Bursa Malaysia: Higher Net Profit Of RM28 Million Due To Strong Trading Volume In First Quarter 2010

Bursa Malaysia Berhad (Bursa Malaysia) today announced a net profit of RM28 million for the quarter ended 31 March 2010 – an 81% increase compared to the net profit of RM15.5 million for the corresponding period last year.

Bursa Malaysia’s Chief Executive Officer, Dato’ Yusli Mohamed Yusoff said, “Our first quarter 2010 results were driven by stronger trading volume and increased investor confidence in our equities market. For the period under review, the daily average trading value was significantly higher than the 2009 full year daily average trading value of RM1.2 billion, signifying a more vibrant trading activity and renewed interest in Malaysian stocks. Clearly, investors are viewing our market offerings and opportunities positively and this has contributed to the bourse’s good performance.”

Bursa Malaysia’s stellar performance in the first quarter of 2010 is attributed to a buoyant equities market which traded at a daily average trading value of RM1.5 billion compared to RM0.7 billion recorded in the first quarter of 2009. The improved equities market, combined with stronger investor sentiment and active trading landscape, contributed to a significant increase in equities trading revenue of 103% to RM39.6 million from RM19.5 million in the first quarter of 2009. For the quarter ended 31 March 2010, market capitalisation rose to RM1.1 trillion versus RM0.7 trillion in the same corresponding period. Market velocity was recorded at 35% for the period in review compared to 23% for the corresponding period.

Chart 1: Trading revenue

The trading revenue for the derivatives market experienced a 9% drop to RM8.5 million from RM9.4 million in the corresponding quarter in 2009. However, total contracts traded increased marginally to 1.41 million in the first quarter of 2010 compared to 1.38 million in the same period in 2009. The increase in contracts traded is attributed to the marginal improvement in the trading of crude palm oil futures (FCPO) contracts to 931,868 in the first quarter of 2010 from 822,879 in the corresponding period last year.

Operating expenses increased by 15% mainly due to accelerated depreciation of Bursa Trade Derivatives trading platform, increasing staff costs from the higher headcount, as well as higher conference and exhibition expenses in organising the 21st Palm and Lauric Oils Conference and Exhibition (POC2010) and Invest Malaysia 2010 events. Offsetting these increases was a decrease in market development expenses.

Clearer signs of economic and market recovery have resulted in renewed confidence in the Malaysian market as a destination for fundraising. For the quarter ended 31 March 2010, the total funds raised from listing and rights issues in the equities market improved to RM10.2 billion from RM6.1 billion in the first quarter of 2009. During the period under review, Bursa Malaysia attracted three initial public offerings compared to none in the previous corresponding period. Dato’ Yusli added, “The increase in the number of companies listing on Bursa Malaysia is promising, reflecting the confidence that companies have on the attractive valuations of the Malaysian market as well as the post-listing support that the Exchange offers.”

On the bourse’s anticipated performance for the coming year, Dato’ Yusli said, “We have made a good start to the current financial year. We are confident that the Exchange remains well positioned to capitalise on opportunities as global economies continue to recover. We are certainly optimistic that the Exchange’s performance moving forward will be resilient and reflective of the healthy trading performance that we currently enjoy.”

The presentation of the financial results for the first quarter of 2010 is also available on Bursa Malaysia’s website ( www.bursamalaysia.com ).