(From left) Bursa Malaysia Bhd chief executive officer Datuk Muhamad Umar Swift, chairman Tan Sri Abdul Wahid Omar, and chief financial officer Rosidah Baharom at Bursa's first-half financial results briefing on Tuesday. (Photo by Zahid Izzani/The Edge)

KUALA LUMPUR (July 30): Stock exchange operator Bursa Malaysia Bhd (KL:BURSA) on Tuesday announced its highest quarterly net profit in three years, thanks to higher income from the securities market.

Net profit for the three months ended June 30, 2024 (2QFY2024) was RM80.45 million, up 5.5% compared to RM76.25 million over the same period a year earlier, Bursa Malaysia said in an exchange filing. Earnings per share came in at 9.9 sen in 2QFY2024, compared to 9.4 sen in 2QFY2023.

Revenue for the quarter rose 38.27% year-on-year to RM199.94 million — also the highest in three years — from RM144.6 million. The company declared an interim dividend of 18 sen per share, higher than 15 sen per share in 2QFY2023. The dividend is payable on Aug 28, 2024.

The company now expects to make a profit before tax of RM361 million to RM379 million, up from the previously announced range of RM293 million to RM323 million. “We are also optimistic on achieving our other” targets for the financial year ending 2024, said Bursa Malaysia chairman Tan Sri Abdul Wahid Omar.

Bursa Malaysia kept its target to grow non-trading revenue by 5%-7% for FY2024. Among other non-financial targets, the company is also aiming to host 42 initial public offerings (IPOs) with RM13.0 billion in total market capitalisation.

All in all, net profit for the first six months (1HFY2024) totalled RM155.48 million, up 17% from RM132.42 million while revenue rose 29% to RM387.14 million from RM301.1 million in 1HFY2023. Pre-tax profit totalled RM209.2 million.

Trading activities to sustain

“Trading in the securities market remained active, contributing significantly to the exchange’s performance,” said Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift. “Based on the current economic conditions and improved market sentiment, we are optimistic that this positive momentum can be sustained.”

In 2QFY2024 alone, profit at the securities market climbed nearly 30% to RM112.8 million compared to RM87.2 million in 2QFY2023. For 1HFY2024, profit for the segment gained close to 30% year-on-year to RM212.6 million as average daily trading value rose to RM3.5 billion.

Trading velocity, which measures market turnover relative to the total market capitalisation, increased by 14 percentage points to 42% in 1HFY2024 from 28% in 1HFY2023.

Non-trading revenue, such as fees from IPOs and market data, was up 9.6% to RM72.3 million in 1HFY2024, driven by growth in listing and issuer services as well as depository services.

However, profits at its derivatives segment fell 23% to RM26.4 million in 1HFY2024 as higher operating expenses offset an increase in trading revenue. Average daily contracts for the derivatives increased by 13.6% to 84,927 contracts.

At its data business, operating revenue rose 15.4% to RM38 million in 1HFY2024 driven by client acquisition, growth in licensing for algorithmic trading and analytics, index revenue from its partnership with FTSE Russell as well as higher number of subscribers.

“We will leverage our strengths and drive changes that will excite investor interest and increase market liquidity,” Umar said. “The exchange will expand its range of innovative products and solutions, including a Waqf-featured exchange-traded fund, and new retail investor access to investment notes via BR Capital.”