Friday, 20 April 2012

Bursa down 1%, CIMB cuts TP on flat profit growt

KUALA LUMPUR (April 20) : BURSA MALAYSIA BHD [] shares fell as much as 1% after analysts slashed their target prices for the exchange operator after it reported flat profit growth in the first quarter.

Bursa declined seven sen to RM6.90 before settling higher at RM6.93 at lunch break.

CIMB Investment Bank Bhd analyst Winson Ng wrote in a note that the research firm has slashed its fair value for Bursa by 5% from RM7.65 to RM7.28. “Given our cautious stance on the equity market, we now value Bursa at a 20% discount to its five-year average price-to-earnings ratio (PER) instead of 15%, which reduces our target PER from 25.5 times to 24 times.

“We remain neutral on the stock as it is expected to perform in line with the market,” Ng said.

Bursa said net profit rose 0.7% to RM40.77 million in the quarter ended March 31, 2012 from RM40.49 million a year earlier while revenue fell 4.8% to RM110.52 million from RM116.11 million. Revenue declined due to less trading income from the securities and derivatives market, it said.

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