Kenanga gains from robust stock market

PETALING JAYA: Kenanga Investment Bank Bhd has benefited from a robust stock market with its pre-tax profit for the first nine months of its financial year 2020 rising to more than a decade high.

Pre-tax profit for the three quarters of its financial year hit Rm81.6mil while pre-tax profit for the third quarter topped Rm63.3mil, a seven-fold hike from the same period last year.

Earnings were largely driven by increased brokerage fees, higher net interest income, trading and investment income, as well as management fee income, the investment bank said.

It also recorded a share of profits from its joint-venture company, Rakuten Trade.

For the quarter under review, Kenanga said its net income stood at Rm289.5mil, a surge from the corresponding period of Rm110.5mil. Net income for the nine-month period ended Sept 30, 2020, stood at Rm577mil, an increase of 72% from the same period last year.

“This year has been an extraordinary year for the equity markets globally, boosted by heightened retail participation. Kenanga Group’s strong foothold in the retail segment, augmented by digital transformation that we kick-started a few years ago, put us in a pole position this year to capitalise on sudden customer shift to online broking and the surge in trading volumes.

“Despite the intense competitive landscape, we continue to grow market share and aim to sustain this traction through new digital products and innovative solutions

that are in the pipeline,” commented group managing director Datuk Chay Wai Leong.

“On many levels, this year has validated the importance of being in the forefront of technology. We are on track with our digitisation blueprint and will continue to build a robust ecosystem for our customers, accelerate growth, reinforce resilience and safeguard the interests of our stakeholders. It has been a strong year for us and we are well-positioned to move into the new year on a positive note,” he said.

Looking at digital products included Kenanga’s acquisition of 4.99% equity interest in Merchantrade Asia, an e-money player to explore digital opportunities, it said.

Kenanga also announced a partnership with supply chain financing company, Bay Group Holdings Sdn Bhd (Capbay), in a bid to transform the traditional factoring market in Malaysia.

These ventures join a joint venture with Japan-based Rakuten Inc to introduce Rakuten Trade as the first fully online stock trading platform in Malaysia.

Kenanga had also this year presented its first-in-the market algorithmic trading calls, which generates trading strategies for the retail segment.

The group is expected to roll-out a robo-advisory platform by the first quarter of next year.