UPDATE 2-HKEx outlook rosy as breaks 4 quarter falling streak

* HKEx Q2 net HK$1.37 bln vs HK$1.32 bln consensus forecast

* Trading volumes jump 60 percent from Q1

* Capital raising increases 11-fold from Q1 (Adds CEO comments, closing share price, details on IPOs)

By Parvathy Ullatil

HONG KONG, Aug 12 (Reuters) - A stock market rebound helped Hong Kong Exchanges & Clearing (HKEx) (0388.HK), the world's largest listed exchange operator, end four quarters of shrinking earnings and improving turnover suggested a rosy outlook.

Analysts said on Wednesday that they expected the increase in capital-raising and surging fund flows into the region to bolster the exchange's revenues further as a blazing stock market rally has sent the benchmark Hang Seng Index .HSI up 42 percent so far this year. It is one of the best performers among the major global markets.

"I believe there will be more IPOs (initial public offering) in the second half ... sizes will be bigger than those listed in in the first half," HKEx CEO Paul Chow said during a media briefing on Wednesday.

HKEx saw new listings worth HK$17.6 billion ($2.27 billion) in the first half.

"We have been talking to many issuers overseas and will have something to announce in the next few months," Chow added.

HKEx had received 33 applications for new listings by the end of July, six of which have been approved in principle, the company said. The company has received nine applications so far in August, Chow said.

The exchange operator is also looking at ways to simplify its listing requirements to cut down on costs and bureaucracy for companies that would like to list on the bourse.

Shares in HKEx, which recently overtook Chicago's CME Group (CME.O) as the world's largest exchange operator by market capitalisation, rose to a 15-month high on Tuesday but fell 3.9 percent on Wednesday, in-line with the broad market.

The stock has more than doubled this year, outstripping a 67 percent jump in rival Singapore Exchange's (SGXL.SI) shares as investors bet on a likely deregulation of the Chinese capital markets, which is expected to bring more liquidity and trading products into Hong Kong.

The media has reported that Chinese regulators are discussing possibly cross listing of Shenzhen B shares and Hong Kong H-shares, and the introduction of China A-share ETF-related derivatives to Hong Kong.

PROFIT BEATS CONSENSUS

The bourse operator said that it would "expand our product and service offerings to position ourselves well for a market recovery". It did not give any details.

HKEx reported a second-quarter net profit of HK$1.37 billion, compared with HK$1.32 billion a year earlier.

The result beat a consensus forecast of HK$1.32 billion from four analysts polled by Reuters and was a 64 percent improvement over the HK$834.24 million profit it reported in the first three months of 2009.

Average daily turnover, the key determinant of exchange revenue, swelled to nearly HK$72 billion in the second quarter, from a dismal HK$45 billion in the first quarter, as confidence in an early turnaround in the Chinese economy took hold and fundraising activity picked up pace.

The IPO pipeline heated up with 11 new listings in the April-June period compared with a seven in the first three months of 2009, while total capital raising rose nearly 11 fold in the second quarter. However, the latest figure was still well below the record levels seen in 2006-2007.

HKEx's regional rival Singapore Exchange (SGXL.SI) last week reported a 0.9 percent increase in its June quarter earnings. [ID:nSIN469216] ($1=7.750 Hong Kong Dollar) (Editing by Chris Lewis and Karen Foster)