Prospects

To combat the financial crisis of 2008, the US Federal Reserve used quantitative easing as a monetary policy tool to boost the US economy. After the first and second rounds of quantitative easing, the US economy has finally showed signs of a recovery. Due to these and other improvements in the US economy since the start of quantitative easing, the Fed will end its quantitative easing measures at the end of June 2011. Nevertheless, the United States will keep reinvesting proceeds of maturing mortgage debt into the market and retain the exceptionally low interest rate policy for a long period of time.

In our corporate finance division, with the improved liquidity in the market, the abundance of new IPO listings from mainland companies, coupled with the strong demand for corporate financing by listed companies, we believe our corporate finance division will continue to contribute good profits to the Group in FY2012.

Looking ahead into FY2012, we see bright prospects in the horizon for our financial services core business. The reason is three-fold. Firstly, the low interest rate environment is expected to boost our brokerage and its related businesses. Secondly, with China’s unwavering economic growth, and the growing demand for renminbi-denominated investment products such as renminbi-denominated IPOs, we see new opportunities in our financial services sector. With the Group’s facilities in place for renminbi-denominated products, such as renminbi-denominated bank accounts, settlement system for renminbi-denominated products and the arrangement in place for margin financing for renminbi-denominated products, we believe we are well-positioned to grow our business in the renminbi-denominated financial market. Lastly, with our strong cash position, as shown by the new high in our cash position as at 31 March 2011 since 2004, that provides us further ammunition for expanding and growing our financial services core business well into and beyond FY2012.

The road ahead is a prosperous one for the Group. With Hong Kong being a key constituent of China, the Chinese Central Government has clearly emphasized in its Twelfth Five-Year Plan its aim to develop Hong Kong as a center of international finance. With this plan in place, coupled with our extensive experience and industry know-how in financial services, the Group is poised to generate strong growth in the future for the Group and its stakeholders.