Bursa Malaysia Berhad (Bursa Malaysia) today reported a net profit of RM15.5 million for the first quarter of 2009; a decrease of 63% compared to the net profit of RM42.1 million for the corresponding period last year. The lower profit was predominantly due to the decline in equities trading revenue as a result of the prevailing adverse economic conditions that have impacted all markets globally. For the quarter ended 31 March 2009, Bursa Malaysia registered RM54.4 million in operating revenue, a decline of 40% from RM91.0 million recorded in the same period last year.
The daily average trading value for the securities market (on-market and direct business transactions) was registered at RM690 million for the period under review compared to RM2.04 billion in the first quarter of 2008. This resulted in the decrease in equities trading revenue by 60% to RM19.5 million as compared to RM48.9 million in the first three months of 2008. Quarterly velocity for the period in review was at 23% due to the lower trading volume recorded in the securities market.
The derivatives market was also impacted by the weakening market sentiments. This market experienced a drop of 21% in terms of the number of derivatives contracts traded, of which a total of 1.38 million contracts were traded in the first quarter of this year in comparison to 1.76 million contracts in the corresponding period in 2008. However, interest remained strong in Bursa Malaysia’s star product, the crude palm oil futures contract (FCPO), as demonstrated in the stable performance of 823,000 contracts for the first quarter of 2009 versus 827,000 contracts for the corresponding period in 2008. Open interest for FCPO was also strong at 88,926 contracts for the end of March 2009 in comparison to 43,624 contracts recorded in same period in 2008. The Kuala Lumpur Index Futures (FKLI) registered a decline in the contracts traded; 522,000 contracts were traded in the quarter ended 31 March 2009 against 894,000 contracts in the same period last year. In effect, the trading revenue for the derivatives market fell by 23% to RM9.4 million from RM12.2 million in the same period last year.
Bursa Malaysia Berhad’s Chief Executive Officer, Dato’ Yusli Mohamed Yusoff acknowledged that the company’s revenue was greatly impacted by the poor trading volume due to the continuing economic crisis. Dato’ Yusli said, “Bursa Malaysia is in active cash conservation mode; exercising prudent cost management and cost-cutting measures to handle the current challenges. To mitigate the impact, we aim to cut down on our budgeted operating expenses and capital expenditure by 15%.”
Dato’ Yusli also said that at the recent Annual General Meeting, Bursa Malaysia’s shareholders have approved a final gross dividend of 7.8 sen per share which represents a payout of 91% of the company’s net profit for the period ended 31 December 2008. This dividend will be paid out to shareholders on 4 May 2009. Dato Yusli added, “We aim to strike a balance between rewarding our shareholders and continuing with development plans for the company. Against the backdrop of the sluggish market conditions, we have still been able to contribute to our shareholder value by giving a dividend payout that is higher than our dividend policy of minimum 75% dividend payout.”< /p>
Stable revenue comprising depository services, information services, listing fees, broker services and participants’ fees decreased by 14% to RM22.7 million from RM26.4 million in the same quarter last year. Total operating expenses was lower by 4% at RM42.2 million from RM43.8 million due to the company’s cost management efforts.
Dato’ Yusli added that the market is showing signs of an encouraging trend as witnessed in the first few weeks of April 2009. “While investors are generally waiting for clearer signals of economic recovery from global markets, the volume of trading activity in our market has seen a slight rebound this month which speaks of improved sentiment and confidence in the market’s fundamentals,” Dato’ Yusli concluded.
The presentation of the financial results for the first quarter of 2009 is also available on Bursa Malaysia’s website (www.bursamalaysia.com ).
FINANCIAL RESULTS | 1Q09 | 1Q08 |
---|---|---|
RM'mil | RM'mil | |
Operating revenue | 54.4 | 91.0 |
Other income | 9.7 | 10.3 |
Total revenue | 64.1 | 101.3 |
Staff costs | (18.8) | (22.6) |
Depreciation and amortisation | (9.2) | (4.5) |
Other operating expenses | (14.2) | (16.7) |
Profit from operations | 21.9 | 57.5 |
Finance costs | (0.1) | (0.1) |
Profit before tax | 21.8 | 57.4 |
Income tax expense | (6.3) | (15.3) |
Profit for the period | 15.5 | 42.1 |