As of 14:00 HKT on 6 August, Hong Kong Exchanges and Clearing (HKEX, 388.HK) traded at HK$428.2, up about 49 percent from its opening price of HK$287 on the first trading day of the year—nearly three times the Hang Seng Index’s return. During the period, the stock peaked at HK$452 and bottomed at HK$218.40, underscoring sharp shifts between exuberance and profit-taking.

（image source：uSMART HK app）

What’s Fueling the Rise: Fund-raising Fever and Surging Turnover

The primary catalyst is an extraordinary rebound in Hong Kong’s IPO market. Dealogic data show that IPO proceeds reached US$14.1 billion in 1H 2025—up 695 percent year-on-year and US$480 million ahead of the world’s second-ranked exchange. An influx of new listings not only lifts listing-fee income but also draws much wider investor participation.

Trading activity has risen in tandem. In Q1, HKEX’s cash-market average daily turnover hit a record HK$242.7 billion; total revenue grew 32 percent and profit attributable to shareholders jumped 37 percent to HK$4.08 billion, setting a quarterly record. Coupled with strong growth in derivatives and commodities, clearing and ancillary fees expanded sharply, turning market volume into bottom-line gains.

Financials and Valuation

In the first quarter, HKEX generated HK$6.9 billion in revenue and other income, and HK$4.1 billion in attributable profit. EBITDA margin improved to 78 percent from 72 percent a year ago, reflecting solid cost control despite higher activity. Over the past twelve months, the exchange paid HK$9.26 per share in dividends, implying a 2.2 percent yield and an 80 percent payout ratio.

At the intra-day price on 6 August, HKEX trades at about 38× trailing earnings—well above the Hang Seng’s 16× average, higher than CME Group’s 26×, and roughly in line with Nasdaq Inc.’s 37×. The premium shows investors are betting the IPO pipeline and trading boom will persist; but with multiples near historical highs, any miss in the upcoming interim results could prompt a swift re-rating.

Risks and Outlook

A renewed tightening of global liquidity could slow fund inflows, while geopolitical uncertainty—particularly U.S.–China relations—may affect listing demand and risk appetite. Regional competition is intensifying: Singapore, for example, has launched a S$3.7 billion market-revitalisation plan and a 20 percent tax rebate for new listings, luring some Chinese firms to consider dual-listing.

Looking ahead, a healthy queue of red-chips and Southeast Asian tech firms keeps the IPO pipeline full, and southbound quota expansion under Stock Connect may sustain market turnover. Yet with valuation rich and macro headwinds mounting, further upside depends on whether late-August interim results can extend Q1’s earnings momentum and whether the full rollout of FINI meaningfully accelerates new-listing capacity. For investors betting on the “HKEX story,” the key is to watch real earnings delivery and the next inflection in global risk sentiment rather than short-term market euphoria.

（image source：uSMART HK app）