The Group’s positive results were achieved despite a 12% decrease in operating revenue from RM218.3 million in 2004 to RM193.1 million. Trading revenue declined 18% from RM137.1 million in 2004 to RM113.0 million in 2005 due to a combination of factors that affected market sentiment and subsequently reduced trading activity.
The decline in revenue was offset by a 37% reduction in operating expenses. Whilst staff cost, after adjusting for VSS, decreased by 31% from 2004, other expenses such as IT maintenance, depreciation and building maintenance also registered a decrease from the year before, albeit at a lower amount.
“We have done well in our first year as a listed company, despite difficult market conditions. Apart from beating our initial public offering (IPO) profit forecast by 35% we also delivered commendable returns to our shareholders,” said Yusli Mohamed Yusoff, Chief Executive Officer of Bursa Malaysia Berhad. “Combined with the earlier interim net dividend of 7.2 sen per share, the 81 sen capital repayment in December, and the proposed final net dividend of 7.2 sen per share, which is subject to shareholders’ approval, total shareholder returns stand at 88% to date since the IPO,” said Yusli.
In addition, Bursa Malaysia’s return on equity improved from 2.4% in 2004 to 6.9% in 2005, driven primarily by two capital management exercises and the interim dividend payment. “The return on equity may still be small but we are making good progress,” said Yusli.
The proposal to pay a final gross dividend of 10.0 sen will be tabled at the forthcoming Annual General Meeting of shareholders for approval. Taking into consideration the interim dividend, dividend payout from the 2005 profits would amount to approximately 90.2%, 15.2% in excess of the minimum dividend payout policy.
He added, “Many view us as a proxy for the Malaysian capital market. If our performance this past year is anything to go by, I hope it sends out strong signals of the potential inherent in our market today. More importantly, our share performance also indicates positive support from foreign institutional investors who are often seen by our domestic ones as the barometer for our market’s attractiveness.”
To date, Bursa Malaysia’s IPO has garnered two awards – the ‘Best Malaysian Equity Deal in 2005’ by IFR Asia and ‘Malaysia Deal Of The Year 2005’ by Asiamoney.
Despite the lacklustre trading activity in 2005, Bursa Malaysia saw 79 new listings on the exchange, raising RM8,917 million funds.
For 2006, Bursa Malaysia will be focusing on three strategic objectives:
- Enhancing the quality of the Malaysian market with regard to liquidity, infrastructure, products, regulations and perception
- Growing investor base and enhancing market promotions
- Improving operational and financial efficiency.
Yusli commented, “We expect to see more developments in the market this year, especially arising from measures that were put in place in 2005. At the exchange, we will be pursuing new products and expanding our investor base more aggressively while striving to maintain a healthy regulatory framework to ensure fair and orderly trading. On a larger scale, the foreign brokers are now up and running and the market should benefit from the expected bank mergers as well as transition of brokers to investment banks.”
The presentation of the financial results for 2005 is also available on Bursa Malaysia’s website (http://www.bursamalaysia.com).
| FINANCIAL RESULTS | 2005 | 2004 |
| RM ‘Million | RM ’Million | |
| Operating Revenue | 193.1 | 218.3 |
| Other Income | 64.5 | 68.2 |
| Total Revenue | 257.6 | 286.5 |
| Total Operating Expenses | (139.7) | (222.9) |
| Profit/(Loss) from Operations | 117.9 | 63.6 |
| Finance Costs | (0.4) | (0.1) |
| Profit Before Taxation | 117.5 | 63.5 |
| Taxation | (32.3) | (25.2) |
| Minority Interest | (3.9) | (3.2) |
| Net Profit for the Period | 81.3 | 35.1 |
