In FY21, Bursa’s DATV for the securities market for the full year came in at RM3.5 billion, slightly lower than AmInvestment Bank’s estimate of RM3.7 billion. — Bernama photo
KUCHING: With Bursa Malaysia scheduled to release its results for fourth quarter of 2021 (4Q21) on Friday, the team at AmInvestment Bank Bhd (AmInvestment Bank) expect weaker earnings due to lower daily average trading volume (DATV) for securities market.
The research firm saw that in 4Q21, DATV (of on-market transactions) for equities declined to RM2.5 billion versus 3Q21 and 2Q21’s RM2.9 billion and RM3.8 billion respectively.
“On a monthly basis, October, November and December each saw lower DATV of RM2.9 billion, RM2.8 billion and RM1.9 billion respectively,” it detailled.
“In FY21, DATV for the securities market for the full year came in at RM3.5 billion, slightly lower than our estimate of RM3.7 billion. This was contributed by weaker trading activities in 4Q21.
“FY21 saw a 15.8 per cent y-o-y drop in DATV from RM4.2 billion in FY20. In 4Q21, trades by institutions accounted for 41.7 per cent of the total value of securities traded versus 33.5 per cent in 3Q21.
“This was contributed by a higher percentage in the value of securities traded by foreign institutions.”
Meanwhile, AmInvestment Bank saw that trades from retail investors and IVTs were lower at 30.8 and 13.1 per cent respectively in 4Q21 compared to 35.1 and 15.1 per cent respectively in 3Q21. For nominees, the percentage of the value of securities traded was also lower at 14.5 per cent in 4Q21.
Foreign fund inflow into the securities market was higher at RM600 million cumulatively in 4Q21 versus RM452 million in 3Q21.
“Octover and November saw inflows in foreign funds of RM1.57 billion and RM167 million respectively into the securities market. However, these were partially offset by foreign fund outflows of RM1.1 billion in December,” AmInvestment Bank added.
On the securities market, there were 29 listings in FY21 compared to 19 in FY20.
In December, the exchange and Securities Commission (SC) announced the lifting of the temporary suspension on intraday and proprietary day traders (PDT) short selling effective January 1, 2022.
“This was not surprising given that the authorities in January 2021 had announced the expiry of the temporary suspension on regulated short selling (RSS),” it said.
“The lifting of the temporary suspensions of RSS, intraday and PDT short selling is expected to result in lower DATV of retail investors moving forward compared to FY20 and FY21.
“The downside risk protection of equities is seen as removed with the lifting of the temporary suspensions. We are already seeing the tapering of trades by IVTs (investment account traders) and retail investors.”
Recently, the authorities announced that the stamp duty on securities transactions will be capped at RM1,000 with the rate of 0.15 per cent.
Although this was still higher than the previous rate of 0.10 per cent, AmInvestment Bank affirmed that the reinstatement of the capping was a relief for the securities market.
“It is seen as less dampening on the trading of shares by retail and institutional investors compared to a full removal of the cap announced earlier in Budget 2022,” it said.
“We continue to expect lower DATV assumptions for the securities market in FY22/FY23 compared to previous two financial years, underpinned by the gradual tapering of asset purchases by developed markets which is seen accelerating due to inflation pressures.
“This will reduce excess liquidity in the market.”