Hong Kong Exchanges and Clearing, which operates the Hong Kong stock exchange, the third-largest bourse in Asia, reported a record net profit of HK$9.3 billion (US$1.18 billion) for last year, an increase of 26 per cent over 2017.
“HKEX has benefited from a rising turnover and this trend has continued this year. Its turnover has reached HK$170 billion on some days this week. This shows investment sentiment has improved, as many central banks, including the US Federal Reserve, have indicated a slow down in interest rate increases. This has led fund managers and other investors to put their money in equities,” said Ben Kwong Man-bun, a director at brokerage KGI Asia.
“The January data for China is also positive. The announcement of the ‘Greater Bay Area’ blueprint is also going to add more cross-border trading between the Hong Kong and mainland China markets, which will benefit HKEX. However, investors should beware. The share price of HKEX has risen substantially in recent months. I believe it will retreat a bit after hitting HK$290 per share,” he said.
Investment bank China International Capital Corporation was more bullish, raising its target price for HKEX shares from HK$310 to HK$345 in a report released on Tuesday, before the profit announcement.
“HKEX will announce its 2019–2022 corporate strategy on February 28, which we see as a short-term catalyst that could push the stock price higher,” the report said.
HKEX chairwoman Laura Cha Shih May-lung said in a statement: “We are entering 2019 with more geopolitical and economic uncertainty than has been the case for many years.
(South China Morning Post)
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