Bursa Malaysia improves financial performance in Second Quarter

Bursa Malaysia improves financial performance in Second Quarter with Rm35 million profit - Increase due to better trading volumes and market sentiment

20/07/09

Bursa Malaysia Berhad (Bursa Malaysia) today reported a higher net profit of RM35 million for the second quarter ended 30 June 2009, a 22% jump compared to RM28.6 million profit recorded in the second quarter of 2008. Operating revenue improved by 12% to RM86.8 million in the period under review compared to RM77.5 million in the previous corresponding quarter. For the half-year ended 30 June 2009, Bursa Malaysia recorded a net profit of RM50.5 million - a 29% decline compared to the net profit of RM70.7 million for the corresponding period last year. Bursa Malaysia’s operating revenue dropped by 16% to RM141.2 million from RM168.5 million registered in the same period last year.

Bursa Malaysia’s Chief Executive Officer, Dato’ Yusli Mohamed Yusoff said, “The stronger quarter-on-quarter results is attributed to heightened investor confidence and improved trading activity in the market. However, our overall six-month results need to be assessed against the backdrop of the subdued performance of the local market, which has been impacted by the uncertainties in the global financial and economic front, especially in the early part of the year. Without a doubt, our cost optimisation and prudent financial management measures have helped contribute to the better financial performance in the second quarter. We are confident that the company is well-positioned to weather the ongoing economic challenges and continue to register growth.”

Market interest picked up in the second quarter of 2009, contributing to a better daily average value and volume at RM1.56 billion and 1.68 billion respectively, compared to RM1.32 billion and 570 million in value and volume in the second quarter of 2008. Quarterly velocity substantially improved to 48% from 31% in the previous corresponding period. On the other hand, velocity for the six months of this year declined marginally to 37% from 38% in the same period in 2008. Trading revenue for the securities market decreased by 21% to RM67.4 million as compared to RM84.8 million in the first half of 2008.

The derivatives business continued to garner steady interest amongst the traders as demonstrated by the increase in total number of derivatives contracts traded in the first half of 2009. The total derivatives contracts traded were 3.27 million, up 6% from 3.08 million in the first half of 2008. However, trading revenue declined by 4% to RM21.1 million from RM22 million in the corresponding period in 2008. This drop was due to a decrease in FKLI contracts which trade at a higher fee compared to FCPO contracts. Nevertheless, the revenue decline was offset by an increase in the number of FCPO contracts, at 2 million for the period under review compared to 1.4 million in the first six months of 2008. FCPO contracts broke record levels in April, chalking an all time 27-year high of 442,220 contracts. Dato’ Yusli said that the steady performance of its FCPO market is attributed to the robust underlying industry which always has a need to hedge their positions against the volatility of the edible oils and commodity markets.

Bursa Malaysia also announced an interim dividend which consists of a franked (taxable) dividend of 5.1 sen gross per share (net 3.825 sen per share) and a single-tier (tax-exempt) dividend of 5.0 sen per share. This is equivalent to a total net dividend payout of 8.825 sen per share. The payout at 92% is higher than the Group’s dividend policy of minimum 75% payout. The interim dividend will be paid out to its shareholders on 18 August 2009. Dato’ Yusli said, “As a listed company, Bursa Malaysia is committed to continuous delivery of sustainable value to shareholders and this attractive two-tier dividend payout demonstrates just that. Moreover, we have successfully contained operating cost increases through a controlled expenditure pattern, which we will continue practising over the long term.”

The financial results for the first half of 2009 are available on Bursa Malaysia’s website (www.bursamalaysia.com).

Financial Results 1H09 1H08
  RM 'mil  RM 'mil
Operating revenue  141.2  168.5
Other income  17.5   18.4
Total revenue 158.7 186.9
Staff costs (39.5) (43.1)
Depreciation and amortisation (18.3)  (9.3)
Other operating expenses  (30.4) (37.9)
Profit from operations 70.5 96.6
Finance costs (0.3) (0.3)
Profit before tax 70.2 96.3
Income tax expense (19.7) (25.6)
Net profit for the period  50.5 70.7