Hong Kong Exchanges and Clearing reported a 31-percent slump in first-quarter profit on Wednesday – its biggest profit drop in nearly six years – as the city’s bourse operator posted an investment loss while initial public offerings and stock trading plunged.
HKEX’s net profit fell to HK$2.67 billion ($340 million) in the first three months of this year, while the company’s total revenue for the quarter was down by 21 percent year-on-year to HK$4.69 billion.
I’m confident we’ll remain extremely well-placed with a range of significant opportunities ahead. We have a strong team, a clear strategy and we’re fully focused on delivering our vision to build the marketplace of the future.
Nicolas Aguzin, HKEX Chief Executive Officer
Despite ongoing market volatility and geopolitical fragility in the first quarter, HKEX still showed its robustness and resiliency, said HKEX Chief Executive Officer Nicolas Aguzin.
The market’s average daily turnover slipped 35 percent to HK$146.5 billion in the first quarter of 2022, compared with a record high at the beginning of last year, but has improved 16 percent from the previous quarter.
However, there was a 16-percent year-over-year decline in core business revenue to HK$4.76 billion, as transaction and settlement fees fell with lower volumes and depository fees due to lower fees for electronic IPO services.
Aguzin said HKEX is not immune to global market sentiment that has led to a softened IPO market, reduced valuations in its investment portfolio and pricing volatility in Hong Kong’s commodities market.
However, he’s optimistic about the stock market’s potential despite its weak performance in the first quarter of 2022, saying that about 180 companies have been lined up for a listing. This shows that many companies are still interested in listing in Hong Kong.
“I’m confident we’ll remain extremely well-placed with a range of significant opportunities ahead. We have a strong team, a clear strategy and we’re fully focused on delivering our vision to build the marketplace of the future,” Aguzin said.
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HKEX will continue to leverage its strengths as a unique super-connector between the Chinese mainland and the world to better connect capital flows, he said, adding he hopes to work closely with the market to support Hong Kong’s position as Asia’s premier financial center.
HKEX shares fell 0.9 percent to a low of HK$319 in afternoon trading on Wednesday before closing down 0.1 percent at HK$321.4 on a total trading volume of HK$1.23 billion.
suzihan@chinadailyhk.com