KUALA LUMPUR 9 July - Financial year 2020 is expected to be a record year in terms of equity trades and earnings delivery for Bursa Malaysia Berhad (Bursa Malaysia).
Maybank Investment Bank Research (Maybank IB) noted, based on the strong second quarter and on expectation that equity trades to taper in the second half, Bursa Malaysia is expected to still post its strongest earnings ever in financial year 2020.
“Equity average daily volume (ADV) surged in May to June, bringing second quarter this year to RM3.85 billion earnings (+74% YoY, +49% QoQ) and first half 2020 to RM3.19 billion earnings (+74% YoY),” said Maybank IB.
These are however substantially priced in - encouraged to hold with a RM7.55 take profit.
Meantime, Bursa Malaysia is sustaining momentum while retail participation in equity trades surged in the second quarter (36.3%) which lifted first half 2020 retail participation to 32.4%.
Read : Bursa Malaysia opens higher as Wall Street overnight cues positive
Initiatives since early 2020 could have helped new features in its Bursa Anywhere App to assist in Central Depository System (CDS) account management and opening; and temporary suspension of short-selling until 30 June 2020 (this has since been extended to 31 December 2020).
Year to date, Bursa Malaysia has also inked two collaborations with regional peers, Shenzhen Stock Exchange and Taiwan Futures Exchange that should be positive for trading volume in the future.
Few swing factors contributing to Bursa Malaysia’s performance which are stronger equity and derivative trading activities; increased volatility in commodity prices and FBM KLCI further driving derivative market activities; and another special dividend payout.
Despite that, Bursa Malaysia is facing smaller equity ADV due to drying up of liquidity; derivative market activities falling short and retracement of foreign funds’ positioning in Malaysia.
Notably, Bursa Malaysia is an exchange holding company, which engages in treasury management and provision of management and administrative services. - DagangNews.com
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