be safe today and ready to profit in the future vítejte u bvb: „naše nezávislost je vaším...

Be safe today and ready to profit in the futureVítejte u BvB: „Naše nezávislost je Vaším aktivem.“

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Pascal Dubey, CBC, May 21st, 2009

Pascal Dubey, Independent Wealth Manager

+ Certified Expert in Finance and Investments by the Swiss authorities

+ Master in economics HEC, University of Lausanne

+ Member of the Swiss Financial Analysts Association

+ Was several years First Vice-President at the executive committee of a Swiss bank

+ Speaks French, English and German

+ Is allowed to open directly accounts with Swiss major banks

+ In partnership with BvB & Cie which was created in Geneva in 1987

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Be safe today and ready to profit in the future

1. What happened?

2. Scenarios

for the future

3. Opportunities

of investment

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Credit spread 5 year bonds AAA-BBB over 10 years, US

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Credit spread 5 year bonds AAA-BBB over 10 years,EUR

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Credit spreads emerging markets

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Balance of payments in % of national GDP (OECD)

8


Consequences of the credit crisis

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Unemployed in Euro zone (in thousands)

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Purchasing Manager Indices up again

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What are the markets telling us?

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Performance over 15 years

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Performance over 5 years

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Investment over 84 years:

Bonds = 4.5%/year, Equities=9.6%/year

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S&P 500 Annual performance histogram (ytd)

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Recipe: Bear market bottom

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Recipe for the best ?

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Caution! Investors are becoming (too) optimistic again

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Cheap?

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VIX (volatility) over 15 years. Not stabilised!

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It all depends on the macroeconomic scenario...

Depression

long-drawn recession & slow recovery

typical recession & sharp recovery

YES, time to put cash to work

YES, but gradually & selectively

NO

Put cash to work?

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-2%

0%

2%

4%

6%

8%

10%

12%

14%

1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007

US personal savings as % of disposable income, 3mma

1959-87 avg: 9.1%

Typical recession & sharp recovery: unlikely

Last data point: February 2009, Value: 4.2%

?

Headwinds are too strong: US consumer, unemployment, costs of credit crisis

Current recession already longer than typical recessions (6-9 months)

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Depression scenario : unlikely: different policy measures

today than in the 1930s...

Source: Datastream, Credit Suisse

2.50

2.70

2.90

3.10

3.30

3.50

3.70

3.90

4.10

4.30

4.50

Jan 1931 Jan 1932 Jan 1933 Jan 1934

1930s: No measure to stabilize the financial system 50% of banks went bankrupt

1930: Monetary policy mistakes: interest rate hikes

-1

0

1

2

3

4

5

6

Aug 07 Dec 07 Apr 08 Aug 08 Dec 08 Apr 09

US interest rates 1930s US interest rates today

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0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09

Billion CNY China CNY Monthly New Loans

March 2009 includes short-term financing

China already shows tentative signs of improvement...

Source: Bloomberg, Credit Suisse IB

Last data point: March 2009

Last data point: China: February 2009, US: March 2009

-10

-6

-2

2

6

10

14

18

2004 2005 2006 2007 2008 2009

YoY%, 3mma, realChina

US

Retail sales

35

40

45

50

55

60

J an-05 J ul-05 J an-06 J ul-06 J an-07 J ul-07 J an-08 J ul-08 J an-09

Index China Manufacturing PMI


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-50

-40

-30

-20

-10

0

10

20

30

40

50

2001 2002 2003 2004 2005 2006 2007 2008

Empire State Manufacturing, New Orders Index

Empire State Manufacturing, Gneral Business Conditions

Index Empire State Manufacturing survey

20

30

40

50

60

70

80

90

100

110

120

J an-05 J un-05 Nov-05 Apr-06 Sep-06 Feb-07 J ul-07 Dec-07 May-08 Oct-08 Mar-09

40

50

60

70

80

90

100

Conference Board Consumer Confidence (lhs)

University of Michigan Consumer Confidence (rhs)

Index IndexUS Consumer confidence

25

30

35

40

45

50

55

60

J an-04 J an-05 J an-06 J an-07 J an-08 J an-09

Index Japan PMI

Source: Bloomberg, Credit Suisse

Last data point: April 2009


Ifo Pan Germany Business Expectations


...and others might follow, as survey data suggests …

FHFA US House Price Index: first positive MoM changes for 2 consecutive months in 2 years

707580859095

100105110

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

IFO Pan Germany Business Expectations

Empire State Manufacturing Survey

US Consumer Confidence Japan PMI

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Source: Bloomberg, Credit Suisse / IDC

The extreme risk aversion witnessed since September is abating...

0

50

100

150

200

250

300

350

400

450

500

Apr 07 Aug 07 Dec 07 Apr 08 Aug 08 Dec 08 Apr 09

USD TED Spread

0

10

20

30

40

50

60

70

80

90

Apr 08 J un 08 Aug 08 Oct 08 Dec 08 Feb 09 Apr 09

VIX

0

10

20

30

40

50

60

70

80

90

Apr 08 J un 08 Aug 08 Oct 08 Dec 08 Feb 09 Apr 09

Index

0

200

400

600

800

1'000

1'200

1'400

1'600

Mar 07 J ul 07 Nov 07 Mar 08 J ul 08 Nov 08 Mar 09

iTraxx Crossover Europe Index

iTraxx Crossover Europe Index

TED-Spread Volatility (VIX Index)

0

50

100

150

200

250

300

J an06

May06

Sep06

J an07

May07

Sep07

J an08

May08

Sep08

J an09

0

100

200

300

400

500

600

CS Liquid Eurobond EURO Total

CS Liquid US Corporate Total (rhs)

Spread to benchmark (bp) Spread to benchmark (bp)

Corporate Bond Spreads to Benchmark

-360 bp

Source: Credit Suisse/IDC

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TED spread US over 15 years

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TED spread EUR over 15 years

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Put cash to work? Soon! But very selectively

Depression

long-drawn recession & slow recovery

typical recession & sharp recovery

YES, time to put cash to work

YES, but gradually & selectively

NO

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Source: Julius Bär

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Source: Julius Bär

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Possible scenario

Source: Julius Bär

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Where would we invest?

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Equity markets are 6-9 months ahead of GDP growth

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€uro versus CZK, US$, CHF 3 years

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€uro versus CZK, US$, CHF 10 years

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Gold : a currency with potential but watch out seasonality

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My cutting edge advice

• Markets are not yet stabilised

• Independent = be Flexible and Opportunistic

• Flexible = use various indicators for short and medium term

investments

• Opportunistic = profit when short term directions of markets are clear,

up or down

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Bond bought at 72 (March 25, 2009), sold at 90 (May 18, 2009)

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What are confirmed investors doing? Our weekly track

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Daily indicator based on statistics

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Hourly indicator based on an algorithm

SX5E is ahead of SP500 within the algorithm. By settling above the 2340 ST CL, SX5E is reaching the 2410 Intra/ST/MT CLs which is the last obstacle before the 2700-2800 MT/LT CL. Here again, the ball is in the hand of LT & MT players (that is a change to November/December range trading !) and the leadership is with SP500. Namely if SP500 confirms an attempt towards 907 MT CL, SX5E might already manage to settle above 2410 and be heading for 2700-2800 area. As mentioned above, we are still looking for a conso rather than an immediate continuation.

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The risk is individualised

• Products with capital protected by the safest banks

• Bonds

• Equities

• Derivative products

• Gold and other commodities

• Forex

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BvB has 2 equity funds :

1.The one in CHF is ranked no1 on Bloomberg

2. The one in €uro has the max of 5* on Morningstar

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Example of our recommendations

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Optimisation of the portfolio

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BvB portfolios beat the market regularly

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Sources

And many other partners not listed

Particularly for this presentation: BvB, Bloomberg, Crédit Suisse, Julius Bär, Raymond James, Black Rock, Syz

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“Our independence is your asset.

Are we your solution ?”

Pascal Dubey

Certified Expert in Finance and Investments

HEC Master in Economics

Member of the Swiss Financial Analysts Association

+41 21 345 10 00, [email protected]

Berger van Berchem & Cie

Geneva – Lausanne – Gibraltar

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Independent = the trend in Switzerland

• The independent wealth managers account today for 20% of the total wealth

managed in Switzerland. Their market share is growing much faster than the banks.

• Simple, discreet and extremely safe, it is very common in Switzerland : the client

chooses himself his banks of deposit and BvB manages his investments through

these banks. Pascal Dubey is allowed to open directly accounts for his clients with

several Swiss major banks, like UBS and Crédit Suisse. He has a direct IT link with

8 banks. He is not allowed, or even able, to transfer or withdraw any money.

• The client can access his account through Internet at anytime.

• It is important to note that BvB is fully independent from the banks in its decisions of

investments and buys only the best products according to the will of each client.

This independence is the key for BvB’ clients.

• Costs are the same than in a bank.

• So there is the guarantee of the bank with the service and performance of an

independent. Very personal indeed !

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The unmatched solution in the Czech RepublicMore than 20 years in Private Banking

Our offices : Geneva 1987, Lausanne 1997, Gibraltar 1999

Legal form: Partnership (partners have unlimited joint and several

liability for the company’s obligations = full commitment)

Clients: Private & Institutional

Staff: 30 = 14 asset managers + 3 analysts + 13 assistants

Research: Internal research company:

Regulation: Member of the Swiss Association of Asset Managers

P. Dubey: Is allowed to open directly accounts with several

Swiss major banks

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Our Banking Partners ↔ Safety & Independence

Depository Banks best suited to your needs:

1. UBS

2. Credit Suisse Group

3. Julius Bär (staff: 3’500)

4. Pictet & Cie (private bankers for 201 years, staff:2’800)

5. Lombard Odier Darier Hentsch (private bankers for 210 years, staff:2’000)

6. Mirabaud & Cie (private bankers for 187 years, staff: 500)

7. Clariden Leu (belongs to Credit Suisse Group, staff: 1’800)

8. Banque Cantonale Vaudoise (State guaranteed for 150 years, staff: 2’000)

Analysis and products from the major Swiss and foreign banks :

+ HSBC, Barclays, JP Morgan, Black Rock, Goldman Sachs, Deutsche Bank,

Commerzbank, BNP Paribas, Crédit Agricole, etc. + brokers and funds managers

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Supervision ↔ For Your Peace of Mind

SFBC : Swiss Federal Banking Commission.

Administrative authority, independent of the Swiss National bank, in charge for the supervision of the banks and the financial markets in Switzerland

SBA : Swiss Banking Association. Association which gathers the banks and defends their interests. It promotes the conditions frameworks and codes of conduct for the Swiss financial centre in the world

SAAM : Swiss Association of Asset Managers.BvB is voluntarily a member of SAAM which provides our client with the guarantee that we will run our business impeccably

Auditor : Controls the respect by BvB of the code of conduct of the ASG, then defers to the ASG

BANK : The banks, where you choose to deposit your assets, are ranked as the safest in the World. The banks are regulated by the Swiss Federal Banking Commission

SFAA : Swiss Financial Analysts Association.Pascal Dubey is a graduate and a member of SFAA and is held to follow the rules of "best practice" (code of conduct) with ethics as a key element

SBASAAM

BvB

SFBC

BANK

YOU

Auditor

SFAA

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Your profile

• Horizon of investment

• Amount to manage

• Personal preferences and restrictions : regions of the world, products, ...

• Real estate : personal situation

• Commodities : metals, agriculture, energy

• Goal: to diversify the risk AND to increase the return versus single bonds and

equities management

• Fiscal treatment still to be discussed: the proposal may vary accordingly

• In order to lower the costs, the proposal may slightly vary depending on the

depositary bank(s)

• The products (bonds, funds, structured) have been carefully selected on an

independent basis in your interest

• Possibility of a tailored product to be discussed

be safe today and ready to profit in the future vítejte u bvb: „naše nezávislost je vaším...

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