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By Imtiaz Merchant

By Imtiaz Merchant. A Brief Introduction of BPS – FUND. Bonanza Portfolio ltd. and Pragmatic Wealth Management. Pvt. Ltd has together initiated India’s premier PMS fund on the line of Shariah compliant parameters. The fund is called ‘Bonanza-Pragmatic Shariah fund.’

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By Imtiaz Merchant

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  1. By Imtiaz Merchant

  2. A Brief Introduction of BPS – FUND • Bonanza Portfolio ltd. and Pragmatic Wealth Management. Pvt. Ltd has together initiated India’s premier PMS fund on the line of Shariah compliant parameters. The fund is called ‘Bonanza-Pragmatic Shariah fund.’ • Bonanza Portfolio Ltd. a “Financial Powerhouse” is India’s 4th largest broking house with presences in more than 1632 outlets across 535 cities. • Pragmatic Wealth Management Pvt. Ltd is one of the pioneers in Shariah Financial Services equipped with strong capital market knowledge and technical expertise. • It’s the endeavor of these two business entities to see that the PMS delivers superior performance.

  3. CORE STRENGHT Pragmatic Wealth Management BONANZA PORTFOLIO LTD • Shariah Expertise for Islamic Investments • Governance by Dr. M.Y Khan and Mr. Imtiaz Merchant • Islami Tijara Shariah Index & Shariah Compliant Search Engine • Market Research Team • Islami Tijara Magazine • India’s 4th largest brokerage house. • Experienced Management and Vibrant Staff. • Efficient Back Office. • NSE, BSE & PMS License. • Bonanza Times

  4. BPS - FUND Objectives Needs Indian Equity Market offers incredible avenue for Shariah complaint investments. At present, it offers the best alternative to the high net worth Indian Muslims who would like to invest their savings in Shariah manner rather than deploying their savings in Banks or Bonds. Islamic Investment is in a nascent stage in India, but given the number of Muslim population and with rising incomes there is a good scope for BPS Fund. The objective is to secure long term gains from the investments in the combination of large and mid size companies which are Shariah complaint. To help create wealth for the Muslims in a Halal manner.

  5. BPS - FUND • It has been observed that the Indian equity market offers incredible avenue for Shariah Compliant Investments. At present, it offers one of the best alternative, to the high net worth Indian Muslim Investors (Rabbul - Mal) who would like to invest their savings in Shariah manner rather than depositing their savings in the bank. • The Indian equity market, with its enormous potential for growth, can compete favorably with global portfolio managers and attract high net worth individual investors. In view of this, we decided to launch a Shariah Fund as “Bonanza-Pragmatic Shariah Fund” (BPS – Fund) as a joint initiative of Bonanza Portfolio Ltd (BPL) and Pragmatic Wealth Management Pvt Ltd. • This Shariah PMS is approved by Securities Exchange Board of India(SEBI) and it is approved by Shariah Board as well.

  6. Scope for Islamic investments • Islamic Finance is one of the fastest growing sector of the World. This alternative way of finance has come a long way offering little by little more and more sophisticated products to investors. • Important financial centers like London and Paris are challenging each other to become the Western hub for Islamic Finance. The potential of Middle Eastern capital available for investment, in both private and public sectors, is approximately $4 trillion. • Rising oil revenues and by the increasing foreign exchanges reserves of some Asian countries will lead to increase these investment capabilities to $6 trillion in 2012 and $10 to $ 15 trillion in 2015. This impressive investment capabilities will skyrocket the Islamic Finance solutions portfolio in order to allow these investment to happen (in the Western Countries)

  7. Who can Invest • Muslim Community in India and Abroad. • High Net Worth Individuals(HNIs). • Professionals. • Muslim Financial Institutions • Muslim Credit Co-operative Societies • Politicians & Businessmen • Investors from all Faith and Religions

  8. Product Highlight A viable option for huge HNI Muslims of India to invest in a Shariah Complaint manner rather than interest based banking. 1 The BPS Fund can also be targeted to non –Muslims because it is socially responsible and ethically sound investment. 2 Islamic Investment is growing at the rate 15% globally and in India it is expected to grow at 20% per annum. 3 It was observed that during economic slowdown the Shariah complaint stocks did better, because its of strict screening norms. 4 CONTD …..

  9. Product Highlight 5 It employs an analytical process to choose Shariah Complaint stocks. Investment policy is strictly on the guidelines and parameters of Shariah principles. Like no days trading , derivative trading or investments in any kind of Debt instruments. 6 Stock selection is done from the universe of 211 Shariah complaint stocks index developed by PWM. 7 8 The PMS Fund is benchmark against BSE Sensex, NSE Nifty, S&P Shariah 500 and S&P Shariah Indices.

  10. Shariah Board • Islamic Investment & Finance Board (IIFB) of India, is an Independent and non- profit organization. The board will certify the BPS-Fund. • The Shariah Board comprises of eminent Muftis and Shariah Scholars. • IIFB is lead by Maulana Mohammad Wali Rahmani, followed by Maulana Khalid Saifullah Rahmani, Mufti Shoibullah Khan, Mufti Hilal Usmani and others.

  11. Marketing & Promotion • Advertisements in well known newspapers ( Inquilab, Milli Gazzate, etc.) read by Muslims. • Banners on different websites visited by Muslims. • Contributing write ups and articles to both, offline and Online media. MEDIA • Reaching to target prospects by Seminars, Conference, Road Shows and Product Launch. • Pamphlet distributions and other activities. BELOW THE LINE ACTIVITY Using various public relation tools to inform the market about the BPS-Fund. PUBLIC RELATION

  12. Portfolio Management Service Fund Procedure

  13. ScreeningProcess 1) Restriction Based on the Type of Securities: Investment is done in Shariah compliant stocks. Securities trading in derivatives and intraday trading in stocks are strictly not permitted. Short selling is completely prohibited. Stocks will be sold upon having its complete possession. 2) Restriction on Business Activity:Investment shall not be done in stocks of the companies whose business activity is prohibited like the Conventional interest based banks, NBFC, Insurance companies, securities trading companies, Entertainment includes film production companies, cinema, Cable TV, music etc. Alcoholic beverages like wine and liquor, tobacco and its related products, Pork and non- Halal food products companies. 3 ) Restriction Based on Financial ratios: a)Interest bearing debt of the companies should not exceed 33 percent of its twelve months average market capitalization. b)Cash plus interest bearing securities of the companies should not exceed 33 percent of its twelve months average market capitalization. c)Trade receivable and other debtors of the companies should not exceed 33 percent of its twelve months average market capitalization. d) Interest Income plus any impure income of the companies to its company's total income should not exceed 5 percent. CONTD …..

  14. Screening Process • On screening the BSE listed stocks it is observed that as on 31th December 2012, out of 3500 stocks on BSE, 700 companies are Shariah compliant. These 700 stocks together accounts for 48% of the Market Capitalization of BSE. • Out of these 700 stocks PWM has selected 211 top Shariah Compliant stocks which amounts to 96% of the Shariah compliant universe for investments. • There are about 50 large cap, 70 mid cap and over 100 small cap stocks available and they are sufficiently liquid for investments.

  15. Stock Selection The stocks invested in PMS Fund is selected from Shariah compliant universe comprising Large, Mid and small size companies. The market capitalization of these Shariah complaint companies is well over 50 % of market capitalization of the NSE and BSE. The fund will be investing in stocks with minimum market capitalization of 1000 crores. BPS – Fund will be invested in the following 9 permissible sectors : Automobiles, Consumer Goods & Services, Construction & Reality, Capital Goods & Industrials, Healthcare, Information Technology, Metal & Mines, Oil & Gas, Power & Utility.

  16. BPS Performance BPS Performance

  17. Fundamental & Technical Research (Rational Analysis) For equity research following ratios are taken into consideration such as Book Value to Price, Price To Earning, Market Share to Enterprise Value, Forward Earnings, Cash Flow, Order Flow & Market Share to Market Cap Technical Analysis : Various indicators are used for exit & entry of the stocks like the Moving Averages, Parabolic SAR, RSI, Standard Deviation. Fundamental and Technical Analysis are used in conjunction and together we call it “Rational Analysis”

  18. Services • Report of the BPS – Fund will be disclosed to the clients on MONTHLY basis. • Net Asset Value (NAV) will be shared with the clients on weekly basis. • Auditors certified Capital gains Tax statement at the end of the year is given to every client. • Any Shariah related queries is instantly attended.

  19. Fee Structure Minimum Investment - Rs.25 Lac (2.5 Million INR) No Entry Fee (Load) Performance Fee- Annualized Profit up to 20% 10 % of profit Annualized Profit above 20 % 15% on the incremental profit above 20% (Profit distribution will be done on Half yearly basis) Pre-Closure Fee- 0.50% (Exit before six months)

  20. Fund Management • Mr. Imtiaz Merchant is the Fund Advisor for BPS-Fund. He has significant expertise in Fundamental as well as Technical analysis, he has more than 14 years of experience in Equity market. • He is well versed with Islamic Finance market and the Shariah complaint norms for investments. He has put in extensive effort into understanding the principles of Islamic finance and has been in discussion with the Islamic Finance scholars and Financial experts. • He has successfully created 14 Islamic Indexes namely Islami Tijara Equity index (ITE index) backtracked since June 2006. • He is also the publisher and editor of Islami Tijara Magazine on Islamic Finance and Investments.

  21. Contact US • BONANZA PORTFOLIO LTD. Bonanza House, Plot No. M-2, Cama Industrial Estate, Walbhatt Road, Behind The Hub, Goregoan (East), Mumbai -400063. Tel No: +91 - 22 - 6760500 / 30863700 Toll Free: 1800220252, 022-39704040 www.bonanzaonline.comEmail: shariahpms@bonanzaonline.com • PRAGMATIC WEALTH MANAGEMENT PVT. LTD. 102, First Floor, Topaz Society, Dr. Nair Road, Agdipada, Mumbai Central (E), Mumbai 400011. Tel.: +91-22-23001290 / 23007290 www.islamitijara.comEmail: contact@islamitijara.com ,

  22. “It is impossible to produce a superior performance, unless you do something different from the majority.” THANK YOU

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