FY2018 Financial Results Analyst & Media Briefing

Transcription

1 30 January 2019 FY2018 Financial Results Analyst & Media Briefing Datuk Seri Tajuddin Atan Chief Executive Officer Rosidah Baharom Chief Financial Officer

2 Agenda Market Recap Key Financial Highlights & Market Performance Financial Review Highlights & Conclusion Appendices 2

3 Market Recap 3

4 Recapping on selected key global and local events FBMKLCI Year-to-date (YTD) Performance For year 2018 FBMKLCI (point) 1,900 1,800 1,700 1,600 1, Jan BNM rate hike 6 February Global equity market selloff led by the US markets March US Fed rate hike; US Gov announced plans to impose tariffs of USD60B on China Imports 8 March US imposed 25% tariffs on Chinese steel and 10% on aluminium 4 April China planned retaliate tariffs on 106 US products 9 May Malaysia 14 th GE 29 May US stated that it would impose tariffs on USD50 billion worth of China s goods 13 June Second US rate hike of the year 22 June In retaliation, EU activated its previous tariff threat of USD3.2B on US Traded Volume (rhs) 6 July US 25% tariff on USD34B Chinese goods took effect 17 Sep US announced 10% tariffs on USD200B Chinese goods 18 Sep China plans to retaliate with tariffs on USD60B US products FBMKLCI (lhs) 10 Oct MY Gov planned to unveil new taxed 2 Nov Malaysia Budget Nov US and China resumed trade talk after a phone call between Trump and Xi Traded Volume (million) 30 Nov US-Mexico- Canada Agreement signed 19 Dec Fourth US rate hike (to 2.50%) 14,000 12,000 10,000 8,000 6,000 1,400 4,000 1,300 2,000 1,200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

5 FBMKLCI has been relatively resilient amid a challenging environment Recapping 2018, the global equity market has suffered heavy losses, due to the various headwinds (e.g. signs of global economic slowdown, tightened monetary policy, geo-political tensions and uncertainties, the various trade wars between global superpowers, and more) Performance of FBMKLCI against MSCI Indices YoY Growth (2018 vs 2017) Performance of FBMKLCI against ASEAN Indices YoY Growth (2018 vs 2017) FBMKLCI -5.9% Jakarta Composite -2.5% MSCI World -10.4% FBMKLCI -5.9% VN-Index -9.3% MSCI Asean -11.3% Straits Times -9.8% MSCI Asia Pacific -15.6% SET -10.8% MSCI Emerging Market -16.6% PCOMP -12.8% Source: Bloomberg Source: Bloomberg 5

6 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18-5,604-4,927-1,120-1,678-1, , ,507 3,376 Putting foreign funds outflow into perspective.. Amid exude of foreign funds in the Asian equity market, Malaysia s foreign outflows of USD2.9 billion is relatively small, equivalent to 0.7% of the total market capitalisation. Foreign shareholdings (by market capitalisation) have also been stable amid the exits of foreign funds. Foreign Funds Flow (FFF) in Asian Equity Market For year 2018 Vietnam Philippines -1,080 1,887 % of Market Capitalisation Percentage (%) Bursa Foreign Funds Flow vs Foreign Shareholdings For year 2018 RM million 9,000 Foreign Funds Flow (lhs) Foreign Shareholdings (by Market Capitalisation) (rhs) % 25% Malaysia -2, ,000 20% Indonesia -3, ,000 15% India -4, South Korea -5, ,000 10% Thailand -8, ,000 5% Taiwan -12, ,000 0% Japan -50, Source: Bloomberg Source: Bursa MIS 6

7 Key Financial Highlights & Market Performance Financial Highlights Financial Trends Securities Market Overview Derivatives Market Overview Islamic Capital Market Overview Dividends 7

8 Financial Highlights Sustained financial performance despite a challenging year Financial Items vs Q2018 4Q2018 vs. 4Q2017 Operating Revenue (RM million) % % Operating Expenses (RM million) % % PATAMI (RM million) % % EPS (sen) % % Cost to Income Ratio 44% 1 percentage point Annualised ROE 26% 25% 2018 vs. 2017: Increase in operating revenue contributed by higher trades in Securities Market. The increase was partially offset by lower revenue from Derivatives Market. 44% 3 percentage points 2 percentage points Operating expenses decreased mainly due to lower technology costs. Cost to income ratio improved by 1 percentage point while ROE remained the same. Second interim dividend of 11.6 sen, equivalent to 92% payout to be paid on 28-Feb

9 Financial Trends Continuous improvement in key financial indicators Cost to Income Ratio (%) ROE (%) Operating Revenue (RM mil) PATAMI (RM mil) 9

10 Securities Market Overview Higher ADV supported by strong performance in the first 9 months of 2018 Average Daily Value ( ADV ) (OMT)(RM mil) Market Capitalisation (RM bil) Fund Raised from IPOs & Secondary Market (RM bil) ,797 1, ,314 2, % 538 1, % 9.2 1, % 1,291 1, Velocity (%) ADV of Foreign Institutions ADV of Retail ADV of Domestic Institutions 31 DEC DEC 2018 FBMKLCI Market Capitalisation No. of IPOs Fund Raised from Secondary Market Fund Raised from IPOs 10

11 Derivatives Market Overview Lower FCPO trades influenced by lower volatility in CPO prices Average Daily Contracts ( ADC ) & Volatility 19% 16% Open Interest (No. of Contracts) 31 Jan , Aug , Dec ,143 5% 10% 57,677 56,488 1 Sept , ,118 6% 85% 49, % 43,092 76% 15% 8,371 10,278 18% ADC FBMKLCI Futures Volatility of FBMKLCI ADC - Crude Palm Oil Futures Volatility of Crude Palm Oil Prices ADC - Others 11

12 Islamic Capital Market Overview Higher trades under volume-based pricing scheme Bursa Suq Al-Sila ( BSAS ) ADV (RM bil) Value of Listed Sukuk (USD bil) Market Capitalisation of Shariah Compliant Stocks (RM bil) 76% 76% % 1, % 1, % No. of Trading Participants Domestic Foreign 31 DEC DEC 2018 No. of Sukuk Domestic Foreign 31 DEC DEC 2018 No. of Shariah Compliant Stocks (%) Market Capitalisation of Shariah Compliant Stocks 12

13 Malayan Banking Genting Malaysia CIMB Group Holdings MISC Digi.com IOI Corp Petronas Gas Tenaga Nasional Petronas Dagangan Hap Seng Consolidated Maxis Sime Darby Plantation AMMB Holdings Petronas Chemicals Group Sime Darby RHB Bank Genting Public Bank Hong Leong Bank Hong Leong Financial Group Kuala Lumpur Kepong Axiata Group Nestle Malaysia Top Glove Corp Malaysian Airports Holdings Hartalega Holdings PPB Group Press Metal Aluminium Holdings Dialog Group IHH Healthcare BURSA MALAYSIA Dividends Total dividend of 33.6 sen for FY2018 was declared Payout 92% * Payout 93%* % Dividend Yield (annualised) Bursa vs. FBMKLCI 31-Dec Payout 93% Payout 94% 15.0 Payout 92%* nd Interim Dividend (sen) Special Dividend (sen) 1st Interim Dividend (sen) * Exclude special dividend Source: Bloomberg and Bursa Malaysia Declared second interim dividend of 11.6 sen. The entitlement and payment dates are on the 19 th and 28 th of February 2019 respectively. 13

14 Financial Review Financial Snapshot Operating Revenue Operating Expenses 14

15 Financial Snapshot Stable performance in 2018 results Operating revenue (RM mil) 0.2% Operating expenses (RM mil) % % 14.0% Q2017 4Q Q2017 4Q PATAMI (RM mil) 0.4% Cost to income ratio (%) percentage points 44 1 percentage point % Q2017 4Q Q2017 4Q

16 Operating Revenue Growth from Securities Trading revenue while Non-Trading revenue remain stable Total RM522.1 mil Total RM523.3 mil % Growth contribution by revenue streams: % % 5.6% % 0.5% 4.9% % 7.9% (RM mil) Securities Trading Revenue Derivatives Trading Revenue BSAS Trading Revenue Listing & Issuer Services Depository Services Market Data Member Services & Connectivity Conference Fee & Exhibition Related Income Increase in Securities Trading Revenue from higher ADV-OMT. Higher Market Data revenue due to increase in number of subscribers. Decrease in Derivatives Trading Revenue due to lower number of ADC. Lower BSAS Trading Revenue despite growth in its ADV due to the impact of volume-based pricing. 16

17 Operating Expenses Reduction in technology costs and lower manpower costs Total RM250.4 mil Total RM241.3 mil Movement of expenses: (RM mil) % % % 5.1% 6.4% % 0.6% Staff Costs Depreciation & Amortisation Marketing & Development IT Maintenance Service Fees Other Operating Expenses^ Lower Depreciation as certain IT assets have fully depreciated. Decrease in Service Fees due to lower Globex fees resulting from lower number of derivatives contracts traded. Note^ - Other operating expenses include building maintenance, administrative expenses and CDS expenses. 17

18 Highlights & Conclusion Highlights of 2018 Initiatives Moving Forward 18

19 Highlights of 2018 Initiatives SI 1 Create a More Facilitative TRADING ENVIRONMENT SI 2 Facilitate More TRADABLE ALTERNATIVES Implementation of Intra Day Short Selling (IDSS) for all investors. Introduction of a new category of traders known as trading specialists who trade on their own account. Launched the Invest Bursa, Invest in You campaign. Expanded Green Lane incentives to reward companies for good corporate governance and disclosure practices. Enhancements of FCPO contract. Introduced enhanced US Dollar denominated Palm Olein Futures Contract (FPOL). Launched the Mini FTSE Bursa Malaysia Mid 70 Index Futures Contract (FM70). SI 3 Reshape MARKET STRUCTURE & FRAMEWORK Waiver on trading and clearing fees for 6 months for new individual investors. Liberalisation of margin financing rules. Introduction of volume-based incentive programme. Launched BURSASUSTAIN, a comprehensive online portal designed as a onestop knowledge and information hub on corporate governance and sustainability. Announced new sector classification and sectorial index series. Enhanced ETF Framework to spur further growth and innovation in the market. SI 4 REGIONAL MARKETPLACE with Global Access (Centre of ASEAN) Organised the Palm and Lauric Oils Price Outlook Conference & Exhibition Organised the Shariah Investing Fair

20 Moving Forward SECURITIES MARKET The Securities Market performance in 2019 is expected to be influenced by domestic and global developments such as Malaysia s corporate earnings results, United States-China trade tension and China s economic growth, amongst others. Nevertheless, the market is expected to continue to be resilient given the country s sound economic fundamentals, and the market s diversified economic sectors and investor base. DERIVATIVES MARKET Developments in global markets in 2019 will have an impact on commodities, equities and financial assets which will influence trading and hedging activities. The ongoing initiatives to attract new participants is expected to further broaden the derivatives trading community. ISLAMIC CAPITAL MARKET With the continuous engagement and effective marketing efforts carried out in 2018, the Exchange expects greater participation of institutional investors on the Bursa Malaysia-i platform. Bursa Suq Al-Sila, on the other hand, will continue to be expanded in its global reach into selective African and Central Asian countries as well as its services being promoted to local non-bank financial institutions. Notwithstanding the challenges ahead, Bursa Malaysia will continue with its initiatives to enhance the breadth and depth of the ecosystem through, amongst others, capitalising on technology to improve market efficiency and trading experience, and greater diversification of the investor base. 20

21 2018 Financial Results Analyst & Media Briefing Q&A 21

22 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 Activity 22

23 Securities Market Trading Activity Quarterly ADV Traded & Velocity ,621 2,716 2,730 2,308 2,161 2,002 2,068 2,053 2,196 2,378 2,316 1,579 1,732 1,841 1,901 2,081 1,913 1,933 2,042 2,227 1,981 1,951 1,842 1,929 1,439 1,595 1,643 1,686 1,740 1,690 1,341 1,430 1Q11 2Q11 3Q11 4Q11 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 Turnover Velocity (%) Average Daily Value Traded (RM mil) Annual ADV Traded & Velocity ,181 1,129 1,454 1,699 1,573 1,915 2,053 1,991 1,812 2,314 2, Turnover Velocity (%) Average Daily Value Traded (RM mil) 23

24 Securities Market Trading Participation Retail vs. Institution Foreign vs. Local Retail ADV Traded (RM mil) Retail (%) Institutions (%) Foreign ADV Traded (RM mil) Foreign (%) From 2008 to 2009, the statistics were based on Brokers submission. From 2010 onwards statistics were based on Bursa s internal system. 24 Local (%)

25 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Securities Market Foreign Ownership Based on Market Capitalisation (%)

26 Foreign Inflow/Outflow Monthly foreign inflow/outflow from 2013 to 2018 (RM mil) 10,000 5, ,000-10, TNFI: RM2.6 bil 2014 TNFO: RM6.9 bil 2015 TNFO: RM19.7 bil 2016 TNFO: RM3.2 bil 2017 TNFI: RM10.8 bil 2018 TNFO: RM11.7 bil TNFI: Total Net Foreign Inflow TNFO: Total Net Foreign Outflow (RM mil) 4,000 3,000 2,000 1, ,000-2,000-3,000-4,000-5,000-6,000-7, Monthly foreign inflow/outflow from Dec 2017 to Dec ,376 1, ,120-1,678-1,415-4,927-5, ,022 26

27 1Q11 2Q11 3Q11 4Q11 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 4Q % Quarterly Average Daily Contracts ( 000) ` ` 18% 76% 71% 12% 6% Derivatives Market Activity Total Annual Contract (mil) ` ` Open Interest ( 000) Others Crude Palm Oil Futures FBMKLCI Futures 27

28 Derivatives Market Demography (%) FKLI (%) FCPO Foreign Institutions Domestic Retail Foreign Institutions Foreign Retail Local Domestic Institutions Local Domestic Institutions Domestic Retail 28

29 1Q11 2Q11 3Q11 4Q11 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 Islamic Capital Market Activity (RM bil) BSAS Quarterly Average Daily Value (RM bil) BSAS Annual Average Daily Value Local ADV Foreign ADV BSAS ADV (RM bil) 29

30 INVESTOR RELATIONS CONTACT INFORMATION RASMONA ABDUL RAHMAN ADAM ISKANDAR AHMAD ZAHAR RAFIDAH AZIZ ir@bursamalaysia.com DISCLAIMER: Bursa Malaysia and its Group of Companies (the Company) reserve all proprietary rights to the contents of this presentation. Whilst the company endeavors to ensure that the contents in this presentation are accurate, complete or have been obtained from sources believed by the Company to be accurate and reliable, neither the Company nor the presenter 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 the Company be liable for any claim, howsoever arising, out of or in relation to this presentation. Copyright Bursa Malaysia Berhad 2017 (30632-P)