Hong Kong Exchanges and Clearing (HKEX) delivered record profit in the second quarter as initial public offerings and trading boomed.
The bourse’s second-quarter profit rose 41% to HK$4.44 billion ($731.1 million), according to a statement Wednesday. Core revenue rose to HK$6.64 billion.
Hong Kong’s stock market has boomed this year, with its benchmark index surging and share sales posting a strong recovery as Chinese firms flock to raise capital. That in turn has boosted trading volumes, one of the main drivers of earnings for the exchange.
Average daily turnover of equity products almost doubled in the period from a year earlier to HK$220 billion, according to the bourse. Southbound turnover, or flows from mainland China into Hong Kong, soared 154% while flows the other way to Shanghai and Shenzhen rose 19%.
Share sales in Hong Kong have topped US$46 billion ($59.14 billion) this year, including a US$5 billion deal from Contemporary Amperex Technology Co Ltd., according to Bloomberg-compiled data. Strong momentum is expected to carry through into the second half as more Chinese firms pivot to Hong Kong listings amid geopolitical turbulence.
During the first half, 44 new listings debuted on HKEX, raising a total of HK$109.4 billion. The exchange had 207 active IPO applications at the end of June, more than double from the same period last year.
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“While we celebrate these achievements, we must remain vigilant in the face of external uncertainties, including tariffs, geopolitical risks, and interest rate fluctuations,” said Chairman Carlson Tong in a statement. “The bourse has also rolled out a series of measures to ease listings, including lowering revenue requirements and easing minimum float requirements, adding further momentum to the market.”
HKEX’s shares have risen 47% this year, beating the benchmark Hang Seng Index’s gain of 24.5%.
HKEX’s corporate funds recorded a HK$1.044 billion net investment income in the first half, up 16% from a year earlier, in part on a “non-recurring exchange gain” because of the appreciation of the US dollar against Hong Kong’s counterpart, HKEX said. Net investment income from cash and bank deposits dropped 30% to HK$433 million.
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HKEX fully redeemed its external portfolio during the second quarter to pay for its permanent headquarters at Exchange Square, it said. The firm received HK$4.3 billion from the redemption in the first half and expecting another HK$600 million in the third quarter.
The whole purchase will set HKEX back HK$6.3 billion, according to a statement in April.
