Hong Kong bourse posts record profit on listings, trading
HKEX has more than 500 companies in its listing pipeline
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[HONG KONG] Hong Kong Exchanges & Clearing (HKEX) reported record first-quarter profit as a surge in initial public offerings and robust trading volumes cemented its status as the top global fundraising venue.
Net income climbed 27 per cent to HK$5.2 billion (S$847 million) in the three months ended March, the exchange said on Wednesday (Apr 29). That beat the HK$4.6 billion consensus estimate from a Bloomberg survey of six analysts. Core revenue rose 22 per cent to HK$7.7 billion.
The Asian bourse rode a wave of historic activity, recording its busiest January ever for new listings. HKEX saw 40 IPOs during the quarter, raising a total of HK$110.4 billion. That figure represents a nearly six times increase from the previous year and positions the city as a top global venue for such capital raises.
Average daily stock turnover rose 13 per cent. Revenue from Stock Connect, the link with exchanges in Shanghai and Shenzhen, jumped 44 per cent to HK$1.4 billion on the back of record-high northbound volume.
The exchange attributed the growth to global investors’ diversification needs and the ongoing appeal of mainland China’s technological innovations and market reforms.
CEO Bonnie Chan said that Hong Kong’s primary market momentum remains robust. The city is maintaining its position as a leading IPO venue with a pipeline of high-quality companies that underscore its role as a premier fundraising platform for innovative and high-growth sectors, she said.
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At the same time, the bourse has been cracking down on brokers struggling with the large pipeline of listings, slamming them for filing sloppy applications. Chinese authorities have also move to limit listings in Hong Kong, after an offshore fundraising boom raised concerns over deal quality.
Looking ahead, HKEX has more than 500 companies in its listing pipeline.
To bolster its competitive edge, the exchange proposed measures last month to lower the entry threshold for dual-class shares and advanced technology firms. It also plans to extend the privilege of confidential listing applications to all prospective issuers as part of a broader effort to streamline the path to market. BLOOMBERG
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