KUALA LUMPUR: The trading activity on Bursa Malaysia could remain relatively robust on continued volatility despite expectations of tapering in FY21.

Following the stock exchange's best-ever performance in FY20, Kenanga Research said domestic retailers' participation is expected to remain robust and boosted by the wide availability of efficient online trading volumes amid continued volatility from the pandemic and prolonged lockdown.

In January 2021, the average daily trading value (ADV)on Bursa Malaysia started strongly at RM5bil but moderated at 1% on a month-on-month basis as compared to 20% in January 2020.

ADV online trades grew 156% to RM2bil in 2020 with online trades accounting for 47% in total

trade value compared to 37% in the 2019.

"Given the risk of a new wave of pandemic coupled with challenging vaccine distribution, trading interests in healthcare, technology and industrial products, and services are likely to be sustained in 1H2021," said Kenanga.

The research hous, which has a "market perform" rating on the stock, raised its FY21 forecast earnings by 33% as it increased FY21 ADV to RM4.4bil from RM3bil previously with FY22 SDV coming in at RM3.6bil.

It maintained its targeted payout ratio of about 92% with FY21 DPS expected to be 40 sen.

However, it does not rule out a consecutive special dividend payment guided by previous years' payout when Bursa Malaysia performed exceptionally well.

Kenanga raised its target price to RM9.65 from RM9 previously as it applied its five-year mean of price-earnings ratio of 22.1x to FY21 forecast earning per share of 43.6 sen.