KUALA LUMPUR: Investors can embrace for a significant increase in trading activities on Bursa Malaysia on Thursday.
MIDF Research said there are two key events that will have a significant impact to the trading behaviour of investors that day.
They are the MSCI Equity Indexes November 2017 review (or rebalancing exercise) and the demerged Sime Darby Bhd will resume trading.
MIDF Research said MSCI Inc is set to release the outcome of semi-annual index review for all the MSCI Equity Indexes.
The relevant changes to the constituents in MSCI Global Standard Index and MSCI Global Small Cap Index will be effective as of the close of November 30.
A total of 14 stocks across the two indexes are involved in the rebalancing exercise.
The affected stocks that will be either added or removed include Nestle (M) Bhd, Press Metal Bhd, SP Setia Bhd, Eco World International Bhd, George Kent (M) Bhd, Petron Malaysia Bhd and Media Prima Bhd.
The firm said the MSCI rebalancing exercises had in the past resulted in significant higher trading activities, both in volume and value.
“The need for fund managers, especially the ETFs (exchange-traded funds) which benchmarked MSCI indices, to replicate the index constituents while minimising the tracking errors, would result in significant trading activities on the rebalancing day.
“We expect volume and value traded to be higher this week as evidenced by the previous rebalancing exercises in May 2016, November 2016 and May2017,” it explained.
MIDF Research said trading of Sime Darby shares was suspended from Nov 27 to 29 in view of its split off from Sime Darby Plantation Bhd and Sime Darby Property Bhd.
The reference price for Sime Darby Plantation is RM5.59. This is followed by Sime Darby Property at RM1.50 and lastly, Sime Darby at RM1.85.
“On November 30, Sime Darby pure play strategy will complete with all three companies to be traded on Bursa,” the firm said.
MIDF Research said Bursa’s key FBMKLCI will have 32 members at the start of trading on Thursday, before the two lowest-ranked companies by market capitalisationbeing removed from the index at the close of trading day.
The two companies will be demoted to the FTSE Bursa Malaysia Mid 70 Index.