• Bursa Malaysia Securities (Bursa) recorded a traded value of RM7,971.0mn on 5th August 2024, more than double that of the previous trading day (2nd August 2024: RM3,980.2mn) and slightly above the previous high of RM7,970.9mn on 30th November 2021. This surge was driven by a heavy market sell-off amid concerns about a potential US recession.

• Despite the recent decline in the stock market, we believe Bursa will continue to benefit from market volatility, which support its daily traded volume and value.

• We anticipate the equity market to remain robust for the rest of 2024, backed by 1) the return of foreign investors which will enhance market liquidity, 2) Federal Fund Rate (FFR) cuts, 3) government fiscal reforms, and 4) improvements in corporate earnings performance.

• Reiterate BUY call for Bursa with a TP of RM11.10, pegged at 26x PER (+1SD above 10-year average PER) to 2025F EPS of 42.6sen. We believe the weakness in the share price offers an attractive opportunity for investors to accumulate the stock.

Traded Value on 5Th Aug 2024 Exceeded Previous High Level in 2021

Bursa Malaysia Securities’ traded value of RM7,971.0mn on 5th Aug 2024 more than doubled compared to the previous trading day (2nd Aug 2024: RM3,980.2mn) and slightly exceeded the previous high of RM7,970.9 in 30th Nov 2021. This surge was attributable to a significant market sell-off driven by concerns over a potential US recession. As a result, the FBMKLCI Index fell by 4.6% to close at 1,536 points, breaking below 1,600-point level. This trend was reflected across all Bursa Indices, with the five worst-performing indices being: Property (-9.7%), Technology (-9.1%), Construction (-9.0%), Energy (-8.2%), and Industrial Products (-7.7%).

Bursa to Benefit from Market Volatility

Despite the recent decline in the stock market, we believe Bursa will continue to benefit from market volatility, which support its daily traded volume and value. We anticipate that the equity market to remain robust for the remaining of the 2024, supported by 1) the return of foreign investors which will boost market liquidity, 2) Federal Fund Rate (FFR) cuts, 3) government fiscal reforms, and 4) improvements in corporate earnings performance. Consequently, we are maintaining our average daily traded value for 2024F/25F/26F of RM3.3bn/3.6bn/3.9bn.

Reiterate BUY with TP of RM11.10 We reiterate our BUY call on Bursa with a TP of RM11.10, pegged at 26x PER (+1SD above 10-year average PER) to 2025F EPS of 42.6sen. We believe the current weakness in Bursa’s share price offers an attractive opportunity for investors to accumulate the stock.

Source: BIMB Securities Research - 6 Aug 2024