Hong Kong Exchanges & Clearing, the operator of the stock and futures markets, reported 2015 profit rose by 54 per cent compared to a year earlier to HK$7.96 billion, slightly beating
HKEx chairman Chow Chung kong said higher turnover in the stock market, solid contribution from London Metal Exchange and a large number of initial public offerings last year all contributed to a strong growth. He however warned of challenges ahead.
“The political instability spreading from the Middle East to Europe, the pace of the US interest rate-hike cycle, the fall in global commodities prices, and the slowdown in the Mainland economy have all cast a shadow over the global financial market,” Chow said in a statement accompany the results announcement.
“In Hong Kong, in anticipation of possible increases in Hong Kong interest rates, there have been corrections in asset values since mid-2015. At HKEx, we will continue our efforts to sharpen our competitiveness to meet the challenges ahead.”
HKEx chief executive Charles Li Xiaojia will host a press conference on the annual result at 4:30pm.
Higher turnover in the stock market is among helped deliver a 41 per cent annual increase in trading fee income at HK$2.25 billion. The average daily turnover of the Hong Kong stock market last year stood at a record HK$105.6 billion, up 52.08 per cent on 2014.
The listing fee income also rose 8 per cent last year to HK$703 million. A clampdown on new listings in China saw mainland companies turning towards Hong Kong, lifting HKEx into the No 1 spot for initial public offerings last year.. In total, 138 companies debuted new shares listings on the exchange, an increase of 13 per cent from the previous year. Total funds raised from lthe istings came to HK$261.33 billion, up 12.39 per cent on year.
HKEx’s wholly owned London Metal Exchange also saw increased trading fee income. For the year, the London Exchange contributed HK$1.40 billion, a rise of 51 per cent.
HKEx’s total revenue was up 24 per cent to HK$3.44 billion, while operating expenses also rose 15 per cent to HK$531 million.
HKEx announced a final dividend of HK$2.87 per share, bringing the whole year dividend to HK$5.95, up 49 per cent from a year earlier.
Meanwhile, companies already listed on the exchange raised HK$847.66 billion through share placements, rights issues and other secondary market fundraising activities, an increase of 19.36 per cent on the year earlier.
In the third quarter, the exchange reported an 81 per cent year-on-year growth in net profit to HK$2.33 billion, helped by a one-off gain from the sale of a leasehold property for HK$445 million.
Brokers however cautioned that HKEx is likely to experience more difficultly in 2016, as the daily turnover on the exchange dropped to as low as HK$60 billion last week, a 40 per cent decline from last year’s daily average.
Ahead of the announcement, shares in HKEx closed at HK$174.80 up 3.37 per cent from Tuesday close. This is compared with their one-year low of HK$160.10 and down from their high of HK$311.40 in April last year.