PETALING JAYA: With an above-average environmental, social and governance (ESG) score, Bursa Malaysia Bhd continues to lead the sustainability space in Malaysia.

Following a review of Bursa’s ESG matters post the release of its 2022 Sustainability and corporate governance reports, Maybank Investment Bank (Maybank IB) Research noted that the company’s updated ESG score was 69 (out of 100), as compared to 73 in the previous review.

The lower score was due to higher greenhouse gas (GHG) emissions/intensity, the brokerage said.

“Its updated ESG rating is still above average. Positively too, Bursa met its carbon neutrality target for 2022,” Maybank IB Research wrote in its report yesterday.

“Fundamentally, we view Bursa’s risk-reward as balanced,” it added.

Maybank IB Research maintained its “hold” call on Bursa, with an unchanged target price of RM6.60.

“Our above-average score of 69 for Bursa remains very much in line with Sustainalytics’ latest score of Bursa’s ESG risks, which is at a low 15.2. Apart from higher GHG emissions/intensity and energy consumption in 2022, Bursa scores well in other areas of our qualitative/quantitative assessment,” it said.

“The higher GHG emission was, in turn, due its operations returning to normalcy post pandemic, ongoing office interior fit-out, and a more conservative approach, by changing the grid emission factor source from the International Energy Agency to that by the Energy Commission of Malaysia, which has a higher value,” it added.

Hong Leong Investment Bank (HLIB) Research lowered its target price for Bursa to RM6.09 from RM6.43 previously following a cut in earnings forecast. It maintained its “hold” call on the counter.

“We lower 2023/24 earnings by 5.3% and 2.2% after imputing higher operating expenditure (that is, higher depreciation and staff cost,” it said.