Bursa Malaysia: First Take: Earnings meet Street as clearing fees offset weaker non-trading revenues

Research evidence excerpt

Bursa Malaysia: First Take: Earnings meet Street as clearing fees offset weaker non-trading revenues

Harsh Wardhan Modi AC Asia Pacific Equity Research

(65) 6882-2450 30 July 2026 J P M O R G A N

harsh.w.modi@jpmorgan.com

Investment Thesis, Valuation and Risks

Bursa Malaysia (Overweight; Price Target: RM9.80)

Investment Thesis

We are OW on Bursa Malaysia.

• We believe Bursa Malaysia is in a structural sweet spot. We expect the ongoing

economic reforms to lead to continued improvement in equity market fund flows. These

reforms include fiscal shifts (subsidy rationalization and re-allocation to infrastructure),

a deepening of the investment cycle (technology supply chain, data centers) and a focus

on renewable energy, among others.

• Cash equities account for ~73% of Bursa’s earnings, so 30-day-moving-average

(30DMA) daily trading volumes have been one of the key stock price drivers. Yet there

have been periods where the relationship has weakened (2016/19) and the stock has

performed more in line with KLCI (0.62 correlation since 2010). Further, there is a

utility aspect to the stock that showed up in 2013-16, when the stock performed well

despite weak volumes and the market. Hence, the phase of the cycle determines the stock

driver. We see the utility aspect providing support in the current volatile environment.

• We forecast 7-18% cash equity volume growth from 2026 to 2028, following a decline

in 2025, given the market weakness. A sustained pickup in IPOs, a recycling of domestic

savings, FX strength and improving nominal GDP should continue to boost trading

volumes over the longer term. Flows from government-linked investment companies

help.

• Bursa benefits from regulations and network effects limiting competition in the cash

equity clearing business.