HKEX's record first-half fails to excite

Shares of Hong Kong Exchanges & Clearing (0388) fell 1.42 percent to HK$373.6 yesterday despite the bourse posting record-high first-half revenue and profit.

The local stock exchange operator said interim net profit grew by 1 percent year-on-year to HK$5.23 billion.

Revenue and other income in the first half rose 2 percent to HK$8.78 billion from a year before. Basic earnings per share were HK$4.15 and HKEX declared an interim dividend of HK$3.71 per share.

Core business revenue in the first six months was up 13 percent from a year ago to HK$7.94 billion, driven by a 20 percent increase in headline average daily turnover.

Hong Kong's initial public offering market ranked second globally by number of IPOs in the first half, with 64 new company listings, including the secondary listing of NetEase (9999) and JD.com (9618), and placed third globally by IPO funds raised, with fundraising amount of HK$92.8 billion.

Stock Connect revenue and other income reached a record half-yearly high of HK$743 million, up 46 percent from a year ago. Stock Connect Northbound and Southbound ADT reached record half-yearly highs of 74.3 billion yuan (HK$83.3 billion) and HK$20.7 billion respectively.

HKEX chief executive Charles Li Xiaojia said Hong Kong does not have competitive edges in the current situation when it comes to attracting foreign companies to go public in Hong Kong.

"The sanctions, for the time being, are different from what we know in history, you could hardly imagine how some sanctions were proposed," Li said.

When asked about when Alibaba and biotech companies will be allowed to be included in the stock connect scheme, Li said: "Anything that should be done ultimately will be done." But he added that this is not a decision that can be unilaterally taken by the Hong Kong stock exchange.

In terms of the search for the successor to the chief executive, Li said he is not involved in that process, but "the board is actively working on it."

Li took the market by surprise in May when he said he is to step down next year.

Meanwhile, mainland computer software developer Kingsoft (3888) said it is considering a secondary listing of its Nasdaq-listed cloud storage subsidiary Kingsoft Cloud in Hong Kong or A-share market amid growing Sino-US tensions.

Elsewhere, Standard & Poor's said if Chinese companies are forced to delist from US stock markets, their credit ratings will not be significantly affected, as they have other funding options.