KUALA LUMPUR (July 28): Despite the deferment of planned IPO listings this year, Bursa Malaysia Bhd said it is looking to launch more innovative derivative products during the year, as part of its operational strategy forward.

Commenting on the exchnage’s outlook during a media briefing on its first half financial results, chief executive officer Datuk Muhamad Umar Swift acknowledged that the planned IPOs in 2020 has dropped to 25 from 40, due to the coronavirus outbreak which prompted companies to push back their listing schedule.

Of the 25 IPOs planned for the year, Bursa is anticipating two Main Market listings, 16 ACE Market listings and seven LEAP Market listings.

“The key thing to remember when people are taking companies to the market is that they need to backed by [financial] results. Now with the MCO (movement control order) impact upon various businesses, what we have seen is that companies are re-evaluating their business forecasts,” Muhamad Umar said.

Nevertheless, going forward, Bursa is aiming to introduce more innovative product offerings including index linked ETFs, singles stock options/ futures, options/ futures wrapped around commodity such as rubber and coffee.

Muhamad Umar said: “We want to democratise investing [by introducing more financial products], and we would like to see more [investing tools] to be provided to private banking clients and premier wealth clients.

“Derivates are risk management tool, what we are trying to do is, one is to provide interesting product to the market, and to introduce new market participants to build a greater depth in the market.”

On the views expressed that Bursa has seen relative flat growth in its derivates segment as opposed to its regional peers, Muhamad Umar said he wants to leverage on the current market momentum and take the opportunity to introduce new asset classes.

Some of the derivatives products slated to be launched this year include 10 counts of Malaysian based single stock futures (SSF), the revamped FTSE Bursa Malaysia Mid 70 Index (FM70) futures and Bursa Malaysia sectorial indices linked ETFs, pertaining to the healthcare, plantation and logistics sectors.

According to Bursa’s website, the SSF offerings that are targeted to launched by this year include CIMB Group Holdings Bhd Futures, DRB-Hicom Bhd Futures, Gamuda Bhd Futures, Genting Bhd Futures, Genting Malaysia Bhd Futures, Hartalega Holding Bhd Futures, Inari Amerton Bhd Futures, My EG Service Bhd Futures, Telekom Malaysia Bhd Futures and Top Glove Bhd Futures.

On the decision by MSCI Inc to move its licensing for derivatives products on a host of gauges to the Hong Kong Stock Exchange from the Singapore Stock Exchange, Muhamad Umar admitted that could be a hiccup to some of Bursa’s plans.

Nevertheless, he said Bursa is still keen to launch interesting indices to the local stock market and is currently still re-evaluating the impact.

When asked if retail investors are sophisticated enough to understand these sorts of products, Muhamad Umar said Bursa will work relentlessly to ensure investors have adequate knowledge to partake in such instruments and highlighted the Bursa Academy as one such avenue.

Bursa shares closed 38 sen or 3.6% lower at RM10.04 today, giving it a total market capitalisation of RM8.12 billion. Year-to-date, the stock is up 64.8%.

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