HKEX first-half net profit rises 31%, CEO Nicolas Aguzin optimistic

Hong Kong Exchanges and Clearing reported a 31% jump in net profit for the first six months of the year, compared to a year ago — and its CEO has expressed optimism about the medium-term outlook.

The strong numbers are attributed to the HKEX’s “diversification away from just the cash business” and the “tremendous” growth of its ETF franchise, CEO Nicolas Aguzin told CNBC’s Emily Tan on Wednesday. He added that the exchange also benefited from the increase in interest rates.

HKEX’s half-year net profit jumped to 6.31 billion Hong Kong dollars ($806.6 million) from HK$4.84 billion a year ago, boosted by the “robust growth” in its derivatives market, the exchange said in its press release.

Revenue from its core businesses rose to HK$9.73 billion in the January to June period, up 5% year-on-year.

Aguzin acknowledged that investors are in an “environment of caution” right now, with geopolitics being one of the factors. Still, he expressed optimism for the exchange’s near term outlook, on hopes of lower inflation numbers and additional stimulus from China.

“We’re quite optimistic about the medium term given that we’ve seen a little bit more predictability in terms of the direction of inflation, [with] inflation coming down,” he said, adding he’s hopeful for “additional stimulus that has been announced from the mainland.”

China unexpectedly cut rates this week in a bid to prop up the flailing economy. The top leadership has pledged stimulus measures to support specific sectors, promote investments and boost consumer confidence.

Meanwhile, there are signs that global inflation is finally coming down. The U.S. consumer price index climbed 3.2% from a year ago in July, a sign that inflation has lost at least some of its grip on the U.S. economy.

When asked about Hong Kong’s status as a capital raising hub in terms of the rankings for its IPOs, Aguzin said: “We’re looking at the long term and opportunity.”

Hong Kong’s stock market was among the worst-performing in 2022, losing 15% that year.

“We’re already a marketplace for new economy [companies], there’s over 110 companies right now that are waiting to go to the market, and they’re waiting for … the right market sentiment to be able to do that,” the CEO said.

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