November 7, 2018 / 5:57 AM / 15 days ago

UPDATE 1-HKEX Q3 profit rises 20 pct; weaker markets cloud outlook

* Q3 net profit HK$2.4 bln vs HK$2 bln a year ago

* Listing fee jumps 29 pct on blockbuster China IPOs

* CEO says confident about rest of 2018 despite macro headwinds (Adds CEO comments, earnings details, context)

By Sumeet Chatterjee and Donny Kwok

HONG KONG, Nov 7 (Reuters) - Hong Kong Exchanges and Clearing Ltd (HKEX), the stock exchange operator in the Asian financial hub, reported a 20 percent rise in quarterly net profit on Wednesday, bolstered by higher trading and stock listing incomes.

The bourse has seen a sharp jump in net profit in recent quarters on the back of a slew of blockbuster initial public offerings, mainly from Chinese companies, this year, as well as increased trading on improved investor sentiment.

HKEX posted a net profit of HK$2.4 billion ($306 million) in its fiscal third quarter ended September, compared with HK$2 billion a year ago, the company said in a statement.

Trading fees increased 16 percent to HK$1.5 billion, while stock listing fees jumped 29 percent to HK$456 million.

Shares of the company extended their morning gains after the results were announced, rising as much as 3.9 percent in the afternoon trade. They were up 1.8 percent at 0521 GMT.

The number of companies filing to go public in Hong Kong has jumped almost three-fold this year, driven in part by China’s burgeoning technology sector and listing reforms designed to attract high-growth technology and biotechnology companies.

But they will have to contend with weaker secondary markets which could hurt deals. The Hong Kong stock index dropped 4 percent in the September quarter, in its biggest quarterly decline since the October-December period of 2016.

The exchange, however, is optimistic about its growth prospects for the remainder of the year.

“Despite global macroeconomic and political headwinds, we look forward to the rest of the year with confidence,” HKEX CEO Charles Li said in the statement, adding the bourse saw record revenue and profit for the nine-month period ended in September.

In April, HKEX finalised a major shake-up of its listing regime. The new rules allow listings by companies with a dual class share structures, and also by biotech firms that have not yet earned any revenues.

Those reforms helped the exchange operator to rank first in terms of total funds raised through market listings globally at $30.7 billion in the first nine months of this year, HKEX said.

In the January-September period, the average daily volume of metals contracts traded on the London Metals Exchange, which is owned by HKEX after its acquisition in 2012, rose 21 percent to 748,960 lots.

The London Metal Exchange is planning to hike fees for some of its services by up to 2 percent from next year, Chief Executive Matt Chamberlain said earlier this month.

Last month, Shenzhen-based Qianhai Mercantile Exchange (QME), also controlled by HKEX, began spot trading, giving the exchange operator much-coveted access to mainland China’s market.

$1 = 7.8335 Hong Kong dollars Reporting by Sumeet Chatterjee and Donny Kwok; Editing by Muralikumar Anantharaman and Subhranshu Sahu

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