KUCHING: There are now 669 securities classified as syariah-compliant under the Securities Commission, equating to 74 per cent of the total 905 securities listed on Bursa Malaysia.
Movements in and out of the list were a lot lesser this time round, resulting in only two net additions currently – bringing a total of 19 inclusions, 15 exclusions and two de-listings, observed Public Investment Bank Bhd (PublicInvest Research).
“The Industrial sector saw the most number of exclusions. The Property sector saw the most activity, while the ACE market saw the most number of name changes,” it said in a report yesterday.
“Notable changes in current listing include Amway Holdings and Star Media Group making their returns after having been excluded in the fifth review, while a whole host of new listings – Pecca Group, LKL International, Salutica, Chin Hin Group and Kim Teck Cheong Consolidated – also made the cut.
“Of some surprise is the failure of Eversendai Group and TDM in making their way back into the current listing, stocks of which count some major Islamic funds as significant shareholders.
“Sarawakian player Perdana Petroleum also failed to make the cut despite restructuring its conventional borrowings to a sukuk issue, though this is not likely to affect the status of its parent Dayang Enterprise Holdings Bhd which remains listed as syariah-compliant.”
As indicated earlier, PublicInvest Research highlighted the property sector being the main beneficiary of stocks being re-classified into the sector, reflective of restructuring schemes and/or business diversifications which are still invariably property-related.
“The immediate disposal criteria remains in place for securities trading in-the-money, but the current weakness in certain stocks versus their estimated investment costs would more than likely see that condition not being met, specifically Bumi Armada which is trading near all-time lows,” it said.
“Kian Joo Can Factory’s significant institutional shareholder is the Employees Provident Fund, but which has been paring its holdings in any case, following the failed takeover of the company’s asset and liabilities via Aspire Insight Sdn Bhd.
“We don’t anticipate major disruptions to the market as a result of this current listing. Any pronounced sell down in Kian Joo Can Factory should be seen as an opportunity for conventional investors to accumulate shares which we think should intrinsically be valued higher.
“We are a less sanguine on the near-term prospects of Bumi Aramda however, given the volatile oil price situation currently.”
Public Invest Research’s year-end FBM KLCI target of 1,800pts is under review, with scope for a potential downgrade post-1QCY16 result reporting.