Hong Kong Exchanges and Clearing Limited (HKEX) has presented the unaudited consolidated results of the Exchange for the nine months ended 30 September 2016.
Here are some of the highlights:
- Revenue and overall financial performance remained steady in Q3 2016, compared to the prior quarter, with some pickup in volumes during September.
- Revenue and other income for YTD Q3 2016 was 20 per cent lower than the prior period. However, after excluding exceptional gains of $514 million in YTD Q3 2015, revenue and other income decreased by 16 per cent. The significant
drivers of Group revenue during the period were:
– Subdued activity on the Cash Market in Hong Kong and Commodities trading on the LME.
– Increased trading of derivatives contracts on the Futures Exchange.
- Operating expenses increased by 2 per cent against YTD Q3 2015. After eliminating a one-off recovery of $77 million from the liquidators of Lehman Brothers Securities Asia Limited in YTD Q3 2015, underlying operating expenses have reduced by 1 per cent compared to the prior period.
- Profit attributable to shareholders decreased by 30 per cent against YTD Q3 2015, where exceptionally high trading income delivered record high profits for the Group, or by 23 per cent after adjusting for the one off items referred to
above. Notwithstanding difficult trading conditions, the YTD Q3 2016 profit attributable to shareholders compares well with pre 2015 results and was 24 per cent higher than the equivalent period in 2014.
Market sentiment improved in Q3 2016 with the Hang Seng Index reaching a 52-week high during September and headline ADT improving to $68.3 billion, 9 per cent above Q2 2016. This was accompanied by an increased level of funds flow through the Shanghai-Hong Kong Stock Connect (SH-HK Connect) where both Northbound and Southbound Trading showed increases over Q2.
In particular, the net inflow of Mainland funds via Southbound trading reached a record high in September. Nevertheless, Revenue was 3 per cent lower than Q2 2016, due to seasonal fluctuation in depository, custody and nominee services, which were down by $146 million, and reduced derivatives trading relative to Q2 2016.
For the fully detailed HKEX report, click here.