“Challenging global operating conditions have resulted in the softening of trading in the securities market," says Wahid.
PETALING JAYA: Securities regulator Bursa Malaysia Bhd
expects the equities market to be challenging in 2023, on the back of persisting volatilities from both domestic and global factors.
The stock market operator anticipates factors such as rising US interest rates and Bank Negara’s overnight policy rate (OPR) hike, the retabling of Budget 2023 and corporate earnings results to influence the market performance.
Having acknowledged that, Bursa Malaysia said it would continue with its ongoing initiatives to further enhance the attractiveness of the Malaysian equity market, such as the ongoing Bursa Research Incentive Scheme, Bursa Digital Research and the monitoring of the listed companies participating in the PLC Transformation Programme.
Bursa Malaysia itself released its financial results for the year ended Dec 31, 2022 yesterday, posting a net profit of RM226.6mil, which translated to a 36.2% year-on-year (y-o-y) slide compared to RM355.3mil in 2021.
Total revenue also declined by 21.4% y-o-y to RM603.2mil against the RM767.5mil from last year.
The exchange is cautiously optimistic and expects the revenue performance to improve in the financial year 2023, notwithstanding the global economic uncertainty, while posting a pre-tax profit target in the range of RM295mil to RM326mil for the year.
Bursa Malaysia chairman Tan Sri Abdul Wahid Omar attributed the decrease in net profit and revenue to the lowering of trading value throughout 2022.
“Challenging global operating conditions have resulted in the softening of trading in the securities market.
“Trading value declined by 41.5% with the average daily value (ADV) of RM2.1bil in 2022, though this is still higher than the pre-lockdown ADV of RM1.9bil,” Abdul Wahid said at a press conference yesterday.
Bursa Malaysia chief financial officer Rosidah Baharom added that trading interest in 2022 had also been influenced by the aforementioned tightening policies of the US Federal Reserve and OPR movements of the central bank, on top of geopolitical issues such as the conflict between Russia and Ukraine.
On the other hand, Abdul Wahid said the derivatives market had recorded a better performance in 2022 as compared to the year before, with average daily contracts increasing by 4.6% from 75,178 contracts in 2021 to 78,621 contracts last year.
Meanwhile, chief executive Datuk Muhamad Umar Swift pointed out that the bourse had overseen a strong initial public offering (IPO) environment last year with 35 new listings, raising a total of RM11.15bil.
Given the encouraging IPO scene in 2022, Muhamad Umar said the regulator is targeting 39 IPOs this year, with a market capitalisation of at least RM10bil with these new listings.
So far this year, Bursa Malaysia has overseen seven listings, one on the Main Board and six on the ACE market.
Commenting on the lower market capital goal as compared to the number of IPO listings, Abdul Wahid said the primary idea is to allow companies with huge growth potential to undertake primary offerings that would enable them to grow.
Muhamad Umar also highlighted that Bursa Malaysia’s market data business segment also improved in 2022, delivering 12.5% y-o-y growth to RM60.8mil from RM54mil the year before.
“To achieve further growth in our non-trading revenue, we will continue improving the delivery of richer data to clients to empower the industry to undertake analytics or offer better products or service,” he said.
