Hong Kong Exchanges & Clearing saw a 140% year-on-year surge in the profit attributable to shareholders in the first three quarters of this year, to $4.01 billion.

According to third quarter results announced today, HKEx recorded income of $5.5 billion in the first three quarters, up 93% on a year earlier, while operating expenses rose15% to $1.03 billion. The profit attributable to shareholders was $4.01 billion, with basic earnings per share at $3.76.

The average daily turnover value on the Stock Exchange was $72.4 billion, 138% higher than the same period last year. The average daily number of derivatives contracts traded on the Futures Exchange rose 69%, to 163,664, while stock-options contracts traded on the Stock Exchange rose 161%, to 168,392.

The rise in profit was mainly attributable to the higher turnover-related income resulting from the increase in level of activities in the cash and derivatives markets, which was partly driven by the improved market sentiment following the relaxation of rules governing the permissible investments under the Qualified Domestic Institutional Investor scheme and the proposed pilot program for direct foreign portfolio investments by domestic individuals.

Market movements monitored

HKEx Chairman Ronald Arculli said the expansion of the QDII scheme in the first half of 2007 as well as the anticipated implementation of the pilot program should present new opportunities for the growth of the financial market in Hong Kong.

HKEx will continue to support the Mainland authorities in preparing for the implementation of the program, he added.

"However, alongside positive factors, other potentially negative ones could dent market sentiment and investor confidence. These include a possible global economic slowdown, lingering volatility in the international credit and asset markets, and growing concern about domestic inflation which could lead the Central Government to implement measures to cool the Mainland economy.

"HKEx will remain vigilant in monitoring market movements and possible repercussions. It also remains focused on enhancing market quality for Hong Kong to hold up well in the face of global market changes."