invest malaysia, hong kong - bursa malaysia...
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Invest Malaysia, Hong Kong
8 November 2012
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
Malaysia Growth Opportunities
3
Reduce Market Friction
ETP Projects up to 2020 2013 Projected GDP Growth
Strong IPO Activities
5%
FGV, IHH, Astro (2012) Malakoff, Westport (2013)
Corporate Governance
Improved ranking from 6th to 4th place out of 11 countries in Asia
Source: Asia Corporate Governance Association
Source: World Bank
Investor Protection
4th in terms of Strength for Investor Protection out of 183 Nations
2012 World Competitiveness
Source: World Economic Forum
21st Most Competitive Nation out of 142 Nations
Source: Various research reports
Amount of Untapped Liquidity
Domestic unutilised deposit of circa RM290 bil
RM203 bil to boost economic growth
Capital Market Task Force established
Securities Market – Capitalise on ASEAN’s Marketplace
4
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).
FY2009 FY2010 FY2011
28%
(FBM KLCI PLCs %) 40%
ASEAN Exchanges ASEAN’s Multinational Marketplace
33%
% Overseas Revenue
6 countries
7 exchanges
529 million people
3,600 companies
USD2.0 trillion market capitalisation
Oct 12
Derivatives Market - Primed for Growth
5
9M11 9M12
Average Daily Contracts (000’)
Crude Palm Oil Futures
FMBKLCI Futures
34.37
37.97 10%
75% 70%
24% 29%
44.90
15%
84%
Others
Infrastructure in place (Globex trading
platform and new clearing system) to grow derivatives business.
Average daily contracts grew by 10% in 2012 (YTD Sept).
Volume traded reached a daily historical high of 78,401 contracts on 29 Oct 2012.
A number of new products in the pipeline.
Awarded “Best Technology Innovation by an Asian Exchange” and runner up for “Asian Derivatives Exchange of the year”.
Islamic Market – Build and Expand Our Niche
6
9M11 9M12 3Q12
47 65
Bursa Suq Al-Sila’ ADV Commodity Traded
(RM bil)
1.15
2.46
No. of Trading Participants
2.06
79%
65
Increasing number of international players trading via the world’s first shari’ah-compliant commodity trading platform, BSAS.
ADV expands rapidly - 79% YoY.
Bursa remains as the leading exchange in sukuk listing with a total of RM33.7 bil listed YTD 31 October 2012.
Exchange traded sukuk on the horizon.
Collaboration with other exchanges in the pipeline.
Bursa Share Price Performance
Attractive Valuation 7
Strong Business Model with Cash Surplus 8
One of the Highest Yield 9
Peer Comparison 10
7
We believe in being responsible
Attractive Valuation
Price correction mainly resulted from Bursa’s removal from the MSCI EM Index. Bursa’s fundamentals have not changed.
8
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
Announcement of MSCI Removal from MSCI EM Index
Actual Removal from MSCI EM Index
Bursa Share Price YTD
0
10
20
30
40
50
60
70
30.5 x Average P/E
23.1x Current P/E
Current P/E vs. Historical
9
Strong Business Model with Cash Surplus
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.
Operating Expenses Operating Revenue (RM mil)
186.0 183.2 197.3
214.0
302.5 297.8
331.3
381.3
2008 2009 2010 2011
Operating Revenue growth (2008 vs 2011) = 26%
Operating Expenses growth (2008 vs 2011) = 15%
3.8
5.0 9.5
13.0 13.5
9.0 10.5
13.0
2009 2010 2011 1H2012
Payout 93%
Payout 94%
Payout 91%
Final Dividend (Single Tier) in sen
Interim Dividend (Single Tier) in sen
Interim Dividend, Net (Franked) in sen
Payout 95%
Bursa Malaysia’s Dividends • Surpassing 75% payout policy • At the price of RM6.32 @ 31 Oct 2012,
dividend yield is 4.3%
4.1
0
1
2
3
4
5
6
7
8
Dividend yield - Bursa vs. FBMKLCI Constituents @ 24 Oct 2012
10
One of the Highest Yield
At 4.1%, Bursa’s dividend yield is higher than majority of the FBMKLCI constituents.
11
Peer Comparison
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.
Results for period Jan – June 2012. Source: Company Accounts/ Bloomberg
513
403 409
71
486
394
335
71
0
100
200
300
400
500
600
HKEx SGX ASX Bursa
1H11 1H12 5%
2% 18%
Revenue 1H12 (USD mil)
31.7
22.8 22.0
14.8
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
HKEx SGX Bursa ASX
Forward P/E @ 2 Nov 2012
6.1
4.1 4.0
3.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
ASX Bursa SGX HKEx
Dividend yield @ 2 Nov 2012
Source: Bloomberg
Financial Review
Financial Snapshot 12
Operating Revenue 13
Stable Revenue 14
Operating Expenses 15
12
We believe in being responsible
13
49.5 48.7 50.1 48.5
3Q 2011 3Q 2012 9M2011 9M2012
Cost-to-income ratio (%)
53.1 51.7
162.7 156.6
3Q 2011 3Q 2012 9M2011 9M2012
Operating expenses (RM mil)
38.6 37.0
114.8 115.8
3Q 2011 3Q 2012 9M2011 9M2012
PATAMI (RM mil)
Financial Snapshot Remained resilient
96.1 96.7
296.5 293.9
3Q 2011 3Q 2012 9M2011 9M2012
Operating revenue (RM mil)
1%
1% 4%
3%
1% 2% 3%
4%
47
14
32
7
14
(RM mil)
Operating Revenue Growth in other revenues offset impact of decline in securities trading revenue
152.7 137.3
38.7 40.6
85.6 95.0
19.5 21.0
9M 2011 9M 2012
Total RM296.5 mil
Total RM293.9 mil
Securities Trading Revenue
Derivatives Trading Revenue
Stable Revenue
Other Operating Revenue
1% 296.5
281.1 281.1 283.0
292.4 293.9
- 15.4
+ 1.9
+ 9.4 + 1.5
9M 2011 9M 2012
Growth contribution by revenue streams:
11% 10% 5%
8%
Securities Trading Revenue Derivatives Trading Revenue Stable Revenue Other Operating Revenue
Operating Revenue Mix (%)
9M 2012
33
28
19
8
10 2
85.6
95.0 + 2.2
+ 1.3
+3.4 +2.3 + 0.3 - 0.1
9M 2011 9M 2012
Growth contribution by revenue streams:
29.4 31.6
25.2 26.5
14.5 17.9
5.5
7.8 8.8
9.1 2.2
2.1
9M 2011 9M 2012
15
Total RM85.6 mil
Total RM95.0 mil
11%
Listing fees
Depository services
Information services
Access fees
Broker services & co-location inc.
Participants fees
(RM mil)
Stable Revenue Recorded healthy growth
23%
8%
5%
41%
8% 4%
Listing fees Depository services Information services Access fees Broker services & co-location inc. Participants fees
Stable Revenue Mix (%)
9M 2012
48
16
5
8
6
17
79.0 75.2
29.5 25.2
8.2 7.7
11.7 12.2
8.6 9.4
25.7 26.9
9M 2011 9M 2012
16
Total RM162.7 mil
Total RM156.6 mil
4%
Staff costs
Depreciation & amortisation
Marketing & development
IT maintenance
Service fees
Other operating expenses
(RM mil)
Operating Expenses Managed, in light of economic environment
5%
5%
14% 4% 8% 5%
Staff costs Depreciation & amortisation Marketing & business development IT maintenance Globex service fees Other operating expenses
9M 2012
Operating Expenses Mix (%)
162.7
156.6
- 3.8
- 4.3
-0.5 + 0.5 + 0.8
+ 1.2
9M 2011 9M 2012
Movement of expenses:
Additional Information
17
We remain accessible
Integrated Exchange 18
Securities Market 19 - 26
Derivatives Market 27 - 29
Islamic Market 30
Our Strategic Intents 31 – 32
Plans to Grow Our Business 33
International Benchmarked 34
Expanding Capital Market 35
Transforming Malaysia 36
Sound Macro Environment 37
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’
TRADING CLEARING SETTLEMENT DEPOSITORY
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
Improve liquidity Enhance vibrancy
Provide accessibility Global visibility
Expand client base
SECURITIES DERIVATIVES ISLAMIC OTHERS
Electronic trading platform for bonds
Labuan International Financial Exchange :
Non-ringgit securities
Bond /Sukuk Listing
LISTING
Diversify offerings
18
Integrated Exchange Bursa Malaysia at a Glance
Immediate Focus
35
30
9M11 9M12 Oct 12 9M11 9M12 Oct 12
26 14
Average Daily Value (RM billion)
Velocity (%) FBMKLCI No. of New Listing
Market Capitalisation (RM trillion) Fund Raised for New Listing & Secondary Market (RM billion)
1.91
12.87
1.30
(30/9/11) 1,387.13
19
10% 21%
1.42
1.17
22.83
1.72
77%
Securities Market Overview FBMKLCI hit a new high of 1,675 on 30 October 2012
(30/9/12) 1,636.66
30.9.11 30.9.12
1.50
25
31.10.12
1.46
(31/10/12) 1,673.07
8.75
1
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0 M
alay
sia
Hon
g Ko
ng
Sing
apor
e
Aus
tral
ia
Taiw
an
Indo
nesi
a
Phili
ppin
es
Thai
land
Toky
o
Fund raised (USD bil) from IPO’s YTD September 2012
RM 18.3 bil
Remaining Attractive Strong IPO activities with large listings
Source: WFE
20
(USD 5.8 bil)
Felda GV raised RM9.9 bil (YTD 3rd largest IPO in the world) IHH raised RM6.3 bil (YTD 4th largest IPO in the world)
12 21% 40
45 49 59 61 68 75 83 90 91 96 148
202
202%
Bursa’s Potential To Grow Its Velocity YTD September 2012
21
Source: World Federation Exchanges (WFE)
(%)
2,610 2,303
2,069 1,751 1,907
1,187 823 854
615
1,490 1,266 1,099 1,435 1,209 1,387
1,793 2,161
1,579 1,732 1,341
1,841 1,439 1,595 1,429
-
400
800
1,200
1,600
2,000
2,400
2,800
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 12
RM mil
1,924
497 805 911
350 472 748
874 718
1,019
2,179
1,181 1,129 1,454
1,699 1,600
-
400
800
1,200
1,600
2,000
2,400
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 YTD 2012
RM mil
68 54 50
41 46 31 25 32
23
48 36
28 35 28 31 37 42 30 34 27 34 27 28 25
Securities Market Trading Activity
22
57
31 40 39
20 23 34 32
25 32
53
34 34 33 33 29
Quarterly ADV Traded & Velocity
Average Daily Value Traded (OMT, RM mil) Turnover Velocity (%)
Average Daily Value Traded (OMT, RM mil) Turnover Velocity (%)
Annual ADV Traded & Velocity
Securities Market Trading Participation
23
From 2006 to 2009, the statistics were based on Brokers’ submission. From 2010 onwards statistics were based on Bursa’s internal system.
65 63 58
73 73 74 75
35 37 42 27 27 26 25
2006 2007 2008 2009 2010 2011 YTD Oct 2012
66 63 76
67 73 74 77
34 37 24 33 27 26 23
2006 2007 2008 2009 2010 2011 YTD Oct 2012
357
806
496 323
392 437 400
Retail (%)
Institutions (%)
Local (%)
Foreign (%)
Retail ADV Traded (RM mil)
Foreign ADV Traded (RM mil)
Retail vs Institutions Foreign vs Local
346
806
283 369 392 442 368
Securities Market Foreign Ownership
Singapore Hong Kong UK
24.6 75.4
Foreign Ownership by Nationality (%)
Foreign Nominees
Based on Market Capitalisation (as at month end)
20.4
20.6
20.8
21.8
21.9
22.0
21.7
22.
1
22.2
22.7
22.4
23.
0
23.3
23.5
23.6
(%)
24
China/Taiwan USA Mid-East Others
6.5 1.9 2.6 1.3 0.1 0.2 12.0
Positive Foreign Inflows Foreign investors were net buyers for the last 14 months out of 17 months
25
(RM bil)
(5.00)
(4.00)
(3.00)
(2.00)
(1.00)
-
1.00
2.00
3.00
4.00
5.00 Ju
n-11
Jul-1
1
Aug
-11
Sep-
11
Oct
-11
Nov
-11
Dec
-11
Jan-
12
Feb-
12
Mar
-12
Apr
-12
May
-12
Jun-
12
Jul-1
2
Aug
-12
Sep-
12
Oct
-12
Local Net Purchases/Sales Foreign Net Purchases/Sales
Increasing Weight in MSCI Malaysia’s weight in the MSCI Asia Pacific Ex Japan Index is on the rise
April 2011
2.9%
April 2012
3.4%
Sept 2012
Increased to 3.8% post Felda & IHH listings
26
9M11 9M12
27
Average Daily Contracts (000’)
Crude Palm Oil Futures FMBKLCI Futures
34.37
37.97
Derivatives Market Overview Volatility drives interest in FCPO to a new height
Open Interest since Migration to Globex®
Others
1/9/10 96,678
Peak on 28/2/12 199,215 31/10/12
178,819
10%
75% 70%
24% 29%
Oct 12
44.90
15%
84%
117
142
123 129
115 114
132 136
162 171
152
174
146
172
28
Derivatives Market Activity
Total Annual Contract (Million)
FBMKLCI Futures
Crude Palm Oil Futures
Others
Open Interest (000’)
Quarterly (Average Daily Contracts 000’)
FMBKLCI Futures
Crude Palm Oil Futures
Others
Open Interest (000’)
24%
75
%
2.6 2.5
4.2
6.2 6.1 6.1 6.2
8.4
28
7.0
20%
29
``
80%
24 22
24 23 25
28
37
32 34 35
31
40 42 1%
66
85
159
125
156
123 132
152
172
Derivatives Market Demography
* 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.
31 19 14 16 16 13 15 15 20 21 19 16
45
48 45 43 40
40 41 46 52 44 42 25
3
6 5
3 3 2 2
2
3 2 2
2
14
23
31 37 40
45 42 37
26 33
37
57
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
(%) FKLI
40 38 35 33 35 31 25 27 36 34 34 38
15 21 26 24 23 27
34 38
27 26 24 20
4 6 4
3 2 1 1 1
1 1
27 21 18
20 22 25 22 15 17
15 13 13
14 14 17 20 18 16 18 20 19 25 28 28
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
(%) FCPO
Local
Domestic Retail
Domestic Institutions
Foreign Institutions Local
Domestic Retail Domestic Institutions
Foreign Institutions
29
Foreign Retail
June - Sept 2012
June - Sept 2012
9M11 9M12
47 65 89 89
19 20
Sukuk Listing (USD$ bil)
No. of Sukuk
Bursa Suq Al-Sila’ ADV Commodity Traded
(RM bil)
1.15
No. of Trading Participants % of Shari’ah compliant Stocks
Number of Shari’ah Compliant Stocks
2.06
18%
79%
3%
Islamic Market Overview Bursa Suq Al-Sila’ gaining momentum & growth is on track
28.4
33.6
30.9.11 30.9.12
33.7
31.10.12
20
847
825 815
88
30.9.11 30.9.12 31.10.12
30
Our Strategic Intents Aligning initiatives with our strategy (1)
SI 1
SI 2
Create a More Facilitative TRADING ENVIRONMENT
Facilitate More TRADABLE ALTERNATIVES
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
Bursa Suq Al-Sila’ expanded Commodity Offering with RBD Palm Olein Revamped Options on Index Futures (OKLI) Options on CPO Futures (OCPO)
B U I L D I N G A C O M P E T I T I V E M A R K E T P L A C E
F O U R S T R AT E G I C I N T E N T S
31
32
Our Strategic Intents Aligning initiatives with our strategy (2)
B U I L D I N G A C O M P E T I T I V E M A R K E T P L A C E
F O U R S T R AT E G I C I N T E N T S
SI 3
Reshape MARKET & STRUCTURE & FRAMEWORK
SI 4
REGIONAL MARKETPLACE With Global Access (Centre of ASEAN)
Introduce Referral Agent Activities 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
ASEAN Exchanges
ASEAN Link
Create a More Facilitative TRADING ENVIRONMENT
Facilitate More TRADABLE ALTERNATIVES
Reshape MARKET STRUCTURE & FRAMEWORK
REGIONAL MARKETPLACE with Global Access (Centre of ASEAN)
33
Plans To Grow Our Business Upcoming initiatives to build a competitive market place
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
SI 1 SI 2 SI 3 SI 4
3rd Amongst 10 Most Developed Asian Countries to provide Companies' Strategic Sustainability View to Stakeholders
4th Amongst 183 Countries For Investor Protection
Ranked 4th Amongst 142 Countries for Strength of Investor Protection and ranked 9th for Efficacy of Corporate Boards World Economic Forum
The MCG Index had increased to 66.9 points in 2011 from 66 points in
2010 and 64.4 points in 2009
World Bank
Asian Sustainability Rating
MSWG
Internationally Benchmarked Improved Country Ranking & Standard
34
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”
Asia Corporate Governance Association
Expanding Capital Market Global Partnerships & Recognition
Migration of Malaysian derivatives products to CME Globex®
QDII – Malaysia Investment destination for China investors
CBRC Recognition
FTSE Upgrade
CFTC Approval
U.S. SEC Approval
“ Designated Offshore Securities Market” recognition to ease trading in Malaysian listed securities & shelf listed bonds by U.S. investors
CME Partnership
Malaysia promoted to Advanced Emerging Market status in FTSE Global Equity Index Series
We have built successful global partnerships and will continue our efforts for more business collaborations.
35
Approval from US Commodity Futures Trading Commission (CFTC) to enable Malaysian Futures brokers to deal with US customers
36
Government Transformation
Plan
Recognition & Competitiveness
Free Capital Mobility & Improved Access to
Capital Market
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
4th for Investor Protection (World Bank) 10th for Resilience in crisis (Sevcorp Int’l Business Confidence Survey) 21st amongst 134 countries for Corporate Governance Framework (World Economic Forum)
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
Transforming Malaysia Conducive Investment Environment
Sound Macro Environment
GDP Growth • Projected 4% - 5% for 2012F (Source: BNM)
Healthy International Reserves • USD138 billion @ 15th October 2012 (Source: BNM)
Strong Banking Sector & Ample Liquidity
• > 90% of assets are RM denominated • Non-performing loan at 1.8% @end April 2012 (Source: BNM)
Conducive Domestic Interest Rates • Overnight policy rate: 3.0%
Manageable Inflation • Modest 2.50 – 3.00 for 2012F (Source: BNM)
Strong Current Account in the Region
• 2012F at RM109.5 billion (Source: BNM)
37
KOAY LEAN LEE [email protected]
603-2034 7306
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 2012
INVESTOR RELATIONS CONTACT INFORMATION
E-mail : [email protected] Fax : 603-2026 3684
38
LIM SIEW CHING [email protected]
603-2034 7277
MUHAMMAD ALI [email protected]
603-2034 7673