Hong Kong’s stock exchange missed profit estimates in the second quarter as a recovery in investment income offset sluggish trading and a slow pace of initial public offerings.
Hong Kong Exchanges & Clearing reported net income rose 34% to HK$2.90 billion in the second quarter, according to a statement on Wednesday. The result missed a HK$2.99 billion estimate in a Bloomberg survey of analysts.
The firm has benefited from rising rates, delivering a gain in investment income for the period after a loss last year. Overall, core revenue gained 5%. Still, profit slid 15% from the first three months of the year as trading dried up amid concern over China’s sluggish economy.
“Looking forward, whilst the macro landscape will continue to shape market sentiment, we are pleased to see encouraging signs of a revival in our IPO market, matched by a very healthy pipeline,” said HKEX CEO Nicolas Aguzin in a statement.
HKEX slid 0.5% in afternoon trading in Hong Kong.
Average daily trading of equity products at the bourse fell 20% in the quarter. The exchange saw 15 IPOs in the second quarter, raising a total HK$11.2 billion. That was up from HK$4.8 billion in the same period a year earlier amid a weak market during Covid.
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The average daily trading on Stock Connect northbound during April to June increased 20% year-on-year to 122.5 billion yuan ($16.8 billion), while southbound trading dropped 3% to HK$30.1 billion.
Revenue and other income generated from Stock Connect rose 8% during the second quarter to HK$588 million.
