Affin Hwang maintains buy on Bursa Malaysia

KUALA LUMPUR: Affin Hwang Capital Research maintained its buy call and target price of RM8 on Bursa Malaysia Bhd as the stock exchange's 1Q net profit of RM63.8mil came in within its and consensus expectations.

As announced in a filing on Wednesday, securities market revenue was up 13% due to stable fee income and securities-market clearing fees. 

Market average daily value was up 15.4% to RM2.93bil while market velocity surged 35% versus 24% in qQ17 and 31% in 4Q17. 

Securities market operating margin for the quarter under review rose from 78.6% in 4Q17 to 81% year-on-year.

The research house also noted two factors that weighed down the derivatives market, including a 12.9% dip in overall volume year-on-year and a reduction in the guarantee fees.

"We remain upbeat on Bursa’s outlook, noting potential catalysts such as the BURSA-SGX Link (to be launched at end-2018), the recent capital-market initiatives announced (such as the stamp-duty waiver on the mid/small-cap counters, intraday short-selling, volume-based incentives, etc), a firmer Ringgit, a stronger pipeline of IPOs and the run-up to the coming general election."