Bursa Malaysia remains at the forefront of environmental, social, and governance (ESG) practices, holding an above-average ESG score of 68 out of 100, slightly down from the previous score of 69. The exchange has achieved carbon neutrality for the third consecutive year, a significant milestone underscoring its commitment to sustainability. In 2023, Bursa offset all Scope 1 and 3 greenhouse gas emissions by purchasing and retiring 3,668 tonnes of CO2 equivalent in carbon credits. Additionally, Bursa has begun transitioning to green energy, installing a rooftop solar photovoltaic system and using Renewable Energy Certificates, which contributed to a 63% reduction in Scope 2 emissions. Looking ahead to 2024, Bursa plans to further diversify its energy mix and transition its vehicle fleet to hybrid or electric vehicles.
A notable development in 2023 was the launch of Bursa Carbon Exchange (BCX), aimed at supporting Malaysia's net-zero target for 2050. BCX began trading carbon credits in September 2023, following a price discovery auction in March. By the end of 2023, BCX had formed collaborations with Gold Standard, Sarawak Energy, Hydropower Sustainability Alliance, and the I-REC Standard Foundation. These partnerships aim to enhance the quality and availability of carbon credits and explore the supply and trade of Renewable Energy Certificates aligned with globally recognised standards.
Despite these advancements, Bursa Malaysia's valuation is expected to remain stable with a target price of MYR9.50, based on a 24x price-to-earnings ratio (+0.5 standard deviation of the 10-year mean) on mid-FY25 earnings per share. Key assumptions include an average daily trading volume of MYR3.5 billion in 2024 and MYR3.7 billion in 2025, alongside an 18% growth in derivative contracts in 2024 and a 5% increase in 2025. Maybank Stock Broking House maintained a HOLD recommendation on Bursa Malaysia, reflecting a potential total return of 5%, which includes a 4% dividend yield over the next 12 months.
