KUALA LUMPUR, Nov 1 ― Bursa Malaysia Bhd's average daily value (ADV) is anticipated to come close to RM2.4 billion for 2023 and throughout 2024, following its first nine months of 2023 core net profit announcement, which came in line with expectations.
Kenanga Research in a note said it is leaving its forecasts relatively unchanged for Bursa Malaysia and maintained its 'Market Perform' call for the stock with a forecast target price (TP) of RM6.26, and that local and foreign investors may be more willing to resume market participation given that there was some clarity from the measures in the recent Budget 2024.
“We also expect flattish interest rates for the overnight policy rate and US Federal (Fed) Funds rates throughout 2024 which may dilute interest in money market products, hence resulting in a reversion back to equity and derivative securities,” it said.
Risks to Kenanga's call include higher/lower-than-expected trading volume in the securities and derivatives markets; lower/higher-than-expected operating expenditure; more/fewer-than-expected initial public offerings, and; higher/lower-than-expected dividend payout.
In a separate note, RHB Investment Bank has maintained its 'Buy' call on Bursa Malaysia, with a TP slightly raised to RM7.60 from RM7.50 previously.
It said that while securities trading activity could see a slowdown in the coming months on weakened sentiment of Asian and Malaysian equities, the investment bank sees potential for a rebound heading into 2024.
At the same time, it said Bursa Malaysia’s non-trading revenue streams are continuing to build positive momentum.
However, Hong Leong Investment Bank (HLIB) has made a 'Hold' call on Bursa Malaysia with a slightly higher TP of RM7.03 from RM6.91.
Overall, it opined that risk to reward profile of Bursa Malaysia is relatively balanced.
“Looking ahead, we are hopeful for further ADV reprieve in financial year (FY) 2024 as Malaysia’s political risk premium, which was largely plagued in the first half (1H) of 2023, has eased following the conclusion of the six state polls.
“Externally, peaking of the Fed’s rate upcycle and possibly a pivot in 2H 2024, could help revive risk appetite for emerging markets including Malaysia,” said HLIB.
Bursa Malaysia yesterday reported a net profit of RM60.41 million for the third quarter ended Sept 30, 2023, up 20.5 per cent from RM50.13 million a year earlier. For the nine-month period, its net profit rose to RM192.83 million from RM177.57 million in the previous year’s corresponding period.
As of 10.08 am, Bursa Malaysia's share price was six sen lower at RM6.73 with 33,700 shares traded. ― Bernama
