The corporate flag for Hong Kong Exchanges & Clearing Ltd (HKEX), right, and the Chinese flag, left, fly outside the Exchange Square complex in Hong Kong, China, on Monday, Sept 16, 2019. (PAUL YEUNG / BLOOMBERG)
Hong Kong Exchanges and Clearing Limited reported 26 percent year-on-year growth in net profit for the first half, buoyed by a strong performance in IPOs, stock trading and cross-border stock connect programs.
According to its interim results released on Wednesday, HKEX’s net profit achieved a record HK$6.61 billion (US$849.6 million) in the first six months. Its half-year revenue rose 24 percent from a year ago to HK$10.91 billion.
The growth was mainly attributed to a buoyant IPO market including major listings such as Kuaishou Technology and JD Logistics, and a range of new biotechnology companies
The growth was mainly attributed to a buoyant IPO market including major listings such as Kuaishou Technology and JD Logistics, and a range of new biotechnology companies. The total capital raised through IPOs surged 128 percent year-on-year to HK$211.7 billion from January till June.
The Chinese mainland recently tightened regulations on tech and tutoring companies.
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Analysts believe it presents a good opportunity for the Hong Kong Special Administrative Region since more mainland companies could choose to list in the city rather than the US due to unknown regulatory risks.
Nicolas Aguzin, the CEO of the HKEX, said that he believes the market will stabilize when everything becomes clearer.
Responding to the allegation that new economy companies listed in Hong Kong are undervalued, Aguzin said that the valuation of some new economy companies has been increasing in recent months. “Looking back (at) our history, there is no sign of that leveling off,” he said.
Meanwhile, the cross-border stock connect programs between Hong Kong and Shanghai and between Hong Kong and Shenzhen remained strong in 2021, achieving record half-yearly turnover in both northbound and southbound trading.
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Bond Connect trading also continued its growth, reaching new highs in trading volume and the number of investors, the HKEX said.