Hong Kong's stock exchange operator churned out a record profit last quarter and beat estimates, as the bourse rode a trading boom spurred by global market volatility and a spate of local listings.
Hong Kong Exchanges & Clearing Ltd. reported net income of HK$4.08 billion ($686.89 million) in the three months ending March 31, up 37% from a year earlier, according to a statement Wednesday. That topped the HK$3.98 billion average estimate of four analysts.
The bourse's trading and listings have picked up since late last year after China signalled greater support to the private sector, and as US President Donald Trump's to-and-fro on tariffs created big bouts of market volatility.
"Even amidst all these volatility, deals get done," HKEX Chief Executive Officer Bonnie Chan said in an interview with Bloomberg TV on Wednesday after the results were released. She said the exchange is currently processing listing applications from more than 150 companies, and there are "no signs of the appetite abating, in fact, quite the opposite."
Hong Kong's dealmakers are optimistic about a flurry of secondary listings from mainland-traded Chinese firms this year. That would build on the Chinese government's stimulus measures. Among closely-watched listings is battery maker Contemporary Amperex Technology Co Ltd's mooted US$5 billion ($6.53 billion)-plus offering, which may become the largest globally in 2025.
Chan said more companies listed in mainland China are looking for an additional, offshore listing in Hong Kong to raise funds for overseas expansion. In addition, HKEX also stands to benefit from potential homecoming listings of US-listed Chinese firms that need "to prepare for uncertain scenarios," she said, adding that the bourse had received "a lot of inbound inquiries."
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HKEX's quarterly revenue jumped 32% to HK$6.86 billion. The latest profit surpassed the previous record of HK$3.84 billion set in the first quarter of 2021.
The exchange's average daily cash trading turnover has more than doubled to HK$249 billion year-to-date from the year-earlier period, according to data compiled by Bloomberg. It surged to a new high of HK$621 billion in early April.
The bourse's shares ended 1.6% higher on Wednesday, extending the year's gains to nearly 16% this year versus a 10% increase in the city's benchmark Hang Seng Index.
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HKEX's core business revenue surged 36% in the latest quarter from a year earlier, reflecting an increase in trading and clearing fees from higher volumes in stocks, derivatives and commodities.
A total of 17 companies debuted on the exchange in the first quarter, up from 12 a year earlier, and total fundraising surged, HKEX said.
