Bursa Malaysia launches new palm oil stock indices

KUALA LUMPUR May 18 (Reuters) - Bursa Malaysia (BMYS.KL), the country's stock exchange operator, has launched three palm oil plantation indices as it wants to tap growing interest in Asia's palm oil industry, its head said on Monday.

The FTSE Bursa Malaysia Palm Oil Plantation Indices include two regional indices tracking Asian listed palm oil companies such as Singapore-listed Wilmar International (WLIL.SI) and Golden Agri-Resources (GAGR.SI).

"These three indices which include the world's liquid and large cap companies will allow investors to track the performance of listed companies which derive their substantial revenues from palm oil related activities," Bursa CEO Yusli Mohamed Yusoff told a news conference.

Bursa operates the world's most active trading crude palm oil futures market where more than 20,000 contracts traded everyday.

The exchange operator is pinning its hopes on the new indices to boost foreign interest on the Malaysian stock market which has been plagued by a lack of liquidity and low free-float due to high government ownership.

Malaysia is the world's second-largest palm oil producer after Indonesia. Palm oil is a key ingredient in the food processing industry and is widely used as a cooking oil.

Plantation stocks form a big part of the Malaysian stock market, making up for nearly one-fifth of total market capitalization.

Sime Darby (SIME.KL), Malaysia's top oil palm planter, is the largest stock on the bourse with a market capitalization of $11.2 billion.

Yusli said the new indices have shown that palm oil shares have outperformed Malaysia's benchmark stock index .KLSE by more than 39 percent over the past three years.

The exchange operator may launch futures contracts based on the new indices but no timeframe has been set, he said.

(Reporting by Soo Ai Peng; Editing by David Chance)