KUALA LUMPUR (Jan 5): Daily trading volume on Bursa Malaysia over the last three days consistently surged past five billion shares, a threshold only breached six times over the past two years, boosted by foreign investors entering the market, according to market watchers.

Notably, trading volume on Friday hit 6.62 billion shares, marking a 13-month high for the local bourse since the 6.87 billion recorded on Nov 24, 2022. Over the last 12 months, trading volume has averaged at 3.3 billion shares per day.

Turnover has also been elevated over the past two days — at RM3.82 billion on Thursday and RM3.74 billion on Friday — well above the 12-month daily average of RM2.08 billion.

Rakuten Trade equity research vice president Thong Pak Leng believes the surge of interest in the local market, as seen by the elevated trading volume and turnover, was due to foreign buying.

“With expectations in the US of the Federal Reserve cutting its rates, funds will flow back to our region,” he told The Edge when contacted, adding that the local market has also been undervalued over the past two years.

“Also, last year was a bad year for the market and investors are playing catch up,” he added.

Likewise, Malacca Securities Loui Low Ley Yee suspects that the renewed interest in the local market stemmed from foreign buying, on top of local institutional investors' activities.

“I think the Fed rate cuts are not so in-theme for Malaysia stocks, but we are definitely being viewed as undervalued as well as being helped by domestic catalysts building up within Johor, infrastructure projects as well as renewable energy,” he said.

Loui expects elevated trading activities to pause momentarily for consolidation, before persisting later.