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OVERVIEWExchange Traded Notes (ETNs) are designed to provide investors with an investment opportunity to access the returns of market benchmarks or strategies. ETNs are not equities or index funds, but they do share several characteristics with these. For example, ETNs are listed on an exchange and, similar to index funds, they are linked to the return of a benchmark index or price.

Absa Capital has established the NewWave ETN Programme. NewWave ETNs will give investors exposure to the performance of various asset classes. The NewWave ETN Programme is an issuance programme of Absa Bank Limited (Absa Bank) in terms of which various asset classes of ETNs are issued and listed on the JSE Limited. These ETNs constitute unconditional, unsecured and unsubordinated obligations of Absa Bank.

Absa Bank is an affiliate of Barclays Bank PLC which lists and issues iPath exchange traded notes on various exchanges around the world with features similar to NewWave ETNs.

BENEFITS OF ETNSETNs provide investors with the opportunity to achieve cost-effective investments in previously expensive or difficult to reach assets, market sectors or trading strategies.

NEWWAVE CURRENCY ETNS NewWave Currency ETNs are designed to provide investors with an easy to access and liquid investment in the specified reference currency, similar to having a currency deposit account with a financial institution.

Any potential investor should, prior to investing ensure that they have some understanding of currencies and how they trade.

HOW DO THE CURRENCY MARKETS WORK? Unlike the equity markets, where investors are primarily driven by profit motive, participants in the currency markets partake for several different reasons. Market participants include:

- Central Banks, which buy or sell off currency reserves in order to meet specific economic objectives

- Banks, which act as dealers in currency - Hedgers, such as corporates and large financial institutions, wh0 wish to neutralise their

currency risk and/or finance international business projects - Speculators/Investors, which include everyone from a hedge fund to individual investors,

who seek to profit from fluctuating exchange rates

WHY INVEST IN CURRENCY ETNS? International currency is the largest and most liquid asset class in the world. And yet, most investors have zero direct exposure to currency in their portfolios. The massive discrepancy exists largely because of currency’s history as an institutional asset. Most currency trades take place either in the highly leveraged futures markets or in institutional – over the counter arrangements – in either case, markets where most retail investors are afraid to tread.

NewWave Currency ETNs are opening up the currency market to retail investors. Buying currency exposure is now as easy as buying equities on the JSE Limited.

DRIVERS OF CURRENCY RETURNS Currency values are always expressed in pairs. The US Dollar for example does not have a value per se in international finance, except when measured against another currency, for example the Rand. NewWave ETNs will be trading on the JSE Limited which will reflect the Rand Equivalent per Currency ETN.

Several drivers can be identified that drive strength of a particular currency – for example:

Interest rates - Every currency lives in the context of the interest rates being paid by a country’s central bank for purchases of government bonds. Comparatively high interest rates tend to attract investors to a currency, on the other hand where lower interest rates will depress a currency’s value.

Inflation/deflation - Countries with low inflation will see their currency appreciate, as their purchasing power rises relative to other countries. High inflation, on the other hand, usually depreciates currency values.

Economic indicators - Employment data, retail sales data, GDP growth and other economic health indicators can influence the value of a country’s currency, but these signals are often highly contextual. For example, strong employment data after a market crisis might support a currency, as it suggests economic recovery. But in a healthy economy, it could signal inflation, which would depreciate the currency’s value.

International trade - Countries that import more than they export (e.g. Japan) must sell their own currency in order to purchase the currency of their export partners, and thus will see their own currency value depreciate as a result. Thus, shifts in macroeconomic international trade metrics such as current account, capital account and financial account data can all influence exchange rates.

Geopolitical or global economic events/default risk - Wars, coups, civil unrest, elections, fiscal policy decisions, and local or worldwide financial crises can all change a country’s underlying economic health, and even increase its default risk, thus affecting its currency.

NEWWAVE ETNS WILL PROVIDE EASY ACCESS TO CURRENCY MARKETSUntil only recently only large financial institutions or corporations could engage in foreign currency trading, due to large minimum sizes and over the counter nature of the marketplace. NewWave ETNs makes it easier for any investor to get exposure to the currency markets.

CURRENCY ETNS DO NOT CHARGE A FEECurrency ETNs will not charge a fee which is normally the case for many ETNs. This means that the Currency note, which is denominated in the foreign currency, will always remain the same principal amount over the life of the instrument. However, the rand equivalent of the ETN will fluctuate.

USING CURRENCY IN A PORTFOLIO Market participants get exposure to currencies predominantly for the following reasons:

Diversification - Currency Investments are, at the core, just another way to hold cash. As investors diversify their equity and bond portfolios, they can do the same with cash investments. Diversifying a portfolio lowers the risk for investors. The NewWave Currency ETNs earn interest at wholesale money market rates minus a market related spread.

Speculation - The second and most basic use of currency in a portfolio is simple speculation. Investors and speculators make fundamental calls, on the value of currency pairs based on either short or long term expectations of the currency markets. Investors wishing to gain exposure to the rising value of the USD, GBP or EUR against the ZAR can do so by using NewWave Currency ETNs.

Hedging - Although few investors have stand-alone currency exposure in their portfolios, all investors who own international equities and bonds have a critical currency aspect to their portfolios and this currency exposure is a key source of returns for international investments.

FREQUENTLY ASKED QUESTIONS

WHAT ARE THE DIFFERENCES AND SIMILARITIES BETWEEN ETNS AND ETFS?General product features common to ETFs and ETNs are:

1. Listed and exchange traded2. Easy accessible investment vehicles for a wide range of asset classes3. Low tracking error 4. Exposure to market risk of the asset class/index5. Daily redeemable to Issuer subject to terms and conditions

Specific features of ETNs are:

Investor owns a note, exposing the investor to the credit risk of the note issuer

WHAT ARE SOME OF THE RISKS OF INVESTING IN CURRENCY ETNS?An investment in the ETNs involves risks. Some of these risks are summarised here, but we urge you to read the more detailed explanation of risks in “Additional risk factors and investment considerations” in the Product Supplement and the applicable Pricing Supplement and “Risk factors and investment considerations” in the Programme Memorandum. Available for download on www.absacapitaletfs.com.

- Currency risk

- Uncertain return

- Issuer credit risk

- Interest rate risk

- Issuer early redemptionNEWWAVE ETNS ETFS

Liquidity Daily on exchange Daily on exchange

Recourse Issuer credit Portfolio of assets

Principal risk Market and Issuer risk Market risk

Tracking error Low tracking error (only fees)

Larger tracking error (fees and rebalancing costs - potential

underlying swaps and collateral fees for synthetic ETFs)

Issuer Subscription and Redemption

Both Subscription and Redemption in block

sizeOnly Redemption in block size

Pricing and Trading Market maker on the exchange Market maker on the exchange

WHO IS THE ISSUER OF NEWWAVE CURRENCY ETNS?Absa Bank Limited is the Issuer of the NewWave ETNs. Absa Bank Limited is an authorised financial services provider and a registered credit provider.

WHO IS ABSA CAPITAL?Absa Capital acts as the originator and issuer agent of the ETNs. Absa Capital, is the investment banking division of Absa Bank Limited and is affiliated with Barclays Capital.

ARE THE NEWWAVE CURRENCY ETNS RATED?No, the ETNs are not rated, but rely on the ratings of the Issuer, Absa Bank Limited.

DO NEWWAVE CURRENCY ETNS OFFER PRINCIPAL PROTECTION?The Principal Amount per ETN will not change and the Issuer will not charge any fees. For example, the principal amount per ETN will equal USD 1.00 (plus any accrued interest during that interest period), however when measured against the rand, the rand equivalent of the ETN can go up or down.

DO NEWWAVE CURRENCY ETNS MAKE INTEREST PAYMENTS?The investment evidenced by each ETN accrues interest daily on the principal amount. The interest earned since the end of the last interest period is referred to as accrued interest. The accrued interest is included in the redemption value of each ETN. ETNs will entitle the holder thereof to receive the accrued interest distribution on the relevant accrued interest payment dates, provided that if the accrued interest per ETN for a particular interest payment period amounts to less than 0.01 cent of the reference currency, then such accrued interest will not be declared by the issuer but will instead be carried over by the issuer to the next interest payment period and added to any accrued interest payable on the ETNs for the following interest payment period. The redemption value of each ETN will accordingly reflect any such unpaid accrued interest, subject to the applicable terms and conditions.

DO NEWWAVE CURRENCY ETNS MAKE DIVIDEND DISTRIBUTIONS?No.

WHAT IS THE INVESTOR FEE FOR NEWWAVE CURRENCY ETNS?There will be no fee levied in terms of the NewWave Currency ETNs.

WHAT IS THE TERM OF THE NEWWAVE CURRENCY ETNS?The notes will have a fixed term of 30 years. Investors wishing to sell their notes prior to maturity can do so in the secondary market or to the Issuer subject to a minimum block size.

HOW CAN I SELL/REDEEM MY NEWWAVE CURRENCY ETNS?Investors can redeem NewWave Currency ETNs in one of three ways:

Sell your ETNs in the secondary market to the market maker. Absa Capital will act as market maker ensuring that there will be intra-day liquidity for the ETNs (subject to a minimum block size), enabling note holders to sell their ETNs in the secondary market.

Redeem your ETNs directly to the issuer, subject to a minimum block size and redemption fee.

Hold your ETNs till maturity and receive the redemption proceeds from the Issuer.

WHAT CAN I EXPECT TO RECEIVE WHEN HOLDING NOTES UNTIL MATURITY?You will receive a cash payment at maturity (the “Redemption Proceeds”) which will be a function of the principal amount per note plus any accrued interest for that interest period.

WHAT ARE THE EXCHANGE CONTROL IMPLICATIONS FOR AN INVESTOR?The NewWave Currency ETNs are classified as an inward listing on the JSE Limited for exchange control purposes. For institutional investors foreign allowance limits apply. However, for retail investor’s foreign allowance limits do not apply.

WHAT IS THE RAND EQUIVALENT PER NOTE?The Redemption Value amount converted at the Rate of Exchange.

WHAT IS THE INTEREST RATE SPREAD?A market related interest rate spread subject to changing market conditions for the Interest Period and published on the website, www.absacapitaletfs.com.

WHAT IS THE PRICE I CAN EXPECT TO PAY FOR A NEWWAVE CURRENCY ETN ON INCEPTION?The rand equivalent of the reference currency, for example in the case of a USD ETN, the principal amount per ETN is USD 1.00 and the Rand Equivalent, assuming a USD/ZAR exchange rate for delivery in five days time is 1:8, and a creation fee of 1% the Rand Equivalent will be R8.08 per ETN .

This example is for information purposes only and investors must familiarise themselves with the content of the programme do cumentation which is available for download on our website, www.absacapitaletfs.com.

HOW DO I CALCULATE THE REDEMPTION VALUE PER NOTE WHEN REDEEMING MY NOTES? The Redemption Value (RV) on any relevant calendar day shall be determined as follows:

RV = P + I

Where:

“ P ” means the Principal Amount per note

“ I ” means the accrued interest calculated daily and distributed as specified in the specific Terms and Conditions

Where Interest = P x i x T

i = interest rate (Libor - interest rate spread)T= n/360 where days are equal to the number of days in the overnight period, which is generally one day except over weekends or public holidays.

Simple Example of a USD ETN

Assumptions: - Interest Rate = 0.5% or 0.05 - Principal Amount per Note = $1.00 - Interest Period = 181 days - Daily Interest Calculation

1*0.05*(1/360) = 0.0001388889 - Total Accrued Interest

0.0001388889*181 = 0.0251388889

ThusRV is 1 + 0.02513 = 1.02513

*This example is for information purposes only

HOW DO I BUY OR SELL NEWWAVE CURRENCY ETNS?NewWave Currency ETNs are listed in the ETN sub-sector of the JSE Limited and may be bought (please see secondary market below) or sold during normal trading hours (9am to 5pm SA time).

PRIMARY OFFERINGIn the primary offering, NewWave Currency ETNs may be subscribed for through any JSE stockbroker, ETF Investment Plan or your CSDP

SECONDARY MARKET Absa Capital will act as primary market maker, ensuring there is intra-day liquidity in the NewWave Currency ETNs. In the secondary market, NewWave ETNs may be bought or sold through any JSE stockbroker or the ETN investment plan. Trading directly with the market maker is subject to a minimum block size.

ISSUER You can contact the Issuer directly to redeem NewWave Currency ETNs subject to a minimum block size and a redemption fee.

CONTACTSPlease contact your stockbroker or CSDP to subscribe. If you do not currently have a stockbroker, contact Absa Stockbrokers (Pty) Limited.Tel no: +27 (0)11 647 0839Website: www.absastockbrokers.co.za

Alternatively, to invest via the investment plan specially structured for the individual investor to have easy access to ETNs via a monthly debit order or a single lump sum investment, contact:Tell no: +27 (0)861 289 383Website: www.absacapitaletfs.com

You can also contact the Market Maker directly on +27 (0)11 895 5512 (trading subject to a minimum block size)

CONTACT THE ISSUER TO LEARN MORE ABOUT NEWWAVE CURRENCY ETNS?You can contact Absa Capital Investments team on +27 (0)11 895 5517 or visit our website www.absacapitaletfs.com

Tel: +27 (0)11 895 6000 :: 15 Alice Lane, Sandton, 2196, South Africa :: www.absacapitaletfs.com

Contact Details

FAIS ACT NOTICE AND DISCLAIMER This brochure/document/material/report/communication/commentary (this commentary) has been prepared by Absa Capital, the investment banking division of Absa Bank Limited – a registered bank in the Republic of South Africa with company registration number: 1986/004794/06 and with its registered office at: Absa Towers East, 170 Main Street, Johannesburg, Republic of South Africa (Absa). Absa is regulated by the South African Reserve Bank. Absa has issued this commentary for information purposes only and You must not regard this as a prospectus for any security or financial Product or transaction. Absa does not expressly, tacitly or by implication represent, recommend or propose that the securities and/or financial or investment Products or services (the Products) referred to in this commentary are appropriate and/or suitable for Your particular investment objectives or financial situation or needs. 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