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Energy Sector Continues to Offer Value against US Equities Dip

London, 20 June 2006 – London & Capital, a boutique, UK-based asset manager, today announced that its enhanced index, MarketGrader, has returned a strong endorsement for US-listed energy stocks, according to the index’s latest holdings. Despite the recent dip in equity markets, MarketGrader continues to find value in the global energy boom. The rules-based, quant-driven index, which re-evaluates more than 5,700 US equities every quarter to select a basket of 40 stocks, has returned a strong weighting towards energy in its latest quarterly rebalancing. Of stocks purchased last quarter*, more than 28% were energy-related, demonstrating that the sector continues to offer significant opportunities.

Daniel Freedman, Joint Managing Director, London & Capital, comments: “Despite some market anticipation of the end to the energy reign, MarketGrader’s objective value, growth, profitability and cash flow stock evaluations have clearly identified the continued investment potential of this sector. As a quant-based investment tool, MarketGrader delivers an unbiased assessment of stocks, irrespective of economical or cultural preconceptions. By definition, the computer-driven methodology avoids investing in overvalued stocks, focusing on those companies that promise long-term profitability. MarketGrader’s results undermine the ongoing verbal debate on whether energy companies are now overvalued.”

MarketGrader is one of the first merit-based equity indices available in the UK. In its latest rebalancing, MarketGrader identified 11 energy stocks, ahead of seven in the financial and industrial sectors respectively.

Ashok Shah, Chief Investment Officer, London & Capital, comments: “MarketGrader’s depth and breadth of research enables a level of analysis impossible for a human analyst to achieve. Every day, the system gathers up to five years of historical financial data sourced from company reports, assessing the data on the basis of fundamentals. MarketGrader does not take in analyst research, price targets or forward looking information. It ignores media reports and market noise on peaks and troughs, and removes the influence of the human emotion which comes into play when asset managers fear a sector is becoming overheated. MarketGrader does not follow the herd mentality – it ensures objective analysis and maximises long-term profitability.”

London & Capital, which has USD 2 billion under management, has offered institutional clients access to the MarketGrader Index via a European medium-term Note since February 2005. The company launched a MarketGrader Fund in November 2005.