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

By Ambar Warrick

Investing.com– Hong Kong Alternate Operator HKEX (HK:) mentioned on Wednesday that its revenue for the third quarter sank 30% as tightening financial circumstances and issues over slowing Chinese language financial development 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. Whole 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 property.

Common day by day buying and selling of equities sank 43% from final yr to HK$84 billion within the September quarter, harm largely by a lull in buying and selling resulting from 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 sequence of COVID-related lockdowns floor the Chinese language economic system to a halt.

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

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

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

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 car maker Zhejiang Leapmotor Know-how Co Ltd (HK:) debuting final month. Whole IPO volumes through the quarter have 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 change fell 0.5% on Wednesday, with falling 1.2%.