HKEX extends lead over LSE as world’s third-most valuable bourse operator as US-China spat boosts Hong Kong listings
- The China-US dispute has driven up HKEX’s share price, firming up its lead over the London Stock Exchange in terms of market cap
- Hong Kong stands to benefit as more US-listed Chinese companies are set for secondary listings in the city
The escalation of tensions between China and the US has unexpectedly cemented Hong Kong Exchanges and Clearing’s place as the world’s third most valuable exchange operator, as it extends its lead over its London counterpart, in fourth place.
HKEX, which runs the Hong Kong stock exchange, has market capitalisation of US$47.1 billion after rising to a record on Tuesday, leading the London Stock Exchange (LSE) by the widest margin in more than two months, according to Bloomberg data. The LSE, capitalised at US$35.7 billion, is seen as a major competitor to Hong Kong after starting a cross-border investment channel with Shanghai and rejecting a takeover bid by HKEX last year.
HKEX’s shares have quickly bounced back from a March low, solidifying its position as the world’s third-largest publicly traded bourse, behind the CME Group and the Intercontinental Exchange in the US.
Deteriorating ties between Beijing and Washington are said by traders to be raising speculation that more Chinese companies trading in the US will return to Hong Kong for secondary listings, elevating the stock price. HKEX may also have benefited when it fended off competition from the rival Singapore Exchange last week to win a contract to offer derivative products linked to the underlying indexes compiled by MSCI to track stocks in Asia and emerging markets.
Shares of HKEX rose 1.8 per cent on Tuesday to HK$288 for a record close since its listing two decades ago when factoring in previous dividends. The stock has climbed 36 per cent from a March nadir, outpacing an 11 per cent gain on the Hang Seng Index in that period.