Bursa Malaysia recorded 4Q12 securities market ADT of RM1.42b. This brings 2012 ADT to RM1.59b, which is 5.5% lower YoY. Whilst this is unexciting, we look forward to a stronger 2013 ADT. We see the upcoming Malaysia General Elections to be a positive for the equities market ADT. We assume 2013 securities market ADT of RM1.99b. Hence, we remain positive on Bursa Malaysia and maintain our BUY recommendation. Our target price of RM6.81 is derived from 22x 2013 EPS, which is minus one standard deviation from the historical average of 31x. Including dividend yield of 4%, shareholders can expect a 12-month total gain of 10%.
Securities market ADT could be boosted by upcoming General Elections. The previous two General Elections Polling Day were in Mar 2004 and Mar 2008, and ADT in 1Q04 and 1Q08 were sharply stronger than that for CY2004 and CY2008 respectively. The ratio of 1QCY ADT over 12-month ADT were 1.49 for 2004 and 1.61 for 2008, which is higher than the 1.16x average from 2004 till 2012. This suggests that ADT picks up during the General Elections period before slowing off in the remaining months of the year. We therefore see scope for Bursa Malaysia securities ADT to gain over the next few months.
4Q12 derivatives business did well, and the outlook is positive. 9M12 derivatives market average daily contracts (ADC) was up 10% YoY to 38k contracts, with volatility driving the trading of crude palm oil futures. 4Q12 derivatives market ADC was 44k, up 5% QoQ and an improvement over 9M12’s level. We expect to see further strength in this space going forward, with CPO futures trading volume to benefit from likely strength in CPO prices.
We forecast 13% net profit growth for 2013, which could increase investors’ interest in the stock. Maintain BUY.
Securities market ADT could be boosted by upcoming General Elections. The previous two General Elections Polling Day were in Mar 2004 and Mar 2008, and ADT in 1Q04 and 1Q08 were sharply stronger than that for CY2004 and CY2008 respectively. The ratio of 1QCY ADT over 12-month ADT were 1.49 for 2004 and 1.61 for 2008, which is higher than the 1.16x average from 2004 till 2012. This suggests that ADT picks up during the General Elections period before slowing off in the remaining months of the year. We therefore see scope for Bursa Malaysia securities ADT to gain over the next few months.
4Q12 derivatives business did well, and the outlook is positive. 9M12 derivatives market average daily contracts (ADC) was up 10% YoY to 38k contracts, with volatility driving the trading of crude palm oil futures. 4Q12 derivatives market ADC was 44k, up 5% QoQ and an improvement over 9M12’s level. We expect to see further strength in this space going forward, with CPO futures trading volume to benefit from likely strength in CPO prices.
We forecast 13% net profit growth for 2013, which could increase investors’ interest in the stock. Maintain BUY.
Source: OSK
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