SC revises guidelines on digital assets

Bursa Q3 net profit jumps 158.9pct to RM121.94mil, revenue at RM237.74mil

SC revises guidelines on digital assets

According to the Securities Commission Malaysia (SC), it has revised its guidelines on digital assets to regulate initial exchange offerings (IEO) and digital asset custodians (DAC). The revised guidelines would facilitate its objectives in promoting responsible innovation in the digital asset space, while at the same time, managing emerging risks and safeguarding the interests of issuers and investors. Earlier in January 2020, it had introduced a framework to enable companies to raise funds via the issuance of digital tokens in Malaysia through an IEO platform registered by the SC. Under the new guidelines, IEO platform operators will be required to assess and conduct the necessary due diligence on the issuer and review the issuer’s proposal and the disclosures in the whitepaper. The IEO platform operators are also required to assess the issuer’s ability to comply with the requirements of the new guidelines and the SC’s guidelines on prevention of money laundering and terrorism financing. The revised guidelines also included rules and regulations on DAC to facilitate interested parties who wish to provide custody services for digital assets. Digital asset custodians play an important role within the digital asset ecosystem of the Malaysian capital market to safeguard digital assets of investors.

Bursa’s Q3 net profit jumps 158.9% to RM121.94mil, revenue at RM237.74mil

According to Bursa Malaysia Bhd’s chief executive officer Datuk Muhamad Umar Swift, the Exchange’s net profit jumped 158.9 per cent to RM121.94 million in the third-quarter (Q3) ended September 30, 2020 from RM47.10 million recorded a year ago. This was attributed to higher trade feeding and clearing fees. The Q3 revenue rose 93.8 per cent to RM237.74 million from RM122.67 million, driven by higher trading revenue. For the nine months, its net profit increased 94.5 per cent to RM272.89 million from RM140.30 million, while revenue rose 52.3 per cent to RM568.27 million from RM373.16 million previously. Bursa had delivered an exceptional performance, recording the highest ever nine-month net profit since its listing in 2005, against the backdrop of unprecedented circumstances. The on-going developments with regards to Covid-19, low-interest-rate environment, the government’s stimulus packages and the gradual re-opening of the economy continue to support investor participation across segments led by domestic institutions and retail. The continuous operations of the local markets had been critical in making available the necessary liquidity and risk management tools for investors to respond in a higher volatility environment and invest in new opportunities. While key economic indicators are pointing towards an improving outlook for the Malaysian economy, the on-going developments of the Covid-19 pandemic will continue to influence the volatility and performance of the Securities and Derivatives markets. Bursa been working closely with other regulators to ensure market efficiency and improved market accessibility and liquidity to support participants during this period. It was well-positioned to continue developing the marketplace and make further progress on its strategic plans. There has been promising results after successfully conducting five listing ceremonies and holding flagship events, namely, Invest Malaysia Conference and Palm and Lauric Oils Price Outlook Conference and Exhibition being fully virtual. Each of these initiatives is important towards making Bursa’s offerings and the market to continue to remain relevant to the diverse range of investors. Investor participation continued to increase, with average daily trading value (ADV) having grown 101.8 per cent to RM4.0 billion in the nine months from RM2.0 billion previously. The additional number of trading days and the higher effective clearing fee also contributed to the increase in trading revenue, while trading velocity increased by 34 percentage points to 62 per cent year-on-year. Non-trading revenue increased by 7.0 per cent to RM110.9 million from RM103.6 million on higher market data revenue, underpinned by the rise in the number of new subscribers. Bursa would continue to build on its data-related offerings to improve non-trading revenue and ensure the long-term resilience of earnings in all market conditions.

Malaysia’s Sept trade surplus surges 49.3 per cent YoY to RM21.97 bil

According to the Ministry of International Trade and Industry (MITI), Malaysia’s trade surplus surged by 149.3 per cent year-on-year (y-o-y) to RM21.97 billion in September 2020, the highest trade surplus ever recorded for the month. Total trade, exports and imports grew by 7.5 per cent, 12.4 per cent and 1.6 per cent, respectively, in September compared to August 2020, with trade surplus recorded a significant expansion of 66.3 per cent. Malaysia’s total trade in September 2020 expanded by 5.5 per cent to RM155.88 billion compared to September 2019. Increases in trade were recorded primarily with China, Hong Kong, the United States, the Netherlands, and Taiwan. Exports rebounded by a double-digit growth of 13.6 per cent to RM88.93 billion, the highest export value ever recorded for the month of September 2020, while imports decreased by 3.6 per cent to RM66.96 billion. Furthermore, exports of manufactured and agriculture goods also registered a double-digit growth in September 2020.

On The Markets

This week, on Thursday (29Oct), the Ringgit remained at 4.16 against the USD from Monday (26Oct). Meanwhile, the Ringgit was 3.0631 to the Sing Dollar on Thursday (22Oct). On Monday (26Oct), the FBM KLCI barely moved with -0.03 points (-0.002%) to 1494.61 from previous Friday’s close of 1494.64. As at Friday (30Oct) 10:00am, the FBM KLCI trending down towards four months low at 1485.66. The U.S. stocks were bullish after receiving latest data on GDP that the economy grew at its fastest rate in the third quarter, at an annualized 33.1%. The Dow Jones Industrial Average gained 139.16 points (+0.52%) to 26,659.11 and the NASDAQ Composite index climbed 180.72 points (+1.64%) to 11,185.59.

KLCI 3 Years Chart

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