KUALA LUMPUR: CIMB Securities Sdn Bhd has revised its earnings forecasts for Bursa Malaysia Bhd for the 2024, 2025 and 2026 financial years (FY24, FY25, and FY26), raising them by 7.8 per cent, 4.0 per cent and 3.2 per cent respectively.

This is after adjusting its average daily volume (ADV) projection to RM3.3 billion from RM3.2 billion. 

CIMB Securities said the adjustment reflects the nine months of 2024 (9M24) record ADV of RM3.6 billion, while its ADV projections for FY25 and FY26 remain at RM3.4 billion and RM3.5 billion respectively.  

"Additionally, we revised up FY24–FY26 non-trading revenue growth to 11 per cent (from 5.0 per cent) and reduced FY24–FY26 operating expenses by 3.0 per cent.

"Following these adjustments, Bursa Malaysia's cost-to-income ratio is expected to be 47 per cent to 48 per cent (previously 49 per cent) compared with 46 per cent in 9M24," said CIMB Securities.

With an anticipated lower ADV of RM2.5 billion in the fourth quarter of 2024 (4Q24), the firm said it projects that Bursa will post a reduced net profit of RM65 million, reflecting a 24.1 per cent quarter-on-quarter (QoQ) decline.

The firm kept Bursa's pre-tax profit target of RM361 million to RM379 million, which implies a lower profit for 4Q24 ranging from RM36.4 million to RM54.4 million.

"This represents QoQ declines of 57.5 per cent at the low end (RM36.4 million) and 36.5 per cent at the high end (RM54.4 million)," it added.

According to the stock exchange, there is no plan to appeal the 2.0 per cent dividend tax announced by the government as the impact on individual retail investors is not significant.

"Although the impact may be minimal, we believe that the tax may dampen investor sentiment as it could discourage high-net-worth investors from investing in high dividend-yielding stocks, potentially reducing trading volumes and ADV," it said.  

CIMB Securities maintained a "Hold" call on Bursa with a higher target price of RM9.53 from RM9.12 previously.

"Anticipating a lower ADV of RM2.5 billion in 4Q24, we expect Bursa Malaysia to record a lower net profit of RM65 million (24.1 per cent QoQ)," it added.

https://www.nst.com.my/business/corporate/2024/11/1128202/bursa-malaysia-gets-earnings-upgrade-cimb-securities