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April 2019

SHARIAH CAPABILITIES

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CORPORATE PROFILE

▪ Market Securities LLP (“MSLLP”) was established in 2002 in strategic partnership with Kyte Broking Ltd, based on experience andknowledge gained through equity derivatives and energy markets.

▪ MSLLP is a fully independent intermediary owned by its founding partners who are dedicated to providing customers with firstclass broking services and acts as Appointed Representative of the Kyte Broking Ltd.

▪ In 2013, the founders of MSLLP established Market Securities (Dubai) Limited (“MSD”) in the DIFC and in 2015 acquired KyteBroking Limited.

▪ Market Securities (Dubai) Limited (“MSD”) is regulated by the DFSA and authorised to deal in investments as well as advise onand arrange investments.

▪ For the purpose of this profile, MSLLP and MSD will collectively be referred to as “Market Securities”.

▪ Market Securities has offices in London, New-York, Paris, Geneva and Dubai.

▪ Market Securities has expanded its skill and experience to a variety of products and the business now covers multi-assetbrokerage services on a range of listed and OTC derivatives & securities.

▪ Market Securities is today specializing in a broad range of financial products including Cash Equity, Equity Derivatives, ForeignExchange, Futures & Options, Fixed Income, Interest Rates, Structured Products and Commodities markets.

▪ In-house structuring capabilities and cross-

asset expertise

▪ Independent approach with outsourced

hedging

▪ Bespoke investment solutions based on

risk-return requirements

▪ Market price optimisation via major

trading desks

▪ Efficient secondary market

▪ Multi-geographical coverage

An independent financial engineering team specialising in the

construction of bespoke investment solutions for institutional clients.

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STRUCTURED SOLUTIONS

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RANGE OF SHARIAH PRODUCTS

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RANGE OF SHARIAH PRODUCTS

MurabahaUsually short term, used for capital needs. Structured against a trade flow, used toarrange financing for raw-material purchases.

Fixed

Commodity Murabaha

Liquidity management and fund raising tool. Involves buy/sell of commodities onmajor commodity exchanges.

Fixed

Ijara (lease)Medium to long term financing under Islamic type of conventional lease product,backed by real asset. (Real Estate finance, Capital Equipment finance)

Fixed or Floating

Istisna’ Short to medium term financing, for project financing (Aircraft, Infrastructure) Fixed

SukukCapital market instrument similar to a conventional bond with a good secondarymarket potential.

Fixed or Floating

Contract Type Contract Application Rate Type

Sources: Market Securities Structured Solutions, Societe Generale, JP Morgan

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SHARIAH SOLUTIONS

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Assets

• Equities & Indices• FI & Credit• Commodities• Mutual Funds•Foreign Exchange

Packages

• Shariah Certificates• Islamic Product Vehicles

SHARIA SOLUTIONS

▪ Products can be adaptable to local

currencies

▪ Short to Long term investment horizons

▪ Regular Income or payment at maturity

only

▪ Can have full or partial capital protection

▪ Almost the same universe of underlying

assets as for conventional structures


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SHARIAH CERTIFICATES(LIGHT)

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TRADE PROCESS AT INCEPTION

IssuerStructurer &

ArrangerHedging

AgentInvestor

1MarketCounterparty

34 2

SHARIA HEDGING

Series of Murabaha Transactions backed by Commodity

Wa’d – unilateral and exclusive promises to enter into a future Commodity MurabahaTransactions


FATWA ON THE PROGRAMME LEVEL

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TRADE PROCESS

▪ 1: Client delivers 100% cash versus Shariah Certificates (Light Sharia) via Euroclear on the Delivery Versus Payment Basis(DVP). This means that there is no settlement risk.

▪ 2: Structurer/Arranger executes the transaction by delivering cash versus Shariah Certificates to the Issuer via Euroclearon the Delivery Versus Payment Basis (DVP). This means that there is no settlement risk.

▪ 3: Issuer delivers cash to a hedging agent whilst issuing Shariah Certificates under European Medium Term Noteprogram.

▪ 4: Hedging Agent executes a transaction in the market via Wa’d and books all interim payments as CommodityMurabaha.

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ISLAMIC PRODUCT VEHICLE (COMPREHENSIVE)

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Return Profile

- Wide Range of payoffs- Tailor made maturities- Islamic finance expertise

Risk Profile

- Partially or fully independent from Issuer’s credit risk

- Sharia compliant underlying assets

- Agreements with various market counterparties

ISLAMIC PRODUCT VEHICLE

▪ Flexible Sharia compliant issuance platform

▪ White labelled, cost efficient

▪ Issuance of Trust Certificates eligible for Sukuk classification


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CELL A

EACH CELL IS SECURED BY A SPECIFIC TRUST ASSET

CELL B

CELL C

HedgingAgent A

HedgingAgent B

HedgingAgent C

CELL A Investor

CELL B Investor

CELL C Investor


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Series of Certificates

CELL A

Underlying Wa’d +

Commodity Murabaha

Transactions

HED

GIN

G

CO

UN

TER

PAR

TY

INV

ESTO

R

Commodity Murabaha 1 (cost price)

Cost Price + Profit 1

Cost Price + Profit 2

Commodity Murabaha 2 (cost price)

Final Commodity Murabaha n

Cost Price + Profit n

Issue Price

Profit 1

Profit 2

Final Redemption Amount +Profit n


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SHARIAH PRODUCT SAMPLES

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SHARIAH PRODUCT IDEASCollateralized Profit-Enhancing Repack Note

RE-PACK NOTE WITH CDS OVERLAYIssuer Special Purpose Vehicle (FATWA)Format EMTN, Note FormatCurrency (Quanto) USDIssue Date Trade Date + 3 WeeksCollateral Bond Kingdom of Saudi Arabia (US80413TAG40 - Yield 3.75%)MaturityReference Entity

17/04/2025 (matching the Collateral Bond)As per table below

Coupon As per table belowObservation Annual, Not Accrued Upon Default, 30/360Call Strike 100.00%Recovery FloatingSettlement AmericanRedemption 100% subject to Credit Event on Collateral and /or

Reference EntityListing Yes (Technical in Luxembourg)Delivery CashSettlement T+10

# Reference Entity Description Coupon (p.a.)

1 Auchan HoldingAuchan Holding, doing business as Auchan, retails consumer goods. The Company offers fresh food,electronics, home furnishings, apparels, and sports, as well real estate development. 5.00%

2 Arcelor MittalArcelorMittal produces steel. The Company manufactures cold rolled, electrogalvanized and coated steels, slabs, bars, and wire rods. ArcelorMittal serves customersworldwide. 4.90%

3 Republic of Italy Sovereign (BBB by S&P) 4.90%

4 ThyssenkruppThyssenkrupp AG manufactures industrial components. The Company produces flat rolled and cast steel, automobile parts, elevators and escalators, machine tools,bearings, nonferrous metals, and plastics. thyssenkrupp develops and manages real estate as well as designs and constructs factories. 5.20%

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5Y Historical CDS Spread

Auchan Holding SADIR ArcelorMittal Republic of Italy thyssenkrupp AG

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SHARIAH PRODUCT IDEAS100% Principal Protected Shark Note on S&P 500 Shariah Index

PRINCIPAL PROTECTED SHARK NOTEIssuer Special Purpose Vehicle (FATWA)Format EMTN, Note FormatCurrency (Quanto) USDIssue Date Trade Date + 3 WeeksGuarantor A- by S&P Rated BankMaturityUnderlying

5 YearsS&P 500 Shariah Index

Knock-Out Barrier 145%Rebate 115%Performance Final level/ Initial levelObservation At maturitySettlement European

Redemption

1) If at maturity, Underlying Performance < Knock-out Barrier: 100%+𝑀𝑎𝑥(0%, 𝐹𝑖𝑛𝑎𝑙 𝐿𝑒𝑣𝑒𝑙 𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝐿𝑒𝑣𝑒𝑙−100%) ∗ Denomination

2) If at maturity, Underlyiing Performance > Knock-out Barrier: 115% * Denomination

Listing Yes (Technical in Luxembourg)Delivery CashSettlement T+10

Following product will repay an investor 100% back at maturity plus the upside participation of the S&P 500 Shariah index as long as the Underlying Index not closing at or above the Knock-Out Barrier at maturity only. If Underlying has closed at orabove the barrier then the product matures at 115% (Rebate).

0.85

0.95

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5Y Historical Performance

SHX SPX

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SHARIAH PRODUCT IDEASCapital Protected Note with Digital Profit

PRINCIPAL PROTECTED NOTE WITH DIGITAL PROFITIssuer Special Purpose Vehicle (FATWA)Format EMTN, Note FormatCurrency (Quanto) USDIssue Date Trade Date + 3 WeeksGuarantor A- by S&P Rated BankMaturityUnderlying

12 MonthsAs per table below

Capital Protection 100%Conditional Profit 6% p.a.Performance Final level/ Initial levelObservation At maturitySettlement EuropeanRedemption 1) If the Worst of Underlying is at or above the Profit

Barrier, then Capital Protection + Conditional Profit

Listing2) If the Worst of Underlying is below the Profit Barrier, then Capital Protection

Delivery CashSettlement T+10

# Reference Entity Description Profit Barier

1 Consumer Cyclical

CONTINENTAL AG

112%SOUTHWEST AIRLINES CO

DELTA AIR LINES INCADIDAS AG

2 Healthcare

BRISTOL-MYERS SQUIBB CO

118%ILLUMINA INCBIOGEN INC

ALEXION PHARMACEUTICALS INC

3 Semi-Conductors

MICRON TECHNOLOGY INC

123%NVIDIA CORP

APPLIED MATERIALS INCBROADCOM INC

0.3

0.8

1.3

1.8

2.3

2.8

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5Y Historical WOF Performance

Consumer Cyclical Healthcare Semi-Conductors

Market Securities Structured Solutions is part of Market Securities Dubai Ltd, a DIFC based entity which is authorized and regulated by DFSA. Market Securities Dubai Ltd was established in 2013 and is regulated by the DFSA and authorised to deal, advise and arrange investments. Market Securities has offices in London, New-York, Paris, Geneva and Dubai.

Danny Skutelis (Head of Structured Solutions)Danny Skutelis has started his professional career at Goldman Sachs in London in a Fixed Income Currency and Commodities department on a Macro Issuance Desk, responsible for newindex and tracker funds. Goldman Sachs was followed by UBS in London where Danny has started in Alternative Investment Strategies and moved into sales to Russia/CIS. After almost 4years with UBS, Danny was asked to join one of the biggest Inter-Dealer Brokers in the world – Tradition in order to set up a Russia/ CIS desk for a hybrid-engineering subsidiary of thecompany called TFS Structured Products. After a rapid expansion in Russia, Danny has driven the company into GCC by setting up a desk in Dubai office of Tradition. As of November 2015,Danny has established a Structured Solutions Desk at Market Securities Dubai a hybrid-engineering boutique.

Pulkit Sangal (Senior Associate)Pulkit Sangal is a Senior Associate within the Structured Solutions team at Market Securities Structured Solutions (part of Market Securities Dubai Ltd) covering Institutions across the MiddleEast. He began his career at Commerzbank AG in Dubai as a member of the Equity Markets & Commodities division representing the Private Banks Sales team in the GCC for 2 years. In hisrole at Commerzbank, Pulkit was responsible for providing tailored Cross Asset Investment Solutions to regional institutions. Pulkit has resided in the Middle East for over 20 years; hisqualifications include the Chartered Alternative Investments Analyst (CAIA) designation and an undergraduate degree in Economics from the Symbiosis School of Economics in Pune, India.

Shafiq Said (Quantitative Research and Structuring Analyst)Shafiq Said has joined the Structured Solutions team in 2017 as a Quantitative Research and Structuring Analyst to further strengthen our proprietary research and pricing capabilities.Shafiq has started his career at BnP Paribas Cardiff, followed by Bank CACEIS in France. Shafiq has earned a double Masters degree in Finance from EM Lyon Business School and UniversiteParis Ouest Nanterre La Defense in 2016. Shafiq is currently involved in structuration of proprietary index strategies and hedging products for our institutional clients.

Nikita Miagkov (Execution Analyst)Nikita has joined Structured Solutions team in June 2018 as an execution analyst to strengthen our execution and identify arbitrage opportunities for our clients. Nikita has started his careeras a fixed income and currencies sales-trader at Commerzbank AG in Dubai. Nikita brings a multicultural experience having lived and studied in the UK. Nikita is a MSc Finance degree holderfrom Cass Business School in London.

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ABOUT US

This material was produced by Market Securities (Dubai) Limited (“MSD”), a company regulated by the Dubai Financial Services Authority (“DFSA”) (firm reference number: F002425),

registered in the Dubai International Financial Centre with the company number of CL1474 and the registered address of Unit N2004 , Level 20, Emirates Financial Towers, Dubai

International Financial Centre, Dubai, 506859, United Arab Emirates.

MSD is authorised by the DFSA to provide services to Professional Clients only as defined in the DFSA Conduct of Business Rulebook. Therefore, this presentation is intended only for

Professional Clients and no other Person should act upon it.

Market commentary is not subject to any prohibition on dealing ahead of its dissemination to clients. The author of this communication may have discussed the information contained

herein with others within MSD, and such other MSD personnel, associates or members may have already acted on the basis of this information (including by trading and communicating the

information contained herein to other clients). MSD, MSD’s personnel, associates or members (including those with whom the author may have consulted in the preparation of this

communication), and other clients may be long or short the financial instruments referred to, may have acquired such positions at prices and market conditions that are no longer available,

and may have interests different or adverse to your interests.

This material is directed exclusively at market professionals and institutional investors and is not for distribution to retail clients, as defined by the rules of the Dubai Financial Services

Authority. Any investment services to which the material may relate will not be made available to such retail clients.

All of the views in this material about matters that include, without limitation, securities and companies, reflect the personal views of MSD staff. No part of these staff member’s

compensation was, is, or will be directly or indirectly related to material contained herein.

The material in this report is for the general information of prospects and clients of MSD only. It does not take into account the particular investment objectives, financial situation or needs

of individual prospects and/or clients. Any prices provided herein (other than those that are identified as historical) are indicative only and do not represent firm quotes as to either price or

size. This material should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its

distribution, form the basis of, or be relied upon in connection with, any contract relating to such action.

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DISCLAIMER

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The information contained in this communication is based on generally available information and, while it is based on material that MSD consider reliable, MSD may not have verified the

contents hereof .

Opinions expressed are MSD staff members current opinions as of the date appearing on this material only. There can be no assurance that future results or events will be consistent with

any such opinions, forecasts or estimates. Past performance is no guide to future performance. The information and opinions contained herein are subject to change without notice.

Unless otherwise stated, share prices are as at the close of business on the date of the research note.

Neither the whole nor any part of this material may be duplicated in any form or by any means. Neither should any of this material be redistributed or disclosed to anyone without the prior

consent of MSD. MSD, its directors, officers, employees and associates accept no liability whatsoever for any direct, indirect, incidental or consequential loss or damage of any kind arising out

of the use of all or any of this material, provided that this exclusion of liability shall not exclude or limit any liability under any applicable law or regulation that may not be excluded or

restricted.

The services, securities and investments discussed in this material may not be available to, nor suitable for all investors. Investors should make their own investment decisions based upon

their own financial objectives and financial resources and it should be noted that investment involves risk, including the risk of capital loss. In relation to securities denominated in foreign

currency, movements in exchange rates will have an effect on the value, either favourable or unfavourable.

(ver. Nov 15)

MARKET SECURITIES (Dubai) Limited

Emirates Financial Towers North 2004, DIFC, Dubai,

P.O.Box: 506859, United Arab Emirates

T: +971 4 374 1335

T: +971 4 374 1300

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