BUY HongKongExchange(0388.HK) TP HK$106

STOCK CALL: UBS starts HKEx (0388.HK) as Buy, target price top-of-the-street HK$106. Believes HK market growth will be fueled by

1. mainland Chinese liquidity flowing through QDII, other channels;


2. forecasts cash market daily turnover to rise to HK$51 billion this year,


3. HK$78 billion by 2011 (18% CAGR in 2007-11);


4. estimates derivatives trading volume CAGR of 33% in 2006-11.

Stock +0.3% at HK$93.60; yesterday's intraday peak of HK$94.15 is all-time high, may not offer much resistance if market conditions remain buoyant.