Malaysian stocks reached a milestone as it hit RM2t in market capitalisation for the first time ever yesterday, MIDF believes this was due to broad gains in blue chip stocks and a slew of new listings.
The FBM KLCI rallied for its fourth straight day to close above the 1,600 level for the first time in two years. The FBM KLCI closed at 1,605.68, its highest close since 8 April 2022.
The house said it was not surprised by the latest development yesterday given the current momentum observed. Average daily volume on a year-to-date basis (as of 7 May 2024) came in at 4.19b shares, an increase of +28.7%yoy, surpassing 2022 and 2023 levels.
Recall that Bursa Malaysia saw its 1QFY24 Average Daily Value (“ADV”) (OMT) rose +36.9%yoy to RM2.93b as all segments saw higher trading interest, especially foreign institutions. ADV (OMT) for domestic institutions, retail and foreign institutions grew +22.8%yoy to RM1.25b, +7.4%yoy to RM656m and +99.0%yoy to RM1.02b respectively.
MIDF says it expects good prospect for trading activities in Bursa Malaysia this year from a corporate earnings and valuation point-of-view. The house expects robust economic growth and hence corporate earnings. It also expect that the expectations of US rate cuts will lead to positive sentiment, especially amongst foreign investors, and this will drive better market valuations.
MIDF is maintaining its BUY call on the stock with an unchanged TP of RM8.20, pegging FY25 EPS to a PER of 25x.
