Bursa Malaysia 2Q net profit within expectations, say analysts

KUALA LUMPUR: Bursa Malaysia Bhd’s higher net profit for the second quarter ended June 30, 2023 (2Q FY2023) was within expectations, according to analysts.

MIDF Research has maintained its "buy” recommendation on the stock with a revised target price (TP) of RM7.50, while Kenanga Research retained its "market perform” call with a TP of RM6.25.

MIDF Research opined the weakness in trading activities continued in 2Q FY2023 due to volatility in global markets caused by the US Federal Reserve’s (Fed) actions and geopolitical issues.

This may have led to or exacerbated the normalisation of retail trade.

However, the firm expects that the US rate hike pause by the Fed will improve sentiment and market valuation going forward.

"This will be a boost to global equities trading activities. In fact, we have seen better performance in July already based on the performance of Bursa Malaysia indices.

"Hence, we expect the situation to improve in 2H FY2023,” MIDF Research said in a note.

Meanwhile, Kenanga Research reckoned that securities' average daily value (ADV) may continue to be slow as participation did not pick up meaningfully despite a more stable domestic political landscape, better

economic performance and the reopening of China’s borders.

That said, the traction from recent initial public offerings (IPOs) could continue to fuel retailers’ interest, with Bursa Malaysia indicating a pipeline of 39 IPOs this year.

Meanwhile, it noted the group is working on new efforts to drive non-trading revenue such as the launch of the Bursa Gold Dinar and a new debt fund-raising platform with RAM.

Its inaugural carbon credit auction in March 2023 could also serve as a platform for sustainable revenue in the near term.

"For now, our FY2023 pre-tax profit falls within the group’s target of RM295 million to RM326 million,” it said.

As at 10.11 am, Bursa Malaysia shares were 12 sen higher at RM6.83 with 208,700 shares traded. - Bernama