KUALA LUMPUR: MIDF Research has maintained its Neutral rating and target price of RM5.90 on BURSA MALAYSIA BHD [] and said it expects the percentage of derivatives trading revenue to total operating revenue to trend higher to 13.9% in FY11 and 15.3% in FY12 (FY10: 11.4%).
However, the equity market is expected to be volatile due to external events before gaining momentum in 2HCY12, it said in a note Oct 20.
The research house said the rise in derivatives trading revenue would not be sufficient to offset a lower revenue from the equity market in FY12 as the latter will still account for significant percentage of Bursa’s total operating revenue.
MIDF Research said it had already rolled over its valuation period to FY12.
“With no changes to our forecast, we maintain our TP at RM5.90 based on FY12 EPS of 24.5 sen pegged to a PER of 24.0x (1 standard deviation below historical 5 years average mean) or PBVR of 3.6x.
“We retain our view that the stock is still pricey by regional peers standard, hence our Neutral rating,” it said.
However, the equity market is expected to be volatile due to external events before gaining momentum in 2HCY12, it said in a note Oct 20.
The research house said the rise in derivatives trading revenue would not be sufficient to offset a lower revenue from the equity market in FY12 as the latter will still account for significant percentage of Bursa’s total operating revenue.
MIDF Research said it had already rolled over its valuation period to FY12.
“With no changes to our forecast, we maintain our TP at RM5.90 based on FY12 EPS of 24.5 sen pegged to a PER of 24.0x (1 standard deviation below historical 5 years average mean) or PBVR of 3.6x.
“We retain our view that the stock is still pricey by regional peers standard, hence our Neutral rating,” it said.
