe and will be calculated on an end of day basis. Subscribers of the FTSE Bursa Malaysia Index Series will receive the new indices as part of their existing data package at no extra cost. A full list of the Industry, Supersector and Sector indices can be found in Appendix 1.

Refining the Free Float Definition

Since the creation of the first FTSE Bursa Malaysia indices in 2006, the FTSE Bursa Malaysia Index Advisory Committee, an independent committee of market specialists and industry experts, has continued to place emphasis on investability, amongst other factors.

The change to the definition of free float restrictions continues to provide domestic investors with robust, reflective and accurate benchmarks and tradable indices. At the same time, the alignment of the FTSE Bursa Malaysia Index Series methodology towards that of the flagship FTSE Global Equity Index Series, used by investors around the world, maintains an internationally approved approach to the Malaysian financial market. 

The methodology change is one of a number of factors reviewed to ensure that as the index series develops, it continues to provide investors with a sound representation of the true investability of companies in the FTSE Bursa Malaysia Index Series, thereby enabling effective and efficient replication of the index.

The enhancement to the index series ground rules will take effect immediately and will also be applied to all new IPOs eligible for inclusion within the FTSE Bursa Malaysia Index Series. The free-float of existing constituents will be reviewed during the December 2011 index review. Details of the free float changes can be found in Appendix 2.

For more information on the indices within the FTSE Bursa Malaysia Index Series, including performance data, constituent information and the index ground rules, please visit www.ftse.com/bursamalaysia

 

Appendix 1

FTSE Bursa Malaysia EMAS Industry Indices (10)

Index Code

Index Name

FBMEMAS0001

FTSE Bursa Malaysia EMAS Index - Oil & Gas

FBMEMAS1000

FTSE Bursa Malaysia EMAS Index - Basic Materials

FBMEMAS2000

FTSE Bursa Malaysia EMAS Index - Industrials

FBMEMAS3000

FTSE Bursa Malaysia EMAS Index - Consumer Goods

FBMEMAS4000

FTSE Bursa Malaysia EMAS Index - Health Care

FBMEMAS5000

FTSE Bursa Malaysia EMAS Index - Consumer Services

FBMEMAS6000

FTSE Bursa Malaysia EMAS Index - Telecommunications

FBMEMAS7000

FTSE Bursa Malaysia EMAS Index - Utilities

FBMEMAS8000

FTSE Bursa Malaysia EMAS Index - Financials

FBMEMAS9000

FTSE Bursa Malaysia EMAS Index - Technology

 

FTSE Bursa Malaysia EMAS Supersector Indices (19)

Index Code

Index Name

FBMEMAS0500

FTSE Bursa Malaysia EMAS Index - Oil & Gas

FBMEMAS1300

FTSE Bursa Malaysia EMAS Index - Chemicals

FBMEMAS1700

FTSE Bursa Malaysia EMAS Index - Basic Resources

FBMEMAS2300

FTSE Bursa Malaysia EMAS Index - Construction & Materials

FBMEMAS2700

FTSE Bursa Malaysia EMAS Index - Industrial Goods & Services

FBMEMAS3300

FTSE Bursa Malaysia EMAS Index - Automobiles & Parts

FBMEMAS3500

FTSE Bursa Malaysia EMAS Index - Food & Beverage

FBMEMAS3700

FTSE Bursa Malaysia EMAS Index - Personal & Household Goods

FBMEMAS4500

FTSE Bursa Malaysia EMAS Index - Health Care

FBMEMAS5300

FTSE Bursa Malaysia EMAS Index - Retail

FBMEMAS5500

FTSE Bursa Malaysia EMAS Index - Media

FBMEMAS5700

FTSE Bursa Malaysia EMAS Index - Travel & Leisure

FBMEMAS6500

FTSE Bursa Malaysia EMAS Index - Telecommunications

FBMEMAS7500

FTSE Bursa Malaysia EMAS Index - Utilities

FBMEMAS8300

FTSE Bursa Malaysia EMAS Index - Banks

FBMEMAS8500

FTSE Bursa Malaysia EMAS Index - Insurance

FBMEMAS8600

FTSE Bursa Malaysia EMAS Index - Real Estate

FBMEMAS8700

FTSE Bursa Malaysia EMAS Index - Financial Services

FBMEMAS9500

FTSE Bursa Malaysia EMAS Index - Technology

 

FTSE Bursa Malaysia EMAS Sector Indices (39)

Index Code

Index Name

FBMEMAS0530

FTSE Bursa Malaysia EMAS Index - Oil & Gas Producers

FBMEMAS0570

FTSE Bursa Malaysia EMAS Index - Oil Equipment, Services & Distribution

FBMEMAS0580

FTSE Bursa Malaysia EMAS Index - Alternative Energy

FBMEMAS1350

FTSE Bursa Malaysia EMAS Index - Chemicals

FBMEMAS1730

FTSE Bursa Malaysia EMAS Index - Forestry & Paper

FBMEMAS1750

FTSE Bursa Malaysia EMAS Index - Industrial Metals & Mining

FBMEMAS1770

FTSE Bursa Malaysia EMAS Index - Mining

FBMEMAS2350

FTSE Bursa Malaysia EMAS Index - Construction & Materials

FBMEMAS2710

FTSE Bursa Malaysia EMAS Index - Aerospace & Defense

FBMEMAS2720

FTSE Bursa Malaysia EMAS Index - General Industrials

FBMEMAS2730

FTSE Bursa Malaysia EMAS Index - Electronic & Electrical Equipment

FBMEMAS2750

FTSE Bursa Malaysia EMAS Index - Industrial Engineering

FBMEMAS2770

FTSE Bursa Malaysia EMAS Index - Industrial Transportation

FBMEMAS2790

FTSE Bursa Malaysia EMAS Index - Support Services

FBMEMAS3350

FTSE Bursa Malaysia EMAS Index - Automobiles & Parts

FBMEMAS3530

FTSE Bursa Malaysia EMAS Index - Beverages

FBMEMAS3570

FTSE Bursa Malaysia EMAS Index - Food Producers

FBMEMAS3720

FTSE Bursa Malaysia EMAS Index - Household Goods & Home Construction

FBMEMAS3740

FTSE Bursa Malaysia EMAS Index - Leisure Goods

FBMEMAS3760

FTSE Bursa Malaysia EMAS Index - Personal Goods

FBMEMAS3780

FTSE Bursa Malaysia EMAS Index - Tobacco

FBMEMAS4530

FTSE Bursa Malaysia EMAS Index - Health Care Equipment & Services

FBMEMAS4570

FTSE Bursa Malaysia EMAS Index - Pharmaceuticals & Biotechnology

FBMEMAS5330

FTSE Bursa Malaysia EMAS Index - Food & Drug Retailers

FBMEMAS5370

FTSE Bursa Malaysia EMAS Index - General Retailers

FBMEMAS5550

FTSE Bursa Malaysia EMAS Index - Media

FBMEMAS5750

FTSE Bursa Malaysia EMAS Index - Travel & Leisure

FBMEMAS6530

FTSE Bursa Malaysia EMAS Index - Fixed Line Telecommunications

FBMEMAS6570

FTSE Bursa Malaysia EMAS Index - Mobile Telecommunications

FBMEMAS7530

FTSE Bursa Malaysia EMAS Index - Electricity

FBMEMAS7570

FTSE Bursa Malaysia EMAS Index - Gas, Water & Multiutilities

FBMEMAS8350

FTSE Bursa Malaysia EMAS Index - Banks

FBMEMAS8530

FTSE Bursa Malaysia EMAS Index - Nonlife Insurance

FBMEMAS8570

FTSE Bursa Malaysia EMAS Index - Life Insurance

FBMEMAS8630

FTSE Bursa Malaysia EMAS Index - Real Estate Investment & Services

FBMEMAS8670

FTSE Bursa Malaysia EMAS Index - Real Estate Investment Trusts

FBMEMAS8770

FTSE Bursa Malaysia EMAS Index - Financial Services

FBMEMAS9530

FTSE Bursa Malaysia EMAS Index - Software & Computer Services

FBMEMAS9570

FTSE Bursa Malaysia EMAS Index - Technology Hardware & Equipment

 

Appendix 2

Free float restrictions include:

  • Shares directly owned by State, Regional, Municipal and Local governments (excluding shares held by independently managed pension schemes for governments).
  • Shares held by Sovereign Wealth Funds where each holding is 10% or greater.  If the holding subsequently decreases below 10%, the shares will remain restricted until the holding falls below 7%.
  • Shares held by directors, senior executives and managers of the company, and by their family and direct relations, and by companies that they control.
  • Shares held within employee share plans.
  • Shares held by public companies or by non-listed subsidiaries of public companies.
  • Shares held by founders, promoters, former directors, founding venture capital and private equity firms, private companies and individuals (including employees) where the holding is 10% or greater.  If the holding subsequently decreases below 10%, the shares will remain restricted until the holding falls below 7%.
  • All shares where the holder is subject to a lock-in clause (for the duration of that clause).
  • Shares held for publicly announced strategic reasons, including shares held by several holders acting in concert.

For clarity, holdings not considered as restricted free float include:

  • Portfolio holdings (such as pension and insurance funds)
  • Nominee holdings (unless they represent restricted free float as defined by FTSE Bursa Malaysia Index Series Ground Rule 3.2.1)
  • Holdings by investment companies
  • ETFs