KLCI Constituent Stocks in Flux: New Opportunities on the Horizon?

The Kuala Lumpur Composite Index (KLCI) is a crucial stock market index in Malaysia, consisting of 30 representative large listed companies that reflect the overall performance and economic activity of the nation. As part of Bursa Malaysia Securities Exchange, it serves as an important benchmark for investors and analysts in assessing the health of the Malaysian stock market.

Selection of Constituent Stocks

To be selected as a constituent stock of KLCI, a company must meet specific criteria, including its size, liquidity, industry diversification, and market capitalization. The list of constituent stocks undergoes biannual reviews in June and December each year that may result in changes to the composition due to fluctuations in market capitalization. The inclusion of new companies with strong upward trends can indirectly boost the overall performance of the KLCI index.

Effective on 18 Dec 2023, $YTL(4677.MY)$ and $YTLPOWR(6742.MY)$ will be included as a constituent of the KLCI index, replacing $DIALOG(7277.MY)$ and Westports Holdings. These two newly added shares have been popular this year due to their strong performance.

$YTLPOWR(6742.MY)$ has announced a partnership with US giant Nvidia Corp to develop an artificial intelligence (AI) data centre in Johor, which will bring in the latest cutting-edge technology to Malaysia by 2024.

$YTL(4677.MY)$ posted its best quarterly net profit since 2006 at RM521.7 million in the quarter ended Sept 30 (1QFY2024), which represented a 14-fold increase from RM36.62 million in the same quarter last year.

Any Opportunity?

Window dressing is a common investment strategy during the last month of each year, where investors tend to invest in stocks that have a high likelihood of being included in the KLCI index or those that have strong growth potential. Statistics show that the KLCI has closed higher in December over the past decade, making it an attractive opportunity for investors.

If you're interested in learning more about KLCI and other macro-related information, check out What to expect in the final month of the year for further insights into the macro landscape！

What to expect in the final month of the year?

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