KUALA LUMPUR, March 19 — AmBank Research has raised its earnings forecasts for Bursa Malaysia Bhd for the financial year (FY) 2021, 2022 and 2023 by 15 per cent, 15.8 per cent and 5.8 per cent to RM367 million, RM325 million and RM287 million respectively.

This is after factoring in higher daily average trading value (DATV) of RM4 billion, RM3.5 billion and RM3.0 billion from RM3.2 billion, RM2.8 billion and RM2.6 billion for the securities market previously.

In a note today, it said Bursa Malaysia is scheduled to release its first quarter 2021 (Q1) results on April 17.

The research house expects an earnings growth of 10.6 per cent quarter-on-quarter and 79.2 per cent year-on-year of RM116 million based on the higher DATV and average daily contracts (ADC) traded for derivatives.

From January to March 11, 2021, the DATV (of on-market transactions) for equities continued to be robust at RM5.0 billion versus RM4.8 billion and RM2.5 billion in the fourth quarter of 2020 (Q4) and Q1 2020, respectively.

From January to February 2021, the percentage of DATV contributed by foreign institutions remained stable at 16 per cent.

Trades from retail investors accounted for 36 per cent of the DATV, which was still higher compared to 38 per cent in FY20. 

AmBank Research said foreign fund outflows from the securities market are seen tapering, and although there were outflows of RM834 million and RM868 million in January and February 2021, March 2021 (up until March 10) saw reduced inflow in foreign funds cumulating to RM530 million into the securities market.

“In the Bursa Malaysia’s briefing on its Q4 2020 results, the management hinted that there were 30+ initial public offerings (IPOs) in the pipeline. Thus far, in 2021 up until Mar 16, 2021, there have been four new listings (Leap Market: 1; ACE Market: 3)” it said.

The listing of Flexidynamic Holdings Bhd on the ACE Market is expected on March 30 2021.

“Under the Pemerkasa stimulus package announced on March 17, 2021, a 12-month waiver of listing fees will be granted to companies seeking IPO on the the Main, ACE and LEAP Markets. This is expected to further attract more companies to list on the local market,” it added.

In terms of derivatives trading, the average total contracts traded remained high at around 80,000 contracts quarter-to-date versus 71,000 in Q4 2020 and 69,000 in Q3 2020.

AmBank Research said quarter-to-date, the ADC traded for crude palm oil futures (FCPO) was higher at 67,000 from 58,048 in Q4 2020, while the FTSE Bursa Malaysia KLCI futures (FKLI) increased to 12,940 contracts from 12,659 contracts in the preceding quarter.

In Q4 2020, Bursa Malaysia booked a conservative RM13.6 million in provisions for the potential tax charges on digital services after the recent change in the scope of the Sales and Services Tax.

“This was despite clarifications still being sought from tax authorities on the matter. We gather that in FY21, Bursa Malaysia will continue to set aside provisions for these taxes prudently until confirmation is received from the authorities.

“We understand that the exchange intends to review the listing and clearing fees for the securities market. However, changes to these fees (if any) are not expected to be implemented anytime soon,” it added.

As at 12.15 pm today, the counter rose three sen to RM9.27 with 329,900 units transacted.


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