Cash equities have remained flat while derivatives and options trading has experienced strong growth at Hong Kong Exchanges and Clearing (HKEx).
Last year average daily turnover value on HKEx’s equity market stalled at US$69.7 billion, up barely 1% from US$69.1 billion the previous year.
In the same period, average daily number of derivatives contracts traded on the futures exchange were up 22% to 269,525 from 221,487 and average daily number of stock options contracts traded on the stock exchange were up 23% to 302,750 from 246,474 a year earlier.
Overall revenue was up 4 % to US$7.9 billion from US$7.6 billion in 2010, with pre-tax profit relatively even on 2010, rising just 1% to US$6 billion.
“Our market infrastructure has been evolving over time to meet the ever-changing demand in the financial services industry. We are pleased that the first phase of extension of trading hours was implemented smoothly,” Ronald Arculli, chairman of HKEx, said in a statement, adding the second phase of the improvements will take effect 5 March. “Thereafter, the gap in trading hours between our markets and our competitors will be reduced further.”
Arculli said HKEx’s attractiveness to investors will again be enhanced by the introduction of after-hours futures trading in 2012.
“A key positive was stronger-than-expected derivative revenues, highlighting the benefit of diversification,” said Arjan van Veen, an analyst at Credit Suisse. “The key negative was the rate of expense growth, at 13% year-on-year, which materially exceeded revenue growth of 4% and is expected to remain elevated near term, as HKEx invests in future growth initiatives.”