Business

Thursday July 19, 2012

Bursa cautious on 2nd half

By DANIEL KHOO
danielkhoo@thestar.com.my


KUALA LUMPUR: Bursa Malaysia Bhd is cautious on its outlook and financial performance for the second half of this year because of the challenges ahead faced by the global economy, particularly in Europe and the United States, said its chief executive officer Datuk Tajuddin Atan.

“It is a challenge. The economy around us and in Europe is facing a lot of challenges.

Tajuddin: ‘The economy around us is facing a lot of challenges.’

“The performance in the first half and the tenacity of the market that showed strong initial public offerings (such as Felda Global Ventures Holdings Bhd (FGVH)) is something that is incredible. An extension of that is a challenge,” Tajuddin said at the press conference after announcing the company's financial performance here yesterday.

He said that revenue in the second half of this year would be “flat or slightly lower” compared with the previous corresponding period.

“On a more positive note, if I can achieve in the second half what we have achieved in the first half, I think it will be a big success story,” he added.

Tajuddin was, however, sanguine on achieving its target of an earlier guidance of a 20% net profit growth by the end of this financial year ending Dec 31, but noted that this would also largely depend on factors that were beyond Bursa's control.

“Let's see how things go. Let's set our targets. If the assumptions were to change dramatically, then we have to be realistic.

“We will most probably achieve our target for the year but if in any event, other matters develop within Europe, we are mindful to say that we might not achieve that target,” he said.

He added that he was happy that Bursa had hosted the world's second and third biggest initial public offerings this year (that of FGVH and IHH Healthcare Bhd) but pointed out that “this will not happen every time.”

He highlighted in his presentation that the exchange operator had managed to enhance efficiency in terms of timing for approvals for listing to between one to 13 days, which is comparable to Hong Kong and Singapore.

The company reported that its second-quarter net profits for the period ended June 30 rose 6.3% to RM37.95mil on the back of revenue also rising to RM105.96mil from RM101.06mil a year earlier. The company also declared an interim dividend of 13.5 sen per share, which will go ex on July 31 and will be paid on Aug 15.

For its first half year-on-year (y-o-y) performance, its net profit grew marginally by 3% to RM78.7mil on the back of first half revenue declining to RM216.48mil from RM217.16mil. The slightly lower revenues were due mainly to the decrease of securities trading revenue impacted by the weakened global economy, according to Bursa's data.

Meanwhile, on the delay on the launch of the Asean Trading Link under the Asean Exchanges of which Bursa is a member, Tajuddin said that he expected it to be launched by this year, adding that Asean Exchanges was facing slight regulatory issues.

“From Bursa's perspective, I think we are ready to go. But this (Asean Exchanges) involves many parties, as it is it is a challenge to bring everybody on board,” he said, adding that there was no resistance to the idea.

On whether FGVH and IHH Healthcare will be included as components of the FTSE Bursa Malaysia KL Composite Index, Tajuddin said “based on the numbers and size, it should, and the issue now is timing, which is very technical.”

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