Morgan Stanley has released a research report projecting that Hong Kong Exchanges and Clearing (HKEX) will see a decline in both revenue and profit in the fourth quarter of 2025 from the record highs achieved in the third quarter. The report noted relatively active market activity in January this year, which the firm believes provides support for the year's performance. Morgan Stanley anticipates a favorable trend to emerge in the second half of the year, benefiting from vibrant market activity and increasingly clear signs of easing PPI pressures. The firm estimates HKEX's fourth-quarter profit for 2025 will decrease by 2% year-on-year, reflecting cost stickiness (a 7% year-on-year increase) and the impact of higher tax rates due to minimum tax requirements. The bank maintains an "overweight" rating with a target price of 508 Hong Kong dollars.

Morgan Stanley expects the average daily turnover for HKEX in the fourth quarter of 2025 to reach 230 billion Hong Kong dollars, representing a 23% year-on-year increase but a 20% decline quarter-on-quarter. Average daily futures volume is projected to decrease by 16% year-on-year, while average daily options volume is expected to rise by 8%. Fourth-quarter revenue is forecast to grow by 4% year-on-year, driven by approximately 12% growth in core business, partially offset by weak net investment income. Morgan Stanley anticipates that HKEX's net investment income will decline both year-on-year (due to a high base) and quarter-on-quarter, primarily due to a reduction in margin fund scale.