Based on a cash offer for members' shares in the two exchanges of HK$3.88 a share and combined pro-forma earnings of HK$538.86 million ($69.39 million) for the year ended June 1999, the shares are valued at 7.69 Times earnings, according to merger documents issued by the exchanges.

This compares with a rating of 20 Times for all listed Hong Kong companies at the end of June. The merger proposal showed that at current prices the Australian Stock Exchange traded at a price/earnings multiple of 43.69 Times its latest audited earnings and Swedish equities exchange OM Gruppen at 20.87 Times.

The pro-forma combined net assets of the two exchanges that will form Hong Kong Exchanges and Clearing Ltd (HKEC) were HK$4.15 billion at the end of June or HK$3.89 per share.

The Stock Exchange ofHong Kong posted after-tax earnings of HK$251.8 million in the year to June and of HK$388.94 million in 1998 after taking an exceptional loss of HK$150.00 million.