Bursa Malaysia anticipates a better IPO year, says CEO

Once govt’s initiatives and policies find a sound footing, Tajuddin is confident that IPOs will improve in 2019


Initial public offerings (IPOs) on Bursa Malaysia could improve this year once government’s initiatives and policies find a sound footing, according to Bursa Malaysia Bhd’s CEO Datuk Seri Tajuddin Atan (picture).

“Last year there were fewer listings on the Main Market because businesses were still trying to absorb all the information from the new Pakatan Harapan government.

“We are hoping some of the government’s initiatives or policies will impact the IPO market positively after a slow 2018. As we speak now, the IPO pipeline is much bigger in terms of quantity and value,” he told reporters after Bursa Malaysia’s 2018 financial results briefing in Kuala Lumpur yesterday.

Bursa Malaysia saw only two lis-tings on the Main Market, the lowest since the exchange’s inception in 1973.

Tajuddin blamed external factors, like market volatility and the US-China trade war. He added that the company is awaiting for policy reforms for the stock exchange to progress forward.

The CEO hopes companies that have received a prior approval for listing will go public this year.

For it’s full year ended Dec 31, 2018, Bursa Malaysia recorded a marginal rise in net profit to RM224.04 million, compared to a net profit of RM223.04 million the year earlier.

Revenue dipped to RM550 million in 2018 from RM556.83 million in 2017.

Net profit for the final quarter (4Q) eased 6.2% year-on-year (YoY) to RM51.86 million due to lower trading revenue.

Its 4Q revenue dropped 8.7% YoY to RM128.92 million.

Bursa Malaysia declared a second interim dividend of 11.6 sen per share for financial year 2018, payable on Feb 28 this year.

Tajuddin said despite market volatility and challenging global economic environment, Bursa Malaysia’s financial performance remained resilient.

“I believe the strategic initiatives implemented over the years have laid a solid foundation that will place us in a better position to fulfil the needs of our stakeholders, and ensure wider relevance and sustainability of our business for long-term value creation,” he added.

For the year, trading revenue increased 2.4% YoY to RM265.8 million on higher average daily trading value for on-market trades.

Its non-trading revenue saw a marginal decrease of 0.1% YoY to RM165.9 million, due to lower listing and issuer services revenue, which fell by 2.7% YoY.

Market data revenue grew 4.9% YoY to RM36.2 million, Tajuddin said.

Volume of crude palm oil (CPO) futures contracts decreased by 12.1% YoY to 10.5 million contracts as a result of lower volatility and weakening CPO prices.

Revenue from its Islamic capital market, Bursa Suq Al-Sila’, decreased by 5.6% YoY to RM14.9 million compared to higher trades last year, which were under the volume-based pricing scheme that attracted lower fees.

Foreign funds withdrew a net RM11.7 billion from the exchange last year, compared to a total net inflow of RM10.8 billion in 2017.

The stock exchange operator’s market capitalisation as at the end of 2018 was 10.8% lower YoY at RM1.7 trillion.

Meanwhile, Bursa Malaysia also announced the appointment of Datuk Shireen Ann Zaharah Muhiudeen as public interest director and non-executive chairman effective March 1, 2019.

She succeeds Tan Sri Amirsham A Aziz, who has held the role of non-executive chairman since March 1, 2015, and will step down on Feb 28, 2019.

Shireen Ann is the founder of Corston-Smith Asset Management Sdn Bhd and was CEO of AIG Investment Corp (Asia) Ltd from 1992 to 2004.

She has more than three decades of fund management experience in emerging Asia equity markets.