IF anything, 1993 will be remembered as the year the Hong Kong stock market defied the laws of gravity, shooting up a massive 115 per cent to end a memorable year at 11,888. Surprising even the most bullish observers, the breathtaking run occurred with no resolution to the Sino-British impasse over Governor Chris Patten's political reforms and amid concerns that China's runaway economy could defy attempts to rein it in. In fact, when it became clear in December that there was no hope left of Sino-British talks re-opening - 17 rounds had failed to produce any major results - the market promptly shot past 10,000 points. China's move to expand the role of a Hong Kong advisory group to consider local issues and matters affecting the 1997 handover was seen as beneficial to the market because investors expected that, with the group's work underway, there would be fewer bumps between now and the changeover. But only a year before, when the row first broke out, the slightest sign of any deterioration in Sino-British relations was enough to send investors scurrying for cover. For instance, the Hang Seng index had plunged to 4,978 by December 3, 1992, just weeks after hitting a high of 6,447 on November 12. In 1993, investors cast politics into the background to ensure the Hang Seng index made a mockery of analysts' predictions. No sooner had brokers peered into their crystal balls - mega-bulls were predicting 7,500 by year-end - the index started soaring in mid-January. In a forerunner of things to come, US fund managers led a stampede of bulls to send the index rising 342.84 points or 6.2 per cent in five days, recouping nearly all the losses caused by the Sino-British row in November. The rally came after China announced that it would stick to the Joint Declaration, and after the Bank of China (BoC) declared it would issue notes in 1994. February saw a record oversubscription of Denway Investment's new issue. In fact, the mainland car maker's offer was oversubscribed more than 600 times, tying up over $240 billion. Only a week before the Denway offer, hot-pot restaurant chain Tack Hsin Holdings had been oversubscribed 552.4 times. In fact, 1993 saw a record number of new issues. A total of 64 company listings raised $27 billion in capital, against 56 which raised about $9 billion in 1992. The year ended with 455 equities on the exchange against 413 in 1992. Total funds raised, including all types of issue, was more than double the previous year's figure of $117 billion at $261 billion. Perhaps more significant were the much-heralded listings, for the first time, of six mainland enterprises, led by Tsingtao Brewery's $900 million offer in June. The way was paved days before, when regulators from the territory and the mainland signed the first cross-border memorandum of understanding on securities regulations. The signing of the Memorandum of Regulatory Co-operation (MORC) marked the culmination of almost two years of negotiations between the two sides and brought Hong Kong's dream of being the Manhattan of China one step closer. At the start of March, momentum for the stock market came in the form of Financial Secretary Hamish Macleod's budget. His speech was seen as ''user friendly'' with ''something for everyone, including the stock market'' and, in response, shares increased more during his speech than for any budget in the previous five years, leaving the index barely 11 points below the record set in November. Within days, the index had hit a record of 6,557.10. But it was still dancing to the political beat and news that Mr Patten would move ahead with political reforms sent the index plummeting. His announcement erased 261 points in less than 30 minutes, translating into a loss of $44.4 billion in market capitalisation. Bears started to rear their heads, with some predicting that the high of 6,508 scored on March 9 was likely to prove a long-standing record. But the politicians had other things in mind and an announcement in mid-April that talks would be held to resolve the Sino-British standoff sent the index soaring 2.1 per cent. A prediction by Hong Kong and Macau Affairs Director Lu Ping that it was ''not impossible'' for the index to break 8,000 further bolstered buying sentiments. In the following two months, record after record tumbled as strong buying from British, United States, Chinese and local institutions helped the index to easily breach the 7,000 mark. However, July saw the market go into its summer slumber after several rounds of talks on Mr Patten's reform proposals had failed to produce any results and the index dipped to below 7,000. In August, the market fought back, rebounding above 7,000 on news of a possible breakthrough in Sino-UK airport talks and better-than-expected Midland Bank results which inspired buying in parent Hongkong Shanghai Banking Corporation. With no sign of an agreement in Sino-UK talks, the market traded in a tight range in September, fluctuating around the 7,500 level, with attention focused on Beijing's Olympic bid. The failure of the bid hurt the market but strong corporate earnings reports helped the market to actually end the month above the 7,600 level. And when Barton Biggs, Morgan Stanley's international chief investment strategist, declared he was ''maximum bullish'' on Hong Kong and China, US investors sparked off a buying frenzy which saw the index break 10 records in 11 trading days and, by mid-October, the Hang Seng stood at 8,763.98 points. Then, with worldwide markets also surging to records, the Hang Seng index smashed through the 9,000 barrier on October 18 - a 1,480-point or 19.6 per cent rise since September. By the end of the month, Japanese buyers had joined the queue and the index rocketed 318 points to end at 9,339. The arrival of the Japanese was fortuitous for the Hong Kong market because, by mid-November, Mr Biggs had made a surprising turnaround, warning of bursting bubbles in China and reducing his weighting of the local market in his portfolio. And when 17 rounds of talks of Sino-UK talks failed to produce any major results and Mr Patten threatened to table his electoral bill to the Legislative Council, investors started dumping shares to drive the index down to just below 9,000 by the end of November. But mega-bullish Japanese and local investors, treating the end of Sino-British dialogue as erasing a long-term uncertainty from the market, sent the index smashing record after record in December - with the 11,000 point mark topped for the first time on December 23.