Bursa Malaysia H1 net profit up 17.4% to RM155.5 million

[KUALA LUMPUR] Bursa Malaysia’s net profit rose 17.4 per cent year on year (yoy) to RM155.5 million (S$45.2 million) for the first six months of 2024.

Revenue in the period increased 28.6 per cent to RM387.1 million from a year earlier, said the bourse operator on Tuesday (Jul 30).

For the second quarter, Bursa Malaysia’s net profit rose 5.5 per cent yoy to RM80.4 million, and revenue climbed 38.2 per cent yoy to RM199.9 million. Both revenue and net profit recorded their highest quarterly figures in three years.

Bursa Malaysia also announced a dividend of 18 sen per share, which works out to about RM145.7 million in total – representing a payout ratio of 93.7 per cent.

At the results briefing on Tuesday, Bursa Malaysia chief executive Muhamad Umar Swift attributed the increase in profit to higher operating revenue, which rose more than 29 per cent to RM374.5 million from a year earlier.

“Trading in the securities market has remained active, contributing significantly to the exchange’s performance. We are optimistic that this positive momentum can be sustained,” he said.

The exchange’s chairman, Abdul Wahid Omar, noted that Malaysia’s capital market saw strong performance in the first half of 2024, with several record highs, including surpassing a market capitalisation of RM2 trillion and the FBM KLCI breaching the psychological 1,600-point mark.

On May 23, the 30-stock benchmark index closed at 1,629.18 points, its highest since March 2021.

Citing the recent gross domestic product advance estimate from the Department of Statistics Malaysia, Wahid said GDP is likely to expand by 5.8 per cent in the second quarter, indicating higher growth and renewed global investor interest in the country’s ongoing reform efforts.

“This interest could positively influence market momentum and stimulate capital market activities. We are upbeat that strong results will be reflected in the exchange’s performance for the second half of the year,” he added.

As such, the stock exchange operator has revised its profit before tax target – one of its key performance indicators (KPIs) – to a range of RM361 million to RM379 million, up from a previous range of RM293 million to RM323 million.

“We are optimistic about meeting our revised headline KPI for this year, underpinned by strong economic fundamentals and confidence in the government’s effective economic restructuring and fiscal reforms,” said Muhamad Umar.

Overall trading revenue from the securities market from January to June increased 52.6 per cent to RM192.2 million, driven by higher average daily value which rose to RM3.5 billion from RM2.1 billion a year earlier.

Revenue from the derivatives market was up 16.8 per cent to RM51.9 million, supported by robust trading activities for Crude Palm Oil Futures and FTSE Bursa Malaysia KLCI Futures contracts.

Trading revenue for the Islamic market, however, fell 5.3 per cent yoy to RM8.3 million from January to June.

Non-trading revenue, which includes listing and issuer services and depository services, increased by 9.6 per cent to RM72.3 million, from RM66 million a year earlier.

Muhamad Umar expects the growth of the non-trading segment to range between 5 and 7 per cent this year, underpinned by higher depositor account opening fees, securities borrowing and lending fees, and transfer fees.

During the same period, trading velocity increased by 14 percentage points to 42 per cent.

In the first six months of 2024, funds raised through 21 initial public offerings (IPOs) totalled RM2.2 billion, 4.4 per cent lower than the previous year. This brought the IPO market capitalisation to RM7.3 billion, 47 per cent lower than the previous year’s RM13.6 billion.

Despite the lower IPO market capitalisation, Bursa Malaysia outperformed other Asean bourses, capturing 33 per cent of the total IPO amount raised in the region, said Muhamad Umar.

“We have a healthy pipeline of IPOs in coming months and are well on track to achieve our annual target of 42 IPOs with RM13 billion in total market capitalisation by end-2024,” he added.

As at Jun 30, Bursa’s market capitalisation increased 21.5 per cent over the past year to RM2 trillion.