MACRO OVERVIEW FIXED INCOME EQUITIES COMMODITIES CURRENCIES

WEEKLY MARKET VIEW 20 July 2012 Contents Waiting for policy stimulus Pg 1 Waiting for policy stimulus Bernanke signals willingness, Wen warns Pg 2...
0 downloads 0 Views 282KB Size
WEEKLY MARKET VIEW 20 July 2012 Contents Waiting for policy stimulus

Pg 1

Waiting for policy stimulus

Bernanke signals willingness, Wen warns

Pg 2

Economic surprises may be bottoming, but more policy stimulus is

Conclusion

Pg 3

likely needed in Europe and likely forthcoming in China. Bernanke’s

Technical analysis

Pg 4

testimony suggests QE3 cannot be ruled out, but we expect data to

Economic & Market Calendar

Pg 6

3-12 month Market Outlook

Pg 7

improve in Q3, meaning such easing may wait until the fiscal cliff looms in 2013. Equities (particularly the high-yielding variety), high yield corporate

Asian monetary policy beginning to soften China, Korea policy rates

bonds and Asian local currency bonds are our preferred asset classes. With Europe once again appearing to be at a critical point in its

8

evolution, short term weakness cannot be ruled out, but we would

7

expect this to be temporary and an opportunity for investors.

%

6 5

MACRO OVERVIEW

4



3

Bernanke signals a willingness to act if the economy worsens. US

2

retail sales data disappoints, but housing data improves. Q3

1

rebound expected

0 Mar-08

Oct-08

May-09

Dec-09 China

Jul-10

Feb-11

Sep-11

Apr-12



Source: Bloomberg, Standard Chartered

Progress towards finalising Spanish bank bailouts a positive, though peripheral sovereign debt markets remain stressed

Korea



Asian data weakening, opening the room to further policy rate cuts, most so in China

FIXED INCOME

Key events this week:

Data / Event

Date

Germany IFO

25 July 25 July 26 July 26 July

Thai policy rates New Zealand policy rates Philippines policy rates Source: Standard Chartered



US high yield default rates remain well below average. Continue to average in on weakness



Regionally we prefer US and Asian corporate credit, though the US offers a better risk-reward trade-off in our view

EQUITIES •

Q2 earnings, the search for yield and sensitivity to interest rates are key themes in equity markets



We maintain our focus on staples, technology and oil sectors

COMMODITIES Manpreet Gill

Senior Investment Strategist

Steve Brice

Chief Investment Strategist

Rob Aspin, CFA

Senior Investment Strategist

Suren Chelliah

Investment Strategist



Oil may face short-term technical resistance, but we remain positive long-term due to geopolitical risks and demand strength



We would not chase the weather-driven rally in soft commodities

CURRENCIES •

FX market positioning still remarkably neutral, excluding the EUR



We continue to prefer to sell into Euro strength short-term, while



South Africa surprises with 50bps rate cut, but still-high yields

preferring Asian currencies long-term likely to continue supporting the Rand This commentary reflects the views of the Wealth Management Group of Standard Chartered Bank

Weekly Market View

Bernanke signals willingness, Wen warns Benchmark (USD) performance w/w* JP Morgan Cash Index

Data and events this week were about as ‘muddle-through’ as you can get. Fed Chairman Bernanke signalled a willingness to act if the

0.01

MSCI AC World Index

economy worsened, but suggested further easing was not imminent.

1.79

Citigroup World BIG Index

Further easing in Europe and Asia is clearly more likely in the near

0.54

DJ UBS Commodities Index

term with the Spanish 10yr bond yield once again around 7% and

3.92

Chinese Premier Wen highlighting concerns on the labour market front.

DXY Index-0.56 ADXY Index



0.21 -1

1

3

Bernanke signals willingness to act, but easing not imminent: Fed Chairman Bernanke’s comments this week suggest that while economic

5

%

data has been “generally disappointing” in recent times, it is too early for

*week of July 13 to July 19 Source: Bloomberg, Standard Chartered

further quantitative easing to be pushed through. His comments noting borrowing conditions remain tight for some businesses suggest measures to encourage lenders to lend are possible. We doubt further monetary easing will be announced as soon as the August 1 FOMC meeting and given we expect growth to rebound in Q3, further easing may have to wait until it is required to offset a further tightening in fiscal policy expected in early 2013. •

China economic surprises may have bottomed while US not far away Economic Surprise Indices

US economic surprises may be bottoming: While retail sales were weaker than expected, housing data continued to print higher than consensus expectations. Housing starts continued to drift higher while

250

the NAHB home builder confidence moved sharply higher. In our view, it

200

is likely US economic surprises are bottoming while the housing market

150

is gradually turning.

100 Index

50



0 -50

German and Finnish support for Spain bank bailouts a positive, but markets still stressed: Finland agreed to support bailouts for Spanish

-100

banks after achieving a deal on obtaining collateral in return, while

-150 -200

Germany’s Bundestag voted in favour of the bailout terms. Together,

-250 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 US

China

these represent significant progress on bank bailouts in Europe.

Europe

Peripheral sovereign debt markets, however, remain stressed with

Source: Bloomberg, Standard Chartered

Spanish 10yr yields approaching 7% again. We maintain our view that ECB action will likely be ultimately required, though a market riot may be required to push policymakers to act. •

Chinese Premier Wen’s comments suggest room for further policy easing: Wen commented that China’s employment situation will become “more complex and more severe” while separately noting that the government will “appropriately” fine-tune policy in the second half to

US homebuilder confidence has rebounded strongly US NAHB home builder confidence index

support growth. This suggests more room for policymakers to ease policy to deal with economic growth concerns. We expect further policy

80

rate and required reserve ratio cuts in the second half, but remain

70 60

mindful that a 2009-style stimulus package remains unlikely as

50

policymakers attempt to avoid a sharp rebound in house prices. •

40

Asian data consistent with a tilt towards policy easing: Indian WPI

30

inflation fell to 7.25%, though the risk of higher fuel prices (due to an

20

increased in regulated prices) and food prices (due to the mixed

10 0 Jun-00

monsoon thus far) mean we remain concerned about inflation risks. Apr-02

Feb-04

Dec-05

Oct-07

Source: Bloomberg, Standard Chartered

Aug-09

Jun-11

Singapore’s weaker Q2 GDP growth (-1.1% QoQ) highlighted the risk to Asian exporters from weaker global growth, underscoring the Bank of Korea’s shift towards policy easing, for example.

2

Weekly Market View What does this mean for investors? Q2 earnings remain a near-term focus for equity markets. US earnings High dividend yield strategy has outperformed year to date MSCI Asia ex Japan Index vs. MSCI Asia ex Japan High Dividend Yield Index

data thus far shows that earnings on aggregate are surprising slightly on the upside, though earnings growth has been negative. Earnings reports are likely to dominate the market’s attention in the short term.

120

The search for yield is likely to remain a key theme in an extended 115

muddle-through economy. In the equity market, this is positive for high 110 Index

dividend yielding stocks. They have outperformed year-to-date, but in our view they are likely to remain attractive in what looks to be an extended

105

period of low growth and low policy rates.

100

95 Jan-12

We also like equity market sectors that are likely to benefit from lower Feb-12

Mar-12

MSCI Asia ex Japan

Apr-12

May-12

Jun-12

Jul-12

interest rates. Monetary easing is already underway in China, while

MSCI Asia ex Japan yield (RHS)

increasing growth concerns suggest a rising tilt towards softer policy stances

Source: Bloomberg, Standard Chartered

elsewhere in the region as well. This is positive for the property sector in China, for example, especially when combined with easing restrictions for first-time home buyers. It does, however, reinforce our underweight view on the banks as lower interest rates put downward pressure on net interest margins and thus profits. US high yield spreads back at long-term median levels BarCap US High Yield spread

We remain Overweight Staples, Technology (IT) and Oil sectors in equities. Staples can do well in difficult market environments. Both

15 13 11

Median

technology and oil sectors offer attractive valuations, with oil in particular

+1 std dev (10y)

offering exposure to the risk of higher oil prices.

-1 std dev (10y)

9

Our preference for corporate credit remains given the low interest rate

7

environment. We note US high yield spreads are again approaching long-

5

term median levels, but believe these levels offer value due to the positive

3

credit risk backdrop. Fitch Ratings reported that the US high yield default

1 -1 Jul-09

rate remained unchanged at 2.2% in June, well below the long-term average, Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

while recovery rates remained well above historical norms. The US and Asia remain our preferred regions, with the US offering the most attractive risk-

Source: Bloomberg, Standard Chartered

reward trade-off in our view. We recognise the risk of some spread-widening especially in the event of a Europe-related rise in risk aversion, but remain comfortable using any spread widening to continue averaging in. FX market positioning remains remarkably neutral: Currency markets were largely lightly positioned ahead of Bernanke’s testimony, with the

No of contracts 000

Market positioning in AUD has rebounded back into usual range AUD net non-commercial positions

exception of the Euro where net positioning remains very short. Short-term, we would focus on pairs like the Euro where both the fundamental and technical picture remains more convincing (we retain our bias to sell into

100

strength). Long-term, we continue to like Asian currencies, with local

80

currency bonds being our preferred implementation route. South Africa’s

60

surprise 50bp rate cut is marginally negative for the Rand, but still-high

40

absolute yields will likely continue supporting the currency.

20 0

Key events next week: US: New home sales, durable goods, Univ. of

-20

Michigan consumer confidence; Eurozone: German Ifo survey; Asia: New

-40

Zealand, Philippines and Thailand policy rates, Korea GDP, China flash PMI.

-60 Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Source: Bloomberg, Standard Chartered

Jan-10

Jan-11

Jan-12

Conclusion: Economic data and policy signals remain consistent with an extended period of muddle-through growth. Equities, high yield credit and Asia local currency bonds remain our favoured asset classes given the value and yields available. 3

Weekly Market View

Technical Analysis S&P 500 – Looking tired, with diminishing momentum. However, it continues to trade in an upward channel with positive bias as long as the lower band of the channel holds. Key supports are placed at 1340 and 1300. Key resistance is placed at 1385 and 1410. 1450

1385

1400 1350 1300

1340

Index

1250 1200 1150 1100 1050 1000 May-11

Jul-11

Sep-11

Nov-11 S&P 500

50 dma

Jan-12 100 dma

Mar-12

May-12

Jul-12

200 dma

Source: Bloomberg, Standard Chartered

Hang Seng China Enterprises Index – The rebound may be justified due to extreme oversold levels reached earlier. The index continues to trade in a downward channel with a positive bias. Resistance is seen at 9750 and then 9900 while support is at 9100. The index needs to break below 9000 or above 9900 for a trend to be established. 14000

13000

12000

Index

11000

10000

9900 9000

9100

8000

7000 May-11

Jul-11

Sep-11 HSCEi Index

Nov-11 50 dma

Jan-12 100 dma

Mar-12

May-12

Jul-12

200 dma

Source: Bloomberg, Standard Chartered

Stoxx Euro 600 – The Euro Stoxx Index has recovered significantly from lows. It continues to trade in an upward channel with a positive bias as long as the lower band of the channel holds. Immediate resistance is placed at 260 and 265. Key support is placed at 251. 300 290 280

260

270

Index

260

251

250 240 230 220 210 200 May-11

Jul-11

Sep-11 Stoxx Euro 600

Nov-11 50 dma

Jan-12 100 dma

Mar-12

May-12

200 dma

Source: Bloomberg, Standard Chartered

4

Weekly Market View Brent Crude – The current rally is likely to face resistance at the upper band of the downward channel. Expect profit booking around this level. Key support is placed at 101. Key resistance is placed at 108. 130 125 120 115

108

USD

110 105 100

101

95 90 85 May-11

Jul-11

Sep-11 Brent oil

Nov-11 50 dma

Mar-12

Jan-12 100 dma

May-12

200 dma

Source: Bloomberg, Standard Chartered

Gold – Gold has been trading in a contracting triangle pattern since the end of last year. The focus now remains on 1550. We observe the range narrowing and a breakout of the pattern is nearing as the range narrows. Support on the downside below 1550 is 1480 (last year July lows). Key resistance is placed at 1640 and then 1680. 1950

1850

USD/Oz

1750

1640

1650

1550

1550 1450

1350 Jun-11

Aug-11

Oct-11

Dec-11 Golds

50 dma

Feb-12 100 dma

Apr-12

Jun-12

200 dma

Source: Bloomberg, Standard Chartered

AUD-USD – The currency pair continues to trade in an upward channel with a positive bias as long as the lower band of the channel holds. Key support is placed at 1.02 and key resistances are placed at 1.048 and 1.065 1.15 1.13 1.11

AUD - USD

1.09 1.07

1.048

1.05 1.03 1.01

1.02

0.99 0.97 0.95 Jun-11

Aug-11

Oct-11 AUD - USD

Dec-11 50 dma

Feb-12 100 dma

Apr-12

Jun-12

200 dma

Source: Bloomberg, Standard Chartered

5

Weekly Market View

Economic & Market Calendar 20 July 2012 Next Week: July 23 - July 27 Event

This Week: July 16 - July 20 Period Expected

US

Chicago Fed Nat Activity Index

Jun

--

Prior

Event

-0.45

US

Advance Retail Sales

Period

Actual

Prior

Jun

0.20%

-0.20%

EC

Euro-Zone Consumer Confidence

Jul A

--

-19.8

US

Retail Sales Ex Auto & Gas

Jun

0.10%

-0.10%

HK

CPI - Composite Index (YoY)

Jun

--

0.043

US

Business Inventories

May

0.30%

0.40%

TA

Industrial Production (YoY)

Jun

0.91%

-0.21%

EC

Euro-Zone CPI - Core (YoY)

Jun

1.60%

1.60%

SI

CPI (YoY)

Jun

5.20%

5.00%

EC

Euro-Zone CPI (YoY)

Jun

2.40%

2.40%

EC

Euro-Zone Trade Balance sa

May

6.3B

4.5B

EC

Euro-Zone Trade Balance

May

6.9B

3.7B

GE

PMI Manufacturing

Jul A

--

45

US

Consumer Price Index (YoY)

Jun

1.60%

1.70%

GE

PMI Services

Jul A

--

49.9

US

CPI Ex Food & Energy (YoY)

Jun

2.20%

2.30%

EC

PMI Manufacturing

Jul A

--

45.1

US

CPI Core Index SA

Jun

229.916

229.446

EC

PMI Services

Jul A

--

47.1

US

Industrial Production

Jun

0.40%

-0.10%

JN

Jul

--

46.2

US

Capacity Utilization

Jun

79.20%

79.00%

CH

Small Business Confidence g Economic Index

US

NAHB Housing Market Index

Jul

30

29

HK

Exports YoY%

Jun

--

5.20%

UK

CPI (YoY)

Jun

2.40%

2.80%

TH

Customs Exports (YoY)

Jun

4.50%

7.68%

UK

RPI (YoY)

Jun

2.80%

3.10%

CH

HSBC Flash Manufacturing PMI

Jul

--

48.2

GE

Zew Survey (Current Situation)

Jul

21.1

33.2

EC

ZEW Survey (Econ. Sentiment)

Jul

-22.3

-20.1

GE

ZEW Survey (Econ. Sentiment)

Jul

-19.6

-16.9

SI

Electronic Exports (YoY)

Jun

1.60%

3.90%

SI

Non-oil Domestic Exports (YoY)

Jun

6.80%

3.20%

Jun

4.90%

-4.80%

US

New Home Sales MoM

Jun

-0.40%

7.60%

US

Housing Starts MOM%

AU

Consumer Prices (YoY)

2Q

--

1.60%

UK

Bank of England Minutes

AU

Conference Board Leading Index

May

-1.40%

UK

Jobless Claims Change

Jun

6.1K

6.9K

GE

IFO - Business Climate

Jul

--

105.3

JN

Machine Tool Orders (YoY)

Jun F

-15.50%

-15.50%

GE

IFO - Current Assessment

Jul

--

113.9

CH

China June Property Prices

GE

IFO - Expectations

Jul

--

97.3

UK

GDP (YoY)

2Q A

--

-0.20%

MA

CPI YoY

Jun

1.60%

1.70%

SK

SK Consumer Confidence

Jul

--

101

US

Fed's Beige Book

TH

Benchmark Interest Rate

Jul 25

--

3.00%

US

Durable Goods Orders

Jun

0.50%

1.10%

US

Initial Jobless Claims

41104

386K

352K

US

Initial Jobless Claims

Jul 21

--

--

US

Continuing Claims

41097

3314K

3313K

US

Kansas City Fed Manf. Activity

Jul

--

3

US

Philadelphia Fed.

Jul

-7

-16.6

GE

GfK Consumer Confidence Survey

Aug

--

5.8

UK

Retail Sales Ex Auto Fuel(YoY)

Jun

2.20%

2.70%

US

Durables Ex Transportation

Jun

--

0.40%

UK

Retail Sales w /Auto Fuel (YoY)

Jun

1.60%

2.10%

US

Cap Goods Orders Nondef Ex Air

Jun

--

1.60%

EC

Euro-Zone Current Account nsa

May

-2.5B

1.3B

US

Cap Goods Ship Nondef Ex Air

Jun

--

0.40%

EC

ECB Euro-Zone Current Account SA

May

10.9B

5.5B

SK

GDP (YoY)

2Q P

2.40%

2.80%

HK

Composite Interest Rate

Jun

0.42%

0.39%

6.60%

GE

Producer Prices (MoM)

Jun

--

-0.30%

Jun

--

-3.04%

SI

Industrial Production YoY

Jun

3.00%

NZ

RBNZ Official Cash Rate

Jul 26

--

2.50%

PH

Overnight Borrow ingRate

Jul 26

--

4.00%

US

GDP QoQ (Annualized)

2Q A

1.50%

1.90%

US

Personal Consumption

2Q A

--

2.50%

CH

MNI July Flash Business Sentiment Survey

US

Core PCE QoQ

2Q A

--

2.30%

TA

Export Orders (YoY)

US

U. of Michigan Confidence

Jul F

73

72

GE

Consumer Price Index (YoY)

Jul P

--

1.70%

TA

Leading Index (MoM)

Jun

--

0.50%

TH

Total Capacity Utilization ISIC

Jun

--

75.9

TH

Mfg. Production Index ISIC NSA (YoY)

Jun

--

5.53

JN

Natl CPI YoY

Jun

--

0.20%

Previous data are for the preceding period unless otherw ise indicated

Previous data are for the preceding period unless otherw ise indicated

Data are % change on preivous period unless otherw ise indicated

Data are % change on preivous period unless otherw ise indicated

p- preliminary data, f- final data, sa - seasonally adjusted

p- preliminary data, f- final data, sa - seasonally adjusted

YoY - year on year, MoM - month-on-month

YoY - year on year, MoM - month-on-month

Source: Bloomberg, Standard Chartered

6

Weekly Market View

3 - 12 Month Market Outlook Central bank policy rates Spot

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

US

0.25

0-0.25

0-0.25

0-0.25

0-0.25

0-0.25

0-0.25

Europe

0.75

0.75

0.75

0.75

0.75

0.75

0.75

UK

0.50

0.50

0.50

0.50

0.50

0.50

0.50

Japan

0.10

0.10

0.10

0.10

0.10

0.10

0.10

Australia

3.50

3.00

3.00

3.00

3.00

3.25

3.75

China

6.00

5.75

5.75

5.75

5.75

6.00

6.50

Taiwan

1.88

1.88

2.00

2.00

2.13

2.25

2.38

Malaysia

3.00

3.00

3.00

3.00

3.25

3.25

3.50

Indonesia

5.75

5.75

5.75

5.75

5.75

6.00

6.25

South Korea

3.00

2.75

2.75

2.75

2.75

2.75

2.75

India

8.00

8.00

8.00

7.75

7.50

7.25

7.00

Philippines

4.00

4.00

4.00

4.00

4.00

4.25

4.50

Thailand

3.00

3.00

3.00

3.00

3.00

3.25

3.75

Forex EUR/USD

Spot

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

1.23

1.18

1.22

1.25

1.25

1.28

1.30

GBP/USD

1.57

1.52

1.55

1.58

1.62

1.64

1.63

USD/JPY

78.79

79.00

82.00

83.00

84.00

85.00

85.00

USD/CAD

1.01

1.05

1.02

1.03

1.00

0.98

0.98

USD/CHF

0.98

1.02

0.98

0.96

0.97

0.98

1.00

AUD/USD

1.04

0.99

1.03

1.03

1.04

1.05

1.07

NZD/USD

0.80

0.76

0.77

0.78

0.82

0.84

0.86

USD/CNY

6.37

6.360

6.295

6.275

6.255

6.215

6.175

USD/SGD

1.25

1.27

1.24

1.22

1.23

1.21

1.18

USD/MYR

3.15

3.20

3.10

3.05

3.15

3.10

3.00

USD/IDR

9460

9,500

9,300

9,100

9,300

9,200

9,000

USD/KRW

1141

1,120

1,100

1,070

1,070

1,060

1,040

USD/TWD

29.97

29.60

29.00

28.70

28.50

28.30

28.50

USD/INR

55.14

56.00

55.50

55.00

57.50

56.00

55.00

USD/THB

31.67

31.50

31.10

30.60

31.40

31.00

30.60

USD/PHP

41.75

41.75

40.50

40.00

41.00

40.50

39.50

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

1,750

1,900

-

-

-

Commodities Spot Gold

1582.45

1,700

Silver

27.26

32

33

35

-

-

-

WTI Crude Oil

92.00

94

101

103

-

-

-

Copper

7730.00

7,800

8,500

9,000

-

-

-

Aluminium

1944.00

2,000

2,100

2,200

-

-

-

Corn

785.50

700

750

700

-

-

-

Soybeans

1656.50

1,500

1,575

1,400

-

-

-

Wheat

933.00

755

735

700

-

-

-

Source: Bloomberg, Standard Chartered Global Research (20 July2012 Economics Weekly publication) * Period averages for each quarter.

7

Weekly Market View Disclosure Appendix This document is not research material and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. This document does not represent the views of Standard Chartered Bank, particularly those of the Global Research function. Standard Chartered Bank is incorporated in England and Wales with limited liability by Royal Charter 1853, Reference number ZC 18. The Principal Office of the Company is situated in England at 1 Aldermanbury Square London EC2V 7SB. Standard Chartered Bank is authorised and regulated by the Financial Services Authority under FSA register number 114276. In Dubai International Financial Centre (“DIFC”), the attached material is circulated by Standard Chartered Bank DIFC on behalf of the product and/or Issuer. Standard Chartered Bank DIFC is regulated by the Dubai Financial Services Authority (DFSA) and is authorised to provide financial products and services to persons who meet the qualifying criteria of a Professional Client under the DFSA rules. The protection and compensation rights that may generally be available to retail customers in the DIFC or other jurisdictions will not be afforded to Professional Clients in the DIFC. Banking activities may be carried out internationally by different Standard Chartered Bank branches, subsidiaries and affiliates (collectively “SCB”) according to local regulatory requirements. With respect to any jurisdiction in which there is a SCB entity, this document is distributed in such jurisdiction by, and is attributable to, such local SCB entity. Recipients in any jurisdiction should contact the local SCB entity in relation to any matters arising from, or in connection with, this document. Not all products and services are provided by all SCB entities. This document is being distributed for general information only and it does not constitute an offer, recommendation, solicitation to enter into any transaction or adopt any hedging, trading or investment strategy, in relation to any securities or other financial instruments. This document is for general evaluation only, it does not take into account the specific investment objectives, financial situation, particular needs of any particular person or class of persons and it has not been prepared for any particular person or class of persons. Opinions, projections and estimates are solely those of SCB at the date of this document and subject to change without notice. Past performance is not indicative of future results and no representation or warranty is made regarding future performance. Any forecast contained herein as to likely future movements in rates or prices or likely future events or occurrences constitutes an opinion only and is not indicative of actual future movements in rates or prices or actual future events or occurrences (as the case may be). This document has not and will not be registered as a prospectus in any jurisdiction and it is not authorised by any regulatory authority under any regulations. SCB makes no representation or warranty of any kind, express, implied or statutory regarding, but not limited to, the accuracy of this document or the completeness of any information contained or referred to in this document. This document is distributed on the express understanding that, whilst the information in it is believed to be reliable, it has not been independently verified by us. SCB accepts no liability and will not be liable for any loss or damage arising directly or indirectly (including special, incidental or consequential loss or damage) from your use of this document, howsoever arising, and including any loss, damage or expense arising from, but not limited to, any defect, error, imperfection, fault, mistake or inaccuracy with this document, its contents or associated services, or due to any unavailability of the document or any part thereof or any contents. SCB, and/or a connected company, may at any time, to the extent permitted by applicable law and/or regulation, be long or short any securities, currencies or financial instruments referred to on this document or have a material interest in any such securities or related investment, or may be the only market maker in relation to such investments, or provide, or have provided advice, investment banking or other services, to issuers of such investments. Accordingly, SCB, its affiliates and/or subsidiaries may have a conflict of interest that could affect the objectivity of this document. This document must not be forwarded or otherwise made available to any other person without the express written consent of SCB. Copyright: Standard Chartered Bank 2012. Copyright in all materials, text, articles and information contained herein is the property of, and may only be reproduced with permission of an authorised signatory of, Standard Chartered Bank. Copyright in materials created by third parties and the rights under copyright of such parties are hereby acknowledged. Copyright in all other materials not belonging to third parties and copyright in these materials as a compilation vests and shall remain at all times copyright of Standard Chartered Bank and should not be reproduced or used except for business purposes on behalf of Standard Chartered Bank or save with the express prior written consent of an authorised signatory of Standard Chartered Bank. All rights reserved. © Standard Chartered Bank 2012.

THIS IS NOT A RESEARCH REPORT AND HAS NOT BEEN PRODUCED BY A RESEARCH UNIT.

8