Lower trading activity to weigh on Bursa Malaysia's 1Q earnings
KUALA LUMPUR: Bursa Malaysia Bhd is expected to report lower earnings for the first quarter of 2025 (1Q25) due to a decline in securities trading activity, according to CIMB Securities.
The stock exchange regulator is scheduled to release its 1Q25 results on April 28.
Net profit for the quarter is projected to come in between RM55 million and RM62 million, down 17.2 per cent to 26.9 per cent from a year ago, and 9.8 per cent to 20.4 per cent lower compared to the previous quarter.
The earnings weakness is largely attributed to a 14.2 per cent drop in securities average daily value to RM2.7 billion, reflecting cautious investor sentiment amid global trade tensions.
CIMB Securities said the decline in revenue, estimated at RM166 million to RM175 million, would push the cost-to-income ratio higher to 53 per cent to 56 per cent from 46.5 per cent in 1Q24.
No dividend is expected for the quarter, as payouts are typically made semi-annually.
Despite a 20.8 per cent year-on-year rise in average daily contracts in the derivatives segment, the growth was not enough to offset lower trading volumes in the securities market.
The research house maintained its "Hold" rating on Bursa Malaysia with an unchanged target price of RM8.15, citing limited near-term catalysts.
CIMB also warned of potential downside risks to its full-year earnings forecast of RM291.2 million should the current trading volumes persist.
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