Hong Kong Stock Exchange sees the secondary listing momentum as profit in the first half increases

HONG KONG (Reuters) – Hong Kong Exchanges and Clearing Ltd (HKEX) (0388.HK) sees a trend of secondary advertising by Chinese companies with New York listing and supports their prospect as the stock market reports a 1% increase from the first half on Wednesday.

Alibaba e-commerce giant (BABA.N) completed its secondary listing in Hong Kong last year. Other companies including travel giant Ctrip (TCOM.O) and Baidu (BIDU.O) considered list of Hong Kong, Reuters reported earlier this year.

HKEX hopes to attract more U.S.-listed Chinese companies, take advantage of a 2018 change to the rule that reduces restrictions on secondary advertising, and potentially benefit from escalating Sino-American political tensions.

“The growing trend of US-listed Chinese companies seeking secondary advertising on the exchange has, and will continue to, bring diversity and vibrancy to Hong Kong’s capital markets,” said HKEX President Laura Cha in the results submission.

Chinese tech companies Netease (NTES.O) 9999.HK and JD.com (JD.O) 9618.HK had a combined $ 7.6 billion in secondary advertising this summer, more than the other 61 Hong Kong IPOs combined in the first half, according to Refinitiv.

HKEX Chief Executive Charles Li said he was pushing for reforms of the “stock connect” arrangements linking Hong Kong with mainland Chinese exchanges to allow investors there to trade in shares of companies such as Alibaba and other Chinese “returning” companies in Hong Kong Kong.

The scheme currently excludes mainland investors from certain companies with secondary advertising and various governance structures, such as Alibaba.

The average daily turnover of HKEX securities in the first half increased 20% year-on-year, as market volatility stimulated trading and clearing costs which accounted for more than half of the turnover of the create company.

A decrease in investment income, as a result of losses on certain investment schemes, in particular in March, meant the net profit for the first half of HK $ 5.23 billion ($ 673.5 million), compared to HK $ 5.21 billion a year earlier.

HKEX was ranked fifth among global exchanges by the amount that was increased by companies in IPOs in the first half, according to data from Refinitiv. It was second when secondary ads were included.

Average daily volume of lots traded on the HKEX subsidiary the London Metal Exchange rose by 1% to 625,000.