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Auto Bailout Plan Unveiled; American Stock Market Closed Mixed

December 22, 2008

Global News & Information Global Capital Research Group

Major Global Indexes Dow Jones Index tumbled by 25.88 points or 0.30% at
8579.11 points as of closing.
Closing Margin (%)
American stock market closed mixed last Friday, with Dow
Dow Jones 8579.11 -0.30
Jones Index tumbled by 25.88 points or 0.30% at 8579.11
S&P 500 887.88 0.29
points; S&P 500 soared by 2.60 points or 0.29% at 887.88
UK:UKX 4286.93 -1.01
points, and NASDAQ Index moved up by 11.95 points or
Nikkei 225 8588.52 -0.91
0.77% at 1564.32 points.
Hang Seng 15127.51 -2.39

American government will pull General Motor and


Major Price Indicator
Chrysler out.
Closing Margin (%) Periodic bailout plan for two auto giants General Motor
WTI Crude Oil 33.87 -6.49 and Chrysler in America was unveiled after long-term
COMEX Gold 838.28 -1.72 discussion. The government decided on December 19 to
LME Copper 2930 1.74 distribute USD13.4bn from first part of the USD700bn for
LME Aluminum 1516 1.47 the two industrial giants as short-term loan. The fund will
BDI Index 818 -1.33 be allocated separately in December 2008 and early next
year. Moreover, should House of Representatives
Hong Kong Industries approve the second part of USD700bn bailout plan, the
Closing Margin (%) two giants will gain another USD4bn loans in February
Info & Tech 903.23 1.59 2009. These loans of total USD17.4bn will maintain their
Raw Material 5483.19 -2.72 operation before March the next year.
Telecom 1691.48 -3.12
Industrial Standard & Poor’s down regulated ratings of 11
758.35 -3.36
Goods financial institutes in Europe and America.
Energy 7452.60 -3.57 Financial risks increased on the whole, Standard & Poor’s
down-regulated ratings of 11 financial institutes last
Performance in Recent 5 Days Friday, including Goldman Sachs, Morgan Stanley,
Deutsche Bank, UBS, Bank of America, Citigroup,
JPMorgan Chase & Co., Wells Fargo, Barclays Bank,
RBS and Credit Suisse Global.

Bank of Japan cut benchmark interest rate by 20


points to 0.1%.
To ease further credit crunch and JPY appreciation, Bank
of Japan announced on Friday to cut its benchmark
--- Hang Seng Index ---- SSE Composite Index interest rate by 20 base points to 0.1% following Federal
Reserve’s rate cut to 0-0.25% on December 16.
As far as we are concerned, Japan’s rate cut was mainly from prospect of exchange rate.
World authoritative financial institutes like Federal Reserve, European Central Bank and Bank
of England all cut their interest rates substantially since the beginning of sub-prime crisis;
whereas extra-low interest rate in Japan prevented its central bank from further rate reduction,
which largely appreciated the JPY, seriously harmed its export industry and destroyed its
macro economy. After the rate cut, interest rate level in Bank of Japan will approach zero, thus
pro-active quantitative currency policy might be implemented once again.

Hang Seng Index closed low by 370.30 points or 2.39% at 15127.51 points.
Hong Kong market opened low and continued the trend later on; as of closing on Friday; Hang
Seng Index was down by 370.30 points or 2.39% to 15127.51 points, and Hang Seng Chinese
Enterprises Index was frustrated by 119.75 points or 1.40% at 8435.31 points.

Real estate shares outperformed Hang Seng Index.


Real estate shares largely outperformed Hang Seng Index despite partial decrease. Cheung
Kong (0001.HK) and R&F Properties (2777.HK) ascended by 2.58% and 1.35% respectively,
meanwhile Henderson Land Development (0012.HK) and Sun Hung Kai Properties (0016.HK)
fell by 0.46% and 1.34% separately.

Financial sub-indexes underperformed.


Financial sub-indexes underperformed. On financial concern, HSBC Holdings (0005.HK)
largely decreased by 6.19% amid the sluggish market; whereas the six Chinese-funded banks
and three insurance enterprises moved mixed, with China Construction Bank (601939) and
PICC P&C (2328.HK) up by 3.67% and 1.10%, Bank of Communications (601328) closed
even, and other six enterprises saw decline ranged from 0.25% to 4.95%.
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Investment Rating System

Performance of stock or sector relative to TX Free-float Index over next 6 months after research publications

Rating Remark
1 Buy Relative performance over TX Free-float
Index >15%

2 Overweight Relative performance over TX Free-float Index 5% ~


15%

3 Neutral Relative performance over TX Free-float Index -5%


~ 5%

4 Underweight Relative performance over TX Free-float Index -5%


~ -15%

5 Sell Relative performance over TX Free-float Index


<-15%

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