Tradable Indices Essay Example for Free

Tradable Indices Essay 1) How many boards are available in Malaysia share market? It consists of a Main Board, a Second Board and MESDAQ with total market capitalization of MYR700 billion (US$189 billion). 2) What are the characteristics of all boards MESDAQ (Malaysian Exchange of Securities Dealing and Automated Quotation) was launched on 6 October 1997 as a separate securities market, mostly for listing technology-based companies. It is part of Bursa Malaysia. The Mesdaq has now been changed to the ACE Market. Bursa Malaysia offers three (3) boards, Main Board, Second Board and MESDAQ Market. Generally, Main Board is for more established companies, Second Board for relatively smaller companies and MESDAQ Market is for high growth and technology companies. Both the Second Board and MESDAQ Market provide an avenue for relatively smaller companies to access the capital market early to fuel their expansion plans. Once established, they can transfer their listing status to the Main Board. 3) Index. How many index traded? (e.g. KLCI) TRADABLE INDICES FTSE Bursa Malaysia KLCI Index (effective 6th July, 2009) * This tradable index comprises the 30 largest companies in the FTSE Bursa Malaysia EMAS Index by market capitalisation. FTSE Bursa Malaysia Mid 70 Index * Comprises the next 70 companies in the FTSE Bursa Malaysia EMAS Index by full market capitalisation. FTSE Bursa Malaysia Top 100 Index * Comprises the constituents of the FTSE Bursa Malaysia KLCI and the FTSE Bursa Malaysia Mid 70 Index. FTSE Bursa Malaysia Hijrah Shariah Index * The FTSE Bursa Malaysia Hijrah Shariah Index is a tradable index which comprises the 30 largest companies in the FTSE * Bursa Malaysia EMAS Index that meets the following triple screening process: * FTSEs global standards of free float, liquidity and investability * Yasaars international Shariah screening methodology * Malaysian Securities Commissions Shariah Advisory Council (SAC) screening methodology FTSE Bursa Malaysia Asian Palm Oil Plantation Index (USD and MYR) * This index comprises the companies from the universes of developed, advanced emerging and secondary emerging countries as classified by FTSE in the Asia Pacific region excluding Japan, Australia and New Zealand that derive substantial revenue from palm oil activities 4) What is characteristics of Index (e.g. FTSE composite index) The two main eligibility requirements stated in the FTSE Bursa Malaysia Index Ground Rules are the free float and liquidity requirements. Free Float * Each company is required to have a minimum free float of 15%. The free float excludes restricted shareholding like cross holdings, significant long term holdings by founders, their families and/or directors, restricted employee share schemes, government holdings and portfolio investments subject to a lock in clause, for the duration of that clause. A free float factor is applied to the market capitalisation of each company in accordance with the banding specified in the FTSE Bursa Malaysia Ground Rules. The factor is used to determine the attribution of the company’s market activities in the index Liquidity * A liquidity screen is applied to ensure the company’s stocks are liquid enough to be traded. Companies must ensure that at least 10% of their free float adjusted shares in issue is traded in the 12 months prior to an annual index review in December. * It contains 30 companies from the main market with approximately 900 to 1000 listed companies. The index has a base value of 100 as of January 2, 1977.[2]