KASB Securities Limited Commodities
KASB Commodities KASB Securities
One of the oldest and largest pure agency brokerage firms in Pakistan today provides a full spectrum of products and services
Products & Services Sales/Trading/Research
FX
Fixed Income
Equities
Commodities
Client Base
We serve more than 6,700 clients
Domestic as well as global client base
Serviced through our online and offline trading platform
Affiliation
The only domestic house with a foreign affiliation on both the Equities, Sales and Research front
With our own domestic group strength and the global reach of the Bank of America Merrill Lynch (BofAML) platform, KASB provides an unrivaled breadth of knowledge and financial services
Our relationship with Merrill Lynch, which has spanned over a decade, gives us access to more than 60,000 professionals worldwide as well as unmatched access to one of the largest international distribution networks 2
KASB Commodities National Commodity Exchange National Commodity Exchange Limited (NCEL) is the first technology driven, de‐mutualized, on‐line commodity futures exchange in Pakistan. NCEL’s shareholders are Karachi Stock Exchange, Lahore Stock Exchange, Islamabad Stock Exchange, Pak Kuwait Investment Company (Pvt.) Limited, and Zarai Taraqiati Bank Ltd
Benefits of trading on the NCEL
Only recognised platform for Futures Trading under law
Regulated by SECP
Guaranteed Settlement
No Credit Risk
Segregation of Funds
Minimal Margin Requirements
Direct Market Access / Ease of Trading
Profit on Margin Account Balances
T+0 Settlement
3
KASB Commodities Global Perspective It is important to note that the Commodities Market in Pakistan is driven by Global Markets. As such, the ability to assess and understand the following is necessary.
Global Financial crisis
Government and Central Bank Actions
Current Scenario
Growth going forward
Impact on Gold
Money Supply & Central Bank Action
4
KASB Commodities Reasons For The Rise In The Price Of Gold
SAFE HAVEN – The global economic crises and uncertainty going forward has led to money flow into gold
MONEY SUPPLY – Printing of money not only in the us, but around the world
DOLLAR – Dollar movement has been erratic
CENTRAL BANKS – Uptick in central bank purchases
ACCESS TO GOLD – Investors have easier access to investing/trading gold via etfs, hedge funds, mutual funds…
The Rise Of Gold
5
KASB Commodities Gold Breakdown INVESTMENT DEMAND 10‐30% of total demand
An alternate currency for central banks
Perceived hedge against uncertainty
Beneficiary of USD weakness
ETFs‐ new investors
Safe Haven Status
JEWELLRY DEMAND 60‐80% of total demand
Display of wealth
Cultural significance specially in the sub continent
Demand linked to gold price and wedding season & religious events
India and China account for 40% of world jewellry demand
6
KASB Commodities Gold Return & Inflation Hedge
1999 ‐ 2009 CPI 7.5% p.a. Gold 21% p.a.
Gold Reserves
Depreciation Of PKR Vs USD •
7
7.5% ANNUAL DEPRECIATION IN THE LAST 20 YEARS.
KASB Commodities Why Gold
CURRENCY HEDGE – An ideal way to hedge against currency devaluation
INFLATION HEDGE – Has historically been a hedge against inflation
NO TAXATION – Commodities are not subject to taxation at the present time
LEVERAGE – Is available in Commodities [Oil – 13:1, Gold – 22:1, Silver – 13:1]
DIVERSIFICATION – Given limited investment avenues in Pakistan, Commodities are an ideal way to diversify investments.
EXPOSURE TO THE GLOBAL ECONOMY – One of the few ways to gain exposure to foreign markets
NO MANIPULATION – Due to the vast size of the Global Commodity Market, it is simply not possible to manipulate the Commodity Market
SAFE HAVEN – Safe haven status is intact as witnessed during the recent global Financial Crisis
LONG AND SHORT ‐ The ability to take Long and Short positions is a distinct advantage as it allows one to be able to not only hedge but take advantage of market movement in either direction
LIQUID INVESTMENT ‐ More liquid as compared to the other asset classes‐ gold can be bought, sold or traded globally
8
KASB Commodities Risks To The Price Of Gold
Dollar Central Bank Buying / Selling
Money Supply
Risks
High Gold Prices
Inflation
Economic Recovery
9
KASB Commodities Product Specification & Commission Structure
10
KASB Commodities Commodity Contacts For additional information on Commodities please contact our Commodities Team:
KASB Securities 5th Floor, Trade Center, I.I.Chundrigar Road Karachi, Pakistan UAN: 111‐222‐000 Email:
[email protected]
11
KASB Commodities Disclaimer KASB Securities (“KASB”) believes that the audience over here is well aware of the risks attached with investments in Pakistan. This presentation and the analysis enclosed in this presentation should not be used as the sole base for any investment decision by any of the investors. KASB adheres to the code of conduct and ethical standards set by the CFA Institute and it encourages its clients to abide by these rules & guidelines. We hereby certify that the views expressed in this research presentation about securities and issues accurately reflect the respective research models applied in the analysis. This proposal is for discussion purposes only. KASB is not an expert on, and does not render opinions regarding, legal, accounting, regulatory or tax matters. You should consult with your advisors concerning these matters before undertaking the proposed transaction. We also certify that no part of our respective compensation was, is, or will be, directly or indirectly, related to the specific recommendations or view expressed in this presentation.
12