Alpha BRIC 40 Update

Alpha Structured Investments has two BRIC specific investments in the market, Alpha BRIC 40 Plus Series 1, which matures later this year and Alpha BRIC 40 Plus Series 2, which matures next year. Full details of these investments is available at the Alpha website, http://www.alpha-invest.com.au/products/bric/40-plus.aspx.

We utilized the Standard & Poor’s BRIC 40 index, which references the top 40 stocks in the 4 BRIC countries, and which is an effective low cost vehicle to generate BRIC market exposure. The performance of the BRIC 40 Index since December 2006 is shown in the chart below:

Since that time the Standard & Poor’s BRIC 40 Index has risen from 2071 in December 2006 to highs of 3284 in November 2007, to current levels of 1653 in April 2009. Overall since that start date the index has fallen by 20.17% - more resilient than falls in most major sharemarkets for the same period.

Both of these investments provide partial capital protection, with that protection level set at 85% of the investor’s initial subscription (for investments made at the initial issue price of $1). To reduce volatility of the final reference price and payout levels, both investments utilize a smoothing mechanism, where the final payout is referenced against the index levels prevailing over each of the four last quarters in the final year of the investment. Series 1 is trading around $0.83 and Series 2 is trading around $0.77. As per the capital protection mechanism, both Series final value will be a minimum of $0.85.

For Alpha BRIC 40 Plus Series 1, the smoothing period is between 1 Dec 08 to 1 Dec 09, and over the past 6 months the reference index levels have fixed at around 1400 (against the initial strike, which was 2070). Although the Index has now recovered, it would need to get to about 2700 to average out the past fixings. The chance that it will do this by the end of the year is quite low, hence the relatively unchanged prices for this investment over the last few months.

For Alpha BRIC 40 Plus Series 2, this was struck at an index price of over 3100. Although the index has risen, it is still only around 2000, 33% below the strike price. If the Index continues to rise to 3000 in the next six months then the performance of this trade will improve.

Alpha intends to provide further investment opportunities over the BRIC sector this year.

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