HONG KONG — Hong Kong Exchanges & Clearing faces a murky earnings outlook after posting its first drop in quarterly profit in more than a year on Wednesday, with initial public offerings poised to lose steam.
The world’s most valuable stock exchange operator, which saw its own share price climb 40% over the past year as investors poured into the market, is now being buffeted by China’s crackdown on the technology and education sectors.
Market players are reassessing expectations about how much the exchange will benefit from recent moves by Beijing to constrain IPOs in New York.
“The new-economy IPOs are set to slow down in both Hong Kong and overseas, and this will impact HKEX eventually,” said Shujin Chen, head analyst for Chinese financial institutions at Jefferies in Hong Kong.
“While the exchange has benefited in the short-term from the sentiment that companies will come to list in Hong Kong rather than U.S., in the long run that will suffer too as…