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Hong Kong Exchanges and Clearing saw profit jump by a fifth in the first three months of this year thanks to a rise in turnover and as the benchmark Hang Seng index rises to its highest level in almost two years.

The exchange operator said market sentiment has improved since the start of this year, with average daily turnover in the cash market rising to HK$74.3bn, a 16 per cent increase from the December quarter and up 2 per cent from a year ago.

The Hang Seng today traded above 25,000 for the first time since July 2015, when China’s stock market rout began, and is up 14 per cent so far in 2017.

Fund flows through the Stock Connect schemes Hong Kong has with Shanghai and Shenzhen also increased.

Trading revenue is still the big contributor to HKEX’s numbers, and so helped drive an 11 per cent rise in revenue and other income to HK$3.05bn. Net profit rose 20 per cent to HK$1.7bn, aided by a one-off insurance recovery that reduced operating expenses.

The average daily number of derivatives contracts traded on the HKEX’s futures exchanges fell by 18 per cent in the first quarter, while stock options contracts were up by 16 per cent. The average daily volume of metals contracts traded on the London Metal Exchange, which HKEX owns, fell by 5 per cent.

HKEX shares were up 0.6 per cent today before breaking for lunch and the release of the results. So far this year, the stock has gained 6.7 per cent.

Copyright The Financial Times Limited 2017. All rights reserved.
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