Bursa expects retail investors to drive trading in 2021

by ASILA JALIL / pic by MUHD AMIN NAHARUL

BURSA Malaysia Bhd expects active trading on the stock market to remain vibrant this year, supported by active retail participation despite high volatility in the marketplace.

In a statement yesterday, the local exchange’s CEO Datuk Muhamad Umar Swift(picture) stated that average daily trading value (ADTV) for the securities market’s on-market trades (OMT) increased 100.8% year-on-year (YoY) to RM5.1 billion in the first quarter ended March 31, 2021 (1Q21), from RM2.5 billion in 1Q20.

“Domestic retail investors continue to play a significant role in our marketplace, sustained by the easy access to the stock market and low interest-rate environment. We have seen a resilient performance in our markets in 1Q21 and expect it to continue to attract investments and trading in 2021,” he said.

Bursa Malaysia’s net profit in 1Q21 rose 87.5% YoY to RM121.39 million from RM64.73 million in the same period last year, driven by higher operating revenue which increased 56.7% YoY to RM228 million from 1Q20.

Total operating expenses for the quarter rose 9.2% YoY to RM69.4 million from RM63.5 million in 1Q20. Its turnover came in at RM232.28 million in 1Q21, up 54.1% YoY from RM150.75 million in the corresponding quarter last year.

Muhamad Umar said the securities market registered trading revenue of RM150.9 million during the quarter under review, an increase of 93.3% from RM78.1 million in 1Q20 due to higher ADV for OMT.

The higher effective clearing fee rate in the quarter also contributed to the increase in trading revenue, but it was partially offset by the lower number of trading days.

Trading velocity in 1Q21 was higher by 31 percentage points to 70% versus 39% in 1Q20.

The exchange’s derivatives market clocked in lower trading revenue in 1Q21 at RM22.6 million, down 15.7% YoY from RM26.7 million in 1Q20.

The decline was due to lower number of contracts traded for crude palm oil futures and FTSE Bursa Malaysia KLCI futures, as well as the lower number of trading days in the quarter.

Its average daily contracts were down by 6.1% with 80,338 contracts in 1Q21 compared to 85,578 contracts in 1Q20.

As for Islamic markets, higher trading activity on Bursa Suq Al-Sila’ led to an increase in the trading revenue by 16% to RM3.4 million in 1Q21 from RM2.9 million in the same period last year .