The group’s net profit of RM56.2 million, which was down 17% year-on-year (y-o-y) and up 15% quarter-on-quarter (q-o-q), met expectations at 24% of consensus forecasts for full-year net profit.
As a result, most research houses have maintained their previous calls and not made any adjustments to the target price.
“Q1 FY2023 saw sequential growth in securities average daily value (SADV) to RM2.28 billion (+9% q-o-q, -15% y-o-y) on greater participation from local institutions and retailers,” said RHB Investment Bank Bhd in a note today.
“The derivatives market, however, was brought down by weaker crude palm oil price volatility,” the note said.
RHB noted that Bursa was taking active measures to improve market liquidity, involving marketing efforts to increase foreign participation as well as improving accessibility to smaller listed companies.
The group is aiming to launch its voluntary carbon exchange platform in the second half (H2) of FY2023, though RHB expects contribution to be minimal in the first few years.
Revenue recognised from carbon credit trading in this quarter was only RM26,000, coming from recently completed auctions.
On another note, AmInvestment Bank Bhd analyst Kelvin Ong noted that the quarter saw large fund outflows.
“The first quarter (Q1 FY2023) saw foreign fund outflows from the securities market of RM1.9 billion cumulatively versus RM6.5 billion inflows in Q1 FY2022,” he said.
An outflow of RM1.3 billion of funds from the securities market was recorded in March, likely due to the banking sector stress.
The outflow was higher than the foreign fund outflows of RM348 million recorded in January 2023 and RM168 million in February 2023.
Foreign ownership of the securities market also declined slightly to 20.2% as at end-March 2023 compared to 20.6% in December 2022.
“Nevertheless, we anticipate the daily average trading value to improve in H2 2023 on the back of a likely pause in US rate hikes ahead after the recent 25 bps (basis points) increase in US Fed Funds rate to a range of 5%-5.25% in May 2023,” said Ong.
“As the stock is trading at a fair 21 times FY2023 price-earnings ratio versus its 5-year historical average of 22 times, we continue to see limited upside potential,” he said.
At 2.46pm, Bursa Malaysia’s share price fell 0.48% or 3 sen to RM6.27, giving it a market capitalisation of RM5.08 billion.