By NG MIN SHEN
Bursa Malaysia Bhd said weaker trading sentiment and listing activity resulted in its net profit falling 26.5% year-on-year (YoY) to RM46.86 million in the first quarter ended March 31, 2019 (1Q19).
In a statement yesterday, the exchange holding company noted operating revenue fell 16.2% YoY to RM121.4 million, while revenue was 16% lower at RM126.53 million due to concerns of slower economic growth and weaker corporate earnings and palm oil prices.
“The 1Q remained challenging on the back of weaker sentiment largely influenced by external concerns.
“These concerns are wide-ranging, and are driving uncertainty in the global economy,” Bursa Malaysia CEO Datuk Muhamad Umar Swift said in the statement
“The spillover of this impact is also affecting businesses of all sizes in our local economy,” he added.
Total operating expenses decreased 1.4% YoY to RM62 million in the 1Q as marketing and development expenses rose to attract greater and more diversified participants into the market.
“Trading revenue (of the securities market) decreased by 22.6% YoY to RM59 million in the 1Q due to lower average daily trading value for on-market trades and direct business trades of RM2.41 billion in 1Q19 compared to RM2.93 billion in 1Q18,” the company stated.
In the meantime, trading velocity in the 1Q was lower by 6% at 29% compared to the same period last year.
Moreover, total non-trading revenue fell 7.6% YoY to RM42.1 million due to softer listing and issuer services revenue.
“Listing and issuer services revenue declined 24.2% to RM11.9 million in 1Q19 from RM15.6 million in 1Q18, mainly due to lower listing fees earned in 1Q19 and lower perusal and processing fees earned as a result of lower number of circular submissions and corporate exercises respectively,” the company said.
In addition, market data revenue rose 18.9% YoY to RM7.6 million on increased subscriber numbers.
Derivatives market trading revenue slipped 13.8% YoY to RM16.4 million in the 1Q due to a lower number of contracts traded for crude palm oil and FTSE Bursa Malaysia KLCI futures, as well as higher market incentives incurred.
Average daily contracts on the derivatives market declined 12.3% YoY to 47,359 contracts in the 1Q from 54,020 contracts recorded in the same period a year ago.
Bursa Malaysia closed three sen lower at RM6.90 yesterday after the release of the 1Q results.