Wednesday 16th May 2007

Dear Reader,

We're delighted to read that Henry Fan, new Chairman of the MPFA, has heeded the need for employees to be able to choose their own MPF providers and opt out of the ones chosen by their employer. That's the first of many changes that the MPFA and Government need to make, if they are not going to abolish the interventionist scheme and its HK$5bn bureaucracy altogether. Don't hold your breath though, because there will be a consultation (in which banks say it is all too difficult), followed by legislation, and it will be years before this takes effect, if ever.

Heads up: the MTRC AGM is on 7-Jun-07. The Government continues to try and railroad (sorry) legislation through LegCo, even though the proposed terms for leasing the KCR are unacceptable to shareholders. The Government wants to take away the company's fare autonomy and put the squeeze on future profits by charging it an ever-increasing share of revenues for leasing the KCR railway system. Last year, MTRC blocked journalists from entering the meeting. We hope that won't happen again, but if you are a journalist and want to be certain, then contact us now for a 1-share proxy. We have 3 seats remaining. To be clear, the KCR lease is not on the AGM agenda - that will only go to a vote if, and after, legislation is passed. There is still time for MTRC and Government to come up with a deal which shareholders can support.

Now, it's time for action against CNOOC's INEDs...

CNOOC voting recommendation (16-May-07)
We urge shareholders to cast their votes against the re-election of INEDs who have not served them well, and to vote against the general mandate, as usual. We note that one of the candidates appears to have discovered time travel.

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David M Webb