Stock on the Move: Bursa Malaysia

KUALA LUMPUR: Of all the upgrades of price targets and hot sectors that have propelled the FBM KLCI upwards, the one direct beneficiary of the surge of interest in equities in Malaysia has been Bursa Malaysia Bhd .

The stock of the local bourse is up 14 sen to RM9.69 a share at midday as the huge lift in buying interest is set to drive its earnings higher.

AllianceDBS Research in a note on Wednesday said based on trading data, it expects Bursa’s earnings to beat estimates given strong trend in equities in the first quarter of this year.

With Bursa Malaysia scheduled to release its earnings on April 26, AllianceDBS said during the first quarter, the average daily volume of equities traded increased to 2.71 billion shares (up 49.1% on-year/ 89.4% quarter-on-quarter).

“It is the highest sequential volume growth recorded since the first quarter of 2007. Average daily value traded for equities stood at RM2.37bil during the quarter, exceeding our full-year average assumption of RM1.85bil by 28%. Meanwhile, derivatives volume also grew strongly by 7.3% on-year and 12.3% quarter-on-quarter,” it said.

AllianceDBS notes that close to 50% of Bursa’s operating revenue consists of revenue from securities trading, the bulk of which comprises clearing fees. 

It said revenue from derivatives trading comprise less than 20% of Bursa’s operating revenue with CPO Futures making up 80% of the total derivative volume traded.