2023-08-17 12:45:00
Hong Kong Stock Exchange (00388)’s performance in the first half of the year grew once morest the trend, not relying on transactions and relying on investment, but the target price was lowered by a major bank
Zhitong Finance APP learned that on August 17, the stock price of the Hong Kong Stock Exchange (00388) opened lower and moved higher. As of the close, it fell 0.8% to HK$297.2 per share. On the news, on August 16, the Hong Kong Stock Exchange announced the 2023 interim performance report. In this regard, Goldman Sachs pointed out that HKEx’s second-quarter earnings per share were in line with Goldman Sachs’ expectations, as weaker revenue was offset by better-than-expected cost management. The bank lowered its 2023 EPS forecast by 4%. The bank lowered the target price of Hong Kong Stock Exchange from 400 Hong Kong dollars to 380 Hong Kong dollars.
The Hong Kong Stock Exchange’s 2023 interim performance report shows that revenue and other income in the first half of the year were 10.575 billion Hong Kong dollars, a year-on-year increase of 18%; net profit was 6.312 billion Hong Kong dollars, a year-on-year increase of 31%. Among them, the main business income was 9.729 billion yuan, an increase of 4.86% year-on-year; the net investment income was 817 million Hong Kong dollars, and the net loss in the same period last year was 378 million Hong Kong dollars, turning losses into profits year-on-year.The Hong Kong Stock Exchange stated that the increase in income was mainly due to the impact of the record high net investment income in the first half of the year.
It is understood that the Hong Kong Stock Exchange’s derivatives transactions, futures transactions, etc., require customers to pay specific margins, and the Hong Kong Stock Exchange will convert these margins into deposits and debt securities to ensure safety. Benefiting from the increase in interest rates on Hong Kong dollar and U.S. dollar deposits, HKEx’s investment income rose from HK$89 million to HK$2.676 billion. Among them, the return on investment of company funds, margins and clearing house funds has increased significantly.However, if the interest rate hike cycle ends, the high investment returns of HKEx may not be maintained.
As of the end of June, the company’s capital on the Hong Kong Stock Exchange reached 35.67 billion Hong Kong dollars, and the annualized net return on the company’s capital investment reached 4.80%. The loss rate in the same period in 2022 was 2.2%. The margin and clearing house fund is HK$201.66 billion, and the annualized net return on investment is regarding 1.58%, which is only 0.34% in the same period in 2022.
Data show that in the first half of this year, the average daily turnover of the Hong Kong securities market was HK$115.5 billion, a year-on-year decrease of 16%. Excluding investment income and charitable foundation donation income, HKEx’s traditional business income in the first half of the year, such as trading fees, trading system fees, settlement and delivery fees, listing fees, depository, custody and agency service fees, was HK$7.858 billion, a year-on-year increase of HK$7.858 billion. A drop of 10.58%.To a certain extent, the substantial increase in investment income may have offset the adverse effects of the stock market pressure from interest rate hikes.
In addition, with regard to the stamp duty issue that the market has been concerned regarding recently, Ou Guansheng said that stamp duty accounts for a large proportion of the overall transaction cost, and he has been paying attention to the impact of stamp duty on the market. Exemption of stamp duty on individual products such as exchange-traded funds (ETFs) and hedging derivatives in the early years has helped to increase market activity. The Hong Kong Stock Exchange will hold meetings with financial institutions from time to time to understand the needs of the market. Market participants expect any way to reduce transaction costs. However, whether to reduce the stamp duty rate depends on how the Hong Kong SAR government balances the needs of all parties.
The Hong Kong Securities and Futures Professionals Association issued a public document on August 9, strongly recommending the “revocation of stamp duty on stocks”. It believes that the Hong Kong government’s increase in stock stamp duty is competing with the people in disguise, robbing the remaining profit margins of securities companies in a severe environment, and tax increases will also affect Hong Kong’s competitiveness and shake Hong Kong’s competitiveness as an international financial center. The Hong Kong government must closely monitor the policy Effectiveness and impact, review and correct in a timely manner, and lower the tax rate to an internationally competitive level.but,It is still unknown whether the reduction of stamp duty will drive the recovery of trading volume in Hong Kong stocks.
In terms of the secondary market, the stock price of the Hong Kong Stock Exchange has continued to fluctuate and fall since it hit a phased high of HK$378.71 per share on January 9 this year. As of the close on the 17th, the stock price has fallen by more than 20% during the period.
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