BICsm Frontier Market Investment Managers and Advisors                                   South Asian Economies Between Ind...
Table of Contents    Our Organization and Proposition    The Investment Team    The Case for the BIC Frontier Markets ...
Our Organization and Proposition                              Investing In Frontier Asia | 3
Who is Elephant Capital Advisors?   Independent investment boutique investing in nine BIC Frontier Markets       -BIC (be...
Our Proposition   Access to a large and rapidly growing region in the world   Use active management to add value        ...
Investment Team                  Investing In Frontier Asia | 6
Management ProfilesCore Team        Mohammed Riad (USA)                                           Kris Loganathan (Sri Lan...
Team Profiles                                                                 Consultants   Riz Khan (USA)                ...
Experience Advantage   The team has the economic, social and cultural perspectives of the region.           -5 nationalit...
ResourcesTrading                                        Research                              Fund Administration   Nomur...
The Case for the BIC FrontierMarkets                                Investing In Frontier Asia | 11
BIC Frontier Asia                                 China                   Nepal       BhutanPakistan                      ...
What are Frontier Markets?   Smaller & Less Liquid       Frontier markets represent those economies that are smaller and...
What are Frontier Markets?“Frontier markets have historically displayed modest correlation to both developed and emerging ...
Characteristics of Frontier Investing     An availability of a growing low cost labor pool, increasing literacy rates, an...
Opportunities in Frontier Asia?    BIC Frontier stocks directly benefit from their strategic location between the world’s...
Risks of Frontier Investing     Frontier capital markets are less developed and stocks are more thinly traded, resulting ...
Statistics of BIC Countries                         Vietnam            Pakistan              Sri Lanka            Banglade...
Statistics of BIC Countries                            Nepal                Bhutan                  Laos            Cambod...
Valuation   BIC economies offer an attractive relative valuation profile versus developed and emerging markets.   Compet...
Regional Performance    Returns on assets and equity are expected to significantly improve in the next several years due ...
Correlations and ReturnsKey CorrelationsWorld Indices (% change)                           Investing In Frontier Asia | 22
Regional Performance         High demand for private market financing activities and a new emerging investing class in   ...
Our Investment Process                         Investing In Frontier Asia | 24
Investment Process   ECA’s investment philosophy is structured on the fundamental belief that a top-down investment strat...
Security Analysis                                            Business             Growth    Valuation          Cash Flow  ...
Risk ManagementHypothetical Portfolio                                  * Companies from periphery       Country Allocation...
APPENDIX           Investing In Frontier Asia | 28
Country ProfilesA senior Indian foreign-service official is quoted in the book “The Rivals” by Bill Emmot. “The thing you ...
Country ProfilesBhutan   Transitioned from an Absolute Monarchy to Constitutional Democracy Monarchy in 1998.   One-thir...
Country ProfilesCambodia   Benefits as a member of ASEAN group from China-Asean free trade agreement (FTA).   China is t...
Country ProfilesSri Lanka   China was largest foreign investment financer involved in nearly all of the country’s major i...
BiographiesMohammed Riad CEO, CIO, Portfolio ManagerMr. Riad has nearly 20 year of experience in the investment management...
Biographies                                    (cont.)Kris Loganathan Managing Director, Asian OperationsKris began his ca...
Biographies                                   (cont.)Khadaega Thabet Junior Operations SpecialistKhadaega has participated...
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ECA- Forth Quarter 2012

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ECA- Forth Quarter 2012

  1. 1. BICsm Frontier Market Investment Managers and Advisors South Asian Economies Between India and ChinaINSTITUTIONAL FIRM OVERVIEW2012 OK to Purchase http://www.dreamstime.c OK to Purchase om/stock-images-rice- field-worker- image2924674?sms_ss=e mail&at_xt=4dda7b13e8f 52a85%2C0
  2. 2. Table of Contents  Our Organization and Proposition  The Investment Team  The Case for the BIC Frontier Markets  Our Investment Process  Appendix  Individual Country Profiles  Staff Biographies
  3. 3. Our Organization and Proposition Investing In Frontier Asia | 3
  4. 4. Who is Elephant Capital Advisors? Independent investment boutique investing in nine BIC Frontier Markets -BIC (between India and China) region Formed in 2011 by Mo Riad -Native of the region with extensive ties there -Educated in US with over 20 years institutional investment management experience Objective to be a leading manager of BIC long-only and hedge funds Headquartered in St. Louis, MO with a research and operations office in Sri Lanka Investing In Frontier Asia | 4
  5. 5. Our Proposition Access to a large and rapidly growing region in the world Use active management to add value -Country allocations -Sector weightings -Fundamental and quantitative company analysis Control risk through diversification rules and on-the-ground oversight Expect attractive returns that are lowly correlated to other equity markets -USA, EAFE, and MSCI EM Investing In Frontier Asia | 5
  6. 6. Investment Team Investing In Frontier Asia | 6
  7. 7. Management ProfilesCore Team Mohammed Riad (USA) Kris Loganathan (Sri Lanka) CEO, CIO, Portfolio Manager Managing Director- Asian Operations Mohammed Riad is Chief Executive and Chief Investment Kris Loganathan is a Partner and joined the Elephant officer of Elephant Capital Advisors, LLC a company he Capital Advisors team in South East Asia in February founded in 2011. He is responsible for the overall business 2011. He provides leadership for the firm’s custodial, leadership role at ECA, including business development, banking, trading, and legal operations in Asia. Kris also administrative, and compliance functions. Mo also directs directs the ECA’s local data aggregation efforts and also the firm’s investment strategy and portfolio management supports the firm’s fundamental research efforts. process and Chairs the firm’s Investment Committee. Dr. Abdur Chowdhury, PhD (USA) Ashekul “Huck” Huq (USA) Chief Economist Senior Research Analyst Dr. Abdur Chowdhury is a Partner and joined the Elephant Huq is a Partner and joined the Elephant Capital Advisors Capital Advisors team in April 2011. Dr. Chowdhury is a team in February 2011. He was instrumental in the member of the Investment Committee and serves as the development of the investment process and is responsible firm’s global economic advisor. Dr. Chowdhury utilizes his for maintaining the fundamental and country specific vast international experience assessing the economic, models utilized in security selection and economic analysis. financial, trade and political landscape, and their Huq is actively involved with the business development and implications for the portfolio investment companies. client service activities of ECA. He also directs ECA’s full- time Internship Program as well as oversees the contributions for the firm’s strategic advisors. Investing In Frontier Asia | 7
  8. 8. Team Profiles Consultants Riz Khan (USA) Firoze Ahmed (USA) Director, Global Marketing Consultant – Information Technology Riz will be joining Elephant Capital Advisors LLC (ECA) as Firoze Ahmed serves as a Strategic Advisor to the Elephant Capital Director, Global Marketing starting October 2012. In this Advisor team. He offers technology support advice to the research role ,Rizs responsibility will be to set overall marketing team and also assists in U.S. business development efforts. Firoze strategy including the planning, and execution, and brings IT consulting experience as head of Business Development at a managerial oversight for High Net Worth investor small business federal IT solutions provider working with the US communities throughout the world that have strong Government and its many agencies . connections to the South Asia frontier markets. Khadaega Thabet (USA) Ara Pararajasingham (Sri Lanka) Consultant – Business Development Junior Operations Specialist Ara Pararajasingham serves as a Strategic Advisor to the Elephant Khadaega is pursuing a BS in accounting degree at Capital Advisor team. He offers analytical database support advice to University of Missouri- St. Louis. For ECA, she assists the research team and also assists in Asian business development in the corporate accounting, account documentation efforts. Ara held a variety of financial analysis and database support and reconciliation, as well as in operations support positions at JP Morgan in NYC. functions. Investing In Frontier Asia | 8
  9. 9. Experience Advantage The team has the economic, social and cultural perspectives of the region. -5 nationalities, 5 languages/dialects, and business experience from 8 countries. Tangible local resources, contacts, and relationships leveraged and directed by US-based management and research team. ECA portfolio management team has over 15 years of institutional equity management experience. Proven “western-style” portfolio management, risk management, and compliance capabilities. One of the few investment managers to focus exclusively on the BIC region. ECA has partnered with a best-class suite of US-based and off shore service providers for access to resources in equity and economic research, execution services, and custodial arrangements. Qualified to fulfill a thorough due diligence process to access growing region via a proven institutional investment manager. Investing In Frontier Asia | 9
  10. 10. ResourcesTrading Research Fund Administration Nomura Securities  Asia Development Bank  Segue Partners Barclays Capital  World Bank/IMF HSBC  HSBC Portfolio Management ConvergEx Group  Nomura  Nomura Tradespex Capital Trust Securities (Pvt) Ltd. (Sri  Barclays Global Lanka)  Access frontier market database  Brookings Institute Elixir Securities (Pakistan)  World dataBank  Transparency International  Standard & Poors Capital IQ  World Economic Forum GCILegal  Local research providers (Asia) Friday, Edlredge, and Clarke, LLC (USA) Marketing  Eager, Davis, and Holmes, LLC (USA) Stinson Morrison Hecker LLP  Bull Marketing, Inc. (USA) CustodyPatents and Intellectual  Pershing (USA)Property  Scottrade USA Banking Harness Dickey (USA)  Deutsche Bank Pakistan  Citibank, N.A.  Standard Chartered  HSBC Bank Asia BangladeshTax & Accounting   HSBC Sri Lanka Burds and Kuntz PC (USA)  American Express Harb, Levy, and Weilland, LLP Investing In Frontier Asia | 10
  11. 11. The Case for the BIC FrontierMarkets Investing In Frontier Asia | 11
  12. 12. BIC Frontier Asia China Nepal BhutanPakistan Laos Bangladesh Vietnam India Myanmar Cambodia Sri Lanka Investing In Frontier Asia | 12
  13. 13. What are Frontier Markets? Smaller & Less Liquid  Frontier markets represent those economies that are smaller and less liquid than the more advanced emerging markets. They are often considered a subset of those economies defined as emerging markets. Frontier economies are differentiated from their bigger developing market brethren by the following more acute risk characteristics; political instability, poor investment liquidity, inadequate financial regulation, weak corporate legal infrastructure, substandard financial reporting, as well as larger currency fluctuations. All Corners of the Globe  Frontier markets exist in all the corners of the globe with country representations in South America, Middle East, Africa, and Asia. $Trillion  Frontier markets represent roughly 4% of global GDP, and depending on your classification, over $trillion when combined. 50+ Stock Markets  Roughly half of the nearly 120 stock markets worldwide representing nearly one third of the world population can be classified as frontier markets. Surging Interest  Growing demand for cheaper labor and access to new sources of raw materials, coupled with a search for higher investment returns has led to surging interest in frontier markets. Investing In Frontier Asia | 13
  14. 14. What are Frontier Markets?“Frontier markets have historically displayed modest correlation to both developed and emerging market indices.....globaleconomic forces may not influence the frontier economies to the same extent as the more interconnected developed markets.”Source: Mekeeta Investment GroupIndex Returns & Correlations U.S. Dollar Standard Sharpe * Correlation to Jun 2002 – Dec 2011 Returns (%) Deviation (%) Ratio MSCI Frontier Index* MSCI Frontier 6.2 14.2 .02 1.00 MSCI Emerging Markets 10.7 22.0 .31 0.36 MSCI EAFE 2.0 20.4 -0.10 0.32 S&P 500 1.7 22.2 -0.10 0.07 BIC Region (GDP weighted Index) 19.2 12.9 1.00 0.20 JPM Global Aggregate Bond 7.3 5.9 0.57 0.08 * Returns use simple price appreciation and not total return. Risk-free rate assumed for 4% for developed markets and 7 % for Frontier. Correlation return numbers calculated using daily price change data.MSCI Frontier Markets (FM) Index Central & Eastern Europe & Americas CIS Africa Middle East Asia  Argentina  Bulgaria  Kenya  Bahrain  Bangladesh  Trinidad & Tobago  Croatia  Mauritius  Jordan  Pakistan  Estonia  Nigeria  Kuwait  Sri Lanka  Kazakhstan  Tunisia  Lebanon  Vietnam  Lithuania  Oman  Romania  Qatar  Serbia  United Arab Emirates  Slovenia  Ukraine Investing In Frontier Asia | 14
  15. 15. Characteristics of Frontier Investing  An availability of a growing low cost labor pool, increasing literacy rates, and rising standards of the middle class can outweigh the structural impediments inherent in many of these economies.  Many frontier markets are undervalued but are rich in untapped natural resources and commodities available at much lower extraction costs compared to developed economies.  Sector and stock concentration in many less liquid developing capital markets adds a level or risk that may need to be actively managed.  Very few investment vehicles are offered for foreign investors for broader access to Frontier Asian Markets.  Currency controls and restriction on foreign direct investment have to be considered in many small frontier markets.  Frontier equity markets exhibit low cross-correlations between themselves in a particular region thus providing additional diversification and lowers overall portfolio volatility.  Frontier economies are generally more dependent on indigenous demand for goods and services and less exposed to global economic developments than emerging market. Investing In Frontier Asia | 15
  16. 16. Opportunities in Frontier Asia?  BIC Frontier stocks directly benefit from their strategic location between the world’s two fastest growing developing markets of India and China.  Three of the 11 nations identified by Goldman Sachs as N-11 are major economies in the FSA.  The FSA market alone is home to over 550 million people and with a total GDP for the region in excess of USD$ 1.25 trillion.  Many BIC economies also have access to shipping routes and port facilities that are vital to Indian and Chinese exports and imports.  FSA economies are experiencing a newfound base in manufacturing benefiting from the rising wage structure, production costs, and currency strengths in the major regional economies of China and India.  The region continues to be one of the fastest areas with 2010 GDP growth of 8.6%. The Asian Development Bank projects “Developing Asia” to grow a healthy 7.3% for 2011.  Consumer demand growth in China and India is trickling down and having a domino effect in FSA market exports.  The continued outsourcing trend and some of the lowest wage rates in the world benefit frontier economies as they are the lowest cost providers of labor in the region.  FSA is one of the largest untapped expected consumer market regions in the world with a rapidly growing middle class.  Continued trend of privatization of state-owned industries will add large number of investment opportunities and increased liquidity to the investable universe for the foreseeable future.  Majority of economies have active stock exchanges with over 1600 listed equities represented in the region. Investing In Frontier Asia | 16
  17. 17. Risks of Frontier Investing  Frontier capital markets are less developed and stocks are more thinly traded, resulting in potentially higher trading costs and lower liquidity.  Macroeconomic shocks to a particular economy or region may significantly affect the performance of frontier market stocks.  Currency, political and social stability, non-conforming accounting practices, and lack of transparency are new “factors” for frontier managers to incorporate in their macro models.  Sector and individual security concentration is more pronounced and needs to be managed. For example, bank stocks in many of the frontier markets can comprise up to 30% of the total market capitalization.  Idiosyncratic political and economic risk can result in severe single market volatility that can be mitigated with an active investment approach.  Corruption in the governments and private sectors coupled with weak judicial systems remain structural risks imbedded in all Frontier markets. Investing In Frontier Asia | 17
  18. 18. Statistics of BIC Countries Vietnam Pakistan Sri Lanka BangladeshNumber of issues 336 644 241 255Stock marketcapitalization $28,804 $38,278 $20,095 $31,803($ million)Population in 90.6 14 187.3 6 21.3 57 158.6 7millions (rank)GDP PPP in billions(rank) $278.1 42 $451.2 28 $104.7 69 $259.3 47GDP per capita(rank) $3,100 167 $2,400 181 $4,900 148 $1,700 196Government Socialist Parliamentary Federal Republic Republic Republic DemocracyLiteracy rate 90.3 49.9 90.7 47.9(% of total pop.)Median age (yrs.) 27.8 21.6 30.8 23.3*CIA World Fact book**2008 year end Investing In Frontier Asia | 18
  19. 19. Statistics of BIC Countries Nepal Bhutan Laos Cambodia Myanmar (Burma)Number of 289 22 3 0 0issuesStock marketcapitalization $4,672 $250 $60 $39.2 0($ million)Population in 29.4 41 .7 164 6.5 103 14.7 66 53.9 24millions (rank)GDP PPP in $35.3 102 $3.6 170 $15.7 135 $30.1 108 $60.1 86billions (rank)GDP per $1,200 208 $5,000 144 $2,400 180 $2,000 188 $1,100 209capita (rank)Government Federal Constitutional Monarchial Democratic Communist Military Regime Monarchy Democracy RepublicLiteracy rate(% of total pop.) 48.6 47.0 73.0 73.6 89.9Median age(yrs.) 21.6 24.8 21.0 22.9 26.9 *CIA World Fact book **2008 year end Investing In Frontier Asia | 19
  20. 20. Valuation BIC economies offer an attractive relative valuation profile versus developed and emerging markets. Competitive margins and attractive dividend yields help to offset additional risks. Name Current Level P/E P/B ROA ROE Div Yield S&P 500 Index 1,314.6 14.8 2.2 9.4% 25.7% 2.0% MSCI EM Index 999.6 11.3 1.7 8.8% 20.9% 2.6% MSCI FM Index 465.1 10.4 1.4 7.0% 16.8% 5.3% VN - Index (Vietnam) 373.0 9.3 1.1 8.5% 20.6% 10.8% Karachi 100 Index (Pakistan) 8,306.6 8.5 1.4 9.1% 21.8% 9.7% DSE General Index (Bangladesh) 4,506.1 10.3 2.2 6.7% 19.6% 2.1% Sri Lanka Colombo All Sh 5,536.1 12.3 2.0 6.8% 19.0% 2.5% BIC Region Index (GDP weighted) 5,367.5 9.7 1.6 7.9% 20.5% 6.4% 16,995.8 17.1 2.9 23.9% 1.5% BSE-500 Index (India) 12.0% 2,298.4 12.6 2.0 20.34% 1.8% CSI 300 Index (China) 6.8% As of 01/24/12: For Composite Index: Ratio calculations are based on GDP weights of individual countries Investing In Frontier Asia | 20
  21. 21. Regional Performance Returns on assets and equity are expected to significantly improve in the next several years due to technological and management advances. Higher EPS and Cash Flow growth is projected due to economic growth and demographics. Variability in yearly country returns argues for active management of country allocations.Country Returns 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Pakistan Pakistan Bangladesh Pakistan Vietnam Bangladesh Vietnam Sri Lanka Sri Lanka PakistanSri Lanka Sri Lanka Sri Lanka Vietnam Sri Lanka Pakistan Bangladesh Bangladesh Bangladesh Sri LankaBangladesh Bangladesh Vietnam Sri Lanka Pakistan Vietnam Sri Lanka Pakistan Pakistan Laos Vietnam Vietnam Pakistan Bangladesh Bangladesh Sri Lanka Pakistan Vietnam Vietnam Nepal Nepal Nepal Vietnam Bangladesh Investing In Frontier Asia | 21
  22. 22. Correlations and ReturnsKey CorrelationsWorld Indices (% change) Investing In Frontier Asia | 22
  23. 23. Regional Performance  High demand for private market financing activities and a new emerging investing class in the regions is driving significant capital markets growth. Country Returns (% change) Index 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 CAGRVietnam 13.8 -22.1 -8.9 43.3 28.5 144.5 23.3 -6.6 5.7 -2.0 -27.5 11.0Pakistan -15.6 112.2 65.5 39.1 53.7 5.1 40.2 -58.3 60.0 28.1 -5.6 20.1Sri Lanka 38.8 31.2 30.3 59.3 27.6 41.6 -6.7 -40.8 125.2 96.0 -8.5 28.1Bangladesh 29.1 -0.9 17.7 103.7 -14.9 -4.0 87.5 -7.0 62.3 82.8 -36.6 21.1Laos − − − − − − − − − − -9.5 -9.5Nepal − − − − − − − − -21.3 -26.3 -21.7 -24.9China -20.6 -17.9 10.3 -15.4 -8.3 130.4 96.7 -65.4 80.0 -14.3 -21.7 0.5India -17.9 3.5 72.9 13.1 42.3 46.7 47.1 -52.4 81.0 17.4 -19.8 13.1Source: MSCI*The ending date for 2011 data is 12/15/2011 for Royal Nepal Index. The beginning date for Lao Stock Index is 1/12/11. The beginning date for Royal Nepal Index is 4/1/2009 Investing In Frontier Asia | 23
  24. 24. Our Investment Process Investing In Frontier Asia | 24
  25. 25. Investment Process ECA’s investment philosophy is structured on the fundamental belief that a top-down investment strategy utilizing global and regional economic data, combined with rigorous security analyses, offers institutional investors the best risk adjusted approach to Frontier Asian Markets equity portfolios. Natural resource Capital markets availability development Labor cost and skill Corporate competitiveness advantages Regional demographics World Economic Forum GCI Strategic geographic legacy Global demand needs in energy Transparency International Global demand for raw materials Ease of Doing Bus. Indices Regional infrastructure spending GDP expected growth Global Ratings Indices ranks Top Down Macro Analysis Imports/Export transportation Tourism demand Foreign Direct Investment Global outsourcing trends Government policy Monetary Policy Country Global Regional governmental policy agendas Allocation Themes Political alliances Industry growth analysis Regional trade pacts Global sector attractiveness Cross-country sector Market Analysis Regional drivers of growth Competitive industry costs Government support investments Government investment Sector Industry Industry development Competitive advantages Sector privatization Dynamics Outlooks Valuation analyses Security Analysis Business Strength Growth Drivers Cash Flow metrics Management Quantitative Fundamental Investing In Frontier Asia | 25
  26. 26. Security Analysis Business Growth Valuation Cash Flow Management Strength Drivers Ratio metrics Cash generation Industry metrics Acquisition history Capital allocation Margins Redeployment of Competitor Sales growth Acquisition history cash flow analysis Industry comparison Economic trends Credibility Balance sheet Barriers to entry Historical trend strength Operating leverage Access to analysis Technological information Payout ratio advantages Business drivers Return on Length of tenure invested capital Capital structure Innovation and R&D Investing In Frontier Asia | 26
  27. 27. Risk ManagementHypothetical Portfolio * Companies from periphery Country Allocation countries that derive > 50% of 0% 0% 2% revenue from region. No more 30% in single country 0% 10% Bangladesh 3% 20% Vietnam 4% Sri Lanka Sector Allocation Pakistan Nepal No more than 35% in a single sector 15% 21% Laos Cambodia Equity Holding Myanmar 25% No more than 5% in individual security Bhutan Other* BenchmarksSector Breakdown MSCI Frontier Markets Utilities Communications MSCI FM Asia Index Energy Basic Materials S&P Frontier BMI Industrial Customized benchmark Diversified Cons. Cyclical Cons. Non-cyclical Financial 0% 5% 10% 15% 20% 25% 30% 35% Investing In Frontier Asia | 27
  28. 28. APPENDIX Investing In Frontier Asia | 28
  29. 29. Country ProfilesA senior Indian foreign-service official is quoted in the book “The Rivals” by Bill Emmot. “The thing you have tounderstand,” he says, “is that both of us (India and China) think that the future belongs to us. We can’t both be right.”The BIC countries stand to directly benefit from this global competition…Vietnam Pakistan Coastline of about 3,400 kilometers facing the  The level of internet users as a % of population in South China Sea giving access to shipping Pakistan is greater than Indonesia, Philippines, Sri Lanka, routes to China and Japan. and India. The Ho Chi Minh City port facilities strategic  Different than most developing economies in Asia, location for access to both Indian Ocean and Pakistan’s industrial sector has a higher contribution to South China Sea ranked 29th in the world, with GDP than the agricultural component. cargo volumes surging more than 4 times from  Gallup Pakistan in a June 2009 study estimated that total 1999 to 2009. TV viewership in the country was 86 million with a near GDP rose by average of 7.3% annually over the split between terrestrial and Sat/Cable technologies. last decade.  The All Pakistan Newspapers Society (APNS) estimates With a literacy rate of over 90%, adding over 1 that there are over 1000 daily newspapers. A 2008 BBC million people a year to its workforce. survey found more than 42% of men read newspapers Lowest labor cost for Southeast Asia economies regularly. with average monthly wage of US$100.  A high growth country, GDP averaged roughly 7% per China has become a “banker” to Vietnam annum from 2000-2007. infrastructure with 4 out of 9 power projects  Highest urbanization in South Asia. The urban population use loans from China. is likely to equal its rural population by 2030. Chinese FDI in Vietnam was up 74% in 2010. Asia’s third largest producer of oil. Investing In Frontier Asia | 29
  30. 30. Country ProfilesBhutan Transitioned from an Absolute Monarchy to Constitutional Democracy Monarchy in 1998. One-third of the population is under the age of 14; the median age is 24.8 years. First country with a constitutional obligation of the population to preserve at least 60% of the nation’s forests. Government forecasts the unemployment rate is forecast to drop to 2.5% be the end of 2012 Power generation from Hydropower is large and fast growing part of GDP with electricity sales accounting for over 25% of exports.Nepal Nearly 50% of total trade value is with next door neighbor, India. Agriculture accounts for 40% of GDP and with 76% of the labor force engaged in some form of agricultural industry. The top income and corporate tax rate is 25%. A nearly 10 year long insurgency by Maoist rebels ended in 2006 with a drafting of a new constitution in April 2008 ending the power of the ruling Monarchy.Myanmar (Burma) India at 13% and China at 11% are the 2 largest export partners. Offshore Shwe and Shwephyu Fields are expected to hold between 5.7-10 trillion cubic feet of natural gas. Pipeline construction under way will link China’s Yunnan province to natural gas fields and ports in Rakhine State for Africa-origin crude oil. Produces more than 90% of the world’s rubies and fine-quality Jade. China contributed to nearly 2/3 of all foreign investment in Burma over the financial year 2010-2011. Investing In Frontier Asia | 30
  31. 31. Country ProfilesCambodia Benefits as a member of ASEAN group from China-Asean free trade agreement (FTA). China is the largest financier of infrastructure projects. The 20th century was a disastrous one for Cambodia who were under French control from 1863-1953 and 70’s under the brutal Khmer Rouge reign of terror. National stock exchange is expected to debut summer of 2012 with US Dollar and Cambodian Riel as currency choices. The United States remains the largest export part with nearly 50% of total exports. GDP expected to average 6.5% in 2011 and 2012 according to ADB.Laos Construction to begin on high-speed railway connecting capital of Vientiane with Kunming, China and to be completed in 2015 and China to finance 70% of US$4 billion cost. China National Petroleum Corp. is financing a natural gas pipeline from Myanmar to Yunnan province. Korea is the number one investor and China the number 2. The government expects the economy to grow at 8.5% in 2012 with a trade surplus resulting from the export of commodities, including gold, copper, electricity, and garments. Thailand continues to be main trading partner for exports and imports. First stock exchange opened this January with 2 companies listing initially. GDP has expanded by an average of 7.9% a year for the past 5 years. Investing In Frontier Asia | 31
  32. 32. Country ProfilesSri Lanka China was largest foreign investment financer involved in nearly all of the country’s major infrastructure projects countrywide. Chinese companies are largest investors in country’s major infrastructure projects. Tumultuous 25-year civil war with minority Tamil separatists ended in June 2009 and ushered in the beginnings of a new era of rebuilding and economic growth. Asian Development Bank forecasts SL GDP growth of 8% in 2011 and 2012. Best performing international stock market in 2010 with a 96% return. India was the largest source of foreign direct investment to Sri Lanka in 2010 with US$110 million committed.Bangladesh Fourth largest rice producer in the world. Southern port city of Chittagong is home to the world’s largest ship breaking yard. 2010 GDP growth of 6.66% is highest since post independence period of 1973-1974. Home to the largest mangrove forest in the world and the world’s longest beach at Cox’s Bazaar. The agriculture sector employs nearly 50% of the labor force and generates roughly 20% of GDP. One of the largest democracies in the world, Bangladesh is also the third most populous Muslim nation. Remains the largest exporter of Jute goods (carpet backing, twine, sacks) and the second largest producer of Jute globally. Investing In Frontier Asia | 32
  33. 33. BiographiesMohammed Riad CEO, CIO, Portfolio ManagerMr. Riad has nearly 20 year of experience in the investment management industry. From 1999 to 2010, Mo held the titles of Managing Director,and Senior Portfolio Manager at Fiduciary Asset Management Co., LLC (FAMCO) an investment subsidiary of the middle market investment bankPiper Jaffray Cos. Mr. Riad served on the firms Strategy, Investment, and Risk Management Committees and has held a wide range of seniorportfolio management and executive roles at FAMCO. Mo developed extensive experience in portfolio strategy, research, and trading through hislead portfolio management roles in large and small cap equity, hedged equity, and quantitative enhanced portfolios. Mo was instrumental in thedevelopment of the firm’s option-based institutional hedged products and trading methodologies. Early in his career, Mr. Riad worked in WealthManagement where he obtained his licensed advisor and securities principal licenses for his roles in branch management at Legg Mason (SmithBarney) in the Washington D.C. and New York offices. Mo serves on the Institutional Advisory Board at CBOE and is active in the optionscommunity as a frequent speaker and panelist at industry conferences and events. Mr. Riad received a Bachelor of Science in Business from WakeForest University and his Masters of Business Administration from Washington University in St. Louis. He was born in Dhaka, Bangladesh andresides in St. Louis, MO.Abdur Chowdhury Chief EconomistWith over 25 years of experience, Dr. Abdur Chowdhury has served as a senior economist in the world’s foremost economic policy and researchinstitutions. Most recently as Chief Economist and Director, Dr. Chowdhury led the United Nations Economic Commission for Europe’s EconomicAnalysis Division located in Geneva, Switzerland. In addition, Dr. Chowdhury served as Senior Researcher at the Institute for TransitionEconomics for the Bank of Finland in Helsinki, Finland. While in Finland Dr. Chowdhury also worked as Visiting Researcher at the WorldInstitute for Development Economics Research of the United Nations. The Food and Agriculture Organization of the United Nations in Rome,Italy named Dr. Chowdhury as a Consultant in 1998. Recognized as an expert in macroeconomic analysis, Dr. Chowdhury has continued to serveas Professor of Economics at Marquette University since 1989. Investing In Frontier Asia | 33
  34. 34. Biographies (cont.)Kris Loganathan Managing Director, Asian OperationsKris began his career as an Analyst for the World Bank in Washington, D.C. He then moved to New York to join the Emerging Markets EquitiesGroup at UBS where he spent six years as a Sales Trader advising on South Africa, Latin America and Emerging Asia markets for institutional buy-side clients. Kris has also worked for the firm’s Equity Derivatives Desk focusing on hedging concentrated equity positions for U.S. assetmanagers, hedge funds and high net worth clients. Kris currently resides in his hometown of Colombo, Sri Lanka. He is an independent consultantproviding strategic advisory services to multinational firms and foreign investors. He is an active investor in the public and private markets in SriLanka and South Asia. Kris received his Bachelor of Arts in Economics from Hampden Sydney College in Virginia.Ashekul Huq Senior Research AnalystHuq has extensive experience in the financial services industry and began his banking career in the Consumer Banking division of integratedfinancial services firm Regions Financial. Huq graduated from Regions Leadership Development Program and later joined the banks CommercialLoan Department as a Relationship Manager in Business Banking. Huq actively managed a portfolio of major commercial relationships, developednew business relationships, and consulted Branch Managers in the Consumer Banking Team for small business development. He coordinatedclient service activities with other areas of the organization such as treasury management, private banking, public funds, trust, mortgage, andinvestments. He has also led numerous civic, business and charity events for the bank. Huq served as a liaison between the U.S. Small BusinessAdministration and Regions Bank in Arkansas. Huq has served on the local boards of many organizations in Arkansas including CivitanInternational. His education background includes a Masters in Business Administration from the University of Arkansas - Little Rock and aBachelors of Science degree in Computer Science from University of Central Arkansas.Riz Ali Khan Director, Global MarketingAs a senior sales professional with 20 yrs of experience, Riz has held executive sales management roles for multinationals in India, UnitedKingdom, and the US. He is an accomplished specialist in brand building, large account management, product portfolio development, as well aschannel and distribution management, Riz spent 9 years with FedEx India as Manager Sales- Corporate Accounts responsible for all-Indiacorporate clients. He was also a Sales Supervisor for Sonex Communications PLC, one of the largest electronics resellers in the United Kingdom.Riz held the position of regional and country head for Airex Logistics in Delhi, India. While in the United States, he has continued his associationwith Airex by performing consulting and advisory services. He is also a co-founder and principal with BGH India, an India-based constructioncompany with 3 locations in India. Riz also an active member and volunteer of National MS Society. Riz earned his Business LeadershipManagement Program certificate from Cornell University, NY, USA in 2011. Investing In Frontier Asia | 34
  35. 35. Biographies (cont.)Khadaega Thabet Junior Operations SpecialistKhadaega has participated in the 2012 Volunteer Income Tax Assistance (VITA) program, where she assisted low income, disabled, and elderly filetheir tax returns. Her experience also includes cashiering and daily banking responsibilities for a St. Louis-based, family owned and operated retailmerchandiser. Khadaega is pursuing a BS in accounting degree at University of Missouri- St. Louis. She was also nominated to the All-MissouriAcademic Team 2012; a regional academic recognition.Firoze Ahmed Consultant – Information TechnologyFiroze is currently the Vice President of Business Development for Telophase Corporation, an Arlington, VA based 8(a) small business federalservice IT provider. His clients are mainly focused on the United States Government which includes both the Civilian and Defense Agencies. Hehas contracted multi-million dollar agreements where enterprise IT solutions and management consulting services were supplied to the U.S.Government. Firoze was also the Director of Government Affairs and his responsibilities included overall business and operations management.He also worked for Net2000 Communications, a regional telecommunications company in the role of a technology program officer. Firoze earneda Bachelor of Arts from the University of Maryland, and resides in the Washington, D.C. metropolitan area.Ara Pararajasingham Consultant – Business DevelopmentAra co-founded a Bangalore-based India sports management firm Leander Sport Pvt. Ltd and currently serves as its CEO. While at Leander Sport,Ara developed deep relationships in the sports management industry and with the investor community. He worked with sponsors, rights holders,agencies, media and sporting team/franchise owners within India. He also pioneered a turn-key Sports Infrastructure practice from Design,Marketing, Development, to Operations for Indian clients ranging from real estate developers, academic institutions and state associations. Priorto this venture, Ara worked for JP Morgan in New York City from 1997-2005. His last position was working with Office of the Chairman as well asvarious division CFO’s as a Vice President for Corporate Risk and Information. He also held V.P. and Associate positions in Investment BankingFinance, Foreign Exchange, and Commodities trading. Earlier in his career he was a Senior Fixed Income Analyst for Reuters in Stamford, CT.Ara earned a Bachelor of Sciences in Mathematics from Madras Christian College in Chennai, India and an MBA in Finance from the BarneySchool of Business at the University of Hartford in Hartford, CT. Investing In Frontier Asia | 35

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