Bursa Malaysia’s 3Q18 net profit remains flat on lower ops profit

However, Bursa M’sia says the securities market recorded a segment profit of RM77.8m in 3Q18


BURSA Malaysia Bhd remains flat in the third quarter ended Sept 30, 2018 (3Q18), as its net profit fell 2.7% to RM50.19 million from RM51.6 million recorded a year ago, due to lower profit from operations.

In an exchange filing yesterday, the exchange holding company said its revenue in the quarter had also dipped to RM129.82 million, against RM130.27 million posted in 3Q17.

However, Bursa Malaysia noted that the securities market recorded a segment profit of RM77.8 million in 3Q18, an increase of 2.5% compared to RM75.9 million in 3Q17 mainly due to higher operating revenue.

“The securities market’s operating revenue for the quarter was RM96.8 million, 2.3% higher compared to RM94.5 million in 3Q17.

“Trading revenue increased by 8.8% to RM61.2 million in 3Q18,” it noted.

Bursa Malaysia said 3Q18 saw a higher average daily trading value (ADV) for on-market trades (OMT) and direct business trades of RM2.47 billion compared to RM2.16 billion in 3Q17.

“However, listing and issuer services revenue decreased by 16.4% to RM14.2 million in 3Q18, mainly due to lower listing and processing fees earned in 3Q18 from lower number of listing and corporate exercises during the three months.

“Segment expenses for securities market increased by 2% to RM22.5 million in 3Q18 compared to RM22 million in 3Q17 mainly due to a one-off professional fees incurred,” it said.

Meanwhile, the derivatives market recorded a segment profit of RM9.5 million in 3Q18, a decrease of 15.6% from RM11.2 million in 3Q17, which was mainly attributed to lower operating trading revenue and higher segment expenses.

Its operating revenue for 3Q18 was RM21 million, 4% lower compared to RM21.9 million in 3Q17.

“Derivatives market’s trading revenue decreased by 4.8% to RM18.8 million in 3Q18 mainly due to lower number of contracts traded for crude palm oil futures (FCPO) and higher market incentives incurred in 3Q18,” it added.

The stock exchange operator added that the FCPO saw a decline of 12.2% in the number of contracts traded in 3Q18, while FTSE Bursa Malaysia KLCI futures contracts grew by 26.5% in 3Q18.

“A total of 3.46 million contracts were traded during the quarter compared to 3.47 million total contracts in 3Q17.

“The derivatives market’s segment expenses increased by 8.4% to RM12 million in 3Q18 mainly due to higher staff costs,” Bursa Malaysia said.

In addition, the company recorded a higher segment loss of RM3.6 million in July to September compared to a segment loss of RM1.9 million in 3Q17 mainly due to lower rental income earned in 3Q18.

Others segment — including Bursa Suq Al Sila (BSAS), bonds and offshore exchange businesses — also recorded a 19.8% decrease in profit to RM1.9 million in 3Q18, compared to RM2.4 million in 3Q17 mainly due to lower BSAS trading revenue earned.

Bursa Malaysia’s overheads also increased marginally to RM16.8 million in 3Q18 compared to RM16.6 million in 3Q17.

“Despite major volatility and declines in emerging-market equities against the backdrop of a challenging global environment in 2018, Bursa Malaysia’s sustainable growth initiatives implemented over the years continue to show progress, raising our standards and strengthening our performance to achieve our highest ever nine-month operating revenue, and highest recorded nine-month ADV for securities market’s OMT of RM2.6 billion since listing in 2005,” Bursa Malaysia CEO Datuk Seri Tajuddin Atan said in a statement yesterday.

“These results are a testament to our ongoing commitment to deliver more opportunities in supporting a vibrant and conducive capital market ecosystem for all market participants,” he added.