17 OUR SUSTAINABILITY APPROACH HOW WE ARE GOVERNED FINANCIAL STATEMENTS SHAREHOLDERS’ INFORMATION ADDITIONAL INFORMATION GROUP MANAGING DIRECTOR’S MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS SEGMENTAL REVIEW Stockbroking In 2023, the Stockbroking division strategically enhanced its operational efficiencies, building upon the progress made in 2022 to navigate challenging market conditions effectively and achieve stability. The division’s concerted efforts, including the recovery of credit loss expense in the prior year, yielded significant results, with PBT surging from RM2.5 million in the previous year to RM16.1 million. Despite market challenges, the division upheld its market share, rising from 10.2% in the previous year to 10.5% as at FY2023. The completion of its algorithmic trading platform in early 2023 marked a significant milestone. Currently utilised by the division’s proprietary trading team, the platform has undergone continuous enhancement, incorporating valuable machine learning capabilities. Although the equities market remained bearish for most of the year, impacting its trading profitability, a turnaround in the last quarter saw improved performance from its traders. With this, the Stockbroking division is positive on the upcoming development of this platform, as it look forward to rolling it out to its clients this year. Meanwhile, its Equity Derivatives department continued its strong performance in 2023. The team’s issuance of Hang Seng indexrelated warrants saw active participation from investors, bolstering its market presence, and making Kenanga-issued structured warrants one of the top performing warrants in the market. Beyond structured warrants, the team has also been diligently working towards creating bespoke Over-the-Counter strategic solutions to meet the unique financial needs of corporates and strategic equity owners. The year 2023 marked significant strides in this direction, solidifying its commitment to providing client-centric solutions. The Group’s joint venture partnership with Rakuten Securities Inc., also delivered positive progress, especially with the organisation’s income diversification strategy through extension of foreign trading capabilities. In 2023, Rakuten Trade added trading access to include the Hong Kong Exchange and was the first (1st) in Malaysia to offer US Fractional Share Trading services. As a result, its foreign market brokerage income increased by 57.9% Year-on-Year. The account opening process was also revamped to improve customer experience. As of December 2023, its Malaysian trading accounts stood at 276,163 since launch, showcasing continued growth. There was also a steady increase in AUA, reaching RM4.1 billion in FY2023, compared to RM3.6 billion the previous year. Additionally, its US trading accounts recorded an increase from 27,830 accounts in 2022 to 39,687 in 2023. Looking ahead, the Stockbroking division is planning for further branch consolidation, in line with the Group’s digitalisation strategy and to improve efficiencies, while maintaining overall customer experience. The division will also continue efforts to enhance investor literacy through public education and outreach for both existing and prospective customers, with a richer and more comprehensive series of marketing and educational content. In addition to these strategic initiatives, the division’s commitment to excellence continues to be recognised through notable industry accolades, which include recognitions at the prestigious Bursa Excellence Awards 2023. The awards include ‘Best Overall Equities Participating Organisation (Champion)’, ‘Best Retail Equities Participating Organisation (Investment Bank) (Champion)’, and ‘Best Online Retail Participating Organisation (Champion)’.
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