Hot Stock Bursa cedes 1.8% on market sell-down

Hot Stock Bursa cedes 1.8% on market sell-down
Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Friday, 21 June 2013 11:55

KUALA LUMPUR (June 21): BURSA MALAYSIA BHD [], the country’s stock exchange operator, lost as much as 14 sen or 1.79% as investors locked in gains amid a broader market sell-down.

The broader market decline came amid anticipation of further capital flight from emerging Asian markets to US-based assets.
This follows the US Federal Reserve’s announcment that it plans to reverse its monetary easing policy

At 11:04am, Bursa shares shed 13 sen or 1.67% to RM7.57 after trading between RM7.56 and RM7.63. A total of 164,000 shares were transacted.

For comparison, the FBM KLCI fell as much as 24.68 points or 1.4% minutes after the opening bell, before recouping losses.

An analyst told theedgemalaysia.com that Bursa was among many declining stocks across the exchange due to the market sell-down.

“Most of the stocks are down today,” the analyst said.

Meanwhile, Affin Investment Bank which initiated coverage on Bursa, recommended a “buy” for the latter's shares with a target price of RM9

Affin analyst Tan Ei Leen said in a note that the research house is “upbeat” on Bursa on several factors.

The first is the potential for higher dividends and capital repayment.

Tan said Bursa’s steady net profit, rising cash hoard and low capital expenditure requirement provide the scope for capital repayment should the firm embarks on more-active capital management intitatives.

Bursa's strong growth prospects are also worth noting amid a rebound in market velocity, lower political risk, and capital market development, according to Tan.

The analyst also expects the growing momentum of derivative trading to support Bursa's growth.