BIMB Research said the exchange operator continues to execute on its strategic priorities with an emphasis on promoting market participation and maintaining cost discipline.
PETALING JAYA: Bursa Malaysia Bhd
’s steady operational momentum and product innovation efforts are expected to support its medium-term prospects, although recent share price gains may cap near-term upside potential.
According to BIMB Research, which recently met Bursa Malaysia’s management, including chief financial officer Azizan Abdul Aziz, the exchange operator continues to execute on its strategic priorities with an emphasis on promoting market participation and maintaining cost discipline.
“The message remains unchanged from the second quarter of financial year 2025 (2Q25) briefing – steady operations, active promotion and cost control,” the research house said following the meeting.
The research house, however, noted that a recent rally in Bursa Malaysia’s share price has left little upside to its target price, prompting a rating downgrade to “hold” with an unchanged target price of RM8.71 a share.
The stock has risen about 8% since its 2Q25 results on July 29, placing its risk-reward profile “on neutral territory” with an upside of around 7% and a dividend yield of roughly 4%.
BIMB Research said that while changes in the management line-up have not altered Bursa Malaysia’s strategic direction, the group remains proactive in driving listings and expanding its product suite.
“Initial public offering listings have reached 41 year-to-date, keeping pace to meet the annual target of 60,” it said, adding management is actively conducting roadshows and conferences to attract market participation.
What could prove to be a more meaningful development, the research house highlighted, is Bursa Malaysia’s plan to introduce smaller-sized futures for the FTSE Bursa Malaysia KLCI and crude palm oil (CPO), alongside tradable carbon credit instruments.
“The rollout timeline, however, remains vague beyond an assurance that it will be ‘soon’,” it quoted management as saying.
The introduction of smaller-denomination KLCI and CPO futures could, in BIMB Research’s view, “meaningfully lift derivatives trading volumes and strengthen Bursa’s derivative business segment”.
Drawing parallels with global exchanges, it noted that this product is proven popular on Chicago’s CME Group Inc for all the major index futures.
Trading activity has also shown signs of improvement.
“There was a noticeable pickup in average daily volume in the just-concluded 3Q25, rising to RM2.59bil – a 5.3% improvement over the first half of financial year 2025 (1H25),” BIMB Research said, adding that average daily contracts for derivatives were up about 9% from 1H25.
These trends point to a stronger 3Q25 performance, even if overall activity still trails the exceptionally high levels of last year.
Looking ahead, the research house observed that “with major global indices setting fresh highs, there are early signs of rotation into emerging markets – Malaysia included – as foreign inflows begin to return”.
Sustained trading momentum could, it said, open scope for upward earnings revisions and sentiment upgrades for Bursa Malaysia.
