This article first appeared in The Edge Financial Daily, on February 3, 2016.

KUALA LUMPUR: Bursa Malaysia Bhd, with its fourth financial quarter ended Dec 31, 2015 (4QFY15) net profit down marginally to RM50.6 million, expects the local stock market to face another challenging year with continued volatility.

Chief executive officer Datuk Tajuddin Atan said he is cautious about the performance for 2016, as factors that adversely affected the economy and market in 2015 are likely to persist.

“More clarity will begin to come in two or three months later, since a lot of people are still enjoying the holidays. The number of trading days is not giving any clarity as to where the market is at this point in time,” Tajuddin told the media during Bursa’s performance review briefing.

For 4QFY15, Bursa’s net profit dropped 4.8% to RM50.6 million, or 9.5 sen a share, from RM53.14 million, or 10 sen a share a year ago. Revenue, however, expanded 5.51% to RM135.56 million from RM128.48 million in 4QFY14.

Bursa’s annual net profit was at RM198.61 million for FY15, a marginal 0.2% increase from RM198.23 million in the previous year. Annual revenue for FY15 grew 2.9% to RM518.9 million, from RM503.76 million in FY14.

The Bursa board of directors has declared a final dividend of 18 sen per share under the single-tier system for FY15.

Tajuddin pointed out that despite market volatility and challenging economic conditions, Bursa has recorded a consistent growth in operating revenue over the past five years from RM381.5 million in FY11 to RM487.7 million in FY12.

Bursa saw its trading revenue from the securities market increase by 2.2% to RM59.8 million from RM58.5 million a year ago. As for the derivatives market, it recorded a revenue of RM24.2 million for the quarter under review, up 14.2% from RM21.2 million in 4QFY14.

Addressing the concerns about foreign sell-offs over the last two years, Tajuddin said that Bursa was not the only exchange affected, and as at Jan 22, the net position for foreigners was a net buy.

“The amount is not really substantial, but there is some form of normality returning to the market,” he said.

Tajuddin explained that when the risk-reward between developed and emerging markets narrows, funds will move out to more advanced market, where risk-reward is slightly better.

Bursa closed unchanged at RM8.40, with 392,400 shares traded, giving it a value of RM4.5 billion.