1H2019 Financial Results Analyst & Media...
30
1H2019 Financial Results Analyst & Media Briefing Datuk Muhamad Umar Swift Chief Executive Officer Rosidah Baharom Chief Financial Officer 1 August 2019
Transcript of 1H2019 Financial Results Analyst & Media...
1H2019 Financial ResultsAnalyst & Media Briefing
Datuk Muhamad Umar Swift
Chief Executive Officer
Rosidah Baharom
Chief Financial Officer
1 August 2019
Agenda• Market Recap
• Key Financial Highlights & Market Performance
• Financial Review
• Highlights & Conclusion
• Appendices
2
Market Recap
3
4
Market Performance for 1H2019Recap on selected key global and local events
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
Traded Volume (rhs) FBMKLCI (lhs)
FBMKLCI(point)
Traded Volume (million)
20 Feb• ECRL negotiations
at last mile, China
willing to lower
price
7-10 Jan • US-China
trade talk
resumed
12 April• ERCL to
proceed
with 33%
cost
reduction
(to RM44B)
FBMKLCI Year-to-date (YTD) Performance As at 12 July 2019
2019
January February March April May June July
7 May• Malaysia
overnight
policy rate
(OPR) cut
(3.25% to
3.00%)
5 & 10 May• US-China trade talk
fell apart
• US tariff hike on
Chinese goods
(from 10% to 25%)
takes effect8 Jan
• MY business
confidence
(RAM) hits
record low
23 Jan • IMF cuts 2019
global growth
to 3.5% (from
3.7%)
23 Feb • Govt in talk to
acquire concessions
for 4 main highways
1 Apr• 121 infra projects
(during previous
administration) to
continue (RM13B)
5 Apr• Norway to
exit emerging
market bonds
29 May• MY added to
US currency
manipulator
watch list
24 April• Brent at
YTD high
(USD74.94)
19 June• US-China
trade talk
to resume
29 June• Further tariffs
on halt, Huawei
ban lifted
5
Market Performance for 1H2019FBMKLCI Performance Against Global and Regional Indices
-1.2%
8.8%
9.0%
10.1%
17.4%
FBMKLCI
MSCI Emerging Market
MSCI ASEAN
MSCI Asia Pacific
MSCI World
Performance of FBMKLCI against MSCI Indices YTD 12 July 2019
Source: Bloomberg
-1.2%
2.9%
9.1%
9.3%
9.4%
10.7%
FBMKLCI
JakartaComposite
PCOMP
VN-Index
Straits Time
SET
Performance of FBMKLCI against ASEAN Indices YTD 12 July 2019
Source: Bloomberg
• The setback in US-China trade negotiations, the overnight policy rate cut by Bank Negara and the net selling by foreign
investors over 1H2019 are among the key factors that have bogged down the performance of FBMKLCI.
6
Market Performance for 1H2019Foreign Funds Outflow: A Perspective
• However, foreign shareholdings (by market capitalisation)
have also been stable amid the exits of foreign funds.
-7,093
-1,131
332
407
1,318
3,354
4,527
4,846
11,339
Japan
Malaysia
Vietnam
Philippines
Thailand
Taiwan
Korea
Indonesia
India
Foreign Funds Flow (FFF) in Asian Equity Market YTD June 2019; In USD million
% of Market CapitalisationPercentage (%)
0.28
0.14
0.22
0.32
0.32
0.52
0.13
0.94
0.24
Source: Bloomberg and WFE
1,026
-816
-1,557-1,411
-2,041
135
23.5% 23.5% 23.7% 23.4% 23.2% 23.1%
0%
5%
10%
15%
20%
25%
-3,000
-2,000
-1,000
0
1,000
2,000
Jan-1
9
Feb-1
9
Mar-
19
Apr-
19
May-1
9
Jun-1
9
Foreign Funds Flow (lhs)
Foreign Shareholdings (by MarketCapitalisation) (rhs)
Source: Bursa MIS
RMmillion
%
Bursa Foreign Funds Flow vs Foreign ShareholdingsFor the past 6 months
• Sentiment was dampened mainly by the possibility of the
US imposing additional tariffs on China despite promising to
hold off more duties in a trade-war truce
Note – information on the FFF for Singapore is unavailable
Key Financial Highlights & Market Performance• Financial Highlights for 1H2019
• Half-yearly Financial Trend
• Securities Market Overview
• Derivatives Market Overview
• Islamic Capital Market Overview7
8
Financial Highlights for 1H2019Lower trades in Securities and Derivatives Markets affect the financial
performance
Decrease in operating revenue contributed by lower trades in the Securities and
Derivatives Market.
Operating expenses decreased due to lower staff and technology costs.
Declared interim dividend of 10.4 sen. The entitlement and payment dates for the
dividend are 19th and 30th August 2019 respectively.
1H2019 vs. 1H2018:
Financial Items 1H2019 1H2018
1H2019
vs.
1H2018
Operating Revenue (RM million) 240.0 279.1 14.0%
Operating Expenses (RM million) 122.6 123.4 0.7%
PATAMI (RM million) 93.2 122.0 23.6%
EPS (sen) 11.5 15.1 23.8%
Cost to Income Ratio 49% 42% 7 percentage points
Annualised ROE 21% 28% 7 percentage points
9
21
19
23
27
25 26
25
22
26 25
28
23
21
45
52 48
44 46 46 47 46
44 46
4246
49
224 216
231 241 240 247
248
225
269
253
279
244 240
93 80
92 106
97 102 99 95
116 107
122
102 93
1H2013 2H2013 1H2014 2H2014 1H2015 2H2015 1H2016 2H2016 1H2017 2H2017 1H2018 2H2018 1H2019
Half Yearly Financial TrendDecline in Cost to Income and ROE performance mainly due to lower
operating revenue
Operating Revenue
(RM mil)
PATAMI
(RM mil)
Cost to Income
Ratio (%)ROE (%)
10
1,412
929
594
495
717
620
1H2018 1H2019
2,723
2,044
36 29
1,771 1,753
1H2018 1H2019
1.0%
Securities Market OverviewADV-OMT declined by 25%
Average Daily Value (“ADV”)
(OMT)(RM mil)
Market Capitalisation (RM bil) Fund Raised from New Listings &
Secondary Market (RM bil)
Velocity (%)
1,692
1,672
FBMKLCI
0.5
1.4
3.11.7
1H2018 1H2019
3.1
3.6
No. of New Listing
Fund raised from new listings
Fund raised from secondary market
ADV - Domestic Institutions
ADV - Retail
ADV - Foreign Institutions Market Capitalisation
11
14
13.9%24.9%
Note: OMT – On Market Trades
11
28 Aug
2018
317,788
1 Sept 2010
111,548
28 June
2019
246,7888 Feb
2019
216,862
10,653 8,990
43,640
38,595
501
1,766
1H2018 1H2019
ADC - Crude Palm Oil Futures (“FCPO”)
Volatility of Crude Palm Oil Prices
Derivatives Market OverviewLow CPO prices and low FBMKLCI volatility continue to affect FCPO
and FKLI trades
ADC - OthersADC – FBMKLCI Futures (“FKLI”)
Volatility of FBMKLCI
10%7%
80%
19%
Average Daily Contracts (“ADC”)
& VolatilityOpen Interest (No. of Contract)
78%
18%
9.9%
4%
49,351
54,794
1%
15%18%
12
Islamic Capital Market OverviewTrades in BSAS grew by 50% mainly due to higher take-up from domestic participants
15.3
26.7
6.2
5.4
1H2018 1H2019
32.1
21.5
49.8%
146 199
No. of Shariah Compliant
Stocks (%)No. of Trading Participants
Bursa Suq Al-Sila’ (“BSAS”) ADV
(RM bil)Market Capitalisation of Shariah Compliant Stocks
(RM bil)
76% 76%
Market Capitalisation of Shariah
Compliant StocksDomestic Foreign
1,102 1,1141.1%
30 JUNE 2018 30 JUNE 2019
Financial Review• Financial Snapshot
• Operating Revenue
• Operating Expenses
• Dividends
13
14
58.246.3
122.0
93.2
2Q2018 2Q2019 1H2018 1H2019
134.3 118.6
279.1240.0
2Q2018 2Q2019 1H2018 1H2019
23.6%
14.0%
11.7%
60.5 60.6
123.4 122.6
2Q2018 2Q2019 1H2018 1H2019
0.1%
Financial SnapshotPerformance affected by global and local events
Operating revenue (RM mil) Operating expenses (RM mil)
PATAMI (RM mil)
43
49
42
49
2Q2018 2Q2019 1H2018 1H2019
Cost to income ratio (%)
7 percentage points
20.4%
6 percentage points
0.7%
15
279.1
240.0
1H2018 1H2019
-28.7
Operating RevenueDeclined 14%, mainly from lower trading revenue
Decrease in securities trading revenue mainly due to lower ADV-OMT.
Decrease in derivatives trading revenue was due to lower number of FCPO and FKLI
contracts.
Increase in BSAS trading revenue was in line with higher BSAS ADV.
Decrease in listing & issuer services mainly due to lower initial and annual listing
fees as well as perusal and processing fees.
Increase in market data revenue due to increase in additional subscriptions.
(RM mil)
146.5
117.8
38.7
33.3
7.4
7.6
31.0
25.2
21.4
21.2
17.4
19.0
11.2
10.9
5.5
5.0
1H2018 1H2019
14.0%
Total
RM240.0mil
Total
RM279.1 milGrowth contribution by revenue streams:
Securities Trading Revenue
Derivatives Trading Revenue
Listing & Issuer Services
Depository Services
Market Data
Member Services & Connectivity
BSAS Trading Revenue
Conference Fee & Exhibition
Related Income
19.6%
-5.4
14.1%
+0.2
2.5%
-5.8
18.6%
-0.2
0.5%
+1.6 -0.3
3.0%
-0.5
9.2%9.4%
16
1H2018 1H2019
123.4
71.0 68.6
11.010.2
6.1 8.6
9.8 10.0
10.0 9.2
15.5 16.0
1H2018 1H2019
Total
RM123.4 mil
Total
RM122.6 mil
(RM mil)
Operating ExpensesCosts decreased marginally by 1% to RM123m
Movement of expenses:
Note^ - Other operating expenses include building maintenance, administrative expenses and CDS expenses.
Decrease in staff cost due to lower provision of variable costs.
Higher business development cost due to increase in marketing and engagement
activities as well as higher incentives provided to market participants.
Lower Globex fees from lower number of derivatives contracts traded.
Lower depreciation as certain IT assets have been fully depreciated.
-2.4
-0.8
+2.5 122.6+ 0.2+0.5
3.3%
7.5% 39.7%
1.4%3.2%
Staff costs
Depreciation & amortisation
Marketing & development
IT maintenance
Service fees
Other operating expenses^
-0.8
7.8%0.7%
17
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Mala
yan B
ankin
g
Genti
ng M
ala
ysi
a
CIM
B G
roup H
old
ings
AM
MB H
old
ings
Petr
onas
Gas
Petr
onas
Chem
icals
Gro
up
MIS
C
Tenaga N
asi
onal
DiG
i.C
om
RH
B B
ank
Maxis
Sim
e D
arb
y
HA
P S
eng C
onso
lidate
d
Sim
e D
arb
y P
lanta
tion
Public B
ank
Genti
ng
Petr
onas
Dagangan
Hong L
eong B
ank
Hong L
eong F
inancia
l G
roup
PPB G
roup
IOI C
orp
Nest
le M
ala
ysi
a
Kuala
Lum
pur
Kepong
Axia
ta G
roup
Top G
love C
orp
Mala
ysi
a A
irport
s H
old
ings
Hart
ale
ga H
old
ings
Pre
ss M
eta
l A
lum
iniu
m H
old
ings
Dia
log G
roup
IHH
Healt
hcare
BU
RSA
MA
LA
YSIA
Dividend Yield (annualised) – Bursa vs. FBMKLCI Constituents
2.99
Source: Bloomberg and Bursa Malaysia
11.0 11.3 13.4 14.010.4
12.0 11.312.3 11.6
10.0 8.0
2015 2016 2017 2018 1H2019
Special Dividend
(sen)Final Dividend (sen)
* Exclude special dividend
Payout
94%
Payout
93%
Declared interim dividend of 10.4 sen. The entitlement and payment dates are on the 19th and 30th of August
2019 respectively.
Note: Comparative figures have been adjusted to reflect the bonus issue exercise completed on 13 April 2018.
Interim Dividend (sen)
DividendsDeclared interim dividend of 10.4 sen for 1H2019
%
Payout
93%*
Payout
90%
Payout
92%*
Highlights & Conclusion• Highlights of 1H2019 Initiatives
• Moving Forward
18
19
Highlights of 1H2019 Initiatives
Bursa and Securities Commission to continue supporting a facilitative and market-friendly ecosystem
Strengthening the Core
Launched Bursa Anywhere mobile application
Launched T+2 Settlement Cycle to improve operational efficiency and reduce systemic risk
Embarked on a securities borrowing and lending (SBL) Proof-of-Concept (POC)
Expanded trading features to provide more opportunities for market participants
Capitalising on Technology & Information
Held the 15th edition of Invest Malaysia Kuala Lumpur
Organised the 30th Annual Global Palm and Lauric Oils Price Outlook Conference
Regional and Global Connectivity
Hosted the 5th Annual “Ring the Bell for Gender Equality”
Sustainability as a way of Life
Classification of Bursa as a Shariah-compliant securities
Corporate Development
20
Moving Forward
SECURITIES MARKET• The Securities Market performance in the first half of the year was influenced by both global and domestic
developments which centred on concerns of softening global growth, easing of global financing conditions and
weaker corporate earnings.
• Despite the external headwinds, the Securities Market performance for the second half of 2019 is expected to be
resilient. The month of June 2019 saw foreign investors turn net buyers, with the trend continuing into July 2019.
DERIVATIVES MARKET• Trading and hedging activities will continue to be influenced by volatility in crude palm oil prices and the
underlying equities market.
• The ongoing initiatives to attract new participants currently focused on the Greater China region, are expected to
further widen the derivatives trading community.
ISLAMIC CAPITAL MARKET• The Exchange expects to see increased participation by retail and institutional investors on the Bursa Malaysia-i
platform, through its continuous engagements and marketing efforts.
• Bursa Suq Al-Sila’ (“BSAS”) on the other hand, is expected to sustain its strong performance through expansion of
its global reach and onboarding of new domestic non-bank participants onto its platform.
Bursa Malaysia will continue to expand and strengthen its products and services offerings to drive trading activities,
as well as attract new investors and participants into our markets. On 11 June 2019, the Exchange launched Bursa
Anywhere, the first-of-its-kind mobile depository services in ASEAN and second only in Asia, that allows individual
investors to access CDS-related services on their smartphones, anytime and anywhere. Additional services will be
provided progressively through Bursa Anywhere to enhance investors’ experience on the Exchange. Considering the
challenging environment and barring any unforeseen circumstances, the Exchange expects to maintain a sustained
performance in the second half of the year.
1H2019 Financial ResultsAnalyst & Media Briefing
Q&A
21
Appendices• Securities Market Trading Activity
• Securities Market Trading Participation
• Securities Market Foreign Ownership
• Foreign Inflow/Outflow
• Derivatives Market Activity
• Derivatives Market Demography
• Islamic Capital Market Activity22
23
1,841
1,439 1,595
1,430 1,643
2,308
2,002
1,686
2,068 2,053 2,196
1,901 2,081
1,913 1,933 2,042 1,981
1,842 1,740 1,690
2,378
2,621
1,951
2,316
2,716 2,730
2,226
1,912 2,069 2,022
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
34
27 2825
28 3731
25
30 29 3028
3028 29 30 29
27 26 25
34 35
26
31 3537
3027
30 29
34 33 3328 30 29 30 27
32 32 29
1,129 1,454
1,699 1,573 1,915
2,053 1,991 1,812
2,314 2,392
2,044
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H19
Turnover Velocity (%)
Quarterly ADV Traded & Velocity
Average Daily Value Traded (RM mil)
Average Daily Value Traded (RM mil)Turnover Velocity (%)
Annual ADV Traded & Velocity
Securities Market Trading Activity
24
369 392
442
354
424
530 464
372
525 538 495
67 73 74 77 78 74 77 79 77 78 76
33 27 26 23 22 26 23 21 23 22 24
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
1H
19
73 73 74 74 74 76 73 73 78 73 69
27 27 26 26 26 24 27 27 22 27 31
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
1H
19
From 2008 to 2009, the statistics were based on Brokers’ submission. From 2010 onwards statistics
were based on Bursa’s internal system.
Retail
(%)
Institution
(%)Local(%)
Foreign(%)
Retail ADVTraded (RM mil)
Foreign ADV
Traded (RM mil)
Retail vs. Institution Foreign vs. Local
Securities Market Trading Participation
323 392 437 404
507 492 544
491 506
647 625
25
Securities Market Foreign Ownership
22.3
23.1
24.4
24.0
24.3
22.8
22.3
22.9
23.423.6
24.224.1
24.1
23.9
23.523.6 23.6
23.4
23.723.4
23.523.5
23.7
23.4
23.2 23.1
Based on Market Capitalisation (%)
26
-10,000
-5,000
0
5,000
10,000
2016
TNFO: RM3.2 bil
2014
TNFO: RM6.9 bil
2015
TNFO: RM19.7 bil
TNFI: Total Net Foreign Inflow
(RM mil)
TNFO: Total Net Foreign Outflow
Foreign Inflow/Outflow
Monthly foreign inflow/outflow from 2014 to 2019
-4,927
-1,678
-99
66
-1,415-719 -1,022
1,026
-816
-1,557 -1,411
-2,041
135
-6,000
-5,000
-4,000
-3,000
-2,000
-1,000
0
1,000
2,000Monthly foreign inflow/outflow from June 2018 to June 2019(RM mil)
2017
TNFI: RM10.8 bil
1H2019
TNFO: RM4.7 bil
2018
TNFO: RM11.7 bil
27
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
1H
19
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
3Q
15
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
18
2Q
18
3Q
18
4Q
18
1Q
19
2Q
19
18%
174
146
172
214
196
213
204196
218
239
288
196
207
229 235
230
283
293
226237
262263
261
295
283
290
306
245
274
247
40
Quarterly Average Daily Contracts (’000)
31
42
60
Total Annual Contract (mil)
Crude Palm Oil FuturesOthersOpen Interest (’000)
18%
78%
6.1 6.2
8.4
9.6
FBMKLCI Futures
`
`
78
%
44 4542
46
42
10.7
50
12.5
44
54
Derivatives Market Activity
55
14.2
62
51
62
56
14.0
5856
62
55
14.1
57 5754
123132
152
214
196196
230
237
295
245
247
53
13.7
56 56
`
`
4%
4%
58
47
5.9
51
28
20 21 19 15 18 20 18 14 11 14 12
5244
42
2828 24
23
1918
25
20
3
22
21 2
5
33
3
2
2633
37
55 53 54 55
6468
5866
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H19
(%)FKLI
36 34 34 36 33 34 31 2823
18 16
2726 24 19
17 1515
1620
2424
1
11
1 11
1 1 1
17
1513
12
10 15 2121 23
20
17
1925 28
3239
35 32 34 3337
43
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H19
(%)FCPO
Local
Domestic Retail
Domestic
Institutions
Foreign Institutions Local
Domestic RetailDomestic
Institutions
Foreign Institutions Foreign Retail
Derivatives Market Demography
29
1.6 2.75.5
13.5 13.4 15.118.1
26.7
0.7 1.21.4
1.72.9
4.5
6.2
5.4
2012 2013 2014 2015 2016 2017 2018 1H19
BSAS Annual Average Daily Value
Local ADV Foreign ADV
2.33.9 6.9
15.2 16.319.6
24.3
32.1(RM bil)
BSAS ADV (RM bil)
13.5
1.3 1.5 1.6 1.8 2.6 2.4 2.7 3.2 3.7 3.7 5.9
8.5 10.4 12.0
14.4 16.9 16.1 12.7 12.2 12.6 13.6
15.1 15.5 16.1 16.2 14.3 15.9
25.7 26.3 27.2
0.3 0.7 0.9 1.2 1.1 1.0 1.1 1.5 1.4 1.5 1.4
1.4 1.5
1.6 1.6
2.1 2.6
2.7 3.0 3.2 3.8
3.7 4.9 5.6 6.4 5.9
5.7
6.8 5.3 5.5
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
3Q
15
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
18
2Q
18
3Q
18
4Q
18
1Q
19
2Q
19
BSAS Quarterly Average Daily Value(RM bil)
Islamic Capital Market Activity
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ensure that the contents in this presentation are accurate, complete, current and have been obtained from sources believed by Bursa Malaysia to be accurate and
reliable, neither Bursa Malaysia or the presenter of this presentation make any warranty, express or implied, nor assume any legal liability or responsibility for the
accuracy, completeness or currency of the contents of this presentation. In no event shall Bursa Malaysia be liable for any claim, however arising, out of or in relation
to this presentation.
This document shall be used solely for the purpose it was circulated to you. This document is owned by Bursa Malaysia Berhad and/or the Bursa Malaysia group of
companies (“Bursa Malaysia”). No part of the document is to be produced or transmitted in any form or by any means, electronic or mechanical, including
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Copyright Bursa Malaysia Berhad 2017 (30632-P)
30
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603-2034 7175
E-mail : [email protected]
RAFIDAH AZIZ
603-2034 7262
ADAM ISKANDAR AHMAD ZAHAR
603-2034 7351
INVESTOR RELATIONS CONTACT INFORMATION
