Electronic boards display various stock prices at Exchange Square in Hong Kong on March 9, 2020. (ISAAC LAWRENCE / AFP)
Hong Kong Exchange and Clearing, the operator of the Hong Kong Stock Exchange, reported a 27 percent plunge in interim net profit amid volatility in global financial markets.
The bourse said its profit attributable to shareholders, for the six months ended June 30, dipped 27 percent to HK$4.836 billion (US$617 million) from a year ago. The company declared an annual 26 percent drop in its interim dividend to HK$3.45 per share.
In the same period, HKEX recorded total revenue and other income of HK$8.94 billion, down 18 percent from the previous year, due to the lower core business revenue; net fair value losses on the externally-managed investment funds; and higher operating expenses due to higher staff costs and professional fees
In the same period, the group recorded total revenue and other income of HK$8.94 billion, down 18 percent from the previous year, due to the lower core business revenue (lower trading and clearing fees driven by lower headline average daily trading and lower depository fees from e-IPO applications); net fair value losses on the externally-managed investment funds; and higher operating expenses due to higher staff costs and professional fees.
HKEX Chairman Laura Cha Shih May-lung said the bouse will stick to its strategic pillars — connecting China and the World, connecting Capital with Opportunities, and connecting Today with Tomorrow.
“We look forward to working closely with our clients, partners, regulators and other stakeholders to further enhance the attractiveness and vibrancy of our markets and strengthen our leadership role in shaping the future of the region’s global capital markets,” the chairman said in the company statement on Wednesday.
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HKEX Chief Executive Officer Nicolas Aguzin said the HKEX’s interim results reflect a fragile global macroeconomic backdrop, ongoing geopolitical tensions, market volatility and the continued impact of the COVID-19 pandemic.
Aguzin added that the bourse will continue to build long-term business, invest in new initiatives such as a new SPAC regime, ETF Connect and Swap Connect and market enhancements such as Derivatives Holiday Trading and a new Value-at-Risk (VaR) platform.
Conita Hung, investment strategy director at Tiger Faith Asset Management, said the bourse operator’s stock price performance in the second half of this year depends very much on the performance of the global economy and the global financial markets which are highly uncertain.
“It depends whether market turnover will increase in the second half of this year amid the uncertain market factors such as the China-concept stock listing and the political and economic relationships between China and the United States,” Hung said.
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She added that as the number of initial public offering activities are forecast to be higher in the second half of the year, the increase in IPO fees should help improving the business performance of the HKEX.
The company’s share price lost 1.55 percent to HK$341.20 per share on Wednesday.