HKEx profit up 3% to $2.26bln

Exchange to tap growing Renminbi-denominated products whilst it seeks to draw international listings.

Hong Kong Exchanges & Clearing saw a 3% year-on-year surge in profit attributable to shareholders in the first half of the year, to $2.258 billion.

According to its interim results announced on Wednesday, HKEx recorded income of $3.454 billion, up 3% on a year earlier, while operating expenses rose 2% to $776 million. Profit before taxation was $2.678 billion, with basic earnings per share at $2.10.

The average daily turnover value on the Stock Exchange was $63.8 billion, 9% higher than the same period last year. The average daily number of derivatives contracts traded on the Futures Exchange and stock options contracts traded on the Stock Exchange grew 2% and 7% to 217,639 and 221,512.

The rise in profit was primarily attributable to the higher turnover-related income resulting from the increase in activity in the cash market and the increase in Stock Exchange listing fees, but was partly offset by the drop in net investment income on account of lower net interest income and lower fair value gains on investments.

Growth in total operating expenses was mainly due to higher staff costs, and IT and computer maintenance expenses, but were partly offset by a decrease in premises expenses, according to a HKEx report.

Future development
HKEx Chairman Ronald Arculli said relaxation of restrictions on renminbi transfers will expedite the development of renminbi-denominated financial products. The group will intensify its efforts to capture every opportunity arising from the renminbi globalisation.

Apart from expanding its footprint on the Mainland, HKEx will focus on attracting international listings. In addition to local and Chinese companies, it has been courting companies from other countries such as Australia, Brazil, Canada, France, Germany, Japan, Mongolia, Russia, South Korea, the UK and the US.