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Dear Shareholders,
I am delighted to present the Annual Report of Bursa Malaysia Berhad for the year ended 31 December 2011.
Malaysia has earned recognition as an advanced emerging market from the FTSE while China has given its seal of approval to Malaysia as an approved investment destination for institutional investors. The World Bank has ranked us 4th globally for Investor Protection,while the World Economic Forum Global Competitive Index 2011-2012 positions us as the second most competitive nation in the ASEAN region. Indeed, global recognition is an essential prerequisite to the success of any vibrant market.
 Tun Mohamed Dzaiddin bin Haji Abdullah Chairman |
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"Bursa Malaysia continued to build on foundations set in place in the previous year, for continuity is the bedrock of sustainability and progress. One of these building blocks was internationalisation of Malaysia’s capital market and we have seen the fruits of our efforts in greater recognition of our status, relevance and efficiency. Today, we have 941 companies listed on our Exchange, representing a wide range of businesses with attractive dividend yields.
The year was significant for us for two reasons. First, it marked the beginning of a new leadership, with the appointment of a new Chief Executive Officer to steer Bursa Malaysia towards becoming a vibrant and competitive Exchange in the region. Second, it was a good year in terms of financial performance and progress on a variety of fronts."
MARKET & FINANCIAL REVIEW
In 2011, Bursa Malaysia delivered a set of positive financial results, with operating revenues showing a 15% growth over the previous year to RM381.3 million, and Profit After Tax and Minority Interest (PATAMI) registering a healthy 29% growth over 2010 to RM146.2 million. Your Company delivered its highest-ever normalised operating profits in the last four years, while managing operating expenses effectively.
The key driver of growth was the Securities Market where trading revenue appreciated 15% over last year, contributing RM193 million to total revenues. These results are mainly a reflection of an increase in Securities trading activity, evident in average daily values which grew 14% over 2010.
Our Derivatives Market enjoyed record trading levels in 2011. Derivatives trading grew 36% to achieve a turnover of RM51.2 million. Our indicators showed 39% growth was achieved in the average daily contracts traded over 2010, whereby foreign trading grew a hefty 59% and domestic trading 31%.
On the Islamic Market, active promotion of Bursa Malaysia as an international Islamic fund-raising centre as well as marketplace for Islamic investment products was evident through Bursa Suq Al-Sila’ and Sukuk Listings. A total of 19 Sukuk programmes by 17 issuers totalling USD28.5 billion were listed during the year.
DIVIDENDS
The Board has proposed a high dividend payout as part of our commitment to deliver shareholder value, with the total dividends declared in 2011 amounting to 26 sen. This is equivalent to a 95% payout, surpassing our dividend payout policy of 75%.
STRIVING FOR GROWTH
In the past few years, our industry leadership has been visible in the revitalisation of the market, promotion of market integrity and drive for greater efficiency and good governance. We began 2011 with a number of strategic initiatives to deepen and broaden our various market and product offerings. Across our markets, we took measures to expand our foreign and domestic investor base, aim for greater diversity, improve market access, innovate and create products and raise awareness of our services. I am pleased to report that these priorities produced measurable outcomes as reflected in positive quarterly results throughout the year.
We also worked on initiatives to uphold and embed the principles of good governance, transparency and sustainability for ourselves as well as for the industry.We produced a guide on Corporate Disclosure to issuers and PLCs to remind them of their disclosure obligations under the Listing Requirements and to help raise the quality and timeliness of disclosures to the market. We also introduced a special Practical Guide to Listing on Bursa Malaysia to assist companies in their evolution towards becoming PLCs in their own right.
OPERATIONAL & CORPORATE DEVELOPMENTS
In line with our continuing goal to make the offerings on Bursa Malaysia more accessible to the global investment community, we successfully migrated our Derivatives products onto the CME Globex® electronic trading platform as reported last year, a move which increased our global exposure. Recognising that connectivity is crucial to our growth, we became a regional exchange-partner through our collaboration with seven stock exchanges in the ASEAN Exchanges in 2011. This will ensure a freer flow of capital within the ASEAN family, help create a robust ASEAN trading marketplace, as well as leverage ASEAN linkages into a connected global entity of exchanges.
Another important development during the year which augurs well for our international rankings was that Malaysia’s market weightage across the Morgan Stanley Capital International (MSCI) indices increased during the year, in particular, the MSCI Emerging Market Index which appreciated from 2.9% previously to 3.2%.
CORPORATE GOVERNANCE
Our Corporate Governance Statement contained in this Report sets out fully Bursa Malaysia’s commitment to keep the corporate conscience alive at all times, and is the product of the Board’s continuing reflection and review. In 2011, the Board adopted a nine-year policy for Independent Directors which would become fully operational from 2013, the ninth year after the appointment of the first batch of Independent Directors of the demutualised Bursa Malaysia in April 2004. The main objective of the policy is to enable progressive refreshing of the Board.
In January 2011, the Board further created the position of a Senior Independent Director (SID) for Bursa Malaysia, to serve as a point of contact for investors and shareholders when the regular channels of communication prove inadequate. The appointment is for a term of one year. The SID is also responsible to receive reports from employees or third parties for the purpose of whistleblowing in accordance with our Whistleblower Policy and Procedures. Accordingly, the Board appointed Dato’ Dr. Thillainathan Ramasamy and Mr Cheah Tek Kuang as Senior Independent Directors for 2011 and 2012 respectively.
GOING FORWARD
From 2011 into the next three years, we have identified five strategic thrusts which will guide us towards our goal to become a competitive and vibrant market. The primary focus will be on expanding the Securities, Derivatives and Islamic Markets and we will invest in the key enablers including a sound regulatory framework, appropriate technologies and our talent pool. Both medium and long-term priorities have been mapped out.
While we take some pride in our achievements in 2011, we remain committed to the stability and quality of the market and sustainability of our business. A volatile global economic environment notwithstanding, we at Bursa Malaysia Berhad remain optimistic for Malaysia’s economic outlook, given the clear catalysts for growth via the Government’s Transformation Programmes which aim to generate a high-income economy through wealth creation.
ACKNOWLEDGEMENTS
I wish to thank my fellow Board members for their guidance during the year under review and also to record the contributions from the management team and the entire staff of Bursa Malaysia Berhad towards our drive for growth and sustainability. We are committed to improving on our performance in 2012, barring any unforeseen circumstances in the global operating environment. |
