PETALING JAYA: Strong growth in trading activity on Bursa Malaysia has exceeded expectations, with average daily value (ADV) in the first quarter of financial year 2026 (1Q26) coming in well above forecasts, according to Kenanga Research.

The research house said 1Q26 ADV rose to RM3.34bil, beating its estimate of RM3bil by 11%, supported by heightened market volatility amid geopolitical tensions and rising inflation concerns.

The stronger-than-expected ADV was driven by a confluence of factors: including foreign inflows, elevated crude oil prices and broader risk-off sentiment.

On a quarterly basis, ADV climbed 25%, while year-on-year (y-o-y) it surged 27%, reflecting increased trading participation as investors repositioned portfolios in response to external shocks.

Kenanga Research noted foreign funds rotated into Malaysian equities, partly due to outflows from Indonesian markets, which further boosted liquidity.

The research house added disruptions linked to tensions involving Iran, particularly around the Strait of Hormuz, had contributed to spikes in oil prices, fuelling inflationary pressures and market uncertainty. This, in turn, lifted trading activity as investors sought to capitalise on volatility.