By Kimberley Kao


Hong Kong's stock-exchange operator reported lower net profit for the second straight quarter, with poor market sentiment cutting further into trading and listing activity in the Asian financial hub.

Hong Kong Exchanges & Clearing said Wednesday that its first-quarter net profit fell 13% from a year earlier to 2.97 billion Hong Kong dollars (US$379.1 million).

Revenue declined to HK$5.20 billion from HK$5.56 billion, with core business revenue falling 7% due to lower trading and clearing fees, the company said.

HKEX posted lower trading volume during the quarter, with headline average daily turnover sliding 22% to HK$99.4 billion as geopolitical tensions and macroeconomic volatility continued to weigh on market sentiment.

The market for new offerings remained well off the boom times of a few years ago when big-money listings were regular occurrences in Hong Kong. A dozen new listings in the latest quarter raised a combined HK$4.8 billion, down 28% from a year earlier, HKEX said.

However, it said its initial public offering pipeline remains healthy, with 85 active applications as of end-March.

HKEX is struggling to boost performance as it faces headwinds including a prolonged stock-market slump, concerns about China's economy and foreign investors exiting the city, factors that have chipped away at Hong Kong's reputation as a destination for global listings.

Sentiment for new offerings has remained muted in 2024. Hong Kong's biggest listing so far this year, Sichuan Baicha Baidao Industrial, which raised about US$330 million in its IPO, slipped 27% in its trading debut Tuesday and was down an additional 9.5% in Wednesday afternoon trading.

The exchange operator said Wednesday that it is in talks with the Hong Kong government on ways to boost the appeal of the city's markets. It said it remains optimistic about its ability to capitalize on China's long-term growth and build connections with capital hubs in Southeast Asia and the Middle East.


Write to Kimberley Kao at kimberley.kao@wsj.com


(END) Dow Jones Newswires

04-24-24 0218ET