Hong Kong Exchanges and Clearing Ltd. lost its rank as the world’s most valuable bourse operator after the stock tumbled for a ninth day.
HKEx fell 8.4 percent to HK$203.4 at the close on Wednesday, valuing the company at HK$243.6 billion ($31.4 billion), trailing CME Group Inc.’s $32.1 billion at Tuesday’s close. The losing streak is its longest on record.
The Hong Kong bourse was the best performer in the benchmark Hang Seng Index in the six months through June, vaulting to the top spot among global exchanges with a 59 percent rally. Optimism that HKEx would benefit from its trading link with Shanghai is now fading as the mainland’s world-beating equity advance turns into a $3.5 trillion rout.
“That valuation isn’t sustainable,” said Jim Antos, an analyst at Mizuho Securities Asia Ltd. in Hong Kong. He cut his rating on the shares to underperform from buy on Tuesday. Turnover on the bourse hasn’t been high enough to justify the stock price, he said.
After the value of shares traded in Hong Kong soared as high as HK$292 billion on April 9, turnover has retreated to an average of HK$145 billion a day since the start of June, data compiled by Bloomberg show. HKEx overtook CME as the world’s biggest bourse by market value on April 8.
Goldman Sachs Group Inc. on Monday recommended selling HKEx shares amid concern weaker volumes will curb earnings. The stock trades at about 24 times projected 12-month earnings, down from as high as 40 times in April.