September 19, 2012 Gamma Team Market Update. Market Update Outline Recent Development Asset Class View: Precious Metal Sector View: Real Estate News Update.

September 19, 2012

Gamma Team Market Update

Market Update

Outline

•Recent Development•Asset Class View: Precious Metal•Sector View: Real Estate•News Update and Technical Views

Recent Developments

• In one week, the world's 2 largest central banks opt for unlimited, open-ended asset purchase programs.

• As a first step, Fed announced a monthly open-ended purchase of MBS of $40 billion.

• If outlook for the labor market does not improve substantially, Fed will undertake additional asset purchases and employ other tools.

• As a result, exceptionally low levels interest rates are likely to be warranted at least through mid-2015

Recent Developments

• ECB announced an unlimited bond- purchase program to regain control of interest rates in EU.

• Germany’s highest court sent a strong message by approving the €500 billion rescue fund.

• This program is targeting sovereign bonds of high debt/GDP countries such as Greece, Spain, and Italy.

• ECB stand behind the euro could represents a strong case for selected bonds in EURO currency.

• 3-year Italy vs. 30-year US Treasury both at 2.80%. Credit (ECB) vs. duration (Fed) risk.

Impact of Recent Developments

1. Extended low interest rate environment;

2. Continuous growth in money supply;

3. Potentially high inflationary environment;• We believe all three support a positive view for Real

Assets in general.• Gold (precious metals) as an asset class is also poised

to gain from current conditions.• Real Estate could be a prime sector to benefit from the

prevailing conditions.

Gold: Demand Fundamentals• Jewelry remains the

largest demand component. Growth coming from India, China, and Russia (55%).

• The largest growing demand component is investment demand (33%).

• The smallest demand component is Industrial one representing 12%.

Gold: Demand FundamentalsInvestment RationalCentral banks especially in emerging markets and Investors have been net buyers of gold for the following reasons:

•Store of value: It retains its purchasing power over years.•Insurance policy: It can be used as a hedge against currency fluctuations, especially US dollar. •Bank guarantee: It is accepted as bank collaterals to reduce borrowing cost.•Risk Management: It can be used as a tool to reduce the overall volatility of investment funds.

Gold: Supply Fundamentals

• Supply from mine production has averaged approximately 2,600 ton per year over the last five years.

• The high value of gold makes recovery economically viable.

• Central banks turned net buyers than sellers in 2009/2010.

Gold: Outlook

Property Report - Canada

• The Canadian Real Estate Association cut its 2013 outlook for home sales and lowered its national average price forecast on Monday as it reported the biggest month-to-month drop in activity in two years.

• Housing became less affordable in Q2: RBC – Home buyers could be facing increased pressure early next year. RBC Economist predicts BOC will move to hike interest rates, resulting in higher mortgage rates.

• Cominar REIT may buy 68 properties from GE Capital with proceed from public offering – QUEBEC: Cominar received $276-M from its public offering and may use it to buy 68 properties from GE Capital Real Estate.

• Nordstrom confirms plan to expand into Canada – iconic U.S. retailer confirmed rumours it will open a flagship, 230,000-square-foot store in Pacific Centre Mall (Vancouver) in Q2 of 2015. Smaller stores will also open in Calgary, Ottawa and Toronto in 2014, with the company eyeing a longer-term strategy to expand into a total of 8 urban centres across Canada.

Property Report - US

• Mortgage Putback Threat Reduced for Lenders Under New Rules - The U.S. overseer of Fannie and Freddie are seeking to reduce the threat that banks will have to buy back flawed mortgages from the 2 GSEs, laid out new rules designed to spur the two firms.

• Brookfield Channels Buffett in General Growth Investment – General Growth rejected a call by minority investor Bill Ackman to explore a deal with larger rival Simon Property Group.

• Realty Income is buying American Realty Capital Trust Inc. for US$1.9B in stock. RIC says the deal will help it increase the revenue it derives from investment grade tenants and diversify its holdings outside the retail industry.

Canadian Real Estate Hedge Fund

VISION CAPITAL CORP.

www.visioncap.ca•FUNDS & STRATEGY•The Vision Opportunity Funds are primarily real estate focused with a principal emphasis on the Canadian market. Vision strives to seek out undervalued or overvalued REITs both absolutely and relative to their peers. The Funds benefit from making concentrated investments in its best ideas and strategies.

In assessing and evaluating target investments the Manager’s approach considers:•Balance sheet strength and near term liquidity•Net Asset Value:•Avoids myopic focus on near term earnings and cash flow•Assesses impact from assets which do not have current earnings or liabilities which may not be sufficiently understood•Combination of “Top Down” and “Bottom Up” strategies to pinpoint opportunities•Top down for assessing asset sectors or regions•Bottom up to select specific investments based on merits of entity•Debt securities that offer high (equity-like) returns

Central banks Interventions

• The central banks moves helped boost stocks to their highest levels since late 2007.

• The results, all pointing to more government intervention in a struggling global economy, helped lift the S&P 500, Dow Jones Industrial Average DJIA and Nasdaq Composite to gains of 2% to 3% for the month.

Technical View - Gold Price

Technical View - S&P 500

Top NEWS

Canadian stocks also climb as Fed launches stimulus Canadian stocks climbed to a five-month high Thursday, with advances in gold and energy stocks after the U.S. Federal Reserve said it would launch a new round of stimulus to aid the world’s largest economy.

China-Canada bank merger - Nexen deal

Canada is still waiting to see what happens with a stalled bank deal with China as the Harper government gets ready to revamp its own official policy on foreign takeovers.

Apple reaches $700 per share

Pre-orders for the new iPhone 5 topped 2 million units in 24 hours.

Top NEWS•  Brazilian stocks also climbed higher extending gains from

the previous session after the U.S. Federal Reserve inspiration.

• European stocks retreated from a Federal Reserve move to 15-month high on Monday, led lower by losses for mining and telecom sectors.

• The question of whether Spain will formally ask for bailout funds remains unresolved even after an informal two-day meeting of European finance ministers in Cyprus this past weekend.

• China: Even with a recent series of stimulus efforts out of Beijing, from new infrastructure projects to lower benchmark interest rates, indicators show that the Chinese economic growth continues to lose steam.

Thank You

Conclusion ~ Comments ~ Questions