Bursa Malaysia’s 3Q earnings fall on higher operating expenses

The company attributed the lower 9-month net profit to an 11.1% YoY drop in operating revenue to RM358m

by SHAZNI ONG/ pic by TMR

BURSA Malaysia Bhd said lower operating profit hit earnings for the third quarter ended Sept 30, 2019 (3Q19), falling 6.15% year-on-year (YoY) to RM47.1 million.

Revenue for the quarter fell 5.5% YoY to RM122.67 million, its filing yesterday noted.

The latest results dragged down its net profit for the cumulative nine-month financial period lower by 26.5% YoY to RM140.3 million, as total revenue fell 16% YoY to RM373.16 million.

The company attributed the lower nine-month net profit to an 11.1% YoY drop in operating revenue to RM357.5 million.

“Total operating expenses in the nine months saw a decline of 2.1% to RM180.3 million from RM184.2 million previously, while marketing and business development expenses increased by 35.2% to RM10.4 million as the securities and derivatives markets continued to focus on marketing and engagement initiatives to attract new participants,” its filing stated.

Bursa Malaysia CEO Datuk Muhamad Umar Swift said not-withstanding the challenging operating environment, the initial public offering pipeline had remained good with 27 new listings to date as compared to 21 listings in 2018.

“Among major Asean bourses, Bursa Malaysia also ranked second for funds raised and the number of new listings in first nine months of 2019,” he said.

Its derivatives exchange has facilitated new inter-broke relationships and signed up new market makers and liquidity providers from the Greater China region, which further expanded the derivatives trading community during the nine-month period.

“We remain positive on the Islamic capital market, which saw increased participation by institutional investors and onboarding of new participants on Bursa Malaysia-i and Bursa Suq Al-Sila’ respectively,” he added.

Muhamad Umar said the company expects to record a satisfactory performance for the rest of the year supported by positive domestic catalysts from the recently announced Budget 2020.

“The government’s efforts directed at developing key economic growth areas — such as Islamic Finance, digitisation and entrepreneurship will be key drivers toward sustainable economic growth in the longer term.

“The proposal for the tax deduction on expenses of up to RM1.5 million incurred for the listing of technology-based companies and small and medium enterprises on the ACE and LEAP (Leading Entrepreneur Accelerator Platform) markets for three years from 2020 to 2022, and the extension of the existing tax treatment for investors in real estate investments trusts by an additional six years until 2025 will certainly provide continued impetus in generating listing interests and attracting local and foreign investors into our capital market,” he said