The equity value of the Chinese mainland capital market will surge to 1.88 trillion US dollars by 2010, as more overseas-listed state-owned companies choose to go public at home, according to Credit Suisse, the world's leading financial service group.

The aggregated value of China's Renminbi-dominated A-share and foreign-currency-dominated B-share markets stood at 630 billion US dollars on September 13.

Credit Suisse's prediction means that the two markets' equity value will reach 50 percent of gross domestic output in 2010 as against 18 percent last year.

Judging from the expansion of stock markets in Russia, the Republic of Korea and Thailand in the past two years, the forecast is conservative, said director Chen Changhua, a China watcher with Credit Suisse.

"It's actually lower than the world average and that of most emerging countries," he added.

The optimistic forecast came after scores of state-owned enterprises, such as Datong-Qinhuangdao Railway and Bank of China, went public on home turf.

Chen told an investment symposium on Thursday that the boom was fuelled by China's rapid economic growth, an adequate domestic capital supply and constant improvements in the stock market system.

Around 93 billion U.S.dollars will be raised on mainland bourses in the next five years, he said.

There are 53 local companies whose equity value exceeds three billion US dollars each. Twenty-nine of them have gone public overseas, posting an aggregated equity value of 731 billion US dollars.

"If they came back to list on the A-share market, the equity value of the A-share market would approach 1.4 trillion US dollars," Chen said.

He said that opportunities on the mainland capital market mainly concern large state-owned enterprises. But the biggest cash cow will be the banking sector whose profits will rise further as they engage in a broader range of financial activities.

Chen said that the largest system defect in China's stock market was disappearing as shareholding reforms convert non-tradable shares into tradable shares.

Now that 1,014 Chinese companies listed on the Shanghai and Shenzhen stock exchanges have completed the reforms, China's stock markets are booming.

The Shanghai Stock Exchange closed at 1902.14 points on Thursday, a new high.

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