ALI ASSET MANAGEMENT COMPANY

SECTION 1 The main business of Ali Asset Management Company is Portfolio Management and the objective of the company is to generate profit on the investment. The company is given Rs. 1 Million and it is asked to invest that in the Stock Market of Pakistan. The investment is done in the shares of companies that are listed on the Karachi Stock Exchange (KSE). All of the investment done is the owners equity and there are no partners or other shareholders in the company. SECTION 2 The company is like mutual funds but in actuality it is not because mutual funds start their life with a public announcement by the Asset Management Company and it is called Prospectus, but in our case since the company is just equity based and sole proprietorship therefore we are not issuing any prospectus.

Net asset value (NAV) represents a fund's per share market value. A NAV computation is undertaken once at the end of each trading day based on the closing market prices of the portfolio's securities. This is usually done to provide shareholders with a view about the shares performance, but in our case since there are no shareholders therefore we will not have a net asset value. SECTION 3 Our Vision To build and sustain a world-class asset management firm that possesses a strong competitive edge in the market and be regarded as the preferred asset management specialist by dedicating ourselves to continuous improvement of our investment offerings Our Mission

At Ali Asset Management Company we are committed to the creation of value for our clients through the skilful management of appropriate investment products in order to provide optimal saving solutions to suit the needs of each of our investors.. Our focus on the portfolio management enables us to pursue superior investment performance to meet the varied and exacting needs of our diverse client base. Ali Asset Management Company decided to invest in the stocks of banks. This is done because of the reason that the main objective of the company is to maximize capital gains and also make profit on the investment. For this Ali Asset management company will use a concentrated approach i.e. it will keep its focus on just one sector. Since banks are the second largest and most stable sector of the stock market with 19 percent of the market share therefore the investment in this sector seems lucrative and Ali Asset Management Company will follow aggressive growth strategy as it speculates capital gains and profits for the business. Additionally the performance of the banking sector has remained strong over the years and it has continued to improve therefore investing in this sector would be safe as there would be a balance between the risk and return. Furthermore Ali Asset Management Company will be investing in the larger banks of this sector as they are better established and have a more strong backing from their holding companies or owners. This will result is exposure to lesser business, technical and fundamental risks as compared to that if the company had invested in the stocks of small banks as their financial risk would have been more. Therefore this strategy would be used to minimize the risk of the investment. SECTION 4 (PORTFOLIO 3)

The financial assets for the company include cash and stocks, and 10 percent of the equity is kept as cash in order to provide a cushion in case if returns are not received as expected. The remaining amount is invested in stocks of different companies. The investment is done by looking at the market and sector trends and hence only those companies are chosen for investment which have strong financial backing and whose performance is better as compared to others in the market. Ali Asset Management Company therefore invested Rs. 963,460 in the stocks of the selected banks and was able to generate a capital gain of Rs. 18,612 on the investment. The capital gain is about 2 percent on the initial amount invested in the portfolio.

National Bank Ali Asset Management Company purchased 1050 shares of the National Bank costing Rs. 52.37 and the total investment amounted to Rs. 54,988. The bank incurred a loss of Rs. 4368 which is about 8 percent. Much of this is because of the drastic decrease in the price of its stock which fell to Rs. 48.21. This can be attributed to the fact that despite being a government owned bank, its performance has declined as compared to past year as the bank incurred a net loss in addition to decrease in its EPS which fell from 9.58 to 9.13. Ali Asset Management Company decided to invest in it because of the fact that national bank is a government bank; therefore it has a very low credit risk as any problems in the bank would be taken care of by the government and hence the government would never let it default. This perception on the part of the investors makes it a safe investment and this is the main reason why Ali Asset Management Company decided to buy its shares as it believes that its stock prices would increase in the future as it is the largest bank in terms of customers base as many people do transaction with national bank because of its strong reputation. MCB Bank MCB bank is one of the largest banks in Pakistan with a branch network that is widely spread all across Pakistan. Ali Asset Management Company invested in the bank and bought 2675 shares worth Rs. 702,000 costing Rs. 262.43 each. Ali Asset Management Company was able to generate a capital gain of Rs. 24,315 on the investment in its stocks. This is because of the fact that the performance of the MCB bank has remained strong over the period as it is considered a stable bank and hence market speculations are positive about its performance. Additionally the bank posted a profit after taxation of approximately Rs. 21 billion as compared to Rs. 19.4 billion in the past. This increase is because of the fact that more people have started using its services as they believe that MCB is a stable bank and that its credit risk is less as compared to other banks. It can also be corroborated by looking at the deposits of the bank which has increased to Rs. 545 billion as compared to Rs. 491 billion in previous years. The capital adequacy ratio has also increased for the bank therefore the financial risk is less in this investment and hence Ali Asset Management Company decided to investment in its shares. Ali Asset Management Company is able to get a steady return of 3.5 percent on the investment. The

decrease in the interest rate by State Bank of Pakistan is also enabling MCB to increase its business activity and hence profits over time. Standard Chartered Bank Ali Asset Management Company bought 2120 shares at a per unit price of 18.16 thus totaling Rs. 38,499 worth of investment. The company was able to generate a return of 1.5 percent on the investment and the total value added from the investment amounted to Rs. 593. This return can again be attributed to the fact that the banks performance has remained stable and good as it generated a profit of Rs. 5.9 billion in 2012 as compared to Rs. 5.4 billion in 2011. Besides that the ROE of the bank increased from 10.31 to 10.86. along with an increase in the EPS which increased from Rs. 1.41 to Rs. 1.53. The growth has been steady because Standard Chartered bank in an international bank with presence across different countries, therefore Standard Chartered Pakistan has the backing of the Standard Chartered International. Additionally it has presence in all major cities of Pakistan as it is somewhat in its maturity stage in Pakistan therefore the bulls and bears in the stock market do not affect its stock price much. United Bank Ali Asset Management Company bought 1200 shares worth Rs. 146,952 costing Rs. 122.46 each. The company incurred a loss on these shares worth Rs.1596 which is 1.1 percent loss on the investment. Although the performance of United Bank Limited has remained strong over the last year as seen from the financial statements of the bank where it was able to generate a profit of Rs. 18 billion in 2012 as compared Rs. 15.4 billion in the previous year along with the increase in EPS, ROA and ROE, but unexpectedly that performance is not depicted in the stock price of the bank and therefore the bearish phase in the market resulted in the decrease of share price of UBL. Despite all this, Ali Asset Management Company is optimistic about the performance of the bank and thus believes that its performance would soon be depicted in the stock prices. Bank Alfalah Ali Asset Management Company bought 900 shares of the bank for Rs. 20,547 costing Rs. 22.83 each. The company incurred a loss on the investment as there was a capital loss of Rs. 333 on the investment which is about 1.6 percent. The main reason for this is the factor that despite increase in net income and EPS the price of the stock did not go up as expected. This is because of the

reason that the bank is in competition with other bigger banks. But because of the overall performance of the banking sector and the presence of Bank Alfalah in Pakistan for a long time, Ali Asset Management Company is optimistic about its performance and believes that stock price would increase in the future. Therefore Ali Asset Management Company went ahead with making the investment in its stock as it is a safe investment as compared to investing in other sectors of the stock market that are unpredictable and are badly affected by the bulls and bears of the market.

SECTION 4

(PORTFOLIO 4)

Ali Asset Management Company again kept 10 percent of the equity as cash in order to provide a cushion in case if returns are not received as expected. The remaining amount is invested in stocks of different banks. The investment is done by looking at the market and sector trends and hence only those companies are chosen for investment which have strong financial backing and whose performance is better as compared to others in the market. Ali Asset Management Company therefore invested Rs. 980,211 in the stocks of the selected banks and was able to generate a capital gain of Rs. 23,406 on the investment. The capital gain is about 2.5 percent on the initial amount invested in the portfolio. National Bank Ali Asset Management Company purchased 1000 shares of the National Bank costing Rs. 51.97 and the total investment amounted to Rs. 51,970. The bank incurred a capital loss of Rs. 930 which is about 1.8 percent. Much of this is because of the decrease in the price of its stock. The decline is less as compared to previous portfolio. This capital loss can be attributed to the fact that despite being a government owned bank, its performance has declined as compared to past year as the bank incurred a net loss in addition to decrease in its EPS which fell from 9.58 to 9.13. Ali Asset Management Company decided to invest in it because of the fact that national bank is a government bank; therefore it has a very low credit risk and any problems in the bank would be taken care of by the government and hence the government would never let it default. This perception on the part of the investors makes it a safe investment and this is the main reason why Ali Asset Management Company decided to buy its shares as it believes that its stock prices

would increase in the future as it is the largest bank in terms of customers base as many people do transaction with national bank because of its strong reputation. MCB Bank MCB bank is one of the largest banks in Pakistan with a branch network that is widely spread all across Pakistan. Ali Asset Management Company invested in the bank and bought 2520 shares worth Rs. 712,706 costing Rs. 282.82 each. Ali Asset Management Company was able to generate a capital gain of Rs. 24,166 which is 3.4 percent gain on the investment in its stocks. This is because of the fact that the performance of the MCB bank has remained strong over the period as it is considered a stable bank and hence market speculations are positive about its performance. Additionally the bank posted a profit after taxation of approximately Rs. 21 billion as compared to Rs. 19.4 billion in the past. This increase is because of the fact that more people have started using its services as they believe that MCB is a stable bank and that its credit risk is less as compared to other banks. It can also be corroborated by looking at the deposits of the bank which has increased to Rs. 545 billion as compared to Rs. 491 billion in previous years. The capital adequacy ratio has also increased for the bank therefore the financial risk is less in this investment and hence Ali Asset Management Company decided to investment in its shares. Ali Asset Management Company is able to get a steady return of 3.4 percent on the investment. The decrease in the interest rate by State Bank of Pakistan is also enabling MCB to increase its business activity and hence profits over time. Standard Chartered Bank Ali Asset Management Company bought 2040 shares at a per unit price of 19.27 thus totaling Rs. 39,310 worth of investment. The company was able to generate a return of 0.1 percent on the investment and the total value added from the investment amounted to Rs. 20.4. This return although is less but can be attributed to the fact that the banks performance has remained stable and good as it generated a profit of Rs. 5.9 billion in 2012 as compared to Rs. 5.4 billion in 2011. Besides that the ROE of the bank increased from 10.31 to 10.86 along with an increase in the EPS which increased from Rs. 1.41 to Rs. 1.53. The growth has been steady therefore the return is less too because Standard Chartered bank in an international bank with presence across different countries, therefore Standard Chartered Pakistan has the backing of the Standard Chartered International. Additionally it has presence in all major cities of Pakistan as it is

somewhat in its maturity stage in Pakistan therefore the bulls and bears in the stock market do not affect its stock price much. United Bank Ali Asset Management Company bought 1100 shares worth Rs. 139,480 costing Rs. 126.8 each. The company incurred a loss on these shares worth Rs.121 which is 0.1 percent loss on the investment. Although the performance of United Bank Limited has remained strong over the last year as seen from the financial statements of the bank where it was able to generate a profit of Rs. 18 billion in 2012 as compared Rs. 15.4 billion in the previous year along with the increase in EPS, ROA and ROE, but unexpectedly that performance is not depicted in the stock price of the bank and therefore the bearish phase in the market resulted in the decrease of share price of UBL. Despite all this, Ali Asset Management Company is optimistic about the performance of the bank and thus believes that its performance would soon be depicted in the stock prices. Bank Alfalah Ali Asset Management Company bought 1500 shares of the bank for Rs. 36660 costing Rs. 24.44 each. The company generated capital gain on the investment of Rs. 270 which is 0.7 percent of the investment done in its stocks. The company was not able to generate more return as expected. The main reason for this is the factor that despite increase in net income and EPS the price of the stock did not go up much. This is because of the reason that the bank is in competition with other bigger banks. But because of the overall performance of the banking sector and the presence of Bank Alfalah in Pakistan for a long time, Ali Asset Management Company went ahead with making the investment in its stock as it was a safe investment as compared to investing in other sectors of the stock market that are unpredictable and are badly affected by the bulls and bears of the market. Bank Alfalah has a sound foundation and backing of strong Abu Dhabi Group which again supported the decision of investing on Ali Asset Management Companys part.

For the second portfolio Ali Asset Management Company decided to invest in the shares of banking sector of Pakistan. The company now has total financial assets of Rs. 1,031,684 as it includes the previously generated profits of Rs. 31,684 on the initial investment of Rs. 1 million. Ali Asset Management Company again kept 10 percent of the total amount as cash i.e. Rs. 103,168 and bought the shares of different banks from the remaining amount on 17th September 2013 and sold them on 24th September 2013. This investment resulted in the net profit of worth Rs.38, 827 for the company.

National Bank

Ali Asad Management Company was able to generate a profit of Rs. 2604.8 on the investment done in the shares of the National Bank. The net return on the initial investment done in its stocks is 2.82 percent. Although the bank incurred a loss as compared to the previous year and its EPS declined from 9.58 to 9.13, but still its stock price rose. Much of this can be attributed to the fact that national bank is a government bank; therefore it has a very low credit risk as any problems in the bank would be taken care of by the government. This perception on the part of the investors makes it a safe investment and this is the main reason why Ali Asad Management Company decided to buy 1760 shares of it. Additionally National bank has a large customer base which again makes it a safe investment as many people do transaction with national bank because of its strong reputation. MCB Bank MCB bank is one of the largest banks in Pakistan with a branch network that is widely spread all across Pakistan. Ali Asset Management Company invested in the bank and bought 2001 shares worth Rs. 579,309 costing 289.51 each. The MCB bank has posted a profit after taxation of approximately Rs. 21 billion as compared to Rs. 19.4 billion in the past. This increase is because of the fact that more people have started using its services as they believe that MCB is a stable bank and that its credit risk is less as compared to other banks. It can be corroborated by looking at the deposits of the bank which has increased to Rs. 545 billion as compared to Rs. 491 billion in previous years. The capital adequacy ratio has also increased for the bank therefore the financial risk is less in this investment and hence Ali Asset Management Company decided to investment in its shares. Ali Asset Management Company is able to get a steady return of 2.6 percent on the investment. The decrease in the interest rate by State Bank of Pakistan is also enabling MCB to increase its business activity and hence profits. Standard Chartered Bank Standard Chartered bank in an international bank with presence across different countries, therefore Standard Chartered Pakistan has the backing of the Standard Chartered International. Ali Asset Management Company therefore bought 1000 shares at a per unit price of 19.93 thus totaling Rs. 19,930 worth of investment. The company incurred a net loss of 0.1 percent on the initial investment done in its stocks. This can be attributed to the bulls and bears in the stock market as these changes resulted in decreased activity despite the fact that the banks

performance has remained stable and good as it generated a profit of Rs. 5.9 billion in 2012 as compared to Rs. 5.4 billion in 2011. But unfortunately this profitability is not clearly depicted in its stock price and according to Ali Asset Management Company the stock prices of Standard Chartered bank should have seen an upward trend in its share prices. Besides that the ROA has declined a bit to 1.59 as compared to 1.61 whereas ROE has increased from 10.31 to 10.86. The EPS has also increased from Rs. 1.41 to Rs. 1.53.

United Bank The performance of United Bank Limited has remained strong over the last year as it can be seen from its share prices too. As a result Ali Asset Management Company bought 1500 shares worth Rs. 200,850 costing Rs. 133.9 each. The company was able to generate a profit on these shares worth Rs.20, 280 which is 10.1 percent gain on the initial investment. This result can be attributed to the fact that UBL was able to generate a profit of Rs. 18 billion in 2012 as compared Rs. 15.4 billion in the previous year. The decrease in the interest rate by State Bank of Pakistan also enabled UBL to increase its business activity as the deposits, lending, and investments increased. Additionally the EPS of the bank also increased from Rs. 12.66 to Rs. 14.71 again depicting good performance and profitability. The ROA and ROE also showed that the performance has been good for the bank. The constant growth of the banking sector in Pakistan is also enabling UBL to expand its operations and generate profits. Bank Alfalah Bank Alfalah performance remained stable this year and the bank was able to generate profit on its different operations. Ali Asset Management Company bought 1100 shares of the bank for Rs. 24,684 and was able to generate a return of 2.9 percent as compared to initial investment. The company was not able to generate more return as expected.