Hong Kong securities trading up 20% in first half, HKEX profit up 1%

[HONG KONG] Hong Kong Exchanges and Clearing (HKEX) on Wednesday reported a 1 per cent increase in first-half profit, as higher trading revenue made up for investment losses.

Average daily securities turnover was 20 per cent higher in the first six months of the year than in the same period in 2019, as market volatility boosted trading and clearing fees that account for more than half of the company's revenue.

However, a sharp decline in investment income, due to losses on certain investment schemes, particularly in March, meant HKEX's net profit was HK$5.23 billion (S$919.4 million) for the first six months of 2020 compared to HK$5.21 billion in 2019.

Revenue in the second quarter was boosted by secondary listings by Chinese tech firms Netease and JD.com, which raised a combined US$7.6 billion.

"The growing trend of US-listed Chinese companies seeking secondary listings on the exchange has brought, and will continue to bring, diversity and vibrancy to Hong Kong's capital markets," HKEX chairman Laura Cha said in the results filing.

HKEX hopes to attract more US-listed Chinese firms, making use of a 2018 rule change which eased restrictions on secondary listings, and potentially benefiting from Sino-US political tensions.

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Other companies including travel giant Ctrip and Baidu were considering Hong Kong listings, Reuters reported earlier this year.

HKEX was fifth among global exchanges ranked by the amount raised by companies in initial public offerings in the first half, according to Refinitiv data.

Including Netease and JD.com's secondary listings would place it second.

Average daily volume of lots traded on the HKEX's subsidiary the London Metal Exchange rose by 1 per cent to 625,000.

REUTERS