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Geopolitics reinforces opportunities in
Global Resources Equities – Press Conference Henrietta LanceSenior Portfolio ManagerIslamic Global Equities
This material is solely for the attention of profes sional investors (see more details and definitions at the end of the pres entation).
TABLE OF CONTENTS
1. Principal Global Equities Performances 2014
2. Global Equities – Where to invest now?
3. Global Resources Equities – Principal points to retain
4. Conclusion & Appendices
Islamic Global Resources 3
Sources: Datastream, Amundi Research
Global Equity market 2014 performances YTDPrincipal Global Equities Performances 2014
4
MSCI Index Price as of 27 Aug. 2014
1 Day 1 Week 1 Month YTD
USA 1,914 0.0% 0.7% 1.2% 8.2%Japan 786 0.0% 0.4% 0.2% -2.4%Europe 1,396 0.1% 2.2% 0.4% 3.1%EMU 187 0.1% 3.3% 0.3% 2.6%France 1,538 0.1% 3.6% 1.2% 2.5%Germany 842 -0.2% 2.6% -0.8% -2.7%Italy 740 0.5% 5.6% -1.6% 10.6%Spain 996 0.1% 4.0% -0.4% 12.2%Emerging markets 51,072 0.4% 0.6% 1.9% 8.3% Brazil 230 1.9% 3.5% 4.9% 14.5% China 66 -0.4% -0.8% 2.0% 5.4% South Africa 1,297 -0.3% 1.0% 2.3% 13.9% South Korea 590 0.3% -0.6% 0.0% 0.1% India 1,000 0.4% 0.5% 2.1% 22.4% Russia 746 0.2% 0.5% 3.5% -5.8% Taiwan 346 1.0% 1.7% 1.5% 14.2%World AC 468 0.1% 1.0% 1.0% 6.3%
Equity Market Snapshot
if > to MSCI World AC
Islamic Global Resources
TABLE OF CONTENTS
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1. Principal Global Equities Performances 2014
2. Global Equities – with growing geopolitical risk where to invest now?
3. Global Resources Equities – Principal points to retain
4. Conclusion & Appendices
Global Equities – Where to invest now?
Islamic Global Resources 6
With growing geopolitical risk where should we inve st? � Which geographic exposure?
– Emerging markets or OECD countries?– Invest East to Asia or West to the Americas?
� Which sector exposure?– Technology, Media and Telecoms - the winning millennium performance 1998-2002
– BRIC and Emerging markets – Infrastructure, Commodities and Demographic boom 2003 – 2007
or
– US Energy miracle and American Manufacturing Renaissance 2011
Global Equities – Where to invest now?
Islamic Global Resources 7
� If Geopolitical risk is growing…what does this mean for investors ?– Russian/Ukraine is a threat to European confidence and economic growth– Largest fall in European gas reserves since 2009 and European gas prices have reversed their 5
year slump as concerns that tensions between Russian and Ukraine will again disrupt flows to the region
– Gas for next month delivery in the UK +21% over rec ent weeks – Middle Eastern violence is increasing the threat for future global Oil and Gas supplies– Iraq, Libya, Sudan, Turkey is resulting in forward Oil prices 2-5 years out rising $10 over last 6
months.
� Global economic growth is looking very patchy (Europe/Japan/China …) while US remains very resilient. – Q2 earnings quality has so far been better in the US than elsewhere
Global Equities – Where to invest now?
Islamic Global Resources 8
…. if we add today’s geopolitical risk, who will ben efit ?
Europe relies on Russia/Ukraine for 25/30% of its e nergy supplies so the conflict is resulting in a tu rnaround in the 5 years slump in European gas prices …
Asia in particular India and Japan depend very str ongly on energy supplies from Middle East so forwar d oil prices (2-5 years) have moved +$10 over the last 6 months.
Energy markets are anticipating future supply tensi on …
Global Equities – Where to invest now?
Islamic Global Resources 9
US still have a strong manufacturing advantage
Big differences remain, with Asian LNG very stretched, US prices low and Europe, in the middle of the range We should not under-estimate the value of “independe nt energy supplies”
Our scenario for 2014/2015
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Global “Equity” Story is STILL mostly in US
� US energy revolution already in play with 4 years of high growth in shale oil and gas production. This is changing the game for the US economy
� More energy independence– Deep and lasting benefits for downstream industrial activities
– US manufacturing renaissance– US shareholder activism boosting undervalued assets
BUT
� Multinational Integrated Oil & Gas majors will also continue to create value for investors
Our scenario for 2014/2015
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Base Metals: Demand, Supply and Politics
Demand & Supply
Politics
� In a world of austerity, demand will be less Infrastructure driven
� In a world of robust demand for Energy, “Energy efficiency” is the key word
� Value added and creation of jobs is starting to have an impact on the global equation
� Indonesia will promote exports of the processed product – not the raw material
� Nickel, Alumina, Copper
� Processing will create jobs domestically
� US uses its ample resources supplies to create jobs in American manufacturing and boost its exports markets
� Refining, Petrochemicals, Automobile
Re-balancing the global economy
Our scenario for 2014/2015
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� Growing Geopolitical risk should be positive for Gold� Bumpy global economic recovery
� Relative stability for Gold (trading range $1250-1450)� In an environment of stable physical Gold, dynamic management will demonstrate to
financial markets their capacity to create value for shareholders
� M&A is returning to the sector – a further catalyst for “value creation”
Gold Mining equities ….are not a lost cause
TABLE OF CONTENTS
Islamic Global Resources 13
1. Principal Global Equities Performances 2014
2. Global Equities – Where to invest now?
3. Global Resources Equities – Principal points to re tain
4. Conclusion & Appendices
Principal Global Resources Equities themes to retain
Source: Factset / Amundi, as of 26/08/2014
Past performance is not an indication of future returns
The importance of Technology and Innovation today
Islamic Global Resources 14
� Global Resources Equities do NOT require a strong appreciation of the underlyingCommodity to see good upside
� Global Resources Equities are driven by growth in cash flow and value creation for shareholders
� A result of corporate action & dynamic management – not underlying Commodity price
Principal Global Resources Equities themes 2014 to retain
Global “Natural Resources”
Islamic Global Resources 15
� A natural resource may exist as a separate entity such as fresh water, and air, as well as a living organism such as a fish, or it may exist in an alternate form which must be “processed” to obtain the resource such as metal ores, oil, and most forms of energy.
� “Processing” requires “Technology and Innovation”It is important to have both Resources and Technology
Principal Global Resources Equities themes 2014 to retain
Source: Statoil
Processing, Technology and Innovation in Global Res ources
Islamic Global Resources 16
TABLE OF CONTENTS
Islamic Global Resources 17
1. Principal Global Equities Performances 2014
2. Global Equities – Where to invest now?
3. Global Resources Equities – Principal points to retain
4. Conclusion & Appendices
Conclusion
Islamic Global Resources 18
� A strong Investment Case both over Short and Long term
� Diversification and Liquidity offered by Shariah Compliant Equities
�With its flexibility to take advantage of the most exciting global resource investment themes, the objective of Islamic Global Resources is to capture value creation for its shareholders.
�Our conviction-based investment process is relying on a deep knowledge of companies, we maintain a balanced and flexible portfolio
�We work on a medium-term investment horizon for sustainable performance
Appendices – Team Biographies
Islamic Global Resources*Société Française des Analystes Financiers 19
� Henrietta LanceSenior Portfolio Manager, Global Agriculture, Islam ic Global Resources, Water
Henrietta Lance Joined Amundi in early 2007 and moved to Global Resources team in 2008. She was European Equity Specialist at Société Générale and Exane. Henrietta started her career at Prudential Bache in London. Henrietta is graduated from Edinburgh University. She holds the CIIA and she is a member of the French Society of Financial Analysts (SFAF*).
� Sudeshna AndréInvestment Specialist
Sudeshna joined Amundi in 1989 and is an Investment Specialist since 2004. Previously was an Equity Strategist. Sudeshna is graduated from the University of Cambridge.
Disclaimer
Islamic Global Resources 20
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Growing Your Investments In A Changing WorldNg Chze HowSenior Vice PresidentRetail & Retirement Funds
For training purposes only. Not for circulation
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MSCI World Index Rebounds
Performance Post Event
1 week 2 weeks 1 month 3 months 6 months
Sept, 111
11 September 2001-3.80% -5.64% 1.77% 4.62% 7.92%
SARS2
11 February 20032.36% -0.31% -4.36% 12.87% 19.32%
US-Iraq 3
20 March 2003-0.46% 0.25% 2.87% 16.98% 23.92%
Indonesia India Ocean Tsunami 4
26 December 2004-0.09% -1.55% -2.05% -0.91% 0.07%
Source: Bloomberg, extracted on 6 August 2014. Performance in USD. MSCI World Index refers to Morgan Stanley Capital International World Index.Past performance is not an indicative of future performanceBBC On This Day - 11 September 2001: US rocked by day of terrorBBC News, Timeline – 7 July 2004: Sars virusBBC On This Day – 20 March 2003: US launches missiles against SaddamBBC On This Day – 26 December 2004: Thousands die in Asian tsunami
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23
An Illustration To Generating Alpha
Source: Blackrock, January 2014.
Futureyielders
HiddenGems
SpecialSituations
ThematicInvesting
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24
Economic Clock
Source: The Australian, 15 October 2011; Smart Investor, 22 August 2012
For training purposes only. Not for circulation
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Disclaimer
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