'In the light of the market concerns and development in major markets elsewhere, the exchange executives consider the time may not be ripe for the adoption of this proposal,' he explained.

'However, we will put it into the [voluntary] 'Code of Best Practice' and encourage listed companies to adopt it. We will review the development in two to three years' time.'

According to reports in the local media, many companies listed on the bourse objected to the idea of quarterly reporting on the grounds that it would prove costly and time consuming, and could lead investors to chase short-term performance over longer-term results.

However, investors groups were unimpressed with the Exchange's decision on Sunday, arguing that by failing to adopt more stringent disclosure proposals, Hong Kong could find itself lagging behind other major financial centres.

'Making quarterly reporting voluntary is making no change at all,' shareholders' rights advocate, David Webb complained to the Hong Kong Standard yesterday. 'It has always been voluntary. I think this is another example of the tycoons holding back the development of corporate governance in Hong Kong.'