First quarter profit at Bursa Malaysia Berhad has risen 44% year-on-year to RM40.5m (£8.2m) driven in part by an upturn in derivatives trading.

According to the borse, trading revenue for the derivatives market posted an increase of 53% to RM13m (£2.6m) in the first quarter of the year compared to RM8.5m (£1.73m) in the corresponding quarter in 2010.

A total of 2.2m derivative contracts were traded in the first quarter of the year, almost double the 1.4m in the same quarter in 2010.

The Exchange’s main derivatives product, the Crude Palm Oil Futures (FCPO) contract, recorded an increase of 62% to 1.51 million contracts traded compared to 930,000 in the corresponding period last year.

Increasing volatility in commodity prices for hedging purposes, as well as the high prices for crude palm oil contributed to the increased volumes for FCPO.

The Kuala Lumpur Composite Index Futures (FKLI) contract also posted a volume increase of 40% to 610,000 contracts compared to 430,000 in the first quarter of 2010.

Bursa Malaysia’s chief executive officer, Dato’ Tajuddin Atan said, “The strong performance this quarter is largely attributed to the increase in trading revenues from our two core business activities; securities and derivatives trading.

“We see the return of positive market sentiments and high liquidity, as well as strong expectations from the various government transformation programmes contributing to an increase in trading activities in the securities market.

“For derivatives, we see the increase largely due to both the cutover of derivatives trading on to the CME Globex trading platform, as well as the increased volatility of commodity prices.”

The positive results reflect the significant growth that the region as a whole has experienced over the past year. Trading volumes on the region’s largest exchange, the Singapore Exchange were up almost 80 year-on-year in March, its best month on record.

For more on the growth of the South East Asian derivatives industry, see FOW magazine in May,