KUALA LUMPUR: Bursa Malaysia Bhd, whose share price surged to a record high of RM10.98 on Tuesday, delivered a strong set of financial results in the second quarter ended June 30,2020 with net profit of RM86.22mil.
The stock exchange operator announced at midday its net profit jumped 86% from RM46.34mil a year ago underpinned by the strong performance from the securities market as trading volume had surged to fresh historic highs.
Bursa's revenue increased by 45% to RM179.77mil from RM123.96mil. Earnings per share were 10.7 sen compared with 5.7 sen a year ago.
The board of directors approved an interim dividend of 17 sen per share for the financial year ending Dec 31,2020, or a dividend payout ratio of 91.1%, payable on Aug 26.
Bursa said the securities market recorded a segment profit of RM123.2mil in 2Q, an increase of 65.1% compared to RM74.6mil a year ago, mainly due to higher trading revenue.
Its operating revenue for 2Q was RM145.2mi, an increase of 54.9% compared to RM93.8mil a year ago.
Trading revenue increased by 87.4% to RM110.1mil in 2Q mainly due to higher average daily trading value (ADV) for on-market trades (OMT) and direct business trades (DBT), which increased by 74.2% to RM3.85bil in 2Q2020 compared to RM2.21bil a year ago.
Trading velocity in 2Q was higher by 33 percentage points to 62% compared to 29% a year ago.
However, listing and issuer services revenue decreased by 12.3% to RM11.6mil in 2Q. This was mainly due to lower annual listing fees resulting from the recognition of the 50% rebate on annual listing fees for year 2020 to aid targeted listed issuers due to Movement Control Order (MCO).
Bursa said market data revenue increased by 31.4 per cent to RM9.5 million in 2Q2020 driven by higher number of subscribers.
For the first half, its net profit rose by 62% to RM150.96mil compared with RM93.19mil in the previous corresponding period. Its revenue was up by 31.9% to RM330.53mil from RM250.48mil.
The increase in net profit was due to higher operating revenue, which increased by 33.6% to RM320.7mil from RM240mil.
Total operating expenses increased by 3.7% to RM127.1mil from RM122.6mil a year ago, mainly due to higher staff and technology costs.
This is Bursa Malaysia’s highest first-half financial performance since its listing in 2005.
Bursa Malaysia CEO Datuk Muhamad Umar Swift said: “I am pleased with our strong first half financial results. Our annualised ROE and EPS of 39% and 18.7 sen respectively has allowed the board to declare an interim dividend of 17.0 sen, the highest since listing in 2005.”
The elevated market volatility has resulted in higher trading activities in both the securities and derivatives markets. However, listing and issuer services revenue saw a slight decline, resulting from the recognition of the 50% waiver on annual listing fees for the year 2020 to assist listed issuers overcome the challenges of the Covid-19 pandemic.
Umar said market data revenue continues to grow, increasing by 18.9% to RM22.6mil from RM19mil in 1H2019, driven by the expansion of market data subscriber base in 1H2020.
For 1H2020, the securities market registered a trading revenue of RM188.2mil compared to RM117.8mil in 1H2019, increasing by 59.7% as a result of higher average daily trading value (ADV) for securities market’s on-market trades.
The broader market was supported by local investors, with higher retail participation during the period.
As for the derivatives market, trading revenue increased by 44.3% to RM48mil in 1H2020 from RM33.3mil in 1H2019, mainly due to higher number of contracts traded for Crude Palm Oil Futures (FCPO) and FTSE Bursa Malaysia KLCI Futures (FKLI).
Average daily contracts (ADC) for the derivatives market rose by 55.9%, with 76,956 contracts in 1H2020 compared with 49,351 contracts in 1H2019.
Bursa Malaysia said that conference fees and exhibition-related income decreased in 1H2020, due to the cancellation of the Palm and Lauric Oils Price Outlook Conference & Exhibition 2020.
As for the Islamic Capital Market, Bursa Suq Al-Sila’ (BSAS), trading revenue decreased by 17.2% to RM6.3mil in 1H2020 from RM7.6mil in 1H2019, despite higher BSAS ADV.
“This was due to a higher proportion of volume-based pricing trades for the half year period.
“Nevertheless, the Exchange continued to grow its base with the onboarding of 14 new participants, five of which are foreign, and is expected to sustain its level of performance through continuous engagement with its participants.
“Malaysia has done well in containing Covid-19. Although uncertainties continue to surround its impact on the economy, we are confident that the stimulus packages will aid in Malaysia’s recovery and maintain the resilience of our markets, ” Umar said.
“Our ongoing efforts to increase market vibrancy and liquidity is having a positive impact. We are witnessing strong retail participation and have recorded the highest trading in Bursa’s history of 12.5 billion on July 20.
“The emergence of millennials in the marketplace is also very encouraging and has been something we have been working very hard to achieve.
“We will continue to introduce new initiatives and streamlined product offerings, such as expanding the range of trading channels and platforms to improve the seamless digital journey on Bursa Malaysia for the new generation of investors.”