Bursa sees 2nd year of profit growth

Bursa Malaysia Bhd, the country’s stock exchange manager, expects profit to increase for a second 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 Yusli Mohamed Yusoff said in an interview today in Singapore. “Expect the market to be volatile but the conditions are quite good for earnings to grow.”

Bursa had a 70 per cent gain in net income to RM177.6 million (US$53.1 million) last year on higher trading volume and listing fees. Yusli’s comments contrast with a forecast that profit will fall to RM141 million in 2010, 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 in 2009. 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,” Yusoff said. “It’s low and stable interest rate has been conducive for businesses to grow.”

Bursa’s profit decreased 57 per cent to RM104.4 million in 2008, when investors shunned emerging markets amid a global financial crisis.

The government may announce more “liberalization and reform measures” this month when the stock exchange holds its 6th annual Invest Malaysia conference, Yusuf 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, he said.

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