Asia FFABA Freight Derivatives Forum Singapore 6 December 2012 The Future of FFA Markets Philippe van den Abeele; MD, Castalia Fund Management Limited Michael Nagler ; Head of Freight, EDF Trading Singapore Pte Ltd Raghu Raghunath; Senior Executive Vice President, Noble Chartering Group Mikal Bøe; Director Risk Management, Thoresen Shipping Services Morten Erichson; President, NOS Clearing ASA Castalia Springs A Source of Inspiration

Setting the scene Tonnage oversupply Uncertain macroeconomic picture Master plan of Chinese shipbuilding Increasing regulation FFA brokerage shrinking pie Baltic's position challenged Diminishing role of financial institutions Low markets/low volumes Screens still backstage role High trading & clearing costs Castalia Springs A Source of Inspiration

Back to the future Increase scrapping Improvement of world economy Shipbuilders going bust Will regulation stick? Leaner and meaner brokers Global opportunity for the Baltic Increasing role of private money pools It can only get better… Will screens ever be prominent? Transaction costs have to be reduced Castalia Springs A Source of Inspiration

Hurdles on the horizon Long period of economic stagnation Shipbuilding is politically sensitive Excessive regulation/witch hunt Integrity of rival freight indices providers Is financial freight too specialised? Timing of shipping recovery Is excessive regulation compatible with lower transaction costs? Castalia Springs A Source of Inspiration

Castalia Springs Limited Investment Manager: Castalia Fund Management Limited c/o Close Brothers (Cayman) Limited 4th Floor, Harbour Place P.O. Box 1034GT 103 South Church Street Georgetown, Grand Cayman KY1-1102 Cayman Islands Telephone: +1 (345) 949-8455 Fax: +1 (345) 949-8499 Subadvisor: Castalia Fund Management (UK) Limited 3 Pembridge Square, Flat C London, W2 4EW, United Kingdom Telephone: +44 (0) 207 229-1808 Fax: +44 (0) 207 221-8664 Managing Director: Philippe van den Abeele Email: p.vandenabeele@castaliafundmanagement.com Castalia Springs A Source of Inspiration