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
Recently Bursa share price is getting sexy and sexier, there are one more similar sexy counter incoming to IPO - mercury securities. Rare 1+1 brokers and universal brokers, leading NP Margin in the financial advisory and stock broking firm.
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....