BURSA MALAYSIA ELEVATES SECTOR CLASSIFICATION FOR MAIN MARKET CO’S
Bursa Malaysia Bhd has introduced five new sectors for public-listed companies on the Main Market of its exchange, adding sectoral indexes accordingly.
The new sectoral classifications, which also saw the removal of four sectors and their corresponding indexes, went live today. The five new sectors and the corresponding indices are energy, healthcare, telecommunications and media, transport and logistics as well as utilities, bringing the number of Bursa Sectoral Indices to 13 sectors with immediate effect.
Bursa Malaysia Senior Vice-President, Information Services, Fareedah Hussein said the exchange took 18 months to develop the framework for sector classification.
“In the 18 months, we conducted detailed research to come out (with this enhancement). It is very timely,” she told reporters after the launch of the new sector classification and sectoral indices by Bursa Malaysia Chairman Tan Sri Amirsham Abdul Aziz here today.
The new sector classification is intended to ensure Bursa Malaysia’s sector and sectorial index continued to appropriately represent the global equity markets and enable asset owners, asset managers, and investment research specialists to make consistent comparisons by industry, she added.
The new sector classification would also see the introduction of a two-tiered structure, with public listed companies (PLCs) classified within the main sectors and sub-sectors.
The consideration used to determine sector classification would be revenue streams taken from PLCs audited accounts as well as the direction and future plans of the PLC.
Meanwhile, three existing sectors and the corresponding indexes will be broadened and renamed to better reflect the business of public listed companies.
Consumer Products would be renamed to Consumer Products and Services, Finance would be renamed to Financial Services and Industrial Products would be renamed as Industrial Products and Services. Four other sectors would be removed namely Hotel, Infrastructure Project Companies, Mining, and its corresponding index as well as Trading/Services and its corresponding index.
Fareedah said the index would be reviewed on a quarterly basis for exclusions and inclusions with the effective date for inclusions or changes in the sectoral index constituents would be on the second Monday of January, April, July, and October.
Three existing sectors will be broadened and renamed. These are finance, which will be named financial services; industrial products, to be renamed industrial products and services; as well as consumer products, which will now be known as consumer products and services.
Considerations for sectoral inclusion will be done on a quarterly basis, with criteria such as the companies’ revenue streams as well as future direction of their businesses being considered.
The new sectoral classification also follows a two-tier structure and is aligned to internationally recognized standards. A total of 42 subsectors were added for the 13 sectors of public-listed companies.