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HKEx annual profit up 14% as expected on disappointing stock connect boost

[HONG KONG] Hong Kong's stock exchange operator reported on Wednesday a 14 per cent increase in annual profit as expected, with disappointing trading on the stock connect with Shanghai launched in November capping profit growth from the programme.

Hong Kong Exchanges and Clearing Ltd, as it is formally known, reported a net profit for 2014 of HK$5.17 billion (S$912.3 million), in line with analysts' expectations according to Thomson Reuters data.

HKEx Chief Executive Charles Li has banked on the stock connect programme, which allows investors in mainland China to buy Hong Kong shares and vice versa, to boost falling trading volumes in the financial hub.

Daily trading volumes via the scheme, however, have remained lacklustre, due mainly to regulatory and technical hurdles that make the scheme unappealing to many institutional investors.

The exchange's shares have risen 3 per cent this year, underperforming the city's benchmark Hang Seng index.