Hong Kong Exchanges Earnings: Positive Interest Rate Exposure Compensates for Lackluster Markets

We maintained our HKD 300 fair value estimate for wide-moat Hong Kong Exchanges and Clearing, or HKEX, following second-quarter results. Although the Hong Kong stock market has lagged this year compared with most other major stock markets, as expressed by the Hang Seng Index being down 9% year to date, HKEX delivered a solid result for the second quarter, with net profit up 34% on the prior corresponding period, or PCP.