Bursa expects local bourse to perform better this year on higher corporate earnings

KUALA LUMPUR: Bursa Malaysia Bhd expects the local equity market to perform better this year, underpinned by a stronger economic growth forecast for 2024 that would pave the way for higher corporate earnings and more fundraising activities.

Bursa Malaysia chairman Tan Sri Abdul Wahid Omar said the stock market performance for the first 30 days of 2024 had improved significantly with an average daily trading value of RM3.2 billion and foreign investment inflows of RM512 million.

“Bursa Malaysia remains committed to improving market liquidity and enhancing market vibrancy, ensuring our standing as an appealing fundraising and investment destination,” he said during the stock exchange operator’s FY2023 financial results media briefing here today.

In terms of capital market performance, he said the FBM KLCI benchmark index emerged as

Asean’s second-best performer, with a 5.7 per cent increase in the second half of 2023, closing

the year at 1,454.66 points. “This was a healthy rebound from the 1,369 points recorded at the close of June 2023,” he noted.

With ongoing geopolitical tensions showing no signs of abating soon, he pointed out that disruptions to global trade and capital flows continue to pose significant downside risks to the economic landscape this year. Nevertheless, he said the outlook for Asean appears to be bullish amid these global uncertainties.

Commenting further on the local market outlook for this year, Abdul Wahid said the optimism was underpinned by resilient consumer spending, an expected rebound in the tourism industry that was facilitated in part by the 30-day visa-free policy for Chinese and Indian national visitors as well as advancements in multi-year investment projects.

“Additionally, the recovery in the electrical and electronic industry, coupled with the implementation of some of the strategic initiatives within the Madani Economy Framework, the National Energy Transition Roadmap, and the New Industrial Master Plan 2030 is poised to stimulate equity market activities,” Abdul Wahid said.

The exchange aims to foster a stronger capital market by expanding product and service offerings, making investment more accessible and attracting new segments, all of which would contribute to increased market vibrancy, liquidity and national prosperity, he added.

Meanwhile, Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift said the exchange has set a target of profit before tax between RM293 million and RM323 million in 2024, with non-trading revenue growth at 5-7 per cent. The exchange is also targeting 42 initial public offerings (IPOs) in 2024, with a total IPO market capitalisation of RM13 billion.

He also revealed that Bursa Malaysia has found no breach of rules in the recent significant decline in share prices which were limited to a few small-cap stocks.

“The impact is not widespread as the 16 affected stocks only constituted about 0.18 per cent of the total market and (they) were not under the same group,” he added.

Bursa Malaysia has seen volatile trading in recent weeks with several counters hitting limit up and limit down. – BK