Despite growing market volatility in the face of complex and challenging geopolitical tensions, Hong Kong’s capital market has remained vibrant with strong investor enthusiasm that’s likely to continue for the rest of the year, says Charles Li Xiaojia, chief executive of Hong Kong Stock Exchange.
The second half will be fueled by more than 100 enterprises awaiting listing approval in the SAR, including biotech companies and US-listed Chinese mainland firms returning home, he said in a webcast announcing the bourse operator’s interim half-year earnings on Wednesday.
For the first half of this year, HKEX posted a record profit of HK$5.23 billion – up 1 percent from the same period in 2019 and beating market projections
Li said the ground-breaking Stock Connect between Hong Kong and the mainland, which offers asset diversification options for investors, has added to the growth momentum.
For the first half of this year, HKEX posted a record profit of HK$5.23 billion – up 1 percent from the same period in 2019 and beating market projections.
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“HKEX had a very good first half, set against a turbulent and volatile macro backdrop, reporting record half-yearly revenue and profit,” Li said.
He attributed the growth to a high cash market turnover, record Stock Connect volumes and a notable number of initial public offerings which offset softness in investment income impacted by swings in global portfolio valuations during the period.
HKEX’s core business revenue climbed 13 percent to HK$7.94 billion in the first six months of the year, driven by a 20 percent increase in average daily market turnover, resulting in higher trading and clearing fees.
In addition, the average daily northbound and southbound turnover through the Stock Connect broke the half-year record of 74.3 billion yuan and HK$20.7 billion, respectively.
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Li said HKEX aims to bring secondary listings of mainland companies to the Southbound Connect, saying: “It should be done, and will be done.”
From January to June, there were 64 new companies listed in Hong Kong, raising a total of HK$92.8 billion, making the Hong Kong bourse rank second globally by the number of IPOs, and third worldwide by the amount of funds raised.
The listed companies include the homecoming listing of mainland online games developer NetEase and e-commerce giant JD, which raised a total of US$6.6 billion.
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Li said the structure of Hong Kong’s stock market has changed with listings in the new economy sector and secondary listings, which brought vibrancy to the local bourse.
As tensions between the US and China escalated, he said the main consideration of public companies is capital demand, and they would turn to Hong Kong for Chinese and international capital.
HKEX’s share price shed 1.42 percent to close at HK$373.6 in Wednesday’s half-day session, with morning trading halted by Typhoon Higos.
