WIEF-SIDC PowerTalk Moving Forward: Banking & Capital Market Trends - Tan Sri Abdul Wahid Omar Chairman, Bursa Malaysia Berhad
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WIEF-SIDC PowerTalk
Moving Forward:
Banking & Capital Market Trends
Tan Sri Abdul Wahid Omar
Chairman, Bursa Malaysia Berhad
8 December 2020Fortunate to have experienced a wide range of business
activities, organisations and challenges over 33 years
Cabinet Minister in
charge of economic
planning
Started career at KPMG First taste of CFO Fulfilled ambition as
CEO of Regional
but found that auditing job at CFO of a major PLC
telecommunications Group Chairman
was not ‘my cup of
company of PNB
tea’
1987 1991-1994 2001 2004-2008 2013-2016 2016-2018
2001-2004 2008-2013 May 2020 - Present
1988-1991 1994-2001
CEO of CEO of
Accelerated Acquired full Chairman of Bursa
Infrastructure Regional
learning at spectrum of Malaysia Bhd
development banking group
Bumiputra financial services & conglomerate Nov 2018 - Present
Merchant Bankers boardroom
Bhd exposure at Amanah
Capital Group Chairman of Universiti
Kebangsaan Malaysia
2This Covid-19 pandemic is unprecedented, triggering global
recession
Global Real GDP
% YoY 1Q 2020 2Q 2020 3Q 2020 2019 2020 YTD 2020E 2021E
World (2.1) (10.1) 2.8 (6.1) (4.0) 4.9
Major Advanced Economies (1.1) (11.7) 1.7 (6.4) (6.0) 3.8
US 0.6 (9.0) (2.8) 2.2 (3.7) (4.3) 3.1
Eurozone (3.3) (14.8) (4.3) 1.3 (7.5) (8.3) 5.2
Japan (1.8) (9.9) 0.7 (5.9) (5.3) 2.3
UK (1.7) (21.5) (9.6) 1.5 (10.9) (9.8) 5.9
BRIC (4.2) (2.7) 5.0 (3.4) (0.9) 7.4
Brazil (0.3) (11.4) 1.1 (5.8) (5.8) 2.8
Russia 1.6 (8.5) 1.3 (3.5) (4.1) 2.8
India 3.1 (23.9) 4.2 (10.4) (10.3) 8.8
China (6.8) 3.2 4.9 6.1 0.4 1.9 8.2
Asian NIEs 0.1 (4.4) (1.3) 1.6 (2.1) (2.6) 3.2
South Korea 1.4 (2.7) (1.3) 2.0 (0.9) (1.9) 2.9
Taiwan 2.2 (0.6) 3.3 2.7 1.6 0.0 3.2
Hong Kong (9.1) (9.0) (3.4) (1.2) (7.2) (7.5) 3.7
Singapore (0.3) (13.3) (7.0) 0.7 (6.9) (5.7) 4.0
ASEAN-6 1.1 (9.7) 4.3 (4.3) (3.8) 5.0
ASEAN-5 1.3 (9.2) 4.8 (3.9) (3.5) 5.1
Indonesia 3.0 (5.3) (3.5) 5.0 (1.9) (1.6) 4.5
Thailand (2.0) (12.2) 2.4 (7.1) (7.2) 5.0
Malaysia 0.7 (17.1) (2.7) 4.3 (6.4) (5.4) 5.1
Philippines (0.7) (16.9) (11.5) 6.0 (9.7) (7.8) 5.8
Vietnam 3.7 0.4 2.6 7.0 2.2 2.9 6.8
Sources: Bloomberg & CEIC (4Q 2019 - 3Q 2020); MKE Economics Research (World quarterly & annual; ASEAN-6's 2020-
2021); IMF World Economic Outlook Oct 2020 (2019-2021 for others)
3
Credit: Suhaimi Ilias, Maybank Investment Bank BerhadUnprecedented response with economic stimulus
packages and Budget 2021
Updated
Further support to growth from continued policy
Malaysia:
measures, Economicfor
particularly Stimulus Packages segments
the vulnerable & Budget 2021
1H20 2H20 1H21 2H21
Segments Measures
Labour market Wage Subsidy Program Targeted Wage Subsidy Program
Hiring and training Enhanced hiring incentives
assistance (PenjanaKerjaya), and re-skilling and up-
To preserve and
for businesses skilling initiatives
create jobs
Households
Various cash transfers (e.g. BPR and BPN)
Blanket loan Targeted loan moratorium and other repayment
moratorium for HHs assistance
For cash flow
relief and
spending support EPF withdrawals and reduction in employees EPF contribution
Businesses Various financing schemes (e.g. PENJANA Tourism Financing, Targeted
Relief and Recovery Facility, High Tech Facility)
Tax relief and other cost reduction measures
For cash flow relief
Blanket loan Targeted loan moratorium and other repayment
and business
moratorium for SMEs assistance
continuity
4
Credit: Suhaimi Ilias, Maybank Investment Bank BerhadBursa doing its part by introducing financial and non-financial
measures to help PLCs during this pandemic
Financial Related Market Measures Non-Financial Assistance / Relief Measures
Arising from Economic / Societal Impact for Managing COVID-19 Impact
Listed issuers Listed issuers
Fees Waiver Time extension and Several Flexibilities
Waiver of all listing related fees (for 12 months • Submission of financial statements and periodic reports
from end Feb 2020) for companies seeking listing • Submission of regularisation plan for PN17/GN3 and 8.03A
in ACE & LEAP Markets, and on the Main Market Listed Issuers
for companies with less than RM500mil market cap • Greater flexibility on the timing of AGM
Increase in the general mandate threshold for new issue
Rebate on Fees of securities to facilitate and expedite fundraising
Rebate of 50% on annual listing fees for year 2020
for listed issuers with market cap below RM500mil Relief to listed issuers with unsatisfactory financial
as at 31 Dec 2019 and report financial losses as condition (triggered PN17/GN3 between 17 Apr 2020 - 30
measured by Group loss after tax in Q2 2020 June 2021)
Investors
Market Participants & The Community New features in Bursa Anywhere app for CDS account holders
to open new CDS accounts, reactivate dormant & inactive
Margin Accounts Flexibilities accounts, and register for e-Dividends electronically
Flexibilities accorded by expanding list of
Expanded suite of investor education platforms and seminars
collaterals, removal of automatic liquidation of
(e.g. new Bursa Academy website, Shariah Investing Virtual
client’s account requirement, removal of
Conference, webinars for retail & institutional investors)
additional margin calls and haircut on collaterals
Amended MAIN & ACE Listing Requirements to encourage
issuers to provide securities holders with an electronic
Community Support option to subscribe to certain corporate exercises
Financial assistance to support communities,
namely the lower-income B40 and hospitals
handling COVID-19 cases
Brokers
Extension of time for submission of selected physical CDS
transaction forms to Bursa Malaysia Depository
Shortened counter service hours by market participants
(during MCO)
5In this time of crisis, it is more important than ever that
the banking & capital market fulfill our pivotal roles and
serve our purpose…
At the national level, we … At the industry level, we At the Organisation
• Mobilise funds to enable can … level, we ...
economic activity • Provide liquidity for • Protect the health
• Drive business performance businesses to sustain their and financial stability
bottom lines of employees
• Create or sustain jobs
• Offer funding and • Ensure and a fair &
• Attract investments, and flexibilities for individuals robust market
enhance the nation’s to lead decent lives (e.g.
growth home financing,
supplementary income
generation)
• Reduce costs & simplify
processes for our users
(businesses & individuals)
6As an exchange, Bursa Malaysia is an integral part of the
financial system to build a resilient economy
Fund Raised through IPO and secondary market
Bursa powers a vital, virtuous cycle
IPO Secondary Market
in the economy RM mil 9,556
10,000
Fundraising: 8,000
6,000 4,550 3,989
Access to raise capital 4,000 2,023 2,005
for businesses 2,000 663
-
2018 2019 YTD Oct 2020
YTD Oct
2018 2019
2020
Number of PLCs that
21 30 18
raised funds
Total funds raised
10.22 6.66 5.99
Businesses Domestic
(RM bil)
powering & Foreign
Source: Bursa
the Investors
economy
• 2.71 mil CDS accounts as at end Oct 2020
Investment & Hedging
Opportunities: • In 2020, the securities market has been an attractive
avenue for wealth generation, especially in light of the low
Via trading and products, we
interest rate environment
provide market participants
with • Foreign shareholding at 21.1% of market capitalisation value as at
• Secure & regulated trading end Oct 2020
platform
• Derivatives Market: Total ADC has grown 34% YTD Oct. 2020
• Assured liquidity
7Apart from healthcare and tech companies, Bursa and the
brokers have also benefited from doubling of business volume
Encouraging trade patterns from our retail investors
Highest retail ADV recorded in history Local Retail Net Buy/Sell Position
• 5-year Net Buy RM17.1bil
• As of Sept 2020, retail investors are Net Buyers at
RM11.5 bil
1400 4-year CAGR 0f 44% 1327
11,676
12,000
1200
10,000
1000
8,000
RM mil
800
6,000
RM mil
600 3,992
442 430 400 4,000 2,605
400 305
2,000
200 82
2016 2017 2018 2019 YTD Sept -
2020 -2,000 -1,229
Rising percentage contribution to total ADV
2016 2017 2018 2019 YTD
33%
19% 18% 21% Sept
17%
2020
Note: Retail ADV comprised of local and foreign retail
• Retail participation has been largely cash driven, and NOT through increased in leverage.
• Top 5 sectors that retailers traded YTD Sep 2020 are in: (1) Healthcare; (2) Industrial Products & Services;
(3) Technology; (4) Consumer Products & Services; and (5) Energy
8We are also seeing younger investors entering the market
with about two-thirds aged 26-45 years
New CDS Accounts Retail Average Daily Value (ADV) Contribution
By Age
Investors aged between 35 – 54 years old is the largest
200,000
65% 187,652 contributor to Retail ADV (50% or RM833 mil) in Sept 2020
12% 1% 2%
150,000
113,665 99,572 July-
Sept
16%
2020
100,000 18%
2H 52,225 25%
50,000 88,080
26%
1H 61,440
-
YTD Sept
18-24 25-34 35-44
2019 2020
45-54 55-64 65 and above
Others
We have also seen remarkable growth in online trading which now makes
up 46% of overall trades
10M 2020 Overall Trades 9M 2020 Retail Trades
22% Online Trades:
46% Online ADV growth of 145%
54% recorded in 10M2020
78%
Online Offline Online Offline 9We’ve seen divergence in performance across sectors…
• Market hit its bottom this year in March, coinciding with when the MCO was put in place.
• The FBMKLCI rebounded from a low of 1,219.72 on 19 Mar 2020 to a YTD 2020 high of 1,628.26 on 3 Dec 2020.
• The Government’s stimulus packages have helped to boost investor confidence.
• Active retail participation and earnings outlook have also driven share prices up, especially in Healthcare and Technology
counters.
• Out of the 13 Bursa sectorial indices, 3 recorded positive growth in the first 11 months of 2020.
BURSA SECTORIAL INDEX YTD Nov 2020 (%)
Healthcare 220.9% Healthcare
Technology 72.0% • PE peaked in August at 45x (coincided with the
Industrial Products & Services 4.7% all-time high prices in August) but retraced to
Transportation & Logistics -0.4% below 15x.
• The glove counters have retraced slightly since
Utilities -5.1%
then, while analysts maintain their
Plantation -6.7% supernormal earnings forecasts, hence,
Telecommunications & Media -8.9% resulting in lower forward PEs.
Financial Services -10.7% • Euphoria for glove stocks fizzled following
Consumer Products & Services -10.9% recent vaccine development news.
REIT -12.9%
Construction -17.7%
Property -20.0%
Energy -35.0%
• FBMKLCI is the best performing market among Emerging Markets (EM) in ASEAN (YTD Nov 2020).
Note : FBMKLCI -1.6% SET Index -10.9% JCI Index -10.9% PCOMP Index -13.1% MSCI EM 8.1%
The FBMKLCI declined by only 1.6% YTD Nov 2020, thanks to Healthcare and Glove stocks holding the
FBMKLCI level resilient.
Without these three companies (Hartalega Holdings Bhd, IHH Healthcare Bhd, Top Glove Corporation
Bhd), the FBM KLCI would have fallen by 11%.
10Closing Thoughts
• This global pandemic is cutting across global economies, corporations,
societies and individuals alike.
• Key is to keep businesses afloat and people employed. Preserve capacity
to be able to meet demand when economies reopen.
• The Banking system and capital markets play a critical role to provide
reliefs to existing borrowers and mobilise funds to finance the real
economy.
• Low interest rate environment is important to lessen debt service burden
for households and businesses alike and stimulate investment and
consumption.
• Capital market participants need to preserve the integrity of the market
and strategise how to sustain the significant increase in trading volume.
• Learning from past crises, there will always be opportunities. Stick to
purpose, play your respective part, be constructive and pragmatic, God
willing, we will come out of this crisis stronger (and wiser).
11DISCLAIMER:
These presentation slides are owned by Bursa Malaysia Berhad and/or the Bursa Malaysia group of companies (“Bursa Malaysia”). Whilst Bursa Malaysia endeavors to
ensure that the contents in this presentation are accurate, complete, current and have been obtained from sources believed by Bursa Malaysia to be accurate and
reliable, neither Bursa Malaysia or the presenter of this presentation 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. In no event shall Bursa Malaysia be liable for any claim, however arising, out of or in relation
to this presentation.
This document shall be used solely for the purpose it was circulated to you. This document is owned by Bursa Malaysia Berhad and/or the Bursa Malaysia group of
companies (“Bursa Malaysia”). No part of the document is to be produced or transmitted in any form or by any means, electronic or mechanical, including
photocopying, recording or any information storage and retrieval system, without permission in writing from Bursa Malaysia.
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