Bursa Malaysia expects 31 listings this year

Its 2Q21 net profit rises to RM89m from RM86.2m a year ago, while revenue increases to RM196.1m from RM179.8m


BURSA Malaysia Bhd expects about 31 new listings for 2021, compared to 19 last year, despite pandemic challenges.

The IPO market continues to see encouraging interest this year with 20 companies listed so far.

Bursa Malaysia chairman Tan Sri Abdul Wahid Omar said there are quite a few IPOs in the pipeline, with many of them still in discussion with various potential advisors.

“What we’ve seen is a lot of interest. Potential issuer approaching us, participating organiser, advisor and the investment banker. There’s a lot of interesting certainty.

“Some of the reasons are CTOS Digital Bhd and before that Mr DIY Group (M) Bhd have encouraged a lot more tech-savvy and digital companies to explore potential listings,” he told reporters yesterday.

Abdul Wahid said the exchange remains optimistic of drawing interest from more issuers to the market, even in a very challenging circumstance.

“As we wrap up vaccination, achieving the majority of adults to be vaccinated by August in the Klang Valley and October nationwide, that would facilitate the reopening (of the) economy.

“With that, we believe this improvement will even grow better.” Bursa Malaysia’s net profit rose to RM88.97 million in the second quarter ended June 30, 2021 (2Q21), from RM86.23 million a year ago.

Revenue increased to RM196.1 million from RM179.78 million previously. For the first half ended June 30, 2021 (1H21), the company’s net profit increased by 39.4% to RM210.36 million from RM150.96 million previously, owing to operating revenue growing by 31% to RM420.2 million from RM320.7 million.

This represents the best 1H financial performance since its listing in 2005. The bourse also declared an interim dividend of 24 sen per share to be paid on Aug 27, 2021.

Bursa Malaysia expects trading on the stock market to remain vibrant, supported by active retail participation and high volatility in the market.

“The challenges arising from Covid-19 are likely to continue for at least in the short term, hence the exchange would continue with ongoing initiatives to attract investments and sustain retail participation in its market.

“The high average daily trading value (ADV) momentum of 2020 continued into the 1H21 with ADV increasing by 4.9% to RM4.4 billion,” said Abdul Wahid.

Meanwhile, Bursa Malaysia CEO Datuk Muhamad Umar Swift said trading activity by retail investors has remained strong, contributing significantly to the performance of the securities market despite the uncertain global environment resulting from the pandemic.

“To improve the quality of activity in our market, we continue to place importance on financial education to sustain market interest.”

Muhamad Umar said the bourse recently launched eRights subscription service to provide convenience to retail investors, offering significant cost and time savings, as a continuation to the enhancement of the services provided under the Bursa Anywhere mobile application.

“In the coming months, Bursa Malaysia will introduce the afterhours (T+1) trading session for the derivatives market (night trading), which will offer greater accessibility and enhance the attractiveness of the Malaysian derivatives market to global players,” he added.

For 1H21, trading revenue from the securities market increased by 41.4% to RM266.1 million from RM188.2 million in 1H20. The improved performance is derived from a higher ADV of RM4.4 billion for the securities market’s on-market trades.

Non-trading revenue from listing and issuer services, depository services, market data and member services and connectivity also recorded an increase in 1H21 compared to 1H20.

The significant increase in listing and issuer services was due to higher perusal and processing fees and listing fees earned in 1H21, while depository services revenue was mainly from higher record of depositors fees, additional issue fees, CDS fees and transfer fees earned in 1H21.

Meanwhile, the derivatives market trading revenue decreased by 6.4% to RM44.9 million in 1H21 from RM48 million in 1H20, mainly due to lower collateral management fees earned after the reduction of the collateral management fee rate to 0.5% effective July 2020 and lower fees earned from the decline in FTSE Bursa Malaysia KLCI Futures contracts in 1H21.

Spurred by growth in the volume of crude palm oil futures, average daily contracts for the derivatives market rose slightly by 4% with 80,061 contracts traded in 1H21 compared to 76,956 a year ago.

On the Islamic market front, Bursa Suq Al-Sila’ trading revenue increased by 5.8% to RM6.7 million in 1H21 from RM6.3 million. Trading activity on Suq Al-Sila’ is expected to sustain its momentum supported by local participants, as well as attracting more foreign participants to trade on its platform.