Trading Update

City of London Investment Group PLC
29 October 2007



For release at 0700h,  29 October 2007


                      CITY OF LONDON INVESTMENT GROUP PLC

                       ('City of London', 'the Company')


                           ANNUAL GENERAL MEETING


                   TRADING UPDATE AND NEW DIVIDEND POLICY 


At the Company's Annual General Meeting to be held at its offices at 10
Eastcheap, London, EC3M 1LX today at 11.30 am., the Chairman of City of London
Investment Group (AIM: CLIG), Andrew Davison, will update shareholders as
follows:

'The current financial year to 31 May 2008 has started positively for City of
London. Funds under management at today's date have increased to US$4.8
billion from the US$3.8 billion at 31 May 2007. The increase is a reflection of
good performance of the emerging markets in which the Company principally
invests and the addition of further funds secured from both existing and new
clients.

'The strong performance of funds under management, our continued focus on
control of costs and the operational gearing inherent in the business, have fed
through to a sharp increase in profitability. At the end of the first five
months of the current financial year, unaudited pre-tax profit has increased by
73% to £4.5million, compared to £2.6 million for the same period last year. As a
result of the Company's performance in the year so far, the Directors believe
that, subject to market conditions, City of London will exceed current market
expectations for the year to 31 May 2008 in respect of both profitability and
funds under management.

'The Company's dividend policy is based on paying dividends that are twice
covered by net earnings with the payout split one third/two thirds between the
interim and final dividend. As we have previously advised shareholders, City of
London is a cash generative business with little requirement for significant
additional capital or operating expenditure. This has not changed. Retained cash
balances have risen from £6.6 million at the year end to in excess of £8 million
today - (before the payment of the proposed final dividend for 2007 of 7p per
share, which will cost £1.7 million).

The Board has determined that the level of cash in the Company is now, and is
forecast to remain, significantly above the cash requirements of the business.
Accordingly, it is intended that the distribution policy be based on earnings of
one and a half times instead of the current two times. Subject to November's
performance, the Board intends to recommend an interim dividend of approximately
6p per share for the current year, payable in March 2008.

'The Company will next update shareholders with its quarterly announcement of
funds under management as at 30 November in early December 2007.'



                                  -ends-





For further information contact:
Doug Allison (Finance Director)              Simon Hudson/Andrew Dunn
City of London Investment Group PLC          Tavistock Communications
Tel: [phone]                           Tel: [phone]

Jeff Keating / Fred Walsh / Simon Brown
Landsbanki Securities (UK)
Tel: [phone]




NOTES TO EDITORS

City of London is an asset management group whose principal activity is
providing emerging market asset management products and services predominantly
to institutional investors via its principal operating company City of London
Investment Management Company Limited. The Group is based in the UK and also has
offices in the US and Singapore. Clients include some of the US's leading blue
chip institutions and endowment funds.

With total funds under management of approximately US$4.8 billion, the Group
manages several Open Ended Funds as well as a number of segregated accounts. The
Group's fund mandates are mainly in emerging markets, although the Group has
more recently diversified its asset management product portfolio by the launch
of a natural resources fund and has also seeded three new funds: a global fund,
a frontier fund and an emerging markets yield fund. The Group seeks to provide
capital growth for clients through active country allocation and stock
selection.




                      This information is provided by RNS
            The company news service from the London Stock Exchange