Hong Kong Exchanges & Clearing (0388)

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I started a new thread on HKEx...

HKEx Q2 profit climbs 9% on improved volumes, IPOs

HONG KONG –Hong Kong Exchanges and Clearing, the world’s second-largest exchange by market value, posted a 9.3 per cent increase in second-quarter net profit, driven by higher trading volumes and a pick-up in initial public offerings.

Net profit rose to HK$1.17 billion (S$191.6 million) in April-June from HK$1.07 billion a year earlier, HKEx said on Thursday.

The exchange, led by former JP Morgan China Chairman Charles Li, has this year reversed a trend of declining trading volumes.

In the first six months of the year it reported average daily turnover up 20 per cent from a year earlier. Trading demand has been boosted by an increase in new issuance as funds raised from initial public offerings rose 29 per cent thanks mainly to two big deals, Sinopec Engineering and China Galaxy Securities.

“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
just curious, how come HK exchange trades at over 30++ times earnings?
is there really so much growth?
(15-08-2013, 05:20 PM)felixleong Wrote: just curious, how come HK exchange trades at over 30++ times earnings?
is there really so much growth?

SGX's PE is more than 24, not very far away from HKEx...

(not vested)
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Which is the world largest exchange
The previous three offshore hubs are London, HK and Singapore. Among the three, HK is the most ill-fated, with the upcoming of offshore hub(s?). Those hub(s?) are located closer to HK, and competing directly on the same pools of customers...

SGX seems having the better prospect than HKEx, both in derivative, securities and bonds markets, esp. the yuan dominated ones, IMO

(not vested)

HKEx bets on tech, yuan push as profits disappoint

HONG KONG — With nearly half of its market value wiped out in the past three years, Hong Kong’s stock exchange is hoping that a slate of new initiatives will give it a much-needed boost after reporting worse-than-expected annual earnings yesterday.

Hong Kong Exchanges and Clearing (HKEx), as it is formally known, has pinned its hopes on a HK$3 billion (S$490 million) technology upgrade, a push into yuan-denominated products and its US$2.2 billion (S$2.78 billion) purchase of the London Metal Exchange (LME) in 2012.

HKEx, the world’s fourth-largest exchange operator, reported a lower-than-expected 11 per cent rise in annual earnings, with net profit for 2013 at HK$4.55 billion, as a recovery in stock trading volumes last year was offset by increased expenses from the LME.

The LME deal is so far acting as a drag on profits for HKEx, as the London exchange’s contribution of a HK$326 million profit last year was offset by its addition of operating expenses amounting to HK$783 million.

Some of those costs came from the building of its own clearing house, LME Clear, which should begin contributing fees when it launches in September this year.

The LME has also been embroiled in a United States lawsuit. Twenty-six class actions have been filed against it, alleging anti-competitive and monopolistic behaviour in the warehousing industry, HKEx said in its statement. The plaintiffs must file consolidated complaints on March 12.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
but still a 11% rise in annual earnings..not a call to buy or sell le
at over 30 times earnings, even 10-15% earnings growth is not enough

0388 would be a more fair buy if priced at 15-20 times earnings
Update on HKEx...

HKEx says rejects one-third of IPO applications as tougher rules bite
04 Mar 2014 18:15
[HONG KONG] Hong Kong Exchanges and Clearing Ltd has rejected a third of all companies applying to list on the city's stock market since it introduced tougher measures in October, the exchange operator's chief regulatory officer said on Tuesday.

Hong Kong's Securities and Futures Commission last year introduced tougher rules for banks preparing companies for listing in an effort to improve the quality of initial public offerings in the city.

So far, six out of eighteen companies that applied to list in Hong Kong since the changes have had their applications returned because required documents were missing or incomplete, the exchange operator said.

"If we were returning five or ten percent of submissions that would show the market's in the right place, but thirty-three percent is too high," Chief Regulatory Officer David Graham told a media briefing.

"In the past, companies could initially submit applications that were around 60 percent complete. Now in reality we expect them to be 95 percent ready," he added.

From April 1, companies that are rejected by the Hong Kong exchange will also face a two-month moratorium on submitting new applications, and their names will also be made public.

With nearly half of its market value wiped out in the last three years, the stock exchange has pinned hopes on a HK$3 billion (US$386 million) technology upgrade, a push into yuan-denominated products and its US$2.2 billion purchase of the London Metal Exchange in 2012 to give it a much-needed earnings boost. - Reuters

Ref: Business Times Breaking News
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
I assume SGX doesn't have the after-hours yuan futures trading yet. It needs to do it, as competition heated up...

HKEx to offer after-hours yuan futures trading in April

HONG KONG – The Hong Kong Stock Exchange, the world’s fourth-largest exchange operator, said yesterday it would add yuan currency futures to after-hours trading from April 7.

The bourse introduced after-hours futures trading, from 5pm to 11pm, last April. Hang Seng Index and H-shares Index futures were the first products that were included.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
The LME acquisition seems a bad move. It was costly and messy. I am glad SGX didn't get it...

(not vested)

HKEx says to fight class action lawsuit on zinc prices

SYDNEY – Hong Kong Exchanges and Clearing said it will contest a class action alleging it and others artificially inflated zinc prices, adding to a growing legal battle that has so far centred on aluminium.

Duncan Galvanizing, one of the oldest galvanisers in the United States, accused the Hong Kong bourse and its units the London Metal Exchange (LME) and LME Holdings, alongside Goldman Sachs Group, JPMorgan Chase & and metal warehouse operators, of conspiring since 2010 to manipulate the U.S. zinc price.

“HKEx and LME management’s initial assessment is that lawsuit is without merit and HKEx and subsidiaries will contest it vigorously,” the Hong Kong Exchange said in a release.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡

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