KUALA LUMPUR: Bursa Malaysia Bhd’s net profit dropped 37.3% to RM50.13 million in the third quarter ended Sept 30, 2022 (Q3 FY2022) from RM79.94 million in the same period last year due to lower securities trading revenue.
The exchange operator said the securities market segment's operating revenue fell to RM100.4 million from RM140.7 million a year earlier, causing the segment profit to shrink 34.9% year-on-year (y-o-y) to RM76.5 million.
This dragged down total segment profits for the quarter by 26% to RM94.6 million from RM127.9 million previously.
Total revenue also declined to RM140.36 million from RM173.98 million previously, the company said in its latest quarterly results announcement.
Bursa Malaysia said trading revenue shrank 40.5% y-o-y to RM55.8 million mainly due to lower average daily trading value for on-market trades and direct business trades, which dipped by 42.1% y-o-y to RM1.75 billion in Q3 FY2022.
Meanwhile, trading velocity in the quarter under review was lower by 16 percentage points at 24% versus 40% in the previous corresponding quarter.
For the nine-month financial period, net profit fell 38.8% y-o-y to RM177.57 million on a 24% lower revenue of RM457.54 million.
In a media statement, Bursa Malaysia said the securities market segment registered trading revenue of RM203 million, a decrease of 43.6% against RM359.9 million in the first nine months of last year.
Trading velocity was lower by 24 percentage points at 30% during the period.
“On new listings, funds raised through initial public offerings (IPOs) in the nine-month period totalled RM2.8 billion, higher than the RM2.3 billion raised in the same period last year,” it said.
Total derivatives trading revenue increased by 11.5% y-o-y to RM73.4 million, contributed by higher collateral management income as well as a higher number of crude palm oil futures and FTSE Bursa Malaysia KLCI Futures.
Average daily contracts rose 2.2% with 78,540 contracts from 76,836 contracts in last year’s matching period, it said.
On the Islamic markets segment, the exchange operator said higher trading activity in Bursa Suq Al-Sila’ resulted in a 17.3% jump in trading revenue to RM11.8 million from RM10.1 million previously.
Meanwhile, the market data business achieved total revenue of RM45.8 million in the nine-month period, up 15.9% from RM39.5 million a year earlier driven by a higher number of subscribers.
CEO Datuk Muhamad Umar Swift said improvements in the performance of the derivatives market and market data businesses helped contribute to profit numbers as global volatility and a higher interest rate environment continued to challenge the securities market business.
“Trading volume is facing strong global headwinds, but the exchange continues to actively engage with existing and potential market participants to highlight the market’s value and appeal,” he said.
He noted the exchange had launched several initiatives, including Public Listed Companies Transformation Programme and the Bursa Research Incentive Scheme, to enhance the attractiveness of existing listed companies.
“To entice domestic and foreign derivatives participants, other initiatives include a further extension of the after-hours (T+1) derivatives trading session (night trading),” he said.
According to Muhamad Umar, ensuring a robust Islamic capital market remains one of the exchange’s main agendas, which is in line with its sustainable and responsible investment as well as environmental, social and governance agenda.
“The exchange continues to develop new shariah-compliant products, such as the upcoming shariah-compliant Voluntary Carbon Market and the Bursa Gold Dinar,” he added. – Bernama