Bursa expects profit to grow a second consecutive year

Bursa Malaysia Bhd (1818) , the country's stock exchange manager, expects profit to increase for a second consecutive year as the economy recovers and the government accelerates efforts to open the market to foreign investors.


"We expect positive growth in earnings this year," chief executive officer Datuk Yusli Mohamed Yusoff said in an interview yesterday in Singapore. "Expect the market to be volatile, but the conditions are quite good for earnings to grow."

Bursa Malaysia posted 70 per cent gain in net income to RM177.6 million last year on higher trading volume and listing fees. Yusli's comments contrast with a forecast that profit will fall to RM141 million this year, according to the mean estimate among 16 analysts surveyed by Bloomberg.

The daily average volume in the stock market has more than doubled to 1.02 billion shares so far this year, compared with 408 million shares in the same period last year. The value of trades jumped to RM1.36 billion a day from RM602.7 million as the global economy revived and the government boosted spending to help resuscitate growth.

"Against the backdrop of a global recession, Malaysia's economy has performed well," Yusli said. "It's low, and stable interest rate has been conducive for businesses to grow."
Bursa Malaysia's profit fell 57 per cent to RM104.4 million in 2008 when investors shunned emerging markets amid a global financial crisis.

The government may announce more "liberalisation and reform measures" this month when the stock exchange holds its sixth annual Invest Malaysia conference, Yusli said. He declined to give details.

His "wish list" includes widening market access for retail investors and allowing foreign brokers to service the Malaysian market.

The government has announced stimulus plans totalling RM67 billion over the past two years to help pull Southeast Asia's third largest economy out of recession. Prime Minister Datuk Seri Najib Razak also eased investment rules in June on initial public offerings and takeovers to attract more overseas investors. - Bloomberg