Bursa Malaysia Cautiously Optimistic About 2nd Half Performance

KUALA LUMPUR, July 25 (Bernama) -- Bursa Malaysia Bhd, which formerly known as Kuala Lumpur Stock Exchange is cautiously optimistic about the performance of the local capital market in the second half of this year, weighed by the lingering challenges brought from the first half of this year. Chief Executive Officer Tajuddin Atan said among the challenges which caused the volatility in the local market were the recovery of the crude palm oil prices, appointment of the new Bank Negara Malaysia governor, Britain's impending exit from the European Union (EU), and the rebalancing of MSCI portfolio. He said Britain's impending exit from the EU and the rebalancing of MSCI (Morgan Stanley Capital International) portfolio, the US index provider, weightage on Malaysia were also affecting the local market in the second quarter. "The rebalancing of the MSCI weightage in May causes selling pressure for foreign funds, tracking Malaysia's equities market," he told reporters at the company's first half financial year 2016 results briefing here Monday. Tajuddin said as at June 30, the total net foreign outflow stood at US$24.53 million (RM100 million). In May, MSCI cut the weightage of most Asian markets, except the Philippines, on its Emerging Market Index with Malaysia's weightage trimmed to 3.09 per cent from 3.43 per cent. The index was designed to measure the performance of large and mid-cap segments of the Malaysian market. Tajuddin said the second quarter saw a reversal in foreign funds from the Malaysian equity market after a strong inflow in the first quarter as the local market performance continued to be influenced by global and local economic and market conditions. However, he said domestic liquidity would continue to provide support to the equity market, given the country's strong economic fundamentals and sound financial system. "We acknowledge the prevailing market condition, which is challenging, but where there is a challenge, there is pockets of opportunities. "What we have built over the past 10 to 15 years is key to any discerning long-term players to look at opportunity to invest for a longer period of time," he said. On the first half performance, Tajuddin said Bursa Malaysia registered a three cent increase in profit after tax and minority interest (PATAMI) of US$24.39 million (RM99.4 million) for the period ended June 30, 2016 compared with the same period last year. He said the better performance was attributed to higher operating revenue, which increased by 3.3 per cent to US$60.97 million (RM248.4 million) despite trading revenue in the securities market decreased marginally due to lower trading activities. On new listing, Tajuddin said the local stock exchange could achieve more than 10 initial public offerings (IPOs) this year after recording five new listings in the first half worth US$98.13 million (RM400 million). "We expects IPOs to reach the teens by year-end but in smaller size as compared to last year," he said. Last year, there were 11 new listings worth US$1 billion (RM4.1 billion) on Bursa Malaysia. --BERNAMA