* HKEx Q2 net HK$1.37 bln vs HK$1.32 bln consensus forecast
* Trading volumes jump 60 percent from first quarter
* Capital raising increases 11-fold from Q1
(Adds comments, share price, details)
By Parvathy Ullatil
HONG KONG, Aug 12 (Reuters) - A stock market rebound helped the world's largest listed exchange operator, Hong Kong Exchanges & Clearing (HKEx) <0388.HK>, end four quarters of shrinking earnings, with trading volume set to continue improving in coming months.
Increased capital-raising and surging fund flows into the region are expected to bolster the exchange's revenues further amid a blazing stock market rally that has sent the benchmark Hang Seng Index <.HSI> up 44 percent so far this year, one of the best performers among major global markets.
"Riding on the bumpy road to recovery, investors are advised to be cautious about potential market volatility," The bourse opeartor warned investors in a statement on Wednesday.
Shares in HKEx, which recently overtook Chicago's CME Group <CME.O> as the world's largest exchange operator by market capitalisation, rose to a 15-month high on Tuesday but were down 2.2 percent by midday Wednesday, in-line with the broad market.
The stock has more than doubled this year, outstripping a 67 percent jump in rival Singapore Exchange's <SGXL.SI> shares as investors bet on a likely deregulation of the Chinese capital markets which is expected to bring more liquidity and trading products into Hong Kong.
Various possibilities including a potential cross-listing of Shenzhen B shares and Hong Kong H-shares, and introduction of China A-share ETF-related derivatives, are being discussed by regulators in both regions, according to media reports.
The bourse operator said in a statement on Wednesday that it would "expand our product and service offerings to position ourselves well for a market recovery".
HKEX reported a net profit of HK$1.37 billion ($200 billion) for the April-June period, compared with HK$1.32 billion a year earlier.
The result beat a consensus forecast of HK$1.32 billion from four analysts polled by Reuters, and marked a 64 percent improvement over the HK$834.24 million profit it reported in the first three months of 2009.
Average daily turnover, the key determinant of exchange revenue, swelled to nearly HK$72 billion in the second quarter, from a dismal HK$45 billion in the first quarter, as confidence in an early turnaround in the Chinese economy took hold and fundraising activity picked up pace.
The IPO pipeline heated up with 11 new listings in the April-June period compared with a seven in the first three months of 2009, while total capital raising rose nearly 11 fold in the second quarter. But the latest figure was still well below the record levels seen in 2006-2007.
HKEx's regional rival Singapore Exchange <SGXL.SI> last week reported a 0.9 percent increase in its June quarter earnings.| HKEx - HKEX | 00388 |  |
| SGX - SGX | S68 | |
| NASDAQ - CME GROUP A ORD | CME | |
