For Immediate Release


BEA Launches the ¡§BEA Capital Guaranteed Coupon Fund¡¨


Hong Kong, 9th December, 2002 ¡V The Bank of East Asia, Limited (¡§BEA¡¨) today announced the launch of two new sub-funds under the Bank of East Asia Investment Series II, namely, BEA AUD Capital Guaranteed Coupon Fund and BEA NZD Capital Guaranteed Coupon Fund (the ¡§Sub-Funds¡¨).

Managed by East Asia Asset Management Company Limited (a wholly-owned subsidiary of BEA) (the ¡§Manager¡¨) and with an investment period of 3 years, each of the Sub-Funds will be available for subscription from 9th December 2002 until 13th January 2003. Guaranteed by BEA, each of the Sub-Funds provides investors with 100% guaranteed capital protection1, and guaranteed 1st year semi-annual Coupon Payments. The 1st year Guaranteed Coupon Payments shall be 6% per annum for the BEA AUD Capital Guaranteed Coupon Fund and 9% per annum for the BEA NZD Capital Guaranteed Coupon Fund2.

Each of the Sub-Funds also offers investors an opportunity to receive a series of semi-annual Bonus Coupon Payments3, which are linked to the least performing stock of 15 global stocks (the ¡§relevant stocks¡¨) specifically selected by the Manager4. From the 4th coupon and onwards, the Bonus Coupon Payments incorporate a rising lock-in mechanism. Once the 3rd semi-annual coupon is fixed, the subsequent semi-annual coupons will not be less than the previous one, irrespective of the performance of the relevant stocks.

BEA AUD Capital Guaranteed Coupon Fund and BEA NZD Capital Guaranteed Coupon Fund are denominated in Australian Dollar and New Zealand Dollar respectively5, and the respective minimum subscription amounts are AUD5,000 and NZD5,000. There is no preliminary charge for subscription for each of the Sub-Funds, and the management fee of each of the Sub-Funds is 1% per annum6.

A preferential deposit interest rate of 4%-5% per annum over BEA base rate will be offered to investors from now on until the end of February 2003 for a one-month local time deposit in HK Dollar, US Dollar, Australian Dollar or New Zealand Dollar, with an equivalent amount not exceeding the investors¡¦ investment amount in the Sub-Funds.

To provide customers with financial flexibility, BEA also offers overdraft facilities of up to 80% of the investors¡¦ investment amount in the Sub-Funds against pledge of their holdings of the Sub-Funds.


Disclaimer

Each of the Sub-Funds has been authorised by the Securities and Futures Commission (¡§SFC¡¨) in Hong Kong. In granting such authorisation, the SFC takes no responsibility for the financial soundness of each of the Sub-Funds or the accuracy of any of the statements made or opinions expressed in the Explanatory Memorandum of each of the Sub-Funds and such authorisation does not imply that investment in the Sub-Funds is recommended by the SFC. Investment involves risks. The value of the investments may go up and down. Each of the Sub-Funds is also subject to the credit risks of the Guarantor and the option counterparty as well as the liquidity risk of the underlying investment of each of the Sub-Funds.

1 The guarantee is issued by The Bank of East Asia, Limited. The benefit of the 100% capital guarantee will only apply to investors who hold their Units on Maturity Date. Redemptions before the Maturity Date are fully exposed to fluctuations in the Net Asset Value of each of the Sub-Funds. Investor who redeems the Sub-Fund(s) prior to the Maturity Date is subject to an early redemption charge and the redemption value may be lower than the 100% guaranteed amount.
2 Each Guaranteed Coupon Payment will only be applicable to Units held by investors on relevant Guaranteed Coupon Date.
3 The value of any Bonus Coupon Payment is not guaranteed and is subject to market fluctuations and to the risks inherent in all investments.
4 The Manager reserves the right to change the composition of the stock basket comprising 15 global stocks before and after the Inception Date under the circumstances listed in the Explanatory Memorandum of each of the Sub-Funds.
5 Although BEA AUD Capital Guaranteed Coupon Fund and BEA NZD Capital Guaranteed Coupon Fund are denominated in AUD and NZD respectively, the performance of each of the Sub-Funds is not linked to the performance of the Australian market or the New Zealand market; and USD/HKD based investors are exposed to the fluctuations in the respective USD/HKD/AUD or USD/HKD/NZD exchange rate.
6 All fees, including the establishment cost of each of the Sub-Funds, for the whole investment period (3 years) amount to approximately 3.88% in aggregate and will be charged upfront at the inception of each of the Sub-Funds. Investor who redeems the Sub-Fund(s) prior to Maturity Date must bear the total fees and expenses incurring in the whole investment period.

Please refer to the Explanatory Memorandum of each of the Sub-Funds for full details of the guarantee and calculation of the Bonus Coupon Payment. Please visit BEA¡¦s website at http://www.hkbea.com for details of each of the Sub-Funds and the Explanatory Memorandum of each of the Sub-Funds.

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For press enquiries, please contact:
Mr Tony Chan
Manager
East Asia Asset Management Company Limited
Tel : (852) 2842 3454