NewHow Hong Kong stock exchange managed to profit even as stocks lost

Hong Kong Exchanges and Clearing, the operator of the local stock and futures markets, on Wednesday reported a 81 per cent year-on-year net profit growth for the third quarter despite a market slump during the period, thanks to a one-off gain from property sales.

Third-quarter profit stood at HK$2.33 billion, compared to HK$1.29 billion a year earlier. It, however, fell 7.5 per cent short of the net profit in the second-quarter, when the market was on a roll. Excluding the one-off gain, the third-quarter profit stood at HK$1.89 billion, up 46 per cent a year earlier but down 25 per cent from the second quarter.

For the first nine months, HKEx profit stood at HK$6.43 billion, up 76 per cent year on year.

“Trading activities on the equity markets slowed following record-higherin second quarter 2015, as market sentiment turned cautious over the global and mainland’s economic prospects,” the HKEx said in the result statement.

In the third quarter, the Hang Seng Index fell 20.6 per cent, dragging the benchmark into negative territory for the year. It was the worst quarter for the blue-chip index since the July-September quarter of 2011.

However, this did not affect HKEx profit as it sold a property for HK$445 million on a disposal of a leasehold property in the third quarter. Total revenue rose 49 per cent in the first nine month to HK$10.6 billion, of which HK$165 million was generated by the Stock Connect scheme between Hong Kong and Shanghai launched in November.

Average turnover in the first nine months was HK$89.8 billion, 69 per cent higher year on year. This was driven mainly by the exceptionally high turnover during April’s market rally, which fizzled out in the third quarter.