Gamuda likely to become index component stock

KUALA LUMPUR: Gamuda Bhd is expected to be added to the FBM KLCI in the upcoming semi-annual review of the benchmark index, which is set for Dec 23.

“After two years (five consecutive semi-annual reviews) in the FBM KLCI reserve list, it seems likely for Gamuda to be elevated into the barometer index,” MIDF Research said in a report.

The report highlighted that since the review on June 24, Gamuda’s share price had increased by 19% to RM7.59 as of Sept 13, placing it 24th in terms of market capitalisation.

“As long as it remains at the 25th spot and above by the cut-off date, an inclusion into the index is rather certain as Gamuda meets both the free float and liquidity requirements.

“Gamuda’s previous entry into the FBM KLCI was more than a decade ago on Sept 20, 2010, replacing Tanjong that was taken private.

“Gamuda was removed from the index in the Dec 11 review alongside MISC Bhd to make way for Bumi Armada Bhd and AirAsia,” MIDF Research said.

As of last Friday, Genting Malaysia Bhd has dropped to 36th place in terms of market capitalisation.

If it maintains this position by the cut-off date for the upcoming review, it will need to be removed from the index according to the established rules.

This could open the door for Gamuda’s potential inclusion.

Meanwhile, MIDF Research said 99 Speed Mart Retail Holdings Bhd, which last traded at RM1.88 last Friday, commands a market capitalisation of RM15.79bil, ranking it 33rd.

The mini-market chain operator will likely be included in the reserve list in the upcoming review

MIDF Research explained that 99 Speed Mart does not qualify for fast entry as a new issue into the FBM KLCI Index series according to the current rules.

The rules allow for fast entry inclusion of a new issue if its full market capitalisation represents 2% or more of the total market capitalisation of the FBM EMAS Index.

“At its initial public offering price of RM1.65, 99 Speed Mart’s market cap was only 0.8% of the entire FBM EMAS Index, thus not qualifying for fast entry.

“The last time there was a fast entrant into the FBM KLCI was on Aug 12 when IHH Healthcare was listed,” it said.

“For it to ascend into the FBM KLCI by December this year, its share price must climb to RM2.41, if everything else remains status quo.

“As a comparison, MR DIY Group Bhd, which was listed on Oct 26, 2020 at RM1.60, entered the FBM KLCI during the June 2021 review after its share price rose 2.4 times to RM3.89 (before the one-for-two bonus issue in June 2022),” MIDF Research said.