A proposal to Hotung

I have been a shareholder of hotung for slightly more than a year. But for the past few years, the share price was consistently trading at huge discount to its net asset value. I believe the time is ripe for the management to address this problem. As such, i have sent out an email to Hotung last week outlining my proposal. Below is the entire content of the email.



Dear Management Team of Hotung Investment Holdings Limited,
As a current shareholder of Hotung which is listed in Singapore, I fully appreciate the efforts put in by the management team in the past few years to turn the company around to profitability. For many years the share price of Hotung has not reflected its true value and since fiscal year 2007 is drawing to a close, I would like to take this opportunity to recommend a proposal which the management can consider.

Proposal: To change the trading currency of Hotung shares from USD (United States Dollar) to SGD (Singapore Dollar).
Below are my reasons for the proposal:
1) The USD (United States Dollar) will be on a general downtrend in the foreseeable future due to the various economic problems and interest rate cuts.
2) The change in trading currency will enhance liquidity of the counter as it removes the necessity and cost of foreign exchange conversion. With easier settlement of trades, retail investors, in particular, will find it more convenient to trade in Hotung shares.
3) By denominating the shares in SGD (Singapore Dollar), the potential pool of institutional investors may expand as several funds and insurance companies in Singapore, which are permitted to invest only in SGD-denominated stocks, can now consider Hotung as an investment option.

In reality, there are many factors that caused Hotung's share price to stay low which we may not know of. However, for a start, the management can take a pro-active step to improve the conditions and reduce the uncertain variables on which the shares are traded. In my humble opinion, a change of trading currency is the way forward at this moment.

Yours sincerely