Invest Malaysia, Hong Kong. 8 November 2012

Transcription

1 Invest Malaysia, Hong Kong 8 November 2012

2 Invest Malaysia, Hong Kong (8 November 2012) Representatives from Bursa Malaysia Bhd: Dato Tajuddin Atan, CEO Datin Azalina Adham, Head of Strategic and Transformation Jamaluddin Nor Mohamad, Head of Islamic & Alternative Markets Ong Li Lee, Acting Global Head, Securities Markets Zul Mustafa, Head of Strategic Planning

3 Malaysia Growth Opportunities 2013 Projected GDP Growth 5% ETP Projects up to 2020 RM203 bil to boost economic growth 2012 World Competitiveness 21 st Most Competitive Nation out of 142 Nations Reduce Market Friction Capital Market Task Force established Source: World Economic Forum Amount of Untapped Liquidity Domestic unutilised deposit of circa RM290 bil Strong IPO Activities FGV, IHH, Astro (2012) Malakoff, Westport (2013) Source: Various research reports Corporate Governance Improved ranking from 6th to 4th place out of 11 countries in Asia Investor Protection 4 th in terms of Strength for Investor Protection out of 183 Nations Source: Asia Corporate Governance Association Source: World Bank 3

4 Securities Market Capitalise on ASEAN s Marketplace % Overseas Revenue ASEAN Exchanges ASEAN s Multinational Marketplace (FBM KLCI PLCs %) 40% 6 countries 7 exchanges 28% 33% 529 million people 3,600 companies FY2009 FY2010 FY2011 USD2.0 trillion market capitalisation Strategically located in the centre of ASEAN (Average GDP of 5.4%), Malaysia s capital market should benefit from the AEC Blueprint and ASEAN Exchanges collaboration. ASEAN Link has gone live, connecting BM to SGX and SET on 18 September 2012 and 15 October 2012, respectively. Bursa is well positioned to capitalise on the total daily trade of approximately USD3 billion (ASEAN ex-vietnam). 4

5 Derivatives Market - Primed for Growth Average Daily Contracts (000 ) % Infrastructure in place (Globex trading platform and new clearing system) to grow derivatives business. 70% 75% 84% Average daily contracts grew by 10% in 2012 (YTD Sept). Volume traded reached a daily historical high of 78,401 contracts on 29 Oct % 24% 15% A number of new products in the pipeline. 9M11 9M12 Oct 12 Others Crude Palm Oil Futures FMBKLCI Futures Awarded Best Technology Innovation by an Asian Exchange and runner up for Asian Derivatives Exchange of the year. 5

6 Islamic Market Build and Expand Our Niche 47 Bursa Suq Al-Sila ADV Commodity Traded (RM bil) Increasing number of international players trading via the world s first shari ah-compliant commodity trading platform, BSAS. ADV expands rapidly - 79% YoY. 79% Bursa remains as the leading exchange in sukuk listing with a total of RM33.7 bil listed YTD 31 October Exchange traded sukuk on the horizon. 9M11 9M12 3Q12 Collaboration with other exchanges in the pipeline. No. of Trading Participants 6

7 Bursa Share Price Performance Attractive Valuation 7 Strong Business Model with Cash Surplus 8 One of the Highest Yield 9 Peer Comparison 10 We believe in being responsible 7

8 Attractive Valuation Bursa Share Price YTD Current P/E vs. Historical 15.0% 10.0% 5.0% Announcement of MSCI Removal from MSCI EM Index Actual Removal from MSCI EM Index % -5.0% -10.0% x Average P/E 23.1x Current P/E -15.0% 0 Price correction mainly resulted from Bursa s removal from the MSCI EM Index. Bursa s fundamentals have not changed. 8

9 Strong Business Model with Cash Surplus Operating Expenses Operating Revenue (RM mil) Operating Revenue growth (2008 vs 2011) = 26% Bursa Malaysia s Dividends Surpassing 75% payout policy At the price of 31 Oct 2012, dividend yield is 4.3% Operating Expenses growth (2008 vs 2011) = 15% Payout 93% 9.0 Payout 94% 10.5 Payout 95% 13.0 Payout 91% Final Dividend (Single Tier) in sen Interim Dividend (Single Tier) in sen Interim Dividend, Net (Franked) in sen H2012 Effective cost management reflected in the financial results. Revenue has gone up by 26% over the last 3 years vis-à-vis increase in expenses of only 15%. Bursa Malaysia has been paying out more than 90% of its profits every year since its listing. With a strong business model high operating leverage, large cash reserve and zero debt, Bursa Malaysia will be able to maintain this payout ratio. 9

10 One of the Highest Yield 8 Dividend yield - Bursa vs. FBMKLCI 24 Oct At 4.1%, Bursa s dividend yield is higher than majority of the FBMKLCI constituents. 10

11 Peer Comparison Forward 2 Nov Dividend 2 Nov Revenue 1H12 (USD mil) 5% 1H11 1H % 18% HKEx SGX Bursa ASX 0.0 ASX Bursa SGX HKEx 0 HKEx SGX ASX Bursa Source: Bloomberg Results for period Jan June Source: Company Accounts/ Bloomberg Bursa s PE of 22x is lower than SGX s and HKEx s of 23x and 32x respectively and below its historical six-year average of 30.5x. Bursa Y-o-Y revenue growth is flat as compared to declines in the other three exchanges. 11

12 Financial Review Financial Snapshot 12 Operating Revenue 13 Stable Revenue 14 Operating Expenses 15 We believe in being responsible 12

13 Financial Snapshot Remained resilient Operating revenue (RM mil) 1% Operating expenses (RM mil) 4% 1% % Q Q M2011 9M2012 3Q Q M2011 9M2012 PATAMI (RM mil) 1% Cost-to-income ratio (%) 2% 3% 4% Q Q M2011 9M2012 3Q Q M2011 9M

14 Operating Revenue Growth in other revenues offset impact of decline in securities trading revenue (RM mil) Total RM296.5 mil % Total RM293.9 mil Growth contribution by revenue streams: % % 10% 5% M M M M Operating Revenue Mix (%) Securities Trading Revenue Derivatives Trading Revenue Stable Revenue 32 9M Securities Trading Revenue Derivatives Trading Revenue Other Operating Revenue Stable Revenue 14 Other Operating Revenue 14

15 Stable Revenue Recorded healthy growth Total RM85.6 mil Total RM95.0 mil 2.1 Growth contribution by revenue streams: (RM mil) % % % % % 4% 41% M M M M Stable Revenue Mix (%) Listing fees Depository services Information services Access fees Broker services & co-location inc. Participants fees M Listing fees Depository services Information services Access fees Broker services & co-location inc. Participants fees 15

16 Operating Expenses Managed, in light of economic environment (RM mil) Total RM162.7 mil Total RM156.6 mil Movement of expenses: % % % 5% 4% % % M M M M Operating Expenses Mix (%) Staff costs Depreciation & amortisation Marketing & development IT maintenance Service fees Other operating expenses M Staff costs Depreciation & amortisation Marketing & business development IT maintenance Globex service fees Other operating expenses 16

17 Additional Information Integrated Exchange 18 Securities Market Derivatives Market Islamic Market 30 Our Strategic Intents Plans to Grow Our Business 33 International Benchmarked 34 Expanding Capital Market 35 Transforming Malaysia 36 Sound Macro Environment 37 We remain accessible 17

18 Integrated Exchange Bursa Malaysia at a Glance SECURITIES DERIVATIVES ISLAMIC OTHERS 2 Markets: Main Market : 813 cos ACE Market : 112 cos Market Cap as at 31 Oct 2012 :RM1,463 billion Products :Shares, REITs, Warrants, ETFs, CBBCs, Loan stocks & Bonds 9 Derivatives Products: Commodity futures Equity futures Equity options Financial futures Islamic Offerings : Sukuk Shari ah-compliant equities i-reits i-etfs Bursa Suq Al-Sila Electronic trading platform for bonds Labuan International Financial Exchange : Non-ringgit securities Bond /Sukuk Listing Immediate Focus Improve liquidity Enhance vibrancy Provide accessibility Global visibility Expand client base Diversify offerings LISTING TRADING CLEARING SETTLEMENT DEPOSITORY 18

19 Securities Market Overview FBMKLCI hit a new high of 1,675 on 30 October 2012 Average Daily Value (RM billion) Market Capitalisation (RM trillion) (30/9/11) 1, % 21% (30/9/12) 1, (31/10/12) 1, Fund Raised for New Listing & Secondary Market (RM billion) % M11 9M12 Oct M11 9M12 Oct 12 Velocity (%) FBMKLCI No. of New Listing 19

20 Remaining Attractive Strong IPO activities with large listings (USD 5.8 bil) RM 18.3 bil Fund raised (USD bil) from IPO s YTD September 2012 Felda GV raised RM9.9 bil (YTD 3 rd largest IPO in the world) IHH raised RM6.3 bil (YTD 4 th largest IPO in the world) 0.0 Malaysia Hong Kong Singapore Australia Taiwan Indonesia Philippines Thailand Tokyo Source: WFE 20

21 Bursa s Potential To Grow Its Velocity YTD September 2012 (%) 202% % Source: World Federation Exchanges (WFE) 21

22 Securities Market Trading Activity RM mil 2,800 2,400 2,000 1,600 1, ,610 2,303 2,069 1,751 1, , Quarterly ADV Traded & Velocity ,161 1,793 1,490 1,266 1,099 1,435 1,209 1,387 1,579 1,732 1,841 1,341 1,439 1,595 1,429 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 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 Oct Turnover Velocity (%) Average Daily Value Traded (OMT, RM mil) Annual ADV Traded & Velocity RM mil 2, ,000 1,600 1, ,179 1,924 1,699 1,600 1, ,019 1, , YTD 2012 Turnover Velocity (%) Average Daily Value Traded (OMT, RM mil) 22

23 Securities Market Trading Participation Retail vs Institutions Foreign vs Local YTD Oct YTD Oct 2012 Retail ADV Traded (RM mil) Retail (%) Institutions (%) Foreign ADV Traded (RM mil) Foreign (%) Local (%) From 2006 to 2009, the statistics were based on Brokers submission. From 2010 onwards statistics were based on Bursa s internal system. 23

24 Securities Market Foreign Ownership (%) Based on Market Capitalisation (as at month end) Foreign Ownership by Nationality (%) Singapore Hong Kong UK China/Taiwan USA Mid-East Others Foreign Nominees 24

25 Positive Foreign Inflows Foreign investors were net buyers for the last 14 months out of 17 months 5.00 (RM bil) (1.00) (2.00) (3.00) (4.00) (5.00) Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Local Net Purchases/Sales Foreign Net Purchases/Sales 25

26 Increasing Weight in MSCI Malaysia s weight in the MSCI Asia Pacific Ex Japan Index is on the rise April % April % Sept 2012 Increased to 3.8% post Felda & IHH listings 26

27 Derivatives Market Overview Volatility drives interest in FCPO to a new height Average Daily Contracts (000 ) Open Interest since Migration to Globex % Peak on 28/2/12 199,215 31/10/12 178,819 1/9/10 96,678 70% 75% 84% 29% 9M11 24% 9M12 15% Oct 12 Others Crude Palm Oil Futures FMBKLCI Futures 27

28 Derivatives Market Activity Quarterly (Average Daily Contracts 000 ) Total Annual Contract (Million) ` ` 80% 20% % 24% 75% Open Interest (000 ) Crude Palm Oil Futures Open Interest (000 ) Crude Palm Oil Futures Others FMBKLCI Futures Others 28 FBMKLCI Futures 28

29 Derivatives Market Demography (%) FKLI (%) FCPO June - Sept June - Sept 2012 Foreign Institutions Domestic Retail Foreign Institutions Foreign Retail Local Domestic Institutions Local Domestic Institutions Domestic Retail * Local - A local participant is an individual who has been admitted as a participant in accordance with The Rules, registered with SC and has the right to trade for himself - all futures contracts listed on the Derivatives Exchange. 29

30 Islamic Market Overview Bursa Suq Al-Sila gaining momentum & growth is on track Sukuk Listing (USD$ bil) Bursa Suq Al-Sila ADV Commodity Traded (RM bil) Number of Shari ah Compliant Stocks % 79% 3% M11 9M No. of Sukuk No. of Trading Participants % of Shari ah compliant Stocks 30

31 Our Strategic Intents Aligning initiatives with our strategy (1) BUILDING A COMPETITIVE MARKETPLACE FOUR STRATEGIC INTENTS SI 1 Create a More Facilitative TRADING ENVIRONMENT New Derivatives Clearing System SBL Enhancement facilitate selling of loaned securities before recalling CDS Straight Through Processing Central Matching System Enhancement for Straight Through Processing BTS New Trading Features New Bursa Malaysia Website ecash payment framework SI 2 Facilitate More TRADABLE ALTERNATIVES Bursa Suq Al-Sila expanded Commodity Offering with RBD Palm Olein Revamped Options on Index Futures (OKLI) Options on CPO Futures (OCPO) 31

32 Our Strategic Intents Aligning initiatives with our strategy (2) BUILDING A COMPETITIVE MARKETPLACE FOUR STRATEGIC INTENTS Introduce Referral Agent Activities SI 3 Reshape MARKET & STRUCTURE & FRAMEWORK Ease of Local Participants entry requirements for Derivatives trading Ease restrictions for establishment branches/kiosks for Futures Brokers Dual Licensing Fast Track Programme - Eligibility requirement further ease with minimum years experience reduced from 10 to 5 years SI 4 REGIONAL MARKETPLACE With Global Access (Centre of ASEAN) ASEAN Exchanges ASEAN Link 32

33 Plans To Grow Our Business Upcoming initiatives to build a competitive market place SI 1 SI 2 SI 3 SI 4 Create a More Facilitative TRADING ENVIRONMENT Facilitate More TRADABLE ALTERNATIVES Reshape MARKET STRUCTURE & FRAMEWORK REGIONAL MARKETPLACE with Global Access (Centre of ASEAN) Maintaining competitiveness in trading technology Introducing more tradable alternatives for investors Balanced and facilitative regulatory framework Growing regional retail investment BTS Replacement Exchange Traded Bonds/Sukuk ETFs New Surveillance System ASEAN Exchanges & ASEAN Link 33

34 Internationally Benchmarked Improved Country Ranking & Standard Asia Corporate Governance Association Malaysia has significantly improved its ranking from 6th to 4th place out of 11 countries in Asia. Bursa Malaysia as a listed company is included in the list of "Top 50 CG ranking of mid/small caps in Asia Pacific World Bank 4 th Amongst 183 Countries For Investor Protection World Economic Forum Ranked 4th Amongst 142 Countries for Strength of Investor Protection and ranked 9th for Efficacy of Corporate Boards Asian Sustainability Rating 3 rd Amongst 10 Most Developed Asian Countries to provide Companies' Strategic Sustainability View to Stakeholders MSWG The MCG Index had increased to 66.9 points in 2011 from 66 points in 2010 and 64.4 points in

35 Expanding Capital Market Global Partnerships & Recognition CME Partnership Migration of Malaysian derivatives products to CME Globex CFTC Approval U.S. SEC Approval Approval from US Commodity Futures Trading Commission (CFTC) to enable Malaysian Futures brokers to deal with US customers Designated Offshore Securities Market recognition to ease trading in Malaysian listed securities & shelf listed bonds by U.S. investors FTSE Upgrade CBRC Recognition Malaysia promoted to Advanced Emerging Market status in FTSE Global Equity Index Series QDII Malaysia Investment destination for China investors We have built successful global partnerships and will continue our efforts for more business collaborations. 35

36 Transforming Malaysia Conducive Investment Environment Government Transformation Plan New Economic Model & ETP - high value & high income Increasing private sector role in driving business Creating a conducive environment for entrepreneurship Focus on developing Human Capital & Innovation Recognition & Competitiveness 4 th for Investor Protection (World Bank) 10 th for Resilience in crisis (Sevcorp Int l Business Confidence Survey) 21 st amongst 134 countries for Corporate Governance Framework (World Economic Forum) Free Capital Mobility & Improved Access to Capital Market Access for Foreign Participation No restrictions on international investments in Malaysia Free to repatriate capital, profits and income Liberalised entry and ownership for foreign players in the capital market Foreign Listings 36 36

37 Sound Macro Environment GDP Growth Projected 4% - 5% for 2012F (Source: BNM) Healthy International Reserves USD th October 2012 (Source: BNM) Strong Banking Sector & Ample Liquidity Conducive Domestic Interest Rates > 90% of assets are RM denominated Non-performing loan at April 2012 (Source: BNM) Overnight policy rate: 3.0% Manageable Inflation Modest for 2012F (Source: BNM) Strong Current Account in the Region 2012F at RM109.5 billion (Source: BNM) 37

38 INVESTOR RELATIONS CONTACT INFORMATION KOAY LEAN LEE LIM SIEW CHING MUHAMMAD ALI ir@bursamalaysia.com Fax : Disclaimer : Bursa Malaysia and its Group of Companies (the Company) reserve all proprietary rights to the contents of this Presentation. Whilst the Company endeavours to ensure that the contents in the presentation booklet 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 booklet to the recipient of this presentation booklet and/or to any other third party. Bursa Malaysia