KUALA LUMPUR: CGS-CIMB Research expects Bursa Malaysia Bhd to post a net profit growth of around 5.5 per cent for the financial year ending Dec 31, 2023 (FY2023), from a decline of 36.3 per cent in FY2022.

In a note today, it said the forecast was partly due to the absence of the one-off prosperity tax (Cukai Makmur) that was imposed in FY2022.

As for the topline, the research house has projected a decent growth of 3.6 per cent in equity income (on the back of a 4.8 per cent increase in equity average daily trading value) and a 5.7 per cent growth in derivative income for Bursa Malaysia in FY2023.

"We maintain our FY2023-24 earnings per share (EPS) forecasts and target price of RM6.60 for Bursa Malaysia, which is pegged to a five-year historical price to earnings (P/E) of 21.5 times. We reiterate 'Hold' on the stock as we believe it s expected FY2023 net profit growth would have been priced.

"The stock price should be supported by a decent dividend yield of 3.9 per cent for FY2023," it added.

Meanwhile, MIDF Research believes that growth targets set by Bursa Malaysia for FY2023 are achievable given that it is very conservative, especially on its pre-tax profit target, given that external factors might be in favour of trading activities this year.

However, operating expenditure growth is expected to be in the mid-single digit as it will be investing to support these targets, the research house said in a separate note.

"Financial targets (set by Bursa Malaysia) are a pre-tax profit of RM295 million to RM326 million, non-trading revenue growth of 5-7 per cent year-on-year, while non-financial targets are 39 initial public offerings (IPOs) with RM10 billion total IPO market capitalisation, launch of new products such as Bursa Gold Dinar, and environmental, social and governance target to reduce ≥5.0 per cent of scope 1 & 2 emissions," it said.

On the other hand, after two straight years of average daily value (ADV) contraction, Hong Leong Investment Bank (HLIB) is hopeful for a modest reprieve in FY2023 for Bursa Malaysia, noting that in the past decade, ADV had never declined for more than two consecutive years.

"Granted, January's ADV of RM2.0 billion is short of our FY2023 target, but we are still in the early days. While the rising probability of a US recession and its contagion could dampen investor sentiment, we reckon that China's reopening will offer some cushioning effect to this," it said.