1. Initial Public Offering (IPO) in Pakistan Capital Markets

2. Equity Market – KSE 100 Average Return 10 yr: 26% 5 yr: 36% 2 yr: 49% (Calender Year ended December)2010201120122013 Listed Companies644638573560 Listed Capital (PKR bn)9191,0481,0941,130 Market Capitalisation (PKR bn)3,2682,9464,2426,057 KSE-100 TM Index 12,02211,34816,90525,261 Return KSE 100 index (%) (Capital Gain)28.1%(5.6%)48.9%49.4% New Companies Listed6443 New Debt Instruments Listed4656 Average Daily Turnover – (Shares, mn) 13397197238 Average Value Daily Turn over-(PKR bn) 4.453.514.687.60 Source: KSE

3. Listed Vs Private Companies Listed companies comprise less than 1% of total companies in Pakistan Source: SECP No of Companies% of Total Paid up Capital (PKR bn) Public Listed5600.9%1,129 Public unlisted2,2453.6%--- Private57,32192.0%2,059 Others (NGOs, foreign companies etc) 2,1873.5%--- Total62,313100.00%---

4. Why Private Companies do not go public? Wealth and control sharing is a barrier  Dilution in wealth of family and partners  Dilution in control and governance  Share holder value dependent on market  Disclosure requirements/Confidentiality compromised  Interests of the minority investors  Cost of IPO  Process Complexity  Macro and market challenges

5. Why Private Companies should go for public? Tangible financial and strategic value  Capital formation - significant source of capital now and in the future  Economic development, savings, re-investment  Cost effective compared to debt  Public becomes partner; with subordinated commitment vs lenders  Provides liquidity in selling  Bankability  Visibility due to public coverage  Unlocks real value of the company to shareholders

6. Relaxed regulations way forward  Recently, regulators have recently taken measures to ease rules so as to encourage fresh issues  Examples of recent important changes:  If post-IPO paid up capital of the company is up to PKR 500m, at least 25% (50% previously) of such capital has to be offered to general public  If post-IPO paid up capital of the company is more than PKR 500m, public offer should be PKR 125m or 12.5% (25% previously), whichever is higher

7. Book building  Book building refers to the process of generating, capturing, and recording investor demand for shares for the purpose of effective price discovery  A maximum of 75% capital can be offered through book building  More recently, we have seen an increasing interest to tap this aspect of IPO as more issuers are opting to go for book building  Book building helps general public by creating confidence in the strike price as institutional and high net worth players participate to determine this price

8. REITs – The next big thing  REITs are expected to be introduced to the market during the ongoing year  This will allow small investors to access an asset class, previously generally reserved for high net worth individuals  REITs are expected to be launched as closed ended funds and will be made available to the general public through IPOs

9. Thank You