BURSA MALAYSIA BERHAD

Transcription

1 BURSA MALAYSIA BERHAD Destination of choice for listings and investments in the region Invest Malaysia New York Dato Tajuddin Atan, CEO May 2011

2 Part I Transforming Malaysia: Drive for Private Sector Growth

3 Malaysian Market Liberalisation Country New Economic Model - 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) 25 th 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 10 th on World Competitiveness Scoreboard 2010 (IMD World Competitiveness Yearbook) 3 3

4 Liberalising Access for Foreign Participation Participants Investors Issuers Foreign shareholding for stockbroking firms, Islamic banks investment banks & insurance companies raised to 70% New licenses for foreign brokers 30% bumi equity in 27 services subsectors dropped Global players present in all segments of the Malaysian Capital Market 30% bumi equity for new IPOs liberalised More foreign IPOs in the pipeline 4 4

5 Sound Macro Environment GDP Growth Projected 5% - 6% for 2011F (Source: BNM) Healthy International Reserves > USD April 2011 (Source: BNM) Strong Banking Sector & Ample Liquidity > 90% of assets are RM denominated Non-performing loan at end Feb 2011 (Source: BNM) Conducive Domestic Interest Rates Overnight policy rate: 3.0% Manageable Inflation Modest 2.5% - 3.5% for 2011F (Source: BNM) Strong Current Account in the Region 2011F at RM billion (Source: MOF) 5

6 Changing Financial Services Landscape under the Economic Transformation Program (ETP) Four Strategic Thrusts & Ten EPPs Identified to Grow Incremental Gross National Income by RM28.8 billion by 2020 Strengthen the Core Serve High Income Population Seed New Growth Go on the Offensive 1. Revitalise equity markets 5. Insure our population 8. Accelerate asset management 9. Create regional champions 2. Deepen and broaden bond markets 3. Transforms DFIs 4. Create integrated payment ecosystems 6. Develop private pension industry 7. Spur growth of wealth management 10. Global Islamic Finance Hub Note: Bursa Malaysia to co-lead item 1 and action/play a part in item 2/4/10 Entry Point Projects alongside MoF, BNM, SC and other key organisations/ agencies/ companies. 6 6

7 Bursa Malaysia s Report Card Case for Change under the Economic Transformation Program (ETP) Revitalise the Equity Markets Case for Change: Low liquidity as well as scale and growth Aspirations: Vibrant Capital Markets that attracts quality listings and investors Status : Completed 1. Building Quality: Launched the Sustainability Programme 2. Enhancing Efficiency: Internet trading for futures products 3. Improving Liquidity: New CBBCs/ETFs/REITs issued Derivatives product migration to CME Globex 4. Internationalising our Market: CME strategic partnership. CME s KL Hub is now a gateway for trading derivatives products, Upgraded FTSE Advanced Emerging Market Status Status : Ongoing 1. Building Quality Enhancing standard of CG and Market engagement and education 2. Enhancing Efficiency Issuing of dual licenses 3. Improving Liquidity Increasing Proprietary Day Traders in the market 4. Internationalising our Market Increased visibility through ASEAN Exchanges Expanding reach and profile of Islamic market 7 7

8 Impact of ETP to our Stocks and Sectors Sectors GNI Impact (RM mil) 21,266 4,280 Jobs Created (No.) Property & Construction 392, , Building an integrated urban MRT 2. Revitalising the Klang River 20,000 17,041 Impact on Stocks/Sector A more extensive MRT costing RM50bn (vs RM36bn originally) will boost earnings for Gamuda and IJM. Property development in surrounding MRT stations/alignment will see better sales, take-up and ASP for MRCB and SP Setia. 3. Connecting SG via highspeed rail 6,223 28,700 Potential investment of up to RM8bn will boost earnings for MRCB's river rehab division. Property development with GDV of RM14bn along the 10km riverbank stretch will be a boon for developers like MRCB and SP Setia. This RM17bn project, which could stop in Iskandar would boost land/property prices for UEM Land. Oil, gas & energy 131,000 52, Improving energy efficiency 2. Consolidating domestic fabricators 13,925 4,108 na 5,000 Fuel subsidy rationalisation and gradual move towards automatic tariff pricing for coal stock will boost Tenaga's earnings significantly. MMHE is the largest local fabricator, and the improved scale will also enhance its regional competitiveness. Source: Pemandu 8

9 Impact of ETP to our Stocks and Sectors (contd.) Sectors 1. Improving FFB yields 2. Increasing oil extraction dates 3. Developing oleo derivatives GNI Impact (RM mil) 10,172 13,711 5,813 Jobs Created (No.) Palm Oil 125,000 42,000 1,600 10,000 Financial Services 121, , Revitalising capital market 2. Developing regional champions 3. Global hub for Islamic Finance 3,325 5,564 7,242 5,858 8,598 (8,524) 11,644 Tourism 67, , A duty free shopping 7,838 3,325 destination 2. Improves rates, mix and 5,528 5,564 quality of hotels 3. Enhance connectivity to medium-haul markets 3,310 7,242 Comms, Content & Infra 36,000 43,000 Impact on Stocks/Sector This will improve productivity and revenue for Sime, IOI, KLK and Genting Plant. Increased market cap and trading velocity will improve earnings for Bursa and stockbrokers. Higher overseas contributions from Malaysian banks. E.g CIMB, Maybank and RHB. Stronger contributions for Banks with Islamic arms. Improves yield and load factor for Air Asia, as well as hotel occupancy and yields for Genting group. 1. Broadband for all 2,160 7,155 Enhances growth for TM, Maxis, Digi and Axiata 2. Extending broadband reach 2,688 3,135 as players move towards quad play. 3. Extending regional telco 2,289 1,220 Source: Pemandu 9

10 Strength of Our Market Capital Market Stakeholders DRIVERS MOF, PEMANDU, BNM, SC, Bursa Malaysia Our Assets PEOPLE MARKET FRAMEWORK LOCATION Our Strengths 1) Stable Political Environment 2) Multicultural: Historical ties with China,India, Indonesia and the Developed World 3) New Corporate Champions: Highly educated business leaders 4) Good Infrastructure & No Barriers: Open access & Business friendly 5) Healthy Credit Market: Globally respected agencies in place 6) Expanding capital market: QDII, US SEC Recognition & FTSE Advance Emerging Economy Status 7) Young Demographics: Malaysia is situated at the heart of ASEAN s 590 million people. With a population of 28 mil, Malaysia s labor force stands high at 64%. Only 5% of population is above age 65. 8) Abundant Resources: Commodity Rich, Ample Land Our Story The Exchange is a conduit to ASEAN as many Malaysian companies have regional growth and footprint. Crossing Borders Regional Champions 10

11 Regional Champions AirAsia is Asia s largest low cost carrier with over 130 routes linking three continents. Regional presence with holdings in PT Indonesia AirAsia, Thai AirAsia, AirAsia Philippines Inc etc. Axiata has over 150 million mobile subscribers in Asia. Controlling interests in mobile operators in Malaysia, Indonesia, Sri Lanka, Bangladesh & Cambodia with significant strategic stakes in India, Singapore and Iran. ASEAN s leading bank franchise with over 1,000 branches, the largest in the region. Presence in CIMB Niaga (Indonesia), CIMB Thai (Thailand) and consumer banking franchise in Singapore and Cambodia. One of the world s leading integrated leisure and entertainment resort Global presence including Australia, the Americas, the Philippines and the UK One of Malaysia s largest and most diversified construction groups Successful infrastructure projects in China, Argentina, India & Vietnam Leading integrated palm oil player and largest vegetable oil based oleochemical manufacturer in Asia Serving global markets in more than 65 countries 11

12 Regional Champions One of Malaysia s leading banking group with a growing presence in South East Asia The Group has expanded internationally, with over 1,750 branches and offices in 14 countries and serving over 18 million customers. The leading integrated petrochemicals producer in Malaysia and one of the largest in Southeast Asia. Production capacity in eastern Peninsular Malaysia as well as manufacturing complexes in Gurun, Bintulu, Labuan and Vung Tau, Vietnam. The Public Bank Group's regional network has been expanded to 109 branches in countries outside of Malaysia. Banking operations presence in Hong Kong and China, Cambodia, Vietnam, Laos and Sri Lanka. The world largest palm oil producer, and diversified multinational involved in property, motors, industrial equipment and energy & utilities, with healthcare as a growing business. Workforce of over 100,000 employees in over 20 countries. The world's largest rubber glove manufacturer Top Glove exports to more than 900 customers in over 180 countries through its sales and marketing offices in Malaysia, the United States and Germany. Some of our companies are global leaders in their respective fields and others are making mark around the region. They grow by leveraging on the country s assets and pro-business policies. These companies now spearhead Malaysia s emergence as a dynamic advancing economy. 12

13 Ride Wave of Market Reform Malaysia houses some of the biggest regional players in ASEAN. With conducive macro environment and the Economic Transformation in full motion, more companies are positioned to take giant leaps towards Malaysia s 2020 high-income economy aspiration. GROWTH Invest in Our Growth Story 13

14 Part II Bursa Malaysia: Conduit to Malaysian Growth

15 Diversified Offerings Strong Niche In Islamic and Commodities SECURITIES DERIVATIVES ISLAMIC OFFERINGS OTHERS 2 Markets: Main Market : 840 cos ACE Market : 116 cos Market 30 Apr 11 : RM1,310 bil (USD442 bil) 10 Derivatives Products: Commodity futures Equity futures Equity options Financial futures Sukuk Shari ah compliant equities i-reits i-etfs Bond Market Electronic trading platform for : Government Bonds Corporate Bonds Products : Shares, REITs, Warrants, ETFs, CBBCs, Loans & Bonds Bursa Suq Al-Sila Offshore Market Non-ringgit securities Sukuk Listing Focus : Drive Liquidity & Vibrancy Focus : Leverage On Existing Strategic Partnership Focus : Attract International Investors & Issuers LISTING TRADING CLEARING SETTLEMENT DEPOSITORY 15

16 1,532 1,288 1,482 1,749 2,234 1,731 Positive Securities Market Momentum FBMKLCI Hit an All Time High at on 17 Jan , Dec ,061 1, , , Dec , April ,275 1, Q10 2Q10 3Q10 4Q10 1Q11 April 2011 Daily Average Trading Value: OMT + DBT (RM mil) FBM KLCI Index Turnover Velocity as at 31 st March (%) Market Capitalisation as at 31 st March (RM bil) 16

17 Steady Securities Market Progress YTD April 2011 Number of IPOs (Incl. 2 REITs in 2010) YTD April 2011 Total Funds Raised (RM bil) (From IPO & secondary offerings) YTD April 2011 No. of New Structured Warrants (Incl. CBBCs & put warrants) Note : Callable Bull Bear Certificate or CBBC is type of structured product, much like a structured warrant. They are issued either as Bull or Bear certificates with a fixed expiry date, allowing investors to take bullish or bearish positions on the underlying instrument. 17

18 23,889 22,517 25,111 24,255 36,785 31,900 Increasing Interest in the Derivatives Market FCPO open interest hits all-time high at 112,921 contracts on May 9 128, , , , , ,565 1Q10 2Q10 3Q10 4Q10 1Q11 April 2011 Daily Average Contracts (Units) Open Positions Daily Average Contracts 1Q11 1Q10 Δ% 4Q10 Δ% FCPO 25,606 15, , FKLI 10,274 7, ,

19 Key Focus for 2011 Strengthen Equity Market Increasing PDTs Collaboration of ASEAN Exchanges Dual licensing New Derivatives Clearing System Expand Derivatives Market Widen & Internationalise Islamic Market More BSAS Participants TO REMAIN COMPETITIVE IN THE REGION Other initiatives will be updated as we progress throughout the year 19 19

20 Securities Market Highlights 13 New Listings YTD 15 May 2011 FBMKLCI Index & No. of PLCs Diverse Sectors & Products (1 Jan 1998) , (30 Apr 2011) 5% 5% 7% 10% 28% 3% 42% Trading/Services Finance Industrial Products Plantation Infrastructure Project Cos. Consumer Products Construction Main Market Call Warrants 266 ACE Market Loans FMBKLCI Index Total Listed Companies Average Market Capitalisation REITs ETFs As at 30 April

21 Derivatives Market Highlights 25% Equity Stake in Bursa Malaysia Derivatives (BMD) Licensing of FCPO Prices to CME Technology Partnership Completed acquisition and group restructuring of BMD CME USD Palm Oil Contract launched 24 May 2010 Migrations of BMD s products to CME Globex trading platform in September 2010 BMD will partner CME in ASEAN in market and technology development Joint product development and marketing Human capital development Strengthen Malaysia s position as the global price benchmark for CPO Ensure price discovery for palm oil remains in Malaysia Global distribution of Malaysian derivatives products via Globex TPs connected directly to CME Globex and are able to trade CME products* TPs can now market Malaysian derivatives products in the US * Subject to them having a clearing relationship with a CME Clearing Futures Commission Merchant (FCM) 21 21

22 Islamic Markets 30 April 2011 Sukuk Listings No. of Listings 19 Bursa Suq Al-Sila an international commodity platform that is able to facilitate commodity-based Islamic financing and investment transactions under the Shari ah principles Value listed USD 27.7bil No. of Trading Participants 36 Exchange Global Ranking 1 Key Statistics % of Shari ah Compliant No of PLCs 87 ETFs 49 REITs 22 Market Capitalisation 58 Foreign Membership Admission 1. Saudi Hollandi Bank 2. Nafaes International Group General Trading and Contracting Company 3. The Islamic Bank of Asia Limited 4. Central Bank of United Arab Emirates 5. Alinma Bank Foreign Membership Shari ah Approvals 1. Al Rajhi Bank 2. Bank Albilad 22 22

23 Setting Priorities and Areas for Growth Solid Foundation People, Sound Regulatory Framework, Technologies Strong Stakeholders Support Five Strategic Thrusts Revitalising the market Improving the Ecosystems Development of world class workforce. Improvement of efficiency & productivity Internationalising the Market Vision A preferred Partner in Asia for Fund Raising, Trading and Investment 23

24 Global Recognition CME Partnership Migration of Malaysian derivatives products to CME Globex CFTC Approval Approval from US Commodity Futures Trading Commission (CFTC) to enable Malaysian Futures brokers to deal with US customers FTSE Upgrade CBRC Recognition Malaysia promoted to Advanced Emerging Market status in FTSE Global Equity Index Series QDII Malaysia Investment destination for China investors U.S. SEC Approval Designated Offshore Securities Market recognition to ease trading in Malaysian listed securities & shelf listed bonds by U.S. investors 24

25 Positive Prospect & Outlook Bursa remains committed in ensuring markets continues to be sustainable and vibrant despite increasing volatility from external factors. Potential Market Catalysts Acceleration in the implementation of various economic transformation programmes. Greater M&A activities & government transformation programmes. Prospects for further divestments by government-linked companies. Strong and Solid System Malaysia s strong economic fundamentals. Liberalisation efforts by the government. Sustained domestic corporate earnings growth attracting portfolio inflows. Progressive Developmental Efforts We continue to invest in the development of the capital market and the regulatory environment. And at the same time, putting a close watch on our expenditure. Barring any adverse developments, we expect improved level of activity in our markets and financial results for the financial year ending 31 December

26 Financial Review Improved Financial Performance 27 Increased Revenue 28 Higher Operating Expenses 29 Sustainable Performance Ratios 30 Dividend Payout 31 Strong Reserves 32 26

27 Improved Financial Performance 33% 19% 20% 44% 43% 1Q10 1Q11 1Q10 1Q11 1Q10 1Q11 1Q10 1Q11 1Q10 1Q11 Operating Revenue (RM mil) Other Income (RM mil) Operating Expenses (RM mil) PAT (RM mil) Earnings Per Share (sen) 27

28 Increased Revenue Driven by Securities Market Derivatives Trading Revenue Other Operating Revenue* 57.7 Operating Revenue 9% % Stable Revenue 25% 1Q % Securities Trading Revenue Securities Trading Revenue Derivatives Trading Revenue Stable Revenue Other Operating Revenue 46% 53% 6% 33% RM107.8 mil in 1Q2011 Securities trading revenue increased due to positive market sentiment Derivatives revenue increased due to increased volatility of commodity prices and migrations to CME Globex Stable revenue grew from higher annual listing fees (higher market cap), increase in listing of structured warrants & IPOs as well as increase in information services subscribers Other operating revenue grew due to higher conference fees (POC) and interest earned from participants contribution 33% (1Q2010: RM81.2 mil) Listing Fees Depository Services Information Services * Other operating revenue mainly comprises conference fees, interest earned from participants contribution and perusal & processing fees. (RM mil) Broker Services 14% 7% 13% 28 1Q10 Stable Revenue Access Fee 0.7 1Q Participants' Fees 14% 28

29 Higher Operating Expenses Talent Investment for Future Growth 2% 11% 25.9 (RM mil) 1Q10 1Q11 ` 4% % 1Q % 9% % Staff Cost Depreciation & Amortisation (D & A) Market Development Technology Charges Building Management Costs Professional Fees Other OPEX Staff Cost D&A Market Development RM57.8 mil in 1Q2011 Technology Charges Building Management Costs 19% (1Q2010: RM48.4 mil) Professional Fees Other OPEX 20% 11% 12% 89% 3% 100% 40% Higher staff costs due to increased headcount as well as talent attraction & development. Higher technology charges due to Globex service fee charged by CME (RM3 mil) for the use of Globex electronic trading platform which commenced in September Operating expenses increase was further attributable to a write off of computer software, the postage hike in July 2010 which raised the cost of CDS consumables, higher market development expenses and higher consultancy fees. Other OPEX comprises administrative expenses, CDS consumables & other miscellaneous expenses

30 Sustainable Performance Ratios (%) 1Q10 ` 1Q Net Profit Margin 9% Operating EBITDA Margin 3% Return on Equity 42% 30 30

31 High Dividend Payout Surpassed 75% Payout Policy FINANCIAL YEAR (sen/net) Dividend Payout Interim Dividend Final Dividend % Interim Dividend - Franked Dividend Single Tier 5.0 Final Dividend % Interim Dividend Final Dividend %

32 Strong Reserves (RM mil) 886 ` ` 870 2% Shareholders Fund 1Q10 1Q11 (RM mil) 594 ` Financial Resources Available for Use % 1Q10 1Q11 The Company has sufficient financial resources to cover its Clearing Guarantee Fund commitment, CAPEX and working capital requirements

33 Additional Information Board of Directors & Shareholdings Structure 34 Securities Market Trading Activity 35 Securities Market Trading Participation 36 Securities Market Foreign Ownership 37 Peer Comparison for 1Q Bursa s Potential To Grow Its Velocity 39 Derivatives Market Activity 40 Derivatives Market Demography 41 Sound Macro Environment 40

34 Board of Directors & Shareholdings Structure As at 30 April Members 7 Independent Non-executive Directors 1 Senior Independent Non-Executive Director (also an INED) 1 Non-Independent Executive Director 3 Public Interest Directors (also independent) Market Capitalisation of Bursa Malaysia : RM4.3 bil (USD1.5 bil) Substantial Shareholders Capital Market Development Fund 19% Shareholding by Size Foreign 19.1% Minister of Finance Inc. 16% Local 80.9% 34 34

35 Securities Market Trading Activity 68% Quarterly DATV & Velocity RM mil 2,800 2,400 2,000 1,600 1, ,610 54% 50% 41% 46% 31% 2,303 2,069 1,751 1,907 1,187 48% 42% 36% 35% 37% 32% 28% 28% 31% 25% 23% 2,161 1,566 1,490 1,266 1,387 1,099 1,209 1, Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Daily Average Trading Value (RM mil) Turnover Velocity 57% RM mil 2,400 2,000 1,600 1,924 31% 40% 39% Annual DATV & Velocity 34% 32% 34% 20% 23% 25% 53% 2,179 34% 34% 33% 39% 2,032 1, ,019 1,181 1,129 1, YTD Apr 2011 Daily Average Trading Value (RM mil) Turnover Velocity 35

36 Securities Market Trading Participation Retail vs Institutions Foreign vs Local YTD April 2011 Retail (%) Institutions (%) Retail DATV (RM mil) YTD April 2011 Local (%) Foreign (%) Foreign DATV (RM mil) From 2006 to 2009, the statistics were based on Brokers submission. From 2010 onwards statistics were based on Bursa s internal system. 36

37 Securities Market Foreign Ownership Based on Market Capitalisation (as at month end) Foreign Ownership by Nationality % 25.8% Singapore Hong Kong China / Taiwan 7.8% 1.9% 1.6% UK 0.9% 74.2% Foreign Nominees USA Mid-East Others 0.4% 0.1% 13.2% Mar

38 Shenzhen SE Shanghai SE Hong Kong Tokyo SE Group Singapore Australian SE National Stock Indonesia SE Thailand SE Malaysia Korea Exchange Taiwan SE Corp. Colombo SE Philippine SE Bombay SE Osaka SE Billion Shanghai SE Colombo SE Shanghai SE Korea Exchange Thailand SE Hong Kong Australian SE Shenzhen SE Indonesia SE Philippine SE Singapore Osaka SE Tokyo SE Group Taiwan SE Corp. National Stock Bombay SE Korea Australia Thailand Malaysia Hong Kong Shenzhen SE Indonesia Osaka Taiwan Colombo Singapore National SE India Bombay SE Tokyo SE Malaysia Peer Comparison for 1Q 2011 Asian Benchmark Index Growth % Asian Market Capitalisation Growth % 4 2 2% 10% 8% 6% 4% 2% 0 2% 0% -2-2% -4% -4-6% -6-8% 30 Funds Raised USD909 mil 5 0 Source: World Federation Exchanges (WFE) 38

39 Bursa s Potential To Grow Its Velocity YTD April 2011 Philippine SE Indonesia SE Bursa Malaysia National Stock Exchange India Singapore SE London SE Hong Kong Exchanges NYSE Euronext (Europe) Australian SE The Stock Exchange of Thailand 16% 31% 38% 47% 50% 55% 58% 71% 75% 87% NYSE Euronext (US) 106% Taiwan SE Corp. Tokyo SE Shanghai SE Korea Exchange Shenzhen SE 115% 126% 127% 182% 262% Source: World Federation Exchanges (WFE) 39

40 28% K 24K 22K K 24K 23K 25K 28K K % 70% % Derivatives Market Activity Quarterly (Daily Average Contracts 000 ) Annually (Total, million contracts) 139K 122K 136K 156K 148K 117K 142K 124K 136K 159K 125K 156K 123K 131K 152K 85K 66K 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q YTD April 2011 KLCI Futures Others KLCI Futures Others Crude Palm Oil Futures Open Position Crude Palm Oil Futures Open Position 40 40

41 Derivatives Market Demography FKLI FCPO % % YTD April 2011 Locals Domestic Retail Domestic Institutions Foreign Institutions YTD April 2011 Locals Domestic Retail Domestic Institutions Foreign Institutions * 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. 41

42 INVESTOR RELATIONS CONTACT INFORMATION KOAY LEAN LEE INTAN DIYANA TAJUDIN 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 2011