KUALA LUMPUR: YTL Corp Bhd and YTL Power International Bhd have made it to the MSCI Malaysia Index, while Dialog Group Bhd has been removed from the list, with effect from February 29.
According to Assoc Prof Dr Ahmed Razman Abdul Latiff, an economic analyst at Putra Business School, the inclusion of YTL Corp and YTL Power in the index indicates that the utility sector would be given more weight or representation in the list.
MSCI provided a list of the additions and deletions in a statement on Monday.
The MSCI Malaysia Index is designed to measure the performance of the large-, mid-, and small-cap components of the Malaysian market. The index, including 94 constituents, encompasses about 99 per cent of the Malaysian equity market.
Tenaga Nasional Bhd, Public Bank Bhd, Malayan Banking Bhd, CIMB Group Holdings Bhd, Press Metal Aluminium Holdings Bhd, CelcomDigi Bhd, Petronas Gas Bhd, Petronas Chemicals Group Bhd, IHH Healthcare Bhd, and Hong Leong Bank Bhd are the top ten constituents.
Sr Samuel Tan, executive director of KGV International Property Consultants, said that the inclusion of YTL Corp and YTL Power is not surprising.
Tan pointed out that both companies satisfied the two crucial requirements for index inclusion, namely liquidity and free float.
Therefore, their inclusion is seen as favorably reflecting the new direction the country is going towards, he told Business Times.
"The YTL group has been at the forefront in many sectors. Their venture into the hyperscale datacentre in Johor is an exciting one.
"The collaboration with Nvidia for the incorporation of artificial intelligence (AI) is a feather in the cap. This will certainly attract many international investors to Malaysia," he told Business Times.
Within the utility industry, YTL Power was able to conceal Wessex Water's lower figures with a larger power generation section.
Its unit, YTL PowerSeraya secured a tender to build a 600 MW hydrogen-ready power plant in Singapore.
Locally, YTL Power acquired a 18.9 per cent stake in Ranhill Utilities Bhd, which has expertise in water treatment and power generation in Johor.
Tan said that YTL Power's first quarter core profit of RM900 million is commendable.
"The consistent rise in their share price is indicative of all these outstanding performances. For comparison, on May 11, 2006, YTL Power was trading at RM1.69 per share, and on February 13, 2024, it was valued at RM4 per share.
"YTL Corp is currently valued at RM2.31 per share, having traded for 91 sen apiece on May 11, 2006. The company estimates that, after accounting for a better contribution from power generation, its FY2204–2026 earnings will expand by 2.0 per cent to 4.0 per cent," Tan said.
With yesterday's closing price of RM3.98, YTL Power's market cap was around RM32.5 billion. Year-to-date, the stock has gained around 55 per cent of its value.
In the meantime, YTL Corp's closing price of RM2.29 gave it a market cap of RM25.24 billion. The stock has increased 19.27 per cent so far this year.
