Houston, Texas, August 3, 2006 - In a month characterized by strong earnings reports in the energy and pharmaceuticals sectors; mixed performance among initial public offerings; lower stock market performance as compared with May, and growing tensions in the Mideast, the percentage of investors’ assets allocated to fixed income assets increased again in July 2006 from a month earlier. Allocations to equities fell for the month and now stand a full percentage point below their level at July 31, 2005. This asset-allocation performance is based upon figures compiled by CPMKTS^sm The Capital Markets Index, the first and only measure of the total return of the U.S. capital markets.

CPMKTS, created by Dorchester Capital Management Company, is carried on The American Stock Exchange under the symbol CPMKTS, with data updates every 15 seconds. The Amex also publishes sub-indexes CPMKTE, CPMKTB and CPMKTL, tracking equities, bonds and liquidity. Dorchester utilizes market data and government statistics to adjust weights used in calculating CPMKTS, ensuring the index accurately reflects the total return of the markets, based on actual asset allocation.

"At 33.15% of total market value, or $8.939 trillion, fixed-income investments not only were higher than the 32.84% reported in June 2006, but also were above July 2005’s level of 32.46%," said Warren Schmalenberger, Dorchester’s founder and chief executive officer. He added that equities, as a percentage of total market value, fell to 51.43% at the end of July 2006, down from 51.74% at the end of June and 52.35% a year earlier.

Liquid investments remained steady at 15.42%, their same percentage as a month earlier, and up from 15.19% a year before. Liquid investments are short-term money market issues - such as Treasury bills, certificates of deposit and commercial paper - that can be converted quickly into cash.

Mr. Schmalenberger noted that the asset-allocation changes took place at the same time that the energy sector reported its earnings for the second quarter rose more than 50% from a year earlier - with strong performances across all exploration and production, integrated oil and gas, equipment and services, and pipelines - and while pharmaceutical companies announced earnings increases of nearly 50%.

He added that July 2006 also was a month when the number of IPOs in the U.S. declined significantly. According to Dealogic, for instance, just nine IPOs were completed in July, raising $1.44 billion, compared with 19 deals, raising $2.84 billion in June, and 17 IPOs, raising $2.61 billion, in July 2005.

"It is important to view investors’ asset-allocation decisions and actions in the full context of market conditions and external events, and to remember that the markets regularly factor future events into buying and selling decisions even before they occur," Mr. Schmalenberger said. "July was a month when a great many factors were at play. Some, such as the strong earnings performances in selected sectors, may have been expected by many, while the heated tensions in the Mideast may not have been."

At July 31, 2006, the value of the investment-grade capital markets was $26.962 trillion, up from $26.835 trillion a month earlier, but down from $27.216 trillion at July 31, 2005.

About Dorchester Capital Management Co.
Dorchester Capital Management Company is a Houston-based company principally focused on designing financial products for the professional investment community. For additional information, please visit the company's Web site at www.cpmkts.com.

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