• 40 stocks added, 30 removed; 673 Shariah stocks in total.
• Prominent  removals:  CCM,  Shell  Refining,  SapuraKencana (SAKP), SHL, Perdana Petroleum and Puncak Niaga.
• Prominent additions: Amway, Boustead Plantations, Hap Seng Consolidated, Icon Offshore, Padini, Kian Joo, Media Chinese.
• The  surprise:  IOI  Corp  is  still  Shariah  compliant,  Media Chinese is now Shariah compliant.

What’s New

The Securities Commission (SC)  has released its  semi-annual list of Shariah  compliant  securities  for  Nov  2014.  40  stocks  were  added, 30 were removed and there were 673 stocks end-Nov 2014.

What’s Our View

The  key  removals  from  the  list  are  CCM,  Shell  Refining,  SAKP, Perdana Petroleum and Puncak Niaga. SAKP and Perdana are within our coverage and we had highlighted their potential removal in our previous notes.

What surprised positively, however, is that IOI Corp, which we had thought  would  not  qualify  this  round,  is  still  on  the  Shariah compliant list.

Prominent  additions  to  the  list  are  Amway,  Boustead  Plantations, Hap  Seng  Consolidated,  Icon  Offshore,  Padini,  Kian  Joo  and  Media Chinese.  Padini  and  Media  Chinese  are  in  our  coverage  and  while we  had  expected  Padini  to  be  reinstated,  Media  Chinese  surprised positively.  Boustead  Plantations  and  Icon  Offshore,  also  under  our coverage,  have  been  Shariah  compliant  since  their  listing  in  Jun 2014.

The  stocks  added  carry  a  total  market  cap  of  MYR28.6b,  2.6% higher  than  the  market  cap  of  the  stocks  deleted  of  MYR27.6b, which  is  a  positive,  for  there  were  more  larger  market  cap (>MYR1b) stocks added to the list this round. We caution of selling pressure  on  stocks  removed  but  the  new  additions  provide  buying opportunity.  We  have  a  BUY  on  Boustead  Plantation,  SAKP, Perdana  and  Padini,  a  HOLD  on  Media  Chinese  and  Icon  Offshore, and a SELL on IOI Corp.

Source: Maybank Research - 28 Nov 2014