Bursa Malaysia Berhad (“Bursa Malaysia”) today reported a net profit after tax of RM108.9 million for the financial year ended 31 December 2006 – a 35% increase over the net profit of RM80.9 million for the corresponding period last year. Bursa Malaysia also substantially met its headline KPIs for 2006.
| 2006 KPIs |
Target |
Achieved | |
|---|---|---|---|
| 1. | Return on Equity (ROE) |
9.1% |
12.8% |
| 2. | Domestic Retail Participation
|
35.0% |
34.4% |
| 3. | New products and services | 10 | 10 |
The Group achieved a Return on Equity (ROE) of 12.8%, exceeding its target of 9.1% - an impressive improvement of 93.9% from its 2005 ROE of 6.6%. It also introduced all 10 products and services which it had planned for earlier, including Bursa Trade Derivatives trading platform and RSS/SBL. On the domestic retail participation, Bursa Malaysia was close to meeting its target and achieved 34.4% against the goal of 35.0% set earlier. Nevertheless, domestic retail participation has increased by 18.6% from the 29.0% achieved in 2005.
Commenting on the results, Bursa Malaysia Berhad’s Chief Executive Officer, Dato’ Yusli Mohamed Yusoff said, “Our strong results reflect our continued focus on delivering sustained revenue and overall business growth. Apart from beating our forecast we also delivered positive returns on equity for our shareholders.”
For the financial year ended 2006, a final dividend of 14 sen per share has been proposed to be paid on 7 May 2007, resulting in a total ordinary dividend of 26.5 sen per share in respect of the financial year. Dato’ Yusli commented, “The positive performance for the period under review demonstrated the increasing value our shareholders enjoy. Combined with capital gains and dividend payout, the 131% total return for shareholders for financial year 2006 is attractive.”
The Group’s net profit attributable to shareholders rose to RM108.1 million from RM77.0 million last year. Total revenue increased by 17.2% to RM301.9 million for the period under review from RM257.6 million over the same period in 2005. The increase was primarily attributed to a 36.3% rise in operating revenue to RM262.1 million from RM192.3 million in 2005.
The growth in Bursa Malaysia’s operating revenue was mainly due to higher trading revenues achieved in both the equities and derivatives markets for the period under review. Total trading revenue rose 60.5% to RM181.4 million for 2006 from RM113.0 million in 2005. Trading revenue from the equity and derivatives market represented 56.5% and 12.7% of operating revenue for 2006 versus 48.3% and 10.5% respectively in 2005.
Trading revenue from the equity market (on-market and direct business) increased by 59.6% year-on-year to RM148.2 million whilst trading revenue from the derivatives market increased by 64.3% to RM33.2 million. The improvement in the revenue for equity market was attributed to higher total trading value of RM277.8 billion, an increase of 38.1% from RM201.1 billion last year.
The derivatives market also continued to grow with a 68.0% increase in the number of derivatives contracts traded to 4.2 million this year compared to 2.5 million last year. The uptrend was largely due to strong growth in crude palm oil (CPO), FKLI and KLIBOR contracts.
During the period under review, Bursa Malaysia successfully attracted 40 new listings, including REITs, which raised RM1.9 billion compared to RM5.4 billion from 79 listings in 2005.
Retail participation in the equity market has increased to 34% in 2006 compared to 29% last year. This is attributable to improved investor sentiment and strong trading activity.
On the bourse’s anticipated performance for the coming year, Dato’ Yusli said, “We have made a very good start to the current financial year. Moving forward, we are focused on achieving our 2007 goals of boosting market velocity and liquidity. Our efforts this year will be geared towards enhancing our efficiencies through new infrastructures such as Direct Market Access and transferring the cash equity market to the Bursa Trade trading platform. We will be pursuing new products and services such as an Equity Exchange Traded Fund and US Dollar crude palm oil contracts while striving to maintain a quality regulatory framework through initiatives that contribute towards improving the quality of Malaysian companies.”
Dato’ Yusli concluded, “We have produced creditable growth for our derivatives sector. Last year’s derivatives revenue charted a strong growth of 64.3%. Our futures contracts also hit record volume on several occasions. I am confident that this development points to a greater demand for introducing more products in this area.”
Bursa Malaysia also announced its 2007 KPI targets as follows:
- Return on Equity (ROE) of 16.8% by end 200
- Target percentage of 40% for velo
- 40% growth in number of derivatives contracts
The presentation of the financial results for 2006 is also available on Bursa Malaysia’s website (www.bursamalaysia.com).
| FINANCIAL RESULTS | FY06 (Audited) | FY05 (Adjusted) |
|---|---|---|
| RM’mil | RM’mil | |
| Operating revenue | 262.1 | 192.3 |
| Other income | 39.8 | 65.3 |
| Total revenue | 301.9 | 257.6 |
| Total operating expenses | (148.4) | (144.1) |
| Profit from operations | 153.5 | 113.5 |
| Finance costs | (0.6) | (0.3) |
| Profit before taxation | 152.9 | 113.2 |
| Taxation | (44.0) | (32.3) |
| Net profit for the period | 108.9 | 80.9 |
| Net profit attributable to: | ||
| Equity holders of the parent | 108.1 | 77.0 |
| Minority interest | 0.8 | 3.9 |
| Net profit for the period | 108.9 | 80.9 |
Note:
The net profit for FY05 has been restated to reflect the prior year adjustment relating to share-based payment under the Employees’ Share Option Scheme (“ESOS”) of RM4.4 million as required under FRS 2 Share-based Payment (“FRS 2”).
