Bursa Malaysia CEO Datuk Tajuddin Atan said the higher earnings in the 9 months were due to the resilient performance of the Securities Market which was supported by continued growth in the Derivatives Market and Islamic Capital Market.
KUALA LUMPUR: Bursa Malaysia Bhd
's earnings rose 17.2% to RM51.60mil in the third quarter ended Sept 30, 2017 from RM44.04mil a year ago, underpinned by higher trading revenue, listing and issuer services.
The stock exchange operator announced on Wednesday its revenue increased by 9.1% to RM130.27mil from RM119.39mil. Earnings per share were 9.6 sen compared with 8.2 sen.
Total comprehensive income for 3Q17 was RM66.8mil, an increase of 7.6% compared to RM62.1mil in 3Q16. The increase was mainly from the fair value changes in quoted shares.
The Securities Market recorded a segment profit of RM75.9mil, up by 18.1% from RM64.2mil a year ago due to higher trading revenue and listing and issuer services. Operating revenue rose 13.8% to RM94.5mil.
Trading revenue increased by 9.6% to RM56.2mil. The average daily trading value (ADV) for on-market trades(OMT) and direct business trades (DBT) of RM2.16bil compared to RM1.88bil a year ago.
Listing and issuer services revenue increased by 36.3% to RM17mil mainly due to the higher initial listing fees earned from larger initial public offerings (IPOs) and higher number of new structured warrants listed, as well as processing fees earned from higher number of corporate exercises.
“The ADV for the securities market's OMT improved by 12.1% to RM2bil. Average daily contracts (ADC) traded on the Derivatives Market increased marginally to 56,848 contracts in 3Q2017.
“On the Islamic Capital Market front, the ADV for Bursa Suq Al-Sila’s (BSAS) soared 34.5% to RM20.4bil,” it said.
The Derivatives Market's operating revenue rose 4.4% to RM21.9mil.
For the nine-month period, its earnings rose 16.9% to RM167.77mil from RM143.45mil in the previous corresponding period. Its revenue increased at a slower pace of 8.5% to RM415.63mil from RM383.047mil.
Bursa Malaysia said the 9M FY17 operating revenue increased by 8.9% to RM392.1mil, while operating expenses increased marginally at 1.4% to RM183.9mil.
The annualised return on equity (ROE) and cost-to-income ratio stood at 27% and 44% respectively, it said.
Bursa Malaysia CEO Datuk Seri Tajuddin Atan said: “The growth in PATAMI (profit after tax and minorty interest) is attributable largely to the increase in both trading and non-trading revenue.”
The equity market remained buoyant up to end of 3Q, 2017, he said, pointing out the FBM KLCI advanced 6.9% in the nibe months, underpinned by overall positive market sentiment and net inflows from foreign investors.
“Increase in listing fee collections from higher and larger initial public offerings (IPOs) and new structured warrants listed, together with processing fees earned from corporate exercises, contributed to the increase in non-trading revenue,” he said.
Tajuddin pointed out the favourable market condition also contributed to improved market activities.
During the nine month period, the ADV for the securities market’s OMT increased by 24.8% to RM2.3bil.
The 10 IPOs that raised a total of RM7.4bil compared to RM500mil a year ago.
The ADC traded for the Derivatives Market stood at 58,817 contracts, a marginal increase of 0.2%.
Seasonality factors impacting crude palm oil (CPO) supply contributed to increased hedging activities and trading of futures CPO contracts, which stood at nine million contracts in 9M2017, a 4.4% increase from 9M2016.
The increase, however, was offset by the decline in FKLI trading due to historically low volatility on both local and global equity markets.
“A stable outlook for commodity prices and the tapering of monetary easing in major economies are expected to continue to affect trading of FCPO and FKLI contracts,” it said.
Improvement in BSAS trading activities amidst stiff competition on the local and global front resulted in a 15.2% ADV growth to RM18.9bil in 9M2017.
“Efforts are being undertaken to expand BSAS’ reach in new regions such as North Africa and Central Asia,” said Bursa.
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