City Lon Inv Regulatory News (CLIG)

CITY OF LONDON INVESTMENT GROUP PLC

("City of London" or "the Group")

tRADING UPDATE FOR THE YEAR TO 31 MAY 2010

City of London (AIM: CLIG), a leading emerging markets asset management group, provides a trading update for the financial year ended 31 May 2010. The numbers that follow are all unaudited.

Funds under management were US$4.38 billion (£3.01 billion) at 31 May 2010, representing an increase since 31 May 2009 of US$0.88 billion, or 25% (£0.84 billion, 38%). Over the same period the MSCI Emerging Markets Index (MXEF) increased by 20%, with the difference of 5 percentage points representing net new money from clients. In addition, as at the year end, mandates which had been awarded but had not yet funded represented a further US$0.19 billion.

For the year to 31 May 2010, City of London expects that pre-tax profits will be approximately £10.4 million (2009: £5.4 million), and that profits after an anticipated tax charge of £3.4 million (33% of pre-tax profits) will be approximately £7.0 million (2009: profits of £3.8 million after a tax charge of £1.6 million, representing 29% of pre-tax profit). Basic and fully diluted earnings per share are expected to be 28.5p and 26.9p respectively (2009: 16.1p and 15.0p).

The Group's policy is to pay dividends which are covered 1.5 times by earnings per share, although exceptional market circumstances in 2008-9 prompted a temporary reduction in the cover level, and the Group stated at that time an intention to return to 1.5 times cover within a two year period. Accordingly, the Board is recommending a final dividend of 15p per share (2009: 10p), which would bring the total for the year to 22p (2009: 15p), covered 1.30 times by earnings per share (2009:1.07 times).

Looking forward, marketing efforts are primarily focused on the equity business, as well as global developed closed end funds and the frontier emerging markets strategy, all of which continue to attract interest from investment consultants. In the UK, a senior fund manager specialising in global closed end funds was appointed to manage an absolute return strategy that takes advantage of discount anomalies on a hedged basis. In Singapore, we have appointed an experienced Asian equities manager to complement the existing team. As is always the case, these products will only be marketed once they have established a strong and clear track record.

The process of internalising the Group's marketing function continues, with the strategy of extending the Group's contacts for new business with the consultant community remaining at its core. During the period, a number of the Group's equity products were approved by three global investment consultants for consideration by their institutional clients. The Group is optimistic with regard to future mandates and now has dedicated marketing resources in place in London and Singapore, as well as in the US.

In 2008 the Group announced plans to migrate its shares from AIM to the Full List of the London Stock Exchange, although these plans were subsequently put on hold as a result of extreme market turbulence. The Board now considers that the time is right to re-activate the listing plan, and the current intention is that subject, inter alia, to shareholder approval, the move to the Main Market will take place in October 2010. A special resolution was passed at the Group's Annual General Meeting in October 2008 to support the delisting of the Group's shares from AIM, but the board considers that in view of the lapse of time a fresh resolution should be proposed, and the notice of a general meeting for that purpose will be sent to shareholders shortly.

As previously announced, Barry Olliff plans to sell a limited number of shares at specific price levels. Following his sale of 125,000 shares at 310p in February 2010, there remain 375,000 shares to sell at 310p, 500,000 at 350p, and 500,000 at 400p.

City of London Investment Group expects to announce final full year results for the year to 31 May 2010 on 13 September 2010.

* prior year final plus current year interim

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This announcement and supporting presentation will be posted to the Company's web-site, www.citlon.co.uk. For further information, please contact: