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MARKET • 10/04/2026 12:37 PM

Kenanga IB Expects Bursa Malaysia's Near-Term Trading Momentum To Remain Supportive

KUALA LUMPUR, April 10 (Bernama) -- Kenanga Investment Bank Bhd (Kenanga IB) believes trading momentum in Bursa Malaysia Bhd could remain supportive in the near term before gradually shifting towards recovery-driven investment themes following the stronger first quarter of 2026 (1Q 2026) average daily value (ADV).

The investment bank revised its financial year of 2026 (FY2026) ADV assumption to RM3.15 billion or an increase of 11 per cent from RM2.85 billion.

“We expect ADV to moderate sequentially, with the second quarter of 2026 at RM3.20 billion, followed by the second half of 2026 (2H 2026) averaging RM3.05 billion, as trading activity normalises. This translates into a five per cent uplift to our FY2026 forecast earnings,” it said in a research note today. 

Kenanga IN said Bursa’s 1Q 2026 ADV beat its estimates by 11 per cent, driven by heightened market volatility arising from geopolitical conflicts and inflation concerns.

“The remainder of 2026’s trading strategies would hinge on beneficiaries and losers from the volatile oil prices. Inflation remains a key overarching concern, with performance hinging on companies’ ability to pass through rising costs amid fluctuating commodity prices,” it said. 

Kenanga IB also said potential beneficiaries include oil and gas counters, plantation stocks due to improving valuation prospects, and renewable energy plays as alternatives to oil.

“Meanwhile, sectors exposed to elevated transportation and logistics costs, particularly contractors, may face greater earnings pressure,” it said. 

For 2027, the investment bank also raised its ADV assumption slightly to RM3 billion from RM2.90 billion, although still below FY2026 levels, as geopolitical tensions ease and market volatility subsides.

“Risks to our call include lower-than-expected trading volume in the securities and derivatives markets; higher-than-expected operating expenses; and fewer initial public offerings,” it said. 

Kenanga IB upgraded Bursa Malaysia to an ‘outperform’ call, with a higher target price of RM9.25, as investors are likely to favour its defensive earnings profile amid broader sector uncertainties. 

-- BERNAMA

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