KUALA LUMPUR (May 28): Kenanga Investment Bank Bhd’s (KL:KENANGA) net profit more than doubled to RM22.83 million in the first quarter ended March 31, 2024 (1QFY2024), from RM10.25 million a year ago, driven by higher trading and investment income, management fee income and higher share of profit from its associate company. 

The share of its associate jumped to RM13.32 million in 1QFY2024 from RM676,000 a year ago, resulting in a strong boost to its earnings.

Earnings per share came in higher at 3.15 sen in 1QFY2024, from 1.42 sen in 1QFY2023, its bourse filing showed on Tuesday.

Quarterly revenue increased 13.58% to RM204.21 million, from RM179.79 million a year before.

It did not declare any dividend for the quarter under review.

Kenanga said it sees trading volume on Bursa Malaysia trending upward as the country’s economy continues its positive trajectory.

Kenanga said it had maintained Malaysia’s gross domestic product growth forecast of between 4.5% and 5% in 2024, driven by robust services sector growth, evident from increased tourist arrivals and spending, along with strong domestic demand, backed by a lower unemployment rate and rising household income.

“This growth is expected to be bolstered by a resurgence in manufacturing and export-oriented sectors, particularly due to the anticipated technological upcycle and China’s gradual economic recovery,” it added.

Nonetheless, it flagged external risks such as a potential global economic slowdown in advanced economies due to high-interest rates and escalating geopolitical tensions, notably in the Middle East and the ongoing Ukraine-Russia war, which could disrupt supply chains and dampen sentiment.

Going forward, the group’s managing director Datuk Chay Wai Leong said in a separate statement that the group continues to be vigilant in monitoring market uncertainties and remains cautiously optimistic of the group’s outlook.

The increased trading volume on Bursa Malaysia lifted Kenanga’s stockbroking business revenue by 20% to RM84.81 million in 1QFY2024 from RM70.72 million a year ago.

The segment’s loss before tax also narrowed to RM1.25 million from RM5.33 million a year before. It attributed the loss before tax of RM1.25 million to the abnormal sell-down on selected counters in January this year.

It noted that its stockbroking division maintains a leadership position with a retail market share of 25%.

Its investment banking also registered higher revenue of RM56.34 million in 1QFY2024, from RM52.53 million a year earlier, boosted by higher foreign exchange gains. But, it incurred a loss before tax of RM2.11 million, versus profit before tax of RM1.20 million the previous year due to lower net interest income and higher credit loss expense.

Meanwhile, its investment and wealth management segment achieved higher revenue of RM53.99 million in 1QFY2024, from RM50.94 million a year ago, driven by higher management fees income. However, the segment’s profit before tax was lower at RM7.61 million, compared to RM8.84 million a year earlier.

On its monetary policy projection, Kenanga said it continues to believe that Bank Negara Malaysia will hold the overnight policy rate steady at 3% throughout 2024.

This stability is projected despite inflation risks from subsidy rationalisation, as it supports economic growth amid global uncertainties, it said.

Kenanga’s share price fell four sen or 3.4% to RM1.14 on Tuesday, bringing the group a market capitalisation of RM839 million.