On 6 May 2008, the Directors of HSBC Holdings plc declared a first interim dividend for 2008 of US$0.18 per ordinary share. The dividend is payable on 9 July 2008 to shareholders on the Principal Register, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register at close of business on 23 May 2008 in cash in United States dollars, sterling or Hong Kong dollars, or a combination of these currencies and with a scrip dividend alternative.

We took the risk to say a month ago that “we think Chinese equities are nearing the bottom. Looking at Asia and China in particular, we find both macro and micro economic data to fuel our optimism. “ Since then the China ADR Index (CAI) rallied 7.5% in line with the Hang Seng’s 7.0% comeback, outshining the Shanghai Composite’s modest 3.7% rally. Have Chinese equities bottomed out?

Under the terms of the agreements, HSBC proposes to acquire a 43.85 per cent stake from E*TRADE Mauritius Limited, an indirectly wholly-owned subsidiary of E*TRADE Financial Corporation, and an additional 29.36 per cent from Infrastructure Leasing and Financial Services Limited (“IL&FS”). Both shareholders will receive a price of INR200 per share for their respective stakes, making a total consideration of INR10,025.5 million (approximately US$241.6 million). In addition, IL&FS will be paid, as part of a three–year non-compete agreement, INR820.1 million (approximately US$19.4 million).

Profit before taxation for the first quarter of 2008 was MYR348 million, 13.0 per cent higher than the MYR308 million reported for the same period in 2007.

136,165,605 ordinary shares of US$0.50 each have been issued by HSBC Holdings plc to shareholders who elected to receive the scrip dividend alternative for the fourth interim dividend for 2007, payable on 7 May 2008. The shares rank pari passu with the existing issued ordinary shares of the Company.

Net income attributable to common shares was C$155 million for the quarter ended 31 March 2008, an increase of 11.5 per cent over the same period in 2007.

Pursuant to Rule 13.43 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, there will be a meeting of the Directors of HSBC Holdings plc on Tuesday, 6 May 2008 to consider the declaration of the first interim dividend for 2008.

Despite a decline in net income from investments, the bank suffered no notable write-downs as a result of the subprime crisis and HSBC Trinkaus has no significant exposure to synthetic credit risk. Net income before tax grew by 9.7 per cent to €207.8 million. The Annual General Meeting on 17 June 2008 will propose the distribution of a dividend of €2.50 as was also the case last year. Consolidated assets increased 12.8 per cent in 2007 to €21.1 billion. Loans and advances to customers increased 34.7 per cent to €4.3 billion. This growth largely reflected expansion in the client base. At the end of the year the bank’s total and core capital ratios were 10.7 per cent and 6.4 per cent respectively.

As the following chart demonstrates, China ADRs are far from overbought at this point. Stocks looking good are BIDU, HBC and AOB.

A healthy correction is likely but this will not break the overall trand for the rest of the year. China stocks, backed by strong fundamentals, are poised to keep rallying for the rest of the year. Remember, short-term corrections are just part of the game.

Reflections on Hong Kong trading, negative S&P futurtes and some key reports coming out today. Overall, I expect China ADRs to pull back 4-6 percent on average today.

Investing in Chinese stocks can be nerve racking. Two to three percent price swings a day are common place many times amplifying into five percent over the course of a week. Who has the stomach for that?

We have always prided ourselves with the performance of our stock picks e.g. “Stock of the Month”, our Growth and Conservative portfolios. Chinavestor premium subscribers, who receive the “Weekly Stock Recommendation”, are raving about the tool and its spectacular track record. And without a doubt, this year’s 65% performance so far is beating all standard benchmarks and indices.

While the premise of this article may be surprising to many, e.g. investing in China has never been more secure, the emergence of the Chinese markets is real, and recent events strongly support this premise. Who could have predicted only a short time ago that the IPO of the Industrial and Commercial Bank of China (ICBC) on October 27 would draw a record- breaking demand for a public offering?

Investing in Chinese equities is a risky business. But one can ask: how risky? Is there a reliable risk measure geared specifically to investors who navigate in the Chinese stock universe? Our current Newsletter addresses this very important question and will shed light on stocks that are relatively safe and stocks that you should avoid.

Liquidity, or the ability to buy and sell large blocks without effecting the share price, is perhaps the most important factor for institutional investors in choosing where to execute their trades. Looking at the Chinese stock universe from an American investor’s point of view, there are three markets that investors would consider: the NYSE, the NASDAQ and the Hong Kong Stock Exchange. Investing in Shanghai and Shenzen is still limited for foreigners and is further complicated by corporate accounting differences and information asymmetry.

Our previous Newsletter focused on the NASDAQ names of the U.S. listed Chinese stock universe. As we said, this issue will give readers a unique perspective of the NYSE listings. As the following chart shows, we chose the twenty biggest names by revenue from the NYSE universe this time . We will compare them to make a point that not everything that shines is gold. In other words, not all the big liquid names offer investment opportunities just because China is growing fast.

I can’t help but quote from our February Newsletter, page 4 last paragraph. “Based on our latest field trip to China, Chinavestor.com expects The9 Ltd. (NCTY) to report a nice surprise. On the other hand, we did not see much activity of Shanda’s line of products and expect the battled game and home entertainment developer to slip.” End of quote. So when Shanda released earnings after the close on February 27th, disappointing news did not surprise us. China’s top online game operator said it swung to a quarterly loss and missed Wall Street revenue targets as online game sales weakened, sending its shares down 19 percent after hours.

I can’t help but quote from our February Newsletter, page 4 last paragraph. “Based on our latest field trip to China, Chinavestor.com expects The9 Ltd. (NCTY) to report a nice surprise. On the other hand, we did not see much activity of Shanda’s line of products and expect the battled game and home entertainment developer to slip.” End of quote.

Chinese Companies have come a long way compared to even a year ago. It used to be hard to find relevant information about financials, quarterly reports submitted to the Exchanges on time were the exceptions.

Even though China’s economy continues to boom, to transform that into the green in our own pocket, is a different story. Investors have to remember that not economic growth but corporate earnings are driving stock prices. For the most part, of course. In addition to current earnings, seasoned analysts have to be able to differentiate between high– and low-quality earnings.

On a quiet Wednesday, August 31st, China Telecom (CHA) Corp. Ltd., China’s last major NYSE listed player reported earnings. The market hardly noticed as investors worried about high oil prices and news of a hefty share sale by PetroChina (PTR). For us, however, this quiet day was much more. We can now kick back and get a sense of what is going on in China, in micro level. Because we all know that economic growth doesn’t necessarily translate into steady stock-market gains, and the Chinese market faces numerous challenges, ranging from company scandals and limited corporate disclosure to efforts by the government to sell its large stake in Chinese companies without hurting the share prices.