Market Insight | HKEX Surges Over 5% Intraday, Up Over 80% from September Low, Daily Trading Volume Soaring, Expected to Drive Profit Growth

During the trading session, Hong Kong Exchanges and Clearing Limited (HKEX) rose more than 5%, reaching a high of HKD 397.8, with a cumulative increase of over 80% from the September low of HKD 218.4. As of the time of writing, it rose by 3.99% to HKD 391.2, with a turnover of HKD 73.72 billion. Huatai Securities stated that since late September, boosted by factors such as the Federal Reserve's interest rate cuts, a combination of mainland China's monetary policies, and the September political bureau meeting, the performance and trading activity of the Hong Kong stock market have rapidly and significantly improved. The daily turnover reached over HKD 500 billion, setting a new record for daily turnover in the history of the Hong Kong stock market. The bank pointed out that the increased trading activity will drive up HKEX's performance for the third quarter and the full year. It noted that for every increase of HKD 5 billion in daily turnover, HKEX's profit is expected to rise by approximately 2.2%. HSBC released a report stating that HKEX is expected to benefit from continued interest rate cuts in the United States, improved risk sentiment in mainland China, further enhancements in infrastructure such as Stock Connect and China Treasury Futures, additional fiscal and monetary policy stimuli, and a potential further narrowing of the premium on A-shares. However, the sharp increase in Average Daily Turnover (ADT) in the Hong Kong stock market during the holiday period may be temporary, and market expectations seem to be overly optimistic