Bursa Malaysia introduces 5 new sectors to better reflect listed firms’ businesses

Three existing sectors and the corresponding indexes will also be renamed and broadened

By NG MIN SHEN / Pic By ISMAIL CHE RUS

Bursa Malaysia Bhd has introduced five new sectors and a new two-tier classification for companies listed on the Main Market as the bourse operator seeks to match global equity markets and international standards.

The five new sectors and the corresponding indexes are energy; healthcare; telecommunications and media; transport and logistics; and utilities.

The move, however, saw the removal of the hotel; infrastructure project companies; mining; and trading and services sectors from the categories.

Three existing sectors and the corresponding indexes will also be renamed and broadened to better reflect the public-listed companies’ (plcs) businesses.

The consumer products sector will be renamed to consumer products and services, the finance sector (financial services) and the industrial products (industrial products and services).

Bursa Malaysia CEO Datuk Seri Tajuddin Atan said the enhancements, effective from yesterday, represented a milestone as the exchange kept abreast of the ever-changing business environment.

“This initiative ensures a more comprehensive, accurate and relevant classification of plcs, and provides increased clarity, better structure and universality to meet the needs of the investment industry,” he said at the launch in Kuala Lumpur yesterday.

For investors, the uniformity and standardisation will allow for better refinement of risk assessment on the listed firms and categories.

“The new sectors and sectorial indexes will provide an opportunity for the creation of new products such as exchange-traded funds and unit trusts,” Tajuddin added.

The new sector classification will see the implementation of a two tiered structure, with plcs classified within 13 main sectors that have been broadened to 42 subsectors.

This classification is intended to ensure that the local bourse’s sector and sectorial index continue to appropriately represent the global equity markets.

Sector classification will be determined by revenue streams of the plcs’ audited accounts, directions and future plans.

The move to introduce new classification would also provide better scoping of sector analysis and identify investment opportunities in line with global trends.

It will also enable asset owners, asset managers and investment research specialists to make consistent global comparisons by industries.

Bursa Malaysia executive VP of new development and market facilitation Shahrul Amry Abd Malek said the enhancements will increase investors’ confidence in the exchange as the initiatives will showcase its ability to provide more complex services.

“We hope these enhancements will improve analysis and investment decisions, thus improving market liquidity and benefitting asset managers, investors and the companies themselves,” he said.

Among the notable changes in sector classifications are Tenaga Nasional Bhd, which has been moved from trading and services to utilities, and Maxis Bhd, which has been moved from trading and services to telecommunications and media. The index is reviewed on a quarterly basis for exclusions and inclusions.

All companies and real estate investment trusts listed on the Main Market — excluding those classified under Practice Note 17 — are eligible for inclusion into the Bursa Malaysia Index Series.