(Photo by Zahid Izzani/The Edge)
KUALA LUMPUR (Jan 28): Investment analysts don’t see Bursa Malaysia Bhd (KL:BURSA) as being able to sustain its earnings growth momentum in 2025, having registered a 50% jump on average daily value (ADV) and a 23% rise in annual net profit the year before.
Analysts revised down their forecasts on the stock exchange’s earnings for the financial year ending Dec 31, 2025 (FY2025), amid expectations of slightly lower ADV.
At midday break on Tuesday, Bursa’s shares were down 16 sen or 1.9% to RM8.31, valuing the company at RM6.73 billion.
While earnings in FY2024 came within expectations, analysts were concerned that potential external headwinds such as the risk of renewed trade tariffs under a possible "Trump 2.0" may dampen market sentiment, which in turn affects Bursa’s bottom line.
Hong Leong Investment Bank (HLIB) reduced its earnings forecast for FY2025 by 5.6%.
The downward revision comes on the back of a more conservative assumption regarding the ADV for FY2025, which HLIB set at RM3 billion, reflecting a slight year-on-year decline of 4.6%.
This is in contrast to the surge in ADV to RM3.44 billion in FY2024, which reached post-pandemic highs, compared with RM2.29 billion.
The research house commented that further upside in ADV may be limited, citing potential external headwinds such as the risk of renewed trade tariffs under a possible "Trump 2.0" administration, as well as a slower pace of Federal Reserve rate cuts.
HLIB revised its forecast for Bursa’s FY2025 profit before tax (PBT) to be in the range of RM369 million to RM408 million, compared with RM410 million in FY2024.
HLIB maintained its “hold” rating on Bursa and cut its target price to RM8.83 from RM9.75 following earnings reduction.
TA Securities also tweaked its earnings forecast for Bursa lower for FY2025.
In its latest result review, TA Securities revised its net profit forecasts for FY2025 to RM323.6 million from RM337.8 million. For FY2026, this was trimmed to RM332.3 million from RM359.7 million.
TA Securities maintained a “buy” rating on Bursa, lowering its target price to RM10.30 from RM10.70. “Our target price is based on an implied FY25 price-earnings ratio (PER) of around 25 times and a 3% ESG premium,” said TA Securities .
“Looking ahead to FY2025, management remains cautious in their outlook and guidance, targeting a PBT range of RM369mn to RM408mn, with non-trading revenue (NTR) growth expected to soften to 5%-7% year on year.
“This conservative stance reflects potential headwinds in the derivatives market and anticipated higher overhead expenses due to ongoing ecosystem enhancements and efforts to improve customer experience,” TA Securities said.