KASB Securities Limited Commodities

Transcription

1 KASB Securities Limited Commodities

2 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 We serve more than 6,700 clients Client Base 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

3 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

4 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

5 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

6 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

7 Gold Return & Inflation Hedge CPI 7.5% p.a. Gold 21% p.a. Gold Reserves Depreciation Of PKR Vs USD 7.5% ANNUAL DEPRECIATION IN THE LAST 20 YEARS. 7

8 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

9 Risks To The Price Of Gold Dollar Central Bank Buying / Selling Money Supply Risks High Gold Prices Inflation Economic Recovery 9

10 Product Specification & Commission Structure 10

11 Commodity Contacts For additional information on Commodities please contact our Commodities Team: KASB Securities 5 th Floor, Trade Center, I.I.Chundrigar Road Karachi, Pakistan UAN: commodities@kasb.com 11

12 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