Barclays Stockbrokers Offers Exposure to Chinese Equities and Agricultural Commodities

28 July 2008

• Investment Note capitalising on growth in the Chinese and agricultural commodities markets
• Designed to provide 125% of any rise in the basket
• Full protection of capital at maturity

With investors increasingly looking to diversify their portfolios, Barclays Stockbrokers today announces the launch of a new Investment Note, giving investors access to the growth opportunities in Chinese Equity markets and Agricultural Commodities. The note is a five year growth investment linked to the performance of a basket of equities and commodities and is designed to provide 125% of any rise in the Basket.

The Basket is made up of three indexes and weighted as follows:
• FTSE Xinhua China 25 Index – 40%
• S&P GSCI Agriculture Excess Return Index – 30%
• S&P GSCI Livestock Excess Return Index – 30%

The FTSE/Xinhau Index includes the top 25 Chinese companies by total market capitalisation, giving access to diverse sectors of the Chinese economy such as telecommunications, petrochemicals and banking. In order to get exposure to the global agricultural commodities market, investors will gain access to the S&P GSCI Agriculture Excess Return Index and the S&P GSCI Livestock Excess Return Index1, which are primarily driven by grain and meat prices.

Investors can put as little as £500 in the note and, after launch, can trade daily through Barclays Stockbrokers. The product is available to invest through a MarketMaster, Investment ISA and SIPP account.

Catherine Penney of Barclays Stockbrokers, says: “We have launched this Investment Note to continue offering our clients the opportunity to diversify their portfolios through exposure to the developing Chinese market and Agricultural Commodities, which are experiencing rapid growth as a result of expanding populations as well as global industrialisation which tends to increase consumption of meat. This Investment Note also offers investors the peace of mind capital protection brings, and if clients hold the product for the full five year term they are guaranteed to receive 125% of any rise in the basket. Not only this but investors can also take advantage of their tax free allowances by investing through an ISA or SIPP.”

Henk Potts, equity strategist at Barclays Stockbrokers, says: “China remains one of the world’s most interesting long-term growth stories, but the short-term macro risk is currently larger than usual. Despite this we still see China as one of the best long-term growth stories in the world. In agricultural commodities, there are tight supply/demand balances and market dynamics, with low customer inventories. In terms of commodities we remain positive on price prospects on the back of lower and delayed 2008 US corn plantings, strong Chinese demand, expanding US ethanol output, rallying crude oil prices and low inventories. All of which leads us to believe that prices will rise.”

The flexible nature of Investment Notes means that an investor may choose to receive the capital protection offered by holding the Note to maturity or can sell the note before maturity to realise shorter term gains. However, if sold before maturity an investor may get back less than they invested.

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