The following is an explanation of investment products:

HANGSENG

A free-adjusted market capitalization-weighted index. This index is used to monitor and record daily changes in the largest companies in the Hong Kong stock market and is a leading indicator of overall market performance in Hong Kong.

The Hang Seng Index (HSI) is a stock price index in the Hong Kong stock market calculated using the free-adjusted market capitalization-weighted method. It monitors and records daily changes in the largest companies in the Hong Kong stock market and is a leading indicator of the overall performance of the Hong Kong stock market. The Hang Seng Index currently comprises 43 companies and represents approximately 65% of the Hong Kong Stock Exchange's market capitalization.

The HSI was first launched on November 24, 1969, and is currently managed by HSI Services Limited, which is owned by Hang Seng Bank, the largest listed bank in Hong Kong by market capitalization. Its responsibilities include calculating, publishing, and managing the HSI and a number of other stock indices, such as the Hang Seng China AH Index Series, the Hang Seng China Enterprises Index, the Hang Seng China H-Financials Index, the Hang Seng Composite Index Series, the Hang Seng Freefloat Index Series, and the Hang Seng Total Return Index Series.

When first launched, 100 points was used as a base number based on the total value of stocks at the close of July 31, 1964. The all-time low was 58.61 on August 31, 1961, after the base value was created but not yet published. The Hang Seng surpassed 10,000 for the first time in its history on December 10, 1993, and 13 years later, it surpassed 20,000 on December 28, 2006. Less than 10 months later, the Hang Seng surpassed 30,000 on October 18, 2007. Its current all-time high is 31,958.41, which occurred on October 30, 2007.

From October 30, 2007, to March 13, 2008, the Hang Seng Index fell 9,426 points, or about 30%, from its peak. The HSI fell more than 3.5% to 22,574 on March 13, 2008, after being affected by Wall Street's decline, with investors concerned about the weakening USD and the economic problems facing the United States.

The HSI also fell as much as 5.4% before closing down 4.2% on March 17, 2008, after JPMorgan Chase announced it would buy the troubled investment bank Bear Stearns. On March 20, 2008, the HSI fell 4.4% due to heightened concerns about a US recession that would impact China's rapid economic growth. Shortly thereafter, on March 25, 2008, the HSI rose 4.5% following strong US economic data and a sharp rise on Wall Street.

Hang Seng Futures Contract Size: USD 50 per pip (at a fixed rate of 1 USD = IDR 10,000, USD 50 = IDR 50,000)
Transaction Example:
A customer opens a BUY order for 1 lot of Hang Seng at 27,500 and then closes it with a SELL order at 28,000 (taking a profit of 500 points).
Sell Price : 28000
Buy Price : 27500
HANGSENG : {(Sell Price - Buy Price) x Contract Size x Number of Lots}
               = {(28000 - 27500) x IDR 50,000 x 1 LOT}
               = Rp 25,000,000
(In short, if you profit 500 points (1 point = Rp 50,000),
then your profit is 500pt x Rp 50,000 = Rp 25,000,000)

Component
On January 2, 1985, four sub-indices were created to clarify the index and classify stocks into four sectors. Currently, there are 43 stocks listed on the Hang Seng Index. The listed components as of December 10, 2007, are:

• HSBC Holdings plc
• Hang Seng Bank Ltd
• Bank of East Asia
• HKEx Limited
• China Construction Bank
• Industrial & Commercial Bank of China
• Ping An Insurance
• BOC Hongkong (Holdings) Ltd
• China Life
• Bank of Communications Ltd
• Bank of China Ltd

• CLP Holdings Ltd
• Hong Kong and China Gas Company Limited
• Hong Kong Electric Holdings Ltd

• Cheung Kong (Holdings) Ltd
• Henderson Land Development Co Ltd
• Sun Hung Kai Properties Co. Ltd
• Sino Land Co Ltd
• Hang Lung Properties Ltd
• China Overseas Land & Investment Limited

• Wharf (Holdings) Ltd
• PCCW Ltd
• Hutchison Whampoa Ltd
• New World Development Co. Ltd
• Swire Pacific Ltd A
• MTR Corporation Ltd
• China Merchants Holdings (International) Co Ltd
• CITIC Pacific Ltd
• China Resources Enterprise, Ltd
• Cathay Pacific Airways Ltd
• Esprit Holding Ltd
• Sinopec Corp
• Li & Fung Ltd
• Yue Yuen Industrial (Holdings) Ltd
• China Unicom Ltd
• PetroChina Company Limited
• CNOOC Ltd
• China Netcom Group Corporation (Hong Kong) Ltd
• China Mobile (Hong Kong) Ltd
• Cheung Kong Infrastructure Holdings Ltd
• China Shenhua Energy Company Limited
• COSCO Pacific Ltd
• Foxconn International Holdings Ltd

In the future, the number of components of the HSI is planned to be 50, in order to reflect changes in the Hong Kong capital market and to maintain the index as a representative market benchmark.

On October 3, 2001, the Hang Seng Composite Index Series was launched, aiming to provide a comprehensive benchmark for Hong Kong's stock market performance. The index comprises 200 stocks listed by market capitalization and structured by geographic region and industry. The total capitalization of the index represents 97% of Hong Kong's stock market capitalization. To ensure transparency, HSI Services established an Independent Advisory Committee to advise on index requirements. The committee measures the performance of HSI components on a quarterly basis.

Classification System
In its classification, the Hong Kong capital market uses the Hang Seng Industry Classification System, a comprehensive system designed specifically for the Hong Kong capital market by HSI Services Limited. This system highlights the unique characteristics of the Hong Kong capital market and maintains international compatibility with international industry mapping classification systems.

General classification guide:

1. Sales revenue obtained from each business line is the main parameter in stock classification, and net profit will also be taken into consideration to determine whether the company's business is running well or not.
2. A company will be classified into different sectors according to its main source of sales revenue.
3. Reclassification of a stock's industry sector will occur if the company undergoes major changes such as a merger or acquisition.

Industrial Sector:

• Energy
• Materials
• Industrial Goods
• Consumer Goods
• Services
• Telecommunications
• Utilities
• Financials
• Properties & Construction
• Information Technology
• Conglomerates

The classification of each stock is based on available public information, such as annual reports and company announcements.

The selection criteria for HSI membership involve in-depth analysis and external consultation. To be selected, a company must meet the following requirements:

• Must be part of companies that contribute above 90% of the total market value for all common shares.
• Must be part of the companies that contribute above 90% of the total turnover in the Hong Kong capital market.
• Has been listed on the Hong Kong stock market for at least 24 months

For stocks with large capitalizations that have not been listed for 24 months, they must meet the following requirements: Average market value at the time of review Minimum listing period

• Top 5 3 months
• 6 - 15 3 months
• 16 - 20 12 months
• 21 - 25 18 months
• Under 25 24 months

Among the qualified company candidates, the final selection is based on

• market capitalization ranking and turnover rate
• level of representation of sub-sectors within HSI
• financial performance

To calculate HSI, the formula used is:

Explanation:
P(t): current price on day t
P(t-1): closing price on day (t-1)
IS: shares issued
FAF: Free-float-adjusted factor, which is between 0 and 1, adjusted every six months
CF: Cap Factor, which is between 0 and 1, adjusted every six months

NIKKEI
Since its inception, the Tokyo Stock Exchange (TSE) has been the most influential stock market activity in Japan. At that time, the Tokyo Stock Market Average Index was introduced, a calculation of all listed companies' shares.

listed on the TSE. This stock market index was calculated in September 1950, using the same calculation method as the Dow Jones index. However, in 1968, TSE Chairman Morinaga discontinued the TSE average index calculation model and sought a more accurate one. Finally, in July 1970, Nihon Keizai Shimbun, Inc. proposed a more refined index calculation system, now known as the Nikkei 225 stock index.

This index is a combination of 225 selected companies, with certain requirements. The selected companies are companies that have large assets and have good credibility in the market. As a company that has a license to calculate the stock market index, Nihon Keizai on July 1, 1971, started calculating the TSE stock index, which was initially launched under the name Nihon Shortwave Broadcasting (NSB) 225 Adjusted average, and the license was owned by Nihon Shortwave Broadcasting Co., a subsidiary of Nihon Keizai Shimbun, Inc. Until finally on May 1, 1985, the name was changed to Nikkei 225 Stock Average.

As a cash market index, the Nikkei 225 stock index is not tradable and only serves as an indicator of general stock market movements. Therefore, to facilitate trading, Nikkei 225 stock index futures were created. These have become highly sought after by investors, both Japanese and international.

On September 3, 1986, the Singapore International Monetary Exchange (SIMEX) officially began trading Nikkei Stock Average Futures. The Osaka Securities Exchange followed on September 3, 1988, and starting September 25, 1990, the Chicago Mercantile Exchange (CME) also acquired a license to trade Nikkei 225 stock index futures.

Index futures are traded for future delivery, like other futures contracts. For example, the trading months for the Nikkei Stock Index 225 Futures include the current month (spot month) and each subsequent quarter. These futures are traded on margin, which serves as collateral to ensure investors meet their obligations. Buyers are required to pay a margin amount upon entering a position.

Since its inception, the 225 companies that comprise the Nikkei index have been fluid and subject to change. A company listed on the Nikkei stock average can be removed and replaced by another more qualified company. Following various criticisms and suggestions from the market, and developments in international economic and monetary conditions, a stricter and more accurate selection system was implemented on December 14, 1990.

Contract Period
Nikkei 225 stock index futures are divided into three-month futures contracts. All buy and sell positions in a contract must be closed at the end of the contract and can be rolled over into the next contract. For example, the March Nikkei 225 contract will be replaced by the June Nikkei 225 contract, and so on. The applicable contracts are as follows:

• March Contract
• June Contract
• September Contract
• December Contract

The end of the contract generally ends in the middle of the contract month.

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