KUALA LUMPUR: Bursa Malaysia Bhd has revamped its sectoral classification for companies listed on the Main Market of the exchange, introducing five new sectors and adding corresponding sectoral indices.
The new classifications, which also saw the removal of four sectors and their related indices, went live yesterday. Those removed were hotel, infrastructure project companies, mining and trading or services.
The newly introduced sectors were: energy, healthcare, telecommunications and media, transport and logistics, as well as utility.
“The new classification is intended to ensure that the bourse’s sectors and sectoral indices continue to appropriately represent the global equity market,” Datuk Seri Tajuddin Atan, the chief executive officer of Bursa, said at the launch of the reclassification.
He added that the new classifications will enable investors and asset managers to make global comparisons.
Three existing sectors will be broadened and renamed. These are: finance, which will 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 companies’ revenue streams as well as future business direction to be considered.
Currently, the healthcare sector comprises companies such as IHH Healthcare Bhd as well as rubber glove makers Hartalega Holdings Bhd, Top Glove Corp Bhd and Kossan Rubber Industries Bhd.
Oil and gas companies Dialog Group Bhd, Serba Dinamik Holdings Bhd and Yinson Holdings Bhd have been grouped under the energy sector, while Tenaga Nasional Bhd, YTL Corp Bhd and Petronas Gas Bhd are among the companies in the utilities sector.
The industrial products and services sector and the consumer products and services sector have the largest numbers of constituents, with 222 companies and 171 companies respectively.
The new sectoral classification follows a two-tier structure and is aligned with internationally recognised standards, said Bursa. A total of 42 sub-sectors were added under the 13 sectors of public listed companies, and the weightage of component stocks within the indices will be based on their market capitalisation.
The previous sectors were deemed too broad-based, said Fareedah Hussein, the senior vice-president of commercial and development of Bursa. The reclassification, she added, makes the sectoral breakdown more granular and transparent.
She shared that Bursa’s research and analysis for the new classification took 18 months to compile, and involved comparisons with regional and global classifications, as well as reference to local analysts.
Tajuddin said the new sectors and sectoral indices also provide opportunities for the creation of new products, such as exchange traded funds and unit trusts. But whether the stock exchange operator will do so depends on demand from the investing community, said Shahrul Amry Abdul Malek, the executive vice-president of commercial and development of Bursa.