HKEx 2010 profit up 7% to HK$5.04bn

The exchange is cautiously optimistic on the global economy in 2011 as problems in US unemployment, Europe sovereign debts, and Middle East political condition may impede recovery.

Hong Kong Exchanges & Clearing's profit attributable to shareholders rose to $5.037 billion last year, up 7% on 2009, with the total dividend per share at $4.20.

According to its final results published on Wednesday, HKEx's income rose 8% to $7.566 billion, while operating expenses grew 8% to $1.612 billion, resulting in an operating profit of about $5.954 billion, according to an HKEx report.

The basic earnings per share was $4.68, up 7% on a year earlier. The interim dividend per share was $1.89 and the final dividend per share was $2.31, totalling $4.20 per share, up 7% when compared with $3.93 in 2009. The dividend per ratio was 90%.

Last year also saw an average daily turnover value of $69.1 billion on the Stock Exchange, up 11%. The average daily number of derivatives contracts traded on the Futures Exchange grew 7% to 221,487. The average daily number of stock-options contracts traded on the Stock Exchange also grew 29% to 246,474. New listings surged 55% from the previous year to 113 companies.

Future prospects
HKEx Chairman Ronald Arculli said the global economy is expected to continue on its recovery path in 2011.

“Nonetheless, sustained high unemployment in the US, massive sovereign debts in Europe, rising interest rates to check inflation and asset bubbles in the emerging markets, and political unease in the Middle East might impede the pace of recovery. We must therefore, continue to carefully monitor developments in the international arena and be vigilant.”

He said it will not be surprising to see mergers of leading exchanges in the quest for strategic flexibility and synergy, but the moves would also intensify competition among exchanges.

“For HKEx, our objectives are clear – to ensure a fair and orderly market in order to protect investors; and to increase our competitive advantage in order to deliver good returns for shareholders. Our strategic plan for 2010 to 2012 remains unchanged.

“We may seek strategic alliances with technology providers, industry participants, and our regional and global counterparts to expedite our growth initiatives. Any alliance we pursue would need to present strategically compelling benefits consistent with our focus on markets in Greater China.”