Hong Kong Exchanges & Clearing (0388)

[cyclone]

Hong Kong’s stock exchange posts its quietest first quarter since 2009 as blockbuster IPOs looked elsewhere to raise funds
* Equity capital market funds fell 66 per cent in the first quarter to US$6.98 billion, making this the quietest quarter since 2009
* Bolstered by Lyft’s US$2.3 billion IPO last month, Nasdaq jumped to the top of the world’s fundraising ranking with US$4.4 billion raised, surpassing Hong Kong’s US$2.8 billion

Enoch Yiu  
Published: 5:30pm, 1 Apr, 2019

Hong Kong’s stock exchange had the quietest first quarter in a decade, as its fundraising tally suffered from a dearth of blockbuster listings, while the US-China trade war deterred acquisitions and an increasingly stringent approvals process discouraged companies from raising fresh capital.

Total equity capital market funds fell 66 per cent in the first three months to US$6.98 billion compared with last year, according to Refinitiv’s data, the worst quarter since 2009 when the market was roiled by the Global Financial Crisis. The total amount raised in initial public offerings (IPOs) on Hong Kong’s main board and the Growth Enterprise Market (GEM) fell 11.6 per cent to US$2.8 billion.

“The IPO market was quiet in the first quarter as the HKEX tightened its approval of new listings,” said Clement Chan Kam-wing, managing director of BDO, the city’s fifth-largest accounting firm. “It raised more critical questions on the purpose of fundraising while rejecting more applications. This forced many [applicants] to delay their listing plans or opt for other methods to raise capital.”

The first quarter was a bad start to 2019 for Hong Kong Exchanges and Clearings Limited (HKEX), the operator of Asia’s third-largest equity market, as the US$2.3 billion IPO in March by the ride-sharing service Lyft raised Nasdaq’s fundraising tally to US$4.4 billion, surpassing Hong Kong. Shanghai was in third place with US$1.6 billion raised, while the New York Stock Exchange (NYSE) was in fourth place with US$1 billion.

The Listing Committee of the city’s stock exchange, working in a new structure following a 2018 overhaul of Hong Kong’s fundraising regulations, has become more stringent in vetting IPO applications. It rejected 24 listing applications last year, more than sevenfold increase compared with the three in 2017.

“There was a notable increase in the number of applicants rejected in 2018 as part of the listing application process, [due] in large part to the heightened scrutiny applied by the exchange following the publication of the revised Guidance Letter on suitability in April 2018,” said David Graham, HKEX’s Head of Listing in a statement last month.

The committee had already allowed the IPO applications by two of the world’s largest makers of bitcoin mining rigs – Bitmain Technologies and Canaan Creative – to lapse. The two companies sought to raise a combined US$3.4 billion in Hong Kong.

The fund raised from follow-on offering by listed company, including those from right issues, share placement and others, can only raise US$3.1 billion. This is down 81 per cent and is the lowest since 2008, Refinitiv data showed.

More details in https://www.scmp.com/business/companies/...arter-2009

[cyclone]

HKEX posts bright first-quarter profit, boosted by surge in foreign trading of A shares
* The operator of Asia’s third-largest stock market posted a 2 per cent rise in net profit to HK$2.6 billion (US$332 million) in the first quarter

Yujing Liu
Published: 1:31pm, 8 May, 2019

Hong Kong Exchanges and Clearing (HKEX), the city’s stock exchange operator, reported better-than-expected first-quarter earnings, as investment income and surging cross-border trading of mainland Chinese shares boosted revenue.

The operator of Asia’s third-largest stock market reported on Wednesday a 2 per cent rise in net profit to HK$2.6 billion (US$332 million) for the January-to-March quarter from the same period last year, beating the market consensus estimate of a 6 per cent decline, according to analysts polled by Bloomberg.

“It’s a decent result,” said Wong Chi-man, head of research at Hong Kong-based brokerage China Galaxy International Financial Holdings.

“It has a high base of turnover volume in the first half of last year, which is a negative factor to its earnings. But net profit still grew 2 per cent even though average daily turnover declined by 30 per cent,” Wong said.

Revenue rose 3 per cent to HK$4.3 billion, driven by a record income of HK$232 million from the cross-border Stock Connect programme, which allows mainland Chinese and Hong Kong investors to trade in each other’s market, according to the HKEX.

The turnover of northbound trading through the Connect climbed to its highest ever quarterly level for the three month ended in March, reaching a total of 75 billion yuan (US$11 billion) on March 5, HKEX said in the statement.

Investment income also climbed by 27 per cent to HK$372 million, supported by a strong rally in Hong Kong’s stock market. It helped offset a 31 per cent plunge in trading and clearing fees, a result of lower market turnover.

More details in https://www.scmp.com/business/companies/...ge-foreign

[weijian]

Hong Kong's IPO Gatekeeper Status Back in Focus After Arrests

The former HKEX official who was arrested is Eugene Yeoh, people with knowledge of the matter said. Yeoh, who resigned from HKEX in May, didn’t respond to calls seeking comments. He co-headed a team that vetted IPO applications and prepared reports for the Listing Committee, a rotating panel of external industry experts that reviews applicants.

Earlier this year, HKEX had received anonymous letters alleging that an unidentified Chinese private equity firm had been raising money from Chinese investors to create shell companies that it planned to list in Hong Kong, a person with knowledge of the matter said. The letters also alleged that a person inside one of the regulators had promised to help make sure the listings were successful, the person said.

It wasn’t clear whether the shell companies ended up going public in Hong Kong, and whether HKEX took any action based on the letters. A spokesman for the bourse declined to comment. Regulators have in recent years tweaked regulations to make it more difficult to list shell companies.

https://www.bloomberg.com/news/articles/...emium-asia

[dreamybear]

China’s investors are piling into Hong Kong shares via Stock Connect channel in the longest shopping spree in 18 months

- Chinese investors buy Hong Kong shares for 21 straight days, the longest such streak since February 2018
- Hong Kong stocks, the cheapest in Asia, trade at the lowest level against mainland equities in one and a half years

Published: 5:15pm, 16 Aug, 2019

Chinese investors are not abandoning Hong Kong’s stocks, even as Asia’s third-largest equity market endures a double whammy of social upheaval and jitters about a global recession.

Mainland traders have been buying the city’s stocks for 21 straight days through Friday via the cross-border investment channel known as the Stock Connect, pouring an aggregate HK$45.3 billion (US$5.8 billion) into equities listing on the Hong Kong stock exchange. That was the longest buying spree since February 2018, when capital poured in for 31 consecutive days.....

The Hang Seng Index is valued at 10.3 times earnings, cheaper than the multiple of 13.7 times in the Shanghai Composite Index, according to Bloomberg data. That makes Hong Kong’s key benchmark the cheapest among Asia’s major markets on a price-to-earnings basis. Out of the 10 industries on the index that its constituents are engaged in, five trade below their book values, the data showed....

Read more : https://www.scmp.com/business/markets/ar...ct-channel

[cyclone]

Hong Kong stock exchange operator makes bid to buy London Stock Exchange for US$36.6 billion
* Would be second overseas acquisition by HKEX after it took over London Metal Exchange in 2012

Enoch Yiu  
Published: 5:04pm, 11 Sep, 2019

Hong Kong Exchanges and Clearing offered to buy the London Stock Exchange for US$36.6 billion, the operator of Asia’s third largest market announced on Wednesday.

“The proposed combination would strengthen both businesses, better position them to innovate across markets and geographies, and offer market participants and investors unprecedented global market connectivity,” the Hong Kong Exchanges and Clearing – the operator of the city’s stock market – said in a stock exchange filing.

More details in https://www.scmp.com/business/companies/...ndon-stock

[weijian]

Charlies Li and his team are stuck between a rock and hard place. On your end, your prospective wife finds the marriage proposal and your conditions unattractive. On your dad's end, he finds this insolent son of his, not worthy of his support. Not to mention that the prospective wife actually finds the dad more attractive!

Hong Kong exchange LSE bid hit by further setback as China balks

The Hong Kong bourse's unsolicited takeover bid for the London Stock Exchange Group Plc was greeted with a scathing rejection and the exchange suffered a further humiliation when China praised the rebuff as well.

The official People's Daily wrote on Saturday that there are "persistent worries" about Hong Kong given the current unrest, and praised the LSE for citing its existing tie-up with the Shanghai Stock Exchange as its preferred way to access China in rejecting the offer. With almost half the Hong Kong bourse's board nominated by Hong Kong's Beijing-backed chief executive, the slap down from the mouthpiece of the Communist party signals growing resistance to the bid.

"The LSE rejection alone would probably have derailed HKEX's ambitions, but the People's Daily article surely represents the end of any acquisition hopes," said Brock Silvers, managing director at Kaiyuan Capital.

https://www.businesstimes.com.sg/banking...hina-balks

[cyclone]

Hong Kong bourse drops bid to buy London exchange, shelving its ambition to create one of the world’s biggest financial markets
* HKEX had faced a deadline of Wednesday to make formal offer for the London bourse operator
* The Hong Kong stock exchange operator will be unable to make a new bid for another six months

Chad Bray & Enoch Yiu  
Published: 8:32am, 8 Oct, 2019
Updated: 5:33pm, 8 Oct, 2019

Hong Kong Exchanges and Clearing Limited (HKEX) refrained from sweetening its £29.6 billion (US$36.4 billion) bid to buy the London Stock Exchange Group (LSEG), after its overtures to create one of the world’s largest financial marketplaces were spurned by London executives.

“The board of HKEX continues to believe that a combination of [London Stock Exchange Group] and HKEX is strategically compelling and would create a world-leading market infrastructure group,” the Hong Kong operator said in a regulatory statement on Tuesday morning. “Despite engagement with a broad set of regulators and extensive shareholder engagement, the board of HKEX is disappointed that it has been unable to engage with the management of LSEG in realising this vision, and as a consequence has decided it is not in the best interests of HKEX shareholders to pursue this proposal.”

By not making a so-called formal offer ahead of Wednesday’s deadline, the HKEX will not be able to pursue a bid for the London bourse operator for at least six months, according to United Kingdom takeover rules.

HKEX shares rose by as much as 2.7 per cent in Hong Kong, in their biggest intraday advance in a month, as investors were relieved that the operator would not raise its financial leverage to buy LSEG. HKEX shares rose to an intraday high of HK$232.20.

More details in https://www.scmp.com/business/companies/...k-exchange

[cyclone]

HKEX warns coronavirus epidemic poses challenges after posting record net profit for second straight year
* Bourse operator reports 1 per cent rise in annual net profit to HK$9.39 billion (US$1.21 billion) amid a slew of new listings and higher stock connect turnover
* HKEX chairwoman Laura Cha Shih May-lung warns Covid-19 and other global factors will shape performance of global stock markets this year

Enoch Yiu
Published: 2:12pm, 26 Feb, 2020
Updated: 2:21pm, 26 Feb, 2020

Hong Kong Exchanges and Clearing warned that this could be a challenging year as the coronavirus outbreak and other macroeconomic factors continue to adversely affect global markets, after it reported record profit for a second straight year.

The operator of the third largest stock market in Asia posted a net profit of HK$9.39 billion (US$1.21 billion), an increase of 1 per cent from HK$9.31 billion in 2018, on the back of a slew of new listings and higher turnover from the stock connect scheme, according to a stock exchange filing on Wednesday. However, the profit was slightly below the consensus forecast of 2 per cent growth according to analysts polled by Bloomberg.

HKEX chairwoman Laura Cha Shih May-lung warned of challenges ahead because of the outbreak.

“Global stock markets in early 2020 have been adversely affected by concerns over the Covid-19 outbreak and this, together with the ongoing Sino-US trade tensions, the upcoming US presidential election and the impact of Brexit, will undoubtedly shape the performance of capital markets in 2020,” she said in a statement.

New listings gained momentum in the fourth quarter last year, with the US-listed e-commerce giant Alibaba Group Holding’s US$12.9 billion secondary offering in November. This allowed the Hong Kong stock exchange to retain the No 1 ranking as the world’s largest IPO market. Alibaba owns the South China Morning Post.

HKEX shares fell 0.5 per cent to close the morning session at HK$260 before the results were announced during the lunch break.

“2019 was a good year for HKEX,” Charles Li Xiaojia, CEO of HKEX, said in the results statement. “Despite a challenging political and economic backdrop, we are reporting record revenue and other income, and profit, for the second consecutive financial year.”

He said the record profit was a result of “very strong stock connect revenue, a buoyant IPO market and good returns from investments offset macro-driven softness in trading volumes in the cash and derivatives markets”.

The company said it would pay a second interim dividend of HK$2.99 per share, bringing its full-year dividend to HK$6.71, the same as a year earlier.

Li will host a teleconference this afternoon instead of a press conference in view of the Covid-19 epidemic, which has infected over 80,000 people worldwide.

More details in https://www.scmp.com/business/companies/...er-posting

[stolt46]

Louis-Vincent Gave paints an optimistic picture for the future of Hong Kong as an international financial hub.

In a recent Interview with Macrovoice Host Eric Townsend Gave explains why he thinks that Hong Kong will thrive and the U.S. as well as the US-Dollar will suffer going forward:

- China needs HK as a financial centre
- Shanghai not in a position to replace it
- Delisting discussion for Chinese company ADRs on U.S. exchanges leading to a flood of secondary offerings in HK by major companies
- Fed's monetary policy damages the US-Dollar
- Chaos in the U.S. might lead to capital flight out of the U.S.

An audio version of the full interview is here:

https://www.macrovoices.com/podcasts-col...-hong-kong

[soros]

During the past 12 months with Hong Kong citizens exposed to covid virus infection attack , the HKEX shares have traded up from $250 levels to around $480 level with sky high PE at 52.

During past 5 years , EPS has risen from $4.76 ( 2016) to $9.1 ( 2020 )

It must be too overvalued for valuebuddies.