Hum Islamic Brokerage Services - Pakistan's Premier Financial Brokerage Services

1. Hum Islamic Brokerage Services Hum Securities present Pakistan`s Premier Islamic Financial Brokerage Services.

2. WELCOME To HUM SECURITIES LIMITED Welcome to Hum Securities Limited. “a renowned and reputed brokerage house working as a corporate member of Karachi Stock Exchange (KSE) since 2005”. Our Mission:“Working Together To Achieve Financial Goal” HUM ISLAMIC BROKERAGE SERVICES (HIBS)

3. Financial crisis of 2007–2010 • The financial crisis of 2007 to the present is a crisis triggered by a liquidity shortfall in the United States banking system. It has resulted in the collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. • The collapse of the housing bubble, which peaked in the U.S. in 2006, caused the values of securities tied to real estate pricing to plummet thereafter, damaging financial institutions globally • securities suffered large losses during late 2008 and early 2009. Economies worldwide slowed during this period as credit tightened and international trade declined. Critics argued that credit rating agencies and investors failed to accurately price the risk involved with mortgage-related financial products. • Arab world had lost $3 trillion due to the crisis. In April 2009, unemployment in the Arab world is said to be a 'time bomb'. HUM ISLAMIC BROKERAGE SERVICES (HIBS)

4. Impact on Pakistan’s Economy Pakistan is another country in South Asia that has been severely affected by the financial crises. In fact, Pakistan seems to be one of the hardest hit with this global crisis. Its economy is already in crises. Pakistan is also facing a serious liquidity crunch, with the only solution being international support. The only option for Pakistan is to approach international monetary fund, which will set highly stringent conditions for the nation. HUM ISLAMIC BROKERAGE SERVICES (HIBS)

5. EFFECTS ON STOCK MARKET • May 23: Record high inflation in the month of May, 2008 resulted in the unexpected increase in the interest rates by State Bank of Pakistan which eventually resulted in sharp fall in Karachi Stock Exchange. • July 16: KSE-100 Index dropped one-third from an all-time high hit in April, 2008 as rising pressure on shaky Pakistan's coalition government to tackle Taliban militants exacerbates concern about the country's economic woes. • August 18: KSE 100 Index rose more than 4% after the announcement of the resignation of President PervezMusharraf but Credit Suisse Group said that Pakistan's Post-Musharraf rally in Stock Exchange will be short-lived because of a rising fiscal deficit and runaway inflation. • August 28: Karachi Stock Exchange set a floor for stock prices to halt a plunge that has wiped out $36.9 billion of market value since April. • December 15: Trading resumes after the removal of floor on stock prices that was set on August 28 to halt sharp falls.

6. THE ALTERNATE TO ELEMINATE CRISIS Islamic banking and finance is a topic of the hot discussion world over especially after economic meltdown. Leading economists and financial experts have recognized Islamic finance as the better and sustainable alternative to the problems of modern economic order. Developed and developing nations of east and west including London, Singapore, Hong Kong and Paris are moving for Islamic finance hubs. Throughout the current economic and financial crisis one contrarian statistic has stood out. Financial assets offered by the Islamic Financial Services Industry (IFSI) and generally classified as “Shariah-compliant,”  were less affected by the crisis. HUM ISLAMIC BROKERAGE SERVICES (HIBS)

7. ISLAMIC INVESTMENT IDEOLOGY Islam provides us comprehensive and straight path of life, which covers all of its aspects, and guide us accordingly, through this we handle individual and social, material and moral, economic and political, legal and cultural, national and international aspects of life. In fact earning, saving and investment can become acts of ‘Ibadah’ if done according to Shariah. HUM ISLAMIC BROKERAGE SERVICES (HIBS)

8. Islamic Industry Products and Services • Takaful is an Islamicinsurance concept which is grounded in Islamic muamalat (banking transactions), observing the rules and regulations of Islamic law. • Islamic banking refers to a system of banking or banking activity that is consistent with the principles of Islamic law (Shariah) and its practical application through the development of Islamic economics • Sukuk ("legal instrument, deed, check") is the Arabic name for financial certificates, but commonly refers to the Islamic equivalent of bonds. Since fixed income, interest bearing bonds are not permissible in Islam, Sukuk securities are structured to comply with the Islamic law and its investment principles, which prohibits the charging, or paying of interest. • Ijarah means lease, rent or wage. Generally, Ijarah concept means selling the benefit of use or service for a fixed price or wage. Under this concept, the Bank makes available to the customer the use of service of assets / equipments such as plant, office automation, motor vehicle for a fixed period and price. HUM ISLAMIC BROKERAGE SERVICES (HIBS)

9. Islamic Industry In Pakistan • Although Pakistan is a late starter to systematically promote IF relative to few other Countries, growth in its IF-industry is substantive. Today Pakistan has • 6 full fledged Islamic banks; 4 operational • 13 conventional banks with Islamic banking branches • Over 150 total licensed Islamic banking branches in 25 cities & town • 2 licensed Takaful companies • Half dozen Islamic mutual funds (IsMFs) with total assets of over Rs7 billion (US$ 0.12 billion) • The growth and development of the Islamic industry has been remarkable after its induction in the country’s economical system parallel to the conventional industry. The growth rate is expected to be 15% every year. The increasing number of institutions that are incorporating with the Islamic modes of financing clearly elaborates the potential of this huge profitable industry. HUM ISLAMIC BROKERAGE SERVICES (HIBS)

10. Islamic Industry Pyramid HUM ISLAMIC BROKERAGE SERVICES (HIBS)

11. Islamic Industry Pyramid HUM ISLAMIC BROKERAGE SERVICES (HIBS)

12. INTRODUCTION HUM ISLAMIC BROKERAGE (HIBS) Hum Islamic Brokerage Services (HIBS) The Premier Islamic brokerage services in Pakistan. HIBS is a newly established department of Hum Securities Limited, “a renowned and reputed brokerage house working as a corporate member of Karachi Stock Exchange (KSE) since 2005”. HIBS offers Shariah Compliant professional and technologically advance brokerage services to all investors looking for value added brokerage services. Our objectives are: HUM ISLAMIC BROKERAGE SERVICES (HIBS)

13. HUM ISLAMIC BROKERAGE (HIBS)  OBJECTIVES: • HIBS brings to you a wide range of investment options which are profitable and at the same time compliant to Islamic / Shariah standards. • HIBS provides you best financial services which are strictly • Shariah compliant and follows best international • standard practices. • Investment in Stocks / Shares • Islamic Investment Pools • Online Trading • Expert Advisory Service Commodity Trading • Dedicated Support by Calls, SMS , and E-Mails • Profit and Loss Sharing account HUM ISLAMIC BROKERAGE SERVICES (HIBS)

14. WHY BUY STOCKS AS AN INVESTMENT ? At present, Investment can be made in many different ways like Bonds, Bank deposits, saving certificates, all these investments are “interest based”. The Real Estate is comparatively non liquid investments. On the other hand Stocks are highly liquid and provides interest (Riba) free investment through “Shariah Compliance stocks” under the guidance of qualified and reputed Shariah experts who select 100 stocks under the strict Shariah Screening Criteria. HUM ISLAMIC BROKERAGE SERVICES (HIBS)

15. SHARIAH SCREENING CRITERIA • Business of the Investee Company • Debt to Total Assets • Should be less than or equal to 40 % • Non-compliant Investments to Total Assets • non compliant investments to total assets should be less than 33%. • Non-complaint Income to Total revenue • non compliant income to total revenue should be less than 5%. Total revenue • Illiquid Assets to Total Assets • The ratio of illiquid assets to total assets should be at least 20%. Illiquid asset • Net Liquid Assets to Share Price • The market price per share should be greater than the net liquid assets per share calculated as: (Total Assets – Illiquid Assets – Total Liabilities) divided by number of shares.

16. WHAT IS KMI-30 INDEX • The objective of KSE- Meezan Index (KMI-30), • is to serve as a gauge for measuring the performance of Shariah Compliant Equity Investment, • and it also provides investors with a suitable benchmark for comparing returns on their Shariah Compliant Investments. HUM ISLAMIC BROKERAGE SERVICES (HIBS)

17. TECHNICAL SCREENING CRITERIA Company should not in a default counter Available in CDC Listing history of at least two months on KSE Operational track record at least one financial year Minimum free float share of 5% Securities are traded for 75% of the total trading days Mutual funds are intangible for inclusion in KMI-30. HUM ISLAMIC BROKERAGE SERVICES (HIBS)

18. Companies In KMI -30 INDEX KMI-30 : 1. Attock Cement Pakistan Limited 16. Oil and Gas Development Ltd.       2. Attock Refinery Limited 17. Pakistan Oil Field Limited       3. Attock Petroleum Limited 18. Pakistan State Oil Limited        4. Atlas Battery Limited 19. P.T.C.L. oA       5. D.G. Khan Cement Company Limited 20.Packages Limited        6. Fauji Fertilizer Company Limited 21. Pak Refinery Limited       7. Fauji Fertilizer Bin Qasim Limited 22. Pak Suzuki Motors Limited       8. GlaxoSmithKline Pakistan Limited 23.Siemens Pakistan Engineering limited       9. ICI Pakistan Limited 24. Sitara Peroxide limited       10. Indus Motor Company Limited 25.Pakistan Petroleum Limited        11. Lottee Pakistan PTA Limited 26. Sui northed Gas Pipeline limited       12. Lucky Cement Limited 27.Sui Southern Gas Company Limited       13. Mari Gas Company Limited 28. Thal Limited        14. Millat Tractors Limited. 29. Tri-Pack Films Limited        15. National Refinery Limited   30. Unilever Pakistan Limited HUM ISLAMIC BROKERAGE SERVICES (HIBS)

19. Performance Evaluation of KMI from past 2 Years HUM ISLAMIC BROKERAGE SERVICES (HIBS)

20. Difference Between Conventional and Islamic Brokerage System Islamic Brokerage Conventional Brokerage • Intraday trading is prohibited • Margin finance is not allowed • Cash settled futures is prohibited • Investment in banks, insurance and any company conducting non-shariah business is not allowed • Intraday trading is allowed • Margin finance is allowed • Cash settled in future is allowed • Investment in banks, insurance companies, etc. is allowed HUM ISLAMIC BROKERAGE SERVICES (HIBS)

21. OUR PRODUCTS • Brokerage : • Dedicated dealer conduct transaction on the behalf oc client with a restriction to follow complete sharia’h scripts with also islamic rules and regulations. • Zero Commision Investmnet Pool: • No commission will be charged, • consultancy fee will be cahrged @ 25% in term of profit. • Invesment Pool Profit & Loss Sharing • Commission with normal bracket wil be charged, • Profit and loss wil be beared by company @ 20:80 HUM ISLAMIC BROKERAGE SERVICES (HIBS)

22. THANK YOU! HUM ISLAMIC BROKERAGE SERVICES (HIBS)