Company Update � Bursa M�sian (BUY, maintain)
- A pick-up in 1Q14 momentum, velocity rising
We reiterate our BUY rating on Bursa Malaysia � the stock remains a high-yield (4.5-6.0% FY14-16E),
high-beta play on robust free cash flow generation and a high dividend payout
of at least 90%. Despite trimming earnings by 3.0% for 2014E and 3.6% for
2015E (due to higher staff costs), we raise our price target by 1.2% to
RM9.50 from RM9.40, as we roll forward our valuation horizon to 2015�s EPS but peged to a lower PE of 22x from 24x. Based on
Bursa�s latest trading statistics, the equities and derivatives
markets gained momentum in 1Q14, as the average daily value (ADV) for
equities trading rose +31% yoy and +28% qoq to RM2.1bn and the average daily
contract rose +11.2% yoy and +20.5% qoq to 50,046. We remain optimistic about
the market going into 2H14, driven by new IPO launches and our expectation of
a more bullish outlook in 2H14, driven by earnings growth.
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