By Lawrence Yong
SapuraKencana Petroleum Bhd (SAKP) and MISC Bhd could be added to a re-weighted FBM KLCI, an index of top Bursa Malaysia stocks, when it is reviewed next month. This would boost the oil and gas (O&G) sector to become the fourth most important after financials, plantation and telecommunications.
YTL Power and BumiArmada are the stocks that may be booted out, Maybank IB research analysts said in a report issued Thursday. Previously, the power sector was the fourth most important in the KLCI index, which tracks the top 30 stocks as measured mainly by their market capitalisation and is the key benchmark to trace Malaysia’s stock performance.
The next semi-annual review of the FBM KLCI 30 constituents will use share prices at market close this Friday, May 31. Changes will be implemented after the market closes on the third Friday in June, namely June 21, the bank-backed research noted.
If the changes are made as expected, then from end-June, the the O&G component could measure up to 11.1%, up from current 8.8%. Financials component would be reduced to 33%, down from 33.8%.
“The O&G sector is one of our key overweights in Malaysia,” said Maybank IB, which means that the bank expects the O&G stocks to perform better than the index.
Maybank IB said that SapuraKencana’s weighting on the index could be 2.9%, based on an actual free float estimate of 0.59, while MISC’s weightings could be 1.6%, based on an actual free float estimate of 0.37.
SAKP is now the 15th largest market cap stock (RM24.7 billion) and MISC weighs in at no.21 (RM21.1 billion). In comparison, YTL Power and BumiArmada are now ranked no.35 and no.33 by their market caps.
SAKP was created last year when SapuraCrest Petroleum and Kencana Petroleum merged. The company issued more shares last month to finance the RM8.5 billion acquisition of Norwegian Seadrill’s global tender rigs business. The integrated oil and gas service company now owns about half of the world’s tender rig barges.
Malaysia’s shipping giant MISC Bhd is experiencing an earnings rebound this year after chopping off its loss-making container business. MISC holds the second largest fleet of Liquefied natural gas (LNG) tankers in the world and mainly services Malaysia’s state oil Petronas.
The top three stocks on the FBM KLCI index are Malayan Banking Bhd., CIMB Group Holdings Bhd. and Public Bank Bhd.
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