Weekly Review. Outlook. Pakistan Weekly Update StockSmart. AKD Equity Research / Pakistan. 4 January AKD Research. Index & Volume Chart

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1 Dec-18 AKD Equity Research / Pakistan AKD Research research@akdsecurities.net Indices KSE-100 KSE-30 This week 37,547 17,595 Last week 37,167 17,274 Change 1.02% 1.86% Indices KMI-30 Allshare This week 62,179 28,000 Last week 61,443 28,001 Mkt Cap. PkRbn bn This week 7, Last week 7, Avg. Daily Turnover ('mn shares) This week Last week Change -3.1% Weekly Review Remaining devoid of any major trigger, the market had a turbulent first week of the new year, with the wild intra-day moves. Gaining 929pts on the second trading session, the benchmark KSE-100 index erased some of the earlier gains in the following two trading sessions before closing the week on a positive note. Overall, the KSE-100 index gained 1.02% WoW to close the week at 37,547pts, up 380pts. Trading activity remained largely subdued with average daily trading volumes further declining to mn shares, down 3.1%WoW. Key news flows impacting the market during the week were: i) Finance Minister Asad Umer hinting towards another fiscal adjustment, with likely announcement of mini-budget in mid Jan 19, ii) the gov t officials reportedly announcing that the Chinese gov t agreed to lend 2bn to Pakistan for helping it boost dwindling foreign exchange reserves, iii) markedly below consensus expectations, monthly inflation reading for Dec 18 clocking in at 6.17%YoY compared to 6.5%YoY in Nov 18 and 4.57%YoY in Dec 17, iv) US President Donald Trump hinting towards a better relationship with Pakistan, eyeing meet-up with Pakistani leadership, and v) FX reserves held by central bank further dwindling 170mn to reach at 7.28bn during the week ended Dec Key performers over the week were: i) BAFL (+8.34%WoW), ii) CHCC (+5.25%WoW), iii) ENGRO (+5.22%WoW), iv) PIOC (+4.29%WoW) and v) HBL (+4.29%WoW), while laggards included: i) FATIMA (-6.48%WoW), ii) HASCOL (- 4.86%WoW), iii) EFOODS (-4.75%WoW), iv) FFBL (-4.66%WoW) and v) NCL (-3.70%WoW). Foreigners remained net sellers, offloading 0.51mn worth of equities, compared to 1.1mn outflow in the previous week. Top-5 Volume Leaders Index & Volume Chart Universe Gainers & Losers Symbol Volume (mn) TRG : PAEL : KEL : SILK : BOP : (share mn) (Index) , ,000 (Shrs'000) 250, , , ,000 50,000 - (Index) 38,200 37,996 38,000 37,795 37,800 37,600 37,542 37,547 37,400 37,067 37,200 37,000 36,800 36, Dec 1-Jan 2-Jan 3-Jan 4-Jan Ready Volume (LHS) KSE100 Index (RHS) 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% BAFL CHCC ENGRO PIOC HBL NCL FFBL EFOODS HASCOL FATIMA ,000 Source: PSX & AKD Research ,000 Outlook Volume (LHS) KSE-100 Index 38,000 36,000 Source: PSX & AKD Research Market participants are likely to stay on the sidelines until policy clarity on macro-issues comes through. Key checkpoint in this regard is a potential entry into an IMF program and consequent policy framework. Moreover, ongoing graft hearings in the apex court against the main opposition leaders could lead to limited investors participation. However, the start of New Year may trigger foreigners interest in a bid to rebalance their portfolios, eventually translating into increased domestic participation. Important disclosures Important disclosures including investment banking relationships and analyst certification at end of this report. AKD Securities does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report. Investors should consider this report as only a single factor in making their investment decision. AKD Securities TREC Holder & Registered Broker Pakistan Stock Exchange REP-019 Find AKD research on Bloomberg (AKDS<GO>), firstcall.com and Reuters Knowledge Copyright All rights reserved. The information provided on this document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject AKD Securities or its affiliates to any registration requirement within such jurisdiction or country. Neither the information, nor any opinion contained in this document constitutes a solicitation or offer by AKD Securities or its affiliates to buy or sell any securities or provide any investment advice or service. AKD Securities does not warrant the accuracy of the information provided herein.

2 Jan 04, ,840 37,796 37,752 37,708 37,664 37,620 37,576 37,532 37,488 37,444 37,400 Jan 03, ,000 37,900 37,800 37,700 37,600 37,500 37,400 37,300 Jan 02, 2019 Jan 01, :30 9:54 10:19 10:44 11:08 11:33 11:57 12:22 12:47 13:11 13:36 14:01 14:25 14:50 15:15 38,500 38,400 38,300 38,200 38,100 38,000 37,900 37,800 37,700 37,600 38,200 38,000 37,800 37,600 37,400 37,200 37,000 36,800 9:15 9:39 10:02 10:26 10:49 11:12 11:36 11:59 12:23 12:46 13:10 13:33 13:57 14:20 14:44 15:07 15:30 15:54 16:17 9:30 9:54 10:19 10:44 11:08 11:33 11:58 12:22 12:47 13:12 13:36 14:01 14:26 14:50 15:15 9:30 9:53 10:17 10:40 11:04 11:27 11:50 12:14 12:37 13:01 13:24 13:48 14:11 14:35 14:58 15:22 9:30 9:53 10:17 10:40 11:04 11:27 11:50 12:14 12:37 13:01 13:24 13:48 14:11 14:35 14:58 15:22 Dec 31, ,300 37,200 37,100 37,000 36,900 36,800 36,700 Source: PSX & AKD Research This Week s Daily Reports Pakistan Cement: Dam ned if you do, dam ned if you don t, (AKD Daily, Jan 04, 2019) After running an initial feasibility study in CY00, construction of Mohamand Dam is expected to finally commence in 1HCY19. With a total PC-I cost of PKR307bn, Federal Govt. is expected to finance the reservoir cost of PKR144bn while WAPDA bridges the shortfall. Dam construction is expected to take 5 years and 8 months and generate meagre annual demand of mn tons cement from CY20. However, a slow pace of construction can result in even lower demand being generated. Players in the vicinity of the dam site are expected to be at an advantage to qualify for the supply contracts where, from our universe, CHCC and LUCK will see an increase of PKR0.39 and PKR0.19 in EPS for FY21 with an increase of 0.05mn tons of cement per annum. We maintain our view of significant pressure on prices in North with 9.4mn tons of capacity additions expected in CY19 and term the incremental demand from the dam as a drop in the ocean. At current levels, we have an underweight stance on the sector. Pakistan OMCs: CY18 was the last nail in the coffin for FO, (AKD Daily, Jan 03, 2019) Altered composition of POL product volumes confirm major schisms in the power chain, confirmed in Dec'17 volumes (1.44mn tonnes -23%YoY/+12%MoM), with no segment growing volumes YoY (HSD/MS volumes -26/0%YoY) and FO's increasingly finicky nature (greater monthly deviations) clouding the outlook for growth Looking back, OMCs largely witnessed the secular decline of FO volumes, spilling over to retail fuels as higher pump prices (MS/HSD prices spiked 18/23%YoY), tough political transition and wider macro-woes factored into POL volumes. Cumulative CY18 sales (20.4mn, -21%YoY) were pulled lower by FO (-50%YoY) whereas ex-fo sales volumes slowed 6%YoY, where HSD/MS composition in total offtake climbed to 39/36% matching the rise of transportation sectoral demand to ~76% over 5MFY19 vs. 63% in FY18, having wide-ranging repercussions on market shares of individual players Considering hampered volumetric outlook, wider market aversion to circular debt exposures, undue leverage levels as monetary tightening ensues and growth multiples, we retain our preference for APL (TP of PkR485/sh, FY19 D/Y of 8.6%), while keeping an eye on HASCOL's slowing volumes and project COD's to adjust our estimates. Pakistan Strategy: Patience wins the Game, (AKD Daily, Jan 02, 2019) Lacking in direction, Pakistan s story was rightfully mirrored by the PSX in CY18 where economic conditions imposed on market sentiment. The end game, however, is likely to be played out in CY19 in our view as Pakistan finally tackles its vulnerabilities both external and local. With the KSE-100 offering a limited 17% upside to our Index target of 43,500, we believe the journey will once again mirror economic re-building, as characterized in CY18. Investors will continue eyeing developments on the political and economic arenas where materialization of IMF inflows will be a key check point. Any announcement to this end may result in a de-coupling of the market from economic variables, at least in the short run. On the flip side, delays in an IMF package could trigger fresh waves of skepticism where we may potentially see the market de-rate to 33,800. Pace of currency and interest rate adjustment will remain contained in CY19 in our view, however, current interest profile has ramifications for the broader economy (GDP growth: 3.8%YoY), with particular emphasis on leveraged plays. Market valuations (P/E: 7.2x, D/Y: 7.6%; Earnings Growth: 14%), while conducive for long term investing, remain insipid on an interest adjusted basis. Preferred plays include a mix of growth and dividend where top picks include MCB, BAFL, HUBC, OGDC, LUCK, NML and INDU. Alpha plays we like include BAHL, APL, SYS and GATM. 2

3 This Week s Daily Reports Pakistan Strategy_2018 is over and out, (AKD Daily, Jan 01, 2019) Extending its turbulent ride from CY17 (-ve return of 15.3%) into CY18 (-ve return of 8.4%), the KSE-100 index reflected a left-tail outcome (consecutive 2yrs of closing in the red) since CY94-95, closing at 36,802pts. Avg. volumes stood at 184.0mn shares (down 28%YoY), the lowest since CY12. In terms of investor participation by class, FPI outflows singularly sapped a cumulative mn during CY18 where 4QCY18 outflows totaled 214.7mn. On the other hand, Insurance sector absorbed 313.3mn in selling activity, rising 64%YoY, while individuals remained net buyers. We expect similar pre-occupations in CY19 (political uncertainty and macro vulnerability) with IMF entry and possible adjustments under the program being key variables driving market direction for the year. We advise investors to build staggered positions (buy on dips) in thematic investment cases (interest rates, FX fragility, pricing power, CAPEX viability), balancing returns with risks (averaging buying rates over the period), rather than timing the market (holding off buying in expectation of weakness). Pakistan Economy: Soft food prices to keep inflation in check, (AKD Daily, Dec 31, 2018) CPI inflation for the month of Dec 18 is likely to clock in at 6.47%YoY vs. 6.50%YoY recorded in Nov 18, tallying to 6.09%YoY for 1HFY19. On a sequential basis, Dec 18 inflation is expected to fall by 0.14% (Nov 18: +0.12%MoM) as the winter effect begins to influence food inflation (down 0.92%MoM). Core inflation measured through NFNE index and a better reflective of long-run inflationary trends continues to gain strength, with Dec 18 reading expected to reach 8.53%YoY (a level last seen in mid-2014). FY19F/CY19F inflation is likely to be recorded at 7.14/8.21%YoY where key upside risks to our forecasts would be the upcoming additional budgetary measures to be announced by the Government and other policy actions agreed under the IMF bailout. We expect three more 50bps hikes in CY19, two hikes in the first half and one in the early second half based on real interest rate. 3

4 Jan-19 Dec-18 Jan-19 Regional Valuations (2019) EPS Growth PE(x) Pakistan 15.98% 6.62 Indonesia 8.05% Malaysia 11.44% Philippines 6.49% Vitenam 12.60% India 25.10% China 12.80% 8.20 % ROE Divd Yld Pakistan 16.3% 8.35 Indonesia Malaysia Philippines Vitenam India China Source: AKD Research & Bloomberg PkR/ Trend TRJ-CRB Index Source: Bloomberg Source: Bloomberg Major World Indices Performance Country Bloomberg Code 4-Jan Dec-18 WoW CYTD Pakistan KSE100 Index 37,547 37, % 1.3% Srilanka CSEALL Index 6,068 6, % 0.3% Thailand SET Index 1,575 1, % 0.7% Indonesia JCI Index 6,275 6, % 1.3% Malaysia FBMKLCI Index 1,670 1, % -1.2% Philippines PCOMP Index 7,761 7, % 4.0% Vietnam VNINDEX Index % -1.3% Hong Kong HSI Index 25,626 25, % -0.8% Singapore FSSTI Index 3,059 3, % -0.3% Brazil IBX Index 37,950 36, % 4.0% Russia RTSSTD Index 15,953 15, % 1.4% India SENSEX Index 35,695 36, % -1.0% S&P SPX Index 2,448 2, % -2.4% DJIA INDU Index 22,686 23, % -2.7% UK UKX Index 6,784 6, % 0.8% Germany DAX Index 10,600 10, % 0.4% Qatar DSM Index 10,350 10, % 0.5% Abu Dhabi ADSMI Index 4,898 4, % -0.3% Dubai DFMGI Index 2,526 2, % -0.1% Kuwait KWSEIDX Index 6,633 6, % 0.0% Oman MSM30 Index 4,276 4, % -1.1% Saudi Arabia SASEIDX Index 7,830 7, % 0.0% MSCI EM MXEF Index % -1.7% MSCI FM MXFM Index % 0.0% International Major Currencies Commodities Source: Bloomberg SPOT 4-Jan Dec-18 Chg +/- WoW CYTD Dollar Index % -0.01% USD/PkR % 0.00% USD/JPY % -1.51% EUR/USD % -0.51% GBP/USD % -0.67% AUD/USD % -0.11% NZD/USD % -0.40% CHF/USD % 0.53% CAD/USD % -1.44% USD/KRW 1,124 1, % 0.77% CNY/USD % -0.20% Source: Bloomberg SPOT Units 4-Jan Dec-18 WoW CYTD TRJ-CRB Points % 1.03% Nymex (WTI) /bbl % 6.01% ICE Brent /bbl % 5.64% N. Gas Henry Hub /Mmbtu % % Cotton USd/Pound % -1.42% Gold /Tr.Oz % 0.68% Sliver /Tr.Oz % 1.42% Copper /MT % -3.95% Platinum /Oz % 0.55% Coal /MT % -3.74% Source: Bloomberg 4

5 Jan-19 Dec-17 Dec-18 Chart Bank Earnings Yield vs. T-Bill (12M) Differential Advance to Decline Ratio (%) Jan-19 Dec-17 Jan-19 FIPI Flows for the week LIPI Flows for the week ('000) (100) (200) (300) (400) 328 (232) (52) (91) (5.00) (10.00) Ind., (2.93) Co., 3.52 Bank/DFI, 3.21 NBFC, 0.12 M.Funds, Others, 0.94 Prop. Trading, (2.99) (500) (600) (462) 31-Dec-18 1-Jan-19 2-Jan-19 3-Jan-19 4-Jan-19 (15.00) (20.00) Ins, (14.73) AKD Universe vs. KSE-100 Index KSE-100 vs. MSCI-EM & MSCI-FM 17% 12% 7% 2% -3% -8% -13% -18% -23% 15% 10% 5% 0% -5% -10% -15% -20% -25% KSE100 MSCI EM MSCI FM KSE-All Share Index AKD Universe 5

6 Jul-07 Jun-08 May-09 May-10 Apr-11 Mar-12 Mar-13 Feb-14 Jan-15 Jan-16 Dec-16 Nov-17 AKD Universe Valuations 4-Jan F 2019F 2020F EPS (PkR) EPS chg (%) 3.65 (6.57) EPS chg (%) ex-e&p (16.60) (0.96) Book Value per Share (PkR) Payout (%) Valuations Price to Earnings (x) PER (ex-e&p) (x) Price to Book (x) Price to CF (x) Earnings Yield (%) Dividend Yield (%) EV / EBITDA (x) Profitability Return on Equity (%) Return on Assets (%) Chg in Sales (%) (13.98) Gross Margin (%) Operating Margin (%) Net Margin (%) Source: AKD Research Market PER Chart 2018 (x) Source: AKD Research 6

7 AKD Universe Active Coverage Cluster s Valuations Stock Symbol Price TP Stance EPS(PkR) PE(x) PB(x) DY(%) UR Under Review (PkR) (PkR) 17 18F 19F 17 18F 19F 17 18F 19F 17 18F 19F Automobile and Parts Indus Motors INDU 1, , Buy Pak Suzuki Motors PSMC Buy Cements DG Khan Cement DGKC Buy Lucky Cement LUCK Buy Maple Leaf Cement Factory MLCF Buy Fauji Cement Company Ltd. FCCL Sell Pioneer Cement Limited PIOC Sell Cherat Cement Co Limited CHCC Sell Gharibwal Cement Ltd GWLC Buy Cable & Electrical Goods Pak Elektron Ltd PAEL Buy Engineering Amreli Steels Ltd. ASTL Buy Fertilizers Engro Corporation ENGRO Neutral Engro Fertilizers Limited EFERT Neutral Fauji Fert. Bin Qasim Ltd. FFBL Sell Fauji Fertilizer Company FFC Sell Fatima Fertilizer FATIMA Sell Food Producers Engro Foods Limited EFOODS Sell Oil & Gas Oil & Gas Development Co. OGDC Buy Pak Oilfields POL Sell Pakistan Petroleum PPL Buy Hascol Petroleum HASCOL Buy (1.55) n.a Attock Petroleum APL Neutral Pakistan State Oil PSO Buy Power Hub Power Co. HUBC Buy K-Electric Co. KEL 5.82 UR UR UR UR UR UR UR UR UR UR UR UR UR UR Kot Addu Power Company KAPCO Sell Personal Goods Nishat Mills NML Buy Nishat Chunian Ltd. NCL Buy Banks Allied Bank Limited ABL Buy Bank AlFalah BAFL Neutral Habib Bank Limited HBL Buy MCB Bank Limited MCB Buy National Bank of Pakistan NBP Buy United Bank Ltd UBL Buy Source: AKD Research 7

8 AKD Universe Coverage Cluster s Performance S toc ks S ymbol P ric e Absolute P e rforma nc e (%) 1 Y e a r 1 Y e a r 4 - Ja n- 19 1M 3M 6M 12 M CY TD High Low KS E Inde x 3 7, , , Automobile a nd P a rts Indus Motors INDU Pak Suzuki Motors PSMC Ce me nts DG Khan Cement DGKC Lucky Cement LUCK Maple Leaf Cement Factory MLCF Fauji Cement Company Ltd. FCCL Pioneer Cement Limited PIOC Cherat Cement Limited CHCC Gharibwal Cement Limited GWLC Engine e ring Amreli Steel Ltd ASTL Fe rtilize rs Dawood Hercules DAWH Engro Fertilizers Ltd. EFERT Engro Chemical ENGRO Fatima Fertilizer FATIMA Fauji Fert. Bin Qasim Ltd. FFBL Fauji Fertilizer Company FFC Food P roduc e rs Engro Foods Limited EFOODS Ca ble & Ele c tric a l Goods Pak Elektron Limited PAEL Oil & Ga s Oil & Gas Development Co. OGDC Pak Oilfields POL Pakistan Petroleum Ltd. PPL Pakistan State Oil PSO Attock Petroleum Ltd. APL Hascol Petroleum HASCOL P owe r Hub Power Co. HUBC K- Electric Limited KEL Kot Addu Power Company KAPCO P e rsona l Goods Nisaht (Chunian) Ltd. NCL Nishat Mills NML Ba nks Allied Bank Limited ABL Bank AlFalah BAFL Habib Bank Limited HBL MCB Bank Limited MCB National Bank of Pakistan NBP United Bank Ltd UBL Source: PSX & AKD Research 8

9 Economic Snapshot End Month Data Monetary Rates T-Bills - 3M % T-Bills - 6M % T-Bills - 12M % PIB 10Y % KIBOR 6M % Discount rate % Policy rate % Inflation Headline inflation % Core inflation % Units Dec Food inflation % (0.20) External Indicators Export (PBS) (mn) 1,977 1,971 1,902 2,231 2,133 2, ,646 2,017 1,728 1,903 1,843 Import (PBS) (mn) 4,910 5,607 4,797 5,280 5,066 5, ,838 4,992 4,430 4,841 4,626 Trade Deficit (PBS) (mn) (2,933) (3,636) (2,895) (3,049) (2,933) (3,670) (3,807) (3,192) (2,975) (2,702) (2,938) (2,783) Export (SBP) 2,464 Import (SBP) 5,140 2,111 2, ,334 2,305 2,246 2,266 2,012 4,943 4,949 5,166 2, n.a 5,133 5,493 4,460 3,792 4,717 n.a Trade Deficit (SBP) (2,676) (2,763) (2,275) (2,638) (2,703) (2,900) (3,121) (3,484) (2,373) (1,991) (2,654) n.a Home Remittances (mn) 1,724 1,639 1,672 1,773 1,651 1,771 1,594 1,929 2,037 1, , ,609 Current Account (mn) (1,256) (1,617) (1,241) (1,237) (1,947) (2,011) (1,976) (2,200) (600) (909) n.a (1,218) Banking Sector Deposits Advances PkR (bn) PkR (bn) Investments PkR (bn) W. A. lending rate % W. A. deposit rate % 12,362 12,002 11,933 12,571 12,277 12,258 13,063 12,551 12,692 13,032 n.a n.a 6,530 6,556 6,629 6,812 6,839 7,046 7,362 7,336 7,426 7,492 n.a n.a 8,542 7,637 8,127 6,853 7,784 6,733 8,179 7,785 6,893 6,677 n.a n.a Spread rate % Public Finance Tax collection PkR (mn) 416, , , , , , , , , , Direct taxes PkR (mn) 188,476 Indirect Taxes PkR (mn) 227,592 95,706 89, ,524 95, , ,441 94,017 71, ,023 n.a n.a 177, , , , , , , , ,781 n.a n.a Currency 20,154 18,957 18,317 17,796 17,540 15,977 16,407 16,891 16,370 14,921 14,016 Fx Reserves (mn) 13,996 USDPkR - Interbank PkR/USD n.a n.a n.a Source: SBP, PBS & AKD Research 9

10 Analyst Certification We, the AKD Research Team, hereby individually & jointly certify that the views expressed in this research report accurately reflect our personal views about the subject securities and issuers. We also certify that no part of our compensation was, is,or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. We further certify that we do not have any beneficial holding of the specific securities that we have recommendations on in this report. AKD Research Team Analyst Tel no. Coverage Usman Zahid (693) Executive Director Research Hamza Kamal (603) Banking Ali Asghar Poonawala (646) Cable & Electrical, OMCs & Automobiles Umer Farooq (602) Textiles & Steel Shahrukh Saleem (685) Cement Sector Qasim Anwar (680) Technical Analysis Nasir Khan (639) Research Production Tariq Mehmood (643) Library Operations DISCLOSURES & DISCLAIMERS This publication/communication or any portion hereof may not be reprinted, sold or redistributed without the written consent of AKD Securities Limited. has produced this report for private circulation to professional and institutional clients only. The information, opinions and estimates herein are not directed at, or intended for distribution to or use by, any person or entity in any jurisdiction where doing so would be contrary to law or regulation or which would subject to any additional registration or licensing requirement within such jurisdiction. The information and statistical data herein have been obtained from sources we believe to be reliable and complied by our research department in good faith. Such information has not been independently verified and we make no representation or warranty as to its accuracy, completeness or correctness. Any opinions or estimates herein reflect the judgment of at the date of this publication/ communication and are subject to change at any time without notice. This report is not a solicitation or any offer to buy or sell any of the securities mentioned herein. It is for information purposes only and is not intended to provide professional, investment or any other type of advice or recommendation and does not take into account the particular investment objectives, financial situation or needs of individual recipients. Before acting on any information in this publication/communication, you should consider whether it is suitable for your particular circumstances and, if appropriate, seek professional advice. Neither AKD Securities Limited nor any of its affiliates or any other person connected with the company accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained therein. Subject to any applicable laws and regulations,, its affiliates or group companies or individuals connected with AKD Securities Limited may have used the information contained herein before publication and may have positions in, may from time to time purchase or sell or have a material interest in any of the securities mentioned or related securities or may currently or in future have or have had a relationship with, or may provide or have provided investment banking, capital markets and/or other services to, the entities referred to herein, their advisors and/or any other connected parties. (the company) or persons connected with it may from time to time have an investment banking or other relationship, including but not limited to, the participation or investment in commercial banking transaction (including loans) with some or all of the issuers mentioned therein, either for their own account or the account of their customers. Persons connected with the company may provide corporate finance and other services to the issuer of the securities mentioned herein, including the issuance of options on securities mentioned herein or any related investment and may make a purchase and/or sale of the securities or any related investment from time to time in the open market or otherwise, in each case either as principal or agent. This document is being distributed in the United State solely to "major institutional investors" as defined in Rule 15a-6 under the U.S. Securities Exchange Act of 1934, and may not be furnished to any other person in the United States. Each U.S. person that receives this document by its acceptance hereof represents and agrees that it: is a "major institutional investor", as so defined; and understands the whole document. Any such person wishing to follow-up any of the information should do so by contacting a registered representative of. The securities discussed in this report may not be eligible for sale in some states in the U.S. or in some countries. Any recipient, other than a U.S. recipient that wishes further information should contact the company. This report may not be reproduced, distributed or published, in whole or in part, by any recipient hereof for any purpose. 10