HKEX boss optimistic on IPO outlook after third-quarter profit falls due to slump in investment income

Hong Kong Exchanges and Clearing posts net profit of HK$3.25 billion (US$417.9 million) for the July to September period versus HK$3.34 billion a year ago

Investment income declines 76 per cent in the third quarter to HK$155 million from HK$645 million a year earlier

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Hong Kong Exchanges & Clearing posted a 3 per cent drop in profit during the third quarter. Photo: Bloomberg

Published: 1:04pm, 27 Oct 2021Updated: 11:05pm, 27 Oct 2021

The chief executive of exchange operator Hong Kong Exchanges and Clearing (HKEX) remains positive on the outlook of initial public offerings in the city despite a marked slowdown in the last quarter.

Nicolas Aguzin said the pipeline of IPO applications stood at over 200 at the end of September, one of its highest levels on record. It includes 50 health care companies, reflecting Hong Kong’s increasing global role as a biotech funding hub

“The IPO market in the third quarter reflects the cautious sentiment amid the regulatory development in mainland China. However, the pipeline of IPOs in Hong Kong remains solid,” Aguzin said during a post-earnings conference.

The bourse will continue to introduce more measures to attract companies to list here, he added, after new listings, a major revenue stream, fell considerably during the quarter.

The slowdown in IPOs and the market downturn was a result of Beijing’s crack down on the tech sector and private tutoring sector, which started in July, resulting in investors selling shares and causing IPO activity to slow down.