Active retail participation, high volatility drive Bursa record 1H earnings

KUALA LUMPUR (Bernama) — Bursa Malaysia Bhd expects trading on the stock market to remain vibrant, supported by active retail participation and high volatility in the market.

Chairman Tan Sri Abdul Wahid Omar said the challenges arising from COVID-19 are likely to continue for at least in the short term, hence the exchange would continue with ongoing initiatives to attract investments and sustain retail participation in its market.

In his welcoming remarks at the virtual media briefing of Bursa Malaysia’s first half (H1) financial performance today, he said the high average daily trading value (ADV) momentum of 2020 continued into the H1 of 2021 with ADV increasing by 4.9% to RM4.4 billion.

“This contributed to the exchange recording a profit after tax of over RM210 million, a 39.4% increase from the previous corresponding period in 2020, and was also the highest ever half-year financial results since our listing back in 2005,” he said.

Abdul Wahid said the global risk-off sentiment that has spurred an outflow by foreign investors from equities is not unique to Malaysia as this was also experienced by other emerging markets in ASEAN.

“Nonetheless, we believe Malaysia is well positioned for recovery, following the eight COVID-19 fiscal stimulus programmes amounting to RM530 billion as well as the accommodative interest-rate levels have been crucial in supporting the economy,” he added.

He said the exchange saw three potential upsides to support this view — “Bursa Malaysia’s market valuation, with its forward price-to-earning ratio of 13.3 times being the lowest in the region, makes it an attractive recovery play over the next few months.

“Secondly, Bursa Malaysia’s initial public offering (IPO) pipeline continues to remain healthy across all three markets, having sustained from the strong momentum last year. Year-to-date, we have witnessed 20 new listings from the target of about 31 new listings this year, which include the recent RM1.21 billion listing of CTOS Digital Bhd, the largest IPO this year,” he added.

He said lastly, the recovery in domestic and major economies appears to be on track, with the ramped-up vaccination rates seen in recent times and the implementation of the National Recovery Plan would facilitate the reopening of the economy.

Meanwhile, Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift said various relief measures and incentives have been introduced to support listed issuers amidst these challenging times.

“Moving forward, we will continue to enhance our platform to support the investing community in growing their wealth and managing risk against volatilities.

“Last May, the exchange launched the Pilot Market Making Program which aims to provide greater liquidity for less traded and illiquid stocks in the marketplace,” he said.

For the first half ended June 30, 2021, Bursa Malaysia’s net profit increased by 39.4 per cent to RM210.36 million from RM150.96 million in the previous corresponding half, due to higher operating revenue, growing by 31.0 per cent to RM420.2 million from RM320.7 million.