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HSBC BRIC INVESTMENT TO LAUNCH IN AUSTRALIA
FIRST PRODUCT IN 100+ SERIES OF STRUCTURED INVESTMENTS

7 May 2008

HSBC Bank Australia will launch the first of its 100+ Series of structured investment products - the HSBC BRIC Investment - on 12 May 2008. The HSBC BRIC Investment is a six year investment product offering exposure to four of the world's fastest growing economies: Brazil, Russia, India and China.

Linked to the performance of the HSBC BRIC Markets Fund managed by HSBC Investments, the HSBC BRIC Investment is a structured product that gives Australian retail investors exposure to BRIC equity markets, at the same time offering 100% capital protection at maturity and the potential for additional payoff using HSBC's unique switch event.

The HSBC BRIC Investment will be distributed directly through HSBC Bank and its financial planners as well as independent financial planner groups. The product has been reviewed by Lonsec and given a 'Recommended' rating.

Tony Cripps, head of global markets for HSBC in Australia said: "This is strategically important for the HSBC Group because Australia is a net exporter of wealth. Australia's total superannuation market sector is projected to reach $3.3 trillion by 2017ⁱ and we expect the demand for international assets to increase significantly.

"HSBC has already announced the establishment of HSBC Alternative Investments in Australia. The HSBC BRIC Investment proposition further supports HSBC's strategy of making use of the HSBC Group's global competitive advantage in Australia.

"We're identifying wealth management areas that HSBC dominates overseas and bringing those HSBC products, systems and expertise to meet Australian demand - giving Australian investors access to international investment opportunities."

The HSBC Group is a global asset manager with over USD386 billionⁱⁱ in assets under management. HSBC's expertise in emerging markets in particular is well established, with some US$93 billionⁱⁱⁱ in assets under management and a global team of over 145 dedicated investment professionals covering 12 emerging markets.

In the BRIC markets alone, HSBC Investments has more than US$63 billion^iv in assets. HSBC's country allocation committee is comprised of the world's leading BRIC and emerging markets specialists.

The HSBC BRIC Markets Fund is actively managed, focusing on liquidity and diversification across BRIC countries and sectors, neutralising stock and sector risks. It's experienced returns averaging some 45%^v per annum since its launch in June 2005 - outperforming the aggregated return for BRIC markets' MSCI Indexes.

Within each BRIC country the fund seeks to track the total return performance of the MSCI US dollar Brazil, MSCI US dollar Russia, MSCI US dollar India and the MSCI US dollar China indices, investing in either all of the securities in the index or a representative sample.

The 100+ Series HSBC BRIC Investment

The 100+ Series HSBC BRIC Investment is linked to a dynamic portfolio with notional exposure to shares in the BRIC Markets Fund, a notional cash asset and notional borrowings. The allocation between these is managed using Constant Proportion Portfolio Insurance technology to maximise portfolio value, while at the same time providing capital protection at maturity.

What distinguishes the HSBC BRIC Investment from other capital protected products in Australia is its unique switch event. In the event that the notional investment approaches close to full cash position, the switch event allows investors to maintain exposure to the BRIC Markets Fund via an Average Option, potentially providing payoff above the capital protection level.

The HSBC BRIC Investment offer period runs from 12 May 2008 until 5 pm on 20 June 2008. The investment starts on 2 July 2008. The minimum investment is $10,000, in increments of $5,000 thereafter.