Equity market hit by global crisis and domestic uncertainties
PETALING JAYA: BURSA MALAYSIA BHD’s net profit for its third quarter ended Sept 30 slumped 64% to RM20.2mil, or 3.8 sen per share, as the global credit crunch and domestic uncertainties impacted trading revenue from the equity market.
Revenue for the period fell almost 40% to RM73.6mil against RM122.3mil in the previous corresponding period, it said in a stock exchange filing yesterday.
Pre-tax profit was also down by 65% to RM26.2mil against RM75.7mil a year ago.
“The results are below expectations,” a Kenanga Research analyst said, without elaborating. Trading volumes are a significant determinant of a stock exchange operator’s earnings. The volume traded on Bursa yesterday was 899 million shares, contrasting sharply with the 15-month high of 2.15 billion shares recorded on Oct 8, 2007.
Year-to-date, as much as 40%, or about RM455bil, had been wiped out from the local stock market.
“The Malaysian equity market has been adversely affected by the global financial crisis.
“The group expects the similar bearish trend to continue in line with the slowing down of the global economy,” Bursa said in the notes accompanying its financial results yesterday.
“The board of directors is cognisant of the global and domestic climates in which the group operates and, as such, acknowledges that the group will not be able to achieve its targets this year,” it added.
In the nine months to Sept 30, Bursa’s net profit stood at RM91mil, or 17.3 sen per share, compared with RM191.1mil, or 36.7 sen per share, for the same period last year.
Bursa said the Malaysian economy was in a better position to weather the financial crisis than it was in the previous Asian financial crisis as it was now a “less-leveraged economy” and was supported by a much stronger banking sector, a larger current account surplus and healthier foreign exchange reserves.
“Despite the global and local uncertainties, the group remains committed in its efforts to make the Malaysian equity and derivatives markets attractive and to introduce competitive and innovative financial products for the Islamic capital market,” it said.
Elsewhere in the region, Singapore Exchange Ltd also reported a lower net profit of S$84.5mil for its first quarter ended Sept 30, 35% lower compared with a year ago.
Asia’s largest listed bourse operator, Hong Kong Exchanges & Clearing’s third-quarter earnings are expected to once again be in the negative territory after falling 6% to HK$1.32bil in the second quarter to June 30 on a year-on-year basis.
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