Presented by: Anthony Muh

For:

Shanghai Stock Exchange

Asian Corporate Governance Association

Local Insight Global View

services provided by:Salomon Brothers Asset ManagementSmith Barney Asset ManagementCitibank Global Asset Managementand affiliated advisory entities

Enhancing Competitiveness and Market Value through Corporate Governance”

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Global PresenceGlobal Perspective with Local Insights

• 15 investment centres and 9 global research centres located in key strategic markets

As at 30-Sep-2004.

Singapore

Stamford

New York

LondonTokyo

Melbourne

São Paulo

San Francisco

Warsaw

Hong Kong

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Citigroup Asset Management

Global presence

• 15 investment centers and 9 global research centers located in key strategic markets

• Approximately 2,600 employees in 20 countries worldwide

Competitive position

• US$5012 billion in client assets under management

• The 9th largest asset manager based on worldwide assets1

Investment capabilities

• Full spectrum of equity, fixed income, balanced and alternative investment strategies

• 400 investment professionals

• Sophisticated, proprietary technology combined with market experience help us manage risk

A Snapshot

As at 30-Sep-2004.1 This ranking is based on the 2004 Pensions & Investments Money Manager Survey The investment advisory services of Citigroup Asset Management are provided by Salomon Brothers Asset Management Inc, Smith Barney Asset Management (a division of Citigroup Global Markets Inc.), Citibank Global Asset Management (a unit of Citibank, N.A. and Citibank International plc), Citigroup Asset Management Limited and affiliated advisory entities. 2 The Asset Management businesses include Citigroup Asset Management (CAM), Citigroup Alternative Investments’ (CAI) Institutional business, Banamex Asset Management and Retirement Services businesses, Koram Asset Management, Travelers Property and Casualty/Travelers Asset Management International Corporation Fixed Income business and Citigroup’s other retirement services businesses (includes Citistreet’s Retirement Services and Latin America Retirement Services businesses) in North America and Latin America.

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The Investment Platform

• Proprietary fundamental research combined with disciplined valuation framework identifies attractive investment opportunities

• Portfolio Management, Fundamental Research and Quantitative Research work as a team to aim to maximise the impact of proprietary information and insights

• Apply repeatable, successful processes with world-class research resources

PortfolioManagement

28 teams worldwide

QuantitativeResearch

Over 30 quantitative analysts

Fundamental Research

Over 130 global equity research analysts

and associates

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Philosophy and Style

“we believe by using proprietary research to define intrinsic value and combining that with shorter term earnings momentum will deliver consistent outperformance”.

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Research is based on identification of sustainable long term cash generation

Time

5

10

15

20

RO

E

0

10

20

30

40

50

60

70

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Normalised EarningsHistoric

Ope

ratio

n ea

rnin

gs p

er s

hare

2009 2010

Sustainable Growth Rate

Average = 12% ROE

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Top-down

Sector

Bottom-up

CountryRisk

Country Liquidity

Country Momentum

CountryValuation

BalanceSheet

EarningsVariability

EarningsForecastability

Deriving for an appropriate discount rate

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Corporate governance a useful tool for measuring management commitment to

creating shareholder value.

Various studies, including those by McKinsey (2000) and the City University of

Hong Kong (2003), suggest that good governance tend to lead to lower capital

costs, higher valuations and stronger stock price performance as investors

appear willing to pay some premium for investments in companies that display

superior corporate governance standards.

Corporate Governance – how it really impacts valuation?

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Defining intrinsic value

Source: Internal. This is for illustration purposes only and does not represent our forecasts or any recommendation to purchase/ sell any security.

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Utilities

Company Name Cty DDM FV Price Ret to FV ESR DDM Alpha

KOREA ELECTRIC POWER CORP KR 36357.61 22250.00 63.4% 0.30 1.95 2.27CHEUNG KONG INFRASTRUCTURE HK 26.14 20.95 24.8% -0.10 0.75 0.83PLUS EXPRESSWAYS BHD MY 2.99 2.59 15.3% 0.10 0.29 0.37DATANG INTL POWER GEN CO-H CN 7.19 6.70 7.3% 0.48 0.01 0.28HUANENG POWER INTL INC-H CN 7.31 6.35 15.1% -0.37 0.28 0.10MALAKOFF BHD MY 6.67 6.50 2.6% 0.30 -0.15 0.00AUSTRALIAN GAS LIGHT COMPANY AU 14.75 13.33 10.6% -0.20 0.08 -0.04HONGKONG ELECTRIC HOLDINGS HK 39.24 34.70 13.1% -0.66 0.20 -0.18HONG KONG & CHINA GAS HK 13.46 14.95 -9.9% 1.10 -0.88 -0.42TRANSURBAN GROUP AU 5.51 5.62 -1.9% 0.01 -0.51 -0.62GAIL INDIA LTD IN 167.89 200.50 -16.3% -0.34 -0.80 -1.05CLP HOLDINGS LTD HK 41.93 44.90 -6.6% -0.30 -0.73 -1.08TENAGA NASIONAL BHD MY 9.73 11.40 -14.7% -0.52 -0.75 -1.09

Ranking intrinsic value

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Global High Grade Credit Research

• Fundamental equity research output is the starting point for credit analysis

– Financial forecasts including credit ratios

– Company-specific risk analysis

– Industry outlook

Financial Analysis– Equity research

template– Financial flexibility– Operating performance– Capital structure– Financial policies

Financial Analysis– Equity research

template– Financial flexibility– Operating performance– Capital structure– Financial policies

Citigroup Ratings– Long-term rating– Rating outlook– Event risk– Probability rating

Citigroup Ratings– Long-term rating– Rating outlook– Event risk– Probability rating

Company Analysis– Industry/markets– Country of domicile– Management– Corporate

structure/governance– Ownership– Event risk

Company Analysis– Industry/markets– Country of domicile– Management– Corporate

structure/governance– Ownership– Event risk

StandardisedResearch Template

Disciplined and Structured Approach to Fundamental Credit Assessment

StandardisedCredit Report

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Ratings Comparison

• For companies under coverage, CAM has been ahead of the Rating Agencies

Case Study – Telecoms

For illustrative purposes only. This example should not be construed as investment advice or a recommendation to buy or sell a security.Please see endnotes for additional information.

Telecom Ratings

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5 CAM

S&P

Moody'sA

A-

BBB+

BBB

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Important Note

The information in this presentation is of a general nature only and is not intended to be, and is not, a complete or definitive statement of the matters described in it. The information does not constitute specific investment advice and does not include recommendations on any particular securities or markets. Although statements of fact in this presentation have been obtained from and are based upon sources we believe to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed. All opinions and estimates included in this communication constitute our judgment as of the date of this communication and are subject to change without notice. This presentation has not been prepared to take into account the investment objectives, financial objectives or particular needs of any particular person. Before making an investment decision you should consider, with or without the assistance of a financial adviser, whether such an investment is appropriate in light of your particular investment needs, objectives and financial circumstances. We do not accept any liability for any direct or indirect loss arising from any reliance on the information contained in this presentation.

The contents of this document may not be reproduced or distributed in any manner without prior permission by Citigroup Asset Management.