[HONG KONG] Hong Kong’s stock exchange beat market estimates with a 21 per cent rise in Q2 net income, fuelled by robust trading volumes and a jump in initial public offerings.

Hong Kong Exchanges and Clearing (HKEX) reported record net income of HK$5.4 billion (US$686 million) in the three months ended June, according to a statement on Wednesday (Aug 19).

That compared with a consensus estimate of HK$4.9 billion, according to data compiled by Bloomberg. Core business revenue rose 17 per cent in the quarter as trading and IPOs extended a winning streak, the exchange said.

“Looking ahead, despite persistent macro and geopolitical uncertainties, the long-term opportunity for HKEX and for Hong Kong remains compelling as global capital increasingly seeks access to China’s innovation economy and Asia’s growth prospects,” said CEO Bonnie Chan, whose contract was renewed this week for a three-year term from March 2027.

HKEX shares rose as much as 1.6 per cent in the early afternoon session in Hong Kong.

The exchange has been delivering record earnings as the city has benefited from Chinese companies linked to the artificial intelligence buildout moving Hong Kong deals to a higher gear.

However, analysts are increasingly focusing on the company’s expansion of its non-equity business.

Hong Kong’s market regulator has also stepped up warnings to investment banks over filing sloppy applications for share sales. HKEX’s shares are little changed so far this year in a weak broader market.

IPO volumes rose 94 per cent in the first half of the year, with 87 companies raising HK$212.4 billion. The bourse ranks second globally after Nasdaq.

Meanwhile, trading via the Stock Connect links with mainland China hit records. The exchange added eight more exchange-traded funds (ETFs) to the southbound link, bringing the total to 31 as at the end of June.

China announced on Tuesday it will support mainland insurance firms to invest in ETFs via the southbound Stock Connect. BLOOMBERG