Press Release, 27 Sept 07 - China Aviation Oil, China Hongxing, Synear Food & Yanlord to join PrimePartners China Index

PrimePartners Corporate Finance Pte Ltd (“PPCF”), which initiated the PrimePartners China Index (“PPCI”), the first index in Singapore to track the performance of fast-growing China companies listed on the Singapore Exchange (“SGX”), has completed a review of the PPCI.

Following the first scheduled review of component stocks of PPCI, the following changes will be effected from the start of trading on Monday, 1st October 2007:

Four stocks will be replaced, viz. China Merchants Holdings, China Paper Holdings, CHT Holdings and United Envirotech Ltd;

Four stocks will be added to bring the number of components back to 25, viz. China Aviation Oil (Singapore) Corporation, China Hongxing, Synear Food Holdings and Yanlord Land Group Ltd.

The main criterions used in this review of component stocks were market capitalization, industry representation and liquidity.

Quek Peck Lim, Chairman of PPCF, who chaired the PPCI Review Committee, said:

"With these changes, as at 25th September 2007, the 25 stocks in the PPCI cover c.55% of the market capitalization of the china-related stocks listed in Singapore. It also continues to capture c.48% of the daily trading value of the chinese universe traded on the SGX.”

In September 2006, PPCF selected 25 Chinese-owned and managed companies from an initial list of 88 companies already listed by end 2005 to form the constituent stocks of the PrimePartners CI based on their market capitalization, trading volume, sufficient free float and industry representation.

At end-August 2007, the chinese universe has further developed to encompass 131 China companies listed on SGX, with a market capitalization of about S$63.4bn, or 8.6 % of the total market capitalization of SGX of S$736bn.

“With growing indications that China is poised for further growth, coupled with the expected strong corporate earnings growth of China companies, China plays outside China continue to be strongly followed and researched, reacting more to fundamentals rather than volatility” said Quek Peck Lim.

This was evidenced by the recent performance of PPCI during the 12-day stock reversal period in July/Aug when the Dow Jones Industrial Index fell shed 5.8% off from an all- time high of 14000.41 points on 19 July 2007. Comparatively, the blue chip Straits Times Index sank 4.6%, the small cap UOB-Sesdaq Index throttled back 13%, whereas PPCI emerged as the least-affected index, declining 3.9% during the same period.

In addition, PPCI has surged 37% during the first half of 2007, while STI advanced at less than half the pace (17%) of the former. Against this background, PPCI has clearly exhibited its strong growth potential while capping its downside.

“From 2000 to end-Aug 2007, 131 China companies have come to SGX and raised nearly S$63.4bn in value for their shareholders. This already dwarfs the 162 Sesdaq companies that have generated S$10.9bn of market cap for its owners and shareholders in the two decades since 1987 when the small cap market was inaugurated,” added Quek Peck Lim.

Of the 37 new IPOs on the SGX in the first eight months of 2007, 18, or nearly half were China companies. Notingly, among all IPOs (inclusive of non-china IPOs) quoted this year, China Farm ranked top with a remarkable share price appreciation of 196% during the 1st day of trading.

“The companies so far listed from China represent a significant new area of investments for punters and serious investors alike on the SGX, and the PPCI we believe will be an important proxy tracking the growth of this fast expanding niche of the SGX,” said Quek Peck Lim.