First-quarter revenue from the commodities business of the Hong Kong Exchanges and Clearing (HKEX) fell 7% year on year to HK$267 million ($34 million), hurt by lower trading fees at the London Metal Exchange.
"While the ADV [average daily volumes] of metals contracts traded was 20% higher compared to the first quarter 2017, the impact of fee reductions for short and medium-dated carry trades introduced as a result of the Strategic Pathway to enhance the market, and new non-fee generating administrative trades [admin trades] introduced in June 2017, resulted in a drop in trading fees by $20 million or 7%," the exchange said in a press release on Wednesday May 9. Operating expenses at the commodities business rose 49% to HK$170 million, HKEX said. Earnings before interest tax depreciation and amortization (Ebitda) fell 32% to HK$174 million. Excluding the one-off insurance recovery of HK$23 million in the first quarter 2017 relating to the warehouse litigation in the US, operating expenses increased 24%, principally attributable to an increase in staff costs from additional...