Bursa Malaysia Q2 earnings likely to fall on weak trading, says Affin Hwang
Affin Hwang Investment Bank Bhd expects Bursa Malaysia's 2Q25 net profit to come in at RM64 million, down 6.4 per cent quarter-on-quarter and 20.3 per cent year-on-year.
Affin Hwang said the weaker performance would be attributed to lower trading activity across the board, particularly among local institutional investors.
"Due to a more cautious market sentiment, Bursa Malaysia saw another subdued quarter, with 2Q25 average daily value (ADV) declining to RM2.4 billion.
"This further dampens the overall the first half of 2025 equity ADV, which came in lower by 23.5 per cent year-on-year at RM2.6 billion," the firm added.
"Until there is more clarity regarding ongoing global trade negotiations, we believe investors are likely to maintain a wait-and-see approach, keeping market sentiment muted in the near term," Affin Hwang said.
Affin Hwang also revised its earnings forecast for Bursa Malaysia downwards, citing the lack of a strong catalyst in the second half of the year.
It also lowered its equity ADV assumptions for 2025, 2026 and 2027 to RM2.6 billion, RM2.8 billion, and RM2.9 billion respectively, from RM2.8 billion, RM2.9 billion and RM3.0 billion previously.
This has resulted in earnings forecast cuts of 5 per cent for 2025, and 3 per cent each for 2026 and 2027.
Bursa Malaysia is expected to release its latest results on July 29.
Affin Hwang maintained its "Hold" call on Bursa Malaysia but reduced its target price to RM7.50 from RM7.70 previously.
The firm said the revised valuation is based on a price-to-earnings ratio (PER) of 22 times, which is in line with Bursa Malaysia's 10-year average.
"At a calendar year 2026 price to earnings ratio of 23 times, Bursa Malaysia is trading slightly below the regional peers at about 26 times, which we view as fair given Malaysia's relatively smaller market capitalisation and lower trading velocity," it added.
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