KUALA LUMPUR (July 31): Bursa Malaysia Bhd (KL:BURSA) may report softer second-half results due to general election-related uncertainty and ongoing geopolitical risks, according to CIMB Securities.

"The decline in average daily volume (ADV) to below RM3 billion in July 2026 suggests investor participation remains cautious despite positive structural catalysts. 

"We therefore expect equity ADV to moderate to about RM2.65 billion in 2H2026 from RM3.5 billion in 1H2026 amid general election-related uncertainty and ongoing geopolitical risks," the house said in a note on Friday, keeping its "hold" call on the stock, with a target price (TP) of RM8.65.

Nonetheless, CIMB Securities maintained its FY2026–FY2028 earnings forecasts, assuming equity ADVs of RM3.1 billion to RM3.3 billion and derivatives average daily contracts (ADCs) of 96,900–105,100. 

The research firm said, at 25 times FY2026–FY2027 price-to-earnings multiple (PE), Bursa appears fully valued relative to its 10-year average PE of 22.6 times, with a 3.6% FY2026 dividend yield.

"Key downside risks include prolonged risk aversion, weaker retail participation, and equity ADV falling below our FY2026 assumption of RM3.1 billion," it added.

Meanwhile, Bursa’s recently announced 1H2026 core net profit met expectations, coming in at RM144.6 million or at 51.7% of the house and 50% of consensus full-year estimates.

Further, the house reported that trading revenue, which accounts for 63% of total revenue, grew 20.7% year-on-year, underpinned by stronger equity market activity, with ADV in 1H rising 35.7% y-o-y to RM3.5 billion.

Moving forward, positive drivers which could prove beneficial for the stock exchange operator include the launch of the MY Value Up Programme by Bursa Malaysia and the Securities Commission Malaysia (SC) in early June.

Separately, another positive driver for Bursa could be the Malaysia-Hong Kong partnership, which is expected to provide strategic support for a longer-term re-rating of Malaysian equities.

However, the benefits of improved valuations, greater foreign participation, and deeper market liquidity are likely to materialise only gradually over time, CIMB Securities explained.

In another note, HLIB Research expects Bursa's 2H performance to remain strong, citing potential catalysts for positive ADV, namely an early 16th general election (GE16) and expansion of the KLCI’s constituents from 30 to 50.

Its "buy" rating on Bursa was retained with an unchanged TP of RM9.85.