Hong Kong Exchanges & Clearing Ltd reported record first-quarter profit as a surge in initial public offerings and robust trading volumes cemented its status as the top global fundraising venue.
Net income climbed 27 percent to HK$5.2 billion ($668 million) in the three months ended March, the exchange said in a statement Wednesday. That beat the HK$4.6 billion consensus estimate from a Bloomberg survey of six analysts. Core revenue rose 22 percent to HK$7.7 billion.
The Asian bourse rode a wave of historic activity, recording its busiest January ever for new listings. HKEX saw 40 IPOs during the quarter, raising a total of HK$110.4 billion. That figure represents a nearly sixfold increase from the previous year and positions the city as a top global venue for such capital raises.
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Average daily stock turnover rose 13 percent. Revenue from Stock Connect, the link with exchanges in Shanghai and Shenzhen, jumped 44 percent to HK$1.4 billion on the back of record-high northbound volume. The exchange attributed the growth to global investors’ diversification needs and the ongoing appeal of the Chinese mainland’s technological innovations and market reforms.
Chief Executive Officer Bonnie Chan Yi-ting said in the statement that the Hong Kong Special Administrative Region’s primary market momentum remains robust. The city is maintaining its position as a leading IPO venue with a pipeline of high-quality companies that underscore its role as a premier fundraising platform for innovative and high-growth sectors, she said.
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At the same time, the bourse has been cracking down on brokers struggling with the large pipeline of listings, slamming them for filing sloppy applications.
Looking ahead, HKEX has more than 500 companies in its listing pipeline. To bolster its competitive edge, the exchange proposed measures last month to lower the entry threshold for dual-class shares and advanced technology firms. It also plans to extend the privilege of confidential listing applications to all prospective issuers as part of a broader effort to streamline the path to market.
