Hong Kong exchange profit down 20%, challenges to persist: CEO
Add BT as a preferred source
HONG Kong’s bourse operator on Thursday reported a 19.6 per cent drop in profits for 2022 as fee income took a hit from rising rates while geopolitical tension curbed trading and listing activities.
The profit attributable to Hong Kong Exchanges and Clearing Ltd (HKEX) last year fell to HK$10.078 billion (S$1.71 billion) from HK$12.53 billion in 2021, according to its earnings results.
That was still better than the average forecast of HK$9.92 from 27 analysts compiled by Refinitiv.
Core revenue of the bourse in the quarter dropped by 9 per cent to HK$18.37 billion from HK$20.1 billion in 2021, dragged down by weaker cash market turnover resulting from tighter market liquidity and sluggish trading.
“The broader challenges of 2022 will likely persist into 2023 – inflationary pressures, geopolitical tensions, economic malaise, and the lasting effects of the Covid-19 pandemic,” Nicolas Aguzin, CEO of HKEX, said in a release.
“However, the longer-term opportunities are still there.” The last month of 2022 saw 21 new listings on the bourse, accounting for about a quarter of total listings in the year, according to Aguzin.
Navigate Asia in
a new global order
Get the insights delivered to your inbox.
Meanwhile, trading volumes on the bourse decline last year.
Average daily turnover was HK$109 billion, down 26 per cent from HK$146.6 billion in 2021, which had been a record year for equities trading.
China’s economic slowdown, a sweeping regulatory tightening that hampered large enterprises’ fundraising outside mainland China, and geopolitical tensions have all resulted in a bleak year for new listings in Hong Kong.
Only US$12.7 billion was raised last year via IPOs and secondary listings in Asia’s most popular fundraising venue, marking a 70 per cent drop from US$43 billion raised in 2021, according to Refinitiv data. REUTERS
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
