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KUALA LUMPUR: Bursa Malaysia Bhd (fundamental score: 2.70; valuation score: 0.9) foresees that initial public offering (IPO) activities this year will be as slow as last year’s, if not worse, as the local market continues to be subject to global volatilities. 

“We believe the market is still trying to figure out how things are positioned [as things] will continue to be subject to volatilities. From the IPO perspective, I think the trend will be close to 2014 or maybe a little lower than that,” Bursa chief executive officer Datuk Tajuddin Atan told reporters during the bourse’s financial results briefing yesterday.  

He said the IPO market has already slowed down last year, with RM5.9 billion raised, compared with the RM8.2 billion raised in 2013. He acknowledged that there are concerns that there might be some delays in IPOs this year due to the weaker market sentiments, but stressed that the number of IPOs should still be “about the same” as last year’s.

Tajuddin said the bourse expects 2015 to continue to be a challenging year where global markets remain volatile, but that it “remains cautiously optimistic as Malaysia has a proven track record being a tenacious and resilient market”. Tajuddin also denied that there would be a rise in listing fees, adding that Bursa needs to provide more value if it were to raise the fees.

On the Singapore Exchange’s move to introduce a minimum trading price of 20 Singapore cents (54 sen) for its mainboard stocks to curb excessive penny-stock speculation after a penny- stock rout involving Blumont Group Ltd, Asiasons Capital Ltd and LionGold Corp Ltd, Tajuddin replied that Bursa is not “thinking along that line”.

“We have a lot of safeguards and frameworks to govern the shares, prices and the like,” he said.  He said that the framework now is sufficient to promote efficient market activities and the performance of shares.

On capital expenditure this year, Tajuddin said he has budgeted close to RM20 million, which is much lower than previous years, as he does not see major expenses with regards to technology. 

Meanwhile, Bursa reported a 57% rise in its fourth quarter ended Dec 31, 2014 (4QFY14), net profit to RM53.14 million from RM33.84 million a year earlier, as the bourse operator and regulator saw higher equities and derivatives trading income. Lower staff cost besides depreciation and amortisation also supported the bottom line.The bourse also delivered its highest full-year net profit since 2008 at RM198.22 million for FY14, up by 15% from FY13’s RM173.08 million, while revenue was 6.06% higher at RM503.76 million versus RM474.99 million a year ago.The group plans to pay a dividend of 18 sen a share in 4QFY14, bringing its full-year dividends to 54 sen.


The Edge Research’s fundamental score reflects a company’’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

 

This article first appeared in The Edge Financial Daily, on January 30, 2015.

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