The Hong Kong Exchanges and Clearing (HKEx) earnings rose 45 per cent in the third quarter because of the robust fund inflow chasing the mainland's double-digit economic growth.

But the HK$566-million earning for a three-month period was the lowest for Asia's largest listed bourse this year.

The results, however, still beat the HK$450-464 million forecast of three analysts surveyed by Reuters and were much better than HK$389 million in the year-ago period.

"It is clearly better than market expectations," CLSA director Dominic Chan said. "I think market consensus is low and people have to raise their estimates now."

The net earnings of the world's fifth largest bourse in terms of market value touched HK$1.67 billion in the first nine months of the year, an increase of 74 per cent year on year.

Thanks to the mainland's booming economy, HKEx is set to ride the current bull run to a record earning this year, analysts said. Their bright forecast is based on the fact that the mainland economy is expected to make more capital to flow into Hong Kong.

Several multi-billion dollar IPOs, including a US$3-billion simultaneous Hong Kong and Shanghai float by top Chinese port builder China Communications Construction, could boost the trade further, they said.

Investors are betting on the fourth quarter, too, and are looking at 2007 with optimism because it is expected to see more frequent, though smaller, offerings by mainland companies. Added to this is the sustained appreciation of the yuan that could lure more "hot" money into the city.

Mainland and Hong Kong country funds drew the most money in Asia from mid-September, with a net inflow of US$1.6 billion that eclipsed the US$240 million taken up by India funds, according to Citigroup.

Since October 1, HKEx's daily average turnover has amounted to nearly HK$40 billion, up about a third from the volume generated in the first nine months of the year.

HKEx's shares hit an all-time high yesterday before the results were announced. They ultimately eased slightly for a 0.5 per cent gain. With their prices doubling this year, the shares made HKEx the best performer on the benchmark Hang Seng index (HSI) after Foxconn International.

Its shares jumped 14 per cent in the third quarter, outpacing a 7.8 per cent HSI gain and a 0.2 per cent drop in the Australian Stock Exchange, but lagging the 26 per cent rise of the Singapore Stock Exchange in the same period.

It's now trading at 33 times its forward earnings, compared to Singapore Exchange's 27 times. The Australian Stock Exchange, Asia's second-most valuable listed bourse, commands a multiple of 24.

"HKEx's third quarter earning has benefited from ICBC's listing in Hong Kong," Fulbright Securities general manager Francis Lun said.

Since ICBC's IPO in Hong Kong, HKEx's average daily turnover, which accounts for about half of its revenue, has risen 43 per cent. ICBC's listing pushed the value of Hong Kong's securities market to a then record US$1.5 trillion, too.

ICBC, the mainland's top lender, raised US$21.9 billion from the world's largest IPO, listing simultaneously in Hong Kong and Shanghai.