Hong Kong Exchanges and Clearing Limited (HKEX) last week announced the government’s appointment of two former financial regulators to its board.
According to the release, former chair of the Securities and Futures Commission (SFC), Carlson Tong, and former CEO of the Hong Kong Monetary Authority (HKMA), Joseph Yam, will replace retiring board members Rafael Gil-Tienda and Stephen Yiu on 26 April 2023, following the exchange’s annual general meeting (AGM).
In addition, the government announced plans to reappoint incumbent director, Nisa Leung, for another two-year term.
The HKEX board continues to comprise six directors appointed by the financial secretary and six independent, non-executive directors elected by shareholders, as well as the chief executive of the HKEX, Nicolas Aguzin, who is executive director.
Financial secretary, Paul Chan, lauded the appointees’ knowledge and experience in financial markets and stressed his confidence in their capacity to enhance further the HKEX’s overall business and competitiveness.
“I am confident that they will work closely with the other directors and together [will] further the development of Hong Kong to become a more vibrant and diversified international fundraising platform with a larger scale,” he said in the release.
During Yam’s tenure, the HKMA introduced a number of strategic reforms that contributed to Hong Kong’s status as an offshore business hub, Chan said, while Tong made important contributions to market development and regulation while at the SFC, he added.
Resilience amid challenges
The news comes on the back of HKEX’s full-year 2022 results announcement, which shows a fall in profits and revenues that were slightly cushioned by a rebound in performance in the final quarter of the year.
The fourth-quarter boom in listings allowed the bourse to regain a spot among the world’s top five IPO destinations after falling to 10th place, in the middle of last year.
Overall, HKEX posted 2022 revenues and income of $18.5 billion, 12% lower than that of 2021, and a 9% fall in core business revenue to $130 million, while operating expenses were 12% up on the previous year due to “higher staff costs and professional fees.” Profit attributable to shareholders was $10.1 billion, 20% less than in 2021.
However, the performance of HKEX in the final three months of the year resulted in a record fourth quarter: Q4 revenue and other income hit $5.2 billion, finishing up by 10% compared to Q4 2021, and core business revenue rose by 7%, attributable to higher net investment income from margin funds. Profit attributable to shareholders was $3 billion, 11% above that of Q4 2021.
HKEX CEO, Nicolas Aguzin, said in the release: “Throughout 2022, HKEX demonstrated focus and resilience, launching a range of important strategic initiatives and introducing a range of new products and market enhancements.”
He highlighted increased mutual access via the Connect schemes; the launch of carbon trading platform, Core Climate; and the introduction of new derivatives and ETF products as the most significant developments to have taken place last year.
“Despite the challenging global economic and geopolitical backdrop, HKEX remained one of the world’s premier capital raising venues, with positive sentiment returning to the IPO market in the second half…. Whilst the road ahead will not be without challenges, we are excited about the year ahead and we look forward to continuing to execute on our vision to build the marketplace of the future.”
In total, Hong Kong welcomed 90 new listings to its main board in 2022, raising a total of HK$104.6 billion ($13.4 billion). This is down from 98 IPOs (-9%) and HK$328.9 billion (-68%) in total proceeds raised in 2021.
Last year, HKEX announced the establishment of a New York office to boost overseas promotion and it relaxed listing rules for specialist tech companies, to increase access to the bourse for firms in this emerging sector.
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