In essence, the BMQ is intended to represent Bursa’s “high flyers” — companies with superior profitability, healthy balance sheets and strong cash flows. This group of companies, according to Bursa, materially outperformed the FBM KLCI over the past decade, delivering an 86.6% gain over 10 years versus a 0.7% decline in the benchmark index over the same period.
The Securities Commission Malaysia is slated to unveil the Capital Market Masterplan 4 this year. The CMP4 will set out the road map for the Malaysian capital market over the next 20 years, with the initial five-year action plan covering 2026 to 2030. It is expected that initiatives and rule changes will focus on tackling some of the chronic structural issues that have plagued Bursa Malaysia for more than a decade: chiefly, efforts to secure listings of larger, quality companies (local and foreign) as opposed to the volume of initial public offerings; raise the average corporate return on equity (for instance, shortening the time frame for the restructuring or delisting of financially distressed companies); strengthen corporate governance to place emphasis on value creation and shareholder returns; and improve liquidity by attracting more and different types of investors, including the younger generation. We have written extensively on the myriad challenges of Bursa — the whats and whys — in previous articles and will not repeat them here. The right reform measures that are well executed will go a long way to rebuilding investor confidence in the capital market, so that Bursa can regain effectiveness as a source of funding that will drive future economic growth.
The Bursa Malaysia Quality 50 Index (BMQ) — the first in-house index, launched in January 2026 — is an initiative that directly aligns with the CMP4 narrative. Unlike the bellwether FBM KLCI, where constituents are based on market capitalisation, the BMQ’s basket of 50 stocks is selected based on three metrics: return on equity, debt-to-equity ratio and operating cash flow relative to net profit. Scores are assigned to each metric, and the top 50 highest-scoring companies are included in the BMQ — provided they are not already part of the FBM KLCI, have a market cap above RM300 million and meet Bursa’s liquidity requirements.
