Hong Kong Exchanges & Clearing profit falls 13%

Hong Kong Exchanges & Clearing Ltd. reported a 13% fall in its first-quarter net profit, as pandemic-triggered turmoil in the financial markets led to an investment loss.

Net profit declined to 2.26 billion Hong Kong dollars (US$291.5 million), while revenue and other income also fell 7% to HK$4.01 billion, the stock-exchange operator said Thursday. The net profit was slightly lower than a FactSet estimate for a HK$2.77 billion profit.

With the significant fall in global portfolio valuations impacting the company’s investment income, HKEX will continue to take steps to de-risk its collective investment schemes, HKEX’s chief executive Charles Li said.

The Hong Kong bourse suffered a net investment loss of HK$47 million in the quarter. However, the bourse’s revenue from its core trading business rose 19% from a year earlier, as a 20% increase in headline average daily turnover lifted trading and clearing fees. The headline ADT stood at HK$120.9 billion in the quarter.

In the primary market, 39 new companies went public in Hong Kong during the quarter, raising a total of HK$14.4 billion, which ranked fourth globally, the operator said. HKEX said it had topped global exchanges in 2019, in terms of IPO funds raised.

In a separate statement HKEX said Mr. Li had informed the board that he would not seek reappointment as chief executive when his current contract ends in October 2021.

The company has formed a selection committee to conduct a formal search process, it said.

Write to Martin Mou at martin.mou@wsj.com

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