BURSA MALAYSIA BERHAD

Business Summary

Bursa Malaysia Bhd is a holding company responsible for the stock exchange of Malaysia. Most of us know that Bursa Malaysia obtains the majority of its earnings is derived by charging individuals a brokerage fee when an individual buys or sells a share. Bursa Malaysia also earns some of its revenue through IPOs and listing of company equities to the share market.

Bursa Malaysia Bhd also offers derivatives market trading. Under the derivatives segment products such as Gold futures, Crude Palm Oil Futures (FCPO), Options on Crude Palm Oil Futures (OCPO). 

Bursa Malaysia Bhd is the sole company in Malaysia that has been empowered to manage the stock exchange and also the derivatives market, making it the sole monopoly in this business segment!

Update 09.02.2019

Dividends (5/5): ⭐ ⭐ ⭐ ⭐ ⭐ 

Value (4/5): ⭐ ⭐ ⭐ ⭐ 

Financials (5/5): ⭐ ⭐ ⭐ ⭐ ⭐ 

Growth (4/5): ⭐ ⭐ ⭐ ⭐ 

Business (5/5): ⭐ ⭐ ⭐ ⭐ ⭐ 

Reference: (i) MyKayaPlus Metrics Definition (ii) MyKayaPlus Metric Evaluation Scale


Historical Operating Revenue

Historical Net Profits

Historical Dividends Paid

Source: BURSA MALAYSIA BHD ANNUAL REPORT

 Being the only party in charge of managing the Malaysia stock exchange, Bursa Malaysia Bhd has enjoyed wonderful returns year on year. Revenue and profits have increased in tandem, which is a no brainer.

 Price

MyKayaPlus Verdict

Bursa Malaysia Berhad is a special company in a highly regulated business segment. Being a service orientated company, where it facilitates equities and derivatives trading, makes it an asset-light company, without needing to buy machinery and building to further scale its business.

Comparatively, against its peer in Singapore, SGX Limited, there is more potential for Bursa to grow more. And when a cash cow company like Bursa Malaysia Berhad grows, the dividend payout would definitely increase in tandem, given that it has a 75% dividend payout policy.

The question is, what price would you consider to buy Bursa Malaysia Berhad? 

DISCLAIMER
The information available in this article/report/analysis is for sharing and education purposes only. This is neither a recommendation to purchase or sell any of the shares, securities or other instruments mentioned; nor can it be treated as professional advice to buy, sell or take a position in any shares, securities or other instruments. If you need specific investment advice, please consult the relevant professional investment advice and/or for study or research only.
No warranty is made with respect to the accuracy, adequacy, reliability, suitability, applicability, or completeness of the information contained. The author disclaims any reward or responsibility for any gains or losses arising from direct and indirect use & application of any contents of the article/report/written material

2 comments

  1. Siti

    reits’ gives off 90%. 75% dividend payout policy? wow. that’s high for a company. am i right? how about banks? do they have a payout policy? 75%.. i’m surprised that not many people discuss or go crazy investing in bursa.

    1. JP

      Hi Siti,

      Yes you are right. REITs give out 90% of their distributable income else they will get corporate tax. Why Bursa Malaysia Bhd is able to payout 75% of its income is due to the very special business model it is in. It is the only company in Malaysia that controls the stock market. Every time we buy or sell shares, a small fee that we pay our brokerage firms also goes to Bursa Malaysia’s pocket.

      Thanks!

      JP

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