HLIB Research observed that weak market sentiment had already started to weigh on Bursa’s trading activities.
PETALING JAYA: Bursa Malaysia Bhd
is expected to navigate a challenging landscape in the coming months, with analysts projecting a subdued outlook for trading activities despite a robust pipeline of new listings.
TA Research noted that Bursa’s softer first-quarter results were “weighed down by rising macroeconomic uncertainties stemming from tariff concerns and significant foreign fund outflows during the quarter”.
While the stock market regulator had maintained its 2025 pre-tax profit (PBT) guidance of RM369mil to RM408mil, higher-than-expected overhead expenses, driven by ongoing ecosystem upgrades and initiatives to enhance customer experience, were likely to add pressure to earnings.
TA Research lowered its target price on Bursa to RM9.10 from RM10.30 but reiterated a “buy” call, citing potential upside risks such as a “compression in risk premiums” and “further pick-up in trading velocity”.
Hong Leong Investment Bank (HLIB) Research, meanwhile, observed that weak market sentiment had already started to weigh on Bursa’s trading activities, with average daily trading value (ADV) falling to RM2.27bil in April 2025.
“Looking ahead, we expect ADV to remain subdued in the coming months as investors continue to embrace a cautious ‘wait-and-see’ posture amid prevailing market uncertainties,” it said.
HLIB Research lowered its target price for Bursa to RM7.70 from RM8.83 and maintained a “hold” recommendation, pointing out that although the share price had fallen recently, it still found Bursa’s risk-reward profile to be balanced.
Similarly, MIDF Research remained cautious, maintaining a “neutral” stance and cutting its target price to RM7.90.
“We had expected that the strong trading activities in 2024 may not be repeatable this year in light of an expected increase in volatility, resulting in equity market valuation to remain relatively stagnant.”
While Bursa’s initial public offering (IPO) pipeline remained strong with 14 listings recorded in the first quarter, MIDF Research cautioned that achieving the group’s 60 IPO target could prove ambitious given current market conditions.
Kenanga Research also flagged the market challenges but noted that Bursa is staying the course with its 2025 targets.
The research house said in spite of ongoing market uncertainties, spurred by developing US trade tariffs, Bursa kept with its targets for 2025, that is, 60 IPOs with a total RM40.2bil market capitalisation across the Main, ACE and Leap markets; non-trading revenue growth of 5% to 7%, and PBT of RM369mil to RM408mil.
Kenanga Research maintained a “market perform” rating and a target price of RM7.80 for Bursa, anticipating investor activity to recover in the second half of the year as trade policy clarity improves.
AmInvestment Research also painted a cautious outlook, pointing to “geopolitical tensions driving market volatility that favours derivatives trading while dampening securities trading revenue”.
Maintaining a “hold” call, AmInvestment Research trimmed its target price to RM8.30 from RM9.10, factoring in reduced securities market daily average transaction value assumptions and lowered net profit forecasts for 2025 to 2027.
