|Bid||241.800 x 0|
|Ask||242.000 x 0|
|Day's Range||240.400 - 245.200|
|52 Week Range||218.800 - 286.200|
|Beta (3Y Monthly)||1.45|
|PE Ratio (TTM)||32.27|
|Earnings Date||Nov 6, 2019|
|Forward Dividend & Yield||7.44 (3.07%)|
|1y Target Est||283.00|
Hong Kong Exchanges and Clearing on Wednesday reported a better than expected 10 per cent decline in net profit during the third quarter even as stock market turnover and fundraising activity fell due to unprecedented anti-government protests.HKEX, which operates Asia's third-largest stock market and owns the London Metal Exchange (LME), said that its July to September quarter net profit stood at HK$2.2 billion (US$280 million), down from HK$2.44 billion a year earlier. On a quarterly basis, net profit declined by 15.4 per cent from HK$2.6 billion in the April to June period before the city was hit by protests.Its earnings per share of HK$1.76 per share beat market forecasts of HK$1.6, according to analysts polled by Bloomberg.Its third-quarter revenue fell 6 per cent year on year to HK$3.34 billion, again beating consensus estimates of a 10 per cent drop.Charles Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing, said the bourse operator had a good nine months despite geopolitical challenges. Photo: Jonathan Wong alt=Charles Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing, said the bourse operator had a good nine months despite geopolitical challenges. Photo: Jonathan WongThe third quarter was disappointing for the HKEX chief executive Charles Li Xiaojia. Besides the lower turnover and fewer initial public offerings, he also failed in his £29.6 billion (US$38.12 billion) bid to buy the London Stock Exchange launched on September 11, as it was rejected by the board of the London bourse."We were disappointed not to proceed with a firm offer for LSEG (London Stock Exchange Group), but we remain resolutely focused on the successful execution of our three-year strategic plan, maintaining good cost discipline and capturing future growth opportunities," Li said in the results statement. Hong Kong edges past Nasdaq as the world's third-quarter IPO hub"Set against a challenging broad geopolitical backdrop, HKEX has had a good first nine months of 2019. Record stock connect revenue, recent resurgence in the IPO market and good returns from investment income offset some macro-driven softness in cash market volumes.For the first nine months of this year, HKEX's net profit fell 1 per cent to HK$7.41 billion from HK$7.48 billion a year earlier.According to Bloomberg's consensus estimates, the exchange may find it hard to achieve its full-year net profit growth of 2 per cent to HK$9.48 billion if the protests continue. "The stock market turnover has gone down and so has the trading fee and settlement fee incomes. This has hurt the stock exchange's profit outlook," said Gordon Tsui Luen-on, chairman of Hong Kong Securities Association.The average daily turnover in the third quarter dropped 16 per cent year on year to HK$77 billion, while the nine-month turnover stood at HK$90.5 billion, a 21 per cent decline from HK$114.7 billion a year earlier, according to HKEX data.Listing fee fell by 10 per cent during the quarter as the amount raised from IPOs plummeted by 63 per cent to US$7.13 billion " the lowest in two years, according to financial data provider Refinitiv. The number of IPOs also decreased to 22 from 52 a year earlier."However, the Hong Kong IPO market has become active again since September after the market sentiment improved. Hong Kong still has a chance to beat New York to reclaim the crown as the No. 1 IPO market worldwide for the full year," Tsui said.China Feihe, whose baby milk formula is endorsed by actress Zhang Ziyi, completed its IPO on Wednesday. It is expected to raise up to US$1.14 billion if it can price its shares at the top end of the range, making it the third-largest IPO this year and the fourth IPO to raise more US$1 billion. Only Budweiser Brewing Company APAC's US$5.8 billion IPO in September and ESR Cayman's US$1.6 billion last month. Chinese sportswear manufacturer Topsports International Holdings also raised US$1 billion last month.Hong Kong Exchanges and Clearing owns the London Metal Exchange. Photo: AFP alt=Hong Kong Exchanges and Clearing owns the London Metal Exchange. Photo: AFPTurnover of metals contracts on the LME fell 4 per cent in the first nine months of the year to 618,000 lots. Meanwhile, the two stock connect schemes continue to bring additional revenue to the exchange. The average daily turnover from northbound trading " which refers to trading of A shares listed in Shanghai and Shenzhen via the HKEX " reached US38.5 billion, the second-highest quarterly turnover. The turnover via the connect schemes during the first nine months had doubled from a year earlier after major index compilers MSCI and FTSE Russell added the mainland traded shares to their benchmark indices.HKEX's costs during the first nine months fell 1 per cent to HK$2.9 billion as a result of a change to the accounting standard treatment on lease. If the effect is stripped, expenditure rose 6 per cent during the period due to higher staff and IT costs. HKEX shares were trading 0.2 per cent higher at HK$250.8 in afternoon trading.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
The operator of Hong Kong’s stock exchange saw its quarterly earnings fall by the biggest amount in almost three years against a backdrop of subdued equity market performance amid months of political unrest in the Asia finance hub. Hong Kong Exchanges and Clearing said in statement on Wednesday that net profit for the three months to September dropped 9.5 per cent year on year to HK$2.2bn ($280.9m) as revenue and other income slipped 3 per cent year on year to HK$3.99bn. Fees the exchange collects from companies for listing shares on the bourse fell 14 per cent. Trading fees were also down during the period as average daily turnover fell 16 per cent versus the second quarter, against a backdrop of Hong Kong equity market underperformance.
Hong Kong's stock exchange operator said quarterly profit dropped 8%, the steepest slide in nearly three years, as investor sentiment was hit by months of political unrest that pushed the Asian financial hub into recession. Hong Kong's Hang Seng index declined 8.6% during the quarter to end-September, marking its worst quarter in four years. While Hong Kong's pro-democracy protests show no signs of abating, the exchange's earnings could be bolstered by a pick up in IPOs in the fourth quarter.
A look at the shareholders of Hong Kong Exchanges and Clearing Limited (HKG:388) can tell us which group is most...
Startup steel trading firm Mettalex is in talks with exchanges about launching a new scrap contract focused on Asia, the firm's head said on Wednesday. Growing trade in steel scrap delivered in containers is ripe for a derivative, said Phillip Price, managing director of Mettalex which has its official launch on Friday. "We are big believers in the idea of a containerised scrap derivative product for south or east Asia.
Chinese biopharmaceutical company, Alphamab Oncology, plans to seek listing approval early next month for a Hong Kong initial public offering (IPO) of up to $350 million, people with direct knowledge of the matter said. Alphamab plans to carry out a deal roadshow and go public by the end of the year, the people added, as the Asian financial hub gets back into business after a freeze in recent months amid frequently violent anti-government protests. The company, backed by Hong Kong-based investment firm PAG, has appointed CLSA, Jefferies Financial Group and Morgan Stanley as sponsors to its IPO - a deal that has been in the planning stages for at least five months.
Hong Kong bourse Chief Executive Charles Li said there are fundamental flaws in the "one country, two systems" formula that govern the former British territory. The comments by Li mark a rare public condemnation from a senior Hong Kong business executive of the Beijing-backed administration under which the territory is ruled at a time when it is grappling with its biggest political crisis in decades. "The great concept, the great creation of one country, two systems is really, has some fundamental flaws at the very beginning of the implementation," he said.
The London Metal Exchange (LME) said on Tuesday it would create a committee to represent the interests and views of producers and users of lithium, a key ingredient in batteries. The LME said the committee was likely to include representatives of nine companies including vehicle makers Tesla and Jaguar Land Rover and lithium producers and processors Tianqi Lithium Australia, BASF and Albemarle. The LME plans a lithium contract, but has given no timeline for an official launch.
In 2010 Charles Li was appointed CEO of Hong Kong Exchanges and Clearing Limited (HKG:388). First, this article will...
Hong Kong stock exchange boss Charles Li ignited his unrequited overture to the London Stock Exchange with a riff on Romeo and Juliet as a corporate romance, and doused it in a wistful blog reference to the author of 'Alice in Wonderland'. After this week dropping the shock $39 billion approach, will Chief Executive Li's next post outlining a strategic vision for the bourse swap British literary references for a metaphor from a Chinese classic? Investors and analysts expect Hong Kong Exchanges & Clearing (HKEX) to refocus its efforts - for now - on expanding its links with mainland Chinese counterparts following the collapse of its ambitions to build a global exchange platform via a merger with the London Stock Exchange Group (LSE) .
Hong Kong Exchanges and Clearing Limited (HKEX) refrained from sweetening its £29.6 billion (US$36.4 billion) bid to buy the London Stock Exchange Group (LSEG), after its overtures to create one of the world's largest financial marketplaces were spurned by London executives."The board of HKEX continues to believe that a combination of [London Stock Exchange Group] and HKEX is strategically compelling and would create a world-leading market infrastructure group," the Hong Kong operator said in a regulatory statement on Tuesday morning. "Despite engagement with a broad set of regulators and extensive shareholder engagement, the board of HKEX is disappointed that it has been unable to engage with the management of LSEG in realising this vision, and as a consequence has decided it is not in the best interests of HKEX shareholders to pursue this proposal."By not making a so-called formal offer ahead of Wednesday's deadline, the HKEX will not be able to pursue a bid for the London bourse operator for at least six months, according to United Kingdom takeover rules.HKEX shares rose by as much as 2.7 per cent in Hong Kong, in their biggest intraday advance in a month, as investors were relieved that the operator would not raise its financial leverage to buy LSEG. HKEX shares rose to an intraday high of HK$232.20.HKEX has just announced that it will not proceed with an offer for the London Stock Exchange Group. Read the announcement and the thoughts of Chief Executive Charles Li in his latest blog. https://t.co/vnEJLDFMGV pic.twitter.com/Jxv6CwphVn" HKEX 香港交易所 (@HKEXGroup) October 8, 2019The decision was a setback for HKEX's Chief Executive Charles Li Xiaojia, who announced his surprise cash-and-stock bid for LSEG on September 11 at £83.61 per LSE share.The combination of the two exchanges would have created one of the world's largest markets for financial instruments, with an 18 hour trading window that spanned time zones from Asia to Europe, making it more attractive for giants such as Saudi Aramco to raise capital, compared with the New York Stock Exchange and Nasdaq. HKEX was the world's top destination for initial public offerings (IPOs) in six of the past 10 years.Li, a former journalist before he became an investment banker, channelled Lewis Carroll, the much-loved British author of Through the Looking Glass."I don't have a crystal ball, but I'm reminded of Carroll, who once said, 'We only regret the chances we didn't take.' My job as CEO at HKEX is, along with the board and the management team, to make sure we take those chances with our eyes wide-open, balancing risk and opportunity," Li said in a blog post on Tuesday. "I need to be rooted in our day-to-day business but forward-focused, certain that if we try something and it doesn't work, we are strong enough and diverse enough to dust ourselves down and move forward. And today, in the absence of a looking glass, I am as certain as I can be, that we are."Li's unexpected bid for LSEG, unveiled within days of a surprise visit to London, came hot on the heels of the London bourse's US$27 billion bid to buy the financial data provider Refinitiv. The HKEX bid was conditional on LSEG dropping its Refinitiv purchase.On Tuesday afternoon, LSE said it remained committed to and "continues to make good progress" on the proposed acquisition of Refinitiv, which is expected to close in the second half of 2020."The announced offer was already very high, and there is no way for the HKEX to raise it further to satisfy LSEG's shareholders," said Christopher Cheung Wah-fung, a local legislator representing the financial services sector, who is also the founder and chief executive of Christfund Securities."As an HKEX shareholder, I do not support the local bourse wasting its time on another overseas M&A;," said Cheung, whose brokerage received HKEX shares when the exchange operator listed in 2000. "It should instead focus more to strengthen its IPO process to attract more companies engaged in China's Belt and Road Initiative to list here. The only sensible deal would be to collaborate more with the stock exchanges of Shanghai and Shenzhen."To be sure, the London bourse had tried to merge before, but failed to get regulators' approval to combine with the Deutsche Boerse two years ago. US$36.6 billion offer for London Stock Exchange boosts Hong Kong M&A;The London bourse operator rejected the HKEX deal on September 13 in a strongly worded letter, questioning its strategic sense and whether it could receive regulatory approval.At Sibos 2019 in London, on September 24, David Schwimmer, LSE's chief executive, said the exchange preferred Shanghai over Hong Kong as a long-term partner to access the Chinese markets."For the long term? For the financial centre of China? We view Shanghai as the financial centre of China," Schwimmer said. "We value that partnership with the Shanghai Stock Exchange, we think it's mutually beneficial. In June, we launched Shanghai-London Stock Connect, the first of its kind."The Connect scheme, a cross-border investment channel that allows Chinese investors to gain access to European equities via London, and for global investors to trade in Shanghai-listed shares via the LSEG, currently features one Chinese company in Huatai Securities, while China Pacific Insurance said last month it would list in London at a later date. No UK-based company is currently listed in Shanghai.HKEX put on a charm offensive to try to convince LSE shareholders to accept the deal, hiring HSBC and UBS to lobby shareholders directly. Several LSE shareholders urged the Hong Kong bourse operator this month to raise the offer by 20 per cent, according to a Reuters report.Some HKEX shareholders, however, were opposed to a potential improved bid, saying it presented more risk to them, including whether regulators would sign off on the combination."The abandoning of the acquisition of LSE will boost the share price of HKEX, as it means the bourse operator will not need to borrow a huge sum of money for the deal," Gordon Tsui Luen-on, broker and HKEX shareholder, as well as chairman of the Hong Kong Securities Association, said on Tuesday.He said he supported the deal. "HKEX's takeover of LSE would help the local stock exchange to expand its global footprint. However, I would not have agreed to further raising the offer price, as that would mean the HKEX would have to shoulder more debt than the original proposal, which might add to HKEX's the financial burden," Tsui said."The HKEX might consider other acquisition targets for expanding its business in the future," he added. Hong Kong may have lost US$4 billion to Singapore during protests: reportThe bid for LSE came as Hong Kong has faced one of its worst political crises this summer, one that has raised questions about its future as an international financial centre.Protesters have taken to the streets over the past four months to demonstrate against a controversial extradition bill that would have made it easier to send criminal suspects to mainland China for trial.The bill has been formally withdrawn, but the protests " marked by increasingly violent clashes between demonstrators and police " have evolved into a larger discussion about income inequality, affordable housing and China's growing influence over the city.At the same time, the UK is undergoing its own political crisis as it prepares to exit the European Union, possibly as soon as the end of this month. Questions remain about whether the UK will seek an extension, or crash out of the 28-nation bloc with no agreement.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
London Stock Exchange Group shares stumbled 6% after Hong Kong Exchanges & Clearing said "it is not in the best interests of HKEX shareholders to pursue" its takeover bid. The LSE had said it was opposed to the offer.
(Bloomberg Opinion) -- That was quick. Workers in Hong Kong’s finance industry returned to the office after a long weekend of violent protests to find that their stock exchange has decided not to pursue a takeover bid for its London counterpart.The limp end to its month-long courtship has left Charles Li, chief executive officer of Hong Kong Exchanges & Clearing Ltd., looking rather silly. One can’t help wondering if the exchange has any leadership, vision or ambition left. The same can’t be said of London Stock Exchange Group Plc. By bidding for Refinitiv, the LSE is taking on a lot of risk. On completion of the deal, the exchange’s net-debt-to-Ebitda ratio would rise to 3.5 times, well above the 1 to 2 times range that its management deems comfortable. It will take the LSE more than two years to bring its debt level back down – and even that estimated time scale is seen as ambitious by analysts. Yet the London exchange is charging ahead, in the face of Brexit and a deteriorating global economic outlook, to diversify away from trading revenue that’s being eroded by the rise of passive investing.HKEX’s pursuit was half-hearted at best. With a squeaky-clean balance sheet, the company could have done a lot more. If it had been willing to bring its leverage ratio to the same level that LSE is tolerating, HKEX would have had more than $18 billion in cash to sweeten its offer. While LSE management was scathingly dismissive of the HKEX offer, many of its shareholders might well have been tempted – especially if the Hong Kong exchange had increased the cash component of its bid. After all, immediate cash-on-hand is always appealing for passive fund managers, which account for almost all of LSE’s ownership. What’s left for Hong Kong? The 200,000-odd finance professionals employed in the city will be asking themselves. HKEX CEO Li, who earned HK$29 million ($3.7 million) last year, likes to talk up Hong Kong as the gateway for foreign capital to China. Reality suggests otherwise. Wary that the Trump administration will limit U.S. investments into China, American fund managers are already tiptoeing away. They got their latest warning on Monday, when Hangzhou Hikvision Digital Technology Co. was placed on a U.S. blacklist. In 2018, foreigners owned more than 10% of the surveillance camera maker. Local retail and institutional investors accounted for only 30% of HKEX trading last year, according to the exchange. Americans are the second-largest outside investors, after those from mainland China, accounting for 10% of Hong Kong’s total trading. The actual number is likely to be quite a bit higher, as U.S. banks also trade Hong Kong stocks using their principal accounts. Billions of dollars will flee as U.S.-China trade tensions escalate. Those still brave enough to stick around may look to the mainland market instead. China’s announcement that it will remove quotas on buying Chinese stocks and bonds in September is a clear sign that Beijing is looking for an onshore alternative to Hong Kong. There’s something to be said for the Chinese market: While the Shanghai and Shenzhen exchanges are near par with Hong Kong by market cap, stocks there are a lot more liquid.At times of economic distress in the mainland, state-owned enterprises routinely perform national service, piling on debt to build roads to nowhere and provide employment. With almost half its board appointed by the Hong Kong administration and its chairman picked by the city’s chief executive, HKEX has the characteristics of a local government financing vehicle in China. So why is the exchange so timid in its drive to maintain Hong Kong’s relevance as a financial center? HKEX shareholders may be cheering after it dropped the LSE bid. Many finance workers won’t be. To contact the author of this story: Shuli Ren at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Hong Kong's bourse on Tuesday scrapped its unsolicited $39 billion approach for London Stock Exchange Group (LSE) after failing to convince LSE management to back a move that could have transformed both global financial services giants. The Hong Kong exchange had said the LSE would have to ditch the Refinitiv purchase for its offer to go ahead.
Hong Kong's bourse has scrapped its unsolicited $39 billion approach for London Stock Exchange Group after failing to convince LSE management and investors to back a move that could have transformed both global financial services giants. Last month's surprise cash-and-shares approach threatened to upend the LSE's $27 billion plan to buy data and analytics firm Refinitiv. The Hong Kong exchange had said the LSE would have to ditch the Refinitiv deal for its offer to go ahead.