BURSA – Fundamental Analysis (27 Apr 2016)

Excel – Download the analysis file

Latest Financial – Q1 2016 Financial Report (25 Apr 2016)

FY16 Q1 Results Highlight:

  • YoY, operating revenue increased by 5% with better performance in stable revenue (+11%) superseding the flat growth in trading revenue (+2%, which was dragged by lower securities trading revenue) coupled with the decent growth in “other income” segment (+7%) which was predominantly driven by higher interest income (+11%), total income grew by 5%. (Kenanga 27 Apr 2016)
  • QoQ, total income decreased by 1% as marginal growth at the operating revenue (+1) was negated by seasonally weaker performance in the “other income” segment (-25%).
  • Key Operating Drivers:



I think fair value of BURSA range from 8.8 to 9.3. Uncertainty risk of fair value is from MEDIUM to HIGH.



Going Forward:

In 2016, retail investors/traders likely to stay on the sideline and become more vigilant with their trading habits given the current choppy market environment. Behavioral finance studies have also shown that investors tend to be more loss averse rather than risk averse, leading to this to effect.

On the other hand, the recent return of foreign funds and impending injection of local funds in 4QFY15 as positive to rejuvenate trading activity in the securities market in the coming months.

The global environment remains challenging with the recovery in high-income economies being gradual and global trade growing at its slowest pace since 2009 (The World Bank, 4 Oct 2015). Malaysia is affected by internal and external factors, particularly the weakening of the Ringgit, with its economic growth currently projected at 4.7% compared to 5.2% at the start of the year. Malaysia remains amongst the world’s healthiest Islamic economic environment (Halal Focus, 28 Sep 2015) that will underpin the interest of its Shariah compliant securities, despite the current global economic situation. Increased adoption of Murabaha and Tawarruq’ contracts in the domestic market for liquidity management as well as the tenor based pricing have deepened the usage and will further spur the growth of Bursa Suq Al-Sila’ (BSAS) activities.

I remain sanguine on the company’s outlook over the longer term. Its business model is also fairly resilient.

I will continue to hold this share, and accumulate it if there is a discount.

At the time of writing, I owned shares of BURSA.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s