Page November 2010 Miranda Lane FinanceTalking Ltd T: +44 (0) F: +44 (0) E: W: Best Practice in Investor Relations Palestinian Capital Market Forum 2010 Making financial markets, accounts, corporate finance & valuation accessible to all

Page Programme The Big Picture Best Practice Local Issues 2

Page Capital Markets Big Picture Investment Bank Investors Raising Money Directors Owners ABC Co Valuation Sell side Buy side 3

Page Raising Money Benefits of Trust Investment Bank Investors Directors Owners ABC Co Valuation Sell side Buy side Personal reputation Company reputation Access to capital at lower cost Prepared to allocate capital Quality advice Positive recommendations 4

Page Raising Money If Trust is Lost Investment Bank Investors Directors Owners ABC Co Valuation Sell side Buy side Less access to capital at higher cost Capital is withdrawn Advisers pull out Reputational damage Negative recommendations 5

Page Raising Money Regulation & Governance – a Prerequisite Investment Bank Investors Directors Owners ABC Co Valuation Sell side Buy side Corporate Governance Financial Regulator 6

Page Raising Money Core Concepts Investment Bank Investors Directors Owners ABC Co Valuation Sell side Buy side COMPANY Highest standards of corporate governance Full and early disclosure of price- sensitive information Openness and honesty of management Sensitivity towards the needs of investors MARKET Equal access for all shareholders to same information No insider trading or other market abuse Rules & regulations governing obligations of listed companies 7

Page Programme The Big Picture Best Practice Local Issues 8

Page Key IR Audiences Sell-side Analysts Investors & Buy-side Analysts 9

Page Best Practice – First Steps Sell-side Analysts Investors & Buy-side Analysts Gain management buy-in for IR Develop your investment story Establish corporate governance principles Establish internal controls to protect shareholders’ investment 10

Page I R Setting Up IR Have a dedicated IR function Consider consultancy support Define your IR objectives Develop disclosure policy and establish mechanisms for reporting price-sensitive information Establish a financial reporting calendar Build relationships with analysts, investors & the financial media Prepare for likely crises 11

Page Typical IR Objectives I R To achieve a realistic valuation for the company’s shares by making the shares an attractive investment proposition To preserve a ready market for future capital To build a broad, diversified shareholder base with an appropriate shareholder mix To build a liquid but stable trading market To comply fully with the regulations designed to protect investors To lower the cost of capital 12

Page Buy-Side Relations Know who your investors are Develop strong personal relationships Regular roadshows/meetings with management Hold annual investor days/site visits/R&D updates etc Participate in investment bank sector conferences Conduct regular perception studies Don’t be drawn into selective briefing 13

Page Sell Side Relations Encourage a wide following - a better informed market will attract investors Offer regular briefings, site visits and updates Good disclosure on outlook will avoid a wide range of forecasts Conduct regular perception studies Don’t be drawn into selective briefing 14

Page The Investment Decision Making Process Sector prospects Company prospects Financial analysis ForecastValuation Investment decision 15

Page Key Valuation Variables Sector prospects Company prospects Financial analysis ForecastValuation Investment decision 16

Page Telling Your Story & Influencing Valuation Sector prospects Company prospects Financial analysis ForecastValuation Investment decision Define your sector or peer group Flag expected changes to trends Clear communication of expected capital structure Clear guidance Help with non- sensitive items Understand your investor base Communicate Quality Growth Risk Clear communication of dividend policy Provide industry statistics KPIs to bring market closer to mgt's view 17

Page Building Trust Sell-side Analysts Investors & Buy-side Analysts Promise & deliver Build relationships Give regular access to senior management Demonstrate commitment to best corporate governance practices Benchmark disclosure, presentations & reports against best practices Keep talking 18

Page Programme The Big Picture Best Practice Local Issues 19

Page Raising Money Local Issues Investment Bank Investors Directors Owners ABC Co Valuation Sell side Buy side COMPANY Control by founders Liquidity Size MARKET Lack of data/analysis Volatility Other risks (geopolitical, repatriation of capital etc) 20

Page Raising Money Palestine - Attracting Capital Investment Bank Investors Directors Owners ABC Co Valuation Sell side Buy side COMPANY A good growth story, backed up by track record to date An understanding of risk Strong management Best practice corporate governance Best practice IR Liquidity The prospect of returns commensurate with the risks involved = create trust MARKET Develop data Develop/attract intermediaries Develop regulation Develop corporate governance = create trust 21

Page November 2010 Miranda Lane FinanceTalking Ltd T: +44 (0) F: +44 (0) E: W: Best Practice in Investor Relations Palestinian Capital Market Forum 2010 Making financial markets, accounts, corporate finance & valuation accessible to all