KUALA LUMPUR: Bursa Malaysia will move its "front office" Tun Razak Exchange (TRX), according to its chairman Tan Sri Abdul Wahid Omar .
He said the bulk of Bursa's operations will remain in the current premise at Exchange Square, Bukit Kewangan while the front office will move to TRX.
This involves the exchange's marketing segment that handles Bursa Malaysia's visibility and branding.
"We are happy where we are. It's a good premise that we own and it serves our purpose. "But there is this intention to create TRX as a financial centre and we have received a proposition from the owner to move there. When Bursa moves to TRX, it will give meaning to the whole development," he told a press conference during the exchange's media briefing for the first half of 2024 (1H24).
Abdul Wahid said Bursa is in discussions with owners of the building.
"The idea is truly to give meaning to the whole development. We are positive on this suggestion and just have to work out the economics," he added.
Last month, Bursa announced that it is in final negotiations with the developer of The Exchange 106 at TRX to move its headquarters there.
In a filing, Bursa said it is likely to occupy two storeys of The Exchange 106 if the discussion with Mulia Property Development Sdn Bhd materialises.
Mulia Property is majority owned by the Minister of Finance (Incorporated).
Bursa Malaysia's profit rose 5.5 per cent year-on-year (YoY) to RM80.45 million for the second quarter ended June 30, 2024 (Q2 2024) from RM76.25 million in the same period last year due to improved market sentiment.
Group revenue was up 38.3 per cent YoY to RM199.94 million from RM144.6 million in Q2 2023. For the first half ended June 30, 2024 (1H24), Bursa's net profit jumped 17.4 per cent to RM155.48 million from RM132.42 million in the same period last year.
Its revenue edged higher to RM387.14 million from RM301.1 million in 1H23. The company declared a higher interim dividend of 18 sen per share for the financial year ending Dec 31, 2024.
This amounts to RM145.7 million, representing a dividend payout ratio of 93.7 per cent.
Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift said the exchange operator revised its pre-tax profit target to a range of RM361 million and RM379 million.
The target was previously within the range of RM293 million to RM323 million.
He said the optimistic outlook stemmed from good market fundamentals among which include lower fiscal deficit and stable government bond yield.
Bursa said for 1H24, the securities market achieved a trading revenue of RM192.2 million, up 52.6 per cent increase from RM126.0 million in 1H23. This was driven by higher average daily trading value (ADV) for securities market's on-market trades and direct business trades in 1H24, which rose to RM3.5 billion from RM2.1 billion in 1H23.
Additionally, trading velocity increased by 14 percentage points to 42 per cent, up 28 per cent in 1H23.
Securities market non-trading revenue increased 9.6 per cent to RM72.3 million in 1H24 while listing and issuer services and depository services contributed significantly to this growth, recording RM33.1 million and RM31.4 million in 1H24, up from RM31.2 million and RM26.9 million in 1H23, respectively. The increase in listing and issuer services was driven by higher processing and perusal, as well as listing fees, earned in 1H24.
The increase in depository services revenue was primarily driven by higher depositors' account opening fees, securities borrowing and lending fees, and transfer fees earned in the same period.
Abdul Wahid said the strong performance was due to improved liquidity and market sentiments on the back of increased optimism in Malaysia's economic progress and plans.
Umar said Malaysia's capital market witnessed strong performance in 1H24, marked by several record highs.
These included surpassing a record high market capitalisation of RM2.0 trillion and the FBM KLCI breaching the psychological 1,600-point mark and hitting the highest level in three years. "Trading in the securities market has remained active, contributing significantly to the exchange's performance. Based on the current economic conditions and improved market sentiment, we are optimistic that this positive momentum can be sustained," he said.
Total derivatives trading revenue increased 16.8 per cent to RM51.9 million in 1H24 from RM44.5 million in 1H23.
This was due to higher number of crude palm oil futures and FTSE Bursa Malaysia KLCI Futures contracts traded, and higher collateral management fees earned in 1H24.
As for the Islamic markets, Bursa Suq Al-Sila' trading revenue was down 5.3 per cent to RM8.3 million in 1H24. "As a multi-asset exchange, we will leverage our strengths and drive changes that will excite investor interest and increase market liquidity.
The exchange will expand its range of innovative products and solutions, including a Waqf-featured exchange-traded fund, and new retail investor access to investment notes via BR Capital," added Umar.-end-