Bursa’s FY24 outlook anticipated to be brighter
KUCHING: Bursa Malaysia Bhd’s (Bursa Malaysia) financial year 2023 (FY23) results have met market expectations with a reported core net profit (CNP) of RM215.9 million that translated to a 3 per cent year on year (y-o-y) contraction and an average daily value (AD) of RM2.05 billion.
In a results note, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) guided that the FY23 earnings had met 97 per cent of their fullyear forecast.
It added that the reported CNP comes after accounting for a RM31.4 million reversal from sales and services tax (SST) provisions for digital services from Jan 2020 to Mar 2022.
While both earnings and ADV had contracted slightly in FY23 compared to the previous year, the research arm noted that Bursa’s cost-to-income had increased by 0.4 percentage points (ppt) to 48.1 per cent despite a 9 per cent increase in personnel cost due to the one-off reversal of SST provision.
“This led FY23 net profit to report at RM247.3 million which is a 9 per cent increase y-oy and after adjusting for said reversal, FY23 CNP would come in at RM215.9 million, a 3 per cent contraction y-o-y,” said the research arm.
Looking ahead, Kenanga Research is expecting the bourse to see higher average daily values (ADV) in 2024 as interest from foreign investors continue returning with more moderate global interest rate expectations.
It reaffirm its 2024 ADV assumption of RM2.40 billion which translates to a 17 per cent y-o-y increase and introduces a 2025 ADV assumption of RM2.55 billion.
Sharing a similar outlook, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) added that Bursa is also transitioning into a multiasset exchange that includes carbon exchange and gold dinar trading with data and technology to deliver superior Customer Experience and increased value for their customers.
While this is expected to support Bursa’s growth, MIDF Research expect this impact to materialise in the medium to long-term instead as it expected the trading platform to continue being influenced by market vagaries in the near-term.