LM, marginally lower than I thought, I was targetting EPS of around 7.5 cents. Dividend inline with expectations. The concern now is this current quarter, as daily transaction values have been WAY LOWER than the quarter just reported. I know it's only one month out of three but the values have been very low, to date.
Since yesterday's quarterly release the IB's have been coming out with their new predictions. The one I was hoping to see was from Jeremy Goh from HLB, as I totally disagreed with his bullish views earlier this year. Not to be disappointed, he released his new opinion :)
A complete turnaround from his earlier predictions of Rm7.95, now downgraded to Rn5.65! That's even lower than my previous Fibonacci target of 5.80.. :)
Although seemingly coincidental, it was his bullish targets and reporting earlier this year that took Bursa from 6.20 to 6.80 within a few days, the rise happening at the same time as his report. The whole play was very, very odd.
Don't completely discount that the ill conceived 50% stamp duty increase may be shelved once the impact is clear. The Minister of Finance made his view known that he thinks the increase was undesirable. Sure there is no certainty, however should the Minister have his way it will be abolished or substantially reduced (maybe in the next budget) and if it is then the positive impact on Bersa share price will be dramatic and immediate as the impact was very negative and immediate when the tax was imposed. I agree the value add put on Bersa shares due to the possibility of the change of heart is hard to put a number on, but to my mind its not zero.
To me, the share price still seems to be defying gravity. Whether that will change once it goes ex dividend on Thursday (11th) is yet to be seen. I still think the logical scenario is for the price to drop, and I retain the targets of 6.35 and 6.20 as important price points.
I keep going back to the data and the low daily transaction values and scratch my head as to why this hasn't dropped, even before the upcoming ex dividend date.
Hi unicornbird.......I would doubt that by adding new products to their list would make that much of a difference to the bottom line. What needs to change is the pool of money that is being invested in all the Bursa products, with obviously the Main market volumes and values requiring a major cash input. This is something we are currently not seeing, in fact the opposite is occurring.
Last quarter's volume and value was poor and although only 6 weeks into the new quarter, the numbers are currently drastically lower than the previous quarter.
I don't see anything changing to the upside until the pool of local and foreign money increases drastically. Certainly no sign of that yet, which points to yet again a lower net profit and EPS for this current quarter.
TT you're right. for now, I also feel the price is too high. I rather buy banks with better yield. for the new products, please don't underestimate the power. 1 deal of oil is enough to change the game, as China trades insane amount of oil in this region.
"Bursa’s average daily trading volume (ADV) appears to be trailing at RM1.62 billion in the third quarter of 2022 (3Q22), compared to RM2.1 billion in 2Q22, and RM2.89 billion in 3Q21, said Kenanga Research. “This comes close to our expected ADV for the period at RM1.55 billion,” it said in a note on Wednesday (Oct 5)."
That's a 20% drop from the previous quarter, so it'll be interesting to see what the EPS is for the quarter to be reported late this month.
Going below Rm6 in becoming more of a reality, imo.
OPEC: 2 millions barrel production cut. US: Very angry. Don't laugh. I will use my NOPEC to sanction all of you. All OPEC members cannot use US Dollar for trading crude oil. A SWIFT ban against OPEC members who trading crude oil between each other. Almighty dollar.
Despite being in a small pond, Bursa is a monopoly which needs little capex and returns >90% of its earnings to shareholders. Its valuation is never cheap.
Historically Bursa's average forward PE is around 25 times. Current forward PE at "only" 22X has offered support.
The share price may tumble if analysts cut earnings, or it suffers a derating, for eaxmple due to 1. a general stock market crash 2. Malaysian economic recession 3. Government imposes capital gain tax for stock trading
The equity market, which turned bearish in 3Q22, will likely remain subdued in 4Q22 and 2023, as we anticipate more market turmoil and fund redemptions for both bond and equity markets. Our equity and derivatives market assumptions for 2022E/23E/24E as follows: i) equity market ADV at RM2.0bn; and ii) derivatives volume at 17.5m/12.4m/12.4m p.a.
Reieterate SELL, as we maintain our Price Target from RM6.74 to RM5.20, based on a P/E target of 22x (at 10-year mean) on revised 2023E EPS of 23.6 sen
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....