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UOB KayHian 4Q earnings down by nearly half as investor sentiment turns cautious

PC Lee
PC Lee2/28/2019 05:40 PM GMT+08  • 2 min read
UOB KayHian 4Q earnings down by nearly half as investor sentiment turns cautious
SINGAPORE (Feb 28): UOB KayHian has reported 4Q earnings of $11.3 million, down 48.9% from a year ago.
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SINGAPORE (Feb 28): UOB KayHian has reported 4Q earnings of $11.3 million, down 48.9% from a year ago.

The securities brokerage says trading volumes across regional markets where it operates started the year strongly but investor sentiment turned cautious in the second half of the year, especially in the last quarter arising from trade tensions and rising interest rate environment.

Group full-year pre-tax profit decreased 4.1% to $86.4 million and after tax profit decreased slightly by 2.2% to $75.8 million.

Commission income declined by 5% to $238.1 million. Interest income rose 13.5% to $110.9 million with more lending activities. Other operating income reduced 7.5% to $25.9 million with lower corporate finance activities.

Commission expenses fell 5.5% to $53.8 million while personnel expenses increased slightly by 3.4% to $130.4 million.

An impairment allowance of $1 million was made to write down the goodwill in a Thai subsidiary. Finance expenses increased 16.8% to $37 million mainly due to higher lending activities and rising interest rates.

For FY18, earnings came in at $74.8 million, 1.9% lower than a year ago as total income fell 16.3% to $9.3 million.

As of Dec 31 2018, the group’s net assets were $1.47 billion and there were no significant changes in the composition of group balance sheet items except for trade-related balances.

UOB KayHian says a more dovish tone from US Federal Reserve and more encouraging US-Sino rhetoric has brought some relief to the markets in January and February 2019 where we saw regional markets rally.

“However we expect market uncertainties to be a feature of 2019 within global economies to prevail over regional stock markets in which we operate. As such we remain cautious on our business prospects for the rest of the financial year,” says the group.

The directors has proposed a first and final one-tier tax exempt dividend of 4.7 cents per share for FY18.

Shares in UOB KayHian closed 1 cent lower at $1.25 on Thursday.

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