KUALA LUMPUR (July 28): Weaker revenue impacted by domestic and global developments, including global inflationary pressures, led Bursa Malaysia Bhd to report lower net profit for the second quarter ended June 30, 2022 (2QFY22), down 33.16% year-on-year (y-o-y) to RM59.47 million, from RM88.97 million a year ago.

The stock exchange operator’s quarterly revenue declined 22.55% to RM151.89 million, from RM196.1 million previously.

For the first half ended June 30, 2022 (1HFY22), net profit dropped 39.42% to RM127.44 million, from RM210.36 million in the previous year, amid lower operating revenue — down 26.4% to RM309.4 million from RM420.2 million, primarily caused by a decline in securities trading revenue. 

Bursa also saw its 1HFY22 revenue went down 25.96% y-o-y to RM317.185 million, from RM428.37 million the year before.

“The board of directors has approved and declared an interim dividend of 15 sen per share for FY22, amounting to approximately RM121.4 million. This represents a payout ratio of 95.3%, higher than the payout ratio for 1HFY21, which was at 92.3%,” Bursa said in a statement. 

For 1HFY22, Bursa said the securities market registered a trading revenue of RM147.2 million, a decrease by 44.7% compared with RM266.1 million the prior year, on lower average daily trading volume for on-market trades and direct business trades.

Trading velocity in 1HFY22 was lower by 28 percentage points at 33%, compared with 61% a year ago, it said. 

However, funds raised through initial public offerings in 1HFY22 were higher at RM2.1 billion, against RM400 million raised in 1HFY21, it noted. 

“Total derivatives trading revenue increased by 6.2% to RM47.7 million in 1HFY22, from RM44.9 million in 1HFY21, contributed by higher collateral management fees earned in 1HFY22, despite recording lower derivatives market average daily contracts (ADCs). ADCs fell 3.4% in 1HFY22, with 77,301 contracts, compared to 80,061 contracts in 1HFY21,” said Bursa. 

As for the Islamic market, higher trading activity in Bursa Suq Al-Sila’ resulted in an increase of trading revenue by 14.4% to RM7.6 million in 1HFY22, from RM6.7 million previously. 

“Driven by a higher number of subscribers in 1HFY22, the market data business showed an 18.3% increase in revenue, closing 1HFY22 with a total of RM31.2 million, compared with RM26.4 million in 1HFY21,” the stock exchange operator explained. 

Bursa chief executive officer (CEO) Datuk Muhamad Umar Swift expects the number of new listings on the local bourse to remain strong in 2HFY22, driven by higher Malaysian economic growth of 5.5% as forecast by the World Bank and higher consumption demand. 

“We will continue to enhance the attractiveness of existing listed issuers through our Public Listed Companies Transformation Programme,” Umar said.

To generate more trading activity, Bursa will continue to actively engage with existing and potential market participants, according to the chairman. 

“Further, to meet the demands of investors as well as creating a more conducive Islamic capital market ecosystem, we will continue to develop new syariah-compliant products, such as the Digital Gold Dinar and a shariah-compliant Voluntary Carbon Market, in line with our Sustainable and Responsible Investment and Environmental Social Governance agenda,” he added. 

At the midday break on Thursday (July 28), Bursa settled five sen or 0.78% higher at RM6.45, giving it a market capitalisation of RM5.22 billion.