Kuala Lumpur: Bursa Malaysia Bhd’s net profit for the fourth quarter (4Q) ended December 31, 2024, is expected to be weaker than that in the third quarter of 2024. This forecast is attributed to a decrease in the daily average trading value (DATV) for the securities market.

According to BERNAMA News Agency, the 4Q 2024 DATV for equities dropped to RM2.6 billion, down from RM3.6 billion in the previous quarter. AmInvestment Bank Bhd anticipates that the 4Q earnings will reach RM64 million, marking a 25.4% decline quarter-on-quarter. This decrease is primarily driven by reduced trading revenue in the securities market.

The note from AmInvestment Bank also highlights a projected core 12-month net profit of RM306 million for 2024, reflecting a year-on-year increase of 37%. The bank forecasts that Bursa Malaysia’s operating revenue for the year will rise by 124.5% to RM738 million, bolstered by enhanced securities and derivatives trading revenue. Bursa Malaysia is set to announce its financial results for 4Q 2024 on January 27, 2025.

AmInvestment Bank noted that all headline financial key performance indicator targets for FY2024 are expected to be achieved. The bank remarked on the healthy domestic liquidity and the robust pipeline for initial public offerings in the securities market. However, it cautioned about ongoing challenges related to foreign fund inflows, influenced by elevated interest rates in the United States which support a strong US dollar. The bank also mentioned uncertainties regarding the impact of US trade and fiscal policies, maintaining a ‘hold’ call on Bursa Malaysia with a target price of RM9.10 per share.

In the derivatives market, AmInvestment Bank observed an 18.1% quarter-on-quarter increase in the quarterly daily average contracts (ADC) traded, reaching 107,000 contracts in 4Q 2024. This rise is attributed to higher ADC traded for crude palm oil futures, although it was partially offset by a decline in ADC for FTSE Bursa Malaysia KLCI futures.

The bank reported a foreign funds outflow of RM7.8 billion from the securities market in 4Q 2024, contrasting with an inflow of RM4.4 billion in 3Q 2024. For the entire year of 2024, the securities market experienced a foreign funds outflow totaling RM4.2 billion, an increase from RM2.3 billion in the previous year.