Clarification on media report of Commercial Times (page C2) and Economic Daily News(page A3) dated March 8, 2008

2008-03-10

1.Name of the reporting media:Commercial Times (page C2)and Economic Daily News(page A3) 2.Date of the report:2008/03/08 3.Content of the report:Rumor has it that Cathay Financial Holdings might acquire Capital Securities. 4.Summary of the information provided by investors:None 5.Company's explanation of the reportage or provided information:Cathay Financial Holdings clarifies that the report was based on market speculation and Cathay doesn’t release any related information. We didn’t participate in the due-diligence process and make indicative proposal either. Please make your investment decision on verified information, instead of on the unfounded speculation. 6.Countermeasures:None 7.Any other matters that need to be specified:None