KUALA LUMPUR: There is anticipation of an increase of investor participation on the domestic market amid growing speculation that the government may soon call for a General Election.

       As the election looms, investors could be positioning themselves in stock exchange operator Bursa Malaysia Bhd to ride on the potential boost in average daily value (ADV).

       "The two-thirds majority win by BN in last week’s Johor elections has heightened grapevine talks of an early GE15.

       "Two out of the last three GEs saw a positive effect on ADV in both the election year (YoY increase) and election month (MoM increase); the exception was GE12 (2008) due to the global financial crisis," said Hong Leong Investment Bank (HLIB) research in a report.

       However, the research firm noted that there is currently a memorandum of understanding between the Federal Government and Pakatan Harapan opposition party not to dissolve Parliament before end-July 2022.

       This would make 2H22 the earliest that the national polls can be held, ahead of the July 2023 deadline.

       HLIB upgraded Bursa Malaysia to "buy" with a target price of RM7.27 after raising its FY22/23 earnings by 3.9% and 3% respectively after updating its model for the latest annual report release and introducing FY24 earnings.

       The research firm noted that it has not yet factored in any potential ADV upside from GE15 into its forecast.

       "Should this happen in 2H22, the ADV decline in FY22 should be less profound (we currently project RM2.48bn; -30% YoY)," it added.