Performance of securities market seen improving

PETALING JAYA: AmBank Research expects the securities market’s performance to improve despite the upcoming MSCI index rebalancing in May, which could negatively impact the foreign inflow of funds.

“Global economic risk is seen as receding and the external environment is likely to improve gradually,” it said in a research note yesterday.

Bursa Malaysia reported a 13.4% increase in net profit to RM56.63 million for Q1’17 from RM49.94 million in the same quarter last year.

AmResearch has revised upwards its net profit estimate for FY17 and FY18 marginally by 4.1% and 2.6% after raising daily average trading value for the securities market to RM2.1 billion and RM2.2 billion from RM1.9 billion and RM2 billion respectively.

The research house is maintaining a “hold” call on Bursa Malaysia with a higher fair value of RM9.70 from RM8.70 in view of better earnings estimates for FY18.

Meanwhile, AmResearch is maintaining its 2017 KLCI target of 1,745 points, with a higher projection of 1,900 points in 2018.

For Q1’17, the securities markets saw a higher fund inflow of RM5.7 billion which exceeded cumulative outflow of RM5.4 billion in Q4’16.

Securities market revenue rose 17.7% in Q1’17, with daily average trading value surging to RM2.37 billion versus RM1.98 billion in Q1’16.