So far in Q3 2006 the NEX has been caught between a market troubled by events in the Middle East and oil prices at new records.

Clean energy stocks ride market rollercoaster

The clean energy sector has endured a torrid ride so far in 2006. The
WilderHill New Energy Global Innovation Index (ticker symbol NEX), which
tracks a selection of global clean energy stocks, surged 43.8% from its
value of 216.25 at the start of the year, hitting a high of 310.96 on 10th
May (up 43.8% on the year), before dropping 24.7% in just over a month to
close at a low of 234.19 on 14 June. It clawed back some territory at the
end of June to finish the second quarter at 258.66. Overall in Q1 2006 it
was up 25.1% and in Q2 2006 it was down 4.4%.

So far in Q3 2006 the NEX has been caught between a market troubled by
events in the Middle East and oil prices at new records. The NASDAQ was down
3.8% during July, while the AMEX Oil was up 4.4%. The NEX has been hit
harder by negative sentiment, closing July down around 2.5% at 252.22.
The drop in the NEX between 11 May and 15 June 2006 had four main causes:
the general market correction, which saw the NASDAQ fall 7% over the same
period; profit-taking by some clean energy investors after 18 months of
strong performance in the sector; concerns that for some companies,
particularly in the solar sector, their results did not back up valuations
of their shares; and finally, the crash in carbon prices in Europe, which
may end up affecting the prospects of a number of NEX constituents.
Only two sectors of the NEX finished in positive territory, likely boosted
by the high oil prices and positive sentiment about commercial viability of
the technologies: wind, and bioenergy (which encompasses biofuels, biomass
and waste-to-energy). Solar was among the worst performers, falling back
11.8%, ending an extraordinary two-year run.

"We were not particularly surprised to see the correction in the NEX in Q2
2006. Our clients had been looking at the valuations of some solar and fuel
cell stocks with some trepidation before it occurred. Overall the clean
energy industry is in good health. There are a few supply bottlenecks, but
we are seeing strong prospects for long-term growth and value creation,"
said Michael Liebreich, CEO of New Energy Finance, the company which
co-publishes the NEX along with their US partners Robert Wilder of
WilderShares and Josh Landess, an experienced clean energy analyst.
The Q2 rebalance of the NEX saw the addition of four companies and the
removal of five. This leaves the NEX with 86 constituents with an aggregate
market value of $286 billion, an increase of $5.0 billion on Q1. However,
this increase was driven by the larger size of the new arrivals. The decline
in the value of the NEX would otherwise have seen $ 4.5 billion wiped off
its aggregate capitalisation during the quarter.

Three of the new entrants resulted from Initial Public Offerings (IPOs),
with an active market in the first part of the quarter raising a record
$5.6bn before the market correction began.

A successful IPO from REC of Norway raised $1.2 billion made it the largest
pure-play clean energy company, with a market capitalisation of $6.8
billion. It knocked Suzlon, the Indian wind turbine maker, off top spot and
extended the NEX's global presence to Oslo. VeraSun Energy, the US biofuels,
biomass and waste-to-energy group, and German silicon wafer supplier Wacker
also listed successfully, raising $253m and $1.5 billion respectively. Also
welcomed to the index was China's Tebian Electric Apparatus Stock Company, a
Shanghai-listed transformer, foil and solar equipment manufacturer.
Leaving the index were Applied Films Corp, the thin-film deposition company
that is being acquired by Applied Materials, NASDAQ-listed fuel cell
consultancy, Entegris, GrafTech International, the NYSE-traded synthetic
carbon materials manufacturer, Italian Exchange-quoted waste-to-energy group
Hera, and Toronto-listed project developer Maxim Power.
After these changes, solar and wind are the largest sectors on the index,
with 17 and 12 stocks respectively. Companies listed in countries that have
signed up to the Kyoto Protocol were down 2%, while groups quoted on the
exchanges of non-signatories US and Australia fell 8.1%.

New Energy Finance publishes regular updates on changes in the value of the
NEX in its bi-monthly New Energy Finance Briefing.

About New Energy Finance:
New Energy Finance is a specialist provider of financial information and
analysis on renewable energy and low-carbon technologies.
Industry sectors covered are as follows: renewable energy (wind, solar,
marine, geothermal, mini-hydro); bioenergy (biomass, biofuels); energy
architecture (supply- and demand-side efficiency, smart distribution, power
storage, carbon capture & sequestration); hydrogen & fuel cells; carbon
markets and associated services. New Energy Finance covers all stages of
investment activity, including venture capital, private equity, public
markets, asset-based finance and M&A. The company has offices in London,
Washington, New York, Beijing, Shanghai, New Delhi and Brisbane, and a staff
of fifty.

Services include the New Energy Finance Briefing (Global and US versions),
the New Energy Finance Desktop, the world's largest database of investors
and investments in clean energy, and the Newswatch service which keeps
investors up-to-date with financial developments in the market. New Carbon
Finance, a division of New Energy Finance, provides price forecasting
services for the European Carbon Markets. New Energy Finance also publishes
reports on clean energy sectors and countries, undertakes research and
consultancy, and runs senior-level networking and briefing events.
In January 2005 New Energy Finance began publishing the world's first global
clean energy stock market index; since January 2006 the Wilderhill New
Energy Global Innovation Index (ticker symbol: NEX) has been calculated and
distributed by the American Stock Exchange. In September 2005 the company
was named Euromoney Ernst & Young Renewable Information Provider of the
Year. New Energy Finance counts the leading financial institutions and
corporates active in the sector among its clients.