HKEX Revenues and RMB Currency Derivative Volumes Grow in Q1

Revenues and other income were $547.9 million in the first quarter.

Hong Kong Exchanges and Clearing (HKEX), which operates the city’s stock exchange, has published its unaudited consolidated results for the first quarter of 2019, ended March 31, 2019, this Wednesday.

Following a solid performance in 2018, overall, the exchange operator managed to report an uptick across all of its key financial indicators, although the growth was low. During the period, revenue and other income was HKD 4.3 billion ($547.9 million). This is higher by three percent when compared with the first quarter of 2018.

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According to the report, the increase in revenue and other income was driven by an increase in net investment income and record high quarterly revenue and other income from Stock Connect. This offset a reduction in trading and clearing fees which was the result of lower cash market turnover and derivatives trading volume.

Operating expenses during the first quarter also noted an increase during the first quarter of 2019. In fact, operating expenses climbed by four percent from HKD 935 million in Q1 of 2018 to HKD 970 million in the most recent quarter.

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Charles Li, Chief Executive of HKEX
Charles Li, CEO of HKEX
Source: HKEX

Commenting on the results, Charles Li, Chief Executive said, “HKEX had a good start to 2019 despite a more challenging macro environment driving year-on-year softness in Cash Market volumes. HKEX continues to focus on its 3-year strategic plan and good cost discipline. We remain well positioned to capture further growth opportunities.”

RMB Currency Derivatives Grow in Q1 of 2019 for HKEX

In the first quarter of this year, Renminbi (RMB) currency derivative volumes continued to grow thanks to an expanding market participant base which offset the relatively subdued volatility of the USD/CNH currency pair.

The average daily volume (ADV) of USD/CNH futures during the quarter was 8,573 contract. When comparing this against the previous quarter, it is higher by 33 percent. On an annual comparison, it is up by 63 percent.

“In January 2019, two new liquidity providers were recruited for USD/CNH futures calendar spread contracts, which will facilitate efficient calendar rolling activities of market participants. Going forward, HKEX also plans to explore the addition of new interest rate derivatives to cater for the growing hedging demand of Bond Connect investors,” the statement said.

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