To: Business Editor

17th September 1998 For immediate release

The following announcement was today issued to the London Stock Exchange.

JARDINE STRATEGIC HOLDINGS LIMITED

INTERIM REPORT 1998 HIGHLIGHTS

• Severe Asian recession impacts earnings and investment values

Results

"The recession in Asia will continue to impact the performance of our underlying businesses for some time. Nevertheless, they remain soundly financed and well able to withstand the current economic turmoil."

Henry Keswick, Chairman
17th September 1998

The interim dividend of US?.60 per share will be payable on 24th November 1998 to Shareholders on the register of members at the close of business on 2nd October 1998. The share registers will be closed from 5th to 9th October 1998, inclusive.

JARDINE STRATEGIC HOLDINGS LIMITED

INTERIM REPORT 1998

PERFORMANCE

Jardine Strategic Holdings Limited today announced that the significant economic deterioration in the Asia-Pacific Region continues to have an effect on the Group businesses. Jardine Strategic's net profit for the first six months of 1998 was US$109 million, a decrease of 37% over 1997. Excluding non-recurring items from both periods, profit declined 16%.

The non-recurring items in the first half of 1998 relate primarily to the profit in Dairy Farm arising from the sale of its European retail interests, offset by provisions in Hongkong Land against certain Southeast Asian assets and in MCL Land against property projects.

Earnings per share for the first half of the year were US?1.89, a decline of 41% compared with the diluted earnings per share for the same period in 1997. Excluding non-recurring items in both periods, earnings per share declined 24% to US?1.76.

At 30th June 1998, net assets per share, based on the market value of the Company's holdings, were US$2.97, compared with US$4.14 as at 31st December 1997, reflecting primarily the fall in value of the interests in Jardine Matheson and Hongkong Land.

The Board has declared an unchanged interim dividend of US?.60 per share.

GROUP REVIEW

Turning to the operations, the Chairman, Henry Keswick, said that Jardine Matheson reported a 33% decline in underlying profit in the first half to US$101 million. Of its businesses, excluding those held through Jardine Strategic:

• Jardine Pacific recorded a profit before non-recurring items of US$25 million in the first half, a decline of 40%. The poor economic environment impacted Marketing & Distribution, although Restaurants performed well. Engineering & Construction produced a steady performance. After a satisfactory first half, the profitability of Airport Services will be affected by the costs associated with the move to the new Hong Kong International Airport. Jardine Transport Services showed improvement, but Property Services had a difficult six months. The volatile financial markets and an increase in non-performing loans also affected the instalment finance business.

  Jardine Pacific has now largely completed its divestment of non-core activities and is focusing on strengthening the market positions of its continuing businesses.

• Jardine International Motors, 75% held, reported a profit of US$28 million, a decrease of 12% excluding the exceptional item in 1997. Turnover was US$1,860 million, a 69% rise, principally due to the BPW and Appleyard acquisitions in the United Kingdom in 1997. An order backlog sustained Zung Fu in the first half, but the outlook is poor in Hong Kong which, like the group's other Asian operations, is being impacted by the economic downturn. In the United Kingdom the result was affected by the higher than expected reorganization costs in Appleyard and lower used car values in its vehicle finance business. Some improvement was seen in France, and there was a growth in profit in California. The full year's performance will be below that of 1997, and a decline in the value of its Hong Kong properties will be recognised in the year-end valuation.

• Jardine Fleming, 50%-owned joint venture, recorded a pre-tax profit for the first half of US$13 million, breaking even after tax and minorities, as volatility in the Asia-Pacific stock markets and currencies made trading difficult. Funds under management and advice at 30th June, however, were little changed from the prior year end. Fund management in Taiwan and Japan raised significant amounts of new money, and Rowe Price Fleming International, its 25%-held United States associate, continued to perform well. The group's position in its markets remains strong, but the difficult operating environment is expected to continue to affect profitability.

• Jardine Lloyd Thompson, 34% held, recorded turnover of ?19 million for the six months, compared with ?17 million in 1997. The pre-tax profit before exceptional items for the period was ?0 million, compared to ?7 million in the prior year. The benefits and cost savings arising from the merger of JIB Group and Lloyd Thompson Group at the beginning of 1997 have enhanced the results. Insurance markets continue to be exceptionally weak, and the progress that has been achieved against this background is encouraging.

Dairy Farm's sales from continuing activities for the six months were US$2,889 million, a 10% decrease over 1997 being due to adverse currency movements offsetting underlying growth. Net profit from continuing activities rose 6% to US$47 million, while gains from disposals enabled the overall net profit to increase by 118% to US$87 million. Good performances were achieved in Australia and New Zealand, although currency declines reduced their contribution. There was steady growth in Hong Kong, and a single management structure is being introduced to improve the efficiency of the retail operations. In Taiwan, the group's first joint venture hypermarket is to open by the year end. Dairy Farm has increased its investment in organizational structure and core competencies to support the growth of its retail businesses in the Asia-Pacific Region. The quality of Dairy Farm's major businesses continues to improve, and its financial strength will allow it to take advantage of investment opportunities.

Hongkong Land's interim profit was US$169 million, an 18% decline over the first half of 1997 due largely to a provision of US$30 million against certain Southeast Asian assets. Underlying earnings per share were steady at US?.87. Occupancy levels remain high in its Hong Kong portfolio despite the increasing competition. But market rents have fallen sharply, which will impact results increasingly during the course of the three-year rent review cycle. Upgrading of the group's properties in Hong Kong continues, and preparations are under way for the redevelopment of 11 Chater Road. Good progress is being made on its developments in Hong Kong, Singapore and Manila, although market conditions have weakened considerably. A decrease of some 35% in the value of its Hong Kong investment properties is believed to have taken place so far this year, in line with the Grade 'A' market, and further declines are likely. The group will revalue its investment properties at the year end, at which time it may also review the values of its development properties. Hongkong Land retains the financial capacity to undertake its current development programme, but a cautious approach is being taken to further new projects.

Mandarin Oriental suffered from the effects of declining travel and tourism in Asia Pacific, with trading profit falling 52% to US$23 million. Net profit declined 72% to US$10 million with higher interest costs and a relatively larger tax charge. There was a significant reduction in visitor arrivals in Hong Kong, although the group's hotels did well to increase market share. In London, the extensive renovation programme of Mandarin Oriental Hyde Park is currently affecting results. Mandarin Oriental, Manila achieved profit growth through cost control and The Oriental, Bangkok had a good six months. However, the group's other Asian hotels made a reduced contribution. Kahala Mandarin Oriental, Hawaii reported increased revenues despite a decline in arrivals from Japan. Mandarin Oriental, Kuala Lumpur will soon open, albeit into a depressed market, while in the United States work has begun on the group's new 25%-held hotel in Miami. Declines in Hong Kong hotel values will be reflected in the revaluation of the group's assets at the year end. The group is maintaining a tight control over costs in the face of the weak markets in Asia, while ensuring that it does not compromise its standards.

Cycle & Carriage reported a net loss for the first half of S$21 million, after an exceptional charge of S$68 million against foreseeable losses on development properties, compared with a profit of S$99 million in 1997. Excluding the exceptional charge, earnings were S$47 million, down 53%. Earnings from its Singapore motor operations weakened due to the impact of lower volumes and continuing pressure on margins. In Malaysia, the non-national car market declined by 85%, and Cycle & Carriage Bintang's motor operations recorded a loss. The group's Australian motor business also suffered from adverse currency movements eroding margins. Further progress was made on a number of Singapore residential property developments and property earnings increased; however, the need for an exceptional charge produced an overall loss. There is unlikely to be any improvement in operating profit in the second half of the year.

Among Jardine Strategic's other investments, Edaran Otomobil Nasional in Malaysia, 17% held, is facing an extremely difficult operating environment in its two main businesses, motor car distribution and finance, and the company is taking steps to rationalise its operations. The Company's carrying value of its investment is currently substantially higher than the market value and will be reviewed at the year end. Connaught Investors saw a modest increase in its investment portfolio in the first half of 1998, with shareholders' funds rising to some US$550 million.

YEAR 2000

As reported in the 1997 Annual Report, the Group's operating companies have programmes in place to address their exposure to the Year 2000 issue. Work is progressing to ensure that millennium compliance is achieved for all business critical systems, and the Board continues to monitor progress on a regular basis. Costs are expensed as incurred.

OUTLOOK

In conclusion, Henry Keswick said, "The recession in Asia will continue to impact the performance of our underlying businesses for some time. Nevertheless, they remain soundly financed and well able to withstand the current economic turmoil."

1. BASIS OF PREPARATION

The unaudited half-year results have been prepared in conformity with International Accounting Standards. In accordance with the revised International Accounting Standard 12, deferred taxation is provided, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying values. This is a change in accounting policy as in previous years deferred taxation is provided to the extent that a liability or an asset is expected to be payable or receivable in the foreseeable future. The comparative figures for 1997 have been restated to reflect the change in policy. The effect of this change has been to decrease the profit after taxation and outside interests for the six months ended 30th June 1997 by US$1.3 million, to increase the profit for the year ended 31st December 1997 by US$0.2 million, and to decrease the Shareholders' funds at 31st December 1997 by US$51.7 million. There have been no other changes to the accounting policies described in the 1997 Financial Statements.

2. PROFIT AFTER TAXATION, OUTSIDE INTERESTS AND PREFERENCE DIVIDENDS

3. NON-RECURRING ITEMS

The comparative figures have been restated to include the 1997 operating results of activities disclosed as discontinued in the current period.

4. SHARE OF PROFITS LESS LOSSES OF ASSOCIATES

Results for the six months ended 30th June 1997 include the Group's share of profit on disposal of life assurance business by Jardine Matheson of US$49.9 million (US$46.9 million after tax and outside interests).

5. TAXATION

Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates and includes United Kingdom tax of US$3.8 million (1997: US$9.1 million).

6. DIVIDENDS

The convertible cumulative preference shares of US$800 each bear dividends at 7? per annum on a reference amount of US$1,000 each. In October 1997, all outstanding preference shares were compulsorily converted into fully paid ordinary shares.

A wholly-owned subsidiary undertaking has agreed to waive the interim dividend on the ordinary shares held by it.

7. EARNINGS PER SHARE

Earnings per share are calculated on the profit after taxation, outside interests and preference dividends of US$108.6 million (1997: US$172.1 million) and on the weighted average number of 913.4 million (1997: 776.7 million) ordinary shares in issue during the period. The weighted average number excludes shares held by a wholly-owned subsidiary undertaking and the Company's share of the shares held by an associate.

Earnings per share excluding non-recurring items are calculated on the profit after taxation, outside interests and preference dividends after adjusting for non-recurring profits of US$1.2 million (1997: US$44.7 million).

Diluted earnings per share are calculated on the weighted average number of 913.4 million (1997: 940.8 million) ordinary shares on the assumption that all outstanding convertible preference shares which were compulsorily converted into ordinary shares on 10th October 1997 and those converted before that date had been converted into ordinary shares on 1st January 1997. Exercise of the call warrants which expired in May 1998 would not result in a dilution of the earnings per share.

8. TERM LOANS

9. ACQUISITIONS AND DISPOSALS

Purchase of associates and other investments includes US$39.1 million relating to the acquisition of a 32% effective interest in P.T. Hero Supermarket by Dairy Farm.

Sale of subsidiary undertakings represents the disposal of Simago by Dairy Farm.

Sale of associates and other investments represents the disposal by Dairy Farm of its interest in Somerfield which it acquired in consideration for its interest in Kwik Save.

10. CORPORATE CASH FLOW AND NET DEBT

Corporate cash flow and net debt comprises the cash flows and net cash/debt of the Company and of its investment holding and financing subsidiary undertakings.

11. MARKET VALUE BASIS NET ASSETS

The Company's investment in Jardine Matheson has been calculated by reference to the market value of US$2,068.7 million (1997: US$5,262.5 million) less the market value of Jardine Matheson's interest in the Company.

Net assets per share are calculated on 907.2 million (1997: 942.2 million) shares outstanding at the end of the period which exclude shares held by a wholly-owned subsidiary undertaking and the Company's share of the shares held by an associate. The figure at 30th June 1997 assumes the full conversion of convertible preference shares which took place in October 1997.

12. INTERIM REPORT

The Interim Report will be posted to Shareholders on or about 8th October 1998. Copies may be obtained from Butterfield Corporate Services Limited, P.O. Box HM 1540, Hamilton HM FX, Bermuda; IRG plc, Bourne House, 34 Beckenham Road, Beckenham, Kent BR3 4TU, England and M & C Services Private Limited, 16 Raffles Quay #23-01, Hong Leong Building, Singapore 048581.

The interim dividend of US?.60 per share will be payable on 24th November 1998 to Shareholders on the register of members at the close of business on 2nd October 1998. The share registers will be closed from 5th to 9th October 1998, inclusive. Shareholders will receive their dividends in United States Dollars, unless they are registered on the United Kingdom branch register where they will have the option to elect for Sterling. These Shareholders may make new currency elections by notifying the United Kingdom transfer agent in writing by 5th November 1998. The Sterling equivalent of dividends declared in United States Dollars will be calculated by reference to a rate prevailing ten business days prior to the payment date. Shareholders holding their shares through The Central Depository (Pte) Limited ("CDP") in Singapore will receive United States Dollars unless they elect, through CDP, to receive Singapore Dollars.

For further information, please contact:

Jardine Matheson Limited Norman Lyle	(852) 2843 8216 (office)
Ludgate Asia Limited Martin Spurrier	(852) 2543 5413 (office)

Full text of this announcement can be accessed through the Internet at
"http://www.irasia.com/listco/sg/jsh1". It is also available through "First Call".

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