bursa malaysia berhadbursa.listedcompany.com/misc/meetingwithinvestors08.pdf · 2008-06-18 · 2...

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Bursa Malaysia and its Group of Companies (“the Company”) reserve all proprietary rights to the contents of this Presentation. No part of this Presentation may be used or reproduced in any form without the Company’s prior written permission. This Presentation is provided for information purposes only. Neither the Company nor the Presenter make any warranty, express or implied, nor assume any legal liability or responsibility for the accuracy, completeness or currency of the contents of this Presentation. It is your responsibility to verify any information before using or relying on it. BURSA MALAYSIA BERHAD Meeting with Korea Investment Holding Dato’ Yusli Mohamed Yusoff, CEO 17 June 2008 Visit us at http://www.bursamalaysia.com

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Bursa Malaysia and its Group of Companies (“the Company”) reserve all proprietary rights to the contents of this Presentation. No part of this Presentation may be used or reproduced in any form without the Company’s prior written permission.

This Presentation is provided for information purposes only. Neither the Company nor the Presenter make any warranty, express or implied, nor assume any legal liability or responsibility for the accuracy, completeness or currency of the contents of this Presentation.

It is your responsibility to verify any information before using or relying on it.

BURSA MALAYSIA BERHADMeeting with Korea Investment Holding

Dato’ Yusli Mohamed Yusoff, CEO17 June 2008

Visit us at http://www.bursamalaysia.com

2

Before 2001- Separate exchanges – KLSE, KLOFFE, COMMEX,MESDAQ

2001 - Consolidation of derivatives exchanges completed (KLOFFE + COMMEX = MDEX)

2002 - Consolidation of stock exchanges completed(MESDAQ merged with KLSE)

2004 - KLSE become a public company limited by shares -Bursa Malaysia

2005 - Listed on 18 March 2005

Our Transformation...

• KLSE: Kuala Lumpur Stock Exchange

• KLOFFE: Kuala Lumpur Options & Financial Futures Exchange

• MESDAQ: Malaysian Exchange of Securities Dealing & Automated Quotation

• COMMEX: Commodity & Monetary Exchange

3

Clearing & Depository by :Citibank & Deutsche

3 Markets:

Main Board : 663 cosSecond Board : 223 cosMESDAQ Market : 125 cos

9 Derivatives Products:

Commodity futuresEquity futures & optionsFinancial futures

Financial instruments:

Non-ringgit securitiesIslamic Sukuk crosslistings

Equities Market Derivatives Market Offshore Market

Trading

Clearing

Settlement

Depository

Trading

Clearing

Settlement

Listing

Clearing

Depository

Integration Across Products and Services

5 Bond Instruments:

M’sia Gov Securities*Gov Islamic Instruments*Central Bank PapersCagamas PapersPrivate Debt Securities

Order Matching*

Bond Market

(Trading)

Negotiation

Reporting

SINGLE EXCHANGE GROUPTotal Market Capitalisation : USD284 Bil (RM930 Bil) @ 12th June 2008

4

Minister of FinanceMinister of Finance

Securities Commission (SC)Securities Commission (SC)

Labuan International Financial Exchange

Labuan International Financial Labuan International Financial Exchange Exchange

Regulatory Framework

Central BankCentral Bank

Bursa Malaysia BerhadBursa Malaysia Bursa Malaysia BerhadBerhad

Labuan Offshore Financial Labuan Offshore Financial Services Authority (LOFSA)Services Authority (LOFSA)

5

1 Executive Director

6 Independent Directors

3 Public Interest Directors (also independent)

10 Board Members @ 16/6/200810 Board Members @ 16/6/20086 Management Committees6 Management Committees

Substantial Shareholders @ 30/5/2008Substantial Shareholders @ 30/5/2008

Dato’ YusliMohamed Yusoff, CEO

DevanesanEvanson, CMO

SelvaranyRasiah, CRO

Omar Merican, COO

Nadzirah Abdul Rashid, CFO

Yew Kim Keong, CIO

SENIOR MANAGEMENT AND SHAREHOLDINGS STRUCTURE

Minister of Finance

Capital Market Development Fund

Newton

19%

19%

9.5%

Foreign Shareholding : 26%Foreign Shareholding : 26%

6

Market Valuation & Listed Companies

375

553

444 465 482

640722 695

849

930

1106984

736 758798 816

865906

9631021

1027

987

Mar

ket V

alua

tion

(RM

b) Num

ber of Com

paniesMarket Valuation Total Listed Companies

As at 12/6/2008

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 YTD 12 June 08

ShariahCompliant

Non- ShariahCompliant

86%

843 Shariah Compliant Companies ; 86% (Mkt Cap USD194B) Source : ISBU

97%

1%1%

Main BoardSecond BoardMesdaqCall Warrants

Market Capitalisation USD284 BIL (RM930 bil)

1%

BOTH CONVENTIONAL & SHARIAH COMPLIANT

97%

Main BoardSecond BoardMesdaqCall Warrants

No. of Counters Listed 1,344

811283

135115

7

4%7%

18%

10%

4%11%4%1%

37%

4%5%

13%

4%

30%

1%5%

9%

11%

21%

1%Number of Listed Companies

DIVERSITY PROVIDES RESILIENCE

Market Capitalisation of KLCI Components

Industrial

TechnologyInfrastructure

Trading/Services

Construction

Others

Consumer Finance

PropertyPlantation

As at 30 May 2008

8

BURSA’S STRONG NICHE IN ISLAMIC CAPITAL MARKET

Expertise

Brand

Infrastructure

1

2 • Islamic finance experts within Bursa Malaysia• Access to Shariah Advisory Council (SAC)

– Close collaboration with Securities Commission on ICM1 transaction and activities• Islamic Financial Services Board (IFSB), international standard-setting organisation for

the Islamic financial services industry• International Centre for Education in Islamic Finance established to develop the global

Islamic finance industry’s human capital• Involvement of leading Islamic finance academics and industry experts as advisors to

capital markets players such as Bursa Malaysia

• Malaysia as leading centre in Islamic banking– 11 standalone Islamic Banks, of which 3 are foreign

• Pioneer in Islamic finance• Islamic friendly

– Highly regarded by Islamic investors, with Middle Eastern liquidity favoring Malaysia over other developed markets

3 • Most established Shariah-compliant legal and regulatory framework• Tax exemptions for Islamic intermediaries

– Asset managers, banking products and Takaful companies• LFX as offshore platform with significant Islamic finance activity

– Significant Sukuk activity– Potential offshore listing destination for Islamic finance products, with access to broad

pool of investors

1. Islamic Capital Markets

9

45%

55%

EFFICIENT REGULATORY FRAMEWORKStimulating Growth of Sukuk Issuance

31%

69%

2006 2007

In 2007, Malaysia has the world’s largest sukuk market of 69% or US$62 billion (RM198.4 billion) of the total issuance of corporate sukuk

Source : Bank Negara and The Islamic Capital Market Task Force (IOSCO)

Malaysia Middle East/GCC

10

OFFERS THE HIGHEST DIVIDEND YIELD

Selected Regional Markets - Dividend Yield

2.32%

2.75%

3.63%

3.92%

4.56%

4.69%

4.20%

1.62%

0.77%

3.54%

China (SHASHR)

South Korea (Kospi)

Indonesia (JCI)

Hong Kong (HSI)

Taiwan (TWSE)

Thailand (SET)

Singapore (FSSTI)

Australia (AS30)

Philippines (PCOMP)

Malaysia (KLCI)

Source: Bloomberg – Dividend yield for main regional indices as at 30th May 2008

11

ATTRACTIVE MARKET P/E VALUATION

Source: Bloomberg - P/E Valuation for main regional indices as at 30 May 2008

14.215.4

11.612.5

14.813.2

14.7 14.714.7 15.1

12.513.4 13.7 13.0

11.3

16.1

Hong Kong Indonesia Singapore Philippines Taiwan Malaysia South Korea Thailand

P/E Forward P/E

12

SIGNIFICANT FOREIGN INVESTORS ACTIVITY REFLECTS MARKET RESILIENCE

85%

82%

69% 81

%

76%

73% 83

%

78%

71%

68% 76%

69%

63%

65%

63%

58%

15%

18%

31% 19

%

24%

27% 17

%

22%

32% 24%

31%

37%

35%

37%

42%29

%

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

YTD May

08

Local Investors Foreign Investors

Breakdown of trading (by value) 1993 to May 2008

13

42%

45%

44% 54

%

44%

49% 59

%

54%

43%

40% 50

%

43%

29%

34%

37%

24%

51%

48%

45% 36

%

42% 43

% 35%

40%

51%

54% 45

%

53%

71%

66%

63%

76%

3%5%6%6% 6%6%7% 7% 11%

10%

14%

8%

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

YTD May

08

Retail Institutions Others

Breakdown of trading (by value) 1993 to May 2008

“Others”- refers to trades conducted for accounts not belonging to individuals/ institutions. Definitions of investors’ type clarified in 2004, hence reducing the type of investor falling under “others” category.

RETAIL PARTICIPATIONDrop in retail volume due to weak investors’ sentiment

14

Malaysian and Foreign Shareholdings as at 31st May 2008

Note : Foreign Nominees reflect shares owned by foreigners but held via Authorised Nominee Companies incorporated in Malaysia.

April 2008Items Total Shareholdings

(Units-Billion)%

Total Market Value(RM-Billion)

%

Direct Holdings 17.3 4.22 44.2 4.56

Foreign Nominees* 56.6 13.82 202.1 20.87

2 Malaysians 335.7 81.96 722.1 74.57

3 Total securities immobilised in CDS 409.6 100.00 968.4 100.00

1 Foreigners

Foreign Shareholdings by Nationality for Selected Countries as at 31st May 2008

Foreign Nominees76.59%

FOREIGN OWNERSHIP HIGH AT 25.4%

Hong Kong1.35%

United Kingdom1.22%

Singapore8.39% Others

11. 91%

Mid-East0.13%

United States of Americas

0.41%

15

20,2

85

11,7

03

14,5

00

19,1

04

22,1

13

26,0

35

27,0

99

24,7

97

22,1

51 30,2

83

105,500128,000

162,628 159,019 158,737 161,544145,107

125,051138,648

128,842

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 April - 12June 08

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Daily Average Volume Open Position

QUARTERLY DERIVATIVES ACTIVITY

FKLI : 51,210 contracts on 26 March 08

FCPO : 37,231 contracts on 13 June 07

Total : 73,230 contracts on 26 March 08

Record Daily Volume

16

2 LEADING DERIVATIVES PRODUCTS

51%45%

4%

Total contracts traded FY 2007 = 6.2 millionTotal contracts traded FY 2006 = 4.1 million

KL Composite Index Futures (FKLI)Crude Palm Oil Futures (FCPO)

3-Month Kuala Lumpur Interbank Offered Rate Futures (FKB3)

54%

7%

39%

50%

25% in 2007

57%40%

3%

51%47%

2%

94% in 2007

Total contracts traded Q1 2008 = 1.8 millionTotal contracts traded Q1 2007 = 1.6 million 13%

17

DERIVATIVES MARKET DEMOGRAPHYFKLI

* Local - A local participant is an individual who owns a seat in the Exchange, registered with SC and is allowed to trade all futures contracts listed on the Derivatives Exchange for his or her own account.

31%19% 14% 16% 16% 13% 15% 17%

45%48%

45% 43% 40% 40% 41% 43%

6%5% 3% 3% 2% 1%

14% 23% 31% 37% 40% 45% 42%3%

2%

39%

2001 2002 2003 2004 2005 2006 2007 YTD April 08

Locals Domestic Retail Domestic Institutions Foreign Institutions

KLCI Futures

18

* Local - A local participant is an individual who owns a seat in the Exchange, registered with SC and is allowed to trade all futures contracts listed on the Derivatives Exchange for his or her own account.

40% 38% 35% 33% 35% 31% 25% 27%

15% 21% 26% 24% 23% 27% 34% 37%

27% 21% 18% 20% 22% 25% 22% 14%

14% 14% 17% 20% 18% 16% 18% 21%

2001 2002 2003 2004 2005 2006 2007 YTD April 08Locals Domestic Retail Domestic Institutions Foreign Institutions

Crude Palm Oil Futures

DERIVATIVES MARKET DEMOGRAPHY FCPO

19

LIBERALISATION EFFORTS – NO CAPITAL CONTROL

Accelerate tax restructuring: Reits (15% local, 20% foreign): Corporate tax (25% - 2009,

26% - 2008)

Liberalisation of Foreign Listing & Dual Listing

No Capital Gains TaxNo Property Gains Tax

Re-introduction of regulated short selling (RSS) and stock borrowing & lending (SBL)

Admission of 5 foreign fund managers (Aberdeen, Nomura, BNP Paribas, Credit Agricole, Franklin Templeton Investments)

Admission of 5 foreign brokers (UBS, CLSA, CSFB, Macquarie, JP Morgan)

20

PROGRESSIVE BUDGETARY MEASURES

LOWER CORPORATE TAXES & SINGLE TIER TAX SYSTEMTo deliver attractive earnings ratio and improve the investability

ATTRACTING MIDDLE EAST FUND3 new stockbroking licensesTax incentives for Islamic stockbroking

ENCOURAGE INTERNET-BASED INVESTINGFully negotiable commission rate

A BOOST TO FUND MANAGEMENT INDUSTRYForeign ownership will be allowed up to 70%Tax exemption on Islamic fund management fees activities till 2016

STIMULANT FOR PROPERTY SECTORMonthly withdrawal from EPF for mortgage repayment50% stamp duty exemption for house less than RM250,000

21

Infrastructure

RSS/SBL Financial Market Trading Platform : Fixed IncomeDirect Market Access : DerivativesBursa Trade Securities

ProductsComplete launch of new FBM Index SeriesFTSE Bursa Malaysia 30 ETF Dow Jones Islamic Market Malaysia Titans 25 ETF or MyETF

Regulatory

Revised listing feesDealers’ representatives mobilityReduced trading fees for derivatives contracts Revised clearing fees

PLCs

CMDF – Bursa Research Scheme IR Incentive ProgrammeMalaysia Investor Relations Association (MIRA)Cross border listings frameworkUnification of 2 Boards

ENHANCING MARKET ATTRACTIVENESS BROADENING MARKET ACCESS

`

22

EXCHANGE’S TARGETS

Velocity

Growth in derivatives contracts traded

56% 46%

Target 1Q08

50% 13%

i

Growth in Velocity to be driven by :Improvement of Infrastructure

Introduction of More Products

Other Initiative

ETF, Reits & Warrants

Retail Plan

Market Making

Growth in Daily Average Contracts to be driven by:

FUPO

Market Making

DMA DerivativesBursa Trade Securities & DMA Equities

Bursa’s KPI 2008

Improvement of Infrastructure

Introduction of New Product

Other Initiative

23

Dubai Gold & Commodities Exchange Development of derivatives markets

Multi Commodity Exchange of India Limited Development of commodities market and for cross listing of products

Dalian Commodities Exchange Joint organizing of “China International Oil and Oilseeds Conference”.

Australian Securities Exchange Facilitating communication channels and fostering relations

Singapore Exchange Derivatives Trading Limited Exploring future business relationship opportunities

NYSE EuronextTechnology Solutions Provider for equities, derivatives & DMA platform: Through NYX Advanced Trading Solutions

GLOBAL NETWORK

Korea Exchange Development of Financial Market Trading Platform for the bond market in Bursa Malaysia

The Agricultural Futures Exchange of Thailand Development of commodities and futures markets

Ho Chi Minh City & Hanoi Securities Trading Centre Facilitating communication channels and fostering relations

Tokyo Stock Exchange Providing mutual cooperation on personnel training & information exchange

PT. Bursa Berjangka Jakarta Development of futures and commodities markets

Hong Kong Exchanges & Clearing Sharing market surveillance information

24

Q&ATHANK YOU