HKEX posts bright first-quarter profit, boosted by surge in foreign trading of A shares

Hong Kong Exchanges and Clearing (HKEX), the city’s stock exchange operator, reported better-than-expected first-quarter earnings, as investment income and surging cross-border trading of mainland Chinese shares boosted revenue.

The operator of Asia’s third-largest stock market reported on Wednesday a 2 per cent rise in net profit to HK$2.6 billion (US$332 million) for the January-to-March quarter from the same period last year, beating the market consensus estimate of a 6 per cent decline, according to analysts polled by Bloomberg.

“It’s a decent result,” said Wong Chi-man, head of research at Hong Kong-based brokerage China Galaxy International Financial Holdings.

“It has a high base of turnover volume in the first half of last year, which is a negative factor to its earnings. But net profit still grew 2 per cent even though average daily turnover declined by 30 per cent,” Wong said.

Revenue rose 3 per cent to HK$4.3 billion, driven by a record income of HK$232 million from the cross-border Stock Connect programme, which allows mainland Chinese and Hong Kong investors to trade in each other’s market, according to the HKEX.

The turnover of northbound trading through the Connect climbed to its highest ever quarterly level for the three month ended in March, reaching a total of 75 billion yuan (US$11 billion) on March 5, HKEX said in the statement.