KUALA LUMPUR (Jan 20): Bursa Malaysia Bhd (KL:BURSA) will likely report a 37%-39% net profit growth for 2024, even as earnings may decline in the final three months on a quarter-on-quarter basis, CIMB Securities said.

Strong derivatives volume helps to offset subdued trading of securities in the fourth quarter, and the exchange operator’s net profit for the full year of 2024 will come in at RM302 million to RM307 million, according to CIMB Securities’ forecasts. Bursa Malaysia is set to release its results on Jan 27.

The lower average daily value in the securities segment in the fourth quarter reflected concerns over US elections outcome and rising geopolitical tensions in the Middle East, CIMB Securities said. That results in cost-to-income ratio climbing to 54%, from 45% in the preceding quarter, it noted.

CIMB Securities is maintaining its “hold” call on the stock, noting that Bursa Malaysia is trading at 22 times its forward earnings, above its historical average, and higher than its peers’ average at the current price.

Shares of Bursa Malaysia have slipped about 6% since the start of 2025, after racking up a 35% gain by the end of 2024, as trading activities surged and the number of initial public offerings rose to nearly two-decade high.

Analysts, however, are divided about whether investors should continue to buy into the stock, with eight “buy”, nine “hold” calls, and no “sell” calls. The average target price is RM9.97, according to Bloomberg, implying a potential return of nearly 19% in the next 12 months from its last price.

Bursa Malaysia could also declare a final dividend of 22.1 sen per share, bringing the total for 2024 to 40.1 sen, and equivalent to a payout ratio of 106%, CIMB Securities said, noting cash balance of RM436.3 million at end of September 2024, and the absence of significant investments in the fourth quarter.

For 2025, the house is projecting an average daily trading value of RM3.4 billion, while cost-to-income ratio will be around 48%. The projections are underpinned by Malaysia’s ongoing policy reforms and a healthy corporate earnings growth of 8%, CIMB Securities added.