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JPMorgan Launches Major New Stream of Structured Investments

May 05, 2008

Sydney, May 5, 2008 – JPMorgan, one of the world’s leading investment banks and structured investment providers, today launched three new structured investment products in response to a rapidly growing demand for ‘home grown’ investment opportunities that combine familiar asset classes with the higher growth potential of alternative investing.

Mr David Jones-Prichard, Vice President, Equity Derivatives and Structured Products with JPMorgan said: “We’ve seen significant and growing local demand in the last few years for innovative structured products, particularly among self managed super funds. These newest products have been developed to respond to market feedback suggesting planners and clients are seeking exposure to familiar asset classes with a ‘twist’.

“This demand is driving greater product diversity and issuance. In 2007, some AUD $4 billion was issued in structured products, up 50 per cent on the previous year. We fully expect this trend to continue as investors become more sophisticated and see opportunities to gain leveraged exposure to alternative markets and investment strategies without risking their capital or sacrificing income.”

The new products offer capital protection if held until maturity, and require a minimum investment of AUD $10,000 and in multiples of AUD $1,000 thereafter.

The structured products launched today are:

ASX 20+

The ASX 20+ provides retail investors with exposure of up to 200 per cent to 20 of the largest market cap stocks on the ASX (ASX 20), with the potential for additional income through participation in the Permal Strategic Allocation Fund, a global hedge fund managed by leading alternative asset manager Permal Group.

At a glance:

• Up to 200 per cent exposure to the ASX 20
• 10 per cent potential income per annum (Years 1 - 6); uncapped income in Year 7
• Non-recourse loan facility that may provide opportunities for investors and Self Managed Superannuation Fund Trustees to apply leverage to their investment
• Maturity payout in the form of ASX 20 stocks, or cash
• 100 per cent principal protection if held until maturity: 1 July 2015
• Offer period from 5 May 2008 to 23 June 2008

EM +

This is the second issue of JPMorgan’s successful EMI + product. First launched in February this year, EM + offers the high growth potential of emerging markets through tracked exposure to the iShares MSCI Emerging Markets Index Fund. The exchange-traded fund is cross-listed on the Australian Securities Exchange (ASX: IEM), removing the currency fluctuation risks normally associated with foreign equity investment. Investors gain access to the earnings potential of up to 25 emerging market equities through EEM US – all with the security of principal protection.

At a glance

• 100 per cent principal protection if held until maturity: 1 July 2013
• Annual coupon payments capped at eight per cent providing income for investors during the investment term
• No foreign exchange risk – all returns are hedged to Australian dollars
• Leverage suitable for use within Self Managed Superannuation Funds
• An offer period from 5 May 2008 to 23 June 2008
• A five year investment period

Trio +

Trio + offers investors a themed investment opportunity by spreading their exposure across three distinct indices: the MSCI Emerging Markets Fund, Berkshire Hathaway Shares (predominantly property and insurance) and the JPMorgan Commodity Curve Index (agriculture). The exposure to the three themes can reach a maximum of 200 per cent, potentially magnifying the capital growth received over the term. The fund has potential to earn an eight per cent annual income.

At a glance

• 100 per cent principal protection if held until maturity: 1 July 2013
• Multi-asset trading strategy that aims to return 8 per cent per annum
• An offer period from 5 May 2008 to 23 June 2008

Contact:

About JPMorgan
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of US$1.6 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients under its JPMorgan and Chase brands. Information about the firm is available at www.jpmorganchase.com or www.jpmorgan.au.

About Structured Investments
Structured investments provide a versatile set of tools for investors looking to combine some of the best features of equity and fixed income. These investments can combine downside protection, growth and income. Performance can be based on the performance of a range of asset classes such as equity indices, global property and commodities.

The risk and return profiles of structured investments can provide additional diversification to an investor’s portfolio, enabling that investor to gain exposure to a select type of asset or group of assets, with the potential to reduce their overall portfolio risk.

A key feature of many structured investments is principal protection, which may be appropriate for investors looking for growth opportunities but wanting the additional security of reduced risk to their principal investment. Maturities generally range from three to seven years, and clients should intend to hold the investments to maturity.

About the Permal Group
The Permal Group, one of the oldest and largest alternative asset management firms, provides investment opportunities in directional and absolute return strategies across global financial markets. Permal offers access to independent investment managers worldwide through its multi-manager and single manager funds, separate accounts, and participation in structured products. Establishing its asset management business over three decades ago, Permal has grown to over $37 billion in assets under management and has approximately 190 employees worldwide (as at 31 December 2007).