2 Who Are BNP? Top Ten World Rankings*, AA+ rated Bank (S&P). Award Winning Derivates designer and issuer.A Pioneer in Islamic Banking, active in the industry since the 1980s.Established BNP Paribas Najmah in Bahrain in 2003, to provide ‘Islamic solutions within its chart of excellence worldwide.’In 2005 BNP Paribas received the Euromoney’s award for Best Islamic Finance House, recognising their achievements in Islamic Project and acknowledging the creative solutions BNP Paribas Najmah’s had developed, putting one of the largest Islamic offerings on the map.
3 BNP Paribas Sharia Board BNP Paribas has a board of three Islamic scholars forming a Sharia Supervisory Committee.Sheikh Nizam Yaguby - Bahrain (Chairman)Educated at the McGill University in Canada and the University of Wales, he studied under the guidance of some of the world's most pre-eminent Islamic scholars, gaining over twenty years experience in teaching Islamic business subjects and has written several research papers on these topics. Dr. Nizam Yaguby is considered a Sharia advisor to many international financial institutions and insurance including, the Dow Jones Islamic index.Dr. Abdul Sattar Abu Ghuddah – Syria (based in Saudi Arabia)Educated in both Damascus and Al Azhar University, Egypt, and a member of several Sharia Boards of financial institutions, including that of The Dow Jones Islamic Index. Dr. Abu Ghuddah has published numerous studies on Islamic banking. And is a member of the International Islamic Fiqh Academy as well as the Islamic Accounting & Auditing Standards Board.Dr. Mohamed Daud Bakar - MalaysiaAn Islamic scholar educated at the University of Kuwait and at the University of St. Andrews in Scotland, Dr Daud Bakar is the Deputy Rector and an Associate Professor in Islamic Law at the International Islamic University in Malaysia. An appointed member of the National Shari’ah Advisory Council of Bank Negara Malaysia Dr. Daud Bakar is also a Shari’ah consultant and advisor for several financial institutions around the world.
4 Islamic Win Win Certificate The Win Win was designed in response to individual and institutional investors’ requests for a product with a better risk / return profile.The global market is experiencing an inflow of investors from the Middle East seeking financial and investment vehicles which comply with Islamic religious principles.The Islamic Win Win Certificate serves as a great comfort to investors who need to know that their financial interests are catered for whilst in observance of Sharia law.
5 Principles of Islamic Finance Islamic Law Encourages:The undertaking of business risks in return for reward, with the underlying principle that the rewards should be commensurate with the level of risk taken.The use of money for ‘lawful’ projectsThe earning of ProfitsIslamic Law Discourages:Leaving funds inactiveIslamic Law Forbids:“Risk-free” reward – (Islamic principles do not recognise the time value of money)The charging or paying of interest (‘Riba’)Uncertainty or deceit (‘Gharar’). All business transactions which cause injustice in any form to any of the parties are forbidden.Speculation or Gambling (‘Maysir’)Investing in certain market sectors (e.g Alcohol, Arms, Cinematography, Financial Services, Gaming, Tobacco, and Pornography)
7 Key FeaturesA 10-year Islamic Certificate issued and guaranteed by BNP Paribas.100% capital-guaranteed at maturity plus potential for Annual Profit Payments of 25%.Protects Capital.Creates Growth.Available in USD, EUR, GBP
8 Win Win – How Does it Work? A basket of 20 blue chip stocks hand picked from the Dow Jones Islamic Titans Indexsm is used as a reference and a barrier price (typically 75%) is established.A 25% Annual Profit Payment is made to the investor provided none of those stocks breaches the barrier during each 12-month Observation Period.Missed Annual Profit Payments are not lost. They are rolled over to the final year and subject to the basket of stocks being above the barrier in that final observation period, ALL MISSED PROFIT PAYMENTS are paid.
9 EXAMPLE OF QUALITY INTERNATIONAL STOCKS FROM ISLAMIC INDEX ( EXAMPLE OF QUALITY INTERNATIONAL STOCKS FROM ISLAMIC INDEX (*Stocks may vary between issues)Yahoo !Cisco SystemsEMC CORP/MASSBHP BillitonE.ON AGIntelGlaxo Smith KlineTarget CorpNokia AB OYRio TintoValeroTotalMicrosoft CorpExxonVodafone AirtouchSiemens AGENI SpABP plcGoogleA T & T
10 Sector & Geographic Distribution Creates Diversity
11 Win Win: An Example* In this example : Lowest performingstock in basket(% of level onlaunch date)350%In this example :You would receive no profit paymentsin the first two years.300%250%200%25%150%You would receive an Profit Payment in the third year and subsequently 25% would be paid annually.100%75%50%25%0%0%You would receive an extra 50% profit payment rolled over through Second ChanceLaunchNov 2002Nov2003Nov2004Nov2005Nov2006Nov2007Nov2008Nov2009Nov2010Nov2011Nov2012COUPONSPOTENTIAL25% COUPON2nd CHANCEFEATURE25%50%TOTAL PROFIT = 250%25%
12 And Again, Remember Second Chance! Annual Profit Payments missed in any year are not necessarily lost. They are rolled over to the tenth year where they are paid as long as the basket of stocks remains above the barrier level in that observation periodOriginal Invested Capital is always guaranteed and returned, in full, at the end of year 10.
13 Advantages and Risks 100% capital guaranteed 100% capital-guaranteed at maturityHigh Potential Annual Profit Payments.A Basket of top quality stocks.Investors can earn back the Annual Profit Payments that have been rolled over in previous years, in the final year.Good historical results.BNP Paribas guarantee liquidity.Rated as a Low risk investment.Structured products are core markets for BNP Paribas, an AA+ rated bank (by S&P), and one of the Largest Global Banks.Win Win, like most protected structured products, is only capital-guaranteed at maturity.The past is no guarantee of the future.High Annual Profit Payments and potential for much more...
14 Back-Testing Methodology (based on the first series prior to issuing the original Win Win Note) At the launch of Win Win, by collating daily closing levels of the stocks in the original basket, BNP Paribas undertook 1245 simulations based on prices from:January 4th 1988 through to January 4th 1998,January 5th 1988 through to January 5th 1998,January 6th 1988 through to January 6th 1998,and so on untilOctober 22nd 1992 through to October 2002That’s equivalent to over 4,500,000 individual stock price checks being used to back-test Win Win
15 And the Solid Back-Testing Results Were Number of ‘profit payments’ years(% of occurrences over 1,245 simulations)0%20%40%60%80%100%4 ormore5 or6 or7 or8 or9 or1099.92%19.13%39.15%58.52%97.43%98.23%99.60%Secondchance100%Historical results :97% - 7 or more profit payments100% of Annual Profit Payments with Second Chance
19 Annual Profit Year 10 $100,000 Year 11 Year 12 $123,834 through to Total Payout$100,000$123,834$$123,834$1,338,472
20 Summary Capital fully guaranteed at maturity by BNP Paribas. 25% Annual Profit Payments potential.Second Chance feature to receive any rolled-over Annual Profit Payments in tenth year.Minimum investment of USD 70,000.Lower investment level through major life companies USD 20,0005% placement fee at outset and a 12.5% performance fee chargeable on any Annual Bonus Payments.All payments guaranteed by BNP Paribas, an AA+ rated bank, and a top ten Global Bank.
21 DisclaimerThe information contained within this presentation is provided to you by BNP Paribas on a strictly confidential basis. Any prices or examples of possible transactions contained in this document are set out for illustrative purposes only and do not constitute any form of offer from BNP Paribas to trade on such terms or constitute an indication that it is possible to trade on those precise terms. It is also understood that all information given by BNP Paribas related to the terms and conditions of a financial transaction shall not be considered investment advice or as a recommendation to enter into that transaction. Actual prices will depend on market conditions at the time the transaction is concluded. BNP Paribas will not assume any responsibility for the financial consequences of the client trading in the financial transactions described in this document.Third Party and counter-party fees not exceeding 1% p.a. for 10 year Certificates and 1.8% p.a. for 5 year Certificates, payable by BNP Paribas do not affect the clients 100% Capital Guaranteed at maturity.* All returns are dependent upon terms of a Principal Protected Certificate issued by BNP Paribas.All returns, profit payments, stocks and the barrier level will vary according to market conditions.PCP will revert before issuing a certificate should prevailing conditions cause any (or all) of the features and benefits to be adversely affected by more than 10% from the illustrated key features of this product, the pricing supplement, and the indicative conditions and pricing.