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FROM THE BOARD OF DIRECTORS AND SENIOR MANAGEMENT
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Bursa Malaysia •
Annual Report 2015
RISKS AND OPPORTUNITIES
The biggest risk in the immediate term to our financial performance is
the ongoing volatility in the global markets. While we are confident that
this will not have a substantial impact on the achievement of our long-
term goals, prolonged weakness in commodity prices and the Ringgit may
further weaken investor and trading sentiments, which may in turn have
an impact on our revenue stream. Weaker revenue contributions from our
markets may also impinge on our ability to create shareholder value over
the short term.
We believe that the Malaysian economy is sufficiently robust with strong
foundations to withstand external impacts. Further strengthening our
economy is the presence of strong domestic institutions that play important
roles in supporting the market. The economy has continued to diversify
beyond its traditional dependence on commodities and has steadily climbed
up the value chain. Gross national income has been on a rising trend, which
is a positive development for us as this translates into a larger pool of
potential investors.
Meanwhile, we have continued our efforts to identify and isolate risk items
related to our regulatory, supervisory and market infrastructures. Bursa
Malaysia continues to invest in technology and in talent to ensure that
we have the resources and capitals required to sustain operations in the
foreseeable future.
ASEAN: THE NEXT STEP FORWARD
The official launch of the ASEAN Economic Community in October 2015
is a timely reminder that we can no longer look solely within our borders
for opportunities. We have stamped our ambition to become ASEAN’s
Multinational Marketplace and have embarked on significant regional and
global campaigns to realise this vision.
As highlighted in our strategic intents, the value-creating platforms that
will form the leverage points for us have been established over the last
several years, and we have continued to improve both the microstructure
and macrostructure of our marketplace. We have already started extracting
value from these levers, and have made our initial forays into improving
regional access for our investors, e.g. by enhancing global access via the
CFTC’s approval and in our participation in the ASEAN Trading Link.
ASEAN remains as exciting a story as ever and we are making headway in
positioning ourselves as its regional leader and Multinational Marketplace.
To achieve this ambition, we must remain focused on our role as a market
operator and regulator and remain relevant to the requirements of domestic,
regional and global investors. 2016 will see us continue to seek out new
investors and market participants interested in using Bursa Malaysia as a
gateway into the rest of ASEAN.
ENGAGING THE DIGITAL GENERATION
With more than 65% of Malaysians connected to the internet, the digitisation
of our marketplace is a must if we are to further grow market participation.
Digitisation will also facilitate greater access into our market as investors
will be able to make use of our services and facilities from anywhere in
the world.
BursaMKTPLC, which was launched in 2014, has received a warm
reception since going online, and will continue to form the backbone of our
digital offerings going forward. Traditional engagement channels, such as
the Bursa Young Investor Club, also provide an alternative channel for us to
educate and promote the value of investing to the next generation.
Finally, our digital strategy also includes attracting greater participation from
millennials, who will be a core demographic group for us going forward. We
plan to make greater use of social media and other creative means as we
did with our CELEB.TRADR programme to reach out to this age group.
MOVING FORWARD
We expect the challenging operating environment to continue through
2016. These developments are reinforcing the need for a sustainable core
at the heart of our operations, and we believe that we have taken the right
steps to ensure our long-term sustainability. Meanwhile, safeguarding
market integrity remains our foremost priority.
In 2016, our priority is to sustain our financial performance within this more
challenging environment while at the same time executing the final phase of
our 2014-2016 Strategic Blueprint to further build our presence as ASEAN’s
Multinational Marketplace. Our fundamentals remain strong and we have
seen evidence of reduced reliance on securities trading contributions. We
must also remain prudent and diligent in managing our costs during this
volatile period.
In comparison against our regional peers, we believe that Bursa Malaysia
has demonstrated a level of resilience which will attract regional investors
seeking safer shores should conditions further worsen. Our continued
development of Bursa Malaysia’s CG framework, coupled with our strength
in investor protection and emphasis on sustainability, should shore up
confidence in the integrity of our markets.
CEO’S MESSAGE
AND MANAGEMENT
DISCUSSION AND ANALYSIS