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UOB Kay Hian posts 15% rise in Q3 net profit to S$20.3m

UOB Kay Hian Holdings on Thursday posted a 14.7 per cent increase in net profit to S$20.3 million for its third quarter ended Sept 30, as higher trading volume and retail participation across its main regional markets boosted turnover.

Total revenue rose 12.4 per cent to S$93.7 million, but after including foreign exchange gain, total income was essentially 14.2 per cent higher year-on-year at S$97.5 million.

Revenue was mostly boosted by higher interest income, thanks to higher financing activities and interest rates, and higher other operating revenue on the back of more advisory activities.

Giving an outlook, the brokerage said that the US-Sino trade rhetoric continued to dominate market sentiment, and its many twists and turns had resulted in significant volatility to the regional stock markets, causing investors to be more cautious.

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"In Hong Kong, where we have significant operations, the continued unrest has dampened its economic activity significantly. However, our Hong Kong operations remained resilient, aided by our corporate finance activities. We are seeing improved profitability across our regional operations in the third quarter," it said.

UOB Kay Hian also completed its acquisition of 106 trading representatives from DBS Vickers in October 2019 and is optimistic that they will make a positive contribution to the group's results going forward.

"With the further US Federal Reserve rate cut of 0.25 per cent and (a) more reconciliatory tone to the US-Sino trade discussions, there is tangible improvement in sentiment seen. We believe regional markets have turned more positive and we are more optimistic of our near-term prospects."