Bursa Malaysia CEO Datuk Muhamad Umar Swift.
KUALA LUMPUR: Bursa Malaysia Bhd
will implement initiatives that will improve operational and cost efficiency, while being steadfast in strengthening market ecosystem and introducing new offerings, to enhance market vibrancy and attractiveness to investors, according to chief executive officer Datuk Muhamad Umar Swift.
“Bank Negara Malaysia’s recent gross domestic growth (GDP) forecast of 4% to 5% for 2023 reinforces our optimism for Malaysia’s economic prospects, given the expectation that strong domestic demand will help anchor Malaysia’s economic growth amid external volatility.
“However, continued concerns over elevated cost of living and input costs might have an impact on consumer and business sentiments, which in turn could influence trading volume in the capital market,” he said in a statement.
Umar said the exchange is cautiously optimistic in meeting all five headline KPIs, as announced earlier in January 2023, provided that no unforeseen circumstances arise during the year.
Bursa Malaysia has set KPIs covering targets for profit before tax of RM295mil to RM326mil, non-trading revenue growth of 5% to 7%, 39 IPOs, product launches including the Bursa Gold Dinar, and reduction in its organisation’s emissions.
In the first quarter ended March 31 (1Q23), Bursa Malaysia posted a 17.4% lower profit after tax and zakat (PAT) of RM56.2mil, or earnings per share of 6.90 sen from RM68mil, or 8.40 sen in the previous year.
The decline in PAT is primarily due to a 13.4% decrease in the securities market’s operating revenue to RM100.0mil in 1Q23 from RM115.6mil in 1Q2022.
Meanwhile, total operating expenses increased by 10.6% to RM80.2mil from RM72.5mil in 1Q22, owing to higher marketing and developmental expenses, technology costs, and depreciation expenses.
Revenue for the quarter stood RM156.5mil, down from RM165.3mil.
For the current quarter under review, the lower operating revenue in the securities market is primarily due to a decrease in trading revenue, with the average daily trading value (ADV) for on-market trades (OMT) and direct business trades (DBT) recording RM2.3bil against RM2.7bil in 1Q22.
Bursa Malaysia said trading velocity decreased by five percentage points to 31% from 36% in 1Q22. Listing and issuer services decreased by 11.4% to RM15.0mil rom RM16.9mil in 1Q22, while depository services dipped by 8.7% to RM13.1mil from RM14.4mil in 1Q22.
On the Islamic Market front, higher trading activity in Bursa Suq Al-Sila’ resulted in an 18.5% increase in trading revenue to RM4.5mil in 1Q23 from RM3.8mil in 1Q22.
The data business segment continued its growth momentum, with operating revenue increasing by 5.7% to RM15.6mil from RM14.8mil in 1Q22.
“The first quarter of 2023 proved to be a challenging period for the capital markets due to various macroeconomic factors, with the securities market’s ADV returning to pre-pandemic levels compared to 1Q22. However, on a quarter-to-quarter basis, we have seen an improvement with our PAT being 14.6% higher than the fourth quarter ended Dec 31, which was at RM49.0mil,” Muhamad Umar said.
“We also saw significant increase in listings, with 10 IPOs in 1Q23, double the number of IPOs recorded in 1Q22, indicating improved market sentiment and demonstrating confidence that companies have in Bursa Malaysia as a valuable fundraising platform.
“We believe that the recent introduction of the LEAP Market Transfer Framework will enhance our market’s attractiveness and facilitate greater market access to more established SMEs,” he added.
