Report Summary

• Asian exchanges (HKEX, SGX, Bursa) are experiencing diverging valuations amidst strong liquidity trends, with HKEX’s P/E premium to peers notably below its 10-year average, presenting an attractive entry point.
• HKEX is expected to benefit from sustained Southbound inflows via Stock Connect and a strong pipeline of jumbo IPOs, with a robust earnings growth outlook and potential re-rating catalysts like global monetary easing and a strong IPO pipeline.
• SGX is enjoying structural tailwinds from increased liquidity via the MAS’s Equity Market Development Programme and the continued rollout of derivatives, supporting sustainable revenue growth.
• Bursa Malaysia is forecast to see a rebound in equity market activity in 2026 as tariff risks subside and economic reforms take hold, with expectations for higher profit growth and ROE expansion.
• The sector is rated Overweight, with an Add rating on all three exchanges. Key risks include global economic slowdown, regulatory changes, and lower trading volumes.
• ESG scores are highlighted, with SGX leading on governance, Bursa as an ESG enabler in Malaysia, and HKEX expected to improve its ESG rating after past controversy.
• Financial forecasts show above-peer EPS growth for HKEX, moderate growth for SGX and Bursa, and stable to improving dividend yields across all three exchanges.