KUALA LUMPUR (Oct 31): Bursa Malaysia Bhd said on Monday (Oct 31) that its third quarter net profit dropped 37.29% to RM50.13 million from RM79.94 million a year earlier, as the bourse operator and regulator registered lower revenue.

Its revenue for the third quarter ended Sept 30, 2022 (3QFY2022) fell 19.33% to RM140.36 million from RM173.98 million a year earlier, its bourse filing showed. Earnings per share dropped to 6.2 sen from 9.9 sen. No dividend was declared.

This is Bursa's lowest quarterly earnings and turnover since the pre-pandemic 4QFY2019 ended Dec 31, 2019, when it recorded a net profit of RM45.56 million, on a revenue of RM129.33 million. In contrast, Bursa posted its best net profit of RM121.94 million in 3QFY2020, on the back of its best ever revenue of RM237.74 million.

Bursa attributed the drop in earnings to the drop in total segment profits for 3QFY2022 to RM94.6 million, down 26% from RM127.9 million in 3QFY2021, dragged mainly by lower contribution from its securities market, which saw profit fall 34.9% to RM76.5 million in 3QFY2022, from RM117.6 million in 3QFY2021, mainly due to lower operating revenue.

The drop in operating revenue was due mainly to lower trading revenue, which dropped 40.5% to RM55.8 million from RM93.8 million, mostly because of lower average daily trading value for on-market trades and direct business trades, which fell 42.1% to RM1.75 billion from RM3.02 billion. Trading velocity in 3QFY2022 was lower by 16 percentage points at 24%, compared to 40% in 3QFY2021.

Depository services revenue also dropped 14.9% to RM12.2 million in 3QFY2022 from RM14.3 million in 3QFY2021, mainly due to lower record of depositors fees and additional issue fees earned.

The only increase was seen in market data revenue, which grew 9.8% to RM11.4 million in 3QFY2022 from RM10.4 million in 3QFY2021, contributed by a higher number of subscribers.

For the first nine months of FY2022, Bursa’s net profit dropped 38.83% to RM177.57 million from RM290.3 million, as cumulative revenue shrank 24.04% to RM457.54 million from RM602.36 million.

Looking ahead, Bursa Malaysia expects the securities market to remain range bound as it continues to be influenced by the ongoing domestic and global developments, as well as the 15th general election that is scheduled to be held on Nov 19.

“The exchange will continue with its ongoing initiatives such as the Bursa Research Incentive Scheme, Investor Relations & Public Relations Incentive Programme, Bursa Digital Research and Public Listed Companies Transformation (PLCT) Programme to attract and sustain institutional participation and retail investors in the market,” it said.

In the Derivatives Market, trading activities of the FCPO and FKLI contracts continue to be influenced by external factors such as the strengthening of the US dollar, rising interest rates and growing concern of a global economic recession, it noted.

Nonetheless, the exchange will continue to enhance the ecosystem through its ongoing initiatives, such as the further extension of the after-hours (T+1) trading session (night trading) to attract domestic and foreign participants.

As for the Islamic Markets, the exchange said it will continue its focus on developing new shariah-compliant products to meet the demands of investors as well as creating a conducive Islamic capital market ecosystem.

To this end, the exchange continues with its developmental efforts for the Shariah-compliant Voluntary Carbon Market as well as the Bursa Gold Dinar, with BSAS trading activity expected to sustain its momentum through the active engagements with its participants.

Taking into consideration Bursa Malaysia’s performance to date and the current challenging and competitive environment, the exchange expects to register a moderate performance as compared to FY2021.

As at 4.28pm, Bursa Malaysia’s share price was trading one sen or 0.16% higher at RM6.41, bringing it a market capitalisation of RM5.19 billion.