KUALA LUMPUR: Stock exchange operator Bursa Malaysia still has plenty of cash and could be in a position to consider another return of capital to shareholders late this year, says chief executive officer Yusli Mohamed Yusoff.
At the end of 2005, Bursa handed RM416mil of its cash pile back to shareholders under its policy to repay capital beyond what is required for operational needs, a sum it has previously put at around RM500mil. At Dec 31, it had almost RM600mil in cash and short-term deposits and investments, and more cash could be raised soon, he said.
“If you look at how much money we need to run the exchange, we probably don't need as much, but for now the board doesn't have any more plans to return any more cash,” Yusli said in an interview.
“As and when circumstances warrant it, we will consider it. There are a couple of other things that we are looking at which may release some cash, but not in the immediate future. Maybe towards the end of the year we can review that situation again.”
Yusli said Bursa's headquarters was potentially up for sale and could be leased back to the exchange.
“This is the major property that we have on our balance sheet and we are looking at the possibility of a sale and leaseback. We are still studying it and it needs to make sense for us financially. If the numbers are marginal, we may not do it.”
Bursa's 2004 annual report put the total net value of land and buildings at almost RM300mil.
The exchange could also reap a cash windfall of about RM100mil when it sets up a new guarantee fund for its clearing house, hopefully in the next few months, Yusli said.
A clearing house ensures smooth trading by taking on the risk of default in market transactions.
“Currently we set aside about RM200mil of our cash as a standby guarantee for clearing,” Yusli said. “So when we set up a clearing guarantee fund, that will release about over RM100mil of cash from the standby (guarantee).” - Reuters
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