HKEx chairman Ronald Arculli blamed the poor results on volatile global stock markets because of the euro-zone sovereign debt crisis and weak economic prospects in the United States.

'Looking ahead, Hong Kong's financial markets are still exposed to a number of risks and uncertainties due to global financial issues,' Arculli said.

The fall in earnings came mainly from a net investment loss of HK$6 million, against a gain of HK$130 million in the second quarter. That was the result of fair valuation losses for its equities and bond holdings caused by the market downturn.

Depository, custody and nomination fees dropped 40 per cent quarter on quarter to HK$192 million from HK$322 million. This was offset by a 14 per cent increase in trading fees to HK$801 million.

On a nine-month basis, HKEx earned a net HK$3.82 billion, up 10 per cent from a year earlier.

Despite hundreds of stockbrokers protesting on Monday against the HKEx's plans to further extend trading hours in March next year, the stock exchange operator is sticking to its timetable.

The exchange had in March extended trading by one hour by opening 30 minutes earlier and cutting the two-hour lunch break by 30 minutes. It plans to extend trading time by a further 30 minutes by cutting the lunch break to one hour in March next year. This will bring daily trading time to 5.5 hours to match international markets, which open six to eight hours a day without lunch breaks.

'Reform and market development may produce some short-term challenges but I believe our stakeholders will embrace them for the long-term benefit of Hong Kong,' Arculli said.

Ben Kwong Man-bun, the chief operating officer of KGI Asia, said the fourth-quarter outlook might not be too optimistic. 'The financial markets globally are still volatile and there are many initial public offerings that have been delayed. This will affect the profit of the exchange,' he said.

Kwong said next year would be better as the market would have stabilised then. 'The further extension of trading hours as well as the launch of yuan products may also boost the turnover of the bourse,' he said.

Louis Tse Ming-kwong, a director of VC Brokerage, said profits in the fourth quarter would not be good. 'The volatile market has discouraged investors from trading in the market,' he said. 'Big companies do not want to have new listings during a weak market.'

The HKEx share price fell to a low of HK$127.50 after the earnings report, but bounced back to close the day 0.71 per cent firmer at HK$128.

$5.04b

The amount HKEx earned in the past financial year, in HK$

- Its share price has fallen 27.4 per cent this year