Q&A  Library

Q: Where can I find Bursa Malaysia Berhad's Annual Report?

Please click here

Q: Do you own all the cash in your cash balance? What is impacting your cash level?

A: Bursa only owns a portion of the cash balance. Higher cash balance is usually due to more funds from operations, higher cash margins received by Bursa Derivatives Clearing and cash collateral for Securities Borrowing and Lending (SBL) activities.

Q: How do I calculate the financial resources available for use?

A: The "financial resources available for use" could be derived as follows:

Cash and Bank Balances+ Short Term Investments + Other Investments - adjusted Trade Payables* - CGF contribution from Trading Clearing Participants(TCPs)"

Note: *Adjusted Trade Payables = Trade Payables less accrued interest

Q: When does Bursa Malaysia announce its financial results?

A: Bursa Malaysia announces its results quarterly, in April, July, October and January/February. You may sign up with our email alert service to get our notification

Q: Where can I find Bursa Malaysia Berhad's latest financial results?

Please click here to view the latest financial results.

Q. Where can I find information on Bursa Malaysia Berhad's historical financial results?

Please click here

This information is also available in our Financial Highlights. Please click here

Q: How do you get other back dated market statistics for reference?

A: For a snapshot of quarterly market statistics, please click here.Bursa Malaysia charges backdated information in accordance to the nature of request. You can write in to our Customer Service department at customerservice@bursamalaysia.com for all backdated market statistics request.

Q: Can the management team provide a general guidance on the growth prospect for 2H09?

A: The outlook for the Group's business depends on the performance of the securities and derivatives markets. While we welcome the improvement in investor sentiment on the securities market in the second quarter of the year, we remain cautiously optimistic on the outlook for the remainder of the year. The goal to transform Malaysia into a high income economy and the series of liberalisation measures to that end indeed bode well for the future of the securities market. The measures together with the stimulus packages are expected to somewhat mitigate impact of the global crisis on the Malaysian economy.

On the derivatives front, we continue to see our FCPO and FKLI products as key revenue drivers. Amidst the volatility in CPO prices, we continue to expect FCPO volumes to hold steady. Volume for FKLI is expected to move in tandem with sentiment on the securities market. We expect the existing direct market access platform (DMA) for derivatives and the market-making framework for derivatives, which will be available in the second half of the year, to further spur liquidity and interest in the derivatives market. Barring any unforeseen circumstances, the Group expects to maintain the same level of performance in the second half of 2009

Q: What is the general management's strategy to overcome challenging market conditions?

A: Amidst the challenging market conditions, we resolved to be cost-disciplined and remains committed to our goal to develop the Malaysian capital market. We will continue to invest in initiatives which will deliver long term value for the capital market. Click to view our strategy and initiatives slide.

Q: Where can I find a snapshot of the revision of fees for securities and derivatives market?

A: The changes in securities fees are as follows: -

2001 and 2002: -

• On Market Transaction Clearing Fee was revised from 0.05% to 0.04% cap at RM200 (Effective 1 July 2001)
• Direct Business Transaction Clearing Fee was revised from 0.05% subject to a minimum of RM25 and cap at RM250 to 0.04% subject to a minimum of RM10 and cap at RM200 (Effective 2 Jan 2002)

2005: -

• On Market Transactions Clearing Fee was fixed at 0.04%, cap at RM500 (Effective 21 Oct 2005)
• Direct Business Transactions Clearing Fee was fixed at 0.04%, subject to a minimum of RM10 and cap at RM500 (Effective 21 Oct 2005)

2007: -

• Net Clearing Fee rebate (50%) for Day Trading Activities Account only (Effective 3 Jan 2007.)
• Net Clearing Fees rebate is not applicable to general public.

2008: -

• On Market Transactions and DBT Clearing Fee were fixed at 0.03%, cap at RM1,000 (Effective 1 Jan 2008)

For derivatives fee structure change, please download here.

Q: Is there a restriction on share ownership for Bursa Malaysia Berhad?

A: Yes, there's a restriction on share ownership by any single shareholder who wish to hold 5% or more voting shares in Bursa Malaysia. An application for approval can be made to the Securities Commission, SC will then submit the application with its recommendation to the Minister of Finance. The MOF may grant approval subject to terms and conditions and as deem fit.

Q: What is the current shareholding structure of Bursa Malaysia?

A: Our substantial shareholders as at June 2009 are :

• Minister of Finance (19%);
• Capital Market Development Fund (19%); and
• Newton Investment Management Limited (6.9%)

Our foreign shareholding @ 30 June 2009 stood at 17.5%.

Q: What is Bursa Malaysia Berhad's latest and historical foreign shareholding?

A: Please mail in your request to ir@bursamalaysia.com.

Q: How does Bursa Malaysia computes market velocity? Is it readily available in the website?

A: Bursa's turnover velocity can be calculated daily, monthly or year to date. The formula are as follows:

Daily Velocity

Annualized Market Transacted Value for the day X 248 days / Market Capitalisation for the day = Percentage of daily velocity

*248=standard annualized trading days.

Monthly Velocity

Calculate the average of the velocity of the month.(Average the daily velocity in the month)

Yearly Velocity

Total market transacted value for the year/ Average market capitalization for the year

Example:-

To compute the daily annualised market velocity, you can refer to the "Daily Scoreboard" for the "daily market value traded" figures and refer "Key Indicator" to get the "market capitalisation".

Daily Annualised Market Velocity
= Daily Market Value Traded X 248 / Daily Market Capitalisation
= RM 0.76bil X 248 / RM 662.07 bil
= 28%

• Directors Not Complying to Listing Requirement

  Q: How does Bursa Malaysia ensure that Directors of PLC are being penalise fairly?

  A:

  i. Firstly, enforcement action against directors are taken on directors who have blatantly disregarded compliance with the Listing Requirements(LRs). This needs to be established through various enquiries and investigation and once this has been established, the nature of the breach must also be taken into consideration in determining whether to proceed with director enforcement. Nature of the breach would involve materiality of the transaction/event, whether it is a related party transaction and whther the breach is capable of rectification.

  ii. Once a prima facie case is established against the director, a notice to show cause will be issued whereby he will given a specific time to make representation in writing as to why Bursa should not find him in breach of the LR for causing, aiding and/or abetting the Company and/or for permitting knowingly the Company to breach the LR.

  iv. Prior to the Listing Committee (which consists of representatives from various distinguished organisations) deciding on the imposition of the penalty to the director, the director will also be given the opportunity to make oral representations before the Listing Committee.

  v. The type of penalty decided by the Listing Committee will also be based on mitigating and aggravating factors specific to the director.

  vi. Once the penalty have been imposed, the affected director has another chance to appeal to Bursa on the penalty imposed. His appeal will be heard by the Appeals Committee.The Appeals Committee's decision will be considered final.

• Companies Seeking Listing

  Q: Why are China companies choosing Singapore or Hong Kong as a listing destination rather than Malaysia? Is it due to some of the ruling/regulation?

  A: We are always vigilant on the competitiveness of stock exchanges regionally. In this respect, we, together with the Securities Commission (SC), have amended our Listing Requirements in April 2007 to facilitate cross border listings and also to align with guidance notes issued by SC on the same. We have also conducted roadshows and conferences, both local and overseas, to promote our competitiveness and attractiveness as a listing destination for foreign companies.

  Further liberalisation measures has also been announced in June 2009 by our Prime Minister, Datuk Seri Najib Tun Razak to attract foreign companies to list in Malaysia. Please click here to see the FAQs for the new Bumiputera equity requirement for companies seeking listing on Bursa Malaysia.

Q: What has been the key capital market liberalisation announcement made during Invest Malaysia?

A: Please click here

Q: Most of the IT developments had come through at the end of 2008. However, there has been a major increase in IT upkeeping and maintenance as well as professional fees from Q109 to Q209. What is the reason behind the delay in cost increase?

A: The maintenance fee for one of our new system (Electronic Trading Platform for the bond market) was waived for a year. The system was launched in March 2008 and the maintenance fee only kicked off in Q209.

In regards to professional fees, Bursa Malaysia has been incurring some advisory fees due to some of the initiatives undertaken.

Q: What is the status of the sale and lease back of Bursa's building?

A: Due to the current economic climate, the management has decided to further discuss the prospect of this plan.

• Lower 4Q08 Derivatives Activity

  Q: Why has the derivatives activity dropped in 4Q08? Which particular contract is contributing to the drop, FCPO or FKLI?

  A: Both the FKLI and FCPO had a drop in volume in 4Q08 from 3Q08. FCPO volume dropped by 110,000 contracts while FKLI dropped by 35,000 contracts.

  FKLI :
  701,853 (3Q08) vs 666,451 (4Q08)

  FCPO :
  850,992 (3Q08) vs 739,364 (4Q08)

  The drop in volume occured mostly in December with both number of contracts were reduced by 60,000 from November. Historically, the month of December has always been slow due to the holidays. The 4Q has more holidays than the 3Q resulting in less trading days.

• Open Positions

  Q: Did you see a reversal in open positions for your futures contracts? Any impact on the trade payable ?

  A: As at end January 09, FKLI's OP stood at 19,725 contracts and FCPO's OP stood at 83,949 contracts. Average Daily Open Interest for January 09 is recorded at 159,333. The amount of trade payable has been about the same level.

• Derivatives Initiatives

  Q: Will Bursa's derivatives initiatives better benefit the FCPO or the FKLI contracts?

  A: Our initiatives is expected to benefit both the FCPO and FKLI contracts:-

  For e.g:

  i. Conversion of KLCI to FTSE methodology – This initiative will be positive for our FKLI contracts due to the ease of tracking index movement of 30 stocks rather than 100 stocks.

  ii. FTSE BM Palm Oil Plantation Index Series – This initiative will see a positive impact on the FCPO contract because, investors could opt to buy the ETF, and also trade the FCPO contracts.

• USD FCPO

  Q: The reception to the US Dollar FCPO Contract looks poor. Are there any initiatives to make this product more marketable and are there any other products in the pipeline?

  A: New futures contracts will usually face difficulty in creating critical mass. Hence, we are currently working on creating a market making framework for derivatives contracts.

• DMA Equities

  Q: When will DMA for equities be introduced and how is it expected to contribute to revenue?

  A: DMA Equities will probably be introduced in the middle of 2009. We do not have an estimate of how much it will contribute to the business, but generally, other markets has experienced positive impact to their volume.

• DMA Derivatives

  Q: What has DMA's present volume been in respect to overall derivatives volume? Has there been an increase or has there been a substitution of volume?

  A: Since we had just launched DMA in 2Q08, it is a little early to determine if our customers would have traded the same amount of volume with DMA or without DMA. Last year, approximately 200,000 contracts were traded through DMA. We could gauge the activity better once we proceed throughout the year.

• Dividend Payout

  Q: Would Bursa be able to maintain its 91% payout this year?

  A: Our dividend policy states that Bursa expects to declare and pay annual dividends of not less than 75% of our PAT after MI in respect of any year. However, in considering the level of dividend payments, we take into account various factors including:

  i) the level of our available cash and cash equivalents;
  ii) return on equity and retained earnings; and
  iii) our projected levels of capital expenditure and other investment plans.

• Special Dividend

  Q: Bursa does not pay special dividend in 2008. Does it mean that going forward, there will be no special dividends payment?

  A: Given the current economic climate, we have decided to be more conservative with our cash resources. Should we report better financial performance and should we have sufficient excess cash, the management will consider paying out a special dividend in the future.

Q: What is the activity level on the bond platform and when can we expect it to have any kind of meaningful contribution to Bursa's revenues?

A: The activity level has been the same as to when we first introduced it. In order for the bond platform to have any kind of meaningful contribution to our revenues, Bursa has to consider doing what some other markets have done E.g: Mandatory trading for certain types of benchmark bonds.

Q: Will you be launching any ETFs this year?

A: Yes we hope to launch the Palm Oil Thematic indices this year.

Q: What is being done to encourage people to invest in ETFs?

A: Bursa realizes that there needs to be more education initiatives and more promotional activity to market the ETFs in order to see more participation from the investors.

• Operating Revenue

  Q: Why has the operating revenue contracted by about 3% quarter on quarter despite the increase in velocity?

  A: The total value of trade done during 4Q was lower than 3Q due to the number of holidays in 4Q. Hence, even though the velocity seems to be going up and the daily average volume traded seems to be improving, the revenue from the equities market has gone down slightly in the fourth quarter due to the lower number of trading days.

• Financial Resources Available for Use

  Q: What is the amount needed for Bursa's operation and what is the excess cash available out of Bursa's cash pile of RM1.14 billion?

  A: The amount includes cash margins which belong to the trading participants. Our own cash position is at about RM400 million cash. We have to set aside RM85 million for our Clearing Guarantee Fund and approximately another RM150 million for CAPEX.

• Investment Yield

  Q: How do you improve your investment yields? Are you just placing it in FDs?

  A: Our investment strategy has been quite conservative. We manage our investment effectively and at the same time taking into account of the risks involved in investing in different kind of products. Besides FDs, we have also invested 30% of our cash in bonds. However, seeing that the bond market has not been doing too well, we have been quite selective in choosing our bonds.

• Higher Trade Payables

  Q: Trade payables actually increased by 65% year on year. Would it reverse in subsequent quarters or would it maintain the same?

  A: The cash margins that are placed are in relation to the open positions for the derivatives trades. It depends on the interest in FCPO and FKLI. If the interest is still there, we will see the same amount of trade payables or even higher depending on the volume of trade that we see in the market during the quarter.

• 2009 CAPEX

  Q: What will the CAPEX breakdown be for 2009?

  A: In 2009, Bursa Malaysia is budgeting about RM85 million for approximately 10 to 15 different projects. The size of each project is relatively small but each project is expected to improve the infrastructure within the business.

• Foreign Investment Outflow

  Q: In view of the current economic condition, has there been a huge outflow of foreign investments from the local bourse?

  A: The lower volumes that we see in the market place are impacted by both the foreign and domestic investors level of activity.

• Foreign Investors Trading Value

  Q: Bursa mentioned in November 2008 that 40% of the total daily trading value was done by foreign investors. Is there any change in that number?

  A: It has come down to about half in terms of proportion in January.

Q: Would all the initiatives presented be implemented in 2009?

A: Yes, most of the initiatives will be implemented in 2009 subject to unforeseen circumstances. However, the completion date of some initiatives like the ASEAN Trading Link and approval by CFTC, the US regulator may not be within our control.

• IPO Prospect

  Q: What is the IPO prospect in 2009?

  A: SC has approved more than 30 companies for IPO applications last year and there has been 23 new listings in 2008. Given the need for companies to raise capital, we are hopeful on a similar number of IPOs in 2009.

• Foreign IPOs

  Q: Will Bursa embark on more initiatives to attract foreign IPOs?

  A: We are still intending to attract foreign companies to list and we have had some meetings with companies from other countries who have indicated interest to list in Malaysia.

Q: What are Bursa Malaysia's key targets for the year 2009?

A: Bursa has not announced any targets for 2009 due to the volatile market conditions. In the medium term, we hope to achieve a sustainable 60% velocity for the equities market and doubling our derivatives business. Bursa Malaysia will always stay focused to continue growing its core businesses. We also hope to build on our advantages in two niche areas namely, the Islamic Market and the Commodities Market. The ultimate objective is to make Bursa Malaysia an attractive investment and listing destination.

Q: Why has Bursa Malaysia decided to shrink the constituents of KLCI from 100 stocks to FTSE BM KLCI's number of constituents, 30 stocks?

A: The proposal to move the KLCI composition from 100 to 30 stocks is based on the discussions that we've had with the industry players. From the feedback we have gathered, a market barometer of 30 constituents is a better representative of the underlying market while being a more manageable basket when products are created of the back of the index.

Q: There's a news report saying that local bourse lost close to RM300 billion since January 2008 due to the crisis in terms of outflow. Please clarify.

A: The "RM 300 billion" lost reported is referring to the amount of market capitalisation