PETALING JAYA: The stock market frenzy over the past few months has given Kenanga Investment Bank Bhd more than a three-fold jump in its net profit for the second quarter of 2020 (2Q20).
The investment bank posted a net profit of RM20.47mil for the quarter, up from RM5.6mil in the same quarter last year, on the back of higher brokerage fees, trading and investment income and management fee income.
The group’s revenue came in at RM209.74mil, which was 24.07% higher year-on-year (y-o-y) and the highest quarterly revenue it has recorded so far.
Kenanga also recorded a share of profits from its joint venture company with Japan’s Rakuten Securities Inc - Rakuten Trade Sdn Bhd - for the first time since its inception.
Rakuten Trade registered over 60,000 new traders within the first 6 months this year to cross the 100,000 mark, charting record volumes traded in its wake, fuelled by the recent market volatility that catalysed a surge in participation from local retail investors.
StarBiz had reported on Saturday that Kenanga ranked second among stockbrokers for 2Q20 in terms of the trades it handled - 117.44 billion units valued at RM54bil - which grew 144.16% and 99.04% respectively.
Stockbroking, which is the group’s main operating segment, recorded a nine-fold increase in profit before tax from RM1.55mil to RM13.74mil On a cumulative six-month basis, Kenanga’s net profit only inched up 1% to RM3.52mil while its revenue increased 15.1% to RM374.84mil.
Group managing director Datuk Chay Wai Leong said the last few months had truly validated Kenanga’s digital strategy which it embarked on a few years ago.
“Digitalisation has enabled us to support the recent resurgence in retail participation, and to capitalise on the bullish stock market sentiments.
“We are committed to fast-tracking our pursuit of innovation to further transform operational effectiveness, elevate customer experience and to provide a robust all-encompassing investing ecosystem for Malaysian investors, ” he said in a statement yesterday, adding that with the group’s prudent risk management practices and strong foothold in the retail market, it was well positioned to end the year on a positive note. Having one of Malaysia’s largest network of dealers and remisiers, Kenanga enabled its team of 1,000 dealers and remisiers to seamlessly operate from home, using the Kenanga remisier portal during the recent movement control order (MCO).
In a filing with Bursa Malaysia, Kenanga said its board and management were cognisant of the economic downturn and market uncertainty arising from the coronavirus (Covid-19) pandemic and have taken steps to mitigate the impact. The group remains cautiously optimistic that it can deliver results to its shareholders by managing its risks prudently and leveraging its strengths in the retail market.
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