dc anto dr investment journal - cantor fitzgerald...royal dutch shell 2,002.0 35.05 18.09 13.7 7.33%...

Cantor Fitzgerald Ireland ltd (Cantor) is regulated by the Central Bank of Ireland. Cantor FitzgeraldIreland ltd is a member firm of the Irish Stock Exchange and the london Stock Exchange.

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InvestmentJOURnAl

Featured this Month:Core Portfolio: July 2016

Stock Watch: CRH, Ryanair

Green Effects Fund: Socially Responsible Investing

Investment Fund Focus: PIMCO GIS Global Investment Grade Credit

ETF of the Month: iShares EURO STOXX 50 UCITS ETF

EIIS 2016: A Guide to Tax Relief Investment Opportunities

August 2016

CANTOR

Dealing Desk

Call: 01 6333 633

Fallout from Brexit should remain a keydriver of returns across asset classes in themonth ahead, especially in light of thedecision by the Bank of England to cutinterest rates by 0.25% and to initiate afurther round of Quantitative Easing. We

expect economic data points will also be more heavilyscrutinised over the coming weeks for signs of Brexit’simpact on the underlying economies of the UK and Europe.Ongoing uncertainty regarding the health of Italian banksshould also remain at the fore given the issue’s widerimplications for stability within the European project as theItalian government seeks to bail-out its weakest banks.

Overall we remain overweight equities in our assetallocation, underweight bonds, and neutral oncommodities. Our preference for equities, particularly thoseof European indices, is based on our belief that the assetclass offers superior expected returns to others; specificallywe prefer defensive sectors like Staples and Healthcare, andthe high level of earnings growth provided by our preferredTech names.

David DonnellySenior Investment AnalystAugust 2016

Welcome...

Cantor Fitzgerald Ireland was formed through the acquisition of Dolmen Stockbrokers in2012, by leading global financial services firm Cantor Fitzgerald. With a proud history ofstockbroking and servicing our private clients in Ireland since 1995, Cantor Fitzgerald Irelandprovides a full suite of investment services, primarily in personalised Share Dealing, Pensionsand Investment Management, Debt Capital Markets, Corporate Finance and Research. Weare recognised as a primary dealer in government bonds. Our clients include privateindividuals and corporate entities, financial institutions, investment funds, Credit Unionsand charities.

Cantor Fitzgerald, a leading global financial services group at the forefront of financial and technological innovation has beena proven and resilient leader for over 65 years. Cantor is a preeminent investment bank serving more than 7,000 institutionalclients around the world, recognised for its strengths in fixed income and equity capital markets.

At Cantor Fitzgerald Ireland we pull together the expertise and experience of Analysts and Investment Professionals from acrossthree continents. An office network that spans from New York to Hong Kong provides us with a uniquely global perspective onthe investment goals of our clients, which we service through our local offices in Dublin, Cork and Limerick.

ContentsCore Portfolio 3Points of Interest in July 4Stock Watch 6

CRH 6

Ryanair 7

Green Effects Fund 8ETF of the Month 9Investment Fund Focus 10EIIS 2016 11Performance Data 15

Investment Returns 15

Cantor Fitzgerald Ireland Bond Returns 16

INVESTMENT JOURNAL AUGUST 2016

2 C A N T O R F I T Z G E R A L D I R E L A N D L T D


C A N T O R F I T Z G E R A L D I R E L A N D L T D 3

Stock Price Total Return Local Cncy (%) Total Return Euro (%) Fwd P/E Div Yield Target 31/07/16 Year to date Year to date *(SIP) FY1 (x) FY1 Weight (%)

Glanbia 17.2 2.03 2.03 18.5 0.86% 2.0

Ryanair 11.9 -20.49 -20.49 9.9 0.45% 4.5

ICG 4.7 -11.57 -11.57 13.9 2.59% 2.0

GlaxoSmithKline 1,688.0 28.44 12.31 16.7 4.71% 4.0

Pfizer 36.9 16.48 13.44 14.2 3.38% 4.0

General Electric 31.1 1.51 -1.14 18.0 3.14% 2.0

Smurfit Kappa 21.0 -9.00 -9.00 9.4 3.83% 3.0

Daimler 60.8 -17.32 -17.32 7.1 5.74% 3.5

DCC* 6,745.0 20.45 5.97 23.1 1.65% 2.0

CRH 27.5 4.80 4.80 14.7 2.62% 4.5

Grafton Group 558.5 -23.67 -33.26 10.7 3.03% 3.5

Royal Dutch Shell 2,002.0 35.05 18.09 13.7 7.33% 4.0

Exxon Mobil 89.0 16.12 13.10 19.9 3.56% 4.0

Apple 104.2 0.14 -2.47 11.8 2.16% 2.0

Alphabet 791.3 1.71 -0.94 20.0 0.00% 4.0

SAP 78.4 8.65 8.65 18.3 1.77% 4.0

Facebook 123.9 18.42 15.33 24.5 0.00% 3.0

PayPal 37.2 2.87 0.19 21.3 0.00% 3.5

Vodafone 229.6 7.54 -5.97 30.9 5.24% 3.5

Verizon 55.4 23.88 20.65 13.5 4.30% 3.5

Bank of Ireland 0.2 -50.34 -13.95 6.9 5.45% 1.5

Prudential 1,335.0 -10.31 -21.58 10.2 3.43% 2.0

Lloyds 53.2 -26.34 -26.93 8.1 6.85% 1.5

AIG* 54.4 -9.25 -12.09 9.8 2.61% 2.0

Allianz 128.3 -17.46 -17.46 8.3 6.12% 4.0

Intesa Sanpaolo 2.0 -32.09 -32.09 8.4 10.80% 3.5

iShare Dax ETF 90.5 -3.93 -3.93 11.8 3.46% 4.0

Proshares Short S&P 500 ETF* 38.2 -7.06 -6.07 n/a n/a 4.0

Current Price as at 31/7/2016. Source: Bloomberg, CFEU estimates. *SIP = Since Inclusion in Portfolio

Portfolio Total Return (€) YTD -6.12%. | Benchmark Return(€) YTD -0.74%

Core Portfolio commentary

Year to date our Core Equity Portfolio has declined by 6%, having been heavily impacted by the surprise Brexit vote andthe resultant decline in sterling and UK exposed companies. While we remain underweight Financials relative to ourbenchmark, we continue to believe in the strong stock specific investment case of our selected banks and insurancenames. We also retain a preference for the strong earnings growth exhibited by our selected names in the Tech space,including Facebook, Alphabet and PayPal. lastly, we maintain a heavy weighting toward companies which pay large,sustainable dividend yields given our expectation for the prevailing low interest rate environment to continue for theforeseeable future.

Core Portfolio 2016

Core Portfolio at 31st July 2016



A few points of interest in...

July

The Italian banks have €360bn of gross non-performing loans (18%of total loans and 20% of the country’s GDP) that are acting as a dragon lending and the wider economy. More capital is required andestimates put the shortfall at between €40bn and €50bn. The Italiangovernment wants to bail out the banks but new EU rules preventthem from doing so until after existing equity and bond holdershave first been bailed in. The problem with this solution is that thereare some 60,000 retail investors holding c. €60bn of subordinatedbonds and the government is reluctant to inflict pain on any votersahead of an important constitutional referendum in October. Inrecent days, ECB chief, Mario Draghi, backed a bailout of Italy’s banks“in exceptional circumstances” in order to avoid a fire sale of assets. Potential solutions include reimbursing the retail bondholders asvictims of miss-selling or creating another bailout fund supportedby Italian financial institutions and pension funds (a €5bn fund calledAtlante, set up in April, was never going to be enough to recapitalisethe Italian banking sector). not all of the Italian banks are distressed but the weaker ones aredragging the stronger ones lower and consolidation is required in acountry of 600 independent lenders.

What’s wrong with Italian banks?

The Prime Minister, Matteo Renzi, has staked his politicalcareer on a constitutional reform referendum due to takeplace this October. Mr Renzi is seeking to strip the senate ofits legislative powers in order to reform a system that oftensees bills bounce back and forth between the two chambers.Renzi has threatened to resign if the referendum fails but thiscould create further political risk for the EU as the right wingFive Star Movement could benefit in any post-referendumelection (Five Star candidates were recently elected mayorsof Rome and Turin).

As Europe’s third largest economy with over €2.2 trillion indebt and unemployment at 11.5%, the Italian politicalsituation is being viewed as another serious threat toEuropean unity, but it isn’t the only European country seeinga rise in right wing, anti-European sentiment.

More on Italy...and another referendum to keep an eye on

David Coffey, Senior Portfolio Manager



U.K. unemployment fell to 4.9% inJuly, the first time it has gone below5% since 2005 (a pre-Brexit numberand too early to see any impact ofBrexit in employment stats). Inflationis showing signs of picking up andreached 1.4% Year-on-Year (YoY) inthe June reading, closing in on theBank of England’s target rate of 2%.The weaker sterling exchange rate isexpected to boost inflation furtheras imports become more expensive.

***

The S&P 500 hit new all-timehighs during the month despitefurther terrorist attacks, the falloutfrom Brexit, an attempted coup inTurkey and the nomination ofDonald Trump as the Republicancandidate for US President.Regardless of the political risks,continued support from centralbanks and record lows on bondyields, we have seen moneycontinue to flow into equitymarkets. The dividend yield of c.2.1% on the S&P 500 is about half apercentage point higher than the10-year US treasury yield.

***

Australia has gone 25 years withouta recession, a record that haspushed living standards to amongthe highest in the world. GDPgrowth is running at c. 3% andunemployment is slightly above5.5%; however, S&P recently cut itsoutlook on the economy tonegative, based on lower iron orepricing and a slowing Chineseeconomy.

***

Nintendo’s market cap doubledfrom c. $20bn to $40bn as itsPokemon Go game went viral andthe stock set a record for the mostshares ever traded in one day inJapan. Some sanity was restored asthe stock retreated but was stillworth some $30bn at the time ofwriting.

In Brief....

The U.K. Purchasing Managers’ Index (PMI or The Markit/CIPS survey) showed asharp contraction across the manufacturing and services sectors in July withinthe U.K. The monthly survey is the first evidence we have seen of a slow downfollowing the Brexit vote. The index is quoted between 0 and 100 where 50indicates no change on the previous month, above 50 is expansion and below50 is contraction. The reading came in at an 87-month low of 47.7 against a Junereading of 52.4. The services sector, which accounts for 80% of the U.K. economy,fell to an 88-month low of 47.4 from a June reading of 52.3. The Bank of Englandleft rates unchanged during July, much to the surprise of most forecasters, optinginstead to cut rates by 0.25% in August and to initiate a new round of QuantitativeEasing to the tune of £60bn of Government debt and £10bn of Corporate debt.

The U.K. Purchasing Managers’ Index(PMI or The Markit/CIPS survey)

The U.S. Election is in full swing as Republicans and Democrats officiallynominated their candidates. Polls narrowed significantly after the Republicanconvention and although Hillary is still the favourite, the race is too close tocall. There are 538 Electoral College votes up for grabs with the candidatesrequiring 270 votes to clinch the presidency. A handful of “swing states”,including Florida, Ohio, Pennsylvania and Virginia, are likely to prove decisivein deciding the 45th President of the United States.

www.fivethirtyeight.com & www.realclearpolitics.com are good websites fortracking developments. The nPR Politics Podcast provides a weekly review ofall the news at www.npr.org/politics.

The U.S. Presidential Election



Shane Kelly,Investment Analyst

CRH Current Price: €27.475*

Following CRH’s 10% upgrade to EBITDA guidance, we reiterated our Outperform rating and increased its weighting in thecore portfolio to 4.5% from 3% to reflect our long term positive outlook for the group.

Management raised EBITDA guidance for H1 to €1.1bn from €1bn with consensus prior to the announcement below this againat €977m. Management cited a stronger trading performance in the latter part of Q2 for the upgrade. Its H1 report is due to bereleased on the 25th of August. H1 is traditionally the quieter half of the year and this is reflected in earnings expectations of€0.27 on revenues of €12.09bn vs. expected EPS of €1.34 in H2 on revenues of €15.58bn

We see this as is a very positive update and a welcome one given the earnings downgrades and uncertainty seen in marketsduring 2016. CRH had flagged that it expected EBITDA to be €1bn in its trading update in April, when consensus was at €900m,so the upgrade highlights the continued momentum in its operations. As well as synergies following the integration of thelafarge Holcim assets, the group’s catalyst in recent quarters has been north America and given the positive data and upgradesin the space recently from the region, it is likely that this is where most of the additional EBITDA will be attributed to. Growth innorth America was 22% in the last quarter, while Europe also performed well, up 12%. The group continues to focus on debt paydown following the lafarge Holcim deal and surprised to the upside on this during FY15 results. The shares are trading at 17.65x2016e earnings a 16% discount to its 5 year average of 20.5x.

CRH Share Price

Source: Bloomberg

*Prices as of 29/07/2016.

StockWatch



Stephen Hall, CFA, Investment Analyst

Ryanair Current Price: €11.935*

Ryanair recently released its Q1/17 results on the 25th July. Its net income rose 4% year-on-year (YoY) to €256m, whichwas 3% behind consensus analyst's expectations as average fares fell 10% on the quarter which was below the -5% to-7% management guidance range given at FY16 results release.

Management maintained its full year 2017 net income guidance range of €1,375m - €1,425m despite a soft yieldenvironment and profit warnings from peers, EasyJet and lufthansa. This was a positive surprise to the markets whichsupported the stock once released. Management remains cautious on the outlook for H2/17 and stressed that risks remainto the downside due to the economic uncertainty following the UK’s decision to leave the EU, potential further terroristattacks impacting consumer confidence, on-going ATC strikes and increased capacity pressuring yields.

Ryanair continues to operate in a challenging environment, however we feel it should continue to capture market shareoff its European low Cost Carrier (lCC) peers due to its competitive advantage on fares and costs, supported by an everimproving customer service experience. The airlines average fare fell to €40 a seat from €45 last quarter, and managementexpects yields to decline by 6% in Q2/17 and by 10% to 12% in H2/17. last quarter, costs fell 9% YoY and were 4% lower onan ex-fuel basis of €28 per seat which was an exceptionally strong performance and means its cost advantage over peersis widening meaning it can be more competitive on price. The airline recorded an average load factor of 94%, up 2percentage points YoY and maintained a 93% target for FY17; it also increased the number of passengers it expects to carryin FY17 to 117 million from 116 million. There was no change to the airlines long term passenger targets, whereManagement expects to carry 180 million passengers by 2024.

Over 50% of its new capacity growth will come through primary airports which will attract higher yielding businesscustomers. Ryanair is attractively valued in our opinion at just 10.8x FY17e earnings and is a highly cash generative companywith a very resilient business model which should continue to capture market share in our opinion as it takes delivery ofmore fuel efficient Boeing airplanes which were hedged at $1.31 meaning its cost advantage over peers should continueto widen. It is also launching Ryanair Rooms, which is a low price accommodation offers starting in October 2016 whichcould support ancillary revenues over time which are not currently reflected in consensus market estimates.

Ryanair Share Price

!Source: Bloomberg

*Prices as of 29/07/2016.



Green Effects FundSocially Responsible Investing

Richard Power, Director of Stockbroking

€0

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€140

€160

€180

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Source: Cantor Fitzgerald Ireland Ltd Research

Objectives

The objective of the Fund is to achieve long term capital growth and income.The fund will provide investors with a product through which they can investin companies with a commitment to supporting the environment andsocially just production and work methods. For this purpose the fund onlyinvests in stocks which are included in the natural Stock Index (nAI).

Performance As of 1/8/2016. 1 Month YTD 1 Year 3 Year* 5 Year*

Green Effects 3.3 2.9 2.8 13.3 12.6

MSCI World € 3.5 1.9 -1.7 12.9 13.5

Friends First Stewardship Ethical 6.4 -0.8 -2.6 12.1 12.6

new Ireland Ethical Managed 5.4 2.3 -1.1 8.1 10.2

*Annualised Return. Source: Cantor Fitzgerald Ireland Ltd Research and Bloomberg.

Manager CommentThe Green Effects Fund nAV price ended July at €186.42 which was a gainof +3.27%. Despite the unexpected Brexit vote and sharp equity market selloff at the end of June, markets brushed off the uncertainties and werebroadly positive in July. The UK Government acted promptly to appoint anew Prime Minister while the Bank of England said it was ready to act tosupport the domestic economy with lower UK interest rates. To this end, theBOE cut interest rates by 0.25% in August and launched a new round ofQuantitative Easing. The fund has exposure to two stocks with domestic UKeconomy exposure namely Kingfisher (home improvement group) andSmith & nephew (surgical device & medical group). Both of these namesended July in a positive fashion. In other corporate news during the monththere was a raft of quarterly earnings releases from the likes of Potlach,Interface and Shimano. On 31 July, Tesla Motors Inc. said it had reached adeal to buy SolarCity Corp., the next step in Elon Musk’s plan to combine hiselectric-car and solar-energy companies. The all-stock deal values SolarCityat about $2.6 billion, with SolarCity stockholders receiving 0.11 share of Teslafor each share of SolarCity.


Key InformationMorningstar Rating � � � � �

NAV €186.42*

Minimum Investment €5,000

Dealing Frequency Weekly

Sales Agent Cantor Fitzgerald Ireland Ltd

Custodian Northern Trust

Administrator Northern Trust

Investment Manager Cantor Fitzgerald Ireland Ltd

Sales Commission 3%

Total Expense 1.24%

Investment Mgt Fee 0.75%

Website www.cantorfitzgerald.ie/greeneffects

*Prices as of 29/07/2016Source: Bloomberg & Cantor Fitzgerald Ireland Ltd Research

Top Ten Holdings

SHIMANO 7.73%

SVENSKA CELLULOSA 7.63%

VESTAS 7.10%

KINGFISHER 6.50%

TOMRA SYSTEMS 4.17%

SMITH & NEPHEW 4.13%

UNITED NAT FOODS 4.06%

EAST JAPAN RAILWAY CO. 3.94%

AEGION 3.72%

MOLINA 3.72%


Green Effects Fund NAV Since Inception



ETF of the MonthMark McPaul, Portfolio Construction Analyst

Fund OverviewThe Fund seeks to track the performance of an index composed of 50of the largest companies in the Eurozone. The EURO STOXX 50 Index, isEurope's leading blue-chip index for the Eurozone. Our preferenceremains for European equities on a relative valuation basis with the USand UK and this ETF offers cost effective investment to a diversifiedportfolio of European blue-chip names.

Key FactsTicker (Bloomberg) SX5EEX GY

Benchmark Index EuroStoxx50

Currency EUR

TER % 0.16%

Distribution Yield 3.87%

Distribution Frequency Quarterly

Fund Size 6.13 Billion

No. Of Holdings 50

Source: www.ishares.com

Performance Summary FUND INDEX

1 Month 3.14% 3.04%

YTD -7.03% -6.90%

1 Year* -14.55% -15.13%

3 Year* 5.58% 4.66%

5 Year* 6.75% 5.88%

*Annualised Returns As of 29/07/2016

Important Information: The value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed.ETFs trade on exchanges like stocks and are bought and sold at market prices which may be different to the net asset values of the ETFs.

iShares EURO STOXX 50 UCITS ETF Why Invest in this Fund

• ECB Stimulus: Ongoing monetary stimulus from the European Central Bank should attract capital flows into Europeanequities.

• Attractive Valuation: European indices continue to trade at a discount to their US and UK counterparts offering furtherupside potential.

• Low Cost: This ETF offers cost effective investment across 50 of the largest companies in the Eurozone.

• Yield: Distribution yield of 3.87%.

Price Chart

& &&

&

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Source: Bloomberg



Why Invest in this Fund

Value – Based Approach: The fund takes a value based approach to credit selection based on bottom up analysis of companyfundamentals.

Active Duration Management: It also takes a tactical approach to duration management (i.e. interest rate risk) and sectorselection. Current duration is at 5.71yrs.

Attractive Yield: This fund offers a yield premium over both Sovereign and Investment Grade bonds with a distribution yield ofc.3.86%.

Fund Overview

The fund invests at least two-thirds (c.66%) in Global Investment Grade (“IG”)Credit and may invest up to 15% in Sub-Investment Grade Credit. The remainingcash is usually invested across Sovereign bonds. This fund offers thediversification benefit of corporate bonds vs. equities in addition to a yield upliftover sovereign bonds. The total expense ratio of 0.49% is also very competitivefor an actively managed bond fund.

The case for credit continues to remain compelling. The fundamentals of mostcompanies outside of the energy sector remain broadly intact. Accommodativecentral bank policies should help to keep defaults low across sectors (ex. Energy),while demand for IG credit will continue to be supported by the very low yieldenvironment.

PIMCO GIS Global Investment Grade Credit

Investment Fund FocusMark McPaul, Portfolio Construction Analyst

Fund InformationInvestment Manager PIMCO Asset Management

ISIN IE00B3D1YW09

Currency EUR

TER % 0.49%

Distribution Yield 3.86%

Distribution Frequency Quarterly

Fund Size (Base Currency) 13,392,984,742

Net Flow YTD (Month End) 1,736,272,917

Performance Summary1 Month 1.19%

YTD 7.57%

1 Year* 6.00%

3 Year* 5.44%

5 Year* 5.23%

*Annualised Returns As of 29/07/2016

Price Chart

& &&

Source: Bloomberg



Richard Power, Director of Stockbroking

EIIS 2016A Guide to Tax Relief Investment Opportunities

The Employment and Investment Incentive scheme (“EIIS”) explained

• The EIIS is a tax relief incentive scheme, which enables investors to deduct the cost of their qualifying investment fromtheir total income for income tax purposes for investment in qualifying small to medium sized companies. EIIS is one ofthe few remaining sources of total income relief. An individual with a taxable income liability in the year the EIISinvestment is made can obtain tax relief from the following:

1. PAYE earnings

2. Rental income from property held in a personal capacity

3. ARF distribution income

• Tax relief is available in two tranches: an initial 30% in year one with a further 10% when additional criteria are met inyear 4.1

Cantor Fitzgerald Track Record

• Cantor Fitzgerald is one of the country’s most experienced firms in structuring and placing EIIS investments.

• Cantor Fitzgerald has raised in excess of €23m in EIIS funding since 2011.

• Cantor Fitzgerald has raised EIIS funds across a range of industries including:

Renewable Energy Telecoms Food & Beverage sectors Retail

• Cantor Fitzgerald has considerable domestic reach with a sales team of circa 40 brokers covering offices in Dublin, Corkand limerick and an extensive network of financial advisors.

• Cantor Fitzgerald raises funds on a company by company basis as opposed to a “blind fund” basis.

1The investee company must prove they have increased employment levels, or have met pre-defined R&D expenditure requirements over the term or the investment



Key Features of EIIS

Investment Criteria• Investments are made in suitable, unquoted qualifying companies.

• Cantor Fitzgerald’s criteria for investee companies include:

Investor Requirements

• Investors must have an income tax liability to the value of the relief being claimed in a given tax year.

• Investors must not be connected (in accordance with Revenue definition) to an investee company.

• Investors should determine the suitability of EIIS investments based on their own personal circumstances.

• Each investor is responsible for submitting his/her own individual claim for tax relief to the Revenue Commissioners.

Illustrative example of EIIS investment return

The following example illustrates the potential return to an EIIS investor on an investment of €25,000 assuming theinvestment grows by 20% over a 4 year investment period.

Criteria EIIS 2016

Investment term 4 Years

Relief available 30% in year 1 + 10% in year 4

Qualifying companies Certain trading activities excluded

Maximum company fund-raise in 12 month period €5.0m

Maximum lifetime company fund-raise €15.0m

Share class permitted Ordinary shares

Maximum investment €150,000 p.a.

- Experienced and capable management team

- Recognised market for products/services

- Growth potential

- Clear, defined market strategy

- likelihood of realisation of investment after 4year period

Investor Cost

Investment Amount €25,000

Plus once-off commission at 3% €750

Total Cost to Investor €25,750

First Tranche Income Tax Relief @30% -€7,500

Second Tranche Income Tax Relief @ 10% -€2,500

Net Cost of Investment (note 1)* €15,750

Potential Return on Investment

net Sale Proceeds (note 2) €30,000

less net Cost of Investment (note 1) €15,750

Gross Gain (including tax relief ) €14,250

Capital Gains Tax (note 3) -€983

Net Return to Investor* €13,267

Potential Times Money 1.55x

Potential IRR 14.6%

*Assuming EIIS terms are achieved

notes:

1. net cost of investment calculated as €25,000plus 3% commission and less income taxreliefs.

2. net sale proceeds calculated as amountinvested plus assumed growth of 20%.

3. Capital gains tax based on 33% of netproceeds less total cost of investment andallowing for annual capital gains threshold of€1,270.



Key Risks

• Medium to long-term investment in unquoted companies with no early exit mechanism.

• Investors are exposed to the performance of the investee company and, as such, may lose some/all of their investedcapital.

• Income tax relief may not be granted or may be withdrawn if the conditions of the legislation are not satisfied by theinvestee companies and/or eligible investors.

Recent transactions

Advisory & Capital Raising Services at Cantor FitzgeraldCantor Fitzgerald is a market leader in providing advisory and capital raising services. Our Corporate Finance team hasparticular expertise in advising SMEs and high growth companies across a range of sectors including renewable energy,technology, food, education and property. We have a strong track record in providing EIIS funding solutions for companiesand over the past five years have raised in excess of €23m in EIIS capital.

The Corporate Finance team at Cantor Fitzgerald has worked with a number of Irish businesses over the last two years,raising capital in excess of €80m, and since 2000 has raised in excess of €500m. The Corporate Finance team is also part ofthe global Cantor Fitzgerald Group with significant presence in Europe and the US. Our sister company in london, CantorFitzgerald Europe is advisor to 75 publicly listed businesses and completed 25 transactions in 2015, raising £350m ininvestment.

For more information visit www.cantorfitzgerald.ie

Warning: This information is on our understanding of current tax legislation and the current Revenue Commissionersinterpretation thereof and is subject to change without notice.

Warning: This information is intended as a general guide only and is not a substitute for individual tax advice.Potential investors should seek competent professional tax advice specific to their circumstances prior to investing.Investors are responsible for establishing their entitlement to participate in this investment and for making theirown income tax relief claims.

WiLine PMU

€4.55m EIIS Equity Fundraise

December 2013 & 2015

Great Northern Distillery



Carlow Brewing Company


November 2015

Raragh Developments Limited



RaraghDevelopmentsLimited

CAHERCIVEEN WIND LTD.

Caherciveen Wind Limited


Decemeber 2011 & 2012

Successful exit achieved inJanuary 2015 and January 2016

Morehampton Foods Limited

EIIS Fundraise

December 2012

Successful exit achieved in 2015



EIIS: Frequently Asked Questions1. What is the limit on the amount of investment on which relief can be obtained?

€150,000 per individual. A married couple can each obtain individual relief on an investment of €150,000, providedeach spouse has sufficient taxable income.

2. Do I have to invest in one company only?

no there is no limit to the number of companies an investor can invest in but tax relief is subject to an overall investmentlimit of €150,000 in any one year and the Cantor Fitzgerald minimum per company is €25,000.

3. When are EIIS investments made?

EIIS investments are made before year end to avail of tax relief for income earned in that year.

Cantor Fitzgerald will have a number of EIIS investment opportunities in 2016.

4. What type of client is this suitable for?

An individual with a taxable income liability in the year the EIIS investment is made. Taxable income includes (1) PAYEearnings (2) rental income from property held in a personal capacity (3) ARF distribution income.

5. When can I get my tax relief back?

Initial 30% tax relief is obtained for the year the investment is made, i.e. for an investment made in 2016, the investorwill get 30% relief in his/her 2016 tax return (usually filed in 2017).

The remaining 10% tax relief is obtained after year 4 of the investment, i.e. for an investment made in 2016, the investorwill get final 10% relief in their 2021 tax return.

6. Is my investment capital guaranteed?

no. The investor is acquiring ordinary share capital in the investee company and the value of that company may rise orfall.

7. Can I exit the investment during the four years if I need liquidity?

no. An early exit will result in claw back of any tax relief obtained.

8. What additional criteria must the company meet in order to avail of the final 10% relief?

Additional criteria typically entail increasing employment levels within the business or demonstrating that pre definedR&D expenditure has occurred.

9. How do I claim back my tax relief?

Revenue will issue an RICT Form (EII 3 Form) to the investee company and the company will pass this onto CantorFitzgerald who will forward it onto investors. The RICT form is typically received circa. 6 months post the investment.Investors will submit this form to their local Revenue office or accountant to process the claim for relief.

With regard to the 10% relief obtained once the shares have been held for a minimum of 4 years, the process to claimthis relief is identical to that as outlined above. Revenue will issue an EII 3A form (typically 3-6 months post expiry of 4year term) and investors then submit this form to their local Revenue office or Accountant to process the claim.

10. What happens if the investee company performs badly?

Investors will still obtain full tax relief (once conditions have been met), however the value of the shares may declinedue to poor performance by the company.

11. What paper work do I need to complete to open an account with Cantor Fitzgerald and invest in the EIISproduct?

- Advisory account form.

- letter of Commitment.

- Certified copy of ID (passport or drivers license).

- Two original utility bills not more than 6 months old.

- Wire transfer to Cantor Fitzgerald (Cheques not accepted).



Performance DataInvestment Returns

EquitiesIndex 30/06/16 31/07/16 % Change % ytd Change 52 Week High DateISEQ 5642.49 5867.64 4.0% -13.6% 6,921 03/12/2015DAX 9680.09 10337.5 6.8% -3.8% 11,670 06/08/2015Eurostoxx50 2864.74 2990.76 4.4% -8.5% 3,687 06/08/2015Stoxx600 (Europe) 329.88 341.89 3.6% -6.5% 404 05/08/2015Nasdaq (100) 4417.699 4730.231 7.1% 3.0% 4,767 01/08/2016Dow Jones 17929.99 18432.24 2.8% 5.8% 18,622 20/07/2016S&P500 2098.86 2173.6 3.6% 6.3% 2,178 01/08/2016Nikkei 15575.92 16569.27 6.4% -12.9% 20,947 11/08/2015Hang Seng 20794.37 21891.37 5.3% -0.1% 24,924 11/08/2015China (Shaghai Composite) 2929.606 2979.339 1.7% -15.8% 4,006 18/08/2015India 26999.72 28051.86 3.9% 7.4% 28,418 10/08/2015MSCI World Index 1653.23 1721.79 4.1% 3.5% 1,771 31/07/2015MSCI BRIC Index 227.41 237.53 4.5% 7.5% 257 11/08/2015

CurrenciesCurrency Pair 30/06/16 31/07/16 % Change % ytd Change 52 Week High DateEuroUSD 1.1106 1.1174 0.6% 2.9% 1.1714 24/08/2015EuroGBP 0.83432 0.84462 1.2% 14.6% 0.8627 06/07/2016GBP/USD 1.3311 1.323 -0.6% -10.2% 1.5819 25/08/2015Euro/AUD 1.49064 1.47066 -1.3% -1.4% 1.6590 24/08/2015Euro/CAD 1.43551 1.45619 1.4% -3.1% 1.6106 20/01/2016Euro/JPY 114.61 114.06 -0.5% -12.7% 139.0000 21/08/2015Euro/CHF 1.08401 1.08323 -0.1% -0.5% 1.1200 04/02/2016Euro/HKD 8.6178 8.668 0.6% 2.9% 9.0780 24/08/2015Euro/CNY 7.3816 7.4172 0.5% -1.7% 7.5168 03/05/2016Euro/INR (India) 75.238 74.435 -1.1% 3.2% 77.4900 12/02/2016Euro/IDR (Indonesia) 14693.18 14551.16 -1.0% -3.4% 16,638.7000 29/09/2015AUD/USD 0.7451 0.7596 1.9% 4.3% 0.7835 21/04/2016USD/JPY 103.2 102.06 -1.1% -15.1% 125.2800 12/08/2015US Dollar Index 96.143 95.53 -0.6% -3.1% 100.5100 02/12/2015

CommoditiesCommodity 30/06/16 31/07/16 % Change % ytd Change 52 Week High DateOil (Crude) 49.01 41.6 -15.1% -1.9% 54.91 31/08/2015Oil (Brent) 49.68 42.46 -14.5% 13.9% 54.32 31/08/2015Gold 1322.2 1351 2.2% 27.3% 1,375.45 06/07/2016Silver 18.715 20.3375 8.7% 46.8% 21.14 04/07/2016Copper 219.55 222.15 1.2% 3.3% 246.85 17/09/2015CRB Commodity Index 412.72 408.07 -1.1% 8.9% 542.10 08/06/2016DJUBS Grains Index 42.4639 38.2348 -10.0% -3.5% 47.95 10/06/2016DJUBS Soft Commodity 121.1717 112.1865 -7.4% 5.1% 129.93 08/06/2016Gas 2.924 2.876 -1.6% 23.1% 3.00 01/07/2016Wheat 445.5 407.75 -8.5% -17.2% 555.00 10/08/2015Corn 371.25 342.75 -7.7% -10.5% 449.00 17/06/2016

BondsIssuer 30/06/16 31/07/16 Yield Change % ytd Change 52 Week High DateIrish 5yr -0.036 -0.12 -0.08 -0.57 0.75 17/09/2015Irish 10yr 0.461 0.339 -0.12 -0.81 1.50 01/09/2015German 2yr -0.661 -0.625 0.04 -0.28 -0.16 07/12/2015German 5yr -0.567 -0.528 0.04 -0.48 0.15 01/09/2015German 10yr -0.13 -0.119 0.01 -0.75 0.82 01/09/2015UK 2yr 0.099 0.11 0.01 -0.54 0.77 09/11/2015UK 5yr 0.35 0.277 -0.07 -1.07 1.54 05/08/2015UK 10yr 0.867 0.685 -0.18 -1.28 2.09 09/11/2015US 2yr 0.5817 0.6554 0.07 -0.39 1.10 29/12/2015US 5yr 0.9997 1.0237 0.02 -0.74 1.83 30/12/2015US 10yr 1.4697 1.4531 -0.02 -0.82 2.37 09/11/2015

Source: Bloomberg and Cantor Fitzgerald Ireland Ltd Research.

July 2016

Performance DataCantor Fitzgerald Ireland Bond Returns



Cantor Fitzgerald Equity & Commodity Linked Bonds: Cantor Fitzgerald Bond Issue Underlying Indicative Indicative Indicative Option A Option B Option A Option B Asset Initial Current Underlying Asset Participation Participation Indicative Indicative (Ticker) Strike Level Performance Rate Rate Performance Performance

GLOBAL DIVIDEND BOND SDGR 3960.34 5682.06 43.47% 80% 170% 34.78% 73.91%

DIVIDEND ARISTOCRATS BOND 1 SPXD10EE 1535.18 2145.33 39.74% 50% 145% 19.87% 57.63%

DIVIDEND ARISTOCRATS BOND 2 SPXD10EE 1522.93 2145.33 40.87% 50% 140% 20.43% 57.22%

DIVIDEND ARISTOCRATS GBP SPXD10EE 1522.93 2145.33 40.87% 50% 140% 20.43% 57.22%

80% PROTECTED KICK OUT 1* AAPL 86.37 104.21 20.66% Kick Out Level: 30% In Year 2 - - PRU 1395.00 1335.00 -4.30% 45% In Year 3 - - BMW 88.18 77.05 -12.62% 60% In Year 4 - - VOD 217.15 229.55 5.71% - - Indicative Performance: -12.62% N/a

80% PROTECTED KICK OUT 2* AAPL 94.72 104.21 10.02% Kick Out Level: 30% In Year 2 - - GSK 1555.00 1688.00 8.55% 45% In Year 3 - - BMW 93.97 77.05 -18.01% 60% In Year 4 - - VOD 195.65 229.55 17.33% - - Indicative Performance: -18.01% N/a

80% PROTECTED KICK OUT 3* RDSA 2346.50 1944.00 -17.15% Kick Out Level: 30% In Year 2 - - GSK 1432.50 1688.00 17.84% 45% In Year 3 - - BMW 85.64 77.05 -10.03% 60% In Year 4 - - ALV 128.20 128.30 0.08% - - Indicative Performance: -17.15% N/a

80% PROTECTED KICK OUT 4* RDSA 2132.50 1944.00 -8.84% Kick Out Level: 30% In Year 2 - - GSK 1485.00 1688.00 13.67% 45% In Year 3 - - RYA 8.56 11.94 39.40% 60% In Year 4 - - ALV 138.45 128.30 -7.33% - - Indicative Performance: -8.84% N/a

CAPITAL SECURE MIN RETURN 1* SX5E 2579.76 2990.76 15.93% - - 10.00% 11.50%

CAPITAL SECURE MIN RETURN 2* SX5E 2589.25 2990.76 15.51% - - 9.10% 17.60%

CAPITAL SECURE MIN RETURN 5* SX5E 2799.2 2990.76 6.84% - - 9.00% N/a

SECURE INCOME & GROWTH* SX5E 2161.87 2990.76 38.34% UKX 5351.53 6724.43 25.65% - - 26.00% N/a

CREDIT UNION EURO BONUS BOND* SX5E 3674.05 2990.76 -18.60% - - 1.00% N/a

OIL & GAS KICKOUT NOTE* XOM 82.23 88.95 8.17% - - - - RDSB 1717.00 2002.00 16.60% - - - - BP 391.70 426.85 8.97% - - - - FP 44.33 42.76 -3.54% Indicative Performance: 0.00% N/a

OIL & GAS KICKOUT NOTE 2* XOM 77.28 88.95 15.10% - - - - RDSB 1469.00 2002.00 36.28% - - - - BP 339.30 426.85 25.80% - - - - FP 42.01 42.76 1.79% Indicative Performance: 17.00% N/a

OIL & GAS KICKOUT NOTE 3* XOM 82.87 88.95 7.34% - - - - RDSB 1711.00 2002.00 17.01% - - - - BP 350.10 426.85 21.92% - - - - FP 41.88 42.76 2.11% Indicative Performance: 17.00% N/a

REAL ESTATE KICKOUT NOTE* SPG 190.52 227.04 19.17% - - - - UL 233.60 246.15 5.37% - - - - DLR 74.80 104.46 39.65% - - - - HCN 65.25 79.33 21.58% Indicative Performance: 20.00% N/a

EUROSTOXX 50 DOUBLE GROWTH NOTE SX5E 2986.73 2990.76 0.13% 200% - 0.27% -

PROTECTED ABSOLUTE SLGLARA 12.05 11.80 -2.14% - - - -RETURN STRATEGIES CARMPAT 615.33 643.55 4.59% - - - - ETAKTVE 128.74 130.77 1.58% - - - - Weighted Basket 1.34% 120% - 1.61% -

GLOBAL REAL RETURN NOTE BNGRRAE 1.27 1.34 4.97% 150% - 7.45% -

EURO BLUE CHIP KICKOUT BOND ALV 128.00 128.30 0.23% SIE 94.49 97.12 2.78% RYA 11.57 11.94 3.15% DAI 58.39 60.82 4.16% Indicative Performance: 12.00% 20.00%

Indicative performance figures & maturity dates



Cantor Fitzgerald Split Deposit Bonds

Underlying Indicative Indicative Indicative Option A Option B Option A Option B SplitCantor Fitzgerald Bond Issue Asset Initial Current Underlying Participation Participation Indicative Indicative Deposit (Ticker) Strike Level % Change Rate Rate Return Return Return

SAFE HARBOUR BOND IV BNPIHBEE 627.10 716.03 14.18% 80% 160% 11.34% 22.69% 10.00%

SAFE HARBOUR BOND GBP IV BNPIHBEE 627.10 716.03 14.18% 80% 160% 11.34% 22.69% 10.00%

SAFE HARBOUR BOND GBP V BNPIHBEE 618.72 716.03 15.73% 80% 160% 12.58% 25.17% 10.00%

SAFE HARBOUR BOND VI BNPIHBEE 624.16 716.03 14.72% 70% - 10.30% N/a 10.00%

SAFE HARBOUR BOND VII BNPIHBEE 627.26 716.03 14.15% 70% - 9.91% N/a 10.00%

SAFE HARBOUR BOND VIII BNPIHBEE 629.75 716.03 13.70% 70% - 9.59% N/a 10.00%

Strike and Maturity Dates for Cantor Fitzgerald Bonds: Product Strike Date Maturity DateEuro Bluechip Kickout Bond 15/07/16 15/07/21

Global Real Return Note 29/04/16 12/07/21

Protected Absolute Return Strategies 24/03/16 31/03/21

EuroSTOXX 50 Double Growth Note 24/03/16 09/04/21

Oil & Gas Kick Out Note 3 16/03/16 30/03/21

Real Estate Kick Out Note 18/12/15 05/01/21

Oil & Gas Kick Out Note 2 18/12/15 05/01/21

Oil & Gas Kick Out Note 30/10/15 12/11/20

80% Protected Kick Out 1 19/05/14 28/05/18




Capital Secure Min Return 1 21/02/13 21/02/19



Credit Union Euro Bonus Bond 17/04/15 22/04/21

Dividend Aristocrat Bond 1 27/05/13 27/04/17

Dividend Aristocrat Bond 2 26/07/13 26/06/17

Dividend Aristocrat Bond GBp 26/07/13 26/06/17

Global Dividend Bond 26/02/13 26/01/17

Safe Harbour Bond GBP V 19/10/12 19/09/16

Safe Harbour Bond IV 21/09/12 22/08/16

Safe Harbour Bond GBP IV 21/09/12 22/08/16

Safe Harbour Bond VI 26/11/12 26/10/16

Safe Harbour Bond VII 30/11/12 01/11/16

Safe Harbour Bond VIII 23/01/13 23/12/16

Secure Income & Growth 21/05/12 21/11/17

WARNING : Investments may fall as well as rise in value. Past performance is not a reliable guide to future performance

All figures are indicative of underlying performance after participation only and represent the potential indicative return of the underlying strategy only,had the investments matured on 29 July 2016. Indicative performance figures may need to be added to the relevant capital protected amount, if any, which

may be less than 100% of the funds originally invested. All performance figures are indicative only and do not include the impact of averaging, if any.

*Indicative performance figures may also include a performance related bonus (if applicable). However final payment of this bonus will depend on theunderlying performance at next annual observation date or maturity. Please consult the Terms and Conditions in the relevant product brochure for further

information.

Please note that while your capital protected amount is secure on maturity, any indicative returns, including those figures quoted above are not secure(other than any minimum interest return on maturity, if applicable). You may only receive your capital protected amount back. These are not

encashment values. The performance above is solely an indicative illustration of the current performance of the underlying assets tracked afterparticipation, gross of tax, and are NOT ENCASHMENT VALUES. If early encashment is possible, the value may be considerably lower than the original

investment amount. Please consult the Terms and Conditions in the relevant product brochure for further information.



DisclaimerCantor Fitzgerald Ireland ltd, (Cantor), is regulated by the Central Bank of Ireland. Cantor Fitzgerald Ireland ltd is a memberfirm of the Irish stock Exchange and the london stock Exchange.

This report has been prepared by Cantor for information purposes only and has been prepared without regard to theindividual financial circumstances and objectives of persons who receive it. The report is not intended to and does notconstitute personal recommendations/investment advice nor does it provide the sole basis for any evaluation of thesecurities discussed. Specifically, the information contained in this report should not be taken as an offer or solicitation ofinvestment advice, or encourage the purchase or sale of any particular security. not all recommendations are necessarilysuitable for all investors and Cantor recommend that specific advice should always be sought prior to investment, basedon the particular circumstances of the investor.

Although the information in this report has been obtained from sources, which Cantor believes to be reliable and allreasonable efforts are made to present accurate information, Cantor give no warranty or guarantee as to, and do not acceptresponsibility for, the correctness, completeness, timeliness or accuracy of the information provided or its transmission. norshall Cantor, or any of its employees, directors or agents, be liable for any losses, damages, costs, claims, demands or expensesof any kind whatsoever, whether direct or indirect, suffered or incurred in consequence of any use of, or reliance upon, theinformation. Any person acting on the information contained in this report does so entirely at his or her own risk.

All estimates, views and opinions included in this report constitute Cantor’s judgment as of the date of the report but maybe subject to change without notice. Changes to assumptions may have a material impact on any recommendations madeherein.

Unless specifically indicated to the contrary this report has not been disclosed to the covered issuer(s) in advance ofpublication.

Past performance is not a reliable guide to future performance. The value of your investment may go down as well as up.Investments denominated in foreign currencies are subject to fluctuations in exchange rates, which may have an adverseaffect on the value of the investments, sale proceeds, and on dividend or interest income. The income you get from yourinvestment may go down as well as up.

Figures quoted are estimates only; they are not a reliable guide to the future performance of this investment. It is notedthat research analysts' compensation is impacted upon by overall firm profitability and accordingly may be affected tosome extent by revenues arising from other Cantor business units including Fund Management and stockbroking. Revenuesin these business units may derive in part from the recommendations or views in this report. notwithstanding, Cantor issatisfied that the objectivity of views and recommendations contained in this report has not been compromised. Cantorpermits staff to own shares and/or derivative positions in the companies they disseminate or publish research, views andrecommendations on. nonetheless Cantor is satisfied that the impartiality of research, views and recommendations remainsassured.

This report is only provided in the Us to major institutional investors as defined by s.15 a-6 of the securities Exchange Act,1934 as amended. A Us recipient of this report shall not distribute or provide this report or any part thereof to any otherperson.

Non-Reliance and Risk Disclosure:

This is a Marketing Communication. It is not a research report as defined by MiFID nor is it intended as such. We are notsoliciting any action based on this material. It is for the general information of our clients.

Company Description

CRH: CRH PlC, a Fortune 500 company, is a diversified international building materials group which manufactures anddistributes a range of construction products such as heavy materials, elements to construct the frame and value-addedexterior products.

Ryanair: Ryanair Holdings PlC provides low fare passenger airline services to destinations in Europe.

PIMCO Global Investment Grade Credit Fund: The Global Investment Grade Credit Fund is an actively managed portfoliothat invests at least two-thirds of its assets in primarily investment grade global corporate and credit instruments. Portfolioduration may vary within two years of the benchmark and the fund may tactically invest up to 15% of assets in below-investment grade issues.

iShares EURO STOXX 50 UCITS ETF: The Fund seeks to track the performance of an index composed of 50 of the largestcompanies in the Eurozone.



Historical Record of recommendation:

CRH: CRH was added to the core portfolio on the 01/01/2016, we have upgraded our recommendation to outperformfrom market perform.

Ryanair: Ryanair was added to the Core Portfolio at inception in and have had an Outperform recommendation since then.

Source: Bloomberg

All regulatory disclosures pertaining to valuation methodologies, definition of the rating system and historical records ofthe above recommendations can be found on the Cantor Fitzgerald Ireland website here:

http://www.cantorfitzgerald.ie/research_disclosures.php

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Cantor Fitzgerald Ireland ltd (Cantor) is regulated by the Central Bank of Ireland. Cantor Fitzgerald Ireland ltd is a member firm of the Irish StockExchange and the london Stock Exchange.

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DUBLIN: 75 St. Stephen’s Green, Dublin 2, Ireland. Tel : +353 1 633 3800. Fax : +353 1 633 3856/+353 1 633 3857CORK: 45 South Mall, Cork. Tel: +353 21 422 2122.LIMERICK: Theatre Court, lower Mallow Street, limerick. Tel: +353 61 436500.

email : [email protected] web : www.cantorfitzgerald.ie Twitter : @cantorIreland LinkedIn : Cantor Fitzgerald Ireland

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