Hong Kong bourse's profit beats estimates on China stimulus, rate cuts

By Selena Li

HONG KONG (Reuters) -Hong Kong's bourse operator reported a 7% rise in third-quarter profit on Wednesday, ahead of forecasts, as China's stimulus package and interest rate cuts by global central banks led to higher trading volumes.

The profit attributable to shareholders of Hong Kong Exchanges and Clearing Ltd (HKEX) rose to HK$3.15 billion ($405.30 million), up from HK$2.95 billion in the third quarter of last year and topping analysts' forecasts of HK$3.09 billion compiled by LSEG.

Shares of HKEX rose as much as 3.7% in the afternoon session after the earnings release. Gains narrowed to 2% at 0600 GMT though remained higher than the 1.28% rise in the benchmark Hang Seng Index.

HKEX said revenues in the three months ended Sept. 30 rose 6% to HK$4.85 billion, marking the best-ever third-quarter revenue in the history of the bourse.

It was mainly due to rising trading and clearing fees, underpinned by China's stimulus package announcements in late September and global central banks' monetary policy easing.

Average daily turnover of equity products on the exchange shot up by 23% compared with third quarter last year. Southbound trading via a stock connect scheme with mainland China jumped 37%.

The bourse's nine-month revenue and profit was its second-best ever, CEO Bonnie Chan said in an earnings release.

HKEX is looking to attract more trades and deals to the largest offshore listing hub for Chinese enterprises, despite a weakening growth outlook for the world's second-largest economy.

Listing fee revenue dipped 3% in the third quarter against the same period last year, but there are signs of improvement in the fourth quarter as companies rush to float in Hong Kong, riding the strengthening market momentum.

The financial centre last week recorded its busiest week for new initial public offering launches in almost two years, giving bankers and investors confidence a two-year share sale freeze could be easing.

China Resources Beverage shares leapt 13.5% on their Hong Kong trading debut on Wednesday after the company raised $650 million in the city's second-largest IPO of the year.

Shares in Horizon Robotics, which raised $696 million in Hong Kong's biggest IPO of 2024, are set to begin trading on Thursday.

To expedite listing approvals, the bourse last week placed a cap of 40 working days each for the exchange and local securities regulator to flag any concerns on applications.($1 = 7.7721 Hong Kong dollars)

(Reporting by Selena Li; Editing by Muralikumar Anantharaman and Jamie Freed)