Hong Kong Exchanges and Clearing Ltd (HKEx) posted a 81% increase in third-quarter profit attributable to shareholders, helped by increased market activity in cash and derivatives markets, income from LME Clear and the commercialisation of the LME’s trading fees.
For the third quarter ended September 30, the bourse posted a 67% increase in third quarter earnings before interest expenses and other finance costs, taxation, depreciation and amortisation (Ebitda) to HK$2.9 billion. Profit attributable to shareholders rose to HK$2.3 billion and revenue and other income rose 52% to HK$3.75 billion
HKEx said it recorded a one-off gain of HK$445 million in the third quarter related to the disposal of a leasehold property.
Profit attributable to shareholders in the nine months ended September 30 rose 75% to HK$6.43 billion, while Ebitda rose 66% to HK$8.14 billion.
Nine-month revenue rose 49% to HK$10.6 billion, exceeding the HK$10 billion mark for the first time in a financial year.
HKEx commodities segment
The commodities segment, which comprises the LME business and the London Metal Mini Futures listed on the HKEx, saw Ebitda in the nine months rise 71% to HK $937 million.
“Due to an unfavourable global macroeconomic environment and the overall depressed state of commodity prices, the average daily volume of metals contracts traded on the LME decreased by 3% during year-to-date third quarter 2015 against year-to-date third quarter 2014,” the bourse said.
But total futures market open interest at September-end rose 1% year-on-year.
Average daily volume of metal contracts in the nine months fell 3% to 681,550 lots due to weaker demand for industrial metals.
Average traded volumes of aluminium fell 9%, zinc down 6%, lead down 0.7%. Copper and nickel daily volumes rose 5% and 6%, respectively.
“During the third quarter of 2015, the LME continued to consult the market on proposed reforms to its physical delivery network in order to address the remaining queues and potential future queues, at LME warehouses,” HKEx said.
To encourage more over-the-counter business to be brought on-exchange, the LME has announced measures to grow options trading on the exchange, increase transparency of data reporting and provide greater protection for participants placing large options orders on the exchange, it added.
And in order to optimise the price-discovery process on the Ring, the LME has refined and enhanced its procedures for establishing the Closing Prices on the Ring, which allows Category 1 Members to efficiently process their orders by separating carry trading and three-month trading.
“A market making programme was introduced to boost existing third Wednesday contract liquidity on LMEselect in October 2015, and similar programmes will be introduced to support the launch of aluminium premium contracts and steel contracts on the LME in November 2015.”
HKEx will also be launching three London Metal Mini Futures contracts on the HKFE, subject to regulatory approval.
In October, the bourse also signed a Memorandum of Understanding to develop the “London-Hong Kong Connect”.