SGX AsiaClear<SUP>TM</SUP> Introduces Clearing For Tanker TC5 Derivatives

The Singapore Exchange (SGX) today announced that SGX AsiaClear^TM will offer the clearing of Tanker Clean Route 5 (TC5) Forward Freight Agreement (FFA) from Thursday, 28 September 2006.

This is in response to market feedback on the increased hedging activities in the TC5 route for shipping refined oil products from Middle East Gulf to Japan and the need for credit-risk mitigation. SGX AsiaClear^TM is therefore well-positioned to provide its central counterparty clearing services for users of TC5 FFAs, from Asian opening hours to New York close.

The clearing of TC5 FFAs will commence with the October 06 Contract Month onwards. The final settlement of these contracts is derived from the arithmetic average of Platts' daily spot assessment prices in the contract month.

This new route enhances the SGX AsiaClearTM suite of over-the-counter (OTC) products, which are designed to meet the dynamic needs of commodity trading and shipping in Asia. SGX AsiaClear^TM currently also clears Tanker FFAs for TD3 and TC4 Routes in addition to Dry Bulk FFAs and Oil Swaps.

Mr. Raymond Lim, Minister for Transport and Second Minister for Foreign Affairs, announced the introduction to the TC5 FFAs at the 3rd Singapore International Maritime Awards held at Singapore's Shangri-La Hotel tonight. He said, "The introduction of this new freight index for the Arabian Gulf-Japan route is a result of close consultation with the industry and reflects the Singapore Exchange's ability to respond quickly to market demands. In a volatile market where risk management plays an increasingly important role, I urge companies involved in shipping, chartering and commodity trading to leverage on Singapore's sound infrastructure and clearing network to manage their market and credit risks."