Bursa Malaysia Q2 net profit jumps 28% to RM76.2 million
Tan Ai Leng
[KUALA LUMPUR] Bursa Malaysia’s net profit rose 28 per cent year on year to RM76.2 million (S$22.5 million) in the second quarter this year.
However, revenue fell 4.8 per cent to RM144.6 million, due to declining trading revenue, said the exchange on Monday (July 31).
For the first six months, Bursa Malaysia’s net profit increased 3.9 per cent year on year to RM132.4 million, while revenue dropped 5 per cent to RM301 million.
Bursa Malaysia also announced a dividend of 15 sen per share. This amounts to around RM121.4 million – representing a payout ratio of 91.7 per cent.
In a statement, Bursa Malaysia chief executive officer Muhamad Umar Swift attributed the increase in profit to an 8.5 per cent decline in operating expenses to RM131.1 million in the first six months of 2023, due to a one-off reversal of provision.
Overall trading revenue from the securities market for the first six months fell by 14 per cent to RM126 million due to declining average daily trading value of around RM2.1 billion – 16 per cent lower than RM2.5 billion in the same period last year.
A NEWSLETTER FOR YOU
Friday, 8.30 am
Asean Business
Business insights centering on South-east Asia's fast-growing economies.
During the same period, trading velocity dropped by five percentage points to 28 per cent. Nevertheless, funds raised through 16 Initial Public Offerings (IPO) increased nearly 9 per cent to RM2.3 billion in the first six months this year.
Despite the declining revenue, the exchange’s chairman Abdul Wahid Omar is optimistic that there will be improvement in the coming months.
“This is backed by resilient domestic demand and an anticipated reversal of international investment flowing back to emerging markets in the second half of 2023,” he added.
Foreign investors turned net buyers for straight three weeks since early July. Last week, foreign investors snapped up equities worth RM637.8 million – the highest since March last year, according to MIDF Research’s fund flow report.
“As we navigate these uncertain times, we are encouraged by potential uplifts arising from the growth potential presented by the relatively attractive valuation of our equity market and anticipated stabilisation of the global interest rate environment,” said Umar.
In the January-to-June period, the derivatives market trading revenue dipped nearly 7 per cent to RM44.5 million, due to lower collateral management fees earned and a lower number of crude palm oil futures contracts traded.
Non-trading revenue increased 3.2 per cent to RM110.3 million in the first six months, driven by good performance from its data business, which recorded an operating revenue of RM32.9 million. It is nearly 6 per cent higher than the same period last year.
Umar said Bursa will continue to drive innovation to become a multi-asset exchange.
“For instance, through our joint-venture entity, Bursa Malaysia RAM Capital Sdn Bhd, we have achieved a significant milestone with the approval-in-principle to launch a new debt fundraising platform,” he added.
The Bursa Carbon Exchange will continue to enhance its offerings, to help businesses reach their net-zero carbon emission goals.
“Given these advancements and barring unforeseen circumstances, we are cautiously optimistic in meeting our headline key performance indicators for the financial year ending 2023,” said Umar.
In its financial statement, the exchange maintained its target of achieving a profit before tax of RM326 million (from RM295 million in the first six months this year); non-trading revenue of growth will increase to 7 per cent from 5 per cent by end-2023.
This year, Bursa is targeting 39 IPOs, which will raise at least RM10 billion in total.
As at June 2023, Bursa’s market capitalisation increased slightly by 1.3 per cent to RM1.7 trillion.
Copyright SPH Media. All rights reserved.
