Hong Kong’s stock exchange operator made record profits in 2024 as a stock market rally and listings revival helped put an end to a two-year slump for the financial hub.
Hong Kong Exchanges and Clearing reported full-year profits of HK$13.1bn (US$1.7bn) on Thursday, topping the previous record of HK$12.5bn set in 2021 amid a pandemic-era trading boom.
Fourth-quarter profits rose 46 per cent year on year to HK$3.8bn. Revenues increased by a third to HK$6bn.
The results were boosted by a rise in the average daily turnover of securities traded on the exchange — a key revenue driver for the company — as investors returned to Hong Kong stocks after Beijing announced a series of stimulus measures last autumn.
“HKEX achieved significant strategic progress” last year, chief executive Bonnie Chan said in a statement, adding that there were “encouraging signs of economic revitalisation” such as China’s stimulus policies and interest rate cuts in other markets.
The results mark the first full year of Chan’s tenure following the departure of Nicolas Aguzin, a former star JPMorgan banker, last year.
Headline average daily turnover on the exchange last year was HK$131.8bn, a 26 per cent increase from 2023.
Fees from trading, clearing and settlement — among HKEX’s most important sources of revenue — rose to HK$11.9bn, up from HK$10bn the previous year.
HKEX listed 71 new companies last year and reclaimed its slot as a top-four IPO market after slipping down global rankings in 2023. The exchange raised HK$190.3bn in funds, including HK$87.5bn from IPOs, an increase of 88 per cent from the previous year.
High interest rates in the US, which translate directly to Hong Kong due to the territory’s dollar peg, had depressed dealmaking in the city. Coupled with its exposure to China’s economic slowdown, the city’s capital markets entered a prolonged slump.
But in the past 12 months, HKEX shares have risen nearly 48 per cent, ahead of a 42 per cent rise in the benchmark Hang Seng index.
Last year, mainland Chinese authorities stepped up support for Hong Kong’s capital markets, expanding the scope of the Stock Connect trading link with the mainland and expressing support for expanding use of the renminbi in the special administrative region.
The exchange also ended the practice of suspending trading during typhoons, a much-loved anachronism for many of the city’s finance professionals but one that was criticised for making the exchange less globally competitive.
At the beginning of this year, the London Metal Exchange, owned by HKEX, confirmed it had approved Hong Kong as an LME warehouse location.