SSE Newsletter. September Vol. 9. Highlights:

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1 Vol. 9 SSE Newsletter September 2013 Highlights: SSE Composite and trading volume of September 2013 show slight increase compared with that of the previous month. CSRC issued policies to boost FTZ(Free Trade Zone) capital market. SSE launched when-issued trading of Chinese government bond. Treasury bond futures start trading. Soliciting Public Opinions on SSE Measures (Trial) for Assessment of Listed Companies Information Disclosure (Draft Version). CSRC issued Interim Measures for the Public Offering of Securities Investment Fund Risk Reserve Fund Supervision and Management.

2 1. Overview of SSE Market For the last 12 months (October 2012 September 2013), the SSE Composite Index started at (closing price, hereinafter inclusive) on October 8 th The index reached the highest ( ) on February 6 th 2012 and the lowest ( ) on June 27 th In September 2013, the index generally reflected a slight up trend, hitting the highest point of on August 13 th. There have been 238 trading days from October 2012 to September The daily average turnover value is USD billion for the period. The single day turnover value peaked at USD billion on Feb. 4 th 2013 and the lowest of USD 5.26 billion on November 26 th The daily turnover is USD billion for September, which showed a slight increase compared to that of the previous month. In terms of accumulated turnover of September 2013, the top 3 sectors were Manufacturing (USD 139 billion), Finance & Insurance (USD 75 billion) and Information Tech (USD 32 billion).

3 For the last 12 months (October 2012 September 2013), the monthly average number of A share new holder accounts is 210 thousand. The single month number of new holder accounts peaked at 390 thousand in March 2013, and the lowest of 140 thousand in October As of October 2013, total number of A-share holder accounts is 90.4million. In September 2013, the daily average trading volume of ETF was USD 252 million, which represented a growth rate of 119% compared with USD 150 million in September The volume reached its highest point of USD 342 million on September 9 th 2013 and the lowest of USD 342 million on September 30 th 2013.

4 2. SSE Updates On September 2 nd, the has publicized methods for supervising honest practices through its official websites and micro-blog, and major securities media. All sectors of the society can directly report to the Disciplinary Inspection Office of the SSE about issues of its staff s honest practices by telephone, fax, , letter and visit. In order to meet the new situation in regulating listed companies information disclosure after implementing direct channels for information disclosure, enhance transparency in regulation, and improve the quality of listed companies information disclosure, On September 19 th, the has improved the assessment system of listed companies information disclosure and formulated the SSE Measures (Trial) for Assessment of Listed Companies Information Disclosure (Draft Version) and is soliciting opinions from the public. The and China Securities Depository & Clearing Corp., Ltd. (CSDCC) have jointly formulated the Business Measures on Trading, Registration and Settlement of Pre-issuance (Trial) of Treasury Bonds of SSE and CSDCC. Upon approval from the Ministry of Finance of the PRC and the China Securities Regulatory Commission, the SSE promulgates the Measures and notifies relevant parties about certain provisions. The launched when-issued trading of Chinese government bond on October 10 th, with the seven-year government bond to be the first instrument up for transaction. This makes the SSE the first market to launch when-issued trading of government bonds in China. Judged from its market performance on the very day, price trend for when-issued trading of Chinese government bonds is steady, with its bid-ask spread keeping within 1 basis point. Current regulations allow qualified market participants (including QFII) to buy and sell government bond among themselves up to four working days prior to the start of bidding. Please refer to the following news report for detailed information:

5 3. Key Statistics of China CPI has been fluctuating in the last twelve months. The YoY growth rate was 1.70% in October 2012, and rebounded to 3.20% in February CPI dropped to 2.70% in August, and increased to 3.10% in September. From October 2012 to September 2013, M2 generally kept its increasing momentum. M0 increased from USD 0.82 trillion in October 2012 to USD 0.90 trillion in September 2013; M2 increased from USD 15.0 trillion in October 2012 to USD 17.1 trillion in September Funds raised to new loan ratio were volatile on China s exchange market. The average from October 2012 to September 2013 was 4.3%, with the highest of 11.9% in December 2012 and the lowest of 0.9% in September 2013.

6 4. Policy Updates on China's Capital Market On September 4 th, the CSRC issued the Trading Guideline for Public offering of Securities Investment Fund Invested in Treasury Bonds Futures (hereinafter referred to as the "Trading Guideline"). It stipulates that hedging should be the fund s investment strategy when investing in treasury bonds futures and strictly curbs speculation and the proportion of such investment. However, for the fund s investment in treasury bond futures from its wealth-management accounts, Trading Guideline did not make specific provision. On September 6th, Treasury bond futures are launched on China Financial Futures Exchange. Han Zheng, Party Secretary of Shanghai Municipal Party Committee and Xiao Gang, Chairman of the CSRC attended treasury bond futures opening ceremony. Tu Guangshao, Executive Vice Mayor of Shanghai city has delivered a speech. On September 27 th, CSRC issued " Interim Measures on Public Offering of Securities Investment Fund Risk Reserve Fund Supervision and Management (hereinafter referred to as the "Interim Measures"), which will take effect from January 1 st, The Commission spokesman said, the release of "Interim Measures embodies the spirit of reviesed "Securities Investment Fund law" and represents a critical scheme of improving the risk provision for fund industry. CSRC spokesman said on September 27 th, the resumption of the IPO must come with the reform of system and mechanism. CSRC is actively preparing documents and technical measures. The IPO will be resumed after the announcement of reform opinions and only issuers that meet the new requirements can go public. On September 29 th, China opened a pilot Free Trade Zone in Shanghai. CSRC, the country's top securities regulator, has issued a package of policies to support the capital market in the Shanghai pilot Free Trade Zone (FTZ). These policies will support for a wide range of market-oriented reforms, including easing restrictions on finance, investment and trade, a move widely hailed as a crucial step in the country's reform and opening up. Qualified individuals and units, including financial institutes and companies in the FTZ will be allowed to invest in both domestic and overseas fund markets.

7 5. QFII, RQFII & QDII As of September 30 th, 2013, the approved quota for QFII, RQFII and QDII were USD billion, USD 22.0 billion and USD billion respectively. The newly approved quota for QFII, RQFII and QDII in September 2013 is USD 1.05 billion, USD 1.12 billion and USD 0.7 billion respectively.

8 You may sign up for a free subscription to this newsletter by sending your name, company name, job title and telephone number to: globalbusiness@sse.com.cn Please feel free to contact Mr. Stephen Wang at , or send an to bzwang@sse.com.cnif you have any query. Disclaimer This newsletter is provided by the (hereinafter referred to as the SSE ) and intended only for those whom it is addressed to. Any unauthorized quotation, reprinting and/or distribution to a third party may be held legally liable. The contents and comments herein are for information purposes only and the SSE makes no guarantees of their accuracy and completeness. The contents, comments and forecasts are subject to change at any time by the SSE without prior notice. The SSE holds the copyright of this newsletter and reserves all rights. Any reproduction, replication, quotation and/or reprinting by any individual or entity is prohibited without prior written consent of the SSE; otherwise, the SSE reserves the right to take any legal action at any time. No.528 South Pudong Road, Shanghai, , PR.China