CIMB Expects Lower 1Q Net Profit For Bursa Malaysia

KUALA LUMPUR, April 24 (Bernama) -- Bursa Malaysia Bhd, which is scheduled to release its first quarter of 2025 (1Q 2025) financial results on April 28, is expected to record a decline in its net profit by 9.8 per cent to 20.4 per cent quarter-on-quarter (q-o-q) and 17.2 per cent to 26.9 per cent year-on-year (y-o-y) to RM55 million-RM62 million.

CIMB Investment Bank Bhd, in its research note, said the anticipated drop mainly stems from an estimated 5.6 per cent to 10.9 per cent q-o-q and 6.3 per cent to 11.5 per cent y-o-y decrease in total revenue to RM166 million to RM175 million.

This would be driven by a 5.3 per cent q-o-q and 14.2 per cent y-o-y reduction in securities average daily value (ADV), respectively, the investment bank added.

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“We estimate this would result in a higher cost-to-income ratio of 53 per cent to 56 per cent (1Q 2024: 46.5 per cent, 4Q 2024: 53.8 per cent).

“No dividend is expected for the quarter, as Bursa Malaysia typically declares dividends semi-annually in the 1Q and 4Q,” CIMB Investment Bank said.

It added that the securities ADV declined to RM2.7 billion in 1Q 2025, down from RM3.2 billion in 1Q 2024 and RM2.9 billion in 4Q 2024, reflecting cautious market sentiment following the Trump administration’s recent reciprocal tariff announcements, which have heightened policy uncertainty and raised concerns over a potential recession.

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With an estimated net profit of RM55 million to RM62 million for 1Q 2025, the bank said the results were expected to come in at the lower end of both its and consensus full-year forecasts, representing 19 per cent to 21 per cent of its RM291.2 million forecast and the consensus RM296.3 million projection.

“Additionally, we observe that ADV in the month of April (up to April 22) fell 32.9 per cent y-o-y to RM2.0 billion, down from RM2.9 billion in the same period last year, bringing year-to-date ADV to RM2.7 billion, marking a 14.3 per cent y-o-y decline from RM3.1 billion.

Consequently, the investment bank cautioned that its earnings projections for Bursa Malaysia might face downside risk.

“Should the current ADV level of RM2.7 billion persist through financial year 2025 (FY2025), we estimate downward revisions to our forecast for FY2025, FY2026, and FY2027 earnings forecasts by 5.5 per cent, 5.6 per cent, and 5.7 per cent to RM275.1 million, RM276.6 million, and RM278.9 million, respectively,” it added.

-- BERNAMA