Indices Computed by Bursa Malaysia

Stock market indices are used as indicators of the performance of the stock market as a whole. A stock market index can be based on all the stocks listed on a stock exchange or on only a sample of stocks. The method of computing the indices also vary. Some are computed on the simple average closing price basis while others are derived using a weighted average method.

Bursa Malaysia computes an index for each of the main sectors traded on the bourse but the most widely followed, by far, is the Kuala Lumpur Composite Index (KLCI).

The Kuala Lumpur Composite Index is generally accepted as the local stock market barometer. It was introduced in 1986 after it was found that there was a need for a stock market index which would serve as an accurate indicator of the performance of

the Malaysian stock market and the economy. At that time, there was effectively no index which represented the entire market.

The Kuala Lumpur Composite Index satisfies stringent guidelines and was arrived at only after rigorous screening of the component companies that were eventually selected to compose the index. In 1995, the number of component companies was increased to 100 and will be limited to this number although the actual component companies may change from time to time.

Bursa Malaysia calculates, electronically, all its indices on a minute by minute basis and these indices are made available immediately to stockbroking companies and other subscribers of real-time market information.