[Conference Direct] HKStock Exchange Annual Revenue Innovator Kao Smylen: Hong Kong stocks will be key driver

[Xinhua News] HKEX announced its results for 2020. The Group's revenue and other income for the year ended 31 December 2020 amounted to HK$192 (HKD), up 18% year-on-year, and shareholders' earnings increased 23% year-on-year to 115.05 yuan, both at a new all-time high. Of these, Hong Kong stocks will account for about 10% of company revenues in 2020, and HKEX Chairman Smyron calls Hong Kong equities a key driver of HKEX earnings.

THE BOARD DECLARED A SECOND INTERIM DIVIDEND OF $4.46 PER SHARE IN CONJUNCTION WITH THE FIRST INTERIM DIVIDEND PAID IN SEPTEMBER 2020 OF $3.71 PER SHARE AND A FULL-YEAR DIVIDEND OF $8.17 PER SHARE, SETTING AN ALL-TIME HIGH.

Looking back over the past year, HKEX Chairman Smith said that 2020 was a challenging year. We had an impressive track record, our core business continued to be strong. Against a backdrop of diversity and uncertainty, we are moving towards our realistic strategic goals. In the future, we believe that more new economy companies and companies returning to Hong Kong as the second listed companies can also drive future earnings growth.

Driven by strong growth in biotech and new economy company fundraising activities, HKEX was the world's second largest IPO in 2020 at HK$4002, an increase of 27% year-on-year to the highest since 2010 and 154 new listed companies in the year.

For the period, HKUST's revenue and other income reached a new high of HK$19.26, up 91% year-on-year. Shanxi Hong Kong's closing rate and average daily turnover were at a new high, with the transaction volume of northbound and southbound transactions reaching RMB, respectively

RMB 210886 and HK$55081; the average daily transaction amount was RMB913 and HK$244, respectively. Bond turnover also hit a new high, with an average daily trading volume of RMB198, an increase of 85% year-on-year.

With the UK market in mind, the LME is in a bid to stay afloat during the pandemic, trading and pricing will be conducted electronically from March 2020, for only the second time in 140 years. The average daily trading volume of the LME's fee-traded metals contracts decreased by 7% compared to 2019, but due to the commencement of fees from January 1, 2020, trading fee revenue increased by 5%.

In November 2020, the Group entered into an agreement to become a minority shareholder of Guangzhou Futures Exchange Co., Ltd. This is our first appearance on the offshore market, and we hope to have more cooperation with futures trading in the future, said Dai Zhiqi, Chairman and Chief Operating Officer, Co-CEO and Chief Operating Officer of the Group.

HKEx embraces technology and leverages new technologies to modernize business and promote business growth. Measures include proposals to streamline IPO acquisition and settlement cycle processes, publication of the FINI framework advisory documents; automate and simplify post-transaction workflows for HK equities and deep equities, such as the launch of Synapse in the first quarter of 2022; improved operational efficiency and the application of new technologies in the HKEX's multi-faceted business, such as robotic processes Dynamic programming and artificial intelligence technologies, etc.

According to Dai Zhiqi, new economy companies and biotech companies are the main drivers of our business growth. Hong Kong's second-listed transactions are very active, contributing to our earnings growth. The current market is very strong and the number of IPO applications is very strong. In addition, we are very much looking forward to the new CEO.

Chairman and CEO of the Group, Co-President and Chief Operating Officer, Dai Zhiqi, and Chairman Smylen attended the press conference and responded to the inquiry, some of which were recorded as follows:

Q: In order to increase revenue, the HKSAR Government plans to adjust the share stamp duty rate, which will now be increased by 0.1% to 0.13% from the current purchase and sale price. Will there be any impact on stock trading in China?

A: HKEx has not been consulted in advance regarding the increase in stamp duty. The market needs time to digest. At present, it is too early. It is difficult to predict the impact on trading stocks. We need time to observe, but there is no need to react too much.

Q: The Chancellor of the Exchequer today mentioned that the HKEx will conduct some consultations on the rules for improving the second listing system. Why is the HKEx doing this?

A: Last year, we announced a consultation on the different equity rights of the corporate board. We observed a lot of mid-cap stock reversals last year, some of which did not have a different equity structure in themselves. If there was a problem with the return, we asked him to have an innovative door, we received There is room for relaxation to many market responses. At the time of the publication of the Board of Shareholders last year, we advised the market to conduct a consultation on this issue in the future. About when we will officially do it, we will announce it at that time.

Q: Hong Kong stocks have had a lot of net inflows this year. Why will this year be so strong? Will this be normal? Timeline of ETFs?

A: Hong Kong equity inflows have been strong in recent times, and Mainland investors need more investment channels, and Hong Kong is a very convenient option. Apart from Shanghai and Shenzhen, Hong Kong is an easily accessible market, and if it seizes this opportunity, Hong Kong is confident of maintaining a clean flow. In addition, institutional investors have reason to continue to participate in our market for a long time, and we want to do better. In terms of ETFs, we don't have a complete timeline yet.

Q: With rising operating costs, in which areas have increased investment?

A: Our operating costs are 8% higher, we invest mainly in attracting talent and IT infrastructure, and we will continue to invest in IT in the future, ensuring poor performance.

Q: How is the CEO's resume process?

A: Our Board of Directors has made careful choices over a long period of time to make the appointment, which is currently under review by the Board of Supervisors, a very normal level. The new CEO Nicolas Aguzin has worked for a long time at USB, has a lot of experience, and everyone has great confidence in him.

Text: Long Man

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