[KUALA LUMPUR] Bursa Malaysia’s net profit rose 21.5 per cent year on year (yoy) to RM59.6 million (S$16.9 million) in the fourth quarter of 2023.

Revenue increased 7.5 per cent to RM156.7 million, supported by higher operating revenue from its securities market and data business, said the bourse on Wednesday (Jan 31).

For the whole of 2023, the stock exchange operator’s net profit increased 11.4 per cent yoy to RM252.4 million, while revenue was up 2.2 per cent to RM616.5 million.

Bursa Malaysia also announced a dividend of 14 sen per share, which works out to about RM113.3 million in total. This is in addition to the interim dividend of 15 sen per share that was paid in August last year, bringing the total dividend to 29 sen per share – representing a payout ratio of 93 per cent.

At the results briefing on Wednesday, Bursa Malaysia chief executive Muhamad Umar Swift attributed the increase in profit to higher operating revenue and lower operating expenses.

He noted that average daily trading values remained above the pre-pandemic level, despite a slight 0.5 per cent decline in 2023.

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The exchange’s chairman, Abdul Wahid Omar, said that emerging markets and developing economies have outperformed advanced economies amid a challenging environment.

“Malaysia’s economy, in particular, remains resilient in 2023, with a projected GDP (gross domestic product) growth rate of close to 4 per cent,” he said.

He said that the FTSE Bursa Malaysia KLCI emerged as the second-best performer in South-east Asia in terms of capital market performance, with a 5.7 per cent increase in the second half of 2023. The index ended 2023 on a high at 1,454.7 points, a “healthy rebound” from the 1,376.7 points recorded in the first half of the year, said Abdul Wahid.

He noted that the exchange started the year on a strong note, with the average daily trading volume for the first 30 days of 2024 surging 55 per cent yoy to RM3.2 billion.

The influx of foreign funds, meanwhile, has given a boost to Bursa Malaysia and pushed the benchmark index to trade above the 1,500 level.

The FTSE Bursa Malaysia KLCI ended flat to close at 1,512.98 points on Wednesday. The benchmark index rose 4 per cent year to date, from 1,453.1 points on Jan 2.

Last week, foreign investors returned as net buyers of Bursa Malaysia, recording a net inflow of RM267.7 million.

Overall trading revenue from the securities market for 2023 increased 1.2 per cent to RM266.6 million, supported by higher average daily value.

The revenue from the derivatives market, however, fell 7.8 per cent to RM89.6 million, due to lower collateral management fees and lesser crude palm oil futures contracts that were being traded last year.

The trading revenue for the Islamic market grew by 3.9 per cent to RM17.1 million last year. Non-trading revenue from its data business recorded an increase of 11.8 per cent to RM68 million, underpinned by the higher securities and derivatives market data revenue.

During the same period, trading velocity dropped by one percentage point to 29 per cent.

Last year, the funds raised through 32 initial public offerings (IPOs) increased 2.8 per cent to RM3.6 billion. This took the IPO market capitalisation to RM13.6 billion, surpassing the previous year’s RM11.2 billion.

Although the number of listings in 2023 missed Bursa Malaysia’s original aim of having 39, the market capitalisation of these IPOs were 36 per cent higher than its earlier target of RM10 billion.

For 2024, the exchange has set a higher IPO target of 42, with these companies to have a total market capitalisation of RM13 billion.

As at December 2023, Bursa’s market capitalisation increased 3.5 per cent to RM1.8 trillion.