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BURSA ANNOUNCES 372% INCREASE IN PROFIT, DECLARES MAIDEN INTERIM DIVIDEND AND PROPOSES MEASURE TO OPTIMISE CAPITAL MANAGEMENT.

BackAug 01, 2005

01 August 2005
BURSA ANNOUNCES 372% INCREASE IN PROFIT, DECLARES MAIDEN INTERIM DIVIDEND AND PROPOSES MEASURE TO OPTIMISE CAPITAL MANAGEMENT


Bursa Malaysia Berhad (Bursa Malaysia) today announced that it posted a net profit of RM44.4 million for the financial period ended 30 June 2005, a 372% increase compared to the net profit of RM9.4 million in the corresponding period last year. Bursa Malaysia also announced that the Board has declared an interim dividend payout of 81.6% of the Group's net profit, 6.6% higher than its dividend payout policy. In addition, Bursa also announced a proposal to undertake a capital repayment exercise of RM416 million to its shareholders in line with the Group's objective of optimising capital management.

Financial results for the period ended 30 June 2005
For the 6 months ended 30 June 2005, the Group registered a net profit of RM44.4 million, a 372% increase from the RM9.4 million registered in the corresponding period last year.

"We are on track to deliver on the RM60 million profit forecast made in our prospectus, despite lower-than-expected trading market activity. With the liberalisation measures that were announced such as the removal of the Ringgit peg and the CDS account liberalisation, we expect investor sentiment to further improve, and hopefully this would translate into sustained, greater trading activity. We are also pleased that cost containment measures within the Group continued to show positive results," said Yusli Mohamed Yusoff, Chief Executive Officer of Bursa Malaysia Berhad.

The Group's operating revenue for the half year ended 30 June 2005 decreased by 16.2% from RM119.1 million to RM99.8 million due to a decline in activities in the equities market. Daily average trading value for On-Market Transactions was RM799.0 million, compared to RM1,008.7 million in the same period last year. As a result, revenue from clearing fee and SCORE fee dropped from RM64.2 million to RM47.9 million. However, revenue from information services saw an increase arising from the implementation of the new fee model which came into effect in October 2004 and also from increase in information subscribers.

Trading related revenue (covering both equity and derivatives markets) and stable revenue accounted for 59% and 38% of operating revenue respectively compared to 65% and 30% respectively in first half 2004.
The group also saw a substantial reduction in operating expenses. The group recorded operating expenses of RM69.0 million, a 47% decrease from the corresponding period last year.

Interim dividend payout
The Board also declared an interim dividend payout of 81.6% of the Group's net profit for the period ended 30 June 2005. This is 6.6% higher than the minimum of 75% dividend payout policy that Bursa has. Based on the number of shares in issue as at end of June of 502, 712,000, the payout is equivalent to a net dividend of 7.2 sen per share or a gross dividend of 10.0 sen per share. The interim dividend will be paid out to its shareholders by the end of this month.

Capital Repayment to shareholders
As part of the Exchange's objectives to optimise capital management and its commitment to increasing shareholders value, Bursa Malaysia has proposed a capital repayment of RM416 million to its shareholders. The amount proposed to be paid translates into 83 sen per share. The proposal will be subject to the approval of its shareholders and the High Court.

"With both the interim dividend and capital repayment, Bursa will be paying out a total of RM0.90 to its shareholders in its first year as a listed entity. We did the first capital repayment in conjunction with our IPO exercise and this will continue to be a key focus of Bursa's strategy. This is also consistent with one of the key initiatives for the GLC transformation announced by the Prime Minister last Friday," Yusli said.
On the business front, the group saw the first listing of an Exchange Traded Fund (ETF) in the form of the Asian Bond Fund ETF and the introduction of clearing facilities for over-the-counter ethylene contracts in July this year. The group also expects the first listing of Real Estate Investment Trust this week.

"The liberalisation of CDS account structure is a pro-active move to promote an investor-friendly trading environment and enhance efficiency of portfolio management.

"The establishment and start of operations by the five foreign stockbrokers, combined with our focused marketing strategy to enhance retail participation through the retail roadshows and improving accessibility of research reports through the CMDF-Bursa Research scheme is anticipated to contribute to increased trading activity in the equities market, " Yusli said.

FINANCIAL RESULTS FOR SIX MONTHS ENDED 30 JUNE 2005
  3 Months Ended 6 Months Ended
  30.06.2005 30.06.2004 30.06.2005 30.06.2004
  RM'million RM'million RM'million RM'million
Operating revenue 47.2 52.7 99.8 119.1
Other income 15.3 14.7 36.2 35.8
Total revenue 62.5 67.4 136.0 154.9
Total operating expenses 32.4 81.9 69.0 130.2
Profit from operations 30.1 (14.5) 67.0 24.7
Finance cost 0.1 0.1 0.1 0.1
Profit before taxation 30.0 (14.6) 66.9 24.6
Taxation 9.7 2.6 21.1 14.0
Minority interest 0.3 0.3 1.4 1.2
Net profit for the period 20.0 (17.5) 44.4 9.4