HKEX Profit Rose in Second Quarter, Sees Improved IPO Activity

By Kimberley Kao

Hong Kong Exchanges & Clearing's net profit and revenue rose in the second quarter as trading activity improved, showing signs of a recovery.

The stock-exchange operator said Wednesday that its second-quarter net profit rose 8.6% from a year earlier to 3.155 billion Hong Kong dollars, equivalent to US$405.1 million.

Revenue was up 8.0% to HK$5.42 billion, it said, with core business revenue rising 6.5% on higher trading and clearing fees from higher volumes across the cash, derivatives and commodities markets.

HKEX said its headline average daily turnover rose 18% to HK$121.6 billion in the second quarter.

HKEX has been struggling to boost performance as it faces headwinds including a prolonged stock-market slump, concerns about China's economy and foreign investors exiting the city, factors that have chipped away at Hong Kong's reputation as a destination for global listings.

However, the Hong Kong exchange operator said its initial public offering pipeline remains healthy, with 107 active applications as of June. It said it received 81 IPO applications in the first six months of the year, up 69% from the second half of 2023.

HKEX raised HK$13.4 billion from 30 new listings in the first half of the year, with fundraising down 25% from a year earlier.

It said new listings in the second quarter saw a 79% increase in IPO funds raised compared with the first quarter, showing that the IPO market is improving.

The Hong Kong government has been seeking to boost the stock market amid macroeconomic concerns, introducing measures to expand the scope of the Stock Connect program that allows mutual access between China's and Hong Kong's capital markets. The Hong Kong government last week said the measures have improved sentiment, though the "delayed U.S. interest rate cuts and concerns about the mainland's economic recovery momentum" capped gains on the benchmark Hang Seng Index, which closed the second quarter 7.1% higher than the quarter ended March.

Hong Kong's Hang Seng Index is up 1.75% so far this year.

Write to Kimberley Kao at kimberley.kao@wsj.com

Corrections & Amplifications

This story was corrected at 0529 GMT. The original version incorrectly said IPO applications in the first six months of the year were up 69% from the year-ago period. Applications were up 69% from the second half of 2023

(END) Dow Jones Newswires

August 21, 2024 01:15 ET (05:15 GMT)

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