Shamik On Gold & Etf Presentation

World Gold Trends &

Gold as an Asset class, Usage , ,Production

Silver production ,trends, use and funds

Gold ETF – Worldwide

India & Love for Gold

ETF Comes to India + Gold Physical & Jewellery

Imagine Fund options

World & India Gold Trends & Microsec ETF imaginative Funds 1

Data has been re-confirmed whenever possible & Information has been
taken from the following sources..

AMFI


On 1st august 2012


Managed Money in Developed Markets has 1-1.5% in gold & Silver


Gold:10 Year Price Movement in a log Chart


Gold: Step up Price Movement & Corrections


Gold vs USDX : Assets & diversification


Correlation to global assets, gold v US dollar


Risk off Risk on : Depletion of safe-havens


When yields collapse in sovereign bonds, investors turn to Gold


Gold Demand Trends & macroeconomic themes

Reassessing “risk-free” assets: Even assets traditionally considered safe are under
pressure. German Bunds interest rates climbed in June. The Swiss franc, yen and US
Treasuries are also facing issues – challenging their role as assets of last resort. Despite
pressures on the price of gold, its lack of credit risk, its liquidity and hedging
characteristics has made gold an attractive vehicle for long-term wealth preservation.

Correlation between gold and risk assets approaches long-term averages: Gold’s
correlation to equities and other risk assets fell towards long-run average levels in Q2
helping portfolio diversification. Gold’s increased correlation to equities in Q1 was an
indirect effect related to a weaker global economy coupled with a stronger US dollar.

Deflationary concerns in some countries provide room for further fiscal and monetary
stimulus.
This may lead to a further debasement of currencies through unconventional monetary
policy and an increased risk of future inflation. These factors should provide support for
future gold investment.


issue of Gold Demand Trends

• The flight to the US dollar as a safe-haven in the first half of 2012 could be reversed. The US debt ceiling
debate in Q3 and federal elections in November, followed by the necessity to confront a US$1.3tn budget
deficit will prove challenging to the US dollar.

• With most currencies under pressure in one form or another, gold is likely to provide a hedging mechanism for
investors. Gold prices declined in most currencies during the second quarter with the exception of the euro,
Swiss franc and Indian rupee, in part due to a strong US dollar. Volatility remained elevated amidst a busy
event-risk period. However, gold generally outperformed risk assets.


11 reasons why gold prices can rise

1. Reflation Prospect of further monetary easing in Euro and US As fiat currency
continues to be deliberately debased look for this price relationship to invert.

2. Third quarter is a seasonally strong quarter for Indian demand.

3. Exceptionally strong demand from China will support strong gold prices.Increase in
Chinese Gold Reserves ...
4. Repatriation of Gold.....Hong Kong recently pulled all its gold holdings and deposits from
London, wants to physically possess and control its gold Look for other countries to
follow.

5. Lack of Gold Supply, fresh mining production in deficit ; Scrap gold supply has slowed
down.

6. Scarcity of Gold, Throughout history only 160,000 tons of gold has ever been mined. For
folks who might not know, all the gold that’s ever been found would fit into two
Olympic-size swimming pools! At that equates to $9 trillion dollars vs $60 trillion in
outstanding fiat currency, 300 Trillion $ of Debt (sovereign, Corporate Household )

Cont…..


7. Central Banks Becoming Net Buyers of Gold Increasing gold holding by central banks.
Despite the recent buying gold holdings as a percentage of central banks reserves are at
historical lows.

7. Major Insurance Companies, University endowment funds are Now Buying Gold due to
Structural changes of the world reserve currency structure.

8. Sovereign Wealth Funds and well known Fund Managers Buying Gold.......The sovereign
wealth funds of China, Qatar, and Saudi Arabia have begun heavily investing in
commodities world-wide to diversify out of fiat currency (dollar, euro). Look for more
SWFs to follow.

10. Gold Hedging Concluding.....Traditional gold hedgers (producers, miners etc) such as
Barrick, the world’s gold company, are eliminating their hedge books…essentially taking
the cap of the market as gold supplies dry up producers are no longer locking in prices
by selling massive quantities of futures takes selling pressure off and indicates
producers believe prices will be going much higher.

11. Continued pressures on the peripheral euro zone countries and banking systems are
likely to see physical bar investment. Persisting negative real interest rates will result
in investors diverting some of their saving to gold


Worldwide Production


How does the gold that’s mined get used

52 percent gets used for jewelry,
18 percent constitute official holdings (as in central banks of nations),
16 percent take the form of investments,
12 percent find industrial uses,
leaving 2 percent unaccounted for.


Worldwide Gold & Silver ETF holdings >>



Gold, ETF holdings last at 2,434 tonnes, up from 2,402 tonnes at the end of May.
Holdings are now just eight tonnes below the peak seen in 2012 mid-March. As the
chart below shows, ETF investors have generally held on to their Gold, with holdings
only dipping by 1.8% over the March to June period.


We have also compiled a list of Global exchange listed funds (ETFs) of gold.

Annual
Name of ETF fee comments
ETFS Gold Bullion
Securities 0.40% Physically-backed sterling-denominated gold ETF.

ETFS Physical Gold 0.39% Physically-backed sterling-denominated gold ETF.

ETFS Physical Gold 0.39% Physically-backed dollar-denominated gold ETF.
ETFS Physical Swiss If you don't trust the UK or US governments you may want to invest in
Gold 0.39% gold held in Switzerland.
A way to bet on the gold price falling. Most suitable for short-term
ETFS Short Gold 0.98% holdings.

ETFS Leveraged Gold 0.98% Designed to deliver double the rise in gold (and double the fall).

ProShares Ultra Gold 0.95% Designed to deliver double the rise in gold (and double the fall).
SPDR Gold Trust (US:
GLD) 0.40% US-listed physically-backed gold ETF - the most popular with investors.


Asians and their love of Gold


India and its love of Gold


India and its love of Gold

India was the world's largest official gold market prior to 1962 when the Indian govt.
banned it and smuggling began ;
imports trade freed up after the reforms initiated from 1992 onwards ; The figures of
the past decade are astounding,
India was still the worlds largest gold market and the table below will show that Indian
demand for gold has consistently been hovering around 25% of total world demand:


Gold ETF Comes to India

Now, as the price of gold rises the billion rupee question is: Will the amount of
gold import and local jewellery demand be constant or Will the nominal rupee
value of gold demand be constant resulting in lower quantity of gold demand?

The months from October to January and April and May constitute the main
marriage season and also have a large number of festivals. Hence demand for
gold is very strong during these months.

Gold Exchange Traded Fund (Gold ETF) was launched in India in 2007 by
Benchmark Asset Management Company

The initial phase witnessed a slow but steady growth in assets, but in the past
two years that the growth has accelerated...

As on June end, there were 14 funds in the Indian Gold ETF domain with a
total asset holding of approx INR 10, 095 crores.



• AMFI Data



Option 1: The graph has been prepared using data of 9 (nine) gold funds starting 3rd
Jan 11 till 31st July 2012. Here, we have removed funds of Birla Sun Life,
Canara Robeco, IDBI, Motilal Oswal and Quantum. These have been
removed because the data for the named funds are not available since 3rd
Jan 2012 and have launched during late 2011 or in 2012.



Option 2: The graph has been prepared using data of 5 (five) gold funds starting 3rd
Jan 2011 till 31st July 2012. Here, in addition to the names mentioned
above we also have removed funds of Axis, HDFC, Kotak, and Religare.
These additional funds were removed as their data were overlapping with
others thus making it difficult to view.


Gold Exchange Traded Funds (Gold ETFs) have been the flavor in the past year with
record volumes in year.

we have seen exceptional volumes during the traditional gold buying days of Akshay
Tritiya & Dhanteras ; we also have seen a huge increase in the overall volumes in the
financial year 2011-12.

Over the past year we have seen a huge rise in interest in the product from the retail
as well as institutional clientele.


Gold as bars, coins, jewelery in India


Microsec Gold & Silver ETF options>>

Microsec MF – Imaginative Investors.......Fund Options & Innovations

Investment is all about promises. Every investment you hold assumes someone is going to
give you something for it, sometime in the future.

Gold ETF – Good Investments, Financially satisfying :

Gold Jewelery – Emotionally Satisfying Happy Investments

How to merge both feelings and opportunities in one ? How to make it an attractive option
; how to Advertise that option at the correct time ?


Microsec MF – Imaginative Investors.......Fund Options

• Microsec AMC can launch a primary Gold ETF;

• A primary Silver ETF + A Combo Gold Silver ETF

• All 3 ETF can have imaginative Fund options and a plain vanilla normal ETF option

• Subject to approvals and solutions possible, both the Gold Fund positioning and
options available can be conveyed via advertising during festival season , wedding
seasons.......

• Options are at the investors discretion, available to those with a certain minimum
amount of units or SIP Purchase programme’s

• The Combo Precious Metals Fund.........Gold and Silver ETF (say 65% gold & 35%
silver) or we can do it as a 60:30:10 Gold/silver /Platinum fund

• This can also have a Dhanteras day Special Advertising - festival fund menu ?

• This Can also be done as an Overseas redemption option with 60:30:10 option in
Gold : silver : Platinum -- to be redeemed abroad by big ticket investors –

• HNI and Corporate’s, looking to diversify Portfolio and invest abroad as per RBI
approvals..........


Microsec MF Gold & Silver ETF

• GOLD ETF fund options – Imaginative Investors

• Fund Options & Innovations

The Festival Fund ; Redeem ETF with money value certificates equivalent to running
gold value of the day at customer option, at select stores to buy coins and bars for
full value of ETF units in a clients account –

• Targeted advertising during festive season, for both urban & rural clientele

• The Wedding Fund : Same as above only exchange or redeem units for jewellery, at
customer discretion, exchange ETF units , full or in part for gold at jewellery store
at ruling gold values of the day< making charges at customer option & jeweler
option >

• Branding as a Happiness fund and (advertising orientation) as a long term
investment fund for family marriage Savings

• The Overseas Redemption Fund....Take gold abroad at a nominated bullion bank,
subject to customer having RBI clearance to invest abroad( any currency risk on
clients account), at the price ruling that day in the designated currency (pounds) in
an approved jurisdiction (UK) –

• Target HNI and Corporates, looking to diversify Portfolio and invest abroad


Indian Gold Jewellery

In gold jewellery the cost of labour or making charges is between 10% (wholesale)
and 15%(retail) of the gold cost!

This labour component is a loss when the gold jewellery is sold back in the market ;
Often the purity is never exactly as stated and even a small loss counts.

This was part of the reason for the failure of the government gold bond schemes.
If an investor were to surrender his/her jewellery which was tested and found to be
of a lower quality, he or she became skeptical of the testing process.

He would lose a lot of money due to lower gold purity as well as making charges

Hence the move towards hall-marking .......and world gold Council approvals

The Microsec AMC - ETF can collaborate with WGC approved jewelery makers using
hallmarked Gold only & WGC approved mints , as Bars & coins suppliers to be
associated with the ETF imagination Fund options

All such options are at the investors discretion with making charges & quality
assaying customised by them & the designated jewelery firms


Gold as bars, coins, jewelery in India


Which Silver ETF Is Right For You? SLV vs. SIVR vs. DBS

• Although silver often times lays in the shadow of investors’ number one
safe haven, gold, this shiny metal has by no means lost any of its luster.

• Silver has always been one of the most popular commodities given its rich
history and various ornamental and industrial uses. The white metal’s
appeal as an investable asset has grown for several reasons over the years.

• Silver is often times used as an alternative (and cheaper) safe haven
investment, as well as a potential hedge against inflation. Additionally, the
commodity is used in a variety of industrial goods and processes, making
it an interesting play on manufacturing or industrial activity.

• And thanks to the ever-expanding universe of exchange-traded products,
there are now several ways investors can gain exposure to the ultra
popular precious metal. Below, we outline the three most popular silver
ETFs and which one will fit your investment objectives


Silver Trust (SLV)

• Quick Stats (as of 7/26/2012)
• Total Assets: $8.3 billion
• Average Daily Volume: 9.2 million
• Expense Ratio: 0.50%
• SLV is by far the largest and most popular silver ETF available on the
market with its portfolio of just over $8.5 billion in total assets. On
average, the fund exchanges hands nearly 13 million times a day. Quite
simply, its sheer size and high levels of liquidity are perhaps its most
appealing features. Since its inception in 2006, iShare’s SLV has been
tracking the spot price of physical bullion. The fund is often used in
portfolios as a part of a long-term strategy, acting as both a diversification
agent and a nice safe haven investment. In addition, SLV has a very active
options market as well as a healthy daily volume, making it an ideal option
for more active traders
• SLV is Right for You if: You are an active trader seeking to either speculate
on silver’s movements or quickly execute positions in the precious metal.


Physical Silver Shares (SIVR)

Quick Stats (as of 7/26/2012)
Total Assets: $475 million
Average Daily Volume: 190,000
Expense Ratio: 0.30%

SIVR is a very similar fund to SLV in that it tracks the spot price of physical silver bullion.
The major distinguishing feature between these two funds is SIVR’s strikingly lower
expense ratio. SIVR charges 20 basis points less than SLV, making it a more appealing
options for both long-term and cost-conscious buyers. Although the difference in expenses
may seem not to have a major impact, consider two separate million dollar portfolios, one
invested in SLV and the other in SIVR. The holder of the SLV portfolio will have to pay up
$5,000 a year in fees, while its competitor will only have to shell out $3,000. Perhaps the
$2,000 difference may not seem to be significant, but over the years the annual expense
payments will add up quickly.

SIVR is Right for You if: You are a long term and cost conscious investor seeking to hold
onto a silver ETF for an extended period of time.


DB Silver Fund (DBS)

• Quick Stats (as of 7/26/2012)
• Total Assets: $65 million
• Average Daily Volume: 6,300
• Expense Ratio: 0.50%
• DBS is another popular silver ETF, offering exposure to silver prices
without directly investing in physical bullion. This fund tracks the DBIQ
Optimum Yield Silver Index Excess Return, a benchmark comprised of
futures contracts on silver. DBS utilizes its proprietary Optimum Yield
methodology to help minimize the negative effects of rolling futures
contracts when markets are in contango, while at the same time
maximizing the positive effects when markets experience backwardation.
This unique feature has attracted many investors: since inception in 2007,
DBS has accumulated more than $66.5 million in assets

• DBS is Right for You if: You are an investor who is looking to achieve silver
exposure through the futures market.


KOLKATA

Investment Banking

Thank You AZIMGANJ HOUSE, 2nd Floor,
7, Camac Street, Kolkata – 700 017
Ph : 91 – 033 2282 9330
Fax: 91 – 033 2282 9335

Brokerage and Wealth Management
SHIVAM CHAMBERS, 1st Floor,
53, Syed Amir Ali Avenue,
Kolkata – 700 019
Ph : 91 – 033 – 3051 2000
Fax: 91 – 033 – 3051 2020

MUMBAI

42A, Mittal Tower, 4th Floor,
210, Nariman Point, Mumbai – 400 021
Ph : 91 – 022 – 2285 5544
Fax: 91 – 022– 2285 5548

Email : info@microsec.in Website : www.microsec.in


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