KUALA LUMPUR (Jan 29): Bursa Malaysia Bhd’s net profit for the fourth quarter ended Dec 31,2019 (4QFY19) declined 12.15% to RM45.46 million, from RM51.86 million a year earlier, amid higher operating expenses.

Earnings per share (EPS) fell to 5.60 sen from 6.40 sen.

Quarterly revenue inched up by 0.32% to RM129.33 million, from RM128.92 million previously.

Bursa declared a final dividend of 10.4 sen, amounting to RM84.08 million. This brings total payout for FY19 to 20.80 sen per share, compared with 33.60 sen for FY18.

In its filing, Bursa said quarterly earnings were affected by an increase in other operating expenses which increased by 23.6% to RM28.22 million, from RM22.28 million last year.

For FY19 as a whole, Bursa’s net profit dropped 17.04% to RM185.85 million, from RM224.04 million in the previous year. EPS fell to 23 sen from 27.80 sen.

Annual revenue declined 8.64% to RM502.49 million, from RM550 million previously.

In a separate statement, Bursa said the decline in FY19’s net profit followed a contraction in operating revenue, which declined by 8.2% to RM480.14 million from RM523.29 million.

In addition, total operating expenses for FY19 increased by 2% to RM246.19 million, from RM241.3 million in FY18, on the back of higher marketing and development expenses, as the securities and derivative markets continued efforts to market and engage initiatives to attract new participants.

Furthermore, there was also recognition of a one-off impairment loss allowance of RM3.3 million, involving IT software.

Bursa chief executive officer Datuk Muhamad Umar Swift said FY19 proved to be relatively challenging, following a long period of strong growth.

“Despite this, Malaysia continues to demonstrate long-term growth and offers compelling investment opportunities.

“Last year, the energy, construction and technology sectoral indices had performed positively, growing by 51%, 34% and 29% respectively.

“The positive trend amongst small- and mid-cap counters are also opportunities for us to build upon. In 2019, Bursa Malaysia ranked 2nd in Asean for the number of listings, testament to our strong fund-raising capabilities,” he said.

In particular, securities market trading revenue declined by 12.3% to RM232.84 million in FY19, from RM265.81 million, on the back of lower average daily value for on-market trades in FY19 — which declined 19.3% to RM1.9 billion, from RM2.4 billion in FY18.

Trading velocity fell four percentage points to 28%, from 32% in FY18.

Non-trading revenue for the securities market dropped 1.2% to RM139.4 million, from RM143.7 million previously, due to lower listing issuer and perusal processing fees, following the lower number of corporate exercises and circular submissions.

In the case of the derivatives market, trading revenue fell 5.8% to RM72.27 million from RM76.70 million in FY18, on the back of lower number of contracts traded for US dollar-denominated Refined, Bleached and Deodorised Palm Olein Futures (FPOL), and FTSE Bursa Malaysia KLCI Futures (FKLI), lower collateral management fees and lower guarantee fees earned.

Average daily contracts (ADC) declined 2% to 55,372, from the 56,488 contracts in FY18.

Crude Palm Oil Futures (FCPO) ADC increased 1.8% to 43,870 from 43,092 contracts in FY18, reflecting the upward trend in FCPO trading since 2QFY19.

“The exchange registered the highest quarterly ADC for FCPO in the fourth quarter of 2019, as volatility in crude palm oil prices increased with the rally in crude palm oil prices,” Bursa said.

Bursa Malaysia shares were trading 0.51% or three sen lower at RM5.83 just after market resumed trading after the noon break, giving it a market capitalisation of RM4.71 billion.