Bursa Malaysia chairman Tan Sri Abdul Wahid Omar.
KUALA LUMPUR: Bursa Malaysia Bhd
has revised its earnings forecast for the financial year ending Dec 31, 2024 (FY24), with the new forecast pre-tax profit range expected to be between RM361mil and RM379mil, up from the previously anticipated RM293mil to RM323mil.
This revision represents notable growth compared to the RM321.5mil pre-tax profit reported in FY23, while the pre-tax profit for the first half of 2024 (1H24) of RM209.3mil makes up more than half of the revised target.
Bursa Malaysia chairman Tan Sri Abdul Wahid Omar said that the updated forecast reflects the positive momentum observed in the market and Bursa Malaysia’s strategic initiatives aimed at bolstering market confidence and performance.
He highlighted the significant contributions of policy reforms, fiscal consolidation commitments and ongoing investment into the capital market as key factors driving this optimistic outlook.
In addition to the revised pre-tax profit forecast, Bursa Malaysia also reaffirmed its commitment to achieving 42 initial public offerings (IPOs) for 2024, noting that 28 IPOs had already been completed to date.
Abdul Wahid said that the strong performance of both domestic and foreign investors in 1H24 has further reinforced confidence in achieving these targets.
For 1H24, 21 IPOs were completed, with the majority being 16 on the ACE Market, four on the Main Market and one on the LEAP Market. This compares to 16 IPOs in 1H23, with 11 from the ACE Market, four on the Main Market and one on the LEAP Market.When asked if the trend of ACE Market IPOs dominating would continue, Abdul Wahid noted that the marketplace provides an avenue for all businesses to raise capital for growth, not just larger entities.
“In the past, perhaps there has been a lot more emphasis on larger entities. But by design, we have contributed to promote not just the Main Market but also the ACE Market.
“This is actually a space where fledgling businesses, as they grow and want to expand, they need more capital and they come to Bursa Malaysia,” he said.
Abdul Wahid also emphasised Bursa Malaysia’s role in facilitating smaller companies from the LEAP Market to transfer to the ACE Market.
“For the second half of the year, we do expect, again, most companies to come into the ACE Market. We also see more Main Market companies coming to the market as well,” he noted.
Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift said to-date, there are approved pending listings of four Main Market companies and 14 companies on the ACE Market, with some in the LEAP Market space as well.
Meanwhile, Abdul Wahid emphasised Bursa Malaysia’s strategic intent to attract new investors by expanding the asset class spectrum.
“We’re strategically planting new asset classes to support the equity movement,” he said.
Speaking in regards to this, Muhamad Umar said the exchange is targeting seven new asset class issuances this year, with a much larger pipeline to meet the market’s needs.He added that the real challenge lies in building a diverse investor base, both institutional and retail.
“Our aim is to create a continuum that bridges new asset classes with traditional securities, encouraging investors to explore beyond conventional equities,” he added.
Muhamad Umar also addressed a query regarding sector classifications, indicating that the exchange might consider updating it (Bursa Malaysia’s sector classifications).
This consideration arises from recent IPOs like Kucingko Bhd, which was listed under the telecommunications sector despite its focus on content creation and digital media.
He acknowledged the need for a review of sector classifications to accommodate new and emerging industries.
“You will probably see a review of our sector classifications to accommodate these new and emerging industries,” Muhamad Umar said.
Additionally, Abdul Wahid said Bursa Malaysia is planning to move its “front office” to the Tun Razak Exchange (TRX), while retaining the bulk of its operations at Exchange Square, Bukit Kewangan.
He noted that the front office, which handles the exchange’s marketing and branding activities, will relocate to TRX.
He said the move aligns with TRX’s vision of becoming a financial centre and would enhance the overall development.
“The idea is truly to give meaning to the whole development. We are positive on this suggestion and just have to work out the economics,” he said.
For the second quarter of 2024 (2Q24), Bursa Malaysia reported a 5.5% year-on-year (y-o-y) increase in net profit, rising to RM80.45mil from RM76.25mil in the same period last year, driven by improved market sentiment.
This is on the back of revenue of RM199.94, which increased by 38.3% from RM144.6mil in 2Q23.
For 1H24, the exchange’s net profit rose by 17.4% to RM155.48mil from RM132.42mil in the same period last year.
Revenue for 1H24 edged higher to RM387.14mil from RM301.1mil in 1H23, driven by a surge in securities trading revenue.
The revenue from securities trading surged by 52.6%, reaching RM192.2mil in 1H24, up from RM126mil in 1H23.
This substantial increase, which now represents 52% of total revenue, reflects significant trading activity in the securities market.
Revenue from derivatives trading grew by 16.8%, from RM44.5mil in 1H23 to RM51.9mil in 1H24.
As for Islamic markets, the revenue from Bursa Suq Al-Sila’ trading declined by 5.3%, falling from RM8.8mil in 1H23 to RM8.4mil in 1H24.
Non-trading revenue, meanwhile, increased by 10%, driven by higher earnings from the data business, depository services, and listing and issuer services.
The company declared a higher interim dividend of 18 sen per share for 1H24, amounting to RM145.7mil, which represents a dividend payout ratio of 93.7%.
In 1H24, the average daily value traded for on-market trading was RM3.27bil, reflecting a 66.8% increase from RM1.96bil in the same period of 2023.
The IPO market capitalisation saw a notable decrease, totaling RM7.3bil in 1H24 compared to RM13.8bil in 1H23.
Total funds raised from IPOs in 1H24 were RM2.18bil, a slight decrease from the RM2.27bil raised in 1H23.
Despite this decline, Bursa Malaysia retained the top spot in the region for IPO proceeds raised in the 1H24 and ranked second in terms of the number of IPOs and market capitalisation.
For 1H24, total net foreign outflow amounted to RM800mil. This compares to net foreign outflow of RM4.2bil in 1H23.
For securities market foreign ownership based on market capitalisation, the percentage was 19.5% in June 2024, down slightly from 19.6% in January 2024 and 19.9% in June 2023.
