Bursa Malaysia shares rise as MIDF sees better prospects on local trading

KUALA LUMPUR (May 8): Shares of Bursa Malaysia Bhd (KL:BURSA) extended gains to its highest since March 2021, following news that Malaysian stocks trading in its exchange hit a historical high of RM2 trillion in market capitalisation on Tuesday (May 7).

The stock exchange operator was among the gainers on the exchange after it rose as much as 20 sen, or 2.57%, to its three-year high of RM7.98 in early trades. The counter later settled up 14 sen or 1.80% to close at RM7.91, valuing the stock at RM6.40 billion, after 4.02 million shares changed hands.

Bursa’s share price has also surpassed the consensus 12-month target price (TP) of RM7.71, according to Bloomberg. The counter has risen 14.88% since the beginning of this year, and 26.39% in the last one year.

There are 15 institutional analysts covering Bursa, with six “buy” recommendations, seven “hold” ratings, and two “sell” calls, according to Bloomberg.

“We expect good prospects for trading activities in Bursa Malaysia this year, from a corporate earnings and valuation point-of-view. We expect robust economic growth and hence corporate earnings,” MIDF Research said in a note.

The better trading activities are also expected to drive Bursa’s earnings prospect moving forward, MIDF head of research Imran Yassin Md Yusof later told The Edge.

The research house, which maintained its “buy” call with a TP of RM8.20 on Bursa, foresees that expectations of US rate cuts will lead to positive sentiment, especially among foreign investors, which will drive better market valuations.

“We have seen better trading activities thus far this year, on the back of the expectation of US Fed (Federal Reserve) rate cuts. Bursa Malaysia is well-positioned to continue developing the marketplace and make further progress of its strategic plans,” it said.

MIDF remains optimistic despite the ongoing global and local developments that continue impacting the volatility and performance of the securities and derivatives markets in the near term.

On Tuesday, Malaysian stocks hit RM2 trillion in market capitalisation for the first time ever, on the back of broad gains in blue chip stocks and a slew of new listings.