* Q1 net lower than analysts' estimates
* Net down for 4th straight qtr; worst qtr since 2006
* Stock market turnover improved in April
* Shares up 2 pct ahead of results
(Adds details, analyst comments)
HONG KONG, May 13 (Reuters) - Hong Kong Exchanges & Clearing <0388.HK>, Asia's largest listed bourse operator, posted a fourth straight drop in quarterly profit as the global crisis battered trading volumes, though turnover picked up last month as funds bought into China's growth prospects.
Market turnover, which accounts for the bulk of HKEx's earnings, improved in April as hefty fund inflows flooded the local market on optimism that the global economy is about to turn the corner, driven in part by China's continued growth.
HKEx said persistent negative market sentiment had a significant impact on both the primary and secondary markets in the first quarter.
"Despite glimmers of hope that global fiscal policy stimulus may be working, with the economy sinking into recession, HKEx's financial performance is likely to be adversely affected," it said in a statement.
HKEx, valued at $15.2 billion, three times its Asian rivals Singapore Exchange <SGXL.SI> and Australia's ASX Ltd <ASX.AX>, said it will work more closely with Chinese authorities and exchanges to seek mutual benefits for their securities markets.
January-March net profit fell to HK$834.24 million ($107.6 million) from HK$1.65 billion a year earlier, lagging two analysts' forecasts for HK$891 million and HK$918 million.
Revenue dropped 41 percent to HK$1.34 billion as average daily share trading more than halved to HK$44.7 billion.
But the value of trading rebounded 39 percent in April to a daily average of about HK$62 billion, analysts said.
Singapore Exchange last month said its quarterly profit fell 46 percent on lower trading volumes and a dearth of new share issues.
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HKEx shares were up 2.3 percent at HK$111.90 by 0636 GMT.
The pick-up in turnover has triggered earnings upgrades by analysts and fuelled a strong rally in HKEx shares, which have risen nearly 53 percent since April, outperforming the benchmark Hang Seng Index's <.HSI> 27 percent gain.
Trading at about 32 times 2009 earnings, HKEx remains the most expensive of Asia's three big listed bourse operators, versus Singapore Exchange's 29 times and ASX's 18 times, according to Reuters Estimates.
Only one leading brokerage has a buy rating on HKEx, while 13 rate the stock a sell or hold, according to Reuters Estimates.
"HKEx is too expensive against its historical PE of around 20 times," said Ivan Li, an analyst at Kim Eng.
