Bursa Malaysia's Q2 net profit seen at lower end of FY25 forecasts, says CIMB
In its latest note, CIMB Securities estimates that the exchange operator's quarterly net profit will likely account for between 44.7 per cent and 47.3 per cent of its own full-year forecast of RM265.2 million, and about 43 per cent to 45.5 per cent of the market's consensus estimate of RM275.7 million.
Based on the firm's estimates, Bursa Malaysia is likely to report a 2Q25 net profit of RM51–58 million, reflecting a quarter-on-quarter (QoQ) decline of 14.0–24.4 per cent and a year-on-year (YoY) drop of 27.8–36.6 per cent.
This would bring the cumulative first half of 2025 (1H25) net profit to RM118.5–125.6 million, marking a YoY decline of 19.2–23.8 per cent.
"Although the results may appear to fall short of our and consensus estimates, they are broadly in line with our expectations, as we had already anticipated a weaker 2Q25 net profit due to lower trading activity driven by cautious market sentiment following the US tariff announcements.
"We continue to expect a better 2H25, supported by a recovery in average daily trading value (ADV) as market uncertainty eases with greater policy clarity on US tariffs.
"Our 2Q25 forecast assumes a higher cost-to-income ratio of 54–57 per cent, exceeding Bursa Malaysia's 50 per cent target, due to lower revenue and higher IT and maintenance costs," it noted.
Meanwhile, CIMB Securities said Bursa Malaysia's operating revenue is projected to decline to between RM153.4 million and RM162.9 million in 2Q25, marking a QoQ drop of 8.3–13.7 per cent and a YoY contraction of 16.0–20.8 per cent.
The decline is mainly attributed to lower trading revenue contributions from the securities and derivatives segments.
"We expect securities ADV to moderate to RM2.4 billion in 2Q25, down significantly from RM3.9 billion in 2Q24 and RM2.8 billion in 1Q25.
"The drop in trading activity largely reflects heightened risk aversion among investors amid market uncertainty.
"Investor caution was further amplified following the Trump administration's announcement of reciprocal tariff measures on April 2, intensifying concerns over escalating trade tensions and their potential impact on global economic growth," it added.
In the derivatives segment, CIMB Securities said average daily contracts (ADCs) in 2Q25 are projected to decline by 11.3 per cent QoQ but rise 5.9 per cent YoY to 90,669 contracts, compared with 102,184 contracts in 1Q25 and 85,644 contracts in 2Q24.
The QoQ decline is primarily driven by reduced trading activity in Crude Palm Oil Futures (down 10.1 per cent QoQ) and FTSE Bursa Malaysia KLCI Futures (down 12.7 per cent QoQ).
CIMB Securities also noted that the overall slowdown in trading reflects a more cautious stance among traders amid elevated market volatility.
It added that sharp swings in commodity and equity markets, along with uncertainty stemming from US trade tariffs, have dampened speculative interest and curbed hedging activity.
Overall, CIMB Securities has maintained a "Hold" rating on Bursa Malaysia, with an unchanged target price of RM7.40.
The firm also projects a 14.5 per cent YoY decline in earnings per share (EPS) for FY25, followed by YoY growth of 0.5 per cent in FY26 and 0.8 per cent in FY27.
It said these projections are based on ADV targets of RM2.7 billion for FY25, RM2.8 billion for FY26, and RM2.9 billion for FY27.
CIMB Securities also noted that at the current share price, Bursa Malaysia is trading at an FY25 price-to-earnings (P/E.) ratio of 24.0 times, which is one standard deviation above its 10-year average of 18.1 times.
"We expect the share price to be supported by a dividend yield of 4.0 per cent," it said.
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