Profits at exchange better than expected

HONG Kong Exchanges and Clearing Ltd, operator of Asia's third-biggest stock market, reported a full-year profit that beat analyst estimates as cost cuts offset lower trading volumes. The shares surged the most in two months.

The company said net income in 2008 sank 17 percent to HK$5.13 billion (US$661 million), beating the median HK$4.81 billion estimate in a Bloomberg News survey of five analysts. Staff costs and related expenses decreased 3 percent and the dividend payout ratio was maintained at 90 percent of earnings, according to a statement from Hong Kong Exchanges yesterday.

"The cuts in staff costs was a big surprise," said Sam Hilton, an analyst at Fox-Pitt Kelton Asia Ltd in Hong Kong.

Volume falls

The financial crisis and global recession has pummeled trading volumes at bourses around the world, including Hong Kong Exchanges. The value of shares traded in the city daily on average in 2008 fell 18 percent to HK$72.1 billion from the previous year, the bourse said.

Hong Kong Exchanges shares climb`ed 6.6 percent to HK$59.60 yesterday, the biggest percentage rise since January 5. The stock is down 19 percent this year, compared with the benchmark Hang Seng Index's 14 percent tumble.

Profit per share in 2008 of HK$4.75 was down from HK$5.72 a share a year earlier, the company said. Revenue slumped to HK$6.48 billion from 2007's HK$7.15 billion.

Staff costs and related expenses declined 3 percent to HK$803.11 million.

The company will pay a second-half dividend of HK$1.80, 47 percent lower than a year earlier, taking its payout for the full year to HK$4.29.