Mainland Firms Help HKEx Boost First Half Earnings

by Mary Swire, Tax-News.com, Hong Kong

17 August 2004

A surge of new share sales by mainland firms has helped the Hong Kong Stock Exchange double its first half earnings to a shade under HK$505 million (US$64.75 million).

The 38 new listings during the first half (23 to the main board and 15 to the second board) raised a total of HK$55.3 billion. This compares to a total of HK$7.2 billion in the same period last year. Moreover, more than 86% of the funds were raised by mainland companies, according to HKEx chief executive Paul Chow.

However, Chow warned that external economic factors may limit the exchange’s income in the latter months of the year.

“Trading appears to have peaked temporarily in the first quarter of 2004 before easing back to a level similar to that of the third quarter of 2003, as investors watched from the sidelines the likely impact of the macroeconomic adjustments in mainland China, high oil prices and the beginning of a rising interest rate cycle in the United States,” he observed.

“It is likely that market sentiment will continue to be affected by the uncertainties created by these issues,” the HKEx chief cautioned.

While average daily turnover on HKEx jumped by 137% to HK$16.8 billion, average daily trading volume fell for the seventh consecutive month, declining 15 % last month to HK$10.7 billion.

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