KUALA LUMPUR (July 31): Bursa Malaysia Bhd’s net profit for the second quarter ended June 30, 2023 (2QFY2023) rose 28.2% to RM76.25 million from RM59.47 million a year ago, as operating expenses fell on a one-off reversal of the provision of sales and service tax (SST) on digital services amounting to RM27.66 million.

Earnings per share increased to 9.40 sen from 7.30 sen. Bursa also declared an interim dividend of 15 sen for 2QFY2023, amounting to approximately RM121.4 million, which represents a payout ratio of 91.7%.

In a bourse filing on Monday (July 31), the local bourse regulator said quarterly revenue dropped 4.8% to RM144.6 million from RM151.89 million a year earlier.

In terms of segmental performance, the Securities Market recorded a segment profit of RM87.2 million in 2Q2023, an increase of 9.4% compared to RM79.7 million in 2Q2022 mainly due to lower operating expenses in 2Q2023.

The operating revenue of the Securities Market dropped 9.6% to RM91.9 million from RM101.6 million in 2QFY2022 due to lower trading revenue.

“Trading revenue decreased by 13.4% to RM57.8 million in 2Q2023 from RM66.8 million in 2Q2022 mainly due to lower Average Daily Trading Value (ADV) for On-Market Trades (OMT) and Direct Business Trades (DBT), which decreased by 14.8% to RM1.90 billion in 2Q2023 from RM2.23 billion in 2Q2022” the group said.

Meanwhile, trading velocity in 2Q2023 was lower by 4% at 26% compared to 30% in 2Q2022. Listing and issuer services revenue also decreased by 5.2% to RM16.3 million, from RM17.1 million in 2QFY2023, and depository services slipped to RM13.8 million in 2QFY2023 from RM13.91 million in 21FY2022.

For the first six months ended June 30, 2023 (1HFY2023), Bursa’s net profit rose 3.90% to RM132.42 million from RM 127.44 million a year ago, despite revenue declining 5.34% to RM301.10 million from RM317.19 million in 1HFY2022.

Subsequently, the group reported a profit before tax (PBT) of RM169.8 million, a decrease of 2.3% from RM173.7 million in 1HFY2022. Total segment profits amounted to RM226.9 million, a 3.1% increase from RM220.2 million as the Securities Market dropped 9.2% and the Derivatives Market grew 10.9%.

Total comprehensive income also widened by 5.2% to RM133.3 million compared to RM126.7 million in the first half of last year, primarily due to higher profits earned in the first half of this year.

“In light of the World Bank’s moderate 2023 global GDP growth projection of 2.1% and the anticipated modest 4.5% growth of the Malaysian economy for 2023 relative to 2022, we are cognisant of the challenging global financial landscape marked by intensified risks and subdued external demands.

“Nevertheless, Bursa Malaysia remains optimistic, backed by the resilience of our domestic market demand, the anticipated reversal of international investment flow back to emerging markets in the second half of 2023 and the multi-faceted strategies that the Exchange is implementing across its markets,” said Tan Sri Abdul Wahid Omar, chairman of Bursa Malaysia in regards to future prospects.

Meanwhile, Bursa Malaysia CEO Datuk Muhamad Umar Swift said the local stock exchange operator is encouraged by potential uplifts arising from the growth potential presented by the relatively attractive valuation of its equity market and anticipated stabilisation of the global interest rate environment. "These factors, coupled with the recently reduced stamp duty rate on the trading of shares, are poised to attract both local and international investors.”

Moreover, the group added that through its joint venture entity, Bursa Malaysia RAM Capital Sdn Bhd, it has achieved a significant milestone to launch a new debt fundraising platform, offering small to mid-sized companies alternative means of fundraising, alongside providing more investment opportunities to investors.

“Going forward, positive impact is expected on the activities in the Securities Market subsequent to the recent announcements on the National Energy Transition Roadmap (NETR) and Ekonomi Madani policy framework,” the local bourse regulator expanded.

Swift added that the group is cautiously optimistic about meeting its headline key performance indicators (KPIs) for the current financial ending December 31, 2023; recording a profit before tax (PBT) of RM295 million to RM326 million and a non-trading revenue (NTR) growth rate of 5% to 7%.

At noon break, Bursa stood one sen or 0.15% higher at RM6.68, giving it a market capitalisation of RM5.41 billion.

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