Kuala Lumpur: Bursa Malaysia Bhd is expected to report a decline in its net profit for the first quarter of 2025 (1Q 2025), with the financial results set to be released on April 28. The anticipated drop ranges between 9.8 per cent to 20.4 per cent quarter-on-quarter (q-o-q) and 17.2 per cent to 26.9 per cent year-on-year (y-o-y), translating to net profits between RM55 million and RM62 million.

According to BERNAMA News Agency, CIMB Investment Bank Bhd highlighted in its research note that the primary factor for the expected decrease is an estimated reduction in total revenue by 5.6 per cent to 10.9 per cent q-o-q and 6.3 per cent to 11.5 per cent y-o-y, bringing the figures to between RM166 million and RM175 million. This reduction is attributed to a decline in securities average daily value (ADV), which fell by 5.3 per cent q-o-q and 14.2 per cent y-o-y.

The bank’s report estimates that this would lead to an increased cost-to-income ratio of 53 per cent to 56 per cent, compared to 46.5 per cent in 1Q 2024 and 53.8 per cent in 4Q 2024. Additionally, no dividend is expected for the quarter since Bursa Malaysia typically declares dividends semi-annually in the first and fourth quarters.

The securities ADV witnessed a decline to RM2.7 billion in 1Q 2025 from RM3.2 billion in 1Q 2024 and RM2.9 billion in 4Q 2024. This shift reflects caution in the market following recent reciprocal tariff announcements by the Trump administration, which have increased policy uncertainty and concerns over a potential recession.

With the net profit estimated between RM55 million and RM62 million for 1Q 2025, the bank noted that these results are expected to be at the lower end of both its and consensus full-year forecasts, covering 19 per cent to 21 per cent of its RM291.2 million forecast and the consensus RM296.3 million projection.

Furthermore, the investment bank observed that ADV in April (up to April 22) fell 32.9 per cent y-o-y to RM2.0 billion, compared to RM2.9 billion in the same period last year, bringing the year-to-date ADV to RM2.7 billion, marking a 14.3 per cent y-o-y decline from RM3.1 billion.

Consequently, the investment bank warned of potential downside risk to its earnings projections for Bursa Malaysia. It estimated that if the current ADV level of RM2.7 billion continues through the financial year 2025 (FY2025), there could be downward revisions to its FY2025, FY2026, and FY2027 earnings forecasts by 5.5 per cent, 5.6 per cent, and 5.7 per cent to RM275.1 million, RM276.6 million, and RM278.9 million, respectively.