Bursa Malaysia Berhad (“Bursa Malaysia” or the “Exchange”) announced enhancements to the Exchange’s sector classification and sectorial index today, introducing five new sectors among other changes, effectively aligning Bursa Malaysia’s sector classification with internationally recognised standards in line with its vision to be a leading, responsible and globally-connected ASEAN Marketplace.
The new sector classification is intended to ensure that Bursa Malaysia’s sector and sectorial index series continues to appropriately represent the global equity markets, enabling asset owners, asset managers and investment research specialists to make consistent global comparisons by industry.
Bursa Malaysia Chief Executive Officer, Datuk Seri Tajuddin Atan said, “The enhancements made to the sector reclassification at Bursa Malaysia is an important milestone in our ongoing efforts to stay abreast of the ever-changing business environment. This initiative ensures a more comprehensive, accurate and relevant classification of Public Listed Companies (“PLCs”), and provides increased clarity and universality to meet the needs of the investment industry.”
“For investors, the benefit of uniformity and standardisation will allow for better refinement of risk assessment through greater granularity on the asset allocation for investment purposes. The new sectors and sectorial index series will also provide an opportunity for the creation of new products such as ETFs and Unit Trusts,” he added.
The new sector classification will see the introduction of a two-tiered structure, with PLCs classified within main sectors and sub sectors. The consideration used to determine sector classification will be revenue streams (taken from the PLC’s audited accounts) as well as the direction and future plans of the PLC. The new classification will allow for better scoping of sector analysis to pinpoint industry investment opportunities, in-line with global market trends.
The key changes introduced are:
- Five (5) new sectors and the corresponding indexes:
- Energy;
- Healthcare;
- Telecommunications & Media;
- Transport & Logistics; and
- Utilities
- Three (3) existing sectors and the corresponding indexes will be broadened and renamed to better reflect the businesses of PLCs:
- Consumer Products will be renamed to Consumer Products & Services;
- Finance will be renamed to Financial Services; and
- Industrial Products will be renamed to Industrial Products & Services
- Four (4) sectors will be removed:
- Hotel;
- Infrastructure Project Companies;
- Mining and its corresponding index; and
- Trading/Services and its corresponding index
“The changes announced today represents a logical progression that is set to further appeal to a wider investor base. The Exchange will continue to develop the capital market to ensure that the market facilitates further investments, promotes confidence and aligns market practices with global best practice,” added Tajuddin.
Detailed information on the new structure and methodology governing the new sector classification is available on Bursa Malaysia’s website at www.bursamalaysia.com and Bursa Marketplace website at www.bursamarketplace.com.