Hong Kong Exchanges and Clearing Ltd. (00388.HK) said net profit for the third quarter jumped 81 percent to HK$2.33 billion, boosted by a one-off gain of HK$445 million from the sale of a rental property.
For the nine months to September, the local bourse operator saw its net profit rise 75.8 percent to HK$6.43 billion from the same period last year despite a market slump in the third quarter that dragged average daily transactions, the Hong Kong Economic Journal reported.
Analysts at Bank of America Merill Lynch said transaction volumes in the fourth quarter will continue to be affected by poor market sentiment, and conditions next year will remain weak.
The brokerage maintained its “underperform” rating on the stock, projecting that profit next year will fall by 13 percent.
It said the Shenzhen-Hong Kong Stock Connect, which is expected to be launched in the first quarter next year, is unlikely to change the picture significantly, considering that the trading link with Shanghai has seen lower-than-expected transaction levels.
Mizuho Securities Co. Ltd. also gave HKEx an “underperform” rating, saying that transaction volumes are expected to rebound only in 2017.
Macquarie Group Ltd., however, rated the stock “outperform”. It said market sentiment will improve following the launch of the Shenzhen stock link as China steps up efforts to open the country’s capital account and internationalize the renminbi.
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