FY2014 Financial Results - Bursa...
27
FY2014 Financial Results Analysts and Media Briefing 29 January 2015 Dato’ Tajuddin Atan Chief Executive Officer Rosidah Baharom Director, Corporate Services
Transcript of FY2014 Financial Results - Bursa...
FY2014 Financial Results
Analysts and Media Briefing
29 January 2015
Dato’ Tajuddin Atan Chief Executive Officer
Rosidah Baharom Director, Corporate Services
2
AGENDA
KEY HIGHLIGHTS AND MARKET PERFORMANCE
FOCUS AREA AND STRATEGY
FINANCIAL REVIEW
CONCLUSION
APPENDICES
3
ROBUST GROWTH
Financial Highlights and Market Performance
Key Highlights
Financial Trends
Securities Market Overview
Derivatives Market Overview
Islamic Market Overview
Dividends
4
Key Highlights Best performance in 6 years; PATAMI up 15%
2014 Achievements
Growing financial strength
• PATAMI of RM198 Mil, up 15% from 2013.
• Cost to Income ratio improved from 48% in 2013 to 46% in 2014.
• ROE recorded a significant increase from 21% in 2013 to 25% in 2014.
• Proposed final dividend of 18 sen per share.
Reaching out to retail • Bursa MKTPLC
• Investors conference / educational program – 9 conferences and 5 Educational programs
• Youth outreach – 6 programs
Expanding product range • FPOL and enhanced FMG5
• MyETF MSCI Malaysia Islamic Dividend
• 3rd Government Guaranteed DINB ETBS
Building a sustainable marketplace • ESG Index – FTSE4Good Bursa Malaysia (F4GBM)
• Regulatory Outreach Programme – 62 sessions
98.6 111.9
143.1 150.6
173.1
198.2
297.8
331.3
381.5
388.5
439.8
471.3
181.9
196.6
212.0
209.2
229.4
232.0
2009 2010 2011 2012 2013 2014
Operating
revenue
(RM’m)
Operating
expenses (RM’m)
PATAMI
(RM’m)
Financial Trends Trending at the right direction
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56% 55% 51% 49% 48% 46%
2009 2010 2011 2012 2013 2014
Improving cost to income ratio
Growing revenue and profits; managed expenses
13% 13% 17% 18% 21% 25%
2009 2010 2011 2012 2013 2014
Stronger ROE at 25%
PATAMI grew 77% from 2010, with 2014 being the highest notwithstanding current market challenges.
Highest ROE attributable to strong growth in profit and effective capital management.
Continuous improvement in cost to income ratio, contributed by steady revenue growth and cost management.
1,702
1,651
31 Dec 2013
31 Dec 2014
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Securities Market Overview Active retail participation; robust secondary market fund raising
Average Daily Value (OMT)
(RM mil)
Market Capitalisation (RM bil) Fund Raised from New Listings &
Secondary Market (RM bil)
992 1,039
424
530
499
484
2013 2014
30 29
Velocity (%) FBMKLCI
1,866.96
8.2
5.9
14.3 18.4
2013 2014
No. of New Listing
18 14
7% 7%
Fund raised from new listings
Fund raised from secondary market
ADV of Domestic Institutions
ADV of Retail
ADV of Foreign Institutions
1,915
2,053
1,761.25
3%
22.5 24.3
Higher ADV mainly due to higher retail participation, as a result of our continuous active outreach efforts.
Higher fund raised contributed by higher secondary market activities and structured warrants listing.
17% 16%
9%
7%
2013 2014
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Derivatives Market Overview ADC surpassed 50,000 contracts
Average Daily Contracts (’000) and Volatility
Crude Palm Oil Futures FBMKLCI Futures Others
43.49
75%
25%
82%
17%
50.65
16%
32.45
10.84
Volatility of FBMKLCI Volatility of Crude Palm Oil Prices
Open Interest
1/9/10
111,548
26/7/13
258,001
31/12/12
214,065
31/12/14
196,413
41.29
8.84
4/9/14
319,476
ADC hit all time high of 50,654 contracts in 2014.
FCPO contracts traded grew by 27% due to uncertainty of CPO prices.
1%
1,029
31 Dec 2013
1,012
31 Dec 2014
32.5
31 Dec 2013
34.2
31 Dec 2014
3.9
6.9
2013 2014
78
93
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Islamic Market Overview Strong growth in BSAS trading driven by conversion to Murabahah deposits
% of Shari’ah Compliant Stocks No. of Trading Participants
Bursa Suq Al-Sila’ ADV
(RM bil) Market Capitalisation of Shari’ah
Compliant Stocks (RM bil)
No. of Sukuk
Value of Listed Sukuk (USD$ bil)
71
74 20 20
77% 5% 2%
Higher BSAS ADV due to continuous promotion, resulting in conversion of bank deposits to Murabahah, and
higher sukuk issuance that trade through BSAS trading platform.
6.7
0
1
2
3
4
5
6
7
8
FELD
A G
LO
BAL V
EN
TU
RES
YTL P
OW
ER
YTL C
ORP B
HD
MALAYAN
BAN
KIN
G
KLCCP S
TAPLED
GR
BRIT
SH
AM
ERIC
AN
TO
BACCO
MAXIS
BH
D
AM
BAN
K H
LD
G B
HD
DIG
I.CO
M B
HD
IOI CO
RP B
HD
UM
W H
LD
G B
HD
SIM
E D
ARBY
TELEKO
M M
ALAYSIA
CIM
B G
RO
UP
PETRO
NAS D
AG
AN
GAN
AXIA
TA G
RO
UP B
HD
PETRO
NAS C
HEM
ICAL
HO
NG
LEO
NG
BAN
K
PU
BLIC
BAN
K B
HD
ASTRO
MALAYSIA
HO
NG
LEO
NG
FIN
AN
KU
ALA L
UM
PU
R K
EPO
NG
TEN
AG
A N
ASIO
NAL B
HD
BU
MI ARM
AD
A B
HD
PETRO
NAS G
AS B
HD
GEN
TIN
G M
ALAYSIA
BH
D
PPB G
RO
UP B
ERH
AD
RH
B C
APIT
AL B
HD
MIS
C B
HD
SAPU
RAKEN
CAN
A
IHH
HEALTH
CARE B
GEN
TIN
G B
HD
BU
RSA M
ALAYSIA
Dividend Yield – Bursa vs. FBMKLCI Constituents
@ 31 Dec 2014
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Source: Bloomberg and Bursa Malaysia
9.5 13.0 13.5 16.0 16.0
16.0 18.0
10.5
13.0 13.5
20.0 20.0
2010 2011 2012 2013 2014
Payout
95%
Special Dividend (sen)
Interim Dividend (sen)
Final Dividend (sen)
* Exclude special dividends
Payout
94%
Payout
95%
Payout
98% *
Payout
92% *
Dividends High payout to shareholders
Approved final dividend of 18 sen. The entitlement and payment dates for the final dividend are 3 April 2015
and 16 April 2015 respectively.
One of the highest dividend yield stock. Dividend yield improved from 6.3% in 2013 to 6.7% in 2014.
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STRENGTHENED MARKETPLACE
Financial Review
Financial Snapshot
Operating Revenue
Operating Expenses
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33.8 53.1
173.1 198.2
4Q 2013 4Q 2014 2013 2014
103.9 119.7
439.8 471.3
4Q 2013 4Q 2014 2013 2014
65.6 59.1
229.4 232.0
4Q 2013 4Q 2014 2013 2014
Financial Snapshot Strong performance with cost optimisation
Operating revenue (RM mil) Operating expenses (RM mil)
PATAMI (RM mil)
57.6
46.0
48.3 46.1
4Q 2013 4Q 2014 2013 2014
Cost-to-income (%)
10% 15%
7% 1%
57%
15% 2 percentage
pts 12 percentage
pts
Growth in securities trading revenue mainly contributed by higher trading participation from
domestic institutions and retail investors.
Marginal increase in derivatives trading revenue (16% increase in derivatives volume) due to
lower guarantee and collateral management fees.
Growth in BSAS trading revenue mainly contributed by higher domestic participation.
Growth in listing and issuer services revenue due to higher number of new structured warrant
listings and higher number of corporate exercises in 2014.
Higher market data revenue due to introduction of new information packages and
commencement of market data charges to brokers.
Lower revenue from member services and connectivity due to lower broker services fee and a
revision in Bursa access fee structure.
439.8 439.8
461.6 462.0 466.2
469.1 469.1 470.5
xx
471.3
21.8 0.4 4.2
4.6 -1.7 5.3 -3.8
0.7
2013 2014
(RM mil)
217.3 239.1
70.3 70.6
5.8 10.0 51.3
55.9 37.1
35.4 26.0 31.3 26.5
22.7 5.6 6.3
2013 2014
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Total
RM471.3 mil
Securities Trading Revenue
Derivatives Trading Revenue
Listing & Issuer Services
Depository Services
7%
Market Data
Member Services & Connectivity
BSAS Trading Revenue
Total
RM439.8 mil
Operating Revenue Revenue boosted by active retail trading in securities market
10%
20%
72%
13%
Growth contribution by revenue streams:
9%
1%
Other Operating Revenue*
5%
Note* - Other Operating Revenue mainly includes conference & exposition income
14%
120.0 127.6
35.0 25.3
8.3 10.8 17.8 18.8
15.8 18.4
32.5 31.2
2013 2014
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Total
RM229.4 mil
Total
RM232.0 mil
1%
Staff costs
Depreciation & amortisation
Marketing & development
IT maintenance
Service fees
Other operating expenses^
7.6 - 9.7
2.4 1.0
2.6 - 1.3
2013 2014
(RM mil)
16% 6%
28% 29% 6%
Operating Expenses Cost optimisation and management
Movement of expenses:
229.4 232.0
4%
Note^ - Other Operating Expenses include building maintenance, administrative expenses and CDS expenses.
Increased staff costs due to continuous talent building efforts.
Decreased depreciation arising from a more cost efficient new trading system (BTS2)
implemented end of 2013.
Increased marketing and development cost due to greater retail outreach and engagement.
Increased service fees due to higher derivatives contracts traded.
Focus Area and Strategy
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STRONGER
COLLABORATION
Focus Area
2014 Milestones and Key
Highlights
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LEVERAGE ON
ASEAN
GROWTH
LEVERAGE ON
DOMESTIC
LIQUIDITY
IMPROVING
MICROSTRUCTURE
Focus 1: Value Extraction Focus 2: Build for the Future
REVIEW
MACRO-
STRUCTURE
REVIEW
MARKET
FRAMEWORK
DEVELOP REGIONAL
PRESENCE &
NEW BUSINESS
Focus Area
Create a More
Facilitative
TRADING
ENVIRONMENT
Facilitate More
TRADABLE
ALTERNATIVES
Reshape
MARKET
STRUCTURE &
FRAMEWORK
REGIONAL
MARKETPLACE
with Global Access
(Centre of ASEAN)
SI
1
SI
2
SI
3
SI
4
16 Jun Launch of USD Denominated
Refined Bleached Deodorised
Palm Olein Futures Contract
28 Jun First Gold & Precious Metals
Price Outlook Symposium
5 Mar Increase in eligible securities
allowed in RSS & SBL from 171
to 218
28 Apr Launch of BURSAMKTPLC -
Everyone's market-in-the-
20 Feb Collaborative arrangement
between Bursa Malaysia and
Saudi Stock Exchange
(Tadawul)
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2014 Milestones and Key Highlights
Q1 Q2
13 Aug Brokers Awards Appreciation
Night honoured deserving
brokers for their 2013
achievements
10 Sep Inaugural ETF-SBL Conference
22 Jul Introduced new guide for
Independent Advisers
Q3
1 Dec i. Implemented Straight Through
Processing to enable seamless
registration process for
registering Dealer's reps, Futures
Brokers Reps and Directors of
Brokers
ii. Launch of Enhanced 5-Year Bond
Futures (FMG5)
18 Dec Issuance of Regulatory Framework to
accord flexibility for client account
Opening
22 Dec Introduced Environmental, Social
and Governance (ESG) Index -
FTSE4Good Bursa Malaysia (F4GBM)
30 Dec Issuance of findings of Corporate
Governance Disclosures in Annual
Reports
28 Nov Bursa Malaysia Recognised as
Approved foreign derivatives
exchange by Taiwan Regulator
Q4
22 Aug Introduced ASEAN Post Trade
Services
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ROBUST GROWTH
Conclusion
Market Recognition
Fair and Orderly Market
Moving Forward
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Market Recognition Our market is internationally benchmarked
4th among 148
countries for Strength
of Investor Protection
5th among 189
countries for Investor
Protection
Top 11 Malaysian PLCs who
scored above 90 in CG
assessment
2nd among 6
ASEAN countries in
Corporate Governance
(CG) assessment
Malaysia ranked by:
Bursa Malaysia ranked by:
Top 5
CG Overall Recognition
and
Exemplary AGM Minutes
12th most
competitive country
in the world
(2013:15th )
Most
Transparent company ahead of the Top 30
FBM KLCI constituents
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Fair and Orderly Market
Bursa will ensure continuous efforts in maintaining a fair and orderly market. We
put in place measures and have achieved the following:
1) Operations
100% uptime for both securities and derivatives trading system
Conducted industry wide BCP exercises for the Derivatives and Securities
markets. All tests were successfully completed.
2) Technology
To improve cyber security, we added another level of protection by
subscribing to the SOC (Security Operations Centre) services.
3) International standards
Securities Market - Observed all of IOSCO Principles for Financial Market
Infrastructures (IOSCO Principles) except Principle 6 - Equity margining
which is currently been worked on.
Derivatives Clearing – Observed all relevant IOSCO Principles.
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Moving Forward
We expect 2015 to continue to be a challenging year where global markets
remain volatile. Broadly, Malaysia will have to continue managing the impact of
these external factors whilst staying on course to becoming a sustainable and
developed economy by 2020.
From a market perspective, this will also include having to face greater
regional competition as well as navigate the impact of changing regulatory
requirements.
The Exchange remains cautiously optimistic as Malaysia has a proven track
record being a tenacious and resilient market arising from the strength of our
investor protection and corporate governance framework that has been built
over the years. These factors will continue to support the growth agenda in the
market whilst maintaining market confidence and integrity.
Going forward, Bursa Malaysia will continue to build a sustainable market by
leveraging on our leadership in the Islamic market and our new ESG Index to
strengthen our presence in ASEAN.
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www.bursamalaysia.com
Thank you
Q&A
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48
36
28 35
28 31
37 42
30 34
27 34
27 28 25
28
37 31
25 30 29 30 28
615
1,490 1,266
1,099
1,435 1,209
1,387
1,793
2,161
1,579 1,732
1,341 1,841 1,439
1,595 1,430
1,643
2,308 2,002
1,686
2,068 2,053 2,196
1,901
-
400
800
1,200
1,600
2,000
2,400
2,800
1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q14 2Q14 3Q14 4Q14
RM mil
350 472 748 874
718 1,019
2,179
1,181 1,129 1,454
1,699 1,573 1,915 2,053
-
400
800
1,200
1,600
2,000
2,400
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
RM mil 20
23 34 32
25 32
53
34 34 33 33 28 30 29
Turnover Velocity (%)
22
Quarterly ADV Traded & Velocity
Average Daily Value Traded (OMT, RM mil)
Average Daily Value Traded (OMT, RM mil) Turnover Velocity (%)
Annual ADV Traded & Velocity
Securities Market Trading Activity
66 63
76 67
73 74 77 78 74
34 37 24 33 27 26 23 22 26
2006 2007 2008 2009 2010 2011 2012 2013 2014
23
65 63 58
73 73 74 74 74 76
35 37 42 27 27 26 26 26 24
2006 2007 2008 2009 2010 2011 2012 2013 2014
From 2006 to 2009, the statistics were based on Brokers’ submission. From 2010 onwards statistics were based on Bursa’s internal
system.
Retail
(%)
Institutions
(%) Local
(%)
Foreign (%) Retail ADV Traded
(RM mil)
Foreign ADV
Traded (RM mil)
Retail vs Institutions Foreign vs Local
Securities Market Trading Participation
357
806
496
323 392 437 404
507 492
346
806
283 369 392 442
354 424
530
26.2
21.3
20.4
21.9
22.7
23.9
23.5
23.2
23.1
23.0
23.1
23.4
23.4
23.4
23.6
23.5
23.5
23.6
23.8
22.7 77.3
24
Foreign Ownership by Nationality (%) Based on Market Capitalisation
(as at month end)
(%)
Singapore
Hong Kong
UK
Foreign Nominees
China
Taiwan
USA
Mid-East
5.3
0.8
2.0
0.4
0.8
0.1
0.1
Others 13.2
Securities Market Foreign Ownership
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
66
85
159
125
156
123 132 152
214 196 196
Quarterly (Average Daily Contracts ’000)
2Q
09
3Q
09
4Q
09
1Q
10
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
3Q
11
4Q
11
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
117
142
123
129 115
114
132 136
162 171
152
174
146
172
214
196 213
204
196
218
239
288
196
23
28
24 25
50
25
Total Annual Contract (Mil)
Crude Palm Oil Futures Others Open Interest (’000)
17%
82%
2.6 2.5
4.2
6.2 6.1 6.1 6.2
8.4
FMBKLCI Futures
18%
29
`
`
82%
24 22
37
32 34 35
31
40 42
44
9.6
45
10.7
42
46
Derivatives Market Activity
42
12.5
1%
44
54 55
26
31 19 14 16 16 13 15 15 20 21 19 17 18 20
45
48
45 43 40 40 41 46
52 44 42 25 28 24
3
6
5 3
3 2
2 2
3
2 2
2 1 2
14 23
31 37 40
45 42 37
26 33 37
56 53 54
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2013 2014
(%) FKLI
40 38 35 33 35 31 25 27 36 34 34 36 33 34
15 21 26 24 23
27
34 38
27 26 24 19 17 15
4
6 4
3 2 1 1 1
1 1
1 1
27
21 18 20 22 25 22
15 17 15
13 12 10 15
14 14 17 20 18 16 18 20 19 25 28 32
39 35
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2013 2014
(%) FCPO
Local
Domestic Retail
Domestic Institutions
Foreign Institutions Local
Domestic Retail Domestic Institutions
Foreign Institutions Foreign Retail
June –
Dec
2012
June -
Dec
2012
Derivatives Market Demography
27
Islamic Market Trading Activity
RM bil
0.01 0.10 0.18 0.27 0.35 0.64
1.05 1.11 1.29 1.41 1.55 2.17
2.46
2.99
3.65 3.40
3.79
4.67 5.10 5.13
7.24
9.90
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50 6.00 6.50 7.00 7.50 8.00 8.50 9.00 9.50
10.00 10.50
3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
BSAS Average Daily Value
