Hong Kong bourse net rises 54 per­cent to a record $1 bil­lion

The Pak Banker - - MARKETS/SPORTS -

Hong Kong Ex­changes & Clear­ing Ltd., the most valu­able ex­change op­er­a­tor in Asia, said full-year earn­ings rose to a record on higher trad­ing turnover.

Net in­come jumped 54 per­cent to HK$7.96 bil­lion ($1 bil­lion) last year, up from HK$5.17 bil­lion a year ear­lier, the ex­change said in a state­ment on Wed­nes­day. Rev­enue in­creased 36 per­cent to HK$13.38 bil­lion in the pe­riod. An­a­lysts were ex­pect­ing net in­come of HK$8 bil­lion, ac­cord­ing to data.

HKEx's fourth-quar­ter net in­come and rev­enue were lit­tle changed from the year-ago pe­riod, at HK$1.5 bil­lion and HK$2.8 bil­lion, re­spec­tively, ac­cord­ing to Bloomberg cal­cu­la­tions us­ing the ful­lyear and nine-month re­ports. HKEx's shares rose 3.5 per­cent to close at HK$175 in Hong Kong trad­ing.

Equity daily trad­ing fell to an av­er­age HK$71.9 bil­lion in the fourth quar­ter from HK$101.5 bil­lion three months ear- lier. The av­er­age daily num­ber of op­tions con­tracts traded also fell in the fourth quar­ter to 334,000. The av­er­age num­ber of fu­tures con­tracts dropped to 308,000 from 323,000 in the third quar­ter.

The bourse, which plans to in­tro­duce new in­dex and cur­rency fu­tures, said it saw its av­er­age daily stock-trad­ing turnover rise 52 per­cent to HK$105.6 bil­lion in 2015. Daily trad­ing has av­er­aged about HK$72.5 bil­lion this year, 13 per­cent lower than in the same pe­riod a year ear­lier, ac­cord­ing to data com­piled by Bloomberg. The com­pany needs to ex­pand its trad­ing links with China to gen­er­ate ad­di­tional rev­enue, some in­dus­try an­a­lysts said.

"We don't see any cat­a­lysts for the earn­ings driv­ers in the first half of 2016," said Ed­mond Law, a Hong Kong-based an­a­lyst with UOB-Kay Hian Hold­ings Ltd.

The planned ex­pan­sion of the eq­ui­ty­trad­ing link be­tween Hong Kong and Shang­hai to Shen­zhen may gen­er­ate ex­tra rev­enue for the ex­change, he said.

At a press con­fer­ence on Wed­nes­day, Chief Ex­ec­u­tive Of­fi­cer Charles Li de­clined to com­ment on whether HKEx plans any ac­qui­si­tions.

"We have a solid port­fo­lio of or­ganic growth and also ex­ter­nal growth that we ac­tu­ally can be solely re­spon­si­ble with­out hav­ing to pay any­body," Li told an au­di­ence of re­porters and an­a­lysts. "We are not ac­tively look­ing for some­thing just to add on to port­fo­lios."

Deal ac­tiv­ity has in­creased in the in­dus­try re­cently, with Lon­don Stock Ex­change Group Plc and Deutsche Bo­erse AG con­firm­ing they are in merger talks while In­ter­con­ti­nen­tal Ex­change Inc. has said it is con­sid­er­ing a bid for the U.K. bourse. Sin­ga­pore Ex­change Ltd. said on Feb. 26 that it's seek­ing to buy Lon­don's Baltic Ex­change Ltd.

"If there are op­por­tu­ni­ties that present them­selves with­out us go­ing around and so­lic­it­ing them, and add value to what we do, we will look at them," said Li.

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