08.19.2020

HKEX Reports Record Half-Yearly Revenue

Charles Li, Chief Executive said: “HKEX had a very good first half, set against a turbulent and volatile macro backdrop, reporting record half-yearly revenue and other income, and profit. High Cash Market turnover, record Stock Connect volumes and a notable number of IPOs, including a number of sizeable secondary listings, offset softness in investment income which was impacted by swings in global portfolio valuations during the period. We remain on track with our Strategic Plan 2019-2021, well-placed to capture future growth opportunities, and fully focused on managing our costs and risks. With robust trading volumes, a strong IPO pipeline, and an expanding product portfolio, including the suite of newly launched MSCI index futures, I am confident that HKEX will continue to play a major role in connecting China and connecting the world.”

Strategic Highlights

Hong Kong’s IPO market ranked second globally by number of IPOs in 1H 2020 (with 64 new company listings, including the secondary listing of NetEase, Inc. and JD.com, Inc.); and third globally by IPO funds raised ($92.8 billion). An innovative virtual IPO ceremony option was introduced for newly listed issuers

Stock Connect Northbound and Southbound ADT reached record half-yearly highs of RMB74.3 billion and $20.7 billion respectively

Bond Connect reached its 3rd anniversary in July, with ADT reaching a record half-yearly high of RMB19.9 billion, tripling that of 1H 2019

ADT of Exchange Traded Products (ETPs) reached $7.1 billion, 34 per cent higher than in 1H 2019. New initiatives, together with stamp duty waiver on stock transfers paid by ETP market makers, will support continued volume growth

Major agreement signed to license a suite of MSCI indexes in Asia and Emerging Markets for the introduction of 37 futures and options contracts, 33 of which were introduced in July and August 2020

New product launches included: USD and CNH Silver Futures, the first Iron Ore Futures ETF, the first commodity-based L&I Product, the first active equity ETF, and the first four A share L&I Products

The LME introduced new rules on optimising its warehouse network on 1 February 2020  HKEX Foundation and its first flagship charity partnership programme were launched, in celebration of HKEX’s 20th listing anniversary

HKEX announced plans for its new Sustainable and Green Exchange (STAGE)

Financial Highlights

1H 2020 revenue and other income was 2 per cent higher than 1H 2019, a half-yearly record high – Core business revenue was up 13 per cent against 1H 2019, driven by a 20 per cent increase in headline ADT, resulting in higher trading and clearing fees

– Stock Connect revenue and other income reached a record half-yearly high of $743 million, up 46 per cent against 1H 2019

1H net investment income fell $681 million, primarily due to the fair value losses of collective investment schemes previously announced at Q1, as a result of the significant global market sell-off in March 2020

Operating expenses were 6 per cent higher than 1H 2019, attributable to annual payroll adjustments and increased headcount arising from the acquisition of BayConnect in June 2019, and higher IT costs and professional fees

EBITDA1 margin was 76 per cent, 1 per cent lower than 1H 2019, but 1 per cent higher than the 2019 financial year

Profit attributable to shareholders was a half-yearly record high of $5,233 million, 1 per cent higher than 1H 2019

Source: HKEX

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