Hong Kong Exchanges’ Profit Drops 0.5% in 3rd Quarter

Hong Kong Exchanges & Clearing Ltd., operator of Asia’s third-biggest stock market, said third-quarter profit fell 0.5 percent from a year earlier after trading volume declined.

Net income fell to HK$1.22 billion ($157 million), or HK$1.13 per share, for the three months ended Sept. 30, from HK$1.226 billion, or HK$1.14 a share a year earlier, the company said in a statement today. Revenue and other income advanced 1 percent to HK$1.84 billion, it said.

An average HK$61.8 billion worth of shares changed hands daily in the quarter, down from HK$66.7 billion the same period a year earlier, the statement said. The benchmark Hang Seng Index climbed 11 percent in that period. Shares in Hong Kong Exchanges have gained 39 percent this year.

“The markets have moved on from what was a lackluster Q3,” Stephen Andrews, an analyst at UBS AG, wrote in a research report.

Andrews estimated the average daily turnover of the bourse will be HK$86 billion next year, and a record HK$95 billion for 2012, the report said. The analyst lifted the share-price forecast for the stock to HK$125 from HK$115, and maintained a “sell” rating on the stock.

Shares in Hong Kong Exchanges slid 0.2 percent to HK$193.80 at the 12:30 p.m. lunchtime trading break in the city.

Profit for the first nine months gained 2 percent to HK$3.48 billion, the statement said. The average daily turnover was HK$63.1 billion in the first three quarters of this year, up 3 percent from a year earlier, it said.

Luring Foreign Listing

Listing fees climbed 28 percent to HK$657 million in the nine months to Sept. 30, according to the statement.

Ronald Arculli, chairman of the bourse, visited companies in France and Italy last month to seek their listings in Hong Kong, the statement said. The bourse has also done overseas listing promotion in countries including Russia, Australia, Japan and Taiwan in the third quarter, it said.

United Co. Rusal’s debut in January marked the listing of the city’s first Russian company, followed by L’Occitane International SA in May as the first French company to hold a Hong Kong initial public offering.

“We remain cautiously optimistic about the further growth of our securities and derivatives markets,” Arculli said in today’s statement. “The potential ramifications of any sovereign liquidity problems or currency wars, concerns about the effectiveness of the fiscal measures of different governments and the elevated risk of growing asset bubbles in persistent low interest rate environments deepen the uncertainty over the world’s economic performance and the outlook for financial markets.”

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