BURSA MALAYSIA BERHAD -...
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BURSA MALAYSIA BERHADQ1 2008 FINANCIAL RESULTS
18 April 2008
2
OVERVIEW
FINANCIAL REVIEW
APPENDIX
PROSPECTS AND TARGETS
3
OVERVIEW
4
PERFORMANCE SUMMARY
1Q08 vs. 4Q07 %1Q08 vs. 1Q07 %
PAT 15%
Operating Revenue 4%
Stable Revenue 13%
Operating Expenses 4%
Operating EBITDA 2%
Stable Revenue 15%
PAT 40%
Operating Revenue 28%
Operating Expenses 11%
Operating EBITDA 44%
5
30,2
83
26,0
35
11,7
03
10,9
39
11,0
81
93,600 105,500158,737 138,648
54,990
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1,32
8
954
910
2,61
0
1,90
7
48%
32% 30%
46%
68%
0501001502002503003504004505005506006507007508008509009501000105011001150120012501300135014001450150015501600165017001750180018501900195020002050210021502200225023002350240024502500
OPERATING DRIVERSEquities Impacted by Global Market Slowdown
Velocity (%)
Market Capitalisation (RM bil)
Daily Average Trading VolumeOMT+DBT (bil)
Daily Average Trading ValueOMT+DBT (RM bil)
Q108
Derivatives Seeing Continued Interest
Q104 Q105 Q106 Q107 Q108
EQUITIES
30,283Daily Average Contracts 26,035
DERIVATIVES
16
Q107 %
Q108 Q107 %
(32)
(3)
(57)
(29)
46 68
985952
2.10.9
2.82.0
Daily Average Contracts (thousand units)Open Position
Daily Average Market Transacted Value – OMT (RM mil’)Daily Average Market Transacted Volume – OMT (mil’ units)Turnover Velocity
6
KEY RATIOS
Return on Equity
Operating EBITDA Margin
Net Profit Margin
Stable Revenue + Derivatives Income:Total Operating Expenses
% %Q407Q108 Q107
21.0
55.8
41.6
88.1
24.5
54.6
47.9
72.9
33.2
71.0
51.6
90.8
%
(37)
(21)
(19)
(3)
(14)
2
(13)
21
Operating EBITDA Margin is lower mainly due to the lower revenue from the equity market and higher staff costs incurred this quarter.
1Q08 vs. 1Q07 Commentary
7
1Q08 EVENTS HIGHLIGHTS
Introduced Direct Market Access Derivatives
Launched Financial Market Trading Platform (Fixed Income)
Listed MyETF Dow Jones Islamic Market Malaysia Titans 25
Awarded Exchange of the Year (Asia Pacific) byFutures & Options World (FOW) Awards 2008
8
FINANCIAL REVIEW
9
Operating Revenue (mil)
Operating EBITDA (mil)
Operating Expenses (mil)
Profit Before Tax (mil)
Taxation (mil)
Profit After Tax (mil)
Earnings per Share (sen)
RM Q107Q108 %Q407
88.9
49.6
43.8
57.3
15.2
42.1
8.0
124.3
88.2
39.5
96.6
26.4
70.2
13.5
92.7
50.6
45.7
57.4
7.9
49.5
9.5
%
(28)
(44)
11
(41)
(42)
(40)
(41)
(4)
(2)
(4)
(0.2)
92
(15)
(16)
Note:
•The effective tax rate of the Group for 1Q08 was marginally higher than the statutory tax rate due to expenses which were not tax deductible
•The effective tax rate for 4Q07 was low due to recognition of unutilised capital allowances and unabsorbed business losses of a profit-making subsidiary as deferred tax assets
FINANCIAL RESULTS OVERVIEW
10
OPERATING REVENUE
30%
1%
14%
55%
Q108: RM 88.9 mil Q107: RM 124.3 mil
Q107
Trading Revenue (Equities)
Trading Revenue (Derivatives)
Stable Revenue
Other Operating Revenue*
Q108
48.9
12.2
26.4
1.4
86.8
12.9
23.0
1.6
86.8
12.9
23.0
1.6
%Q407
86.8
12.9
23.0
1.6
57.6
9.9
23.4
1.8
(44)
(5)
15
(13)
(15)
23
13
(22)
70%
1%
19%
10%
%RM mil’
* Other Operating Revenue = perusal and processing fees
•Equity trading revenue dropped due to lower turnover and revised clearing fee structure.•Derivatives trading revenue dropped due to revised derivatives fee structure. However, number of contracts traded has increased.
1Q08 vs. 1Q07 Commentary
11
STABLE REVENUE
13%
22%
36%
26%
3%
28%
30%
20%
5%
17%
Q108: RM 26.4 mil Q107: RM 23.0 mil
Depository Services
Listing Fees
Information Services
Broker Services*
Participants’ Fees**
Q108
86.8
12.9
23.0
1.6
%
86.8
12.9
23.0
1.6
%Q407Q107
6.9
9.5
5.9
3.4
0.7
6.8
6.4
4.7
4.0
1.1
6.7
7.0
5.1
3.9
0.7
1
48
26
(15)
(36)
3
36
16
(13)
-
RM mil’
* Broker Services comprises of SCORE/Data Comm equipment rental income from brokers/ADM at a fixed monthly rate** Participants’ Fees comprises of application/admission/initial/registration fees, participants’ subscriptions and renewal fees
•Higher listing fees from revised fee structure1Q08 vs. 1Q07 Commentary
•Higher information services fee due to revised fee structure effective October 2007•Lower broker services fees from reduction in number of terminals at broker sites (Migration of old CDS system to web base system)
12
OPERATING EXPENSES
52%5%
10%
8%
8%
17%
10%9%
46%
21%
8%6%
Q108: RM 43.8 mil Q107: RM 39.4 mil
Staff Costs
Market Development
IT Maintenance
Building Management Costs
Depreciation & Amortisation
Other OPEX
86.8
12.9
23.0
1.6
% 86.8
12.9
23.0
1.6
%
Q40718.2
3.6
3.8
2.3
3.3
8.2
20.9
6.2
1.9
2.4
3.6
10.7
% %Q107Q108
22.6
3.5
3.7
2.2
4.5
7.3
24
(3)
(3)
(4)
36
(11)
8
(44)
95
(8)
25
(32)
RM mil’
* Other Opex = professional fees, administrative expenses, CDS consumables, etc.
• Higher staff cost due to higher ESOS expenses (increased number of options) and annual salary increments
1Q08 vs. 1Q07 Commentary
• Higher depreciation due to new IT systems and renovation to accommodate tenants
13
CAPITAL MANAGEMENT
Financial Resources Available for Use
Shareholders’ Fund
Capital Expenditure YTD
@ 31 March 2008
499 *
824
9
RM mil’
* Inclusive of approximately RM100mil final dividend payable in April 2008
14
DIVIDEND PAYOUT > 90%
2007 Total Dividend Including Final Dividend
Dividend Yield as at 31 March 2008
Dividend Yield inclusive of Special Dividend
Total Shareholders’ Return since listing till 31 March 2008
85 sen
6.3%
9.4%
267%
91%
91%
92%
FY05 FY06 FY07
81
1010
Interim Gross Dividend/Share
Final Gross Dividend/Share
Special Dividend
Capital Repayment
% of dividend payout excluding special dividend & capital repayment
Historical Dividend Payout in sen
28
1412.5
28
25
32
15
PROSPECTS AND TARGETS
16
PROSPECTS
EQUITY MARKET
Investors’ sentiment expected to be influenced by domestic political developments and global economic uncertaintiesMalaysian economic fundamentals remain intact
DERIVATIVES MARKET
Expect continued interest in FCPO and FKLI FKLI: Interest from players hedging positionsFCPO: Interest along the growth in demand of the biodiesel and food industries
17
TARGETS
Velocity
Growth in derivatives contracts traded
56% 46%
Target 1Q08
50% 13%
i
Growth in Velocity to be driven by :Improvement of Infrastructure
Introduction of More Products
Other Initiative
ETF, Reits & Warrants
Retail Plan
Growth in Daily Average Contracts to be driven by:
FUPO
Market Making
DMA DerivativesBursa Trade Securities & DMA Equity
Bursa’s KPI 2008
Challenging Year
Improvement of Infrastructure
Introduction of New Product
Other Initiative
18
THANK YOUAPPENDIX
For in-depth financial performance review, prospects and targets, please refer 1Q08 condensed report.
19
0.0291 0.0283 0.02950.0272
0.0226
Q107 Q207 Q307 Q407 Q108
*Clearing Fee revised to 0.03% (capped at RM1,000) effective 1 Jan 08 from 0.04% (capped at RM500)
Effective Clearing Fee RateEffective Clearing Fee RateAffected by institutional bunching of trades and lower retail participation
39% 35% 40% 33% 25%
% of retail trading participation by value
20
369%
197%
196%
182%
159%
158%
143%
141%
108%
98%
78%
71%
69%
69%
46%
32%
30%
53%
Shenzen SE
Shanghai SE
Korea Exchange
NYSE
London SE
Taiw an SE Corp.
Euronext
Tokyo SE
Australian SE
Hong Kong Exchanges
Singapore Exchanges
National Stock Exchange India
Indonesia SE
Thailand SE
Bursa Malaysia
New Zealand Exchange
Philliphine SE
Bombay SE
Turnover Velocity for the past 12 months to February 2008
Source: World Federation Exchanges (WFE)
BursaBursa’’s Sustainable Velocity Target : 60% By 2010s Sustainable Velocity Target : 60% By 2010
53%
21
Quarterly VelocityQuarterly Velocity
910
2610
23032069
17511907
1283
782110746%
41%50%
54%
68%
39%
30% 27%
38%
-302070120170220270320370420470520570620670720770820870920970102010701120117012201270132013701420147015201570162016701720177018201870192019702020207021202170222022702320237024202470252025702620
Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q1080%
10%
20%
30%
40%
50%
60%
70%
80%
Daily Average Market Transacted Volume (million units)Daily Average Market Transacted Value (million RM)Turnover Velocity
22
Quarterly Derivatives ActivityQuarterly Derivatives Activity
30,2
83
22,1
51
24,7
97
27,0
99
26,0
35
22,1
13
19,1
04
14,5
00
11,7
03
159,019 158,737 161,544
145,107
125,051
162,628
128,000
105,500
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q1080
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
Daily Average Volume Open Position
138,648
23
Significant Foreign Investors ActivitySignificant Foreign Investors Activity85
%
82%
69% 81
%
76%
73% 83
%
78%
71%
68% 76
%
69%
63%
65%
63%
57%
15%
18%
31% 19
%
24%
27% 17
%
22%
32% 24%
31%
37%
35%
37%
43%29
%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
YTD Mar 0
8
Local Investors Foreign Investors
Breakdown of trading (by value) 1993 to March 2008
24
42%
45%
44% 54
%
44%
49% 59
%
54%
43%
40% 50
%
43%
29%
34%
37%
25%
51%
48%
45% 36
%
42% 43
% 35%
40%
51%
54% 45
%
53%
71% 66%
63%
75%
3%5%6%6% 6%6%7% 7% 11%
10%
14%
8%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
YTD M
ar 08
Retail Institutions Others
Breakdown of trading (by value) 1993 to March 2008
“Others”- refers to trades conducted for accounts not belonging to individuals/ institutions. Definitions of investors’ type clarified in 2004, hence reducing the type of investor falling under “others” category.
Retail ParticipationRetail ParticipationDrop in retail volume due to weak investors’ sentiment
25
MoU with Dubai Gold & Commodities Exchange Development of derivatives markets
MoU with Multi Commodity Exchange of India Limited Development of commodities market and for cross listing of products
MoU with Dalian Commodities Exchange Joint organizing of “China International Oil and Oilseeds Conference”.
MoU with Australian Securities Exchange Facilitating communication channels and fostering relations
MoU with Singapore Exchange Derivatives Trading Limited Exploring future business relationship opportunities
NYSE EuronextTechnology Solutions Provider for equities, derivatives & DMA platform: Through NYX Advanced Trading Solutions
Global NetworkGlobal Network
Korea Exchange Development of Financial Market Trading Platform for the bond market in Bursa Malaysia
MoU with The Agricultural Futures Exchange of Thailand Development of commodities and futures markets
MoU with Ho Chi Minh City & Hanoi Securities Trading Centre Facilitating communication channels and fostering relations
MoU with Tokyo Stock Exchange Providing mutual cooperation on personnel training & information exchange
MoU with PT. Bursa BerjangkaJakarta Development of futures and commodities markets
MoU with Hong Kong Exchanges & Clearing Sharing market surveillance information