Learn what is CFD and how you can take opportunities in the China market

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Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Exposing Opportunities
in China A50 using CFD
Updated 20.03.2013

2. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
• These presentation slides are provided to you for general information only
and does not constitute a recommendation or an offer or solicitation to
purchase or sell the product mentioned. They do not have any regard to
your specific investment objectives, financial situation and any of your
particular needs. Accordingly, no warranty whatsoever is given and no
liability whatsoever is accepted for any loss arising whether directly or
indirectly as a result of you acting based on this information.
• Investments are subject to investment risks. The risk of loss in leveraged
CFD trading can be substantial. You may sustain losses in excess of your
initial funds and may be called upon to deposit additional margin funds at
short notice. If the required funds are not provided within the prescribed
time, your positions may be liquidated.
• You should also consider the commission and finance costs involved for
trading CFDs. The resulting deficits in your account are subject to penalty
charges. The value of investments denominated in foreign currencies may
diminish or increase due to changes in the rates of exchange.
• You are advised to read the Terms and Conditions of CFD Trading and
CFD Information Sheet before undertaking transactions in CFDs. The
Terms and Conditions of CFD Trading and CFD Information Sheet can be
obtained online at www.poems.com.sg or from Phillip Securities Pte Ltd.
• You may wish to obtain advice from a qualified financial adviser,
pursuant to a separate engagement, before making a commitment to
purchase any of the investment products mentioned herein. In the
event that you choose not to obtain advice from a qualified financial
adviser, you should assess and consider whether the investment
product is suitable for you before proceeding to invest and we do not
offer any advice in this regard unless mandated to do so by way of a
separate engagement.
Disclaimer

3. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
• CFDs may not be suitable for clients whose investment objective is
preservation of capital and/or whose risk tolerance is low. Clients are
advised to understand the nature and risks involved in margin trading.
• You are advised to read carefully and understand the Risk Disclosure
Statement from
www.phillipcfd.com/download/PhillipCFDRiskDisclosureStatement.pdf
before undertaking transactions in CFDs.
• Any CFD offered is not approved or endorsed by the issuer or
originator of the underlying security and that the issuer or originator is
not privy to the CFD contract.
• Phillip Securities Pte Ltd reserves the right to amend the information
presented without prior notice.
• The Straits Times Index CFD (the “Securities”) are not in any way
sponsored, endorsed, sold, or promoted by FTSE International
Limited, The London Stock Exchange Plc, The Financial Times
Limited, SPH Data Services Pte Ltd, Singapore Press Holdings Ltd or
Singapore Exchange Securities Trading Limited (collectively, the
“Index Sponsor”), and the Index Sponsor bears no liability in
connection with the administration, marketing or trading of the
Securities. No warranty or representation or guarantee of any kind
whatsoever relating to the Straits Times Index (the “ST Index”) or the
Securities is given by the Index Sponsor. Singapore Press Holdings
Ltd is entitled to all intellectual property rights in the ST Index.
• Some information in this presentation as been obtained from public
sources which PSPL has no reason to believe are unreliable. PSPL
has not verified such information and no representation or warranty,
expressed or implied, is made that such information is accurate,
complete or verified or should be relied upon as such.
Disclaimer (cont’d)

4. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
(1) Leveraged instrument
- Risk of loss can be substantial
(2) Profits and Losses magnified
- Depending on nature of trade, losses may be unlimited
(3) Suitability
- CFD may not be suitable for you if your:-
a) Investment Objective is CAPITAL PRESERVATION and/or
b) Risk Tolerance is LOW
(4) Execution of Orders
When a client places a CFD order, pre-execution checks are performed on
account status, fund sufficiency, credit limit, etc. In addition, CFD orders
are subject to certain risk management checks, including the ability of
PSPL to hedge its own exposure under CFD positions with clients. This
means that a client’s CFD order may not be filled immediately or it may
not be filled at all.
Risks of Trading CFD

5. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
What will be covered today
• What is Contracts For Difference (CFD)
• Why you should invest in China
• How to use CFD to trade the FTSE China A50
5

6. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
A CFD is a derivative product
that allows you to participate
in the price movement of an
underlying share / index,
without owning the shares of
the company.
What is Contracts For Difference (CFD)?

7. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Client
Brokerage
House
CFD
trades
Contractual agreement between two parties to settle the difference
between the closing and opening price at the close of contract.
Definition of CFD
What is Contracts For Difference (CFD)?

8. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
CFD – A trading instrument to complement your trading strategies
Convenient to short sell
Flexible trading strategies
Diversify with up to 20 times leverage
Gross Profit or Loss =
(Closing Price – Opening Price) x Value of 1 Index Point x Quantity
What is Contracts For Difference (CFD)?

9. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
WHY YOU SHOULD INVEST IN
CHINA
9

10. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Why you should invest in China
• Economic recovery
• GDP +7.9% yoy (exceeding market expectation of 7.4%) last quarter
• 2012 GDP +7.8% yoy (market expectation was 7.7% but PSR was
7.8%)
• Policies
• Domestic demand is stable
• No massive monetary loosening expected in the near term
• CNY is still moderately undervalued
10

11. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Why you should invest in China
11

12. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
A-shares vs H-shares – what’s the diff?
A-shares
• Traded on the Shanghai
& Shenzhen stock
exchanges
• Generally traded as a
premium against the H-
shares
• Foreigners are restricted
from investing
H-shares
• Also known as Hang
Seng China Enterprises
Index
• Companies are
incorporated in China but
traded on the Hong Kong
Stock Exchange
• Price discrepencies with
A-share counterpart of
the same company
• Open to foreigners
12

13. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
What is the FTSE China A50?
• Index that tracks the larges 50 A-shares companies by full
market capitalisation listed on the Shanghai & Shenzhen stock
exchanges
• Provides investors a macro view of the performance of China by
referencing to a single value

14. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
FTSE CHINA A50
How to use CFD to trade the

15. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Features of the FTSE China A50 USD1 CFD
• Gain exposure to a market that’s CLOSED to foreigners
• Up to 5x leverage
• Long and Short
• Competitive spread
• No expiry unlike Futures
• Enjoy corporate actions on ex-date
• Small contract size – minimum of 1

16. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
FTSE China A50
16

17. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
• Is a form of CFD allowing clients to trade the underlying
index
• Based on futures (cash-correlating)
•It tracks the level of the index, although the prices may differ
from the actual index levels
ProfitProfit //
LossLoss
D
a
y
1
D
a
y
5
D
a
y
9
D
a
y
1
3
D
a
y
1
7
D
a
y
2
1
2100
2200
2300
2400
2500
2600
2700
Investor may take a bearish
view and Sell (Short) a China
A50 CFD contract on Index at
8200
When the index level increases to
8600, investor can Buy back his
China A50 CFD contract and incur
a loss
D
ay
1
D
ay
5
D
ay
9
D
ay
13
D
ay
17
D
ay
21
2100
2200
2300
2400
2500
2600
2700
When the china A50 index level
increases to 8600, investor can Sell
off his A50 CFD contract and receive
the profit
Investor may take a bullish view and
Buy (Long) a China A50 CFD contract
on Index at 8200
FTSE China A50 Index USD1 CFD

18. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
How to interpret the product names
FTSE China A50 USD1 CFD
Product Name Traded Currency Index point value
Contract Size = Price of Index x USD$1 x Qty

19. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Index
Value of
1 Index
Point
Contract
Size
*Target
Spreads
Initial
Margin
(IM)
Mainte-
nance
Margin
(MM)
CFD Trading
Hours
(Singapore time)
FTSE
China
A50
USD1
CFD
USD$1
USD$1 x
Price of
Index x
Qty
20 20% 20%
9:01 am – 15:24
pm
FTSE China A50 USD1 CFD (Cash Correlating)
For example: Assume China A50 is currently at 8200 pts
CFD Bid CFD Ask
Straits Times Index SGD5 CFD 8190 8210
*Target spread -10 +10
*Target spreads are subject to variation, especially in volatile market conditions and may widen during out-of-trading hours

20. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Low margin requirements
Trade largest 50 A Shares Chinese counters from as low
as…
20%
(5 times leverage)
Example:
Long 1 lot of China A50 Index USD1 CFD @ 8200
Contract size = 8200 x USD$1 x 1 = USD$8,200
Margin requirement = 20% x USD$8,200 = USD$1640.00
Features of FTSE China A50 USD1 CFD

21. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Order Execution for China A50 Index USD1 CFD?
Golden Rule: Buy on Ask, Sell on Bid
8200 8220
BID ASK

22. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Participate in corporate actions
When a World Index CFD that caters for corporate actions announces
dividends:
- Long positions to receive cash adjustment in World Index CFD Contract
- Short positions to pay cash adjustment in World Index CFD Contract
- Cash adjustment is done on Ex-Date
Formula for dividend adjustment
Step 1: Equivalent number shares =
[Qty of Index Contract x Settlement Price of Index CFD x Value of 1 Index
Point] x Stock Weighting on the Index / Settlement Price of Component Stock
Step 2: Dividend adjustment =
Equivalent number of shares x dividend issued per share
Corporate actions

23. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Working Examples, Example 1: ‘BUY’ (Long) China A50 Index USD1 CFD
Client is bullish on China A50 Index and decides to buy (LONG)
1 contract of China A50 Index USD1 CFD at 8200.
Assuming margin requirement is 20% with leverage of 5 times.
Bought at 2943
Sell off at 3173
The listed example is for illustration purpose only. Past performance not indicative of future
performance

24. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Scenario 1: Client closed his position 21 days later and
sold off China A50 Index USD1 CFD at 8600.
Quote in USD FTSE China A50 USD1 CFD
Quantity 1 contract
Initial Capital $1640
Opening @ 8200:
Contract Value $8,200
Commission ($0.99)
Position closed on Day 21
Finance Charges* ($18.90)
Closing @ 8600:
Contract Value $8,600
Commission (w 7% GST) ($0.99)
Net Profit / (Loss) $379.12
Return on Equity (%) 23.11%
*Finance charge is calculated based on contract opening price, assuming it remains unchanged.

25. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Scenario 2: Client closed his position 21 days later and
sold off China A50 Index USD1 CFD at 7800.
Quote in USD FTSE China A50 USD1 CFD
Quantity 1 contract
Initial Capital $1640
Opening @ 8200:
Contract Value $8200
Commission (w 7% GST) ($0.99)
Position closed on Day 21
Finance Charges* ($18.90)
Closing @ 7800:
Contract Value $7800
Commission (w 7% GST) ($0.99)
Net Profit / (Loss) ($420.88)
Return on Equity (%) (25.66%)
*Finance charge is calculated based on contract opening price, assuming it remains unchanged.

26. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Phillip CFD Trading Platform – CFDTrader 2
You will receive anYou will receive an
email withemail with
instructions toinstructions to
downloaddownload
CFDTrader 2CFDTrader 2

27. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Phillip CFD is now on POEMS Mobile!
Smart CFD Trading anytime, anywhere
with POEMS Mobile iPhone & iPad app.
Trade Shares CFD, or DMA CFD from 1
app.

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Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
• Please read carefully our product information
sheet, terms and conditions and risk disclosure
statements which can be obtained from
www.phillipcfd.com
• Attend our educational seminars. It will help you
have a better understanding of CFD.
• Familiarize yourself with the platform. We
organize tutorials guiding clients on CFDTrader
usage.
• Should you have any queries, kindly contact your
Trading Representative or CFD Desk
Before You Begin Trading

29. Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
www.phillipcfd.com
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