KUALA LUMPUR: CIMB Securities said that Bursa Malaysia Bhd may likely increase its dividend payout in the second half of 2024 (2H24) if it does not identify suitable acquisitions during the period.
The research firm projects a dividend per share (DPS) of 37.2 sen in financial year 2024 (FY24), representing a 6.7 per cent increase in 2H24 dividend to 19.2 sen.
As of June 30, 2024, Bursa Malaysia's cash balance stood at RM2.8 billion. The exchange has indicated that it is exploring potential new investments in its data business segment to expand its non-trading revenue.
Bursa Malaysia's second quarter (Q2) net profit of RM80.4 million came in line with the research firm's forecast of RM81 million.
For 1H24, Bursa Malaysia achieved a net profit of RM155.5 million, supported by higher securities trading revenue on the back of a 66.8 per cent increase in average daily trading value (ADTV) to RM3.3 billion.
"Overall, 1H24 results met both our and consensus expectations, achieving 54.8 per cent and 53 per cent of FY24 forecasts, respectively. A DPS of 18 sen was declared, up from 15 sen in Q2 2023, translating to a dividend payout ratio of 95 per cent," it said.
The research firm maintained its earnings forecasts for FY24, FY25, and FY26 with an ADTV target of approximately RM3.2 billion, RM3.4 billion, and RM3.5 billion, respectively.
It projected a cost-to-income (CTI) ratio of 49 per cent, and trading velocity at 38 per cent. 2H24 earnings, however, are expected to decline by 17.5 per cent to RM128.3 million, primarily due to a 2.1 per cent decrease in ADTV to RM3.2 billion.
"Our conservative view on 2H24 earnings is influenced by concerns over US election outcomes and geopolitical risks, which may dampen ADTV. We are also expecting higher operating expenses in 2H24."
CIMB Securities maintained a "hold" on the company with an unchanged target price of RM9.12.