HK Stock Market Move | The Hong Kong Stock Exchange (00388) fell nearly 3%. Institutions believe that the market volatility may decrease, leading to some pressure on the company's investment returns.

The Hong Kong Stock Exchange (00388) fell nearly 3%, falling by 1.92% to 398.4 Hong Kong dollars, with a turnover of 1.352 billion Hong Kong dollars as of the time of publication. CICC released a research report predicting that the Hong Kong Stock Exchange's second-quarter net profit will be 5.04 billion Hong Kong dollars, a year-on-year increase of 13% but a quarterly decrease of 3%. The Hong Kong Stock Exchange plans to disclose its quarterly results on August 19, and the bank predicts that second-quarter revenue will increase by 12% year-on-year but fall by 1% quarterly to 8.11 billion Hong Kong dollars. Excluding investment income, main operating fee income is expected to increase by 26% year-on-year and by 2% quarterly to 6.95 billion Hong Kong dollars. The report points out that spot trading activity continues to rise, and the trading volumes of the Hong Kong stock market and the Northbound Average Daily Turnover have reached new highs. It is expected that the main operating fee income in the second quarter will increase by 26% year-on-year and by 2% quarterly. In addition, short-term interest rates are rising while long-term interest rates are falling, and with market volatility declining, investment income is expected to come under pressure. RuiFang stated that the quality and demand for the IPOs of the Hong Kong Stock Exchange have significantly improved, with a decrease in the percentage of IPOs breaking below their issue price, an increase in institutional investor support, and manageable risks approaching the end of the lock-up period. The rotation of the AI sector and the selling off of the South Korean stock market are creating opportunities for market entry. The bank has respectively raised its profit forecasts for the Hong Kong Stock Exchange in 2026-2027 by 5% and 6%, to 18.579 billion Hong Kong dollars and 19.42 billion Hong Kong dollars, to reflect higher daily trading volumes, higher IPO fundraising amounts, and higher expected net interest income.