Published On: Fri, Jul 16th, 2010

Bursa Malaysia Posts 10% Growth in Half Year Profit

Bursa Malaysia Posts 10% Growth in Half Year Profit
* Profit of RM55.5 million, 10% increase
* Interim dividend of 9.5 sen per share under the single tier system
* Increase in equities trading revenue by 13%
* Derivatives trading revenue declined 17%
* Daily average trading value for equities rose to RM1.41 billion
* Marginal drop in market velocity to 31%
* Market capitalisation rose to RM1.04 trillion vs. RM817.94 billion

Bursa Malaysia Berhad (Bursa Malaysia) registered a profit of RM55.5 million for the half year ended 30 June 2010, a 10% increase compared to the profit of RM50.5 million for the corresponding period last year.

Bursa Malaysia’s Chief Executive Officer, Dato’ Yusli Mohamed Yusoff said, “Our financial performance reflects our continued focus on delivering sustainability and overall business growth. As demonstrated by the higher trading value for the period under review, the market sentiment improved somewhat although many investors still adopted a cautious outlook.

“Nonetheless, we hope to see greater interest in our market moving forward with the inclusion of new investment offerings such as Exchange Traded Funds (ETFs) and Real Estate Investment Trusts (REITs), as well as Callable Bull/Bear Certificates (CBBC). In addition, as a result of the recognition given by China’s Qualified Domestic Institutional Investor (QDII) which now allows the inflow of China funds to the Malaysian finance and capital markets, we hope to see greater foreign investor attention,” added Dato’ Yusli.

Trading revenue from the equities market grew by 13% to RM76.4 million in the half year ended 30 June 2010, from RM67.4 million in the first half of 2009. This was attributed to the more active market which saw a higher daily average trading value of RM1.41 billion versus RM1.15 billion in the first six months of last year. As at 30 June 2010, market capitalisation rose to RM1.04 trillion in comparison to RM817.94 billion on 30 June 2009. However, velocity for the period under review dropped slightly to 31%, compared to 37% in the first half year of 2009.

On the derivatives front, the number of contracts declined with a total of 2.9 million contracts traded in the period under review compared to 3.3 million contracts in the corresponding period. This resulted in a 17% decline in the derivatives trading revenue to RM17.5 million in the period ended 30 June 2010 from RM21.1 million in the same period last year. The decline in the derivatives market is attributed to the lower volatility of the securities market and range bound prices of crude palm oil.

“We expect that when we migrate our derivatives products to the CME Globex platform, we can look forward to greater interest as there will be far more accessibility globally to our products in the future,” Dato’ Yusli explained.

Stable revenue grew by 14% to RM52.5 million in the first half of this year from RM46.2 million in the same period of 2009. This improvement was attributed to higher listing fees and issue fees as a result of increase in new listings.

The total operating expenses saw an increase of 6% to RM93.9 million mainly due to talent development initiatives as well as accelerated depreciation of Bursa Trade Derivatives trading platform as a result of the planned migration of the derivatives products on to the CME Globex trading platform by year end. Offsetting these increases was a decrease in market development expenses and effective optimisation of IT maintenance cost.

During the period under review, Bursa Malaysia successfully attracted 12 new listings, which raised RM2.3 billion compared to RM29 million for the first half of last year. In addition, 86 structured warrants were listed during the first half of this year in comparison to 30 in the same period in 2009. The Exchange also witnessed the listing of two new REITs as well as two ETFs early this month.

Dato’ Yusli commented, “The growth in listings in our market has been healthy and encouraging, and we expect to see more listings come to Bursa Malaysia in the second half.”

Bursa Malaysia also announced an interim dividend of 9.5 sen per share under the single tier system. The payout at 91% is higher than the Group’s dividend policy of minimum 75% payout. The interim dividend will be paid out to our shareholders on 13 August 2010.

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