Despite Covid, Bursa Malaysia reaps massive gains

Bursa Malaysia Berhad (“Bursa Malaysia” or the “Exchange”) recorded a massive profit for the nine-month financial period. The Profit After Tax and Minority Interest (“PATAMI”) of RM272.9 million for the period ending on 30 September 2020 (“9M2020”). This PATAMI is a 94.5% increase from RM140.3 million in the previous corresponding period that ended 30 September 2019 (“9M2019”). The rise in PATAMI is due to higher operating revenue, which increased by 55.0%. The operating income for this period is RM554.0 million and higher from the previous corresponding period.

Meanwhile, total operating expenses in 9M2020 increased by 11.1% to RM200.4 million from RM180.3 million in 9M2019. This increase is due to higher staff costs, professional fees and information technology maintenance cost.

“Against the backdrop of unprecedented circumstances, the Exchange delivered an exceptional 9M2020 financial performance, recording the highest ever nine-month PATAMI since listing in 2005,” said Datuk Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia. “Firstly, the on-going developments with regards to COVID-19. Secondly, the low-interest-rate environment. Thirdly, the Malaysian government’s stimulus packages. Lastly, the gradual re-opening of the economy continue to support investor participation across segments led by domestic institutions and retail. The continuous operations of our markets have been critical in making available the necessary liquidity and risk management tools for investors to respond in a higher volatility environment and invest in new opportunities.”

Securities Market Growth

Investor participation in the Bursa Securities Market continued to increase. The average daily trading value (“ADV”) growing by 101.8% to RM4.0 billion in 9M2020 compared to RM2.0 billion in 9M2019. As a result, Securities trading revenue increased by 101.1% to RM349.2 million in 9M2020 from RM173.6 million in 9M2019. The increase in trading days and higher effective clearing fee in 9M2020 also contributed to the rise in trading revenue. Trading velocity increased by 34 percentage points to 62% compared to 9M2019.

Increase in Data Subscribers on Bursa

Non-trading revenue increased by 7.0% to RM110.9 million from RM103.6 million in the previous corresponding period. Higher market data revenue added to this increase. Above all, market data revenue increased by 20.4% to RM26.7 million in 9M2020 from RM22.2 million in 9M2019.  The rise in the number of new subscribers contributing to this growth. Depository services revenue also increased by 9.3% to RM34.4 million in 9M2020 from RM31.5 million in 9M2019 due to higher Record of Depositors fees and account opening fees earned. The Exchange will continue to build on its data-related offerings. It hopes to improve its non-trading revenue and ensure the long-term resilience of earnings in all market conditions.

Derivatives Market Trading Revenue

Derivatives Market trading revenue increased by 33.8% to RM69.2 million in 9M2020 from RM51.7 million in 9M2019. This increase mainly due to higher number of contracts traded for Crude Palm Oil Futures (“FCPO”) and FTSE Bursa Malaysia KLCI Futures (“FKLI”). Total average daily contracts (“ADC”) for the Derivatives Market increased by 41.3% to 74,408 contracts in 9M2020 compared to 52,644 contracts in 9M2019.

A rise in Islamic Capital Market

As for the Islamic Capital Market, trading revenue for Bursa Suq Al-Sila’ (“BSAS”) in 9M2020 decreased by 13.5% to RM9.6 million from RM11.1 million in 9M2019 despite the growth in ADV by 3.0% to RM32.5 billion in 9M2020. This growth was mainly due to higher trades under the volume-based pricing scheme that attracts a lower fee. With the increase in foreign participation, many are expecting an increase in trading on BSAS. The sentiments are that this increase will sustain for the rest of the year.

“While key economic indicators are pointing towards an improving outlook for the Malaysian economy, the on-going developments of the COVID-19 pandemic will continue to influence the volatility and performance of the Securities and Derivatives markets. We have been working closely with other regulators to ensure market efficiency and improved market accessibility and liquidity to support participants during this period,” commented Datuk Umar.

CEO of Bursa Malaysia is confident

Datuk Umar concluded by saying, “Despite the challenges, we are well-positioned to continue developing the marketplace and make further progress on our strategic plans. We have seen promising results after successfully conducting five listing ceremonies and holding our flagship events, namely, Invest Malaysia Conference and Palm and Lauric Oils Price Outlook Conference & Exhibition fully virtual. Each of these initiatives is important towards ensuring our offerings remain relevant to our diverse range of investors,” he added.

The financial results for 9M2020 are available on Bursa Malaysia’s website at www.bursamalaysia.com.

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