KUALA LUMPUR (Nov 6): Gamuda Bhd (KL:GAMUDA) is expected to be included in the FBM KLCI, according to RHB Research and CIMB Securities ahead of the semi-annual review of the index's component stocks on Dec 5, while Genting Malaysia Bhd (KL:GENM) and Genting Bhd (KL:GENTING) risk exclusion.

As of Nov 5, 2024, Bloomberg market data indicate that Gamuda has advanced to the 18th place in terms of market capitalisation among eligible main market stocks.

CIMB, in a note on Wednesday, said Gamuda will likely be added to the benchmark index if it maintains a market capitalisation ranking of 25 or higher until Nov 25, the cut-off date for the November index review.

"Currently, Gamuda’s market cap is 19% higher than that of PPB Group Bhd (KL:PPB), which ranks 26th. If Gamuda is added, we anticipate that Genting Malaysia, which currently has the lowest market cap among KLCI constituents, might be removed from the index," it said.

Besides Gamuda, RHB is expecting 99 Speed Mart Retail Holdings Bhd’s (KL:99SMART) to be added to the KLCI component stock list, replacing Genting Bhd (KL:GENTING).

"99 Speed Mart's ranking, at No 27, puts the stock in contention to be added, with RM2 billion of market cap separating it from the 25th place. With all things being equal, 99 Speed Mart could make the cut if its share price rises to RM2.50," it said.

RHB said if Gamuda and 99 Speed Mart are included in the key index, they will replace the two lowest-ranked component stocks, which are currently Genting Malaysia and Genting.

Under the index rules, a stock is removed if its market cap ranking falls to 36th or lower, and added to the KLCI if it rises to 25th or higher during the periodic review.

Meanwhile, RHB said the reserve list comprises stocks that would be used if one or more constituents are deleted from the KLCI during the period, until the next semi-annual review.

The research house expects the revised KLCI reserve list to include 99 Speed Mart — unless it reaches No 25 in terms of market cap — Malaysia Airports Holdings Bhd (KL:AIRPORT), AMMB Holdings Bhd (KL:AMBANK), Westports Holdings Bhd (KL:WPRTS) and Genting Malaysia, with Genting included if 99 Speed Mart enters the composite index.

RHB also noted near-term uncertainties arising from the US election, and how that impacts US and global macroeconomics is still playing out.

This, it said, coupled with geopolitical risks centred on events in the Middle East, could keep investor sentiment on edge until greater clarity emerges.

"Key investment themes include adding defensive colour to portfolios to guard against near-term volatility and protect realised gains achieved year-to-date, staying nimble to build positions on broad-based market weakness, and focusing on stocks with a Johor angle — coupled with a bottom-fishing strategy for small- and mid-caps," the house added.

Shares of Gamuda closed 26 sen or 2.99% higher at RM8.95 on Wednesday, with a market capitalisation of RM25.25 billion, while 99 Speed Mart went up 10 sen or 4.42% to close at RM2.36, with a market capitalisation of RM19.82 billion.

On the other hand, Genting Malaysia shares rose two sen to RM2.30 for a market capitalisation of RM13.66 billion, while Genting gained three sen to RM4.02 for a market capitalisation of RM15.59 billion.