According to third quarter results announced on Wednesday, HKEx recorded income of HK$5.5 billion in the first three quarters, up 93% on a year earlier, while operating expenses rose 15% to HK$1.03 billion. The profit attributable to shareholders was HK$4.01 billion, with basic earnings per share at HK$3.76.

The average daily turnover value on the Stock Exchange was HK$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 the level of activity 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.

HKEx Chairman Ronald Arculli suggested that 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," Arculli stated.

"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," he added.