16-05-2025
MSCI removes six stocks following latest review
CIMB Research said the development was negative for the excluded stocks, as it could trigger selling by passive funds that closely tracks the index.
PETALING JAYA: The latest MSCI Malaysia Small Cap Index quarterly rebalancing is not expected to have a significant impact to the main index stocks, although smaller capitalised counters could see some rebalancing moving forward.
MSCI has announced the removal of six stocks following its latest review.
The affected stocks are British American Tobacco (M) Bhd , D&O Green Technologies Bhd , Dayang Enterprise Holdings Bhd , Pentamaster Corp Bhd , Berjaya Sports Toto Bhd , and UWC Bhd .
CIMB Research said the development was negative for the excluded stocks, as it could trigger selling by passive funds that closely tracks the index.
The MSCI Malaysia Small Cap Index comprises 68 stocks and accounts for about 14% of the stock market.
The MSCI Malaysia Index measures the performance of the large and mid cap segments of the Malaysian market.
With 30 constituents, the MSCI Malaysia Index covers about 85% of the local equity universe.
'Our analysis of the six stocks removed from the MSCI Malaysia Small Cap Index indicates that they accounted for around 4.4% of the total free float adjusted market capitalisation of the MSCI Malaysia Small Cap Index of US$36bil as at end-April 2025,' the research house pointed out.
Since non-strategic foreign shareholdings in the stocks are relatively low, CIMB Research said potential fund outflows could amount to RM146mil.
This is based on a worst case scenario playing out that all identified passive holders within the top 30 shareholders fully exit their positions.
Meanwhile, it points out that daily foreign fund inflows surged to a record high of RM796.1mil on May 13, a day after the United States and China agreed to lower tariffs on their products for the next 90 days.
This marked a de-escalation in the ongoing trade war between the world's two largest economies.
