HKEX Reports Record High 2019 Profits Despite Drop in Trading

Hong Kong Exchanges and Clearing Limited (HKEX) has published its financial results for the year ended on the 31st of December, 2019, this Wednesday, revealing a record performance for the Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term.

In particular, HKEX managed to achieve record revenues and other income for the twelve-month period. During the year, the exchange posted revenue of $16.3 billion. This is higher by 3 percent from 2018, resulting in record-high profit attributable to shareholders of $9,391 million, which is also higher by 1 percent.

Despite solid revenue and other income, trading volumes fell from 2018’s record highs, dragged down by the macro-environment, which dampened investor confidence. Nonetheless, the turnover of RMB Currency Futures (USD/CNH) reached another milestone at 1,938,891 contracts. This represents a growth of 10 percent when measured against the same period of the previous year.

Commenting on the results, Charles Li, the Chief Executive Officer of HKEX, said in the statement: “2019 was a good year for HKEX. Despite a challenging political and economic backdrop, we are reporting record revenue and other income, and profit, for the second consecutive financial year."

“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."

HKEX and the impact of Coronavirus Coronavirus The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, Read this Term

Looking to the future, HKEX’s CEO states that its regional and global markets will continue to be sensitive to geopolitical and macroeconomic uncertainties, as well as the epidemic situation of COVID19 (Coronavirus).

“Our focus will be on maintaining operational resilience in times of unpredictability and challenges: I am confident that the success of the Group will continue to be underpinned by long-term growth in China, the continuous strength of Hong Kong as a vibrant international financial centre and our focus on embracing technology,” the report said.

“It is also our top priority to further build, strengthen and diversify our capabilities in market connectivity, to develop our talent pipeline and to reinforce Hong Kong’s relevance to both the East and West as the decade unfolds. In doing so we will realise our vision of being the ‘Global Markets Leader in the Asian Time Zone.’”