10:17     REX FINANCIAL H<00555> - Announcement (1)                           

    The Stock Exchange of Hong Kong Limited takes no responsibility for the   
    contents of this announcement, makes no representation as to its          
    accuracy or completeness and expressly disclaims any liability            
    whatsoever for any loss howsoever arising from or in reliance upon the    
    whole or any part of the contents of this announcement.                   
                                                                              
                                                                              
    REXCAPITAL Financial Holdings Limited                                     
    (Incorporated in Bermuda with limited liability)                          
    (Stock code: 555)                                                         
                                                                              
    ANNOUNCEMENT                                                              
    Termination of Sale of REXCAPITAL Financial Group Limited                 
                                                                              
    Reference is made to the announcement jointly issued by REXCAPITAL        
    International Holdings Limited and REXCAPITAL Financial Holdings Limited  
     ("the Company") dated 8 April 2005 regarding further extension of        
    completion date of the sale and purchase agreement dated 12 January 2004  
     in relation to the entire issued share capital of REXCAPITAL Financial   
    Group Limited (together with its subsidiaries, the "RFGL Group") entered  
     into between the Company as vendor and REXCAPITAL Group Limited, a       
    wholly-owned subsidiary of REXCAPITAL International Holdings Limited, as  
     purchaser (the "Purchaser"), as amended and supplemented by the          
    supplemental letters dated 8 April 2004, 27 May 2004, 29 June 2004, 29    
    July 2004, 25 August 2004, 23 September 2004, 25 October 2004, 26         
    November 2004, 29 December 2004, 4 January 2005, 28 January 2005 and 8    
    April 2005 (the "Sale and Purchase Agreement"). The disposal of           
    REXCAPITAL Financial Group Limited contemplated under the Sale and        
    Purchase Agreement (the "Disposal") was for a total consideration of      
    HK$229,000,000 and it constituted a major transaction of the Company. As  
     previously disclosed, the supplemental letters were entered into to      
    extend the long stop date of the Sale and Purchase Agreement until all    
    the conditions of the Sale and Purchase Agreement were fulfilled and to   
    extend the completion date of the Sale and Purchase Agreement to allow    
    the Purchaser to conduct an update due diligence review on the RFGL       
    Group.                                                                    
                                                                              
    Termination                                                               
                                                                              
    The board of the directors (the "Board") of the Company wishes to inform  
     that a notice of termination was received by the Company on 6 May 2005   
    to terminate the Sale and Purchase Agreement with immediate effect. The   
    Purchaser was not satisfied with the results of the update due diligence  
     it conducted on the RFGL Group. The Board, having considered the notice  
     of termination, has resolved to terminate the Sale and Purchase          
    Agreement. In reaching this decision, the Board has taken into account    
    legal advice obtained by the Company and the changes in the financial     
    position of the RFGL Group to date.                                       
                                                                              
    Impact of the Termination                                                 
                                                                              
    As stated in the circular of the Company dated 3 February 2004, the       
    original reasons for the Disposal was to enable the Company (i) to        
    realize its investment in financial services including broking,           
    securities margin financing and asset management at a reasonable price;   
    and (ii) to focus its resources on its other core businesses which could  
     generate a stable income stream, i.e. money lending business and         
    investment trading and holding. The original intended use of proceeds of  
     the Disposal was for additional general working capital of the Company   
    and for expansion into other business areas not restricted to financial   
    services. Given that with the termination of the Sale and Purchase        
    Agreement, the title to RFGL Group shall continue to remain with the      
    Company, the termination of the Sale and Purchase Agreement does not      
    have any financial impact on the Company and the Company continues to     
    have sufficient working capital to carry on its operations and fulfill    
    its financial commitments. The Company intends to keep the RFGL Group     
    within its group of companies.                                            
                                                                              
    Principal Business of the Company                                         
                                                                              
    The Company is principally engaged in investment holding. The             
    subsidiaries of the Company are principally engaged in the provision of   
    financial services including broking, securities margin financing,        
    investment trading and holding, money lending and asset management.       
                                                                              
    Principal Business and Financial Results of the RFGL Group                
                                                                              
    The RFGL Group is principally engaged in the provision of financial       
    services including broking, securities margin financing and asset         
    management.                                                               
                                                                              
    The unaudited results and net asset values of RFGL Group are as           
    follows:-                                                                 
                                                                              
                               2004              2003