Mr Lo's optimism has been fuelled by the strong response from potential listing candidates after aggressive stock exchange marketing.

Another driving force behind the GEM had been the mainland's private enterprises, he said.

Mr Lo said in the longer term, mainland enterprises would become the GEM's leading component.

Mr Lo's optimism is shared by investment bankers and auditors.

Arthur Andersen partner Kennedy Liu, who has been advising GEM candidates, said many companies were eager to be listed as the board would provide fund-raising opportunities for smaller companies to expand their business.

'Only mentioning the mainland companies, the interest [for GEM listing] is already huge,' he said.

'We already have over 50 companies on hand that are actively seeking GEM listing.' GEM sponsors said guidelines recently released by mainland authorities covering listing on the board had helped to clear obstacles.

Mr Lo said even Silicon Valley companies were interested in a GEM listing.

'I've just come back from a roadshow to the US, response was very good,' he said, referring to investors and Silicon Valley firms.

Mr Lo said the exchange had received 13 GEM listing applications, with another 20 to 30 companies preparing to apply.

Among them were four Silicon Valley companies seeking dual listing on the GEM and Nasdaq.

The GEM board, which expects to make its debut in the second half of next month, is forecast to grow to about 40 companies in the first year, with a combined market capitalisation of between $50 billion and $60 billion, according to Mr Lo.

About 30 per cent of these companies would be in the Internet business and another 30 per cent would be telecommunications-related firms.

Software firms and other growth companies are expected to account for the remaining 40 per cent.

GEM