PETALING JAYA: Bursa Malaysia Bhd stock received generally mixed views from several research houses after the stock exchange operator reported a 6% lower profit for its first quarter on revenue that grew 0.5%.
Maybank Investment Bank (MIB) rated the stock a “buy” while Kenanga Research had a “market perform” call and CIMB Research rated it a “neutral”.
A foreign fund manager said that a reason for the mixed views may be due to the divergent trends noticed in its first-quarter net profit and revenue figures, resulting in different interpretations of the stock’s fundamentals.
MIB said in its report that Bursa’s first-quarter operating revenue climbed 1% year-on-year with a 14% fall in equities trading revenue, which were offset by 64% higher trading revenue from derivatives and a 15% increase in stable revenue.
“We continue to expect higher volume for both equities and derivatives going forward on strong liquidity flows as risk appetite returns,” MIB said.
CIMB Research, meanwhile, said that expectations of a pick-up in trading value had largely been “priced in”, given the stock’s 11% rise over the past three months.
“The inflow of foreign funds did little to spur Bursa’s first-quarter net profit which accounted for 24% of our financial year 2013 forecast and 22.6% of consensus, which is in line with our expectations given anticipation of better trading value after the general election,” CIMB Research said.
Kenanga in its report noted that Bursa’s first-quarter results were slightly “below expectations” and that it saw the company possibly paying a 27.5 sen net dividend per share this year.
“With the date of the general election fixed, we believe that the uncertainties over the GE should gradually ebb.
“The strong liquidity in the financial system should continue to support the downside risk in our view. In addition, the performance of the local equity market is still lagging behind regional peers,” Kenanga noted.
Kenanga has fine-tuned its financial year 2013 earnings estimate for Bursa to RM158.8mil from RM175.6mil after adjusting for the latest quarterly results and financial year 2014 forward earnings estimate to RM161.4mil.
MIB has upgraded its price target to RM8 for Bursa, while CIMB has it at RM6.79. Kenanga upped Bursa’s price target to RM7.20.
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