Hong Kong Exchange Profit Falls 27% on Weak Listings, Trading

The operator of Hong Kong’s stock exchanges and the London Metal Exchange reported a 27% fall in profit on Wednesday for the first half of 2022.

Hong Kong Exchanges and Clearing Ltd (HKEX) suffered a notable decline in public listings and trading at its two Hong Kong exchanges from both China’s economic slowdown, plus lingering political tension.

HKEX’s profit dipped to HK$4.8 billion ($612 million) in the first six months from HK$6.6 billion in the same period last year, the company said in an exchange filing.

Revenue at the company, which operates the Stock Exchange of Hong Kong, the Hong Kong Futures Exchange and the London Metal Exchange, fell 18% to HK$8.9 billion from last year’s HK$10.9 billion.

The weaker performance was “set against a fragile global macro economic backdrop, ongoing geopolitical tensions, market volatility and the continued impact of the pandemic,” Nicolas Aguzin, CEO of HKEX, said in a release.

HK Daily Turnover Down 27%

Average daily turnover in Hong Kong’s securities market declined by 27% in the first half to HK$138.3 billion, from a record high in the first six months of 2021.

Listing activities crumbled as Covid restrictions curbed bankers’ travels to the mainland, with uncertainties over a new offshore listing rule and US-China audit spats weighing on investor sentiment.

Only $2.4 billion has been raised this year via IPOs and secondary listings in Asia’s most popular fundraising venue compared with $30.3 billion by the same time last year, according to Refinitiv data.

In the global listing league tables, Hong Kong Exchanges and Clearing’s ranking has dropped to 10th this year from third last year.