Developing | HKEX posts first profit growth in 3 quarters as IPOs, stocks trading revive in Hong Kong
Hong Kong Exchanges and Clearing Limited (HKEX) reported its first earnings growth in three quarters, as initial public offerings (IPOs) and stocks trading returned amid a leadership change at the city’s bourse.
Net profit at the operator of the world’s fourth-largest stock market rose 9 per cent to HK$3.16 billion (US$405 million), or HK$2.49 per share, in the three months ended June, in line with market estimates. Sales increased 8 per cent to HK$5.4 billion during the quarter, also meeting analysts’ forecasts.
That was the market operator’s most profitable quarter since March 2023, marking an auspicious start for Bonnie Chan Yiting, who took over as HKEX’s chief executive in March this year. Carlson Tong Ka-shing, a veteran accountant and regulator, took over as the exchange’s chairman on April 24.
HKEX shares dipped 0.4 per cent to HK$231 at the noon trading pause in Hong Kong before the exchange reported its earnings. The stock has fallen by 14 per cent this year.
“HKEX had a robust first half, with the second quarter seeing an upswing in market momentum and trading activity, driving record second quarter revenue and other income and profit,” Chan said in a statement. “Fundraising activity remained resilient and has shown signs of warming, with the second quarter seeing a 50 per cent quarter-on-quarter increase in new listings and a 79 per cent increase in IPO funds raised.”
Increasing IPO activity led to more fees for the exchange operator, helping HKEX raise its fee income by 7 per cent during the quarter. More shares changed hands in the second quarter, as the average daily trading turnover rose 18 per cent from last year to HK$102.7 billion. This was a gain of 22 per cent from the HK$99.4 billion of transactions in the first three months of the year.
Hong Kong’s capital market, which had wallowed in a bear market for three years during the Covid-19 pandemic, spiked in mid-April after China unveiled five stimulus measures, including supporting qualified industry leaders to raise funds in Hong Kong, and easing the eligibility criteria for exchange-traded fund products under its Connect scheme.
