Bursa Malaysia Bhd, the Malaysian stock exchange holding company, anticipates challenges affecting the market to remain in the second half (2H) of the year.
Chief executive officer Tajuddin Atan told a reporters at a press briefing on its 1H results, that the impact from the issues that affected the market during the first six months are expected to continue.
While foreign inflows were strong during the first quarter, the second quarter saw global and local events that including the announcement of a new central bank governor, Brexit, MSCI rebalancing and palm oil prices.
“Despite challenging market conditions, our profit after tax and minority interest (PATAMI) for first half of 2016 is the best first half results since 2008,” Tajuddin said, adding that the bourse is “cautiously optimistic” about the remainder of the year, acknowledging pockets of opportunities for investors with long-term horizons.
Bursa Malaysia recorded a PATAMI of MYR99.4 million ($24.32 million) in the period, 3 per cent higher than a year ago.
On listings on Bursa Malaysia, Atan noted that the sizes of the exercises were smaller than a year ago as there were no mega listings in the period. Fund raised from new listings and secondary market fell 31.9 per cent in 1H 2016 compared with 1H 2015.
Secondary market fundraising came in at MYR7.1 billion ($1.74 billion) compared with MYR8.1 billion ($1.98 billion) a year ago.
New listings in 1H this year raised a total MYR400 million ($97.9 million), starkly contrasting the MYR2.9 billion ($709.6 million) in the same period last year. Both 1H periods in 2015 and 2016 had five listing exercises.
Bursa Malaysia said it continues to work on making the exchange attractive for companies to go public, and is setting up a team to look into this area.
“Efforts have been made, we are setting up a team to work on this area but the effect won’t be immediate. We need to get feedback from the market and the Securities Commission is proactive in facilitating us on this,” Atan said.
In July last year, the bourse announced updates in its listing requirements for the ACE Market, leading to a growing number of ACE Market listings this year.