ARIF HABIB COMMODITIES

(An Arif Habib Group Company)

April, 2013

Arif Habib Group serves over 100,000 local /international clients base

Our success factors include continuous investment in Intellectual Capital, strong IT Strategy, capacity building and insistence on Best Practices

• The Arif Habib Group ranks amongst the largest and oldest financial services in Pakistan today

• Managing assets in excess of PRs. 37 billion (US$ 617 million), the Group holds interests in the securities & commodities brokerage, investment and financial advisory, investment management, commercial banking, commodities, private equity, cement and fertilizer industries

Why Arif Habib

Commodities?

We are a wholly owned

subsidiary of Arif Habib

Limited. We are one of

the top most and oldest

broker registered with

Pakistan Mercantile

Exchange. We stand

amongst the pioneers of

the country’s commodity

brokerage industry.

Industry Leaders

Professionals Team & Qualified Analysts

Round the Clock Superior Service (5am-2am)

Research on range of commodities including Agriculture, Precious Metals, Base Metals and Energy

Daily Research, SMS Alerts and Regular Trading Calls

Online & Offline Trading

Lowest commission starting with Rs.25. We offer Account Opening from Rs.25,000/-

Minimum margin requirement at 4.25%

Customized market watch for PMEX

Strong Relationship Management

Focused Investor Education

Pakistan Mercantile

Exchange (PMEX) –

technology driven, de-

mutualised, on-line

commodity futures

exchange in Pakistan

Trades Regulated by

SECP with No Credit

risk

Pakistan’s first and only Commodity and Futures exchange –operational since Apr 2007

Active Contracts at PMEX are Gold 1, 10, 100 Troy Ounce, Silver 10, 100, 500 Troy Ounce and Crude Oil 10, 100 Troy Ounce. TOLAGOLD Physical Delivery. Other Contracts include Sugar, Wheat, Rice , Palm Oil

3 Contracts trade at a point of time for futures. E.g.

Dec, Jan, Feb

First Physical Gold Delivery in Aug 2007 5 Contracts for Spot Mon, Tue, Wed , Thurs, Fri

Biggest Exchange of Pakistan in terms of Traded Volumes by Jun 2010. Daily Traded Value has crossed Rs.8bn between 2011-12

Guaranteed Settlement on T+0 basis

Contract Expires on Last Friday of Preceding Month

Category of Investor in Futures Markets

Financial Institutions

Agricultural - Farmers

Industries

Individual/Retail Investors

Government

Suppliers discover information about future prices of commodities

Speculators

Hedgers to transfer risk to some other party

Arbitrageurs to take advantage of price difference in different markets

Categories of traders in Futures Markets

Hedgers

Producers – Farmers

Consumers – Refineries, Food processing companies

Speculators

Institutional proprietary traders

Brokerage Firms

Spot Commodity traders

Hedge funds

• Supplier

Farmers, miners, oil producers etc

Arbitrageurs

Brokerage Firms

Investors

Pakistan Commodity

Exchange trade in

Spot/Futures

A market in which multiple buyers and sellers trade commodity -linked contracts on the basis of rules and procedures laid down by the exchange.

This includes:

Spot trade for immediate delivery of the commodity (Physical)

Forward contracts (Off Market)

Futures trading (Through Exchanges)

Market takes global perspective in to account to determine prices including Global Financial Crises, EU Stability, World Economic Growth Forecasts, Employment Data, Interest rate environment, US Dollar/Euro Parity, Safe Haven, Ease of Access and Central Bank/Government actions

Pakistan Mercantile Exchange (PMEX) provides Overnight Liquidity and Currency Risk Hedge at no cost

Biggest Exchange in terms of Membership

Investment Portfolio diversification

Best Risk Management Practice in the country

100% institutional shareholding

Low cost of trading starting with Rs.25 in Gold, Rs. 45 in Silver

and Rs35 in Crude Oil

Low Margins - High leverage with no cost (In Gold 22 times,

Silver and Crude Oil 13 Times)

Hedging against Inflation/ Arbitrage with other exchanges

Highly liquidity and Idle Balances earn interest

Pakistan Mercantile Exchange –Products

International Commodities – Most traded on PMEX

Gold – 1 ounce contract (5 Year return over 200%, 3Year return over 100%, 5 Year Annual Return over 31% upto 2012 in rupee terms)

Crude Oil – 10 barrel contract (17% 5 Year Annual Return in Rupee Terms)

Silver-10/100 ounces contract (28% 5 Year Annual Return in Rupee Terms)

Domestic Commodities

IRRI-6 Rice/Wheat/Sugar/Palm Oil Futures Contract

Financial Futures

KIBOR Futures Contract

Pakistan Mercantile

Exchange– Trading Value

traded over Rs.118bn by

August 2011(6-fold growth in

one year’s time)

Contracts traded 110,000 on

average during 2011-12(160%

YoY increase)

Pakistan Mercantile ExchangeBenefits of diversification - an illustration

USD/PKR KSE100 Gold Silver Crude

USD/PKR 1 -0.02 0.56 0.02 -0.20

KSE100 1 0.46 0.70 0.67

Gold 1.00 0.74 0.21

Silver 1 0.67

Crude 1

Returns* 0.5% 14.6% 22.2% 71.2% 15.1%

Inflation adj.* -12.4% 1.8% 9.3% 58.3% 2.2%

Diversifying portfolioCorrelation Matrix

*based on relative returns average since Jul-2010 to Dec-2011

PMEX Trading ProceduresOnline Trading

Market Timings: 5AM to 2AM

Contract Period: Physical Delivery: Upto 7 Days, Cash Settled Contracts: 30, 60, 90 days

Order Placement: Investor completes and delivers Account opening form along with check (Online fund transfer facility) to obtain Login ID and Password from Arif Habib Commodities to enter main screen client trade portal of PMEX

Single Screen customized market watch along with online account statement, reporting on clearing and settlement

Investment in Gold

Used as Jewelery major

demand in India

And alternative asset major

demand by China

Currency Hedge(Average rupee depreciation stood at Annual 7.5% during 20 year period ending 2009)

Inflation Hedge (Average CPI stood 7.5% per annum and gold return over Annual 21% during 10 year 2002-2012)

Taxation(PMEX donot deduct)

Leverage at no cost(13:1 for Oil, Silver and 22:1 for Gold)

Diversification

Exposure to Global Economy

No Local Manipulation

Safe Haven

Long/Short Positions

Liquid Investment

Lack of reliable alternative assets

Hedge against uncertain future

Gold can be sold to someone outside Pakistan

Locals loosing faith in economic growth

Contact Us:Arif Habib Commodities

(An Arif Habib Group Company)60-64 Karachi Stock Exchange Building

Stock Exchange Road Karachi -74000

Commodities Help Desk:Phone: 32461104-734-2512-2598

Fax: +92 21 32462830Email: commodities@arifhabib.com.pk

Website: www.arifhabibcommodities.comFollow us on

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