HKEX Logs 30% Drop in Q3 Profit as Rising Rates, China Jitters Weigh By Investing.com

By Ambar Warrick

Investing.com– Hong Kong Change Operator HKEX (HK:) mentioned on Wednesday that its revenue for the third quarter sank 30% as tightening financial situations and considerations over slowing Chinese language financial progress saved most merchants cautious of massive investments.

Revenue attributable to shareholders for the quarter ended September 30 fell to HK$2.26 billion ($288 million) from HK$3.25 billion a yr earlier. Complete income fell 17% to HK$4.32 billion, the agency mentioned in a press launch.

Whereas most quarterly metrics fell from document highs logged final yr, a decline in buying and selling volumes additionally mirrored decreased investor urge for food for risk-driven belongings.

Common every day buying and selling of equities sank 43% from final yr to HK$84 billion within the September quarter, damage largely by a lull in buying and selling on account of rising inflation and rates of interest throughout the globe.

Publicity to the Chinese language market, one of many largest attracts for buying and selling in Hong Kong shares, grew to become much less profitable this yr as a collection of COVID-related lockdowns floor the Chinese language financial system to a halt.

A struggling property market additionally noticed buyers dump once-respected actual property shares en masse this yr.

Weak point in commodity markets additionally weighed. The London Metals Change, which HKEX owns, noticed a 14% drop within the chargeable common every day worth (ADV) of metallic contracts traded. This coincided with a pointy drop in metallic costs, as markets feared slowing financial progress will hit metallic demand.

Nonetheless, derivatives markets remained a sole vivid spot for the HKEX. ADV of derivatives contracts traded on the futures trade grew 9% within the September quarter, the one sector of the corporate to log progress.

Hong Kong’s IPO market additionally noticed some indicators of thawing within the quarter, with choices from a number of main companies together with China Vanke spinoff Onewo Inc (HK:) and electrical automobile maker Zhejiang Leapmotor Expertise Co Ltd (HK:) debuting final month. Complete IPO volumes in the course of the quarter had been greater than twice these seen within the first half of 2022.

Nonetheless, the HKEX has to take care of slowing demand for equities as international sentiment sours additional. Shares of the trade fell 0.5% on Wednesday, with falling 1.2%.