HKEX 0388

[winston]

Not vested.

UPDATE 1-HKEx Q3 net up; daily turnover down q/q

* Q3 net up 33 pct to HK$1.27 bln vs forecast HK$1.25 bln
* Q3 average daily turnover up 5 pct yr/yr, down 6.6 pct q/q

HONG KONG, Nov 11 (Reuters) - Hong Kong Exchanges & Clearing (HKEx) <0388.HK>, the world's second-largest listed exchange operator, said its third-quarter net profit rose 33 percent as trading volumes improved and IPO market activity picked up.

But some analysts expressed cautioun on the outlook for HKEx as competition from Chinese rivals increases and as daily turnover, which fell on a quarter-on-quarter basis, shows no significant uptrend.

Earnings at HKEx, which recently slipped behind global No.1 CME Group in market capitalisation terms, outperformed regional rival Singapore Exchange , which last month posted an 11 percent rise in net profit for the same period.

[ID:nSIN541309] HKEx on Wednesday reported a net profit of HK$1.27 billion for ($163.9 million) for the July-September period against HK$959.65 million a year earlier, when a global sell-off slashed stock trading volumes and halted new listings.

The result was in line with an average forecast of HK$1.25 billion from three analysts surveyed by Reuters, but marked a decline over the HK$1.37 billion profit it reported for the second quarter of 2009.

"The decrease in profit (from the previous quarter) was mainly driven by the lower market turnover and lower net investment income," chairman Arculli Ronald Joseph said in a statement.

Average daily turnover, the key determinant of exchange revenue, rose 5 percent to HK$66.7 billion in the third quarter, compared with HK$63.6 billion a year earlier. However, it fell 6.6 percent from HK$71.4 billion in the second quarter as investors turned cautious despite the recovery in the stock market.

Listing fees rose 8 percent from the second quarter after the IPO market revived as rising risk appetite and a recovery in share prices encouraged companies and investors back to the primary market.

"We will continue promoting our fundraising platform around the world, and strengthening our offerings and services to increase our competitiveness," Arculli said.

HKEx shares have risen about 90 percent this year, beating a 56 percent gain in the broader market <.HSI>. The stock was down 1.13 percent to HK$140.20 at midday on Wednesday, despite a 0.69 percent gain in the broader market.

Source: Donny Kwok, Reuters

[winston]

HKEx profits up 33pc by Katherine Ng, The Standard HK

Renewed appetite for stocks and IPOs have helped third-quarter earnings at Hong Kong Exchanges & Clearing (0388) surge 33 percent from a year ago to HK$1.27 billion.

But the figure was 7 percent short of the HK$1.367 billion net profit the bourse operator achieved in the second quarter.

Analysts said the July to September performance was slightly better than the average forecast of HK$1.25 billion.

But there is concern over rising competition from the Shanghai and Shenzhen exchanges.

"The decrease in profit was mainly driven by lower market turnover and lower net investment income," said chairman Ronald Arculli yesterday.

Average daily turnover at the world's second-largest listed exchange operator fell 6.6 percent to HK$66.7 billion from HK$71.4 billion in the second quarter.

But that figure represented gains over the HK$63.6 billion of a year earlier and the HK$61 billion in the first nine months.

Firms raised about HK$364.8 billion in the third quarter, bringing in listing fees of HK$514.44 million, 8 percent up from the second quarter, as IPOs and equities once again gained investors' favor. The new companies brought the number of firms listed on the bourse to 1,286.

Arculli said promoting HKEx as a fundraising platform and strengthening its offerings and services are the keys to increasing the bourse operator's competitiveness.

HKEx has proposed speeding up rights issues and open offers by shortening the timetable and accepting mainland accounting standards to simplify procedures.

Consultations on the proposals are underway and are expected to be completed by the end of the year.

Shares of HKEx closed 0.28 percent lower at HK$141.40.

The stock has risen about 90 percent this year, outperforming the Hang Seng Index, which gained 56 percent.

http://www.thestandard.com.hk/news_deta ... 91112&fc=7

[winston]

Not vested. From Phillips:-


Recommendation

We have not changed earnings in this report. We believe once the ADT further increases, the market will recognize HKEx as a lagger and it is very likely to happen in 3 months.

We assign “Trading Buy” for HKEx with 3-month target price of $164, about 26x 2010 P/E. We believe HKEx will outperform and its total return is expected to exceed HSI by 5% or more in the coming 3 months.


Key Risk

- Lower than expected market turnover

- Rebound of global market ended and market sentiment squeeze

[winston]

Not vested. The dear can get dearer. The ADT has been quite steady at HK$65b per day. IPO will continue to provide volume and I dont think Dark Pools would be threat yet.

==========================================

DJ MARKET TALK: HKEx +0.7%; GuocoCapital Says Expensive, Sell

1201 [Dow Jones] HKEx (0388.HK) +0.7% at HK$135.80 vs HSI down 0.3%, recently more resilient vs broad market (down 4.3% past one month, vs HSI down 6.5%); relative outperformance likely due to recent newsflow suggesting IPO pipeline remains strong for HK bourse, including heavyweight AIA floatation, while Russian aluminum giant UC Rusal gets conditional listing OK.

Still, GuocoCapital keeps view stock expensive, trading at 30.5X/27.0X house's forecast FY09/10 earnings, which 84% premium vs HSI's FY09 P/E of 16.6X vs historical premium of 40% to 120%. Keeps Sell call, 6-month target price of HK$119

Source: Dow Jones Newswire

[millionairemind]

Hong Kong as a financial centre
Flagrant harbour

Jan 7th 2010 | HONG KONG
From The Economist print edition
Hong Kong’s stock exchange looks beyond China
http://www.economist.com/businessfinanc ... d=15211802

[millionairemind]

Jan 11, 2010
Hong Kong leads IPO race

HONG KONG - HONG KONG'S stock exchange was the world's hottest IPO market last year with more than US$30 billion (S$41.7 billion) in new listings, but it stands accused of sacrificing quality for quantity.

The bourse is keen to stay ahead of rival Shanghai and attract non-Chinese companies, but criticism has mounted after the controversial approval of Russian aluminium giant UC Rusal's share sale and a string of listing debacles. The exchange repeatedly delayed approving Rusal's US$2.6 billion initial public offering (IPO).

Unproven allegations that chief executive Oleg Deripaska has links to organised crime dogged the world's biggest aluminium maker in its attempts to become the first Russian company to list in Hong Kong. And when the listing was finally approved last month, the Securities and Futures Commission (SFC) stepped in with what observers call 'unprecedented' restrictions for the IPO.

The SFC stipulated a minimum investment in Rusal equivalent to about US$130,000 - reportedly a bid to shield small investors from the complicated offering.

'It was quite a surprise that the SFC agreed to Rusal's listing,' said Raymond Chan, acting director of the Centre for Corporate Governance and Financial Policy at Hong Kong Baptist University. 'I think the exchange and SFC are aware of the quality problem.'

Mr Chan warned that the exchange could be putting its reputation at risk. 'Listing in Hong Kong would be associated with low quality.' -- AFP

[winston]

Not logical...

HKEX has been climbing when the turnover has been dropping.

Nowadays, turnover has been very high but HKEX has been dropping in price

[winston]

PE 28 is undemanding ?

DJ MARKET TALK: HKEx Down 1.8%; Valuation Undemanding - Taifook

1143 [Dow Jones] HKEx (0388.HK) down 1.8% at HK$133.40, falling more than HSI's 1.1% decline, as trading volume of local bourse has remained relatively tepid (last at HK$25.32 billion) ahead of Chinese New Year holidays (starting from Feb. 14).

Taifook has fine-tuned its FY09 earnings estimate for HKEx, as actual average daily turnover (ADT) coming in at just HK$65 billion for 4Q09 and HK$62 billion for FY09, which were below house's earlier expectations. But keeps its FY10 earnings forecast on an ADT assumption of HK$80 billion.

( I have not seen HK$80b in a long time. And if you cant get it in a bull market with record IPOs, can you get it in a bear market ? )

"Despite trading at a premium to international peers, HKEx is in a unique position to capitalize on major catalysts that may drive turnover and valuation in the years ahead."

( Like what ? And what about dark pools ? )

Rates at Buy, HK$152 target, derived from undemanding 30X FY10 P/E.

Source: Dow Jones Newswire

[winston]

Not vested.

DJ MARKET TALK: HKEx Down 1.6%; Market Volume Tipped To Pick Up

1533 [Dow Jones] HKEx (0388.HK) down 1.6% at HK$127.40, but falling less vs HSI down 2.5%, despite HK market volume hovering at very low level, at HK$34.09 billion with half-hour of trade left; full-day volume set to fall short of HK$50 billion mark for each trading day so far in year of Tiger.

Still, "many investors probably haven't come back from long holidays, and mainland markets haven't re-opened," says Ample Financial Group's Alex Wong; expects market volume to pick up significantly starting Monday, when A-shares re-open.

HKEx's current price not far from year-to-date high of HK$124 hit Feb. 9; at HK$124, stock would be trading at 22.1X, 19.5X this year and next's earnings based on Thomson Reuters, while yielding 4.1%, 4.6%; points to limited downside.

Source: Dow Jones Newswire

[winston]

And how are darkpools, blackpools, muddypools etc. gonna affect their future results ?


HKEx Q4 net profit up 3 pct, caution on competition

* Full-year net down 8 pct, 2nd straight year of contraction
* Average daily turnover seen rising in 2010
* IPO volume expected to rise this year
* Shares ease 1.6 percent before results (Adds details, background)

By Alison Leung HONG KONG, March 4 (Reuters) - Hong Kong Exchanges & Clearing (HKEx) <0388.HK>, the world's second-largest exchange operator by market value, reported lower-than-expected quarterly earnings and warned of intense competition around the world.

However, with stock market turnover strong since the beginning of 2010 and a continuing flow of initial public offerings (IPOs) on the exchange, analysts expressed optimism that HKEx would return to annual profit growth this year after two consecutive years of declines due to the global financial crisis.

The exchange sees opportunities from the further opening of the mainland China market but rising competition from exchanges around the world and in the region.

"The increasing internationalisation of the RMB (Chinese yuan) ... will significantly expand the mainland opportunities for HKEx as well as intensify the competitive pressures facing HKEx," it said in a statement.

( Big words. What does it mean for the shareholder of HKEX ? Chinese punters being allowed to punt in HK ? )

HKEx, which since January has been led by former JP Morgan banker Charles Li, vaulted past regional rival Singapore Exchange , which reported a near 4 percent loss in its October-December quarter earnings. [ID:nSGE60D03V]

Australia's ASX Ltd , Asia's third-largest listed bourse after Hong Kong and Singapore, reported its weakest first-half earnings of A$170.6 million for the six months ended December. [ID:nSGE61F05O] HKEx reported a 3 percent rise in net profit of HK$1.23 billion ($158.5 million) for the October-December period on increased trading volume, based on Reuters calculations from full-year results announced by the company on Thursday.

The results were lower than a consensus forecast of HK$1.32 billion from 16 analysts polled by Thomson Reuters I/B/E/S and compared with HK$1.2 billion a year earlier.

For the whole of 2009, HKEx's net profit fell 8.3 percent to HK$4.70 billion as the global financial crisis battered trading volume in the early part of the year.

HKEx Chairman Ronald Arculli said this week that he expected 2010 to be even stronger for IPOs than 2009 and that the exchange had received 39 listing applications.

His comments came despite the shelving of a potentially massive $10 billion-$20 billion IPO by American International Assurance, a casualty of AIG's sale of the unit to Prudential for $35.5 billion.

Shares of HKEx eased 1.6 percent on Thursday at the lunchbreak and before the results were announced, against a 0.5 percent loss on the benchmark Hang Seng Index <.HSI>.

Average daily stock market turnover, the key determinant of exchange revenue, rose 29 percent to HK$65.4 billion in the fourth quarter, taking full-year average turnover to HK$62.3 billion a day, down 14 percent from 2008.

Source: Reuters