Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on October 30, 2018

KUALA LUMPUR: Bursa Malaysia Bhd turned in a flattish third financial quarter ended Sept 30, 2018 (3QFY18) with net profit slipping 2.7% to RM50.19 million, from RM51.6 million a year earlier, as operating expenses offset revenue growth.

Quarterly revenue fell a marginal 0.3% to RM129.82 million from RM130.27 million for the same quarter last year.

In a stock exchange filing, Bursa said save for a rise in segmental profit for its securities market division, other segments such as the derivatives market and exchange holding company divisions reported lower profits.

Staff cost, depreciation and amortisation, and other operating expenses rose 2.7% year-on-year (y-o-y) to RM60.73 million for the quarter from RM59.1 million a year ago.

It said the securities market division recorded a 2.5% y-o-y increase in segmental profit, mainly due to higher operating revenue from trading revenue and market data.

“Listing and issuer services revenue decreased by 16.4% to RM14.2 million for 3QFY18. The decrease was mainly due to lower listing fees and processing fees earned in 3QFY18 on a lower number of listing and corporate exercises in 3QFY18.

“Trading revenue increased by 8.8% to RM61.2 million for 3QFY18. 3QFY18 saw a higher average daily trading value for on-market trade and direct business trade of RM2.47 billion compared with RM2.16 billion for 3QFY17,” it added.

Meanwhile, the derivatives market showed a 15.6% decrease in segmental profit on lower operating trading revenue mainly due to a lower number of contracts traded for crude palm oil futures and higher market incentives.

Its exchange holding company recorded a higher segmental loss of RM3.6 million for the quarter, compared with a segmental loss of RM1.9 million a year ago, mainly due to lower rental income earned, it added.

For the cumulative nine-month period, net profit rose 2.6% y-o-y to RM172.19 million from RM167.77 million, while revenue grew 1.3% y-o-y to RM421.09 million from RM415.63 million.

Bursa chief executive officer Datuk Seri Tajuddin Atan said in a separate statement that the bourse operator was confident that the government’s emphasis on fiscal and governance reforms as outlined in the midterm review of the 11th Malaysia Plan bodes well in the long term for strengthening investor confidence.

“Despite major volatility and declines in emerging-market equities against the backdrop of a challenging global environment in 2018, Bursa’s sustainable growth initiatives implemented over the years [have] continued to show progress,” he said.

He added that this had raised the company’s standards and strengthened its performance to achieve its highest-ever nine-month operating revenue, and highest recorded nine-month average daily trading value for the securities market’s on-market trade of RM2.6 billion, since listing in 2005.

The securities market’s velocity stood at 30% in the third quarter, compared with 26% in same quarter last year.

Total operating revenue for the period stood at RM402.26 million, 2.6% higher compared with RM392.06 million previously.

Tajuddin said Bursa will continue its efforts to digitalise, liberalise the rule framework and broaden the investor base to enhance the breadth and depth of the ecosystem.

Shares in Bursa fell 10 sen or 1.31% to settle at RM7.55 yesterday, giving it a market capitalisation of RM6.1 billion.

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