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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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Public Bank Bhd (1295) is optimistic of solid earnings growth this year despite a tough economy and has pledged to maintain a high dividend payment.

The largest lender in the country based on market value, and among the most profitable in the region, believes it can maintain its strong earnings momentum and last year’s record profit.

“We expect 2009 to be extremely challenging. However, the past few years of building size and market share coupled with the strengthened asset quality will keep us resilient in the face of challenges,” co-chairman Tan Sri Thong Yaw Hong told the 3,600 share-holders who attended an annual general meeting in Kuala Lumpur yesterday.

Public Bank’s net profit increased 22 per cent to a record RM2.58 billion last year as it earned more from loans and other non-interest income.

Together with a planned final dividend which involved cash and treasury shares, the bank declared an equivalent of 89.8 sen gross dividend last year.
“Shareholders can expect the liberal dividend payout to continue in future, barring unforeseen circumstances,” chairman Tan Sri Dr Teh Hong Piow promised.

Still, the prospect of a deeper recession worldwide and a worsening domestic economy could make it more challenging to meet its target of 15 per cent loan growth this year, chief operating officer Leong Kwok Nyem told reporters later.

The latest 50 basis points cut in the Overnight Policy Rate (OPR) will trim two to three basis points off its net interest margin, but is not expected to have a significant impact on its profits, Leong added.

Public Bank’s core net interest margin, or the difference between what it earned on loans and paid for funds, stands at 2.4 per cent currently.

Leong said that the lower Statutory Reserve Requirement, or zero-interest deposit placed with Bank Negara Malaysia, helps to offset the impact of margin squeeze.

Falling deposit rates also helps, while its large portfolio of car loans – which locks in fixed rates for years – gives the lender an edge.

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MALAYSIAN conglomerate MMC Corp Bhd (2194) booked a 31.5 per cent fall in fourth-quarter net profit, hit by a RM141.9 million windfall tax at its power division.

MMC, which is developing the Jazan Economic City in Saudi Arabia, posted October-December net profit of RM128 million. Its full-year net profit was RM527 million, from RM552 million.

The company, which controls power firm Malakoff Bhd, said its power generation business reported lower earnings during the three-month period, after it set aside RM141.9 million for the windfall profit levy.

Malakoff owns 40 per cent of Kapar Energy, a 2,420-Megawatt independent power producer in the central Selangor state.
“The group’s performance was affected by a lower contribution from the energy and utilities division as a result of the full provision for the windfall profit levy and the impairment loss on investment in an associate,” MMC said in an earnings statement yesterday.

It said the impairment loss was worth RM50.6 million. Despite a deepening economic crisis around the globe, the company forecast its financial performance to stay firm in 2009.

“Notwithstanding the current adverse economic scenario, the board expects the group’s financial results in 2009 to be satisfactory compared to those achieved in the last financial year,” it said. It did not elaborate.

Ahead of the results, MMC’s shares rose 0.7 per cent to RM1.41 as the broader market gained 0.3 per cent. The stock slumped 78 per cent last year, underperforming the benchmark stock index’s 39 per cent loss. – Reuters

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