US$9mil revenue from Stock Connect

HONG KONG: Hong Kong’s stock exchange operator said a stock connect programme with Shanghai that launched on Nov 17 contributed just US$8.8mil to revenue last year, showing how disappointing trading on the programme has capped profit growth.

Hong Kong Exchanges and Clearing Ltd (HKex), as it is formally known, said in a filing in Hong Kong that the stock connect programme contributed HK$68mil in revenue in 2014.

Fourth-quarter profits were HK$1.52bil (US$195.98mil) according to a Reuters calculation from company figures.

HKEx chief executive Charles Li has banked on the stock connect programme, which allows investors in mainland China to buy Hong Kong shares and vice versa, to boost falling trading volumes in the financial hub.

Daily trading volumes via the scheme, however, have remained lacklustre, due mainly to regulatory and technical hurdles that make the scheme unappealing to many institutional investors.

The programme only launched halfway through the fourth quarter, meaning its impact has not been fully felt.

Average daily turnover in the fourth quarter rose to HK$80bil from HK$59bil a year ago, the filing showed, a 35% increase but not yet the transformative boost some market participants had hoped for.

HKEx also saw improved numbers of listings in 2014, with 122 initial public offerings (IPOs) compared with 110 in the previous year. — Reuters