Shares in Hong Kong’s bourse operator tumbled after the city’s government said it would raise the stamp duty charged on equity trades in the Asian financial hub, threatening the group’s biggest revenue stream.

The move by finance secretary Paul Chan on Wednesday to increase stamp duty from 0.1 to 0.13 per cent of the value of each trade came as Hong Kong Exchanges and Clearing reported record profits for the 2020 financial year.

Shares in HKEX fell by as much as 12.3 per cent before later trimming losses to 8.8 per cent. The Hang Seng index of stocks that trade in the city fell as much as 3.5 per cent — its biggest intraday drop since May, when the market was hit by reports that Beijing was planning to impose a draconian national security law on Hong Kong.