Bursa Malaysia’s derivatives trading revenue jumped 36% to RM51.2 million (US$17 million) last year as securities average daily trading value increased 14% to RM1.79 billion (US$0.6 billion), securing a sharp increase in profits for the southeast Asian exchange.
Trading revenue from the securities market was up 15% to RM193 million (US$64.2 million) for the year, compared to RM167.9 million (US$55.8 million) in 2010.
Total number of derivatives contracts traded increased by 37% to 8.45 million in 2011, from 6.15 million a year earlier, while foreign and domestic participation in the market grew by 57% and 30% respectively.
“On the derivatives front, 2011 was a remarkable year of milestones achieved and new records established,” said Tajuddin Atan, chief executive of Bursa Malaysia. “We broke records in terms of contracts traded for both Bursa Malaysia derivatives and crude palm oil futures and celebrated the first-year anniversary of our migration onto the CME Globex trading platform.”
Bursa Malaysia’s net revenues increased 29% last year on the back of strong performance in derivatives markets. For 2010, the bourse filed RM113 million (US$37.6 million) profit after tax and minority interests.
“2011 was a challenging year for markets around the globe, marked by macroeconomic uncertainty and Europe’s persistent debt crisis. But we delivered a good set of results despite the difficult conditions and this demonstrates the tenacity and resilience of our market in times of uncertainty,” added Atan. “Our securities and derivatives markets recorded improvements in trading volume as a result of increased participation by both foreign and local investors.”
The bourse, which is a member of the Association of Southeast Asian Nations (ASEAN) exchanges, is proposing a dividend distribution of 95% of its net profit.
In December, Bursa Malaysia introduced new functionality on its derivatives market that will allow its members to trade block-sized orders. The bourse’s new negotiated large trade facility is intended to allow large trades to be executed at a single price, thereby minimising market impact cost and increasing certainty of execution.