Index Definitions:

One cannot invest directly in an index.

BOCHK Offshore RMB Bond Index Tracks the total return performance of the offshore Renminbi (RMB) denominated bonds which (i) are issued outside the Mainland of China and (ii) satisfy a set of pre-specified and transparent eligibility criteria. It includes RMB denominated bonds issued in the Hong Kong SAR presently and perhaps in other countries or regions in the future. The Index launched on 31 December 2010 with a base value of 100.

Hang Seng Composite Index A market capitalization weighted index that covers about 95% of the total market capitalization of companies listed on the main board of the Hong Kong Stock Exchange.

NASDAQ Composite Index A market capitalization weighted price-only index that tracks the performance of domestic common stocks traded on the regular NASDAQ market, as well as National Market System traded foreign common stocks and ADRs.

MSCI AC (All Country) Far East Free Ex-Japan Index A market capitalization weighted index that monitors the performance of stocks from the Far East region, excluding Japan.

MSCI AC (All Country) Pacific ex Japan Index A free float-adjusted market capitalization weighted index that monitors the performance of stocks from the Pacific region, excluding Japan.

MSCI World Index A free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.

MSCI World Energy Index An unmanaged index composed of more than 1,400 stocks listed on exchanges in the U.S., Europe, Canada, Australia, New Zealand and the Far East. The MSCI World Energy Index is the Energy sector of the MSCI World Index. The

MSCI World/Consumer Staples Index A free-float weighted equity index based on the Consumer Staples sector. The MSCI World/Consumer Discretionary Index A free-float weighted equity index based on the Consumer Discretionary sector.

The MSCI World/Industrials Index A free-float weighted equity index based on the industrials sector

WilderHill Clean Energy IndexPurchasing Manager’s Index (PMI) An indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment. A PMI of more than 50 represents expansion of the manufacturing sector, compared to the previous month. A reading under 50 represents a contraction, while a reading at 50 indicates no change. A modified equal weight index comprised of companies that focus on cleaner or renewable energy sources.

Key Terms:

Return on Investment A measure of profitability; net profits divided by net worth or total equity.

Cash Flow: the total amount of money being transferred into and out of a business.

Discounted Cash Flow A measure of a company’s financial health; cash receipts minus cash payments over a given period of time.

Earning Per Share (EPS) The portion of a company’s profit allocated to each outstanding share of common stock.

Basis Points (BPS) A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security.

Alpha A measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index.

Duration The duration number is a complicated calculation involving present value, yield, coupon, final maturity and call features. Fortunately for investors, this indicator is a standard data point provided in the presentation of comprehensive bond and bond mutual fund information. The bigger the duration number, provided in years, the greater the interest-rate risk or reward for bond prices.

Price to Book Ratio (P/B Ratio)  A ratio used to compare a stock’s market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter’s book value per share. Return of Equity (ROE) The amount of net income returned as a percentage of shareholders equity.

Return of Capital A return from an investment that is not considered income.

Forex (FX) The market in which currencies are traded. The forex market is the largest, most liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world.

Pip(s) The smallest price change that a given exchange rate can make. Since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point – for most pairs this is the equivalent of 1/100 of one percent, or one basis point.

Capital Expenditure (CAPEX) Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment.

Hong Kong Interbank Offer Rate (HIBOR) An interest rate stated in Hong Kong dollars on the lending and borrowing between banks in the Hong Kong interbank market; it is a reference rate for lenders and borrowers that participate directly or indirectly in the Asian economy.

People’s Bank of China (PBOC) is the state-ran bank of China.

Basis Point is a unit that is equal to 1/100th of 1%,

EBITDA is net income with interest, taxes, depreciation, and amortization added back to it, and can be used to analyze and compare profitability between companies and industries because it eliminates the effects of financing and accounting decisions.

E&P stands for Exploration and Production.

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