Hong Kong exchange trading fee drops 21% as trade war, protests hurt

Credit: REUTERS/Bobby Yip

Hong Kong Exchanges and Clearing Ltd (HKEX) posted a 21% drop in trading fee in the first half of the year, as the Sino-U.S. trade war and political unrest in the Asian financial hub hit market sentiment.

Trading fee drops to HK$952 mln from HK$1.2 bln a year earlier

Profit rises 3% to HK$5.2 bln on higher listing fees

Adds trading fee details; context

HONG KONG, Aug 14 (Reuters) - Hong Kong Exchanges and Clearing Ltd (HKEX) 0388.HK posted a 21% drop in trading fee in the first half of the year, as the Sino-U.S. trade war and political unrest in the Asian financial hub hit market sentiment.

Markets continued to be sensitive to uncertainties in the U.S. interest rate outlook, a potential no-deal Brexit, and the recent "social unrest" in Hong Kong, HKEX Chairman Laura Cha said in the statement.

Ten weeks of increasingly violent clashes between police and pro-democracy protesters, angered by a perceived erosion of freedoms, have plunged Hong Kong into its worst crisis since it reverted from British to Chinese rule in 1997.

The Hang Seng Index .HSI, which dropped 2.1% on Tuesday pulling it 16% lower from the year's peak, was trading up 0.7% on Wednesday. It's down 8% since June 12, when street clashes escalated between anti-government demonstrators and the police.

Concerns over China's slowdown, as a result of the tit-for-tat Sino-U.S. tariff war, have also dragged on Hong Kong's economy. The Hang Seng is Asia's second-worst performer after South Korea's this quarter.

The stock exchange operator's trading fee, which accounts for half of its revenue, dropped 21% to HK$952 million in the first half, it said in a filing. As a result, revenue fell 11% to HK$1.9 billion.

Profit at the bourse, however, rose 3% to HK$5.21 billion ($664 million) in the six months ended June, as listing fee rose 6.7% to HK$475 million as a result of higher overall number of listed companies on the bourse, it said.

Apprehension over capital outflows triggered by escalating political unrest has also pressured Hong Kong currency, with analysts warning of more weakness for the stock market and the Hong Kong dollar.

($1 = 7.8445 Hong Kong dollars)

(Reporting by Sumeet Chatterjee; editing by Sherry Jacob-Phillips and Gopakumar Warrier)

((sumeet.chatterjee@thomsonreuters.com; +852-2847 2094;))

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