Bursa Malaysia’s net profit falls by a third to RM59.47m in Q2

KUALA LUMPUR, July 28 ― Bursa Malaysia Bhd reported a net profit of RM59.47 million for the second quarter ended June 30, 2022 (Q2 FY2022), down 33.2 per cent from RM88.97 million a year earlier mainly due to lower operating revenue.

Revenue declined by 22.5 per cent to RM151.89 million from RM196.10 million, the exchange operator said in its latest quarterly results announcement.

“Total segment profits for Q2 FY2022 was RM109.2 million, a decrease of 23.6 per cent compared to RM142.9 million in Q2 FY2021,” it said.

Bursa Malaysia said the securities market segment recorded a profit of RM92.0 million, a 30.7 per cent drop compared to RM132.7 million a year earlier, mainly due to lower operating revenue in the quarter under review.

Its operating revenue fell 28.9 per cent to RM115.0 million from RM161.9 million in Q2 FY2021.

“Trading revenue decreased by 42.1 per cent to RM66.8 million in Q2 FY2022 from RM115.3 million in Q2 FY2021 mainly due to lower average daily trading value for on-market trades and direct business trades, which decreased by 42.2 per cent to RM2.23 billion in Q2 FY2022 compared to RM3.86 billion in Q2 FY2021,” it said.

Bursa Malaysia said trading velocity in the quarter under review was lower by 21 percentage points at 30 per cent compared to 51 per cent in last year’s corresponding period.

Listing and issuer services revenue dipped by 8.2 per cent to RM17.1 million from RM18.7 million in the year-ago quarter mainly due to lower perusal and processing fees and additional listing fees earned from corporate exercises in Q2 FY2022.

Meanwhile, for the first half-year ended June 30, 2022 (H1 FY2022), Bursa Malaysia's profit after tax and zakat (PAT) fell 39.4 per cent to RM127.44 million from RM210.36 million in the previous year’s corresponding period due to lower operating revenue, primarily caused by a decline in securities trading revenue.

Its operating revenue also decreased by 26.4 per cent to RM309.43 million from RM420.16 million in the first half of 2021.

In a media statement, chief executive officer Datuk Muhamad Umar Swift said the weaker revenue stream was influenced by domestic and global developments including global inflationary pressures, which resulted in a decline in H1 FY2022 profit.

The board of directors approved and declared an interim dividend of 15 sen per share for the financial year ending Dec 31, 2022, amounting to RM121.4 million.

Bursa Malaysia said this represents a payout ratio of 95.3 per cent, higher than the payout ratio for H1 FY2021, which was at 92.3 per cent.

For H1 FY2022, the securities market segment registered trading revenue of RM147.2 million, a 44.7 per cent decrease compared to RM266.1 million in the first half of 20221, due to lower average daily trading value for on-market trades and direct business trades of RM2.46 billion against RM4.51 billion in H1 FY2021.

“Trading velocity in H1 FY2022 was lower by 28 percentage points at 33 per cent compared to 61 per cent in H1 FY2021. However, funds raised through initial public offerings in H1 FY2022 totalled RM2.1 billion, which was much higher than the RM0.4 billion raised in H1 FY2021,” it said.

Total derivatives trading revenue grew by 6.2 per cent to RM47.7 million from RM44.9 million in H1 FY2021, contributed by higher collateral management fees earned despite recording lower derivatives market average daily contracts (ADC).

The ADC in H1 FY2022 fell 3.4 per cent to 77,301 contracts from 80,061 contracts in the same period last year.

As for the Islamic markets, higher trading activity in Bursa Suq Al-Sila’ resulted in an increase of trading revenue by 14.4 per cent to RM7.6 million in H1 FY2022, from RM6.7 million in the previous year’s corresponding period.

Muhamad Umar said taking into account the World Bank’s forecast of 5.5 per cent economic growth for Malaysia driven by higher consumption demand, Bursa Malaysia expects the number of new listings to remain strong in the second half of 2022.

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

He added that to generate more trading activity, the exchange will continue to actively engage with existing and potential market participants.

“Further, to meet the demands of investors as well as creating a more conducive Islamic capital market ecosystem, we will continue to develop new Shariah-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 and Governance agenda,” he added. ― Bernama