|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's range||61.74 - 63.00|
|52-week range||25.91 - 74.21|
|Beta (5Y monthly)||0.85|
|PE ratio (TTM)||65.04|
|Forward dividend & yield||1.05 (1.69%)|
|Ex-dividend date||08 Mar 2021|
|1y target est||N/A|
(Bloomberg) -- A year anticipated to be full of headwinds for Hong Kong’s stock exchange turned euphoric instead. The challenge is now to add to the momentum.Hong Kong Exchanges & Clearing Ltd. on Wednesday reported that profit rose 23% to a record HK$11.5 billion ($1.48 billion) in 2020.Incoming Chief Executive Officer Nicolas Aguzin is preparing to take the helm after a year when trading jumped 60%, the bourse saw the biggest initial public offering flood in a decade and inflows of cash through links to Shanghai and Shenzhen doubled. Political tension drove a bevy of high-profile Chinese firms to find a new home in Hong Kong on concern they would be booted off U.S. exchanges, their long-time source for funding.The boom has continued in 2021 and investors have cheered. The stock is up 150% in the past 11 months. The bourse is now the world’s biggest in terms of market value, far bigger than its London rival and four times as big as Nasdaq Inc., for example.The exchange’s shares fell on Wednesday amid reports the city will raise the stamp duty on stock trading for the first time since 1993, potentially cutting trading volumes. The shares were down 5.4% as of noon. “HKEX faces several uncertainties,” said Alex Wong, director of asset management at Ample Capital Ltd., citing a push to open up to yuan-denominated products and getting further links to China, such as ETF Connect and Primary Connect.Aguzin, who’s slated to take over in May but still needs regulatory approval, faces pressure to build on the legacy of his successor Charles Li, who became known as “Mr. China” for convincing Beijing to set up mainland stock trading links, which now account for 10% of the exchange’s revenue.The appointment of Argentina-native has been met with skepticism in the city because of his outsider status. Being the first non-Chinese CEO, his ability to navigate the halls of power in Beijing, has come under question.That could now largely fall on Chairman Laura Cha, who as the former vice chairman of China Securities Regulatory Commission, is well connected in the country. But Cha is also seen as less likely than Li to try to push reforms on Beijing.Plans to allow mainland investing in IPOs and trading in futures of Chinese shares have so far seen little progress. In an effort to build up its own exchanges, Beijing has also so far nixed allowing investments in dual listed companies -- technology giants such as JD.com Inc., Alibaba Group Holding Ltd. and NetEase Inc.“As H.K. and mainland China markets become increasingly connected, the relationships of the company and the new CEO with mainland China regulators would increasingly matter to further broaden the mutual market access,” said Yafei Tian, an analyst at Citigroup Inc., in a recent report.The appointment of a veteran investment banker rekindled some anticipation that the bourse would again try its hand at acquisitions. Plans to internationalize have largely been put on hold since Li famously embarked on a failed bid to buy the London Stock Exchange in 2019.“There’s a broad array of organic and inorganic growth options in front of us,” said Fred Hu, a board member and founder of Primavera Capital Ltd. “And Aguzin is well positioned to take HKEX into the future, to further deepen the connectivity with China but also connectivity with the rest of the world.”Analysts for now are bullish the exchange can continue to ride the current boom of more mega-IPOs. It could also get a boost from a proposal by Hang Seng to expand the city’s benchmark index from the current 50.Hang Seng Proposes Major Overhaul of Hong Kong Stock Index (2)That could propel the share price above HK$600, according to Steven Leung, executive director at UOB Kay Hian (Hong Kong). China International Capital Corp. has a target price of HK$634.“IPOs and the daily turnover level matters more to the HKEX share price than the new CEO’s strategy, which is more mid- to long-term,” said Leung. Nonetheless, the exchange should explain further the decision to name a non-Chinese speaker as CEO and why it was announced before getting the regulatory approval, he said.(Updates with earnings in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Shares in Hong Kong’s bourse operator tumbled after the city’s government said it would raise the stamp duty charged on equity trades in the Asian financial hub, threatening the group’s biggest revenue stream. The move by finance secretary Paul Chan on Wednesday to increase stamp duty from 0.1 to 0.13 per cent of the value of each trade came as Hong Kong Exchanges and Clearing reported record profits for the 2020 financial year. Shares in HKEX fell by as much as 12.3 per cent before later trimming losses to 8.8 per cent. The Hang Seng index of stocks that trade in the city fell as much as 3.5 per cent — its biggest intraday drop since May, when the market was hit by reports that Beijing was planning to impose a draconian national security law on Hong Kong.
(Bloomberg) -- It was heralded as China’s answer to JPMorgan -- a homegrown financial giant on the cusp of the biggest stock-market debut the world has ever seen.Instead, with billions on the line and an initial public offering all but sealed, Chinese authorities have abruptly thrown into doubt the future of Ant Group Co. and its celebrated founder, the billionaire Jack Ma.Only days before the financial-technology juggernaut was to go public in Shanghai and Hong Kong -- a coup for China’s financial markets that once would have been unimaginable -- the $35 billion IPO was halted on Tuesday after Ma was summoned by regulators. In an extraordinary turn of events, authorities announced that they had belatedly discovered an array of shortcomings that, by some accounts, might require the sprawling Ant to be overhauled.“The way I’d read it, it’s a deliberate public relations move,” said Sean Darby, chief global equity strategist at Jefferies. “This has happened before when companies appear to have become too big versus the state for the authorities’ liking.”Reaction in the financial market was swift. Ma’s Alibaba Group Holding Ltd., which owns a third of Ant, plunged 7.1% in Hong Kong, after falling by the most in almost six years in New York. The sell-off reduced Ma’s fortune by almost $3 billion. Hong Kong Exchanges & Clearing Ltd., owner of the city’s bourse, dropped 2.2%.The move upends what had been one of China’s biggest business success stories, as well as what was to be a pivotal step in the development of the nation’s fast-growing capital markets.“It’s definitely surprising,” said Mike Bailey, director of research at FBB Capital Partners. “If there is something strange going on on the macro side for China’s financial markets or in the company, that would be worrisome.”In just a decade, Ant, an affiliate of Ma’s Alibaba Group, has exploded into the world’s largest financial technology company, reshaping the lives of many ordinary Chinese. But its ascendance -- and Ma’s growing global reputation -- has also posed a threat to China’s state-run lenders and their political benefactors.Tuesday’s developments left bankers and global investors groping for answers. The immediate fate of the many billions already tied up in the IPO is for now uncertain.Changes NeededChinese authorities didn’t give much detail about the issues behind the suspension, beyond saying that the much-anticipated debut couldn’t go ahead because there had been “significant change” in the regulatory environment.The company will have to make changes that include capital increases at its lucrative micro-lending units, according to people familiar with the matter. It will also have to reapply for licenses for the units to operate nationwide, the people added, asking not to be identified discussing a private matter.The IPO is expected to be delayed by about six months, and funds will be returned to investors in the meantime, news portal QQ.com reported, citing an unidentified person.Major gray market brokers for the deal, including BTIG LLC, told clients all transactions will be canceled, according to people familiar with the matter. Millions of shares were traded in the over-the-counter market prior to Ant’s planned debut, many at about a 50% premium to the listing price of HK$80 ($10.32). BTIG didn’t immediately respond to a request for comment.Ant, which spun out of Alibaba in 2010, has long been seen as a champion of China’s economy and an example of how the Communist Party has allowed entrepreneurs -- especially in the technology sector -- to flourish within its top-down political system. Tuesday’s setback may cast a pall over the country’s financial markets, even as President Xi Jinping tries to create stock exchanges that can rival the U.S.“Ant Group sincerely apologizes to you for any inconvenience caused by this development,” the company said in a message to investors. “We will properly handle the follow-up matters in accordance with applicable regulations of the two stock exchanges.”There were warning signs on Monday when Ma was summoned to a rare joint meeting with the People’s Bank of China and three other top financial regulators and told his firm would face increased scrutiny and be subject to the same restrictions on capital and leverage similar to banks.“This further reinforces the regulatory pressures building on tech giants,” said Nader Naeimi, head of dynamic markets at AMP Capital Investors Ltd. in Sydney. “It’s good news for banks, bad news for Jack Ma,” he said, referring to the competitive threat Ant poses for traditional lenders.Record IPOThe IPO was on pace to break records. It had attracted at least $3 trillion of orders from individual investors for its dual listing in Hong Kong and Shanghai, and in the preliminary price consultation of its Shanghai IPO, institutional investors subscribed for over 76 billion shares, more than 284 times the initial offering tranche.The fintech company’s IPO would have given it a market value of about $315 billion based on filings, bigger than JPMorgan Chase & Co. and four times larger than Goldman Sachs Group Inc.Dealmakers at firms including Citigroup Inc. and Morgan Stanley were set to feast on an estimated fee pool of nearly $400 million for handling the Hong Kong portion of the sale, but were instead left reeling after the listing was pulled. Top executives close to the transaction said they were shocked and trying to figure out what lies ahead.But Ant has faced scrutiny in Chinese state media in recent days after Ma criticized local and global regulators for stifling innovation and not paying sufficient heed to development and opportunities for the young. At a Shanghai conference late last month, he compared the Basel Accords, which set out capital requirements for banks, to a club for the elderly.And over the weekend, at a meeting of the Financial Stability and Development Committee led by Vice Premier Liu He, officials stressed the need for fintech firms to be regulated.Ant dominates China’s payments market via the Alipay app. It also runs the giant Yu’ebao money-market fund and the country’s largest online consumer-lending platform. Other businesses include a credit-scoring unit and an insurance marketplace.(Updates with gray market trading in 13th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.