Hong Kong’s stock exchange missed profit estimates in the second quarter as a recovery in investment income offset sluggish trading and a slow pace of initial public offerings.

Hong Kong Exchanges & Clearing Ltd. reported net income rose 34% to HK$2.90 billion ($371 million) in the second quarter, according to a statement on Wednesday. The result missed a HK$2.99 billion estimate in a Bloomberg survey of analysts.

The firm has benefited from rising rates, pumping up its investment income. Still, profit slid 15% from the first three months of the year as trading as dried up amid concern over China’s sluggish economy.

“Looking forward, whilst the macro landscape will continue to shape market sentiment, we are pleased to see encouraging signs of a revival in our IPO market, matched by a very healthy pipeline,” said HKEX Chief Executive Officer Nicolas Aguzin in a statement.

Authorities to Allow Block Trades in HK, Mainland China Link (1)

Average daily trading of equity products at the bourse fell 20% in the quarter. The exchange saw 33 IPOs in the first half, raising a total HK$17.9 billion, down 9% from the same period of 2022.

--With assistance from Kiuyan Wong.