KUALA LUMPUR: Bursa Malaysia Bhd’s net profit for the financial year ended Dec 31, 2019 (FY2019) fell 17% to RM185.86 mil from RM224.04 mil posted in FY2018.
Revenue decreased to RM502.49 mil from RM550 mil previously.
The stock exchange operator, in a filing with Bursa Malaysia today, said the decline was mainly attributed to lower operating revenue, which decreased 8.2% to RM480.1 mil in FY2019 compared to FY2018.
Nevertheless, it has declared a final dividend of 10.4 sen per share for FY2019, amounting to about RM84.1 mil, which is payable on Feb 28.
CEO Datuk Muhamad Umar Swift said Malaysia continued to demonstrate long-term growth and offers compelling investment opportunities despite a relatively challenging year in 2019.
He said the energy, construction and technology sectoral indices had performed positively, growing by 51%, 34% and 29% respectively, in 2019.
“The positive trend amongst small and mid-cap counters are also opportunities for investors to build upon,” he added.
He said last year, Bursa Malaysia was ranked second in Asean for the number of listings, a testament to its strong fund-raising capabilities.
Muhamad Umar said retail participation reached 24.5% last year, a record high in the last five years.
He said as at Dec 3 last year, market capitalisation on Bursa Malaysia stood at RM1.7 tril, an increase of 0.7% year-on-year, while the average daily contracts traded on the derivatives market decreased by 2% to 55,372 contracts.
On prospects, Bursa Malaysia said greater volatility is expected in both the securities and derivatives markets this year, arising from global and local developments such as the ongoing US-China trade negotiations and the recent 2019 novel coronavirus outbreak.
“Barring any unforeseen circumstances, the exchange is expected to benefit from this volatility which will provide greater activity in the respective markets.
“Bursa Malaysia will continue to expand and strengthen its product and service offerings to enhance the market attractiveness and vibrancy,” it added.
Muhamad Umar also said that Bursa Malaysia is ramping up its non-trading revenue (NTR) segment to strengthen performance going forward.
According to him, only 36% of the bourse’s revenue came from its NTR segment, while more than 60% was from its trading sector.
He said Bursa Malaysia is building up a business model for its market data segment and is looking at introducing more value-added information services.
“We are the golden source of data in the market and we want to see how we can value add and provide solutions to the market,” he added.
He sees the NTR segment likely starting contributing more to Bursa Malaysia’s revenue by next year.
“We have products on derivatives that nobody tracked. We think it’s a great product. So, we have conversations with our participants, people in the market on what they want, what can we solve for them..,” he said.
In FY2019, Bursa Malaysia’s operating revenue declined by 8.2% to RM480.1 mil from RM523.3 mil the previous year.
The NTR revenue for the bourse was slightly down at RM139.4 mil from RM143.7 mil in FY2018, on lower listing and issuers fees and perusal processing fees.
However, the downtrend was mitigated by higher market data revenue of RM38.6 mil from RM36.2 mil previously.
Meanwhile, securities trading revenue depreciated to RM232.8 mil from RM265.8 mil due to geopolitical tensions and soft domestic corporate earnings.
Its derivatives trading revenue declined to RM72.3 mil versus RM76.7 mil in 2017, mainly on the lower number of contracts traded for US dollar-denominated refined, bleached and deodorised palm olein futures and FTSE Malaysia KLCI Futures, lower collateral management fees and guarantee fees.
Muhamad Umar said the bourse is allocating RM30 mil for capital expenditure this year for new and upgrading of Bursa Malaysia’s existing system.
As of now, 16 new initial public offerings (IPOs) are in the pipeline, he disclosed.
Three of them are for the Main Market, 11 for the ACE Market and five for the Leading Entrepreneur Accelerator Platform (LEAP) Market.
To date, Bursa Malaysia has seen the listing of three new IPOs, of which two are on the LEAP Market and the third on the ACE Market.
Bursa Malaysia is targeting 40 IPOs for listing on the bourse in 2020 from 30 last year. – Jan 30, 2020, Bernama
