KUALA LUMPUR (Aug 25): Kenanga Investment Bank Bhd posted a net profit of RM20.47 million for the second quarter ended June 30, 2020 (2QFY20), surging 265% from RM5.6 million in the same quarter a year earlier (2QFY19) after retail trading swelled during the quarter.

Revenue for the quarter jumped 24.1% to RM209.74 million from RM169.05 million in the previous year’s corresponding quarter.

Kenanga said its net income increased 46% year-on-year to RM170.1 million, thanks to higher brokerage fees, trading and investment income as well as management fee income.

The group also recorded a share of profits from its joint venture company Rakuten Trade and a reversal of credit loss provision.

It said the recent market volatility resulted in a surge in participation from local retail investors, which fueled record high trading activity in the equities market, noting that trading volume on Bursa Malaysia had swelled to a daily peak of 26.65 billion securities earlier this month, valued at RM9.05 billion — the highest in the region.

Notably, Kenanga’s share price has doubled year-to-date to trade around its 13-year-high levels. At the time of writing, the counter was trading at 93.5 sen, versus levels around 45 sen at the start of the year.

For the first half of its financial year (1HFY20), net profit was relatively flat at RM13.5 million, versus RM13.39 million in the previous year, while revenue increased 15.1% to RM374.84 million from RM325.69 million.

“The last few months has truly validated our digital strategy which we embarked on a few years ago. Digitalisation has enabled us to support the recent resurgence in retail participation, and to capitalise on the bullish stock market sentiments.

“We are committed to fast-track our pursuit of innovation to further transform operational effectiveness, elevate customer experience and to provide a robust all-encompassing investing ecosystem for Malaysian investors,” said Kenanga group managing director Datuk Chay Wai Leong in a statement.

“With our prudent risk management practices and strong foothold in the retail market, we are well positioned to end the year on a positive note,” he added.

Chay said Kenanga’s strong foothold in the retail market and its prudent risk management practices put the group in a good position to end the year on a positive note.

Rakuten Trade registered over 60,000 new traders within the first half of the year, with its total traders now past the 100,000 mark.

At 12.30pm, Kenanga fell 2.5 sen or 2.6% to 93.5 sen, giving it a market capitalisation of RM675.76 million.

Edited by Lam Jian Wyn