HKEX

The Hong Kong Exchanges and Clearing Ltd (HKEX) saw a double-digit fall in both revenues and profits in the first half of 2022, amid weakening global market sentiment, but Chinese mainland-related business remained a highlight, according to financial data revealed by the exchange on Wednesday.

The stable performance of mainland-related business reflected that global investors still maintain confidence in the mainland markets, as they are retreating from US stocks and other markets, analysts noted.

According to the exchange's filing, revenues and other income dropped by 18 percent year-on-year to HK$8.93 billion ($1.14 billion). 

Net profit fell by 27 percent to HK$4.8 billion, or HK$3.82 per share, the lowest first-half profit since 2017, according to media reports. Average daily turnover also slipped by 27 percent, the data showed.

Vanessa Lau, HKEX Group chief financial officer, said that the results reflect global market sentiment and the weaker economic outlook.

On the other hand, the interim results showed that mainland-related business remained stable, one of a few performance highlights.

For example, average daily turnover of the northbound leg of the Bond Connect rose 17 percent year-on-year to 31 billion yuan ($4.56 billion) in the first half of 2022, a half-year record. 

This showed that overseas investors are not as worried about the mainland markets as they are about global markets, since their confidence in China's economic performance persists, said Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology.

The homecoming of mainland companies listed in the US amid political tensions is a boost for the Hong Kong market, which is a top choice for those companies as a result of its "international gene," analysts noted.

Nicolas Aguzin, HKEX's CEO, revealed that the exchange's IPO pipeline remains strong with over 180 active applications as of July, and more mainland companies are expected to convert to a primary listing in Hong Kong.

Dong said that as the pace of US delisting quickens, the second half of this year should see a rebound in IPO numbers and fundraising volume on the Hong Kong market.

Five Chinese state-owned companies recently announced that they had notified the New York Stock Exchange and applied for voluntary delisting.

Global Times