Earnings are in line, and we assume stronger 2013 securities ADT. Bursa Msia reported 3Q12 net profit of RM37m, down 4% YoY. This is close to our estimate of RM38m.  9M12 net profit of RM116m represents 76% of our 2012
forecast.  Whilst  operating  revenue  of  RM97m  was  up  a  mild  0.6%  YoY,  this was more than offset by a 15% rise in other operating expenses. We maintain our  assumption  of  2012  and  2013  securities  market  ADT  of  RM1.7b  and RM2.0b  respectively  '  which  factors  in  more  trading  following  the  recent listings and the upcoming General Elections. Our earnings forecasts are also unchanged.  Our  target  price  of  RM6.81  is  derived  from  22x  2013F  EPS, which  is  minus-one  standard  deviation  from  the  31x  historical  average. Maintain BUY.

Derivatives  business  growth  offset  weakness  of  securities  market.  9M12  securities  ADT  of  RM1.72b  fell  10%  YoY.  The  positive  is  that  9M12 derivatives  market  average  daily  contracts  (ADC)  rose  10%  YoY  to  38k
contracts,  with  volatility  driving  the  trading  of  crude  palm  oil  futures.  3Q12 ADC was even stronger at 42k. We continue to  be optimistic on  Bursa  Msia' growth in the derivatives business.

Mega  listings  for  Bursa  Msia.  For  9M12,  Bursa  Msia  raised  RM18.3b  from IPOs,  which  exceeded  that  of  HKEx,  SGX  and  ASX.  The  two  big  listings  of Felda GV and IHH raised RM9.9b and RM6.3b, and were the third and fourth
largest  globally  respectively.  Astro  Msia  was  also  just  listed,  and  more  IPOs are in the pipeline. We believe these will contribute to stronger ADT ahead.

Source: OSK