Kuala Lumpur Composite Index

The Kuala Lumpur Composite Index (KLCI) is a capitalization-weighted stock market index. Introduced in 1986, it is now known as the FTSE Bursa Malaysia KLCI. The enhancements to adopt FTSE Bursa Malaysia Index methodology were implemented on Monday, July 6, 2009.

The enhancement will adopt the internationally recognized index calculation formula to increase transparency as well as making the index more tradable.

The FTSE Bursa Malaysia KLCI comprises the largest 30 companies listed on the Malaysian Main Market by full market capitalisation that meet the eligibility requirements of the FTSE Bursa Malaysia Index Ground Rules.

Eligibility

The two main eligibility requirements stated in the FTSE Bursa Malaysia Index Ground Rules are the free float and liquidity requirements.

Free Float

Each company is required to have a minimum free float of 15%. The free float excludes restricted shareholding like cross holdings, significant long term holdings by founders, their families and/or directors, restricted employee share schemes, government holdings and portfolio investments subject to a lock in clause, for the duration of that clause. A free float factor is applied to the market capitalisation of each company in accordance with the banding specified in the FTSE Bursa Malaysia Ground Rules. The factor is used to determine the attribution of the company’s market activities in the index.

Liquidity

A liquidity screen is applied to ensure...
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