KUALA LUMPUR: Bursa Malaysia Bhd, which achieved its best-ever first-half financial performance in January-June 2020 (H1’20) since its listing in 2005, stressed that the pipeline of initial public offerings (IPO) remains healthy with 25 new listings expected this year compared with its initial target of 40 due to the impact of Covid-19.
“We anticipate two Main Market, 16 ACE Market and seven LEAP Market listings this year,” CEO Datuk Muhamad Umar Swift told a press conference after announcing its Q2 results yesterday.
There were seven listings in H1’20, while there were 30 listings last year.
Umar said RM1.6 billion was raised in H1’20 from new listings compared with RM1.4 billion in H1’19 due to the bigger IPO sizes.
On new offerings, Umar said the bourse is interested in exchange-traded funds and new derivatives products, looking at potential options around rubber and coffee.
“We’re also engaging other exchanges to bring their products to Malaysia’s derivatives space.
One of the key objectives is to ‘democratise’ investing. We’d like to see the opportunities provided to private banking clients, private wealth clients to be available on the exchange.”
Bursa Malaysia’s net profit for the second quarter ended June 30 jumped 86% to RM86.23 million from RM46.34 million a year ago, thanks to the securities market. Revenue went up 45% to RM179.78 million compared with RM123.96 million in the same quarter last year.
For the six months period, its net profit jumped 62% to RM150.96 million from RM93.19 million due to higher operating revenue, which increased by 33.6% to RM320.7 million from RM240 million in H1’19. Revenue was up 32% to RM330.53 million from RM250.49 million in the previous year corresponding period.
Total operating expenses in H1’20 increased by 3.7% to RM127.1 million from RM122.6 million in H1’19, mainly due to higher staff and technology costs.
Its annualised return on equity and earnings per share of 39% and 18.7 sen respectively have allowed the board to declare an interim dividend of 17 sen, or a dividend payout ratio of 91.1%.
CFO Rosidah Baharom said the possibility of a higher dividend this year will depend on its H2’20 performance. “We will evaluate in terms of our cash position. We’ll strive to maintain our track record to pay at least 90%, subject to the board’s approval.”
The elevated market volatility has resulted in higher trading activities in both the securities and derivatives markets.
For H1’20, the securities market registered a trading revenue of RM188.2 million compared with RM117.8 million in H1’19, increasing by 59.7% as a result of higher average daily trading value for on-market trades. The broader market was supported by local investors, with higher retail participation during the period.
“We see confidence coming back to the market (in H2’20). However we are also mindful because this is fragile. If we see a re-emergence of Covid-19 infections, that would also impact the volatility and confidence of the market,“ said Umar.
Derivatives market trading revenue increased by 44.3% to RM48 million in H1’20 from RM33.3 million in H1’19, mainly due to higher number of contracts traded for crude palm oil futures and FTSE Bursa Malaysia KLCI futures. Average daily contracts for the derivatives market rose 55.9%, with 76,956 contracts in H1’20 compared with 49,351 contracts in H1’19.
Bursa Malaysia recorded the highest trading volume in its history of 12.5 billion shares on July 20, Umar noted, adding that the emergence of millennials in the market is encouraging.
“This has been something we have been working very hard to achieve. We will continue to introduce initiatives and streamlined product offerings, such as expanding the range of trading channels and platforms to improve the seamless digital journey on Bursa Malaysia for the new generation of investors,” he said.
source https://www.thesundaily.my/business/bursa-malaysia-posts-best-ever-first-half-results-since-its-listing-says-ipo-pipeline-still-healthy-MX3198718
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