PAC CHALLENGE<0166> - Announcement

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.

                        PACIFIC CHALLENGE

                Pacific Challenge Holdings Limited
        (incorporated in Bermuda with limited liability)

DISPOSAL OF THREE WHOLLY OWNED SUBSIDIARIES OF THE COMPANY

The Board wishes to announce that the Company has entered into the 
Agreement on 28th March, 2000 with Steppington, an independent 
third party, for the Disposal of the entire share capital of three 
of its wholly owned subsidiaries: PCN, PCF and PCS.

The board of directors (the ``Board'') of Pacific Challenge 
Holdings Limited (the ``Company'') wishes to announce that on 28th 
March, 2000, the Company has entered into an agreement (the 
``Agreement'') with Steppington Holdings Limited (``Steppington'') 
for the disposal  (the ``Disposal'') of the entire share capital 
of three of its wholly owned subsidiaries, namely, Pacific 
Challenge Nominees Limited (``PCN''), Pacific Challenge Futures 
Hong Kong Limited (``PCF'') and Pacific Challenge Securities 
Limited (``PCS''). Steppington and its beneficiaries are 
independent third parties not connected with any of the directors, 
chief executive and substantial shareholders of the Company or its 
subsidiaries or an associate (as defined in the Rules Governing the 
Listing of Securities (``Listing Rules'') on the Stock Exchange of 
Hong Kong Limited (the ``Stock Exchange'')) of any of them.  
Steppington is not a company or a subsidiary of a company listed 
on the Stock Exchange.

Consideration

Pursuant to the Agreement, the cash consideration of HK$29,300,000 
(``Consideration'') will be payable by Steppington to the Company 
as to 10% upon signing of the Agreement and the balance will be paid 
in cash upon completion of the Agreement, which is expected to be 
on or before 28th August, 2000. The Consideration was arrived at 
after arm's length negotiations between the Company and Steppington, 
and with reference to the aggregate net asset value of PCN, PCF and 
PCS plus a premium.

Condition of the Agreement

The Agreement is conditional upon the granting of:

1.      the approval of the Stock Exchange on the transfer of the shares 
of PCS and, where applicable, the consequential changes (if any) 
in the directorate of PCS and the maintenance of the two Stock 
Exchange Trading Rights by PCS after the transfer;

2.      the approval of the Securities and Futures Commission (the 
``SFC'') on the transfer of the shares of PCF and, where applicable, 
the consequential changes (if any) in the directorate of PCF and 
the maintenance of the one Futures Exchange trading Rights by PCF 
after the transfer; and

3.      the approval of the SFC on the transfers of the shares of PFS 
and the shares of PCF and the consequential changes (if any) in the 
directorate of PCS and PCF.

Reasons for the Disposal and future plans of the Company

PCN is principally engaged in the provision of limited nominee 
services, while PCF and PCS are principally engaged in futures and 
stock broking respectively.  The Board considers the Disposal to 
be in line with the Company's press announcements dated 18th 
February, 2000 and 15th March, 2000 as PCN, PCF and PCS, operating 
the traditional brokerage business, are expected to face increasing 
competition and reduced commission levels in the brokerage industry 
in the coming years.  The net profits before tax of PCN, PCF and 
PCS for the year ended 31st March, 1999 were approximately HK$0.005 
million, HK$0.284 million and HK$3.334 million respectively.  The 
aggregate net tangible asset value of PCN, PCF and PCS after 
distribution of all their retained earnings as dividends to the 
Company upon completion of the Agreement will be approximately 
HK$17.3 million, which represents approximately 8.4% of the 
consolidated net tangible asset value of the Company as at 31st 
March, 1999.  

The Company continues to carry on its fee-based corporate finance 
and investment advisory activities, loan arranging, and debt 
financing through its remaining subsidiaries.  The Company also 
intends to increase its focus on the Internet business in alliance 
with E1 Technology Limited, the single largest shareholder of the 
Company.

The Board considers the terms of the Agreement to be fair and 
reasonable and are in the interests of the Company.

Use of proceeds

The net proceeds from the Disposal will be used as general working 
capital for the Group.  Currently, the Company has not allocated 
the net proceeds for any specific use.

Appointment of executive director of the Company

Further to the announcement dated 15th March, 2000, Mr. Shah Tahir 
Hussain was appointed as an executive director of the Company 
effective from 27th March, 2000.

General

This announcement is  being made by the Company to keep the market 
and the Shareholders informed of the Company's developments 
pursuant to the general obligation imposed by paragraph 2 of the 
Listing Rules.

By Order of the Board
Pacific Challenge Holdings Limited
Dr. Lily Chiang
Chairman

29th March, 2000