Bursa Derivatives eyes gold, precious metals futures

Bursa Derivatives eyes gold, precious metals futures
Business & Markets 2013
Written by Afiq Isa of theedgemalaysia.com
Friday, 19 July 2013 09:53

KUALA LUMPUR: BURSA MALAYSIA BHD []’s unit Bursa Malaysia Derivatives is set to introduce new commodity derivatives such as gold futures by the year-end as it seeks to diversify its income stream.

Bursa Malaysia Derivatives Bhd CEO Chong Kim Seng said yesterday it is working on bringing more derivative instruments to the local futures exchange.

“We need to become full-fledged (exchange operator) and diversified. We are aware of the need for more margin hedging instruments,” he said after Bursa Malaysia announced its financial results for the second quarter ended June 30 (2Q13).

“The gold and precious metals business is hotly discussed at the moment, so we are hoping to present them to the market at some point in time,” added Chong.

Although he did not elaborate, earlier this month, a newswire reported that Bursa Derivatives has plans for a rollout of a gold futures contract that will be traded in ringgit and 100g denominations.

“We are also working on revitalising Malaysian government securities with a bond futures contract, especially in light of the US Federal Reserve’s action,” Chong said, referring to the tapering of bond purchases by the Federal Reserve by next year.

Meanwhile, Bursa Malaysia yesterday reported earnings of RM54.82 million or 10.3 sen per share for 2Q13, up 45% from RM37.73 million the previous corresponding quarter. Revenue rose 24% to RM130.35 million from RM105.38 million.

Earnings stood at RM93 million or 17.5 sen per share for the first half of 2013 (1H13), up 19% from one year previously.

Revenue came in at RM223.9 million, a 13% increase from 1H12.

The better earnings was largely attributed to increased trading participation after the conclusion of the 13th general election held in May, with net profit and revenue showing quarter-on-quarter improvements of 43% and 18% respectively.

Bursa has also announced a single-tier interim dividend of 16 sen and a special dividend of 20 sen for the quarter.

Bursa Malaysia CEO Datuk Tajuddin Atan said it expects to see more IPOs in 2H13 after seven IPOs approved for listing.

“This month alone we have three IPOs, so there is a great amount of interest from companies seeking to raise funds here,” he said.

The exchange saw seven new listings in 1H13, with funds raised from the listings and secondary market at RM10.43 billion compared with RM13.88 billion in the same period last year.

Tajuddin was also optimistic on the prospect of exchange-traded bonds and sukuk (ETBS), but stressed the need to increase public awareness on how the financial instrument works.

“There needs to be more familiarisation on ETBS, not only from the retailer’s perspective but also the issuer’s,” he said.

DanaInfra Nasional Bhd is the first issuer of an ETBS in Malaysia, with the DanaInfra Retail Sukuk listing in Bursa last February.

The retail sukuk was issued to fund the CONSTRUCTION [] of the Sungai Buloh-Kajang mass rapid transit line which is estimated to cost in excess of RM20 billion.



This article first appeared in The Edge Financial Daily, on July 19, 2013.

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