Bursa Malaysia Berhad (Bursa Malaysia) and global index provider FTSE Group (FTSE) have announced that Malaysia's primary benchmark index, the Kuala Lumpur Composite Index (KLCI), will adopt the FTSE global index standard.

From 6 July 2009 the enhanced index will be known as the FTSE Bursa Malaysia KLCI, and it is hoped will stimulate creation of and investment into Exchange Traded Funds, structured products and other index-linked products in multi markets.

It will comprise of the largest 30 companies listed on Bursa Malaysia's Main Board based on investable market capitalization, and be free-float adjusted and liquidity-screened.

The index will be calculated by FTSE according to transparent, publicly available rules and overseen by a committee of independent market practitioners who will review the index twice a year in June and December.

Commenting, Dato' Yusli Mohamed Yusoff, chief executive of Bursa Malaysia, said: "The improved benchmark index for the Malaysian market will be in line with globally accepted standards that place importance on tradability, investability and transparency - three important criteria used by investors to evaluate a market's attractiveness.

"This enhancement is important to ensure that the index remains representative in measuring the pulse of the Malaysian market while maintaining linked-standards to the global economy; so as to build our market's quality and relevance in the global arena."

The improved index will closely track the pulse of the Malaysian market as the index will adopt a higher speed of calculation of every 15 seconds in comparison to 60 seconds currently.

The index value will remain unchanged and will adopt the KLCI index closing value on 3 July 2009.

Paul Hoff, managing director, Asia Pacific for FTSE Group, added: "We are pleased to be working with Bursa Malaysia again as it enhances its market access through the adoption of a free float weighted large cap benchmark. This development should be well received by both domestic and global investors."