Bursa Malaysia earnings in line with expectations, says AmInvestment

The 30% Club Malaysia, a business group campaigning for more female directors on company boards, said only 95 out of 928 listed companies has achieved 30% women board representation, while 372 companies has not had a single woman at all on their boards

KUALA LUMPUR: AmInvestment Research has reaffirmed its Hold call with an unchanged fair value of RM9.70 a share on Bursa Malaysia Bhd as its Q3FY17 earnings kept pace with its expectations.

The research firm said the bourse's lower net profit of RM51.6mil, which was 13.3% lower quarter-on-quarter, was in line with its earnings expectations of RM50mil and RM51mil.

However, 9MFY17 net profit of RM167.7mil, which was 17% higher year-on-year, was in line with AmInvestment Research's expectations.

Davily average trading value (DATV) for on market trades (OMT) in Q3 was lower at RM1.95bil compared to RM2.62bil in the previous quarter. 

For 9MFY17, DATV (OMT) for equities was RM2.31bil, which was 24.8% higher y-o-y.

AmInvestment Research said foreign fund flows were strong in the first half of 2017 with RM10.7bil in inflows. Q3, however, saw an outflow of RM560mil in foreign funds.

"Foreign fund outflows of RM242mil and RM737mil were recorded in August and September 2017 respectively. This trend continued to extend into October 2017 with a month-to-date outflow of RM336mil," it said.

The effective clearing fee rate (ECFR) in Q3 improved marginally to 2.35bps, although it went lower year-on-year for 9MFY17 as trading in equities was dominated by institutions during the period.

The 10 new listings in 9MFY17 compared to seven new listings in the same period in 2016 resulted in higher listing and depository fees. 

"Total funds raised from new listings and secondary market were up 125% y-o-y to RM18bil in 9MFY17," said AmInvestment Research.

Derivatives trading revenue dipped by 9.5% y-o-y for 9MFY17 owing to a drop in the number of contracts traded.

Trading revenue for BSAS slipped 6.9% y-oy due to volume-based pricing which provided discounts for larger size contracts of commodities traded, said AmInvestment Research.

"The volume discount incentives are expected to provide Bursa with the ability to compete with other service providers on pricing," it said.