Participation Certificates - Make it your business?

Merrill Lynch to issue four China Participation Certificates on SGX

Merrill Lynch announced on 5 Mar 2008 that it will issue four Participation Certificates in April on the Singapore Exchange (SGX) that provide investors with a cost effective way to obtain access to selected China-themed sectors.

The four Participation Certificates are China Water, China Consumer Brands, China HShares
Discount and China S-Shares and as the names indicate, provide transparent access to the
China water sector, China consumer brands sector, a basket of H-Shares which are trading at a
discount to their A-Share counterparts and a basket of S-Shares which likely to benefit from
China’s economic growth and subsequent money flows into the Singapore stock market,
respectively.

The underlying indices for the four Participation Certificates are the Merrill Lynch China
Water SGD Index, the Merrill Lynch China Consumer Brand SGD Index, the Merrill Lynch HShares Discount SGD, and the Merrill Lynch S-Shares SGD Index, respectively. Each index is
based on Merrill Lynch research and the composition is reviewed at least twice a year.


The Participation Certificates are designed to be buy-and-hold investments, whose price
return is tied to a stock index, a single stock or a basket of stocks and indices. It is a non-leveraged product with exercise price of zero and is suitable for investors who wish to have an exposure to some of these unique baskets of stocks, indices or both.

As I type, Bernanke is speaking on CNBC talking about measures to solve the housing/credit problem. The Dow is down some 200+ points. The martket will continue to be highly volatile, with down side bias. MYOB will dissect the participation certificates to see if you should make it your business.

Stay tuned.