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FROM THE BOARD OF DIRECTORS AND SENIOR MANAGEMENT
Bursa Malaysia
•
Annual Report 2014
31
CEO’S MESSAGE AND MANAGEMENT DISCUSSION AND ANALYSIS
ENHANCING OUR MARKET STRUCTURE
We are constantly looking at ways to develop our market structure to secure
long-term sustainability. One of our core initiatives designed to enhance our
market structure is the implementation of ASEAN Post Trade services. We are the
first exchange participating in the ASEAN Trading Link to implement the service
and we believe that it represents an important value add for our market traders.
We have also taken steps to ease access to our markets by streamlining entry
requirements through policy changes such as the revamp in the derivatives
market participantship structure. These measures are in line with our overall
drive to make us a more efficient and effective market.
MAINTAINING A FAIR, ORDERLY AND EFFICIENT MARKET
Bursa Malaysia has a regulatory duty to uphold market integrity by ensuring a
fair, orderly and efficient market. To this end, we are continuously looking at new
developments in best practices for markets and to champion these practices to
our PLCs.
Our efforts in this area have helped propel the overall level of corporate
governance (CG) in Malaysian PLCs - an improvement that has been recognised
by international CG watchdogs.
TRANSFORMING INTO A HPO
We took another step forward in 2014 towards transforming Bursa Malaysia
into a HPO. Talent recruitment and management reform remain key enablers
of this transformation and we have continued to drive the development of our
talent bench by implementing aggressive employee recruitment and retention
strategies.
We have bolstered our capabilities in line with our demand for higher standards
of governance, and we continued the process of institutionalising the new
performance benchmarks into our corporate culture.
To support our journey towards becoming a HPO organisation, our Group Human
Resources (GHR) has instituted a number of talent management programmes
designed to secure our long-term sustainability and meet our future talent
requirements.
BEST PERFORMANCE SINCE 2008
Our financial performance in 2014 is the best since 2008 and is trending in
the right direction. Bursa Malaysia posted a record profit after tax and minority
interest (PATAMI) of RM198.2 million (+15% y-o-y), an improved cost-to-income
ratio of 46.1% (-2 percentage points y-o-y) and a higher return on equity (ROE)
of 25.4% (+5 percentage points y-o-y). Financial performance for the year under
review was driven by higher trade volumes in all three of our markets due to
higher domestic participation.
FINANCIAL HIGHLIGHTS
2014
2013
Financial Results
RM million RM million
% change
Operating Revenue
471.3
439.8
+7%
Other Income
32.5
35.2
-8%
Operating Expenses
(232.0)
(229.4)
+1%
Profit Before Tax
271.8
245.6
+11%
Income Tax Expense
(67.8)
(66.2)
+2%
Profit After Tax
204.0
179.4
+14%
Minority Interest
(5.8)
(6.3)
-8%
PATAMI
198.2
173.1
+15%
Financial Ratios
Cost to Income Ratio
46.1%
48.3% 2 percentage points
Return on Equity
25.4%
20.7% 5 percentage points
7% GROWTH IN OPERATING REVENUE
Operating revenue rose to RM471.3 million in 2014 from RM439.8 million in
2013, which represents a growth of 7%. Apart from higher trading revenue
from all three markets, the greater number of new structured warrant listings
and secondary issues in 2014 also improved revenue growth.
Revenue from our securities trading activities rose 10% to RM239.1 million in
2014 from RM217.3 million in 2013. Revenue growth was supported by higher
domestic participation, particularly in the retail segment.
Our Derivatives Market saw a marginal increase in trading revenue of RM70.6
million from RM70.3 million in 2013. Although volume traded showed a healthy
16% increase, lower guarantee and collateral management fees offset the
increase.