Bursa Malaysia records lower after-tax profit in Q1 on declining operating and trading revenue
Tan Ai Leng
BURSA Malaysia’s net profit for the first quarter ended Mar 31, 2022 declined 44 per cent to RM68 million (S$21 million) from RM121.4 million in the year-ago period, due to lower operating and securities trading revenue, the bourse said in a filing on Thursday (Apr 28).
Operating revenue slid 29.4 per cent to RM161 million, while the average daily trading value of securities nearly halved to RM2.6 billion.
Muhamad Umar Swift, chief executive officer of Bursa Malaysia, said the average daily trading value of securities has continued to normalise to pre-pandemic levels, after uncharacteristically high activity since the Movement Control Order in early 2020. This contributed to the decline in profit for the first quarter.
Nevertheless, on a quarterly basis, net profit is up 4.6 per cent compared to the fourth quarter of 2021, when it was RM65 million. This gain was mainly due to average daily trading value being higher in Q1, by close to 3 per cent.
Umar expects trading conditions to improve in coming quarters, as the reopening of international borders from April will boost the country’s economic activities. Bank Negara Malaysia has projected Malaysia’s growth to be between 5.3 per cent and 6.3 per cent for the full year.
“As such, better economic growth can be expected as the nation moves towards the endemic phase, and we anticipate more trading opportunities for investors due to movements in crude palm oil prices, interest rate policies and the benchmark FBM KLCI index,” he said in a statement.
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On the bourse, trading velocity in Q1 2022 was down to 36 per cent, compared to 70 per cent in Q1 2021. Funds raised through initial public offerings in the latest quarter totalled RM1.5 billion, up from just RM0.2 billion in the same period last year. But the Derivatives Market Average Daily Contracts fell 3.5 per cent to 77,513 contracts.
The stock exchange operator is aiming to attract global investors’ interest through various initiatives, including the public-listed companies (PLC) transformation programme launched in March this year.
The PLC transformation programme aims to help PLCs achieve higher levels of performance through sharing of best practices and insights, enhanced engagement and greater transparency practices.
“Further, and in line with the Sustainable and Responsible Investment and Environmental Social Governance agendas, Bursa Malaysia will continue to deliver new product and service offerings as well as the new voluntary carbon trading platform, which will enhance the breadth and depth of the ecosystem,” said Umar.
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