Chairman and Managing Director's Statement

The collapse of the global debt markets in late 2008 and the resulting steep decline in value across all asset classes has shown our conservative, disciplined approach to asset evaluation and investment strategy to be both sound and justified.

We made a conscious decision not to make any investment, due to inflated value expectations and unsustainable inflationary pressures witnessed throughout the GCC region in 2008. However, the objective professionalism of our staff and our conservative approach to the investment of third party equity has enabled us to end the fourth quarter of 2008 with closing IndustRE development fund with a commitment of USD 324 million and to start the second quarter of 2009 with no investments in a negative equity position.

The challenges of the current operational environment continue. The failure and depressed nature of the capital and equity markets respectively continue to impair broad based investor sentiment. However, the cost of holding cash and the current opportunity of low asset values is driving cash rich acquisitions, while the desire to remove depressed asset values or correct asset allocations on balance sheets is encouraging asset transfers and distressed sales.

We therefore forecast an improvement in wholesale investor sentiment, within niche sectors, as well as a broad increase in general market activity by the end of the second quarter. Continuously adapting our strategy to benefit from these market changes and expanding SinoGulf's regional private equity will see our assets under management exceed our 2009 budget.

We remain optimistic about the long-term benefits of operating wholesale asset and fund management services within the region and are well positioned for a recovery of the broader economy.

For more than seven years, SinoGulf has been committed to delivering a high degree of professionalism for the benefit of investors, employees, our community and our shareholders. We remain committed to this aim.

Yours faithfully,

Q2 2009