Hong Kong exchange posts 31% rise in H1 profit despite IPO malaise

Hong Kong exchange posts 31% rise in H1 profit despite IPO malaise

Hong Kong's stock exchange operator reported a first-half revenue of $1.4 billion on Wednesday even as new listings remain far below pre-pandemic peaks
Hong Kong's stock exchange operator reported a first-half revenue of $1.4 billion on Wednesday even as new listings remain far below pre-pandemic peaks. Photo: ISAAC LAWRENCE / AFP
Source: AFP

PAY ATTENTION: Follow our WhatsApp channel to never miss out on the news that matters to you!

Hong Kong's stock exchange operator reported a "strong" first-half net profit of HK$6.31 billion ($807 million) on Wednesday, up 31 percent on the same period last year despite IPO activity being impacted by "global market fragility".

It was a "good half year for HKEX, despite continued global macro uncertainty and market fragility", bourse chief executive Nicolas Aguzin said in the earnings report.

First-half revenue rose 18 percent to $1.4 billion compared to the year before.

The bourse attributed the strong revenue result -- its "second best ever" -- to a $345 million net investment income buoyed by high interest rates, and strong performance of its external portfolio.

"In the first half of 2023, Hong Kong Cash Market trading volume and IPO activity continued to be impacted by global market fragility," HKEX said in its announcement.

Read also

Asian markets fall on China woes, US rate concerns

"The global IPO market was weak, though Hong Kong performed relatively well", it said.

PAY ATTENTION: Share your outstanding story with our editors! Please reach us through info@corp.legit.ng!

But new listings in the first six months raised just $2.3 billion, down nine percent from the year before.

The figures were also a sharp contrast to peak levels in 2020 when IPOs raised $51 billion.

Hong Kong's bourse has only recently emerged from the shadow of the city's strict zero-Covid policy, which spooked international investors and tanked the wider economy.

New listings from China's mega-companies also dried up in recent years following Beijing's regulatory crackdown on the property and technology sectors.

The bourse last month published rule changes that would allow mainland Chinese firms seeking a listing to refrain from disclosing China-related risks.

Under previous rules, those prospective IPOs had to list risk factors linked to Chinese "laws and regulations, political and economic environments, foreign exchange risks and controls" and other related risks.

Read also

Japanese economic growth smashes expectations

The bourse has denied this would lessen the scrutiny of Chinese-incorporated firms.

In its Wednesday results announcement, HKEX said the IPO market showed "signs of good momentum" in the second quarter and that it had 104 active applications for new listings as of June.

"We are pleased to see encouraging signs of a revival in our IPO market, matched by a very healthy pipeline," Aguzin said.

Average daily turnover of equity products in the first half fell by 14 percent year-on-year.

The bourse's stock price has declined by around 13 percent since the start of the year.

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.