CGS remains positive on Bursa Malaysia Bhd’s MY Value Up programme, saying the initiative could improve communication between listed companies and investors, strengthen commitments to shareholder value and potentially support higher market trading activity.
The research house reiterated its ADD call on Bursa Malaysia with an unchanged RM11.80 target price, following a Sept 3 meeting hosted with more than 20 institutional investors to discuss the programme’s implementation.
CGS said Bursa indicated that public-listed companies are expected to begin submitting their value-up plans towards the end of 2026, with the information to be published on a dedicated microsite.
Participation will remain voluntary, at least through 2026 and 2027, according to the research note.
Programme Open Beyond Initial 88 Companies
One key takeaway from the meeting was that participation in MY Value Up will not be restricted to the 88 companies initially selected by Bursa, but will be open to all listed companies.
CGS said some of the 88 companies had highlighted difficulties in providing certain financial targets, particularly where earnings are affected by external factors beyond management control.
Bursa is also considering the introduction of a new index comprising companies that demonstrate strong performance under MY Value Up criteria, according to the research house.
CGS said such a development could increase investor visibility for companies that successfully implement measures aimed at improving capital efficiency, transparency and shareholder returns.
Seen Supporting Market Activity
The research house said it viewed the programme positively because it is designed to improve the transmission of corporate information to investors while encouraging listed companies to make more explicit commitments to maximising shareholder value.
CGS believes this could, in turn, support higher equity trading activity on Bursa Malaysia.
The research house maintained its expectation for an increase in equity average daily value (ADV) in 2026 and 2027, which underpins its positive stance on the exchange operator.
Bursa Earnings Growth Seen As Re-Rating Catalyst
CGS said potential re-rating catalysts for Bursa include stronger earnings growth and improving returns on equity.
It forecasts Bursa’s FY2026 net profit to increase by 19.2%, while return on equity is projected to rise to 41.8% by FY2028, from 29.9% in FY2025.
The research house maintained its FY2026-FY2028 earnings per share forecasts.
Its RM11.80 target price is based on a dividend discount model using a 9.1% cost of equity and 4% terminal growth rate.
Downside risks include a sharp pullback in equity trading activity over the coming quarters and a larger-than-expected increase in operating expenses.
