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Liquidity

Challenges For
Asian Bond
Investors November 2010

Disclaimer
THIS DOCUMENT IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED, FURTHER DISTRIBUTED TO ANY PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE.
No reliance may be placed for any purposes whatsoever on the information in this document or on its completeness. Neither the LLP nor its members, or advisers nor any other person makes any representation or warranty, express or implied, as to, and accordingly no reliance may be placed on, the fairness, accuracy or
completeness of the information contained in the presentation or of the views given or implied. Neither the Company nor any of its respective members, or advisers nor any other person shall have any liability whatsoever for any errors or omissions or any loss howsoever arising, directly or indirectly, from any use of this
information or its contents or otherwise arising in connection therewith.
The information contained in this document is for background purposes only. The subject matter of the document may be subject to change and neither the Company nor its members, or advisers undertakes any responsibility for updating or amending the contents to reflect such changes. The material contained in this
document reflects current legislation and the business and financial affairs of the Company which are subject to change without notice and audit, and is subject to the provisions contained within legislation.
This document is being communicated in the United Kingdom only to persons who have professional experience in matters relating to investments falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (all such persons being referred to as “relevant
persons”). This document is only directed at relevant persons and other persons should not rely on or act upon this document or any of its contents.

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Introduction to the speaker

Amias Berman & Co.


 Is an independent, global fixed income agency brokerage,
execution, advisory and origination firm
 Was founded in 2009 to address the structural changes in the
Jeremy Amias fixed income market

 Began his career with Salomon Brothers in London in  Operates with an exclusively client-focused, non-conflicted
1984 business model, in which we do not run positions, or hold legacy
assets
 In 2002, Jeremy transferred to Hong Kong to head both
European and Asian fixed income sales for Citigroup.  Uses technology to provide alternative sources of liquidity in a
similar manner to the way that dark pools provide liquidity in equity
 He was later named Head of FICC (fixed income, markets
currencies and commodities) for the Asia Pacific region
within Citigroup, where he managed a business of 950
employees in 20 offices and 17 countries. Our core business comprises of:
 Took Citigroup to a market leading position in FICC in  Capital Markets
the region
 Portfolio Advisory
 Prior to founding Amias Berman, Jeremy was Chief
Operating Officer - Finance at Noble Group, Asia’s largest  Transaction Advisory
diversified commodities trading company  Bank Balance Sheet Solutions
 Private Placements 2
How Big Is The Asian Bond Market?

Despite the growth, Asia’s debt market is small


 H1 2010 Asian new debt issuance was $46bn compared to the developed worlds $1206bn
 The amount of debt outstanding is also small relative to developed countries
 Net inflows into global bond funds was $120bn with $40bn of that going into EM Debt funds (as of
September 2010)

Debt Securities Outstanding (in USD Billions)

$396.39 $76.84

$2,964.71 United Kingdom


United States
Asia & Pacific
Hong Kong
$6,765.08

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0
500
1000
1500
2000
2500
3000
1989
1991
1993
Jun.1994
Dec.1994
Jun.1995
Dec.1995
Local Currency Markets

Jun.1996
Dec.1996
Jun.1997
Dec.1997
Jun.1998
Dec.1998
Jun.1999
Dec.1999
Jun.2000
Dec.2000
Jun.2001
Dec.2001
Jun.2002
Dec.2002
Jun.2003
Dec.2003
Asia’s Local Currency Markets Are Growing Fast

Jun.2004
Dec.2004
Jun.2005
Dec.2005
Jun.2006
Dec.2006
Jun.2007
Dec.2007
Jun.2008
Dec.2008
Jun.2009
Dec.2009
Local Currency Corporate Debt Securities Outstanding (in billions of USD)

China

Malaysia
Singapore
Philippines

South Korea
Chinese Taipei
Hong Kong SAR

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Liquidity Challenges For Institutional Investors

Investors have to go
through the funnel of
market makers vastly
reducing the level of
liquidity

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Liquidity Challenges For Institutional Investors

Client Client
Liquidity Liquidity

Client Client
Liquidity Liquidity

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NYSE Stock Exchange Volumes

Lehman
Brothers
Files For
Bankruptcy

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Electronic Trading and Execution

abcoe is an innovative buy-side to buy-side fixed income trading system. It gives institutional
buy-side clients access to other buy-side client liquidity via Bloomberg ALLQ

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Order owner Ability to
has limited simultaneously
time to accept inactivate all
trade orders

Trade blotter
feature Specified
automatically spread
logs all converted
completed into bid/offer
trades price

Only orders Commission


at the top of clearly stated
the book will
be displayed
on ALLQ.
This is All orders
indicated by must be firm
a tick. in order to be
processed

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Our system taps into the existing client liquidity on Bloomberg

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Disclaimer

THIS DOCUMENT IS ISSUED BY A MEMBER OF THE SALES AND TRADING DEPARTMENT OF AMIAS BERMAN (OR ONE OF ITS AFFILIATES). SALES AND TRADING
DEPARTMENT PERSONNEL ARE NOT RESEARCH ANALYSTS. THIS DOCUMENT IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE
REPRODUCED, FURTHER DISTRIBUTED TO ANY PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE.
Information set out within this publication constitutes short term trading ideas. This publication has not been prepared in accordance with legal requirements designed to promote
the independence of investment research. Trading ideas contained within this publication are not subject to any prohibition on dealing ahead of distribution.
This publication does not purport to be comprehensive or to contain all the information on which a prospective investor may need in order to make an investment decision. The
information contained in this document is not intended as an offer or a solicitation of an offer, to buy or sell any specific security. The information contained herein is based on
publicly available information and sources, which we believe to be reliable, but we do not represent it is accurate or complete. This publication does not take account of whether
an investment, course of action, or associated risks are suitable for the recipient neither Amias Berman (Hong Kong) Limited (the “Company”) or Amias Berman & Co LLP nor its
affiliated companies, directors, members, officers, employees or advisers nor any other person makes any representation or warranty, express or implied, as to, and accordingly
no reliance may be placed on, the fairness, accuracy or completeness of the information contained in the presentation or of the views given or implied. Neither the Company nor
any of its respective directors, members, officers, employees or advisers nor any other person shall have any liability whatsoever for any errors or omissions or any loss
howsoever arising, directly or indirectly, from any use of this information or its contents or otherwise arising in connection therewith. Any figures used herein are for illustrative
purposes only and not indicative of the actual return likely to be achieved by the intended recipients.
The subject matter of the document may be subject to change and neither the Company nor its employees or advisers undertakes any responsibility for updating or amending the
contents to reflect such changes. The material contained in this document reflects current legislation and the business and financial affairs of the Company which are subject to
change without notice and audit, and is subject to the provisions contained within legislation.
Amias Berman & Co LLP, its affiliated entities and their respective directors, officers, employees or members of their immediate families may from time to time hold positions or
effect transactions in any investment or related investment covered in this publication and may have received compensation for investment banking or other services.
This document is being communicated in the United Kingdom and Hong Kong only to persons who have professional experience and intended to be used only by “eligible
counterparties” and “professional clients” as defined by the Finance Services Authority or Chapter 571D of the Securities and Futures (Professional Investor) Rule (referred to as
“professional investors”). This document is only directed at eligible counterparties or professional investors, other persons should not rely on or act upon this document or any of
its contents. Retail clients must not rely on this publication and should note that the services of Amias Berman are not available to them.
Hong Kong: Amias Berman (Hong Kong) Ltd is a licensed securities firm under the Securities and Futures Ordinance and regulated by the Securities and Futures Commission
(SFC) in Hong Kong.
UK: Amias Berman & Co LLP is an authorized and regulated Company in the UK by the Financial Services Authority (FSA).

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