KUALA LUMPUR (Jan 9): BIMB Securities expects Bursa Malaysia Bhd (KL:BURSA) to report strong double-digit growth for its final quarter and FY2024 earnings, driven by a robust securities trading segment.

"The year-on-year (y-o-y) improvement in 4Q2024's (fourth quarter of 2024) earnings is likely driven by higher traded values amid robust economic conditions," said BIMB in a note on Thursday.

"However, the quarter-on-quarter (q-o-q) decline is expected due to weaker traded values, influenced by seasonality and global uncertainty following Trump’s policies," added the research house.  

Bursa's results are scheduled for release on Jan 27, 2025.

BIMB expects Bursa to see a y-o-y improvement in revenue by 7% and earnings by 12% for the final quarter, primarily driven by higher contributions from securities trading revenue, which it estimates at RM90 million for 4Q2024 (+28% y-o-y), supported by increased securities trading value amid rising foreign participations in 2024 as compared to 2023.

Notably, the average daily traded value rose by 6% y-o-y to RM2.8 billion in 4Q2024 from RM2.7 billion.

However, the research house anticipates a weaker performance on a q-o-q basis, forecasting revenue to decline by 21% and earnings by 22%, attributed to seasonal factors and market uncertainties, particularly those arising from new policies introduced by incoming US president Donald Trump.

Bursa’s initial public offering (IPO) activity also remained strong in the fourth quarter of 2024, with the exchange issuing 20 IPOs compared to 14 IPOs in the third quarter.

As a result, BIMB expects revenue from listing and issuer services to grow by 14% q-o-q, reaching RM21 million.

For FY2024, the research house expects BIMB to report a 22% rise to RM308 million from RM252 million a year ago.

The research house further anticipates Bursa’s earnings to grow by 12% y-o-y in 2025, reaching RM344 million. However, this projected growth reflects a more moderate pace due to the high base effect in 2024.

BIMB noted that the securities trading segment is expected to remain resilient in 2025, supported by global interest rate trends, including potential easing measures by the US Federal Reserve, which could result in increased capital inflows.

The research house cited various national initiatives such as the National Energy Transition Roadmap (NETR), the New Industrial Master Plan 2030 (NIMP 2030), and the Public-Private Partnership Master Plan 2030 (PIKAS 2030) as factors that could help further attract foreign and direct investments.

BIMB reiterates its “buy” call on Bursa with a target price of RM11.10.

According to Bloomberg, in December 2024, seven analysts had “buy” calls, while eight had “hold” ratings on the stock. As of January 2025, BIMB is the sole research house covering Bursa.

At the time of writing, Bursa shares were unchanged at RM8.75, valuing the company at RM7.1 billion.