JKH tops MSCI Frontier Markets Asia Index

Monday, 8 December 2014 00:00 - - {{hitsCtrl.values.hits}}

Sri Lanka’s largest listed company John Keells Holdings (JKH) is ranked at the top out of the 34 stocks captured in the latest compilation of the MSCI Frontier Markets (FM) Asia Index. As at 31 October, JKH has an index weight of 9.05% which has seen the stock improving from its second position from the previous index update (end-August 2014).

“This is a significant feat as Sri Lanka itself accounts for the smallest country weight of 13.88% in the index,” according to Frontier Research. The other constituents in the index are large and mid-cap stocks from, Pakistan, Vietnam and Bangladesh. JKH is the only company representing the Industrial sector in the index. The stock was earlier second to the Oil and Gas Development Company from Pakistan which has seen a fall in its market capitalisation in recent months. Sri Lanka’s Commercial Bank (COMB) is the other stock in the top ten constituents, occupying the ninth spot which is one spot lower from the previous index list. COMB has a weightage of 4.13% in the index while the financial sector as a whole accounts for 32% of the index. Sri Lanka’s lowest weightage signals the higher valuation at which JKH and COMB are trading relative to most constituents in this index as well as to most stocks in the CSE. JKH and COMB are also included in other frontier indices such as the S&P Extended Frontier 150 Index, the iShares MSCI Frontier 100 ETF, the FTSE Frontier 50 index and the S&P Frontier BMI (Broad Market Index). “While market capitalisation is a key figure for the compilation of such indices like the MSCI FM Asia Index, liquidity and free-float of stocks are other key factors in the compilation. Positive perception in these indices could be one of the key reasons for the higher valuation attached to stocks such as JKH and COMB,” Frontier Research said.