Hong Kong Exchanges & Clearing saw a 94% year-on-year surge in the profit attributable to shareholders in the first half of this year, to $1.1 billion. The interim dividend declared per share was 94 cents, up 92% over a year earlier.

Investment income also surged 78%, to $217 million.

HKEx Chairman Ronald Arculli said the rise in profit was primarily attributable to growth in turnover-related income from the significant increase in activities on cash and derivatives markets, and more investment income arising from a rise in fair value gains of corporate fund investments and higher interest income.

According to the interim results announced today, HKEx recorded income of $1.9 billion, up 53% on a year earlier, while operating expenses rose 5% to $6 billion. The profit attributable to shareholders was $1.1 billion, with basic earnings per share at $1.04 and interim dividend declared per share at 94 cents. The dividend payout ratio was 90%.

Compared with this year's first quarter, the group's investment fund size grew 12% in the second, to $25.3 billion.

Stock market turnover

The average daily turnover value on the Stock Exchange was $32.6 billion, 93% higher than the same period last year. The average daily number of derivatives contracts traded on the Futures Exchange and stock options contracts traded on the Stock Exchange also rose 56% and 152% to 97,471 and 63,411.

In the first half of this year, 22 companies were newly listed on the Main Board and four on the Growth Enterprise Market. Total capital raised, including post-listing funds, reached $195.6 billion. Total market capitalisation exceeded $10 trillion on May 3.

As at June 30, 948 companies were listed on the Main Board and 200 on the Growth Enterprise Market, with a total market capitalisation of about $9.84 trillion. In addition, there were 1,481 derivative warrants, eight Exchange Traded Funds, four Real Estate Investment Trusts and 174 debt securities listed. The average daily turnover in this year's first half was about $32.4 billion on the Main Board and about $199 million on the Growth Enterprise Market.

The first batch of callable bull and bear contracts was listed on June 12, and there were 11 such contracts listed as at the end of June. A total turnover volume of 277 million units and a turnover value of $204 million were recorded.

External factors

Mr Arculli said HKEx's performance in the second half of this year might be affected by a number of external factors. Geopolitical risks, stagflation in the US economy, escalating energy prices, the rising cost of capital due to increasing interest rates and the intensifying global competition might all have an impact on the cash and derivatives markets in Hong Kong.

He noted the valuation of the renminbi as well as the macro-economic adjustments introduced to cool the Mainland economy might have a bearing on the Mainland's economic performance.

The longer term outlook for the Mainland, however, remains promising and there is sustained demand for capital there. Given Hong Kong's unique competitive strengths, continued issuer and investor interest in listing of Mainland enterprises in Hong Kong is expected.

International profile

In addition to serving Mainland enterprises, Mr Arculli said HKEx will expand its international profile by allowing overseas companies, particularly those incorporated in other Asian countries, to list on the Stock Exchange subject to further discussions with the Securities & Futures Commission.

He stressed HKEx remains committed to ensuring an effective regulatory regime that strengthens market integrity and investor confidence and reinforces Hong Kong's status as an international financial centre and a major capital-formation centre for Mainland enterprises.

Meanwhile, HKEx will continue focus on creating value for shareholders through enhancing the quality of its core businesses and prudently controlling its operating costs.