Hong Kong Exchange Operator's Profit Slips as Trading, Listing Activity Cools — Update

By Kimberley Kao

Hong Kong Exchanges & Clearing posted an unexpected profit decline, its first in more than two years, as trading and listing activity in the Asian financial hub showed signs of moderation.

Net profit fell 0.8%, ending a growth run that began in early 2024, while revenue growth slowed to 1.2%, a far cry from strong double-digit rates Hong Kong's stock-exchange operator generated during its streak of record earnings.

The weaker-than-expected results come as concerns around artificial-intelligence valuations have hit stock markets around the world recently, and forced companies from memory-chip makers to hyperscale data-center operators to delay public listings. China is also tightening scrutiny around listings amid the market volatility, according to a Wall Street Journal report, potentially affecting an important pipeline for Hong Kong.

HKEX Chief Executive Bonnie Y Chan acknowledged the heightened macro uncertainties and continuing volatility Friday, saying the backdrop has only strengthened the exchange operator's "conviction in building a deeper and more diverse multiasset ecosystem."

"With global investors rethinking their capital-allocation strategies, this is a defining moment for Hong Kong's markets," Chan said.

HKEX's quarterly net profit edged down to 4.86 billion Hong Kong dollars, equivalent to US$619.8 million, from HK$4.90 billion a year earlier. Revenue and other income rose 1.2% to HK$7.87 billion, slowing sharply from growth of 18% in the second quarter and 20% in the first quarter.

Analysts had expected net profit of about HK$5.03 billion on revenue of HK$8.09 billion for the three months ended September, according to a Visible Alpha consensus.

HKEX said trading volumes fell during the quarter, with the headline average daily turnover dropping 11% "against a backdrop of more cautious market sentiment amid inflation concerns, uncertainty over U.S. interest rates and weaker momentum in AI-related stocks."

Higher trading and clearing fees from increased commodities market and Northbound Stock Connect volumes helped cushion the bottom line, as did a rise in listing fees, it said.

Funds raised from 31 new listings in the third quarter more than doubled to HK$176.0 billion, though listing activity eased compared with the first two quarters of the year.

HKEX shares ended 2.3% lower after the results, taking losses this year to more than 5%.

Michael Zhang of Citi Research said he expected the postearnings stock reaction to be relatively muted, pointing to HKEX's share-price weakness in recent months that likely already reflected expectations of softer trading activity.

Hong Kong's exchange operator has been rolling out measures to boost the market's attractiveness, such as allowing confidential filings for companies looking to list in the city. It also launched new indexes to track companies along the AI value chain, including chips and robotics, to capture momentum in the industry.

HKEX has said it plans to introduce one-day settlement trades by the second half of 2028, a move aimed at improving efficiency and reducing settlement risk.

For now, as sentiment around AI developments remains volatile, Hong Kong's Nasdaq-like Hang Seng Tech Index appears to bear the brunt of the pain. The tech gauge has declined about 26% this year, making it one of the region's worst-performing indexes.

Write to Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

November 06, 2026 04:48 ET (09:48 GMT)