99Speedmart and Gamuda Set for Further Gains?

The FTSE Bursa Malaysia KLCI constituent review, announced after market close on December 5th, saw the entry of 99Speedmart and Gamuda, marking the first exit for long-standing blue-chip stocks $GENTING (3182.MY)$ and $GENM (4715.MY)$, which had been constituents for 15 years.

$99SMART (5326.MY)$, the largest IPO in seven years, achieved a remarkable feat by entering the index within three months of its listing, highlighting a significant moment for Malaysian IPOs this year. Its IPO price was set at RM1.65, offering investors a robust return exceeding 52%.

The last company to gain fast entry was $IHH (5225.MY)$, which was included just one month after its listing and currently ranks fifth with a market capitalization of 64.59B.

$GAMUDA (5398.MY)$ also garnered attention, climbing to the 17th position with a year-to-date return of 100%, making it one of the best-performing construction and property development firms. The surge is attributed to lucrative data center construction contracts, with cumulative orders expected to reach RM31.4 billion by year-end, potentially generating RM2.45 billion in pre-tax profits at a 7% margin.

In contrast, $GENTING (3182.MY)$ and $GENM (4715.MY)$ have faced challenges, with both stocks underperforming year-to-date. Despite GENM reporting a 220% surge in net profit for the nine months ending September 2024, optimism about the international tourism sector and regional gaming market recovery remains cautious following a steady decline since its peak in 2017.

Reviewing the changes in constituents over the years, at this time last year, the $YTLPOWR (6742.MY)$ duo was included in the index and subsequently reached new highs in the first half of the year amid the development of data centers. This June, $SUNWAY (5211.MY)$ was announced to replace AMMB Holdings in the index. Sunway now boasts a market capitalization of RM27.48 billion, ranking 15th. Its stock price has steadily risen following its inclusion, benefiting from the booming construction sector due to high-margin government contracts and data center projects this year.

As one of Malaysia's key indices, the FTSE Russell Malaysia Composite Index is also the benchmark for the FTSE Bursa Malaysia Kuala Lumpur Composite Index Futures (FKLI), and is tracked by a related passive fund,   $FBMKLCI-EA (0820EA.MY)$. Investors seeking broad exposure to Malaysia’s top 30 blue-chip stocks can opt for this ETF, providing an efficient way to track the overall market performance at a lower cost.

Meanwhile, companies newly included in the FTSE 70 MidCap Index alongside $GENTING (3182.MY)$ and $GENM (4715.MY)$ are $CARLSBG (2836.MY)$, $GENP (2291.MY)$, $MALAKOF (5264.MY)$, $NATGATE (0270.MY)$ , $ORIENT (4006.MY)$, $TANCO (2429.MY)$ , and $VITROX (0097.MY)$.