KUALA LUMPUR (April 28): Bursa Malaysia Bhd’s net profit for the first quarter ended March 31, 2022 (1QFY22) dropped 44.01% to RM67.97 million from RM121.39 million a year earlier, due to lower operating revenue primarily caused by a decline in securities trading revenue.

The average daily trading volume of securities continued to normalise to pre-pandemic levels which contributed to the decline in the latest quarterly net profit compared to the same quarter last year.

In a filing on Thursday (April 28), Bursa said its quarterly revenue fell 28.83% to RM165.3 million from RM232.28 million.

The regulator’s earnings per share declined to 8.4 sen from 15 sen previously.

According to a statement, Bursa’s securities market registered a trading revenue of RM80.4 million, a 46.7% decrease compared to RM150.9 million in 1QFY21, owing to the lower average daily trading value for securities market’s on-market trades and direct business trades.

“Trading velocity in 1Q2022 was lower by 34 percentage points to 36% compared to 70% in 1Q2021. Funds raised through initial public offerings (IPOs) in this quarter totalled RM1.5 billion, much higher than the RM0.2 billion raised in 1Q2021,” said Bursa.

The derivatives market average daily contracts fell 3.5%, with 77,513 contracts in 1QFY22 compared to 80,338 contracts in 1QFY21

As for the Islamic markets, higher trading activity in Bursa Suq Al-Sila’ resulted in an increase of trading revenue by 12.2% to RM3.8 million in 1QFY22 from RM3.4 million in 1QFY21. “The exchange will continue to actively engage with its participants and develop new Shariah-compliant products, such as the Digital Gold Dinar, aimed to meet the demand of the investors,” said Bursa.

Listing and issuer services rose 7.2% to close 1QFY22 at RM16.9 million, compared to RM15.8 million a year ago. The market data business also showed a 4.8% increase in revenue, closing 1QFY22 with a total of RM14.8 million compared to RM14.1 million in 1QFY21.

Total operating expenses reported a 4.6% increase to RM72.5 million in 1Q2022 from RM69.4 million previously due to higher provisions for depreciation and amortisation as well as increased technology, marketing and administrative expenses.

Bursa chief executive officer (CEO) Datuk Muhamad Umar Swift anticipates more trading opportunities for investors due to movements in crude palm oil prices, interest rate policies and the FBM KLCI amid the reopening of the economy and international borders.

“To ensure we sustain the interest of global investors, we will continue to enhance the attractiveness of listed issuers through initiatives such as the PLC Transformation programme launched earlier this year.

“Further, and in line with the Sustainable and Responsible Investment  and Environmental Social Governance  agendas, the exchange 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,” Muhamad Umar added.

At the 12.30pm break on Thursday, Bursa shares settled unchanged at RM6.93 with a market capitalisation of RM5.61 billion.