HKEX Sees Solid Performance in H1 2019, RMB Trading Surges

Increased volatility in the RMB against the USD supported higher trading volumes.

Hong Kong Exchanges and Clearing Limited (HKEX) has published its financial results for the first half of 2019, ended on the 30th of June 2019. Taking a look at the results, the exchange operator has managed to report an increase across its key financials.

During the six months ended on the 30th of June this year, HKEX reported revenue and other income of $8.58 billion. When measuring this against the first half of 2018, it has risen by five percent.

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According to the report, the uptick in revenue was driven by an increase in net investment income and a record half-year revenue from Stock Connect. These segments managed to offset a drop in trading and clearing fees, which were dragged down by lower cash market turnover.

Alongside revenues, operating expenses also increased by two percent against H1 of 2018. This was thanks to higher staff and IT costs, which was partly offset by lower premises expenses, the report said.

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RMB currency derivative trading on HKEX posts strong results in H1

In the first half of 2019, the trading volume for RMB currency derivatives grew, with more than 1 million futures contracts traded during the six-month period. This is higher by 48 percent than the first half of 2018.

Powered by a surge in the volatility of the RMB against the USD in the second quarter of this year, the average daily volume (ADV) for USD/CNH futures surged to 10,782 contracts in June of this year. This is higher by 29 percent when compared with the first five months of the year.

Supporting this uptick in trading, new liquidity providers were recruited for USD/CNH futures and its calendar spread contracts by HKEX in the first half to further enhance market liquidity, the report said.

HKEX noted another record during the first half of 2019, as its OTC Clear saw a total of $105 billion of the notional amount being cleared. This has grown by 92 percent from the first half of 2018.

Breaking this down, during H1 of 2019, a notional amount of $58 billion was cleared for HKD interest rate swaps (IRS). This is higher by 242 percent year-on-year. During the period, HKEX also noted a good flow of USD/HKD cross-currency swaps (CCS) with a total notional amount of $18 billion being cleared. This is almost double than what was cleared in the same period of last year.

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