Bursa Malaysia enhances sector classification, sectoral indices

Good impact: Gains made on Bursa Malaysia yesterday were due to the positive sentiment in Asian markets and the rise in US stock futures after the US and China agreed not to impose more tariffs on each other

KUALA LUMPUR: Bursa Malaysia Bhd has enhanced the exchange’s sector classification and sectoral indices, including introducing five new sectors to align its sector classification with internationally recognised standards.

The five new sectors and the corresponding indices are energy, healthcare, telecommunications and media, transport and logistics as well as utilities, bringing the number of Bursa Sectoral Indices to 13 sectors with immediate effect.

Bursa Malaysia Senior Vice-President, Information Services, Fareedah Hussein said the exchange took 18 months to develop the framework for sector classification.

“In the 18 months, we conducted detailed research to come out (with this enhancement). It is very timely,” she told reporters after the launch of the new sector classification and sectoral indices by Bursa Malaysia Chairman Tan Sri Amirsham Abdul Aziz here today.

Chief Executive Officer Datuk Seri Tajuddin Atan was also present.

The new sector classification is intended to ensure Bursa Malaysia’s sector and sectorial index continued to appropriately represent the global equity markets and enable asset owners, asset managers and investment research specialists to make consistent comparisons by industry, she added.  

The new sector classification would also see the introduction of  two-tiered structure, with public listed companies (PLCs) classified within main sectors and sub sectors. 

The consideration used to determine sector classification would be revenue streams taken from PLCs audited accounts as well as the direction and future plans of the PLC.

Meanwhile, three existing sectors and the corresponding indexes will be broadened and renamed to better reflect the business of public listed companies.

Consumer Products would be renamed to Consumer Products and Services, Finance would be renamed to Financial Services and Industrial Products would be renamed as Industrial Products and Services.  

Four other sectors would be removed namely Hotel, Infrastructure Project Companies, Mining and its corresponding index as well as Trading/Services and its corresponding index.

Fareedah said the index would be reviewed on a quarterly basis for exclusions and inclusions with the effective date for inclusions or changes in the sectorial index constituents would be on the second Monday of January, April, July and October.  

All companies and REITS listed on the main market are eligible for inclusion into the Bursa Malaysia Index series, except for companies that are under Practice Note 17, she added. - Bernama