HKEX Commodities Unit Gains From Volatility as Metals Hammered

(Bloomberg) -- Hong Kong Exchanges & Clearing Ltd.'s metals division posted its strongest quarter in four years at the start of 2020 as global economic ructions fueled price swings and a surge in trading.

The unit -- which derives most of its business from the London Metal Exchange -- saw first-quarter revenue climb 15% from a year earlier to $403 million. That's the best performance since the same quarter in 2016. Earnings before interest, taxes, depreciation and amortization jumped 26% to $238 million.

The LMEX index of six metals had its worst start to the year since at least the start of this century as the pandemic crisis battered prospects for demand. But heightened volatility across markets, as well as macroeconomic uncertainty and the possibility of supply disruptions, also boosted trading appetite.

For aluminum, average daily volumes grew 13% from a year earlier, while copper volumes rose about 9%. The busier activity also came after the LME raised user fees from the start of the year, further bolstering income.

The metals results contrast with an overall weaker first-quarter performance at HKEX, where Chief Executive Charles Li has said he's stepping down. Li spearheaded the exchange's purchase of the LME in 2012.

©2020 Bloomberg L.P.

With assistance from Bloomberg