“`html
Bursa Malaysia’s Q2 2025 Results: Navigating Market Headwinds with Strategic Resilience
Bursa Malaysia Berhad, the heart of our nation’s capital markets, has just released its financial results for the second quarter ended June 30, 2025. The report paints a picture of a company navigating a challenging market environment, with a notable dip in its core securities trading revenue. However, it’s not all doom and gloom. The exchange has demonstrated resilience through its diversified business segments and has continued its commitment to shareholder returns by declaring an interim dividend.
In this analysis, we’ll dive deep into the numbers, break down the performance of each business unit, and explore what the future might hold for our national stock exchange. Let’s get into it.
A Tale of Two Halves: Financial Performance Deep Dive
Overall Performance: A Challenging Quarter
At a macro level, Bursa Malaysia faced a tough quarter compared to the same period last year. The decline in trading activity on the securities market was the primary driver behind the reduced top and bottom-line figures. This led to an increase in the cost-to-income ratio to 56%, up from 45% in the second quarter of 2024, indicating higher costs relative to income.
Q2 2025 Results
Operating Revenue: RM166.7 million
Profit Before Tax (PBT): RM76.0 million
Net Profit (Attributable to Owners): RM57.1 million
Earnings Per Share (EPS): 7.1 sen
Q2 2024 Results
Operating Revenue: RM193.8 million
Profit Before Tax (PBT): RM109.3 million
Net Profit (Attributable to Owners): RM80.4 million
Earnings Per Share (EPS): 9.9 sen
The key reason for this performance dip was a significant slowdown in the Securities Market. The Average Daily Trading Value (ADV) for on-market trades and direct business transactions fell by 39.0% to RM2.4 billion from RM3.9 billion in the same quarter last year. As the exchange’s income is heavily tied to trading volumes, this reduction directly impacted trading and clearing fees.
Beyond the Headlines: A Look at Business Segments
While the Securities Market faced headwinds, the story across Bursa Malaysia’s other segments reveals a more nuanced and strategically resilient picture. The diversification strategy appears to be bearing fruit, providing stability and growth in other areas.
| Business Segment | Revenue (Q2 2025) | Change vs Q2 2024 |
|---|---|---|
| Securities Market | RM110.3 million | -22.0% |
| Derivatives Market | RM27.3 million | +2.5% |
| Islamic Market | RM5.5 million | +23.0% |
| Data Business | RM21.1 million | +10.7% |
- Securities Market: The largest segment saw its revenue fall by 22.0% due to the aforementioned lower trading activity. However, listing and issuer services revenue grew by 11.9%, thanks to a higher number of corporate exercises and structured warrants.
- Derivatives Market: This segment was a pillar of stability, posting a 2.5% revenue increase. Growth was driven by a higher number of Crude Palm Oil Futures (FCPO) contracts traded, demonstrating continued confidence in this key commodity market.
- Islamic & Data as Growth Engines: The Islamic Market was a standout performer, with revenue surging by 23.0%, propelled by higher trading on the Bursa Suq Al-Sila’ (BSAS) platform. The Data Business also showed healthy growth of 10.7%, boosted by more subscribers and the new Centralised Sustainability Intelligence (CSI) solution services.
A Reward for Shareholders: Dividend Declared
Despite the challenging quarter, the Board has shown confidence in the company’s financial position and its commitment to shareholders.
Bursa Malaysia has declared an interim single-tier dividend of 14.0 sen per share for the financial year ending December 31, 2025.
Navigating the Future: Risks and Strategic Outlook
Looking ahead, Bursa Malaysia acknowledges the uncertain global landscape, citing ongoing US trade negotiations, geopolitical tensions, and a slowing global growth forecast by the World Bank. Domestically, however, the outlook remains more resilient, with Bank Negara Malaysia projecting economic growth between 4.0% and 4.8% for 2025.
The Exchange’s strategy focuses on several key areas:
- Sustaining IPO Momentum: The exchange expects the strong IPO pipeline to continue into the second half of 2025, a key driver for listing fees and market vibrancy.
- Strengthening the Derivatives Ecosystem: Initiatives are underway to expand product offerings and strengthen the derivatives market further.
- Broadening Islamic Finance: The Exchange is committed to expanding its range of Shariah-compliant products to meet evolving investor needs.
- Leveraging Data and Sustainability: The CSI platform is expected to see increased adoption, driving transparency and creating a new revenue stream.
Summary and Investment Recommendations
In summary, Bursa Malaysia’s second-quarter results reflect the cyclical nature of its core securities business, which is heavily influenced by market sentiment and trading volumes. The decline in profit was significant but not unexpected given the market conditions. The key positive takeaways are the strong performance of its diversified segments—particularly the Islamic and Data businesses—and the consistent return of capital to shareholders via dividends. This highlights a strategic direction that is successfully building resilience against the volatility of the trading market.
This analysis is for informational purposes only and does not constitute any investment advice or recommendation to buy or sell.
- Market Volatility: The core Securities Market revenue remains highly dependent on trading volumes, which can be unpredictable.
- Global Economic Headwinds: An uncertain global environment could continue to weigh on investor sentiment and capital flows.
- Execution of Strategy: The company’s future growth hinges on its ability to successfully execute its diversification strategy, grow its IPO pipeline, and increase adoption of new platforms like the CSI.
- Cost Management: The increase in the cost-to-income ratio is a key metric for investors to watch in the coming quarters.
Final Thoughts
From my perspective, this report highlights the classic challenge for a stock exchange: its core revenue is cyclical and tied to market sentiment. However, Bursa Malaysia’s strategic push into data, Islamic finance, and derivatives is a commendable effort to build more stable, recurring revenue streams. The performance of these smaller segments is a crucial indicator of the company’s long-term health and its ability to weather the inevitable storms in the public markets.
What are your thoughts on Bursa Malaysia’s performance? Do you believe their diversification strategy will be enough to counter the volatility in the securities market?
Share your views in the comments below!
“`
