UPDATE 1-HKEx posts 1st profit rise in 4 quarters 12 Aug 2009 13:30

* 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

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HKEx Q1 dives 49 pct; analysts say shares overvalued 13 May 2009 14:46

* 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.

For a related Graphic, click

http://graphics.thomsonreuters.com/059/HK_STKEX0509.jpg

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.

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HKEx Q1 net dives 49 pct as stock trading shrinks 13 May 2009 12:57

HONG KONG, May 13 (Reuters) - Hong Kong Exchanges & Clearing <0388.HK>, Asia's largest listed bourse operator, on Wednesday said its first-quarter earnings fell 49 percent on lower trading volumes and fee income as the global financial crisis pummeled stock values and damped investor interest.

HKEx said it earned HK$834.24 million ($107.6 million) in the January-March period, down from HK$1.65 billion a year earlier, marking its fourth consecutive quarterly profit decline.

The numbers lagged behind two analysts' forecasts for HK$891 million and HK$918 million.

HKEx did worse than its rival Singapore Exchange <SGXL.SI>, which reported a 46 percent drop in third-quarter profit, hurt by lower trading volumes and a dearth of new share issues.

($1=HK$7.749)

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