Wednesday is one of the most important days for the history of Hong Kong's stock market, as its market capitalization reached 10 trillion Hong Kong dollars (1.28 trillion U.S. dollars) for the first time.

Experts here believed that the figure represents the full confidence of the overseas investors in Hong Kong as well as in the Chinese mainland.

Ronald Arculli's, newly appointed chairman of the Hong Kong Exchanges & Clearing Corporation (HKEx), said at a brief celebration at the HKEx hall Wednesday afternoon that the market capitalization of the stock market reached an important milestone on Wednesday.

"We are proud of this achievement but we will not become complacent. We will continue to emphasize market quality to ensure our market remains attractive to issuers and investors."

He said the figure represented a brisk stock market.

Hong Kong share prices also closed at a 5.5-year high Wednesday with the blue chips reaching 17,099.48 during the session, driven by the stock of HSBC, leading banking giant in Hong Kong.

The HSBC went up more than 1 percent to 137.3 HK dollars, also a record high price. The traded volume of the HSBC accounts reached 11.4 billion HK dollars (1.46 billion U.S. dollars) in the sessions of Tuesday and Wednesday.

They said though the blue chips' hiking margin is similar to that of in 1997, now Hong Kong has good investment environment and the financial crisis could not occur.

They said, the stock index of the Japanese, Singapore and South Korean markets surged about 30 percent respectively since the beginning of this year, while the Hang Seng Index only rose about 10 percent recently, the hiking of the Hang Seng Index is quite normal.

Experts believed that the further declining of the U.S. dollars in the foreign exchange market would lead to another round of investment in the capital market. With the gradual appreciation of renminbi and the economic growth of the Chinese mainland, the Chinese mainland ventures listed in Hong Kong will become more attractive to investors.

Since the beginning of this year, the Hang Seng China Enterprise Index surged around 30 percent while the Hang Seng Index only rose about 10 percent.

A senior analyst of the Prudential Brokerage Limited said, benefited from the Chinese mainland's latest release of the qualified domestic institutional investor (QDII) scheme, thick traded volume of property and some other favorable international situations, the environment of Hong Kong's stock market is sound.

He said, the expected winding up of the banks' interest rate hike by the end of this year will benefit the property market and all these will have positive impacts on Hong Kong's stock market.

An analyst of the BCOM Securities Company Limited said the reaching of 10 trillion HK dollars of the market capitalization is an achievement for the market sooner or later with the introduction of QDII scheme and the listing of large-sized Chinese ventures in Hong Kong.

He believed that the economic control of the Chinese mainland will not give negative impact to Hong Kong's economic growth and the coming listing of the Bank of China in Hong Kong will sure to attract great number of both collective and private investors.

Hong Kong stock market achieved a "bumper harvest" in 2005, with eight records, including the total market capitalization, the total traded volume and the fund raising volume of the newly listed ventures.

Hong Kong Financial Secretary Henry Tang said last week that the reaching of 10 trillion HK dollars of the market capitalization would be a milestone of Hong Kong's history, indicating Hong Kong's attractiveness as an international financial center for overseas investors.

Tang said, in general, the figure showed that the investors have confidence in Hong Kong's future.

Source: Xinhua