Hong Kong's stock exchange on Wednesday reported its biggest quarterly drop in profits for six years as tightened Chinese regulations strangled new listings and the city struggled with its worst-ever coronavirus outbreak.

Hong Kong Exchanges and Clearing (HKEX) announced a net income of HK$2.67 billion ($340 million) for the three months ended March -- 31 percent down on-year -- with quarterly revenue down 21 percent at HK$4.69 billion.

The exchange operator has now seen four consecutive drops in quarterly profits.

"We were not immune to global market sentiment, which resulted in some softness in the IPO market, reduced valuations in our investment portfolio and pricing volatility in our commodities market," said HKEX chief executive Nicolas Aguzin.

The bourse raised HK$14.9 billion in initial public offerings in the first quarter, down 89 percent on the same period last year.

In recent years Hong Kong experienced an IPO bonanza, helped in part by trade tensions between Washington and Beijing as Chinese companies sought to list closer to home.

But increased scrutiny by Chinese regulators of industries like gaming, education, property and Big Tech has dramatically curbed enthusiasm for IPOs.

Last month, Chinese conglomerate Dalian Wanda Group delayed a planned Hong Kong listing of its shopping mall unit owing to market volatility, according to Bloomberg.

Aguzin said that HKEX's IPO pipeline remained "incredibly strong", with the bourse reporting 150 active applications as of the end of March.

The exchange "demonstrated its robustness and resiliency despite ongoing market volatility and geopolitical fragility" in the past quarter, Aguzin added.

HKEX shares were down 0.30 percent in Wednesday afternoon trade, having lost 29 percent since the start of the year.

Bloomberg Intelligence analyst Sharnie Wong earlier noted that HKEX's IPO fundraising declined as Chinese issuers may be deterred by "regulatory challenges and risk-off sentiments".

In March, the bourse listed Hong Kong's first special purpose acquisition company (SPAC) -- popular investment vehicles sometimes called "blank cheque" companies.

HKEX started to allow SPAC listings this year, subject to a strict framework, with 10 applications in the works by the end of the quarter.

The introduction of SPACs in Hong Kong was a boost to the competitiveness of the underperforming bourse, following in the steps of regional rival Singapore.

Many Hong Kong firms have reported grim first-quarter results as the city imposed strict controls to tackle its worst-ever coronavirus outbreak fuelled by the Omicron variant.

Like Shanghai and Shenzhen, Hong Kong's stock exchange overall is in the midst of a slump and has fallen 22 percent in the past six months.

Asian markets sink as traders fret over global outlook
Hong Kong (AFP) April 27, 2022 - Asian markets were back in negative territory Wednesday following a rout on Wall Street as traders are faced with a perfect storm of crises including China's Covid-linked economic woes, US interest rate hikes, soaring inflation and the Ukraine war.

The downbeat mood across the world has been compounded by weak earnings from some of the world's biggest companies, while pledges of support from Beijing have largely fallen on deaf ears.

Tech firms, who rely on debt to drive growth, led a plunge in New York on fears that the Federal Reserve is at the beginning of a period of sharp rate increases aimed at taming scorching inflation.

The numerous issues around the world are acting as a massive drag on sentiment, with many worrying about the global economic outlook.

While about 80 percent of S&P 500 firms reporting so far have beat expectations, National Australia Bank's Ray Attrill said misses by high-profile names were taking the spotlight.

This came "amid deepening concerns that corporate earnings, however strong now, cannot usurp the stiffening (global) economic headwinds stemming primarily from the ongoing war in Ukraine and China's Covid-zero policy".

China's Omicron crisis has seen officials lockdown Shanghai, the country's biggest city, while there are fears Beijing will soon follow as infections continue to rise there.

That has raised concerns about already strained supply chains and that a crucial driver of world growth is enduring a serious economic slowdown.

Asian markets tracked Wall Street down.

There was a minor bounce in early trade for Hong Kong and Shanghai following a report that Xi Jinping had committed to boosting infrastructure construction as a means of accelerating the economy.

The comments were the latest from China's top brass, who have made a series of promises in recent weeks to kickstart growth, but analysts said the key cause of worry for investors was the leaders' refusal to back away from their Covid strategy.

"The market is no longer responsive because there's no easing up of the negative in view right now," said Yang Ziyi, at Shenzhen Sinowise Investment.

"We just need to wait. We saw the same kind of numbness towards vocal support during the burst of the 2015 bubble and in 2018."

There were also losses in Tokyo, Sydney, Seoul, Singapore, Wellington, Taipei, Manila and Jakarta.

And analysts said there was a lot of uncertainty on trading floors.

"We know that sentiment is in a terrible state right now," said Lori Calvasina, of RBC Capital Markets, on Bloomberg TV.

"This is a market that's very, very confused. There's just a real lack of conviction in anything people want to buy at this moment in time."

Oil -- which has been under pressure in recent days owing to worries about Chinese demand -- extended Tuesday's bounce after Russia threatened to cut off gas to Bulgaria and Poland, with bets on further gains ahead.

Crude "is supported via the escalation of geopolitical tensions with Russia starting to cut off EU gas supplies. And this is just the beginning, so oil could remain supported as the EU pulls the plug on gas supplies in a domino effect across the continent", said SPI Asset Management's Stephen Innes.

"And, of course, the offset is China lockdowns and everything that entails with the oil market desperately trying to skirt those recession storm clouds building on the horizon."

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China worries weigh on global stocks, Wall Street plummets
New York (AFP) April 26, 2022
Stock markets mostly fell Tuesday as investors worried about the impact of the Covid outbreak in China and rising interest rates in the United States. A relief rally in Europe faded as the day wore on, while major US indices saw big declines after Monday brought some relief from recent negative sentiment. The Dow closed more than two percent in the red while the Nasdaq lost four percent in what Charles Schwab investment bank described as a sell-off fueled by a range of bad omens, including loomi ... read more