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Surging global demand for Chinese stocks led Hong Kong’s exchange operator to its highest-ever quarterly profits, as investors renewed their optimism over Chinese technology companies and new listings.
Net profit at Hong Kong Exchanges and Clearing rose 36 per cent year on year in the first quarter to HK$4.1bn (US$528mn) on revenues of HK$5.5bn, up 42 per cent from the same period last year. Earnings per share rose by almost a dollar to HK$3.23.
The exchange has benefited from a spate of initial public offerings and rising interest from mainland Chinese and global investors in Hong Kong-listed shares, especially of technology companies, driven by optimism over China’s progress in artificial intelligence and hopes of greater fiscal stimulus from Beijing.
“The renewed global interest in China opportunities that picked up in the second half of 2024 continued to build momentum into 2025, boosted by exciting developments in artificial intelligence and innovation,” said group chief executive Bonnie Chan on Wednesday.
Hong Kong has emerged as a bright spot in global listings, with Chinese multinationals including BYD, Xiaomi and Midea either launching secondary listings or selling shares in the territory over the past six months.
The city was a top-five IPO venue in the first quarter of 2025, and listing volumes year to date are at their highest since 2021, according to Dealogic data.
Chan said the IPO pipeline increased by 36 companies to a total of 120 in the first quarter, with groups including battery maker CATL set to launch secondary listings.
The revenue boost was mainly driven by trading fees, which doubled year on year as investors increased their purchases of equities. Southbound trading fees from mainland Chinese investors almost quadrupled from HK$46mn to HK$167mn in the same timeframe.
The exchange also continued to play its role in the internationalisation of Chinese assets. It now permits Chinese government and policy bank bonds held through the Bond Connect scheme — which allows investors in mainland China and Hong Kong to trade in each other’s bond markets — to be used as margin collateral in derivative transactions.
The volume of HKEX’s renminbi futures contracts increased by 57 per cent as investors sought to hedge their exposure to the Chinese currency in a volatile foreign exchange environment. Its London Metal Exchange trading fees also grew 10 per cent, driven by an increase in metals contracts.
The group confirmed it paid a HK$90mn fine to the UK’s Financial Conduct Authority over the 2022 nickel crisis in which a short squeeze and low inventories led prices to spike before the exchange suspended trading for a week.
HKEX also confirmed it was working to build a local settlement house that could be a competitor to Euroclear, stating it was working on “developing an international central securities depository in Asia”.
The exchange last week announced an agreement to buy its permanent headquarters in Exchange Square, in the Central district of Hong Kong, for about US$810mn.