KUALA LUMPUR (Jan 23): CGS International raised its target price on Bursa Malaysia Bhd (KL:BURSA) to a consensus-topping RM10.30 a share, citing equity market optimism, as the stock exchange regulator considers a value-up programme to boost undervalued companies, similar to initiatives in South Korea, Japan, and Singapore.

In its note, it said Bursa’s chief financial officer Azizan Abd Aziz told institutional investors at the CGS International Malaysia Corporate Day on Jan 7, 2026 the exchange is discussing the proposed value-up programme with listed companies, focusing on setting criteria and targets.

A value-up programme helps undervalued companies grow by improving governance, using capital efficiently, and communicating better with investors, often with regulatory support and incentives. For example, South Korea’s 2024 programme offers tax benefits, greater visibility, and a high-yield index to attract investors and boost stock valuations.

CGS International said the recent launch of the Bursa Malaysia Quality 50 Index (BMQ) and the Bursa Malaysia Quality Shariah Index (BMQ-S) “could be the precursor to the rollout of a comprehensive value-up programme for Malaysia’s stock market in the near term”.

CGS International raised its target price for Bursa by 91 sen to RM10.30 from RM9.39 on expectations of recovery in equity average daily value in 2026 and resilient derivatives income. It also projected a rise in return on equity from 29.9% in the financial year ended Dec 31, 2025 (FY2025) to 31.9% in FY2027. 

The research house reiterated its ‘add’ call on the stock. 

“The potential downside risks for our ‘add’ call include a drastic decline in trading activities in the equity and derivative markets. In addition, any higher-than-expected increase in its operating expenses would negatively impact its net profit growth,” CGS International said in a note to clients. 

Another risk, it said, would be if total fees payable to the Securities Commission Malaysia in FY2026 to FY2028 exceed the incremental income generated from Bursa’s revision of listing and regulatory fees.

Bursa raised its listing and regulatory fees with effect from Jan 1 this year, which is expected to generate at least RM28 million in additional annual income. This would partly offset the annual fees payable to the Securities Commission, estimated at RM35 million in FY2026, RM40 million in FY2027 and RM45 million in FY2028, said CGS International. 

Bursa’s share price rose to a high of RM8.65 on Monday (Jan 19), its highest level since July 2014. As at 12.01pm on Friday, the stock was 0.23% lower at RM8.58 a share, giving it a market capitalisation of RM6.94 billion.

According to Bloomberg, the stock currently has seven ‘buy’ calls, nine ‘hold’ calls and two ‘sell’ calls, with a consensus 12-month target price of RM8.58.