2. PSG Product Overview

3. Presentation Overview Market Jargon What is a CFD ? Key features of CFD product Comparison with traditional shares Comparison with other derivatives Pro’s & Con’s od trading CFD’s CFD Trading examples Investor risks and obligations

4. Market Jargon InvestorInvestor TraderTrader DerivativesDerivatives LongLong ShortShort GearingGearing MarginMargin

5. Market Jargon - Investor Investor – An Investor buys shares with the intention of holding them for a few months to years.Investor – An Investor buys shares with the intention of holding them for a few months to years. Share selection is based on long-term factors, such as company fundamentals or imminent sector growth.Share selection is based on long-term factors, such as company fundamentals or imminent sector growth.

6. Market Jargon - Trader A trader buys (or sells) shares with the intention of holding them for a much shorter timeframe, usually within days or weeks.A trader buys (or sells) shares with the intention of holding them for a much shorter timeframe, usually within days or weeks. Share selection is based on short- term factors, such as market momentum or upcoming news flow.Share selection is based on short- term factors, such as market momentum or upcoming news flow. Traders have a short-term view and act fast to bank profits. It requires more attention than investing, but the rewards are far quicker.Traders have a short-term view and act fast to bank profits. It requires more attention than investing, but the rewards are far quicker.

7. Market Jargon Derivative - A contract whose value depends on (or derives from) the value of an underlying asset e.g. share – ANG, BIL, SOL.Derivative - A contract whose value depends on (or derives from) the value of an underlying asset e.g. share – ANG, BIL, SOL. Long - When you go long, you are hoping that the underlying asset is going to rise so that you can profit from this upward movement.Long - When you go long, you are hoping that the underlying asset is going to rise so that you can profit from this upward movement. Short – If you are shorting (or selling a contract), you will make a profit if the underlying asset of your CFD falls below the price you entered the contract at.Short – If you are shorting (or selling a contract), you will make a profit if the underlying asset of your CFD falls below the price you entered the contract at.

8. Market Jargon - Gearing CFDs are geared products. This means that there are money multiplier effects at work i.e. gearing magnifies your returns 10 times or more. Gearing is essentially the borrowing of funds to purchase a financial instrument i.e. trading on margin. This means that you are leveraged. For each cent the share moves in your favour, you are multiplying the profits by up to 10 times.

9. Market Jargon - Margin Due to the gearing aspect, you gain exposure to much more than your margin (deposit) covers you for. You put down a small deposit (10%- 15%) but benefit from the movement of the total exposure. If the margin requirement is 10%, you effectively put down one tenth of the total value of whatever share you are trading.

10. What is a Contract For Difference? Contract between 2 parties to settle at the close of the contract the difference between the opening price and closing price of a share specified in the contract multiplied by the number of shares specified in the contract CFD: Contract for Difference Party 1: Writer (Stockbroker e.g. Online Securities) Party 2: Holder (Investor) Contract type: Long OR Short Internationally popular with professional investors and speculators (>30% LSE volume trade)

11. What is a Contract For Difference? Client Buy shares Deliver shares Deliver CFD

12. What is a Contract For Difference? A geared investment whereby you only pay a Margin deposit 10% Top 40 shares10% Top 40 shares 15% on Top 41 - Top 100 shares15% on Top 41 - Top 100 shares but benefit from the entire movement of the underlying share

13. CFD Product Description Offer Long and Short CFD’s on Top100 JSE listed shares. Margin deposit 10% Top 40 shares 15% on Top 41 - Top 100 shares Variation margin required for adverse share price movement. Brokerage 0.4% per transaction Breakeven 0.92% (VAT included) Zero UST Financing at competitive rates Current borrowing rate 12.63% (± Prime – 2%) Minimum Exposure per trade of R100 000 (R10 000 margin) Underwritten by Online Securities Ltd PSG Online is a stockbroking firm who is a member of JSE We are regulated by the Securities Exchange Control Act

14. Comparison with traditional shares CFDTraditional Equity No physical equity holding Do not pay UST No voting rights Earn synthetic dividends Physically hold equity Pay UST of 0.25% Voting rights Earn real dividends Leveraged trading Settle only collateral (10% - 15%) plus top- up if required Gearing provided at cheap rates (Safex +2% or roughly Prime -2%) Not leveraged Must settle full exposure amount Expensive to borrow against shares Settlement Period Settled T+1 Settlement Period Settled T+5 Taxation Considered a Trader Added to personal income (Trading Instrument) Taxation Capital Gains Tax (CGT) (Investment Instrument) Easy to short Suitable for both hedging & trading opportunities Typically long only

15. Comparison with other Derivatives WarrantFutureCFD RegulatedBy JSE No Regulation Listed Instrument Yes No GearedYes Payment Upfront Warrant Premium Margined Trade CostsSame as Shares Cheaper than Shares Short the Market? Yes Max LossPremium Paid Unlimited Loss

16. Comparison with other Derivatives WarrantFutureCFD RegulatedBy JSE No Regulation Risk ProfileLower than Futures & CFD’s High (see Max Loss above) Liquid MarketYes = Dedicated Market Makers Liquidity only provided by person who initially traded with you Pricing Methodolody Option Pricing (Black & Scholes) Delta between 0 and 1 Futures Pricing (Delta 1) Similar to Futures (Delta 1)

17. Pro’s & Con’s of CFD trading Low trading costsLow trading costs No expiry dateNo expiry date Hedge your current portfolioHedge your current portfolio All the benefitsAll the benefits Gearing & RiskGearing & Risk No voting rightsNo voting rights AdvantagesDisadvantages

18. CFD Example

19. Profitable Long CFD Position Number of Shares1 000 Buying PriceR309.00 ConsiderationR309 000.00Number shares * buying price 0.4% BrokerageR1 236.00Consideration * 0.4% VAT @14%R173.04Brokerage * 14% TotalR310 409.04∑ (consideration, Brokerage, VAT) Margin RequiredR31 040.90Total * margin % Break-Even on BuyR310.41Total/number shares Percentage move needed 0.46%(breakeven price/ Purchase price)-1 Number of Shares1 000 Selling PriceR356.00 ConsiderationR356 000.00Number shares * buying price 0.4% BrokerageR1 424.00Consideration * 0.4% VAT @ 14%R199.36Brokerage * 14% TotalR354 376.64Consideration- Brokerage -VAT Break-Even on SellR354.38Total / number shares Gross ProfitR43 967.60(Total sell consideration- Total buy consideration) 356 309

20. Profitable Long CFD Position Interest Calculation12.63% SAFEX 10.63% + 2% p.a Days in position (d)5 Assumed for e.g. Interest Cost(R537.05) (Total consideration* 12.63%) * (d/365) Interest Income on MarginR36.70 [Margin deposit * (SAFEX - 2% p.a) ] * (d/365) Net ProfitR43 467.25 Gross profit – interest on cost + interest on margin Straight Equity Return %4.003%On 100 shares CFD return %40.03%On 1000 shares 356 309

21. Non-profitable Long CFD Number of Shares1 000 Buying PriceR356.00 ConsiderationR356 000.00 Number shares * buying price 0.4% BrokerageR1 424.00 Consideration * 0.4% VAT @14%R199.36 Brokerage * 14% TotalR357 623.36 ∑ (consideration, Brokerage, VAT) Margin RequiredR35 762.37 Total * margin % Break-Even on BuyR357.62 Total/number shares Percentage move needed0.46% (breakeven price/ Purchase price)-1 Number of Shares1 000 Selling PriceR309.00 ConsiderationR309 000.00 Number shares * buying price 0.4% BrokerageR1 236.00 Consideration * 0.4% VAT @ 14%R173.04 Brokerage * 14% TotalR307 590.96 Consideration- Brokerage -VAT Break-Even on SellR307.59 Total consideration / number shares Gross Profit- R50 032.40 (Total sell consideration- Total buy consideration) 356 309

22. Non-profitable Long CFD Interest Calculation12.63% SAFEX 10.63% + 2% Days in position (d)5 Assumed for e.g. Interest Cost(R618.74) (Total consideration * 12.63% ) * (d/365) Interest Income on MarginR42.28 [Margin deposit * (SAFEX - 2% p.a) ] * (d/365) Net Profit- R50 608.86 Gross profit – interest on cost + interest on margin Straight Equity Return %- 2.42%On 100 shares CFD return %- 24.2%On 1000 shares 356 309

23. Important notes on CFD Long Positions Pay interest at SAFEX + 2 % p.a The holder will receive a synthetic dividend Synthetic dividend –Dividend is not earned tax free as a CFD is a derivative contract –In the case of a Long CFD, a holder of a long contract will be paid an amount equal to the dividend by issuer. –This is seen as an income and is subject to tax

24. CFD Example

25. Profitable Short CFD Position Number of Shares1 000 Selling PriceR356.000 ConsiderationR356 000.00Number shares * selling price 0.4% BrokerageR1 424.00Consideration * 0.4% VAT @14%R199.36Brokerage * 14% TotalR354 376.64Consideration- Brokerage -VAT Margin RequiredR35 437.66Total * margin % Break-Even on SellR354.38Total/number shares Percentage move needed0.46%(breakeven price/ Purchase price)-1 Number of Shares1 000 Buying PriceR309.00 ConsiderationR309 000.00Number shares * buying price 0.4% BrokerageR1 236.00Consideration * 0.4% VAT @ 14%R173.04Brokerage * 14% TotalR310 409.04∑ (consideration +Brokerage& VAT) Break-Even on BuyR310.41Total / number shares Gross ProfitR43 967.60(Total sell consideration- Total buy consideration) 356 309

26. Profitable Short CFD Position Interest Calculation8.63% SAFEX 10.63% - 2% p.a Days in position (d)5 Assumed for e.g. Interest CostR418.94 (Total consideration * 8.63%)*(d/365) Interest Income on MarginR41.89 [Margin deposit * (SAFEX - 2% p.a.) ] * (d/365) Lending Fee of 1.5% p.a.(R72.82) (Consideration * 1.5%) * (d/365) Net Profit (G.P R43 967.60)R44 355.61 Gross profit + interest on cost + interest on margin- lending fee Straight Equity Return %2.517%On 100 shares CFD return %25.17%On 1000 shares 356 309

27. Non-profitable Short CFD Number of Shares1 000 Selling PriceR309.00 ConsiderationR309 000.00 Number shares * selling price 0.4% BrokerageR1 236.00 Consideration * 0.4% VAT @14%R173.04 Brokerage * 14% TotalR307 590.96 Consideration- Brokerage - VAT Margin RequiredR30 759.10 Total * margin % Break-Even on SellR307.59 Total/number shares Percentage move needed0.46% (breakeven price/ Purchase price)-1 Number of Shares1 000 Buying PriceR356.00 ConsiderationR356 000.00 Number shares * buying price 0.4% BrokerageR1 424.00 Consideration * 0.4% VAT @ 14%R199.36 Brokerage * 14% TotalR357 623.36 ∑ (consideration +Brokerage& VAT) Break-Even on BuyR357.62 Total / number shares Gross Profit- R50 032.40 (Total sell consideration- Total buy consideration) 309 356

28. Non-profitable Short CFD Interest Calculation8.63% SAFEX 10.63% - 2% p.a Days in position (d)5 Assumed for e.g. Interest CostR363.63 (Total consideration* 8.63%)*(d/365) Interest Income on MarginR36.36 [Margin deposit * (SAFEX - 2% p.a) ] * (d/365) Lending Fee of 1.5% p.a.(R63.20) (Consideration * 1.5%) * (d/365) Net Profit (G.P. - R50 032.40) -R49 639.61 Gross profit + interest on cost + interest on margin – lending fee Straight Equity Return %- 16.138%On 100 shares CFD return %- 161.38%On 1000 shares 309 356

29. Important notes on CFD Short Positions You pay a script lending fee of 1.5% p.a. Receive interest at SAFEX -2 % p.a. The holder is liable for the dividend Synthetic dividend –Dividend is not earned tax free as a CFD is a derivative contract –In the case of a short CFD, a holder of a short contract will have to pay the dividend to the issuer

30. Investor Risk and Obligations CFD’s provide investors with leveraged exposure to an underlying security. This has the effect of magnifying profits and losses and consequently trading in CFD’s carries significant more risk than traditional equity investments, therefore the CFD product is only suitable for experienced and sophisticated clients. In particular investors should note that profits and losses on CFD trades can be many times the original trade size. Depending on the nature of a trade, losses may be unlimited. One should therefore only trade in CFD’s if prepared to accept the attendant degree of risk. A worst case scenario should always be anticipated before entering into a trade as the value of a CFD contract is calculated on a continuous basis and investors have the responsibility to ensure that amounts transferred to meet their variation margin responsibilities are cleared timeously.

31. PSG Online Sitemap

32. Top 100 Shares: Margin List reset after each Quarterly futures Close out

33. CFD Holdings

34. CFD Order Book StatusDescription XCancelled MMatched OOpen Order AAAwaiting Authorization OMPartially Matched Order XMPartly Matched & Cancelled Order

35. CFD Share Statement

36. CFD Margin Statement

37. CFD Financial Statement

38. Summary & Conclusion CFD tradingCFD trading is only suitable for experienced & sophisticated clients. No admin cost (R40 p.m.)No admin cost (R40 p.m.) Open a CFD trading accountOpen a CFD trading account Happy trading!Happy trading!

39. Contact Details Trading Desk (011) 996 5201 Cameron Pluck (011) 996 5202 Pierre Hageman (011) 996 5252 Elaine van Damme (011) 996 5212 Sihle Ngema (011) 996 5248

40. Questions?