Company Coverage
Bursa Malaysia (BURSA MK): 2Q26: Muted Near-Term Outlook; Downgrade To HOLD
HOLD (Downgraded)
Current price:
Target price:
Upside:
RM8.70
RM8.20
-5.7%
Analyst
Highlights
- Bursa Malaysia reported 2Q26 net profit of RM72m (+26% yoy, -1% qoq). Earnings were in line.
- Domestic political uncertainty to take centre stage.
- Downgrade to HOLD with a lower target price of RM8.20 (based on 24.0x FY27F P/E), from RM9.63, reflecting our earnings downgrades and a lower valuation multiple. We reduce our target PE to 24.0x (historical mean) from 25.5x (+0.5SD) as we now expect the earnings and trading activity recovery to be back-end loaded into 2H27, warranting a more conservative valuation approach.
Analysis
- In line. Bursa Malaysia (Bursa) reported 2Q26 net profit of RM71.8m (+25.8% yoy, -1.4% qoq), bringing 1H26 earnings to RM144.6m (+15.2% yoy), which came in broadly in line with expectations at 49% of our full-year forecast. 1H26 revenue grew 19.6% yoy, driven by a 26.9% yoy increase in securities trading revenue, in line with stronger average daily value traded (ADV), alongside a 64% yoy surge in listing revenue supported by larger IPOs. However, earnings growth was relatively more muted at 15.3% yoy due to higher operating expenses, primarily arising from the new regulatory fees payable to the Securities Commission Malaysia, effective 1 Jan 26 (capped at RM35m p.a. for 2026).
- 2Q26 yoy earnings growth underpinned by strong securities market trading revenue. 2Q26 earnings rose 25.7% yoy, driven primarily by a 33% increase in securities trading revenue, underpinned by a 40% yoy surge in ADV. On a qoq basis, earnings dipped slightly (-1%) in tandem with the 2% qoq decline in ADV to RM3.26b.
Highlights
- Bursa Malaysia reported 2Q26 net profit of RM72m (+26% yoy, -1% qoq). Earnings were in line.
- Domestic political uncertainty to take centre stage.
- Downgrade to HOLD with a lower target price of RM8.20 (based on 24.0x FY27F P/E), from RM9.63, reflecting our earnings downgrades and a lower valuation multiple. We reduce our target PE to 24.0x (historical mean) from 25.5x (+0.5SD) as we now expect the earnings and trading activity recovery to be back-end loaded into 2H27, warranting a more conservative valuation approach.
Analysis
- In line. Bursa Malaysia (Bursa) reported 2Q26 net profit of RM71.8m (+25.8% yoy, -1.4% qoq), bringing 1H26 earnings to RM144.6m (+15.2% yoy), which came in broadly in line with expectations at 49% of our full-year forecast. 1H26 revenue grew 19.6% yoy, driven by a 26.9% yoy increase in securities trading revenue, in line with stronger average daily value traded (ADV), alongside a 64% yoy surge in listing revenue supported by larger IPOs. However, earnings growth was relatively more muted at 15.3% yoy due to higher operating expenses, primarily arising from the new regulatory fees payable to the Securities Commission Malaysia, effective 1 Jan 26 (capped at RM35m p.a. for 2026).
- 2Q26 yoy earnings growth underpinned by strong securities market trading revenue. 2Q26 earnings rose 25.7% yoy, driven primarily by a 33% increase in securities trading revenue, underpinned by a 40% yoy surge in ADV. On a qoq basis, earnings dipped slightly (-1%) in tandem with the 2% qoq decline in ADV to RM3.26b.
HOLD (Downgraded)
Current price:
Target price:
Upside:
RM8.70
RM8.20
-5.7%
Analyst
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