PakIstan's CapItaI harkets offerIng

Crowth, Peturns, ProfessIonaIIsm

Presented by
Syed SadIq HussaIn
ChIef nvestment DffIcer
AK0 nvestment |anagement LImIted




WPakIstan: The EconomIc Turnaround Story
WPartIcIpatIng In the EconomIc
Turnaround, Current Investment DptIons
WAK0 Croup
WAK0 Investment hanagement LImIted

PakIstan: The EconomIc Turnaround Story

PakIstan: EIght Years Ago
Past Fears:
NucIear tests Iead to sanctIons, depIetIon of foreIgn
exchange reserves and deterIoratIng economIc
sItuatIon.
CapItaI Account CIosure
HeIghtened currency deprecIatIon fears
SovereIgn PIsk HIgh
PatIng downgrade rIsk from InternatIonaI CredIt
PatIng AgencIes

Pakistan: A More ResiIient Economy Today
W PakIstan's economy has had a turn around In the last 6 - 7 years. The C0P
has grown at 6 plus rate over the last four years and the CoP target for
FY07 Is set at 7.
W ForeIgn currency reserves are currently at USS12.6bn, thus allevIatIng the
rIsk of capItal account closures. (ForeIgn reserves were down to USS200mn
seven years ago when capItal accounts were closed).
W A confluence of factors Is expected to accelerate domestIc demand goIng
forward, and hence boost economIc growth. CoP Is targetIng a sustaInable
C0P growth rate of 6 plus over the next four years.

PakIstan: PosItIvelStabIe EconomIc IndIcators
Dollar Rate
40.00
4S.00
S0.00
SS.00
60.00
6S.00
70.00
]
a
n

3
8
]
u
l

3
8
]
a
n

3
3
]
u
l

3
3
]
a
n

0
0
]
u
l

0
0
]
a
n

0
1
]
u
l

0
1
]
a
n

0
2
]
u
l

0
2
]
a
n

0
3
]
u
l

0
3
]
a
n

0
4
]
u
l

0
4
]
a
n

0
S
]
u
l

0
S
]
a
n

0
6
]
u
l

0
6
US$/PkR
Strength of the Currency:
PakIstanI Fupee has shown
exceptIonal strength by
maIntaInIng the same parIty
versus the US0 over the last 4
years, despIte a hIgh oIl prIce /
hIgh InflatIon scenarIo.
W Standard Poor's PatIng:
CrowIng strength of PakIstan's
economy Is clearly evIdent In Its
SEP credIt ratIng. The country's
ratIng has Improved from "CC
/negatIve" In 2000, to
"8+/posItIve" In 2005.

PakIstan: PosItIvelStabIe EconomIc IndIcators
CrowIng ForeIgn Exchange
Peserves:
PakIstan's foreIgn exchange
reserves had dropped to a
crItIcal level at the end of last
decade. The reserves have
seen a complete turnaround as
a result of smart
fIscal/monetary polIcy
management.
W ForeIgn 0Irect Investment:
700 growth In F0 over a
perIod of just 4 years affIrms
the exponentIally growIng
foreIgn Interest In PakIstan as a
developIng economy offerIng
exceptIonal returns.
Reserves
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
133833 133300 200001 200102 200203 200304 20040S 200S06
US$ (mn)
US$

S00
1,000
1,S00
2,000
2,S00
3,000
3,S00
4,000
4,S00
200102 200203 200304 20040S 200S06
F D !
FD!

PartIcIpatIng In the EconomIc Turnaround
Current Investment DptIons

&AE Investment Options
W ank deposIts:
ank deposIt rates In UAE are around 5X p.a. In comparIson, the
InfIatIon estImates for FY06 range from 6X (DffIcIaI UAE Covernment),
8X (IhF report) to 15X (UAE market estImates). Therefore,
Investments In bank deposIts actuaIIy gIve a negatIve return when
adjusted for InfIatIon.
W FIxed Income:
FIxed Income returns In UAE are approxImateIy In the range of 4X -
5X p.a.. Dnce agaIn, when adjusted for the most conservatIve
InfIatIon estImate of 6X, Investments made In fIxed Income gIve a
negatIve InfIatIon adjusted return.
W EquItIes:
EquIty returns In UAE for the Iast 1 year were -57X, whIIe for the Iast
three years the return has been +77X p.a.. AIthough the equIty
market In the UAE has the potentIaI for posItIve returns over the Iong-
term, these returns are extremeIy voIatIIe.

Pakistan Investment Options
W ank 0eposIts:
8ank deposIt rates In PakIstan are In the 8-9 p.a. range.
nflatIon for FY06 was 7.8. Therefore, Investment In bank
deposIts In PakIstan return a mInImal yet posItIve InflatIon
adjusted return.
W FIxed Income:
FIxed Income returns are around 10 p.a.. However, fIxed
Income Is an IllIquId asset class In PakIstan and mInImal InflatIon
adjusted returns do not justIfy the lIquIdIty rIsk taken.
W EquItIes:
quItIes returned a healthy J5 In FY06. Dver the last 5 years,
the average annual return has been 42 p.a.. PakIstan's capItal
market offers a very LQU0 and FCULAT0 Investment avenue
wIth HCH FTUFNS and relatIvely LDW 7DLATLTY.

Pakistan: Short-Term VoIatiIity Justified by Long-term Returns
Year 1998 1999 2000 2001 2002 2003 2004 2005 YTD-2006
Return -46% 50% 6% -15% 112% 65% 40% 53% 3%
(as of 24th Aug '06)

quItIes: PakIstan versus |Iddle ast |arkets
W The foIIowIng tabIe shows a comparIson of hIddIe Eastern markets wIth
PakIstan's CapItaI harket.
Important poInts to note:
W The returns of PakIstan's capItaI market over dIfferent tIme perIods has been
much more consIstent as compared to other hIddIe Eastern markets.
W 0aIIy traded vaIue of PakIstan's capItaI market Is among the hIghest when
compared to hIddIe Eastern markets, thus makIng It one of the most IIquId
markets In the regIon.
W PakIstan's capItaI market has 10 tImes as many IIsted companIes as any other
hIddIe Eastern market. ThIs provIdes depth of Investment for potentIaI
Investors.
3 months 6 month 1 Year 3 Years DaiIy Traded VaIue (&S$) Listed Companies
Kuwait 0% -17.9% 0% 159% 206,400,000 90
Dubai -4.7% -38.31% -57.5% 231% 353,860,000 52
Qatar 0% -10.47% -38% N/A 73,017,000 36
Saudi Arabia 2.7% -20.8% -21.4% 322% 2,128,000,000 76
Bahrain 10.5% 0% 6.0% 89.0% 2,120,000 42
Pakistan 2.68% -12.15% 29.08% 133% 270,000,000 700

KS ndex: HIstorIcal 7aluatIon ComparIson
W arnIngs growth of 20 annually for last J years, and 17 for FY2007F.
W 0IvIdend yIeld has seen consIstent and healthy growth, expected at 5.59 for FY2007F.
W KS Is hIstorIcally cheaper on PrIce to arnIngs, PrIce to 8ook, and PrIce to Cash Flow
makIng It an Ideal tIme to buy a hIgh growth market at an exceptIonally attractIve level.
Source: AKD Research (Stock Smart, Sep 8
th
, 06)

KS 7ersus |Idastern |arkets: 7aluatIon ComparIson
W PakIstan's capItaI market Is sIgnIfIcantIy cheaper than hIddIe Eastern markets on
PrIce to EarnIng ratIo.
PakIstan to Abu 0habI "PrIce to EarnIngs PatIo" (PlE) 0Iscount: 31X
PakIstan to 0ubaI "PrIce to EarnIngs PatIo" (PlE) 0Iscount: 54X
W PakIstan's capItaI market aIso fares weII on the "PrIce to ook PatIo" (Pl) versus
other hIddIe Eastern markets.
W PIse In KSE (KarachI Stock Exchange) "PrIce to EarnIngs ratIo" has been graduaI over
the Iast 10 years wIth the Index tradIng beIow 5x PE In earIIer part of the decade and
graduaIIy rIsIng to PE range of 8x to 13x. ThIs shows a steady rIse In confIdence In the
IocaI economy.
W The PE vaIuatIons In most hIddIe Eastern markets have spIked recentIy, coIncIdIng
wIth rIsIng oII prIces. ThIs sIgnIfIes a hIgher rIsk and more specuIatIve Investment arena.
P/E (x) P/B (x)
Pakistan 8.89 2.54
Abu Dhabi 12.87 2.21
Dubai 19.19 3.17
Source: Emirates Financial Services

|utual Funds: The ndustry
W |utual fund Industry In PakIstan Is growIng at a fast pace, as Is evIdent
from the followIng chart that shows growth In assets under
management (AU|).
W There are currently 28 Asset |anagement CompanIes provIdIng servIces
the sector.
W The mutual fund Industry offers a whole array of Investment products
to satIsfy the rIsk profIle of any fund manager or Investor.
et Assets
0
20
40
60
80
100
120
140
FY02 FY03 FY04 FY05
R
s
.

i
n

m
i
I
I
i
o
n
140 100 50.5 25.1
Net Assets
(IIIIon
Pupees)
FY
05
FY
04
FY
03
FY
02
140 100 50.5 25.1
Net Assets
(IIIIon
Pupees)
FY
05
FY
04
FY
03
FY
02
Open-End Funds 26
CIosed End Funds 20
Equity Funds 27
Money Market Funds 3
BaIanced Funds 4
Bond / Income Funds 9
IsIamic Funds 3

%he AKD Group
AKD Group AKD Group
FinanciaI Services ReaI Estate TeIecommunications OiI & Gas
Securities Brokerage /
Asset Management /
Venture CapitaI
ReaI Estate
DeveIopment &
Construction
WireIess LocaI Loop &
Long Distance
InternationaI
Working Interest in OiI
ExpIoration &
Production
AKD Securities (Pvt.)
Limited /
AKD Investment
Management Ltd /
TMT Ventures / AKD
Trade
AKD CapitaI DVcom Limited
OiI & Gas Investments
Limited

The AKD Group
W AK0 SecurItIes:
AK0 SecurItIes Is a leadIng securItIes fIrm provIdIng fInancIal servIces to a large and dIversIfIed
group of foreIgn and local InstItutIonal and IndIvIdual clIents. AK0 SecurItIes Is one of the leadIng
brokers In equIty sales and tradIng. t accounts for approxImately 8 to10 of the daIly tradIng
volume at the KarachI Stock xchange. n Investment bankIng AK0 SecurItIes have been on top of
the league tables:
6:9: World Call Payphones Ltd - PakIstan's fIrst successful PD In J years
0-9: 0ewan Salman FIbre Ltd - Sole advIsor and arranger of PakIstan's largest TFC offerIng.
: 0han FIbres Ltd - FInancIal advIsor on the largest prIvate sector acquIsItIon In PakIstan's
hIstory.
8970880/0-9: |etropolItan Steel - ProvIder of dIstressed debt fundIng to purchaser and Is
partner In turnaround
W AK0 Trade:
AK0 Iaunched the fIrst onIIne tradIng system In PakIstan, AK0 Trade, In November 2002. The
company has Increased the number of actIve Investors In PakIstan and currently servIng over 7,000
clIents globally.
W ThT Ventures:
AK0 was a pIoneer In IntroducIng venture capItal to PakIstan by launchIng T|T 7entures In 2001.
The company manages an ncubatIon Fund wIth 7 Investments. The Company Is also raIsIng a
prIvate equIty fund of S100 mIllIon, a joInt venture wIth SAF (www.seaf.com) a global prIvate
equIty management company. T|T 7entures has Invested In 8 projects so far and plans to Invest In
another 5 In the next year.
W 0V Com:
07 Com Is AK0's fIrst venture In the telecom sector. The company plans to provIde cost effectIve
and advanced telecom servIces In the country. t Is one of the three companIes that hold a natIon
wIde WLL lIcense.

AKD Investment Management Ltd (AKDIML)
W AK0IhL Is a whoIIy owned subsIdIary of AK0 SecurItIes, and was Iaunched In
September 2004.
W Assets Under hanagement:
AK0|L currently manages approxImately PkF J bIllIon.
W AK0IhL Is currentIy managIng three mutuaI funds.
- AK0 Index Tracker Fund (AK0ITF):
Structure: CIosed End
Fund Type: Index Fund
UnderIyIng Index: KarachI Stock Exchange 100 Index (KSE100)
- CoIden Arrow SeIected Stocks Fund (CASSFL):
Structure: CIosed End
Fund Type: EquItIes (ConservatIve Stance)
- AK0 DpportunIty Fund (AK0DF):
Structure: Dpen End
Fund Type: EquItIes (AggressIve Stance)

AKDIML: Growth of Assets &nder Management
AKDIML - Assets &nder Management
0
1,000
2,000
3,000
4,000
Sep '04 Dec '04 Mar '05 June
'05
Dec '05 Mar '06 Jun '06
(
P
k
R

m
n
)

AKDIML: CIosed End Schemes
W AK0 Index Tracker Fund (AK0ITF):
AK0|L has become a pIoneer of InnovatIon In PakIstan's capItal
market by launchIng the fIrst lndex Trccker Fund In the market.
AK0TF was launched In Dctober '05 and tracks the KS100 Index. t
Is a closedend fund wIth AU| of PkF 820.5mn. The fund has
fulfIlled Its objectIve of trackIng the KS100 wIth desIred accuracy
sInce InceptIon. The management company Is In the process of
convertIng the fund to an Dpennd structure to Improve lIquIdIty
and remove the tradIng prIce / NA7 dIsparIty.

AKDIML: CIosed End Schemes
W CoIden Arrow SeIected Stocks Fund (CASSFL):
CASSFL Is PakIstan's oldest prIvately held closed end mutual fund and It was
acquIred by AK0|L In September 2004. The fund has been one of the leadIng
performers followIng the acquIsItIon, provIdIng a return of 144 (0ec 0405) versus
KS100 return of 62 In the same perIod. CASSFL Is one of only closed end schemes
that has been awarded 5 stars from JCF7S credIt ratIng agency. AU|: PkF: 1 bn
Year to Date (12.09.06) Return Comparison:
KSE100 Index versus GoIden Arrow
1.68%
4.31%
0%
1%
2%
3%
4%
5%
KSE100 GoIden Arrow
December 04 - December 05 Return Comparison:
KSE100 Index versus GoIden Arrow
62.00%
144.00%
0%
20%
40%
60%
80%
100%
120%
140%
KSE100 GoIden Arrow

AKD Investment Management Ltd (AKDIML)
AK0 DpportunIty Fund (AK0DF):
AK0DF Is an open end equIty fund, launched In Q2 2006. The
fund follows an aggressIve Investment phIlosophy. AK0DF fIlters
through the opportunItIes presented In the capItal markets,
searchIng for the optImal combInatIon of Investment strategIes,
maInly In equItIes, followed by fIxed Income and money markets
to ensure the fund provIdes Industry leadIng returns. The fund
has outperformed the KS100 Index and all equIty mutual funds
In the Industry sInce Its InceptIon.
AU|: PkF: 1 bIllIon

AKD Opportunity Fund: Pure Out-Performance

Contact 0etaIls
Corporate DffIce
2nd Floor
ContInental Trade Center
8lock 8, ClIfton
KarachI PakIstan
Telephone : (9221) 5J71J057
Fax: (9221) 5J7J217
maIl : Info@akdInvestment.com
WebsIte : www.akdInvestment.com

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