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Bursa Malaysia Bhd, the exchange operator posted a 10% decrease in its net profit for the third quarter ended Sept 30, 2010, chalking RM27.7mil against RM30.75mil a year earlier. But on a quarter-on-quarter basis, Bursa’s net profits declined only marginally.

One of the reasons for its lower profit (when compared with a year ago) was because of a one-off rise in collection of central depository system (CDS) fees in the previous corresponding period.

“There was recognition of prior periods’ CDS fees of RM4.7mil charged to authorised depository agents in the previous corresponding period,” Bursa said in its notes to the accounts.

In a statement it said that total expenses were 9% higher at RM141.7mil for the nine-month period of 2010. The increase was attributed to higher staff cost due to staff development expenses and remuneration adjustments. “The higher operating expenses were also attributed to the accelerated depreciation and write off of Bursa Trade Derivatives and related IT systems.”

It added that these increases were partially offset by decreases in market development expenses and effective optimisation of IT maintenance cost.

Bursa also said its revenue for the third quarter rose to RM86.76mil from RM86.29mil it gained for the same period last year.

It said equities trading revenue increased by 7% to RM40.7mil for the quarter, while daily average trading for on market trades and direct business trades was higher at RM1.48bil from RM1.38bil a year ago.

“Derivatives trading increased by 5% to RM9.6mil and total contracts traded for the quarter was 1.58 million, up from 1.51 million traded in third quarter 2009,” it said.

In a statement yesterday, Bursa chief executive officer Datuk Yusli Mohamed Yusoff said it made relatively good progress throughout this year and this was translated to consistently positive financial performance for the group.

“Our market has proven its resiliency and our sustainable growth thus far is driven by strong trading value and increased trading activity in our market,” he said.

Seow Mee Hon from DBS Vickers Research said though there was a slight decrease on net profit (year-on-year), Bursa’s fourth-quarter results would be more positive, giving the positive capital market activities in the coming months.

“Major new listing such as Petronas units’ (Petronas Chemicals Group Bhd and Malaysia Marine and Heavy Engineering Holdings Bhd) listing that was scheduled in the fourth quarter will contribute positively to Bursa’s fourth-quarter results,” she told StarBiz in a phone interview yesterday.

Bursa’s earnings per share for the quarter was 5.2 sen versus 5.8 sen.

For the nine months ended Sept 30, its net profit rose to RM83.26mil from RM81.27mil a year ago while revenue was RM259.14mil versus RM245mil previously.

Bursa’ shares closed at RM8.35 yesterday with 571,800 shares traded.

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I posted the criteria for PN17 companies and here in this posting I will outline the criteria to be classified as GN3 company. GN3 classification is applicable for ACE market companies.

Pursuant to Rule 8.04(2) of the Listing Requirements, where a listed corporation triggers any one or more of the following Prescribed Criteria, it must comply with the provisions of Rule 8.04 and this Guidance Note:

(a) the shareholders’ equity of the listed corporation is 25% or less of the issued and paid-up capital of the listed corporation;

(b) where the listed corporation has incurred loss in any 1 full financial year commencing on or after its listing, which equal to or exceed the amount of its shareholders’ equity at the end of the said financial year and the shareholders’ equity is equal to or less than 50% of the issued and paid-up capital of the listed corporation at the end of the said financial year;

(c) where the listed corporation has incurred aggregated losses in any 2 consecutive full financial years commencing on or after its listing (“said financial period”) -

(i) which exceed the amount of its shareholders’ equity at the end of the said financial period;

(ii) the loss incurred in the second full financial year of the said financial period is 50% or more of the loss incurred in the first full financial year of the said financial period; and

(iii) the shareholders’ equity is equal to or less than 50% of the issued and paid-up capital of the listed corporation at the end of the said financial period;

(d) receivers or managers have been appointed over the asset of the listed corporation, its subsidiary or associated company which asset accounts for at least 50% of the total assets employed of the listed corporation;

(e) a winding up of a listed corporation’s subsidiary or associated company which accounts for at least 50% of the total assets employed of the listed corporation;

(f) the auditors have expressed an adverse or disclaimer opinion in the listed corporation’s latest audited financial statements;

(g) the auditors have expressed a modified opinion with emphasis on the listed corporation’s going concern in the listed corporation’s latest audited financial statements and the shareholders’ equity of the listed corporation is 50% or less of the issued and paid-up capital of the listed corporation;

(h) a default in payment by a listed corporation, its major subsidiary or major associated company, as the case may be, as announced by a listed corporation pursuant to Guidance Note 5 and the listed corporation is unable to provide a solvency declaration to the Exchange;

(i) the listed corporation has suspended or ceased -

(i) all of its business or its major business; or

(ii) its entire or major operations,

for any reasons whatsoever including, amongst others, due to or as a result of -

(aa) the cancellation, loss or non-renewal of a licence, concession or such other rights necessary to conduct its business activities;

(bb) the disposal of the listed corporation’s business or major business; or

(cc) a court order or judgment obtained against the listed corporation prohibiting the listed corporation from conducting its major operations on grounds of infringement of copyright of products etc; or

(j) the listed corporation has an insignificant business or operations. This is not applicable to a Sponsored Corporation during the Sponsorship Period.

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Many would have wondered what criteria that caused a company to classified as PN17 by Bursa Malaysia. PN17 are only referred to distress companies in the Main market.

Below are the criteria:

Pursuant to paragraphs 8.04(2) of the Listing Requirements, where a listed issuer triggers any one or more of the following Prescribed Criteria it must comply with the provisions of paragraph 8.04 and this Practice Note:

(a) the shareholders’ equity of the listed issuer on a consolidated basis is 25% or less of the issued and paid-up capital (excluding treasury shares) of the listed issuer and such shareholders’ equity is less than RM40 million;

(b) receivers or managers have been appointed over the asset of the listed issuer, its subsidiary or associated company which asset accounts for at least 50% of the total assets employed of the listed issuer on a consolidated basis;

(c) a winding up of a listed issuer’s subsidiary or associated company which accounts for at least 50% of the total assets employed of the listed issuer on a consolidated basis;

(d) the auditors have expressed an adverse or disclaimer opinion in the listed issuer’s latest audited financial statements;

(e) the auditors have expressed a modified opinion with emphasis on the listed issuer’s going concern in the listed issuer’s latest audited financial statements and the shareholders’ equity of the listed issuer on a consolidated basis is 50% or less of the issued and paid-up capital (excluding treasury shares) of the listed issuer;

(f) a default in payment by a listed issuer, its major subsidiary or major associated company, as the case may be, as announced by a listed issuer pursuant to Practice Note 1 and the listed issuer is unable to provide a solvency declaration to the Exchange;

(g) the listed issuer has suspended or ceased -

(i) all of its business or its major business; or

(ii) its entire or major operations,

for any reasons whatsoever including, amongst others, due to or as a result of -

(aa) the cancellation, loss or non-renewal of a licence, concession or such other rights necessary to conduct its business activities;

(bb) the disposal of the listed issuer’s business or major business; or

(cc) a court order or judgment obtained against the listed issuer prohibiting the listed issuer from conducting its major operations on grounds of infringement of copyright of products etc; or

(h) the listed issuer has an insignificant business or operations.

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