08.06.2009

The Pakistan market update aims to bring you information on the currentstatus of the WIOF Pakistan Performance Fund as well as the situation on thelocal market at present and a brief summary of affairs since inception.

The Pakistan Performance Fund

In the second half of last year the benchmark KSE100 index of Karachi stockexchange, Pakistan's biggest, dropped more than 50 %. The market remainedfloored or frozen from late August till early December 08. During this periodthe fund was kept fully liquid as a strategy because due to the floor, the stockprices were not reflecting the declining economic and financial situation of theoverall economy. We started our investments in January 09 after a further fallin the market and the removal of the floor. We initially invested only 20 % andhave gradually increased to the current level. In the first four months of thisyear our fund saw a positive performance of 40.6 % while the KSE100 index wentup by 18.35 %. The fund has strongly outperformed the market sinceinception.

What is currently happening in Pakistan?

Politically:

The political climate has improved in Pakistan in last three months or so.The issue of dismissed judges has been resolved amicably and recently, theleader of the opposition party has been cleared by the courts to take part inelections. There is also strong consensus among all major political parties onthe mode and direction of the military operation in the north-west Pakistan.Historically at loggerheads, all political forces from both sides are unanimouson tackling militancy by force.

Economically:

Target GDP has now been revised to 3% for the current year. The next budgetwill also see a cut in public spending as agreed with the IMF and other lenders.Thus next years GDP target will not be more than 5%. The trade deficit hasdecreased, due to commodity prices fall and heavy duties imposed on importeddurable goods. The government is also trying to improve tax to GDP ratio in thenext budget but is facing resistance from various trade bodies. Inflation hasstarted to come under control with CPI dropping by 3% to 18%. Chances of furtherrate cuts are remote presently. Due to the law and order situation FDI hasdecreased. Foreign Portfolio investors are still net sellers in the stockmarket.

Globally:

The current government is now looked upon favorably by the US after the Swatmilitary operation. Statements also show that Pakistani officials have taken USauthorities into confidence on safety of the nuclear arsenal. EU and UK are alsovisibly supporting Pakistan on various trade and aid issues.

Outlook

KSE100 index has been in the top 5 performing indices of the year. Asmentioned above stock market has increased by 18% this year. Still PE multiplesare among the lowest in this region. PE of top 20 stocks is 6× and Dividendyield is between 7 to 12%.

We expect the market to improve further by 20 to 30% by Dec 09.

Stefan Wuethrich, Portfolio Manager, Habib Bank AG Zurich

LEGAL NOTICE This document is designed for the professional advisers only.This document is not an invitation to subscribe for units or shares in the fundsdescribed herein and is by way of information only. Past performance is not aguide to the future. The value of investments, and the income from them, can godown as well as up. You may not get back the amount you have invested. Youshould be aware that currency fluctuations, either up or down, may also affectthe value of an investment. The mention of any specific shares should not betaken as a recommendation to deal. Commissions, trailing commissions, managementfees and expenses all may be associated with mutual fund investments. Yields arenot guaranteed and can fluctuate. Net asset value information has been obtainedfrom sources believed to be reliable but WIOF makes no representation to itsaccuracy, reliability or completeness and accepts no liability for any direct orindirect loss arising from its use. WIOF and Cornhill Management International S.A. assumeno liability for the correctness or accuracy of the given information and it maybe subject to change at any time, without notice. Performance shown does nottake account of any fees and costs associated with subscribing or redeemingshares. It is assumed that all dividends were reinvested. Before investing inany WIOF Sub-fund(s) investors should contact their financial adviser and referto all relevant documents relating to the particular Sub-fund(s), such as thelatest annual or semi-annual report and/or simplified prospectus, which specifythe particular risks associated with the Sub-fund, together with any specificrestrictions applying, and the basis of dealing.