FTSE BURSA MALAYSIA KLCI Elevating Malaysia’S Benchmark Index to Global Standards
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FTSE BURSA MALAYSIA KLCI Elevating Malaysia’s Benchmark Index to Global Standards 6 July 2009 A PREFERRED LISTING & INVESTMENT DESTINATION Wider International Appeal Increased Investor Attention Efficient Infrastructure Internationalised Products & Services Bursa Trade Securities FTSE Bursa Malaysia Index Methodology Direct Market Access FTSE Bursa Malaysia KLCI Thematic Indices – Shariah and Plantation Market Making Framework USD Crude Palm Oil Futures New Boards: Main & ACE Market Commodity Murabahah House Multi currencies Platform Underscored by Sound regulatory framework; high priority on investor protection 2 KUALA LUMPUR COMPOSITE INDEX (KLCI) ¾ Representative of the Malaysian Stock Market 18 Apr 1995 Fix at 100 stocks 1,600 Freq : 1 min. 1,400 19 Mar 1998 30 Jan 1990 Enhance objectives Freq : 15 minutes to better track 1,200 the economy 1,000 4 Apr 1986 KLCI launch 800 @ 189.96 pts KLCI Index Value 600 400 29 May 1992 15 Dec 2005 Min. Volume Enhance rules 200 1000 lot p.a. to better track the market 0 1999 1986 1977 2008 1996 2007 2001 2004 2005 2006 2002 2003 1987 1988 1989 1991 1992 1993 1994 1995 1997 1998 1974 1975 1979 1981 1984 1985 2000 1990 1976 1978 1980 1982 1983 3 INDEX STRATEGIC OBJECTIVES ¾ Market driven index Competitive Market Place Global Internationally-accepted Reach Index Methodology Globally Relevant Exchange Traded Wider Tradable (Liquidity) Derivatives Exchange Traded Investment Robust Investable (Free Float) Funds Index Opportunities FTSE Transparency (Clearly Structured Warrants Defined Rules) Index Linked Funds BURSA MALAYSIA KLCI Continuity of Historical Provide Strength and Historical Trend Market Appeal Stability Continuity Fund friendly to Remain Representative of promote creation of the market Index Linked Products Closely track the pulse of the Market 4 ROBUST INDEX ¾ FTSE Bursa Malaysia Index Methodology – Transparent rules Select Investable Tradable Robust Filter Universe Universe Universe Index Rank by All listed Free Float full market Free Float Liquidity companies Adjustment Weighted capitalisation Tested * Minimum Minimum 10% requirement annual turnover 15% of free float shares 5 * Except FBM Fledgling Index, FBM Second Board Index and FBM MESDAQ Index ARRIVAL OF FTSE BURSA MALAYSIA KLCI ¾ A market driven robust index Robust Index Market Appeal Wider Investment Opportunities KLCI -alignment of existing products 100 Constituents Every 60 sec FBM Index International International FTSE BURSA MALAYSIA KLCI Methodology Methodology Branding (Effective 6 July 2009) Large 30 Every Constituents 15 sec 1,600 1,400 Global Reach 1,200 1,000 800 Historical 600 Continuity KLCI Index Value 400 200 0 1999 1996 1977 1986 2008 2006 2007 2004 2001 2002 1993 1994 1990 1985 1983 1981 1978 1975 2005 2003 2000 1997 1998 1995 1991 1992 1987 1988 1989 1984 1982 1979 1980 1976 1974 6 STATISTICAL ANALYSIS ¾ Remains representative of the market KLCI FTSE Bursa Malaysia KLCI Number of Constituents 100 30 Market Capitalisation Representation to Main Board 74% 64% Correlation to FTSE Bursa Malaysia EMAS (5Years) 99.4% 99.1% Volatility (3 yrs) 16.5% 17.0% Volatility (5 yrs) 14.2% 15.0% Data @ 31 Dec 2008 7 INVESTMENT OPPORTUNITIES ¾ FTSE Bursa Malaysia KLCI aligns the index linked products for a wider range of investable opportunities ETF Index Linked Funds Structured Warrants FKLI FTSE BURSA MALAYSIA KLCI OKLI 8 FTSE BURSA MALAYSIA INDEX SERIES ¾ Better profile to PLCs and more choices for investors Main Board Thematic Indices* Index Performance (26/6/06 – 31/12/08) 250 FTSE Bursa Malaysia 1 KLCI FTSE Bursa 2 200 FTSE Malaysia FBM Mid Cap Top Bursa 100 Index Malaysia 3 FBM SCAP FTSE EMAS 150 Bursa Malaysia Index Mid 70 Index 4 FBM Large Cap FBM Fledgling 100 FTSE Bursa Malaysia 5 Small Cap Index FTSE Asia Pac Universe FTSE Bursa Malaysia Fledgling Index 50 – ex Japan, N.Zealand & Aust. 2006 2007 2008 *Thematic Indices FTSE Bursa Malaysia FTSE Bursa Malaysia 1 FTSE Bursa Malaysia EMAS Shariah Index Second Board Index MESDAQ Index 2 FTSE Bursa Malaysia Hijrah Shariah Index 3 FTSE Bursa Malaysia Palm Oil Plantation Index Second Board MESDAQ Market 4 FTSE Bursa Malaysia Asian Palm Oil Plantation Index – USD 5 FTSE Bursa Malaysia Asian Palm Oil Plantation Index - MYR 9 STRENGTHS OF FTSE BURSA MALAYSIA KLCI INTERNATIONAL KLCI will be known as FTSE Bursa Malaysia KLCI to provide BRANDING global relevant, recognition and reach. FTSE Bursa Malaysia index calculation methodology – Free GLOBAL Float, Liquidity and transparent. METHODOLOGY Made up of primary market movers, better define market activities ROBUST while remaining representative of the market. BAROMETER A smaller basket of 30 constituents, easier to manage and more MARKET appealing for product issuers to create market liquidity. APPEAL Speed of calculation increased from every 60 seconds to every FASTER 15 seconds tracking the market pulse closely and more CALCULATION efficiently. CONTINUITY OF Preserves the historical movements of the Malaysian stock VALUES market. 10 11 APPENDIX – Highlight on FKLI & OKLI ¾ Arising from the transition of KLCI to FTSE Bursa Malaysia KLCI on the 6 July 2009, the contract specifications for FKLI and OKLI contracts that are created in the trading months as stated in the table below will be varied with effect from 1 February 2009 Trading Contract Type Contract Underlying Index Month Month a Feb 2009 – 2nd Quarter Sep 09 The trading of the contracts will be based on KLCI Apr 2009 from 1 Feb 2009 until 3 Jul 2009, and subsequently based on FTSE Bursa Malaysia KLCI till expiry. b. May 2009 1st Quarter Sep 09 The trading of the contracts will be based on KLCI 2nd Quarter Dec 09 until 3 Jul 2009, and subsequently based on FTSE Bursa Malaysia KLCI till expiry c. Jun 2009 Next Month Jul 09 The trading of the contracts will be based on KLCI 1st Quarter Sep 09 until 3 Jul 2009, and subsequently based on FTSE 2nd Quarter Dec 09 Bursa Malaysia KLCI till expiry. d. Jul 2009 Spot Month Jul 09 The trading of the contracts will be based on KLCI Next Month Aug 09 until 3 Jul 2009, and subsequently based on FTSE 1st Quarter Sep 09 Bursa Malaysia KLCI till expiry. 2nd Quarter Dec 09 12.