News Release

HSBC Launches Asian U.S. Dollar Bond Index

16 September 1999

NEW YORK – HSBC (NYSE:HBC) today announced the availability of the HSBC Asian US Dollar Bond Index (HSBC ADBI). The Index tracks the performance of an Asian bond portfolio comprised of U.S. dollar-denominated, fixed rate, straight bonds. The portfolio does not include Japanese debt.

Stuart Gulliver, head of treasury and capital markets in the Asia-Pacific for HSBC, said, "The HSBC ADBI fills a gap in the rapidly-evolving bond market. Investors will now have an index that helps them benchmark their portfolios and track their performance against a pool of assets that historically has not had a great degree of correlation with any other asset class.

"We believe that the HSBC ADBI will contribute significantly to the overall objective of promoting investors' interest in, and the development of, the Asian debt market excluding Japan and this initiative reiterates HSBC's commitment to assist in this process."

The HSBC ADBI currently has 76 issues spread over eight countries and territories that meet the selection criteria. The index has sub-indices for each of the countries and territories represented: mainland China, the Hong Kong SAR, Indonesia, Korea, Malaysia, the Philippines, Singapore, and Thailand. The Index derives its strength from its mechanistic, rule-based construction and rich price data going back to December 31, 1996.

"HSBC has developed a novel approach to address the inherent liquidity characteristics of the underlying asset class and corresponding index replication issues," said Alison Johns, head of Asian product, HSBC Securities (USA) Inc. in New York. "Apart from using market capitalization to assign weightings to constituents, HSBC ADBI makes adjustments to weightings through a simple set of liquidity measures including market participants' responses to a poll, conducted quarterly, by an external agency."

The other selection criteria are a minimum size of US$250 million and no credit rating restrictions. Only U.S. dollar and fixed-rate bonds with a minimum of one year to maturity can be included.

The product is available in the United States through HSBC Securities (USA) Inc. and can be accessed through Bloomberg (HSBI page), Reuters (HSBCBOND1 page), Bridge (page 888), Telerate (page 2795), Wilshire Axiom and on the HSBC Web site at www.hsbcmarketsasia.com. The Hongkong and Shanghai Banking Corporation Limited, a principal member of the HSBC Group, developed the Index.