As a regulator and market operator, we have a duty to uphold market integrity and investor protection while ensuring that our markets remain attractive as a destination for listing, trading and investment. For this, we have remained focused on enhancing our regulatory frameworks and approaches, providing a fair and orderly market that is easily accessible with diverse and innovative products and services. We have also heightened our efforts to promote best corporate governance (“CG”) and sustainability practices among listed issuers.
We are committed to assisting the development of the Malaysian capital markets, providing the infrastructure required to create a globally competitive and vibrant marketplace. One of the key Entry Point Projects identified to drive the Financial Services National Key Economic Area (“NKEA”) under the Economic Transformation Programme (“ETP”) is Revitalising Malaysia’s Equity Markets, aiming to increase Bursa Malaysia’s market capitalisation to RM3.9 trillion by 2020 from RM1 trillion in 2010, create 8,598 jobs by 2020 and improve trading velocity from 31% of total market capitalisation to 60% in line with regional averages.
The technological requirements of our marketplace have grown in tandem with the expansion of our regional and global presence. T echnology has become crucial in enabling market access, facilitating efficient settlements and protecting the data and security of our market participants. While making upgrades that will ensure greater efficiency as well as protect the integrity and stability of the marketplace, we managed to record a 100% uptime for all three of our markets in 2015. More information on our initiatives to ensure fair and orderly markets can be found on pages 52-58 of the Annual Report 2015 (“AR2015”).
Our efforts to create value prevailed in 2015. Despite challenging operating conditions resulting from persistent volatility in the markets and depressed commodity prices, our markets remained resilient on the back of high quality PLCs and a healthy ecosystem. We remained the top destination in ASEAN for fundraising, a leader in Islamic capital market development, and continued to provide the benchmark for crude palm oil contract settlement price. We also heightened our efforts towards becoming ASEAN’s Multinational Marketplace.
Our economic value generated, distributed and retained is summarised on page 6 of the AR2015 and described in detail in the Financial Statements of the AR2015. Bursa Malaysia also received grants for the development of the bond trading platform, the development of clearing facilities and the licence for the order management system for the Derivatives Market, and the construction of an Environmental, Social and Governance (“ESG”) Index. We have disclosed information on grants received and their utilisation on page 167 of the AR2015.
The biggest risk to our financial performance in the immediate term is the ongoing volatility in the global markets. Prolonged weakness in commodity prices and the Ringgit may further weaken investor and trading sentiments, which may in turn have an impact on our revenue stream. Weaker revenue contributions from our markets may also impinge upon our ability to create value to our stakeholders. We have discussed our business opportunities and risks in more detail in the CEO’s Message and Management Discussion and Analysis as well as in the Statement on Internal Control and Risk Management sections of the AR2015.
Going forward, as we review our sustainability approach and disclosure, we will assess other possible risks and opportunities, including those posed by climate change, that may impact our operations, revenue or expenditure.
We invest in community initiatives that enhance capital market awareness, and which are linked to our business strategy, such as our Bursa Marketplace (“BursaMKTPLC”), which is a free retail online platform to reach out to 538 million people in the ASEAN nations. T he platform has enabled Bursa Malaysia to engage with its various stakeholders such as brokers, analysts, investors and the community at large.
Our infrastructure investments and services in support of BursaMKTPLC have enabled the greater community to learn, practise or start trading and become informed investors and savvy traders. Since its launch in 2014, BursaMKTPLC has received 460,000 unique visitors with a return rate of 58.9%. T here are 21,900 research reports on its repository, which have been viewed over 1.6 million times.
Whilst Bursa Malaysia practises open sourcing, we are committed to support local industries where 99% of our suppliers in 2015 were Malaysian registered companies.
We practise ethical procurement and vendor management. We require all our employees to comply with the Purchasing Manual, which sets forth the procurement framework for Bursa Malaysia, and the relevant laws and regulations in the selection of our vendors and in dealing with our suppliers.
Suppliers that meet our Environment, Health and Safety requirements will have a competitive advantage in our selection process. Where applicable, the committee appointed to evaluate tenders shall decide on the key measurements, weightage and scoring system in their evaluation of suppliers’ commitment to good environmental and social practices.
Going forward, we intend to evaluate the impact of labour practices, human rights and society in our supply chain.
Our voluntary commitment to the United Nations Sustainable Stock Exchange (“UN SSE”) Initiative affirmed our efforts to integrate global best practices in our marketplace. As a partner exchange to the UN SSE Initiative, we intend to engage more actively with other partner exchanges, investors, regulators and policy makers to shape the sustainability agenda for our capital markets.
We support and encourage international standardisation of non-financial reporting to enhance issuers’ ESG disclosures and collaborate with FTSE to provide ESG products such as our FTSE4Good Bursa Malaysia (“F4GBM”) Index.
Besides providing guidance on ESG disclosure and conducting workshops or training on non-financial reporting for listed issuers, we also conducted workshops and seminars for organisations such as the Ministry of Finance, the Employees Provident Fund and Kumpulan Wang Persaraan (Diperbadankan) to heighten their knowledge on the merits of sustainability practices.
|1||Analysis of CG Disclosure||Provide feedback to listed issuers for improvement||No. of listed issuers analysed||450 listed issuers analysed|
|2||Advocacy Programme||Improve standards of CG practices and disclosures||No. of directors and practitioners who participated||1,900 directors and practitioners participated|
|3||ESG Engagement Programme||Improve listed issuers CG and sustainability practices||No. of listed issuers engaged||200 listed issuers engaged|
|4||F4GBM Index||Improve listed issuers CG and sustainability practices||No. of index constituents||2015: 34 constituents
2014: 25 constituents
|5||ISO 27001 Certification||Address cyber attack risk||Certification for Bursa Malaysia Information Security Management System (“ISMS”) comprising:
- Securities T rading Services
- Equity Clearing
- Settlement Services and Depository Services
|2015: Certified for ISMS
2014: Certified for Securities Trading Services
|4||Procurement from local suppliers||To support local suppliers (Malaysian registered companies)||% of local suppliers||2015: 118 local suppliers (99.2% of total suppliers contracted)
2014: 129 local suppliers (98.5% of total suppliers contracted)