We maintain our HOLD recommendation on Bursa Malaysia (Bursa) with an unchanged fair value of RM6.80/share, pegging the stock to FY23F P/E of 22x, on par to its 5-years historical average.
No changes to our earnings estimate and our 3-star ESG rating.
The Government has announced a reduction in stamp duty from 0.15% to 0.10% on the transaction value of securities subject to a maximum cap of RM1,000 per contract for shares traded on Bursa Malaysia.
The lower stamp duty will be effective from July 2023.
Exhibit 1 shows the impact of the lower stamp duty on the transaction cost to investors. This is based on our assumption of a brokerage fee of 0.3%, revised stamp duty of 0.1% or max RM1,000 per contract and clearing fee of 0.03% or max RM1,000 per contract on the transacted value.
The difference on a transaction value of RM10,000 is minimal with savings of RM5 (-10.4%) while for a higher contract value of RM100,000, the impact will a reduction of RM50 (-10.4%). In the case of a contract value of RM1mil, there will not be any difference before and after as stamp duty will be capped at RM1,000 per contract.
Overall, the measure is seen as mildly positive for equity trading and volume. The impact on institutional trade is likely to be muted as the 0.05% difference in stamp duty is not expected to trigger a surge in trading activities given the absence of a significant inflow of foreign funds presently into the securities market.
Meanwhile, on retail investors, sentiment could improve slightly but would still depend largely on key market catalysts and active trading by institutional investors before seeing trading participation rise.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....