"Hong Kong Exchanges Profit Falls on Lower Trading | AboutHK.Com - more information about HK"
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| Bloomberg  Hong Kong Exchanges & Clearing Ltd., operator of Asia’s No. 3 stock market, said first-half profit fell 26 percent as the value of equities traded tumbled by a third amid the slump in the global economy.
Net income in the six months ended June 30 dropped to HK$2.2 billion ($284 million) from HK$2.97 billion a year earlier, the company said in a statement today. That beat the median estimate of HK$2.1 billion in a Bloomberg survey of four analysts. The bourse cut its interim dividend to HK$1.84 a share, from HK$2.49. It maintained a payout ratio of 90 percent.
The average daily value of shares traded in the city during the half decreased 33 percent from a year earlier as the global slowdown dragged the Hang Seng Index to a four-month low on March 9. The gauge climbed 80 percent since then.
“Hong Kong Exchange’s performance should improve in the second half, following the Hang Seng Index’s movement,” said Steven Leung, Hong Kong-based director of institutional sales at brokerage UOB-Kay Hian Ltd. “In our view, the index hasn’t reached its peak for the second half yet, so market volume should be able to be sustained. Hong Kong Exchanges is a stock that we like as we still see more upside to its share price.”
Shares in Hong Kong Exchanges sank 3.9 percent today to HK$146. The stock has almost doubled in 2009, outperforming a 42 percent advance by the benchmark Hang Seng Index on speculation trading values would increase as the market rallied.
‘Buy’ Rating
Goldman Sachs Group Inc. has a “buy” recommendation on the stock because Hong Kong Exchanges has “direct exposure to market recovery,” it said in a research report dated Aug. 10.
The Hang Seng Index gained 28 percent in the first half of this year, rebounding from a 48 percent slump in 2008, amid speculation stimulus efforts worldwide, including 4 trillion yuan ($585 billion) of spending in China, will revive growth.
The exchange said today profit per share in the first half fell to HK$2.04 from HK$2.76 a year earlier. Revenue slumped to HK$3.35 billion from HK$4.21 billion. Earnings for the second quarter climbed 3 percent to HK$1.37 billion, or HK$1.27 per share, from HK$1.32 billion, or HK$1.23, a year earlier.
First-half listing fees brought in HK$326.8 million, according to unaudited numbers on the exchange’s income statement. That’s 8 percent lower than a year earlier.
Total equity funds raised on the bourse’s main board through initial public offerings amounted to HK$17.6 billion in the first half, 65 percent lower than a year earlier, the statement said.
‘Big’ IPOs?
Ronald Arculli, chairman of Hong Kong Exchanges & Clearing Ltd., told Bloomberg Television today that he’s anticipating “big” initial public offerings in the city later this year and in the first half of 2010 as investor sentiment and economic growth improves.
The bourse will consider accepting financial statements of Chinese companies audited under mainland accounting standards in order to cut costs for those businesses planning to sell shares in Hong Kong.
Consultation will take place in “the next couple of months,” Mark Dickens, the head of Hong Kong Exchange’s listing division told reporters after the earnings results.
To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net This e-mail address is being protected from spambots. You need JavaScript enabled to view it
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