1. Staff Costs
Source Operating expenses increased by 6%, primarily due to higher staff costs.
Confidence: high
0388.HK
T3Hong Kong Exchanges and Clearing Limited
Brokerages & Exchanges '26: Global Exchange OperatorsBrokerages & Exchanges '26: Options & Retail DerivativesCity-Specific Businesses '26: Hong Kong Business
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OverviewHong Kong Exchanges and Clearing Limited (HKEX) operates major stock and futures exchanges and clearing houses in Hong Kong, mainland China, and the UK. It offe
Hong Kong Exchanges and Clearing Limited (HKEX) operates major stock and futures exchanges and clearing houses in Hong Kong, mainland China, and the UK. It offers platforms for trading equities, derivatives, and commodities, alongside post-trade and technology services for issuers and investors. HKEX serves as a vital link between China and global capital, achieving record revenues and profits in H1 2026 through robust market activity and strategic diversification.
Key Inputs And Sourcing
2. IT Infrastructure & Software
Source Operating expenses increased by 6%, primarily due to IT costs. The Technology segment ensures user access to platforms and underlying infrastructure, and the Data and Connectivity segment offers platform and infrastructure services and related technology services.
Confidence: high
3. Market Data Sourcing & Licensing
Source HKEX focuses on its index business and data as part of its multi-asset strategy. The Data and Connectivity segment offers market data sales.
Confidence: medium
4. Regulatory & Compliance Services
Source The highly regulated nature of exchanges implies significant regulatory costs, as exemplified by a non-recurring FCA fine of HKD 90 million paid in 2025.
Confidence: medium
5. Energy & Utilities
Source Covered under inflationary increases in other operating expenses.
Confidence: low
6. Professional Services
Source Covered under inflationary increases in other operating expenses, essential for legal, audit, and consulting needs of a financial institution.
Confidence: low
Industry Publications
- Risk.net (risk.net) — Specializes in risk management, derivatives, and regulatory issues in financial markets, directly impacting HKEX's clearing services, derivatives products, and compliance environment.
- Central Banking (centralbanking.com) — Provides news and analysis specifically on financial market infrastructure, which is highly pertinent to HKEX's core business as an exchange and clearing house.
- The Asset (theasset.com) — A leading publication for Asia's capital markets, banking, and asset management sectors, offering regional insights and news directly relevant to HKEX's role as a bridge between China and global capital.
- DealStreetAsia (dealstreetasia.com) — Focuses on private equity, venture capital, IPOs, mergers and acquisitions, and the startup ecosystem across Asia, which is crucial for monitoring HKEX's capital formation and listing pipeline.
- World Federation of Exchanges (WFE) (world-exchanges.org) — The global trade association for exchanges and clearing houses, offering industry statistics, research, and policy insights crucial for understanding the broader market infrastructure landscape HKEX operates within.
Economic Data Watch
1. National Bureau of Statistics of China (NBS) — National Accounts
Metric/field Gross Domestic Product (GDP) - Year-on-Year Growth Rate (%)
Cadence quarterly
Why it matters Reflects the overall health of the Chinese economy, which drives investor confidence and capital allocation to China-linked assets traded on HKEX.
Signal to watch Higher growth indicates stronger economic fundamentals, potentially leading to increased market activity and IPOs.
Confidence: high
2. Hong Kong Monetary Authority (HKMA) — Interest Rate Statistics
Metric/field HIBOR - 3-month (%)
Cadence daily
Why it matters Directly impacts HKEX's net investment income from margin funds, as higher rebates are paid to participants in a lower interest rate environment.
Signal to watch Lower HIBOR can negatively impact net investment income; higher HIBOR can be positive.
Confidence: high
3. Ministry of Commerce of the People's Republic of China (MOFCOM) — Foreign Investment Statistics
Metric/field Actual Utilized Foreign Direct Investment (FDI) (USD billion)
Cadence monthly
Why it matters Indicates international capital inflow into China, which can translate to increased interest in China-linked assets and potential IPOs on HKEX.
Signal to watch Increasing FDI suggests growing international confidence and capital allocation to China.
Confidence: medium
4. HKEX / Hang Seng Indexes Company Limited — Market Data
Metric/field Hang Seng Index (HSI) - Daily Close Price
Cadence daily
Why it matters The HSI is the benchmark for the Hong Kong cash market; its performance influences overall market sentiment, trading volumes, and derivatives activity on HKEX.
Signal to watch Sustained upward trend and lower volatility indicate a healthy market environment, favorable for HKEX's core business.
Confidence: high
5. National Bureau of Statistics of China (NBS) — Economic Indicators
Metric/field China Manufacturing PMI (Official)
Cadence monthly
Why it matters A leading indicator of China's industrial health and economic activity, which underpins corporate earnings and investor confidence, influencing capital market activity.
Signal to watch PMI above 50 indicates expansion; a sustained trend above 50 is positive.
Confidence: medium
Free Alt Data Watch
1. Google Trends — Search Interest Data
Metric/field Search interest for 'HKEX' (Worldwide, 5-year trend, normalized score)
Cadence daily
Why it matters Reflects general public and investor interest in the exchange, potentially correlating with market participation.
Signal to watch Rising search interest suggests increased awareness and potential engagement with HKEX markets.
Confidence: medium
2. Google Trends — Search Interest Data
Metric/field Search interest for 'Hong Kong IPO' (Hong Kong, 5-year trend, normalized score)
Cadence daily
Why it matters Indicates potential issuer and investor interest in Hong Kong's IPO market, a key revenue driver for HKEX.
Signal to watch Increasing search interest points to a healthy and active IPO environment.
Confidence: high
3. CSRC Official Website — News & Announcements
Metric/field Number of new policy announcements related to cross-border capital flows or Connect programs
Cadence event_driven
Why it matters Policy changes from China's top securities regulator directly impact the scope and activity of HKEX's crucial Connect programs.
Signal to watch Announcements expanding Connect scope or easing restrictions are positive; tightening measures are negative.
Confidence: high
4. HKEX Official Website — Press Releases & Announcements
Metric/field Number and nature of new product launches or strategic initiative announcements
Cadence event_driven
Why it matters Direct insights into HKEX's strategic execution, product diversification, and efforts to enhance market competitiveness, which drive future revenue.
Signal to watch Frequent announcements of new products (e.g., derivatives, ETFs) and market enhancements are positive.
Confidence: high
5. LME Official Website — Market Data
Metric/field LME Chargeable Average Daily Volume (ADV) for all metals
Cadence daily
Why it matters The LME is a significant part of HKEX's commodities segment; its trading volumes directly contribute to HKEX's revenue.
Signal to watch Sustained high or increasing ADV indicates strong performance in the commodities segment.
Confidence: high
Paid Alt Data Watch
1. Bloomberg / Refinitiv — Real-time Market Data
Metric/field HKEX Cash Market Average Daily Turnover (ADT) and Derivatives Average Daily Volume (ADV)
Cadence daily
Why it matters Provides granular, real-time insights into HKEX's core revenue drivers, allowing for immediate assessment of market activity trends.
Signal to watch Consistently high or increasing ADT/ADV signals robust market activity and strong revenue generation.
Confidence: high
2. Preqin — Private Capital Data
Metric/field Total Private Equity and Venture Capital Funds Raised in Greater China (USD billion) by quarter
Cadence quarterly
Why it matters Strong private market fundraising often precedes public listings, providing a forward-looking indicator for HKEX's IPO pipeline, especially for new economy companies.
Signal to watch Increasing fundraising activity suggests a healthy pool of potential future IPO candidates.
Confidence: medium
3. Kpler / S&P Global Platts — Commodity Market Analytics
Metric/field Daily Trading Volume and Open Interest for LME Base Metals Futures (e.g., Copper, Aluminum)
Cadence daily
Why it matters Offers detailed, real-time insights into the health and liquidity of HKEX's LME commodities segment, a key diversification area.
Signal to watch High trading volumes and growing open interest indicate strong market participation and hedging demand.
Confidence: high
4. FactSet / S&P Global Market Intelligence — Equity Capital Markets Data
Metric/field Number of active Hong Kong IPO applications, estimated deal size, and sector breakdown
Cadence weekly
Why it matters Provides a comprehensive, forward-looking view of HKEX's listing revenue potential and the diversity of its IPO pipeline.
Signal to watch A growing number of high-quality applications across diverse sectors indicates a strong future for listing fees.
Confidence: high
5. Thinknum Alternative Data — Company Employee Data
Metric/field Employee headcount trends for Hong Kong Exchanges and Clearing Limited (0388.HK) and top 5 Hong Kong-based brokerages
Cadence monthly
Why it matters Changes in staffing levels at HKEX or key market participants can signal operational expansion, contraction, or shifts in market activity and confidence.
Signal to watch Increasing headcount at HKEX or major brokerages could indicate growth expectations and increased market activity.
Confidence: medium
Search Keywords Brand Product
- Stock Connect
- Bond Connect
- Swap Connect
- LME
- China Government Bond futures
- CGB futures
- USD Gold Futures
- Orion Derivatives Platform
- Orion Cash Platform
- financial infrastructure
- stock exchange
- futures exchange
- clearing house
- derivatives trading
- IPO market
- capital formation
- China capital flows
- multi-asset ecosystem
- fixed income currency commodities
- ETP trading
Search Keywords Event Phrases
- HKEX 2026 Interim Results
Search Keywords Policy Regulatory
- Connect program expansion
- insurance company investment ETPs
- REIT Connect
- Southbound RMB counter
- What They Do (Plain English & Analogies)
- Hong Kong Exchanges and Clearing Limited (HKEX) is like the central marketplace and plumbing system for financial trading in Hong Kong, and a key link to mainland China. Imagine it as a giant shopping mall for investments, where people can buy and sell stocks, bonds, and other financial products. HKEX provides the platforms for these trades, ensures they are settled correctly, and offers services like safekeeping investments. It also owns the London Metal Exchange (LME), making it a global hub for metals trading. Essentially, HKEX connects investors from around the world to opportunities in Asia, especially China, and helps companies raise money by listing their shares.
- Very Brief History
- HKEX was founded on March 6, 2000, through the merger of the Stock Exchange of Hong Kong, the Hong Kong Futures Exchange, and Hong Kong Securities Clearing Company. A significant milestone was the launch of the Connect programs, starting with Stock Connect 12 years ago (around 2014), which created unprecedented links between China and international capital. Over the years, it expanded to include Bond Connect and Swap Connect, and in 2018, it further enhanced its commodities franchise with the launch of Qianhai Mercantile Exchange in China. HKEX also acquired the London Metal Exchange (LME) in the UK.
- "Street Stereotype"
- The company's street stereotype is that it is the primary bridge between China and global capital. Its 'Stock Connect' programs and robust IPO pipeline are seen as the key pulse for Asian liquidity.
- Subsidiaries On Linked In*
- The Stock Exchange of Hong Kong Limited — Operates the stock market in Hong Kong
- Hong Kong Futures Exchange Limited — Operates the futures market in Hong Kong
- London Metal Exchange (LME) — World's premier base metals market
- LME Clear Limited — Clearing house for LME
- Hong Kong Securities Clearing Company Limited (HKSCC) — Provides clearing, settlement, depository, and nominee activities
- HKFE Clearing Corporation Limited (HKCC) — Provides clearing, settlement, depository, and nominee activities
- The SEHK Options Clearing House Limited (SEOCH) — Provides clearing, settlement, depository, and nominee activities
- OTC Clearing Hong Kong Limited (OTC Clear) — Provides OTC interest rate derivatives and non-deliverable forwards clearing and settlement services
- Qianhai Mercantile Exchange Co., Ltd. (QME) — Commodity trading platform in Chinese Mainland
- HKEX Information Services Limited — Provides market data dissemination
- HKEX Foundation Limited — Corporate social responsibility arm
- CPAL — Dubai-based entity incorporated in September 2025 in DIFC, fully owned by HKEX Group
- Customer Sectors & Example Clients
- HKEX serves a diverse range of customers, including both issuers and investors. Customer sectors include financial institutions, asset managers, large asset owners, and retail investors. Specific examples of companies that have listed on HKEX include Chinese Mainland technology and AI-related stocks, biotech, new energy, EVs, consumer, and mining companies. Notable examples mentioned in the transcript for dual listings are CATL and Innolight. Merdeka, an Indonesian gold mining company, is an example of a non-Chinese company that recently completed a secondary listing.
- New Customers / Segments They'Re Targeting
- HKEX is actively targeting new customer segments and expanding its market reach. A significant development is allowing insurance companies on the Chinese Mainland to invest in Hong Kong-listed Exchange Traded Products (ETPs) through the Connect franchise. They are also working to bring more participants and products into the Connect programs, including REIT Connect and the Southbound RMB counter. Furthermore, HKEX is developing 60-40 ETFs tailored for Southbound investments, partnering with exchanges like KRX (Korea Exchange) and Bursa Malaysia. They are also focused on attracting more non-Chinese companies to list on their market.
- Sales Geographies And Expansion Plans
- HKEX currently operates and oversees exchanges and clearing houses across Hong Kong, mainland China (through Qianhai Mercantile Exchange), and the United Kingdom (through the London Metal Exchange). The company is actively strengthening its connectivity to major markets and liquidity pools in the region, with increased connectivity with exchanges in Southeast Asia and Central Asia. They have partnered with KRX on a semiconductor 60-40 index and with Bursa Malaysia on a large-cap theme 60-40 index, indicating a focus on expanding product offerings and investor access across Asia.
- How Key Themes May Help/Hurt
- The buildout of 'Options & Retail Derivatives' significantly helps HKEX. The company has direct exposure to derivatives through futures, options, and stock options, and the transcript highlights record half-yearly average daily volumes for derivatives. Strong growth in stock options and Hang Seng TECH Index Futures and Options, along with the development of new products like 5-year government bond futures and revitalized USD Gold Futures, directly benefits HKEX's revenue from trading and clearing fees. The increasing retail participation in ETPs and the focus on tailored ETFs for Southbound investments further underscore the positive impact of this theme on HKEX's business model.
3 Main Long-Term Bull Details
- Unrivaled China Connectivity: HKEX's Connect programs (Stock Connect, Bond Connect, Swap Connect) provide an unparalleled and continuously expanding conduit for global investors to access China's capital markets and for Chinese investors to access international markets through Hong Kong. This unique position is a structural advantage that drives significant trading volumes and capital formation.
- Diversified Multi-Asset Ecosystem: HKEX is strategically building a comprehensive multi-asset ecosystem beyond its core equities business, encompassing fixed income, currency (FIC), commodities, derivatives, indices, and data. This diversification reduces reliance on any single asset class and creates new revenue streams, offering a broader range of products and risk management tools to investors.
- Robust IPO Pipeline and Capital Formation: Hong Kong continues to be a leading global IPO venue, attracting a healthy and diverse pipeline of issuers, including technology, biotech, new energy, and international companies. This strong capital formation activity, coupled with robust follow-on fundraising, ensures a continuous supply of quality companies and liquidity for its secondary markets.
3 Main Long-Term Bear Details
- Reliance on Market Sentiment and Trading Volumes: Despite diversification, a significant portion of HKEX's revenue is tied to trading and clearing fees, making it susceptible to fluctuations in global and regional market sentiment, investor confidence, and overall trading volumes. A prolonged downturn in market activity could negatively impact its financial performance.
- Geopolitical and Regulatory Risks: As a key financial hub connecting China and the world, HKEX is exposed to geopolitical tensions and potential changes in regulatory policies from both Hong Kong and mainland Chinese authorities. These factors could impact cross-border capital flows, listing attractiveness, and operational flexibility.
- Competition for Listings and Talent: While the transcript emphasizes strong IPO interest, HKEX faces ongoing competition from other global exchanges for high-quality listings. Additionally, the company's operating expenses are increasing due to investments in talent and IT, indicating a competitive environment for resources and potential pressure on margins if revenue growth does not keep pace.
- Competitors And Differentiation
- While the transcript does not explicitly name direct competitors, HKEX operates in the global exchange landscape alongside major players like CME, Deutsche Börse (DB1.XETRA), Singapore Exchange (S68.SI), Nasdaq (NDAQ), and London Stock Exchange Group (LSEG.LSE). HKEX differentiates itself primarily through its unique position as the 'primary bridge between China and global capital' via its pioneering Connect programs (Stock Connect, Bond Connect, Swap Connect). Its strategy focuses on building a vibrant multi-asset ecosystem encompassing equities, fixed income, currency, commodities, derivatives, indices, and data, coupled with continuous enhancements to its market infrastructure, operational platforms, and listing framework.
- Recent Performance & What The Market'S Focused On
- HKEX delivered an exceptional first half of 2026, reporting its best-ever half-yearly revenue and profit, surpassing previous records set in the second half of 2025. Revenue and other income increased by 19% year-on-year to HKD 16.7 billion, and profit after tax was HKD 10.6 billion, up 24% year-on-year. Average Daily Turnover (ADT) in the cash market reached a record half-yearly high, up 18% year-on-year, with Northbound Stock Connect ADT more than doubling. The derivatives and commodities markets also performed strongly. The market is focused on HKEX's ability to sustain this momentum through disciplined execution, making its markets more competitive, building out its multi-asset ecosystem (especially in FIC and commodities), and strengthening connectivity across Asia. The successful launch of 5-year China government bond futures and the revitalization of USD Gold Futures are key areas of attention, as is the continued growth of ETPs and the healthy IPO pipeline.
- Revenue Segments And Estimated Mix
- Cash Market — Mix: Significant contributor, record half-yearly high volumes; Source: 2026 Interim Results Analyst Presentation; Trend: ADT increased by 18% year-on-year
- Equity and Financial Derivatives Market — Mix: Strong performance, record half-yearly high volumes; Source: 2026 Interim Results Analyst Presentation; Trend: Trading volumes increased by 6% year-on-year
- Commodities Market — Mix: Strong performance, record half-yearly high volumes; Source: 2026 Interim Results Analyst Presentation; Trend: LME chargeable ADV reached a record half-yearly high, trading volumes increased by 18% year-on-year
- Post Trade (Clearing, Settlement, Depository, Listing Fees) — Mix: Significant contributor, increased fees; Source: 2026 Interim Results Analyst Presentation; Trend: Increased depository and listing fees
- Net Investment Income from Margin Funds — Mix: Contributor, partially offsetting revenue growth; Source: 2026 Interim Results Analyst Presentation; Trend: Decreased by 11% year-on-year due to higher rebates and lower investment returns
- Product Brands
- Stock Connect
- Bond Connect
- Swap Connect
- LME (London Metal Exchange)
- Hang Seng TECH Index Futures and Options
- USD Gold Futures
- FDR007 contracts (planned)
- Orion Derivatives Platform (ODP)
- Orion Cash Platform (OCP)
- China Government Bond (CGB) futures
Bull / Bear DetailsHKEX remains a compelling long investment as the primary bridge between China and global capital. The group delivered record H1 2026 revenue and profit, demonst
Thesis
HKEX remains a compelling long investment as the primary bridge between China and global capital. The group delivered record H1 2026 revenue and profit, demonstrating regained market vibrancy and robust trading across cash, derivatives, and Connect programs. Strategic diversification into a multi-asset ecosystem, including FIC and commodities, alongside an active IPO pipeline and enhanced cross-border connectivity, underpins sustained growth, despite ongoing pressure on net investment income. (Updated 2026-09-07)
Bull case
HKEX achieved exceptional financial performance in H1 2026, reporting record half-yearly revenue and profit, surpassing previous records. This was driven by renewed global investor interest, optimism in China's outlook, and strong trading volumes across the cash market, derivatives, and Stock Connect, all reaching half-yearly record highs. This demonstrates the regained vibrancy of Hong Kong's markets and robust operational execution.
The strategic expansion of HKEX's multi-asset ecosystem and enhanced connectivity are significant growth drivers. Recent policy announcements allowing Mainland insurance companies to invest in HK-listed ETPs via Connect, progress on REIT Connect and Southbound RMB counter, and the successful launch of 5-year CGB futures (with plans for collateral acceptance and repo market development) broaden product offerings and attract deeper liquidity.
Hong Kong maintains a robust and diverse capital formation platform. It ranked as the second leading global IPO venue in H1 2026, with activities spanning various sectors and strong follow-on fundraising. Efforts to attract non-Chinese companies and the complementary nature of A&H listings further strengthen the IPO pipeline, ensuring a continuous supply of quality companies that support secondary market activity.
Bear case
Net investment income from margin funds faces persistent headwinds. In H1 2026, it decreased by 11% (21% excluding a non-recurring gain) due to higher rebates payable to participants under revised arrangements and lower investment returns from a lower interest rate environment. This pressure is expected to continue impacting overall profitability, offsetting some gains from core trading activities.
While management views A&H listings as complementary, the competitive landscape for IPOs remains a concern. A normalization of A-share IPOs could intensify competition for listings. Although HKEX is attracting non-Chinese companies, sustaining its leading IPO venue position requires continuous innovation and competitive enhancements to its listing framework to counter potential shifts in issuer preferences.
The potential extension of trading hours, particularly for the cash market, presents challenges. While technically ready, management acknowledges concerns about thinner liquidity and wider bid-ask spreads if hours are extended without sufficient market readiness. This could negatively impact market quality and attractiveness for participants, potentially diluting the benefits of increased accessibility.
Bull / Bear Case
- Bear Case
- HKEX faces persistent headwinds from net investment income from margin funds, which decreased by 11% in H1 2026 (21% excluding a non-recurring gain) due to higher rebates and lower investment returns from a lower interest rate environment. This pressure is expected to continue, offsetting some gains from core trading activities. While management views A&H listings as complementary, the competitive landscape for IPOs remains a concern, with a normalization of A-share IPOs potentially intensifying competition. Sustaining its leading IPO venue position requires continuous innovation to counter shifts in issuer preferences. Additionally, the potential extension of cash market trading hours presents challenges, with management acknowledging risks of thinner liquidity and wider bid-ask spreads if not implemented with sufficient market readiness, which could negatively impact market quality.
- Bull Case
- Hong Kong Exchanges and Clearing Limited (HKEX) delivered exceptional financial performance in H1 2026, reporting record half-yearly revenue and profit, driven by renewed global investor interest and optimism in China's outlook. This led to strong trading volumes across cash, derivatives, and Stock Connect, demonstrating regained market vibrancy. The strategic expansion into a multi-asset ecosystem, including FIC and commodities, is a significant growth driver, with new policy announcements allowing Mainland insurance companies to invest in HK-listed ETPs and the successful launch of 5-year CGB futures. Hong Kong also maintains a robust and diverse capital formation platform, ranking as the second leading global IPO venue in H1 2026, with strong follow-on fundraising and efforts to attract non-Chinese companies, ensuring a continuous supply of quality listings.
- More Compelling & Why
- Bear. HKEX's current P/E Ratio (TTM) of 26.15x is significantly higher than the Capital Markets industry median of 15.43x, suggesting an elevated valuation despite strong H1 2026 results. The strongest bear argument is the persistent pressure on net investment income from margin funds due to revised rebate arrangements and a lower interest rate environment, which directly impacts profitability and is expected to continue. My view would flip to bullish if HKEX demonstrates a sustained increase in global interest rates leading to higher net investment income, coupled with a significant and measurable diversification of revenue streams from its multi-asset ecosystem, bringing its valuation more in line with industry peers.
Key Factors
| Key Factor | Why It Matters | What To Watch | What It Signals | Where/How To Track | Free Alt Data | Paid Alt Data |
|---|---|---|---|---|---|---|
| IPO Funds Raised | Strong IPO activity signals investor confidence in Hong Kong as a listing venue and directly boosts HKEX's listing fees and related revenues. It reinforces HKEX's role as a key bridge for China-global capital flows and validates its strategic initiatives to enhance market attractiveness. | Total IPO funds raised reported quarterly and half-yearly. For H1 2026, total funds raised reached USD 41 billion (approximately HKD 320 billion). | Bullish if H1 2026 IPO funds raised exceed HK$220 billion (already achieved), and if full-year 2026 projections reach at least HK$400 billion. | HKEX press releases, HKEX monthly listing statistics, interim/annual reports. | Financial news reports on Hong Kong IPOs (e.g., SCMP, Wall Street Journal). | Dealogic: Global IPO data, specifically for Hong Kong. |
| Total Revenue Growth | Total revenue is the overarching measure of HKEX's financial performance, reflecting overall market activity across its diverse segments. Consistent strong growth indicates effective monetization of trading, clearing, and data services, validating the company's strategic diversification and operational efficiency. | Quarterly and half-yearly reported total revenue growth year-over-year. Q2 2026 revenue increased by 18% year-on-year. | Bullish if total revenue growth for Q2 2026 (or subsequent quarters) is at least 15% year-over-year (already achieved). | HKEX interim/annual reports, earnings call transcripts, press releases. | Financial news reporting on HKEX earnings. | S&P Global Market Intelligence: HKEX financial statements and consensus estimates. |
| 5-year China Government Bond (CGB) Futures Trading Volume & Collateral Acceptance | The newly launched 5-year CGB futures contract is a landmark product for offshore CNH price discovery and risk management, attracting institutional investors. Its success, coupled with CGB collateral acceptance, diversifies HKEX's fixed income revenue and builds a vibrant multi-asset ecosystem. | Sustained growth in 5-year CGB futures trading volumes and open interest, and the official announcement and implementation date for HKEX clearing houses to accept CGB as collateral (expected before year-end 2026). | Bullish if CGB futures trading volumes and open interest show consistent month-over-month growth, and if CGB collateral acceptance is implemented as planned by year-end 2026. | HKEX press releases, HKEX Monthly Market Highlights (for derivatives volumes), LME announcements (if related to LME Clear). | Financial news (e.g., Reuters, Bloomberg) covering China's bond market and offshore CNH derivatives. | Bloomberg Terminal: CGB futures trading data (volume, open interest); IHS Markit: Fixed income market data and collateral management trends. |
| Cash Market Average Daily Turnover (ADT) | High cash market turnover directly translates to increased transaction fees and market data revenue, indicating robust equity market activity and investor confidence. Sustained high volumes reinforce HKEX's position as a vibrant financial hub, attracting more listings and trading participants, which is crucial for long-term growth. | Monthly reported Cash Market ADT. The Q2 2026 headline ADT was HKD 289 billion, with July 2026 ADT at HK$307.2 billion. | Bullish if monthly ADT consistently exceeds HK$300 billion, indicating sustained market vibrancy and revenue growth. Bearish if monthly ADT falls below HK$280 billion, suggesting a slowdown in market activity. | HKEX Monthly Market Highlights (released monthly on HKEX website). | Financial news outlets (e.g., Reuters, Bloomberg) reporting on Hong Kong stock market volumes. | Bloomberg Terminal: HKEX Cash Market ADT data. |
| Mainland Insurance Companies Investing in HK-listed ETPs via Connect | This policy announcement significantly expands the investor base for Hong Kong-listed ETPs, driving increased trading volumes and Assets Under Management (AUM). It boosts HKEX's revenue from derivatives and ETPs, strengthening its Connect franchise and enhancing market liquidity and depth. | Specific implementation details from regulators, growth in ETP Average Daily Turnover (ADT) and AUM in HKEX's monthly market statistics, and official reports on Mainland insurance company investment flows. ETPs contributed 17% of headline ADT in H1 2026. | Bullish if regulatory approval and implementation lead to a measurable increase in ETP ADT (e.g., ETP contribution to headline ADT rising above 17%) and AUM. | HKEX press releases, CSRC/NFRA announcements, Hong Kong SFC, HKEX Monthly Market Highlights. | Chinese financial news outlets (e.g., Caixin, Securities Times), industry association reports from insurance or asset management sectors. | Bloomberg Terminal: Hong Kong ETP AUM and trading volume data; Refinitiv Eikon: ETP flow data, specifically tracking institutional participation. |
Key Reported Metrics, Reratings Triggers & ResultsIPO Funds Raised is a crucial indicator of HKEX's role as a primary bridge for China-global capital. Strong IPO activity signals investor confidence, directly b
Upcoming print · 2026-10-28
| Key reported metrics | ||
|---|---|---|
| Metric | Last period | Why it matters |
| IPO Funds Raised | USD 41 billion (approximately HKD 319.8 billion) for H1 2026 | IPO Funds Raised is a crucial indicator of HKEX's role as a primary bridge for China-global capital. Strong IPO activity signals investor confidence, directly boosts listing fees, and reinforces its competitive advantage. |
| Cash Market Average Daily Turnover (ADT) | HKD 289 billion (Q2 2026) | Cash Market ADT is a primary driver of HKEX's transaction-based revenues and market data income. Exceeding expectations signals robust market liquidity, sustained investor confidence, and effective monetization of its strategic position. |
| Total Revenue | 18% y/y growth for Q2 2026 | This is the overarching measure of HKEX's financial performance, reflecting overall market activity across its diverse segments. Strong growth indicates robust momentum and validates its strategic position as a key bridge for China-global capital flows. |
Last reported · 2026-08-19
| Key reported metrics | Rerating thresholds | Earnings results | ||||||
|---|---|---|---|---|---|---|---|---|
| Metric | Last period | Why it matters | What's needed for rerating | Rerating context | Earnings date | Actual reported | Hit target? | Notes |
| Cash Market Average Daily Turnover (ADT) | 14% | The Cash segment is a core business for HKEX. High cash market turnover directly translates to increased transaction fees and market data revenue, indicating robust equity market activity. | For Hong Kong Exchanges and Clearing Limited (0388.HK) to rerate higher, its Cash Market Average Daily Turnover (ADT) for Q2 2026 needs to hit HK$300 billion or more. This would represent a significant beat on the reported Q2 2026 ADT of HK$289.5 billion and analyst consensus forecasts of approximately HK$290 billion. It would also demonstrate continued acceleration beyond the 21.8% year-on-year growth seen in Q2 and the 17% year-on-year growth in July 2026 (HK$307.2 billion). | Hitting this threshold matters because Cash Market ADT is a primary driver of HKEX's transaction-based revenues and market data income. Exceeding already strong analyst expectations signals robust market liquidity, sustained investor confidence, and effective monetization of its strategic position as the key bridge between China and global capital, particularly through Stock Connect and a vibrant IPO pipeline. This validates the investment thesis and supports a higher valuation. | HKD 289 billion (Q2 2026) | No | The Cash Market Average Daily Turnover (ADT) for Q2 2026 reached a record quarterly high of HKD 289 billion, but it did not meet the rerating target of HK$300 billion or more. Despite missing this specific quarterly target, the average daily turnover volume in the cash market for the first half of 2026 was a record half-yearly high, 18% higher compared with the first half of 2025. | |
| IPO Funds Raised | Nearly six times | HKEX's role as a primary bridge between China and global capital makes its IPO pipeline crucial. Strong IPO activity signals investor confidence and directly boosts listing fees and related revenues. | IPO Funds Raised for the first half of 2026 to exceed HK$220 billion, representing a year-on-year increase of over 100%, and for the company to project full-year 2026 IPO funds raised to reach at least HK$400 billion. | Achieving this threshold would strongly validate HKEX's investment thesis as the key pulse for Asian liquidity and a primary bridge for China's capital. It signals robust market confidence and directly boosts transaction-based revenues, justifying a higher valuation and reinforcing its competitive advantage. | USD 41 billion (approximately HKD 319.8 billion) for H1 2026 | Partially | IPO funds raised for the first half of 2026 reached USD 41 billion (approximately HKD 319.8 billion), which exceeded the HK$220 billion target and represented a significant year-on-year increase, surpassing the total full-year 2025 fundraising. However, the company did not explicitly project full-year 2026 IPO funds raised to reach at least HK$400 billion, though management stated they were 'on good track to beat last year's record' (USD 37.5 billion). | |
| Total Revenue | 20% | This is the overarching measure of the company's financial performance, reflecting overall market activity across its diverse segments and its ability to generate income from trading, clearing, and data services. | Total Revenue growth of at least 15% year-over-year for Q2 2026. | Achieving 15%+ YoY revenue growth would significantly surpass the analyst consensus of approximately 10% and Citi's 13% estimate. This demonstrates robust momentum, reinforcing HKEX's role as the key bridge for China-global capital flows and its strong IPO pipeline, justifying a higher valuation and strengthening the long thesis. | 18% y/y growth for Q2 2026 | Yes | HKEX reported an 18% year-on-year increase in revenue for Q2 2026, successfully meeting the rerating target of at least 15% year-on-year growth. The group also achieved its best-ever half-yearly revenue and profit in the first half of 2026. | |
Key QuestionsWill the recent policy allowing Mainland insurance companies to invest in Hong Kong-listed ETPs via Connect, along with progress on REIT Connect and the Southbo
Will the recent policy allowing Mainland insurance companies to invest in Hong Kong-listed ETPs via Connect, along with progress on REIT Connect and the Southbound RMB counter, translate into a material acceleration of Southbound trading volumes and ETP ADT in the next quarter, validating HKEX's role as a key China-global capital bridge?
- Question 2
Can HKEX demonstrate sustained growth in trading volumes and participant engagement for its newly launched 5-year CGB futures and other FIC/commodities products, and will the planned acceptance of CGB as collateral before year-end significantly advance its multi-asset ecosystem strategy and contribute meaningfully to revenue in the next quarter?
- Question 3
Will HKEX sustain its strong IPO fundraising momentum and attract a diverse pipeline of new listings, offsetting the slight decline in active applications, and how effectively can it mitigate the ongoing headwinds from lower net investment income on overall profitability in the upcoming quarter?
Earnings Transcript Summary
· 2026H1 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 3 Things Management Is Most Focused On1. Sustaining Market Momentum and Competitiveness: Management emphasized sustaining the vibrancy of Hong Kong's markets, making them more competitive, and enhancing the listing framework to attract global investor interest and capital formation. 2. Building a Multi-Asset Ecosystem: A key strategic focus is to build a comprehensive multi-asset ecosystem beyond equities, encompassing fixed income, currency (FIC), commodities, derivatives, indices, and data, to support Hong Kong's next phase of growth and provide diverse investment and risk management opportunities. 3. Strengthening Connectivity and Operational Enhancements: HKEX is focused on strengthening connectivity to major markets and liquidity pools in the region, particularly through the Connect programs, and continuously modernizing market infrastructure, operations, and technology platforms to improve accessibility and efficiency. | Call Takeaway & ToneThe overall takeaway is that HKEX delivered a very strong first half of 2026, with record revenue and profit, driven by renewed investor interest, robust trading volumes across all major segments, and successful execution of strategic initiatives. The tone was highly positive and confident, with management emphasizing the regained vibrancy of Hong Kong's markets and their strategic focus on sustaining momentum, diversifying the multi-asset ecosystem, and enhancing connectivity to solidify Hong Kong's position as a leading international financial center connecting China to global capital. | Prior Quarter'S Y/Y Growth By SegmentGroup Revenue and Other Income (Q1 2026): 20% year-on-year increase. Cash Market Average Daily Turnover (ADT) (Q1 2026): 14% year-on-year increase. Derivatives Average Daily Turnover (ADT) (Q1 2026): 1.7% year-on-year decrease. Northbound Stock Connect Average Daily Turnover (ADT) (Q1 2026): 69.6% year-on-year increase. Commodities (LME chargeable ADV) (Q1 2026): 26% year-on-year increase. Net Investment Income (from corporate treasury funds) (Q1 2026): 4% year-on-year increase. | 3 Things Analysts Most Pressed On (And Mgmt Responses)1. Further Opening of Cross-Border Flows (Connect Programs) and ETP Initiatives: Richard Xu inquired about discussions regarding further opening cross-border channels (e.g., Southbound, more ETFs in Southbound) and future ETP initiatives. Management responded by highlighting recent policy announcements allowing Mainland insurance companies to invest in Hong Kong-listed ETPs via Connect, and ongoing progress on REIT Connect and Southbound RMB counter. They also detailed strong ETP growth, the development of leverage and inverse products, covered call ETFs, and 60-40 ETFs tailored for Southbound investments, including partnerships for new indices and fixed income ETFs. 2. Longer-term Growth Potential of 5-year CGB Futures: Charles Zhou asked about the potential of the newly launched 5-year China Government Bond (CGB) futures contract and its role in the China fixed income derivatives market and FIC ecosystem. Management noted encouraging early signs and strong institutional interest, explaining its role as a price discovery tool for the offshore CNH curve, attracting more CNH debt issuance, and building a vibrant fixed income market. They also mentioned plans to accept CGB as collateral in clearing houses and explore building a repo market. 3. Northbound ADT Drivers and IPO Market Competition: Gary Lam questioned the underlying drivers of the significant improvement in Northbound ADT and the reasons for a slight fall in active IPO application numbers, as well as competition between A-share and H-share IPOs. Management attributed Northbound ADT growth to increased global interest in A-shares and the returned vibrancy of the A-share market, further noting an expansion in eligible stocks. Regarding IPO applications, they clarified that the number decreases due to successful conversions into listings (over 100 IPOs year-to-date, exceeding full-year 2025 fundraising) and emphasized that interest remains very strong. They viewed A&H markets as complementary, not competitive, as companies seek access to large shareholder bases and deep capital raising platforms, with a growing trend of non-Chinese companies listing in Hong Kong. | Revenue SegmentsGroup Revenue and Other Income: 19% year-on-year increase. Cash Market Average Daily Turnover (ADT): 18% year-on-year increase. Northbound Stock Connect Average Daily Turnover (ADT): more than doubled year-on-year. Derivatives Market Trading Volumes: 6% year-on-year increase. Commodities Market Trading Volumes: 18% year-on-year increase. Total Net Investment Income: 11% year-on-year decrease (21% decrease excluding non-recurring valuation gain). |
Transcript Tidbits
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| About Expanding Eligible MarketHKEX is focused on sustaining momentum, making markets more competitive, building a multi-asset ecosystem, and strengthening connectivity to major regional markets and liquidity pools. A policy announcement allows Chinese Mainland insurance companies to invest in Hong Kong-listed ETPs through the Connect franchise. Progress is being made on REIT Connect and including the Southbound RMB counter. Efforts are underway to develop 60-40 ETFs eligible for Southbound investments. The number of eligible stocks for Northbound ADT expanded by about 20%. HKEX is also attracting non-Chinese companies to list, with a recent secondary listing of an Indonesian gold mining company (Merdeka) and about 10 non-Chinese companies in the pipeline from various jurisdictions. | About CompetitionHKEX aims to make its markets even more competitive and enhance the attractiveness and competitiveness of its listing platform. Hong Kong ranked as the second leading global IPO venue in the first half of 2026. Management views the A-share and H-share markets as highly complementary rather than competitive, with companies increasingly seeking listings on both markets for broader capital access. Hong Kong also demonstrates strength in follow-on fundraising. Efforts are being made to reduce frictions and increase the competitiveness of the Northbound Connect channel. | About The Broader IndustryThere is renewed global investor interest in HKEX markets, driven by optimism in China's outlook and exciting developments in innovation. Positive market sentiment and strong interest in Chinese Mainland technology and AI-related stocks are noted. Global capital allocation patterns are changing as investors seek more diversified growth and risk management opportunities. Investors are requiring deeper liquidity, more diverse products, and sophisticated risk management tools across Asia. | Where Things Are HeadedHKEX's focus is on sustaining momentum through disciplined execution, building a vibrant multi-asset ecosystem spanning equities, fixed income, currency, commodities, derivatives, indices, and data. They are making tangible progress with new FIC products, growing commodities activity, and a developing index business. The next decade of connectivity is seen as an even greater opportunity for capital market growth. For CGB futures, they hope to launch other tenors down the road. HKEX plans to open its two biggest clearing houses to accept CGB as collateral before the end of the year and is exploring building a vibrant repo market. The next development for trading hours is likely in derivatives after-hours trading, aiming to extend to cover the U.S. time zone closing. | Updates On ThemeOptions | Broader Themes EmergingAI-related stocks are driving strong interest in Chinese Mainland markets. Global capital allocation patterns are shifting towards diversified growth and risk management opportunities across Asia. | Bullish-Leaning Quotes (Short)HKEX delivered an exceptional first half of 2026, reporting the group's best ever half yearly revenue and profit. We are confident that the Hong Kong's markets have regained their vibrancy. Hong Kong ranked as the second leading global IPO venue in the first half of 2026. Early signs are very encouraging (for CGB futures). The interest remained very strong, very, very strong (for IPO applicants). | Bearish-Leaning Quotes (Short)Lower net investment income from margin funds, attributable to higher rebates payable to participants. Lower investment returns, reflecting a lower interest rate environment for reinvestment. Net investment income is expected to continue to be affected by the revised margin collateral arrangements, fluctuating margin fund size and movements in Hong Kong dollar interest rates. If you keep extending, could you have like thinner liquidity, could you have bid-ask spread that's not as tight (referring to extending trading hours). | HiringOpEx increased primarily due to higher staff costs. This reflects partly the group's investment in talent to build our multi-asset ecosystem. |
Upcoming Events
| Catalyst ID | Estimated Timing | Estimated Date Start | Estimated Date End | Catalyst | Why It Matters | Ticker Or Theme Specific | Transcript Date | Source Type |
|---|---|---|---|---|---|---|---|---|
| 0388.HK_7492b3c1 | later this year | 2026-10-01 | 2026-12-31 | HKEX plans to launch FDR007 contracts in its OTC clearing business, subject to regulatory approval. | The launch of FDR007 contracts will expand HKEX's suite of RMB risk management products, supporting its multi-asset strategy and offering investors more avenues to access China and manage risk through Hong Kong. | Ticker | 2026-08-19 | earnings_transcript |
| 0388.HK_56aa217f | later this year | 2026-10-01 | 2026-12-31 | Planned launch of LME Steel HRC Shanghai and London, supported by the Shanghai Futures Exchange LME hot-rolled coil futures settlement price licensing initiatives. | This initiative strengthens cross-border cooperation in commodities and facilitates international market participants' access to China-linked benchmarks for trading and risk management, contributing to the diversification of HKEX's commodities franchise. | Ticker | 2026-08-19 | earnings_transcript |