PETALING JAYA: Bursa Malaysia’s average daily value (ADV) is expected to strengthen in 2024, following two years of modest performance.
While still in its early days, Hong Leong Investment Bank (HLIB) Research said Bursa Malaysia’s ADV for the current financial year ending Dec 31, 2024 (FY24) is off to a good start, with January’s figure at RM3.2bil.
This, the research house said, was the third consecutive monthly increase in its ADR.
“After two prior years of modest ADV (FY22 and FY23 at RM2.07bil and RM2.06bil, respectively), we reckon that FY24 will see a better showing.
“ADV will be propelled by, externally, an end to the Fed’s rate upcycle and an eventual pivot; and domestically, political risk premium which plagued the local bourse for the past two years.”
UOB Kay Hian (UOBKH) Research meanwhile said Bursa Malaysia’s on-market transactions ADV of RM2.05bil in FY23 was relatively flat compared to FY22’s RM2.06bil.
“Improvement in foreign and retail participation helped to offset a decline in domestic institutional participation.
However, in 2024, we expect both local and foreign institutional participation to chart positive growth, as we remain optimistic for equity markets to sustain their risk-on-mode.”
Separately, Kenanga Research noted that Bursa Malaysia had rebranded itself to be a multi-asset exchange with the launch of its Bursa Gold Dinar mobile app to make investing in gold more accessible.
“This supports part of the group’s broader 2024 to 2026 strategic roadmap, in which it hopes to, on top of its key securities business, widen its derivative offerings to a broader international level and to strengthen other revenue streams (data solutions), for which it hinted it is open to considering inorganic growth opportunities.”
Bursa Malaysia recorded a profit after taxation and minority interest of RM252.4mil in FY23, compared with the RM226.6mil reported in FY22.
The growth was attributed to a higher operating revenue of RM592.8mil for FY23, a 1.3% increase from the RM585.3mil registered in FY22.
MIDF Research said Bursa Malaysia saw better trading activities in the second half of FY23, on the back of the expectation of a US Federal Reserve rate pause.
“Going forward, we expect US rate cuts and domestic factors will influence trading activities.
“We are maintaining our “buy” call on the stock with a revised target price of RM8 (from RM7.50 previously).
UOBKH Research is also maintaining its buy call with a target price of RM8.05, while Kenanga Research is maintaining its “underperform” call on the stock with a higher target price of RM6.45 (from RM6.25 previously).
