• We maintain our HOLD call on Bursa Malaysia (Bursa) with an unchanged fair value of RM10.35/share based onFY18 PE of 23x (5-year historical average PE).

• Bursa has announced that the stamp duty for trading of small- and mid-cap companies on the exchange be waived. This will promote a more active trading of small- and mid-cap stocks listed on Bursa. It will support the exchange's other initiatives such as the Mid and Small Cap (MidS) Research Scheme and the Leading Enterpreneur Accelerator Platform (LEAP) Market.

• The present stamp duty is minimal at 0.1% value of equity trade subject to a maximum charge of RM200 and GST charges.

• We understand that the initiative to waive stamp duty will only be implemented in March 2018 and will be valid for a period of 3 years.

• We view this as an extension to the waiver of stamp duty for exchange-traded funds (ETF) and structured warrants to increase the vibrancy of the capital market which was announced earlier in Budget 2018.

• Also, a trading link will be established with the Singapore Stock Exchange (SGX) by the end of 2018. The link will encourage higher cross-border trading of Malaysian and Singapore equities. In addition, it will facilitate a more efficient clearing and settlement of the stocks traded.

• In FY17, equity trades continued to be dominated by institutions (77%). Meanwhile, retail trades constituted only 23% of the total equity trades. We are of the view that any increase in the retail trading participation will be beneficial to Bursa's earnings as it will raise the effective clearing rate on equities.

• We are positive on the new measures to improve the trading activities in the market. We maintain our forecast as our FY18 earnings have already factored in a higher assumption for daily average trading value (DATV) on an OMT basis of RM2.5bil for equities vs. an actual RM2.31bil achieved in FY17.

Source: AmInvest Research - 7 Feb 2018