singapore and hong kong, 18 june 2009 asia pacific

Singapore and Hong Kong, 18 June 2009 Asia Pacific

Global Research

Important disclosures are found in the Disclosure appendix

Emerging market currencies (EM) have rallied sharply in the past few months, supported by the rally in risky assets and optimism that the global economy has bottomed out (Figure 1). Signs that China is emerging from the downturn earlier have also raised expectations of for a certain degree of decoupling of emerging markets from the developed markets. We believe that the flushed liquidity situation – due to the dramatic monetary easing undertaken by the Fed and other central banks – will continue to favor Asia and other emerging markets. To reflect this view, we favor a basket of regionally diversified, high-yielding emerging market currencies.

Emerging markets (excluding Eastern Europe) broadly have strong fundamentals. In particular, they have manageable levels of household and government indebtedness, and their banks can support domestic demand with new lending. Our GDP forecasts also anticipate a stronger economic recovery in several Asian and other selected EM economies in 2010 (Figure 2), helped by monetary and fiscal easing. Relatively low government debt burdens in some of the largest EM countries such as China and Russia, imply less pressure for fiscal consolidation and thus, more scope to support economic growth. Increased access to International Monetary Fund (IMF) financing and swap lines with G3 central banks have also cut the tail risks for more leveraged economies, reducing the contagion risk for stronger EM countries like Brazil, Mexico and selected Asian countries.

Research Weekly Asia We continue to favor selected emerging market currencies

Private Banking

Highlights

Emerging market medium-term prospects remain supportive.

Some consolidation is likely in the near term, given the strong performance since March.

We continue to see EM currencies as a source of significant portfolio alpha.

However, at this point of the global economic cycle, we prefer selective EM currencies that offer both value and yield attraction.

We particularly favor the currencies of Brazil, Indonesia, Turkey and South Africa in a stable risk appetite environment.

As a group, BRIC countries' currency appreciation prospects over the next year may be limited, given the large gains thus far.

Top investment ideas

Emerging Markets credits: BUY UKRSIB 2010 and 2011 USD-denominated bonds

Europe: BUY Novartis (NOVN VX) Novartis offers robust dividend yield

Figure 1 Performance of selected pool of emerging market currencies

0 5 10 15 20 25 30 35

ZARBRL

KRWCOPHUFIDR

PLNRUBMXNTRYINR

TWDSGDTHBMYRPHPCNY

Gains since March 2009

Source: Credit Suisse, Bloomberg

Singapore and Hong Kong, 18 June 2009

2

Market correction is due, opportunity for cherry picking

The strong rally in EM currencies since March suggests that valuations are becoming less attractive and long positions are becoming crowded. Our in-house EM equity risk appetite indicator has already reached "euphoria" level, which suggests that EM equities are vulnerable to corrections (Figure 3). In addition, with inflation low and growth still weak, few EM countries currently have a policy incentive to let their currencies appreciate substantially above current levels. For example, in export-dependent Asia, central banks have a history of managing their currencies, reflecting a policy preference for exchange rate stability and the use of the currency as a nominal anchor for the economy. Other countries may also use this opportunity to build up their low reserves levels, such as South Africa, which has only USD 35 bn in reserves.

Speculation about a Latvian lats devaluation and possible contagion across Europe last week shows that investors should still assign a rather low weighting to Central and Eastern European (CEE) currencies in their portfolios, with very few exceptions. In particular, we view pegged CEE currencies (Baltic States and Bulgaria) and CEE currencies with weak fundamentals (e.g., Romania and Hungary) as being at risk. In the G10 space, the Swedish krona (SEK) could be affected via financial contagion, given that 20% of its cross-border lending goes to the Baltic States. While currencies of more solvent economies might suffer temporary setbacks due to contagion, we would view their correction as temporary and hence, potential buying opportunities.

We would caution investors against chasing the market higher now and we would look for better entry opportunities in selected EM currencies that have solid economic fundamentals, access to sufficient liquidity and high yield. Our preference is to focus on selected Latin American, Asian and African currencies.

We believe high-yielding BITS currencies (Brazil, Indonesia, Turkey and South Africa) will benefit from a global economic recovery

With the worst of the global downturn likely behind us and major economies slashing rates towards 0%, investors are likely to seek currencies that can stay firm, are underpinned by solid economic fundamentals, and provide a significant positive carry (Figure 4). In our opinion, within the EM space, the BITS currencies (Brazil, Indonesia, Turkey and South Africa) offer the best return to risk ratio. In the upcoming section, we highlight our reasons for favoring these currencies. We expect an outperformance of the BITS currency basket in an environment where the global economy and risk appetite continue to recover (Figure 5). Brazilian real (BRL)

The strong recovery of the Brazilian real in recent weeks has made it the top-performing currency this year with an appreciation of 20% against the USD. We believe the BRL will continue to benefit from improved risk appetite as the global economy recovers and commodity prices pick up. The prudent approach of the Brazilian central bank and government in recent years have contributed to the relatively quick return of investors to Brazil. Debt restructuring has made Brazil less vulnerable to devaluations, as the Brazilian government is now a net external creditor. In addition, the Brazilian central bank adopted a cautious approach during the boom phase and has intervened to stem BRL appreciations. This has increased the currency reserve buildup to USD 200 bn. Moreover, Brazil has a USD swap facility with the Federal Reserve. The IMF also regards Brazil as a possible candidate for the flexible credit loan facility (FCL), which is given only to stable emerging economies. Nevertheless, a looming major uncertainty in 2010 comes from the October 2010 presidential elections (currently President Lula cannot be re-elected for another term). While it is too early to speak about the election impact on the BRL, the event risk needs to be highlighted. However, recent elections in other EM countries have been encouraging in that they did

Figure 2 Figure 3 CSPB's GDP forecasts for emerging markets Equity performance is highly correlated

-10.0

-7.5

-5.0

-2.5

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2009 2010

Real GDP Forecast in %

Chi

na

Indi

a

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a

Phi

lippi

nes

Mal

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a

Sou

th A

fric

a

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an

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ico

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Indexed 1 May 2008 =100

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May 08 Aug 08 Nov 08 Feb 09 May 09

MSCI WorldMSCI EM AsiaMSCI Latin AmericaMSCI Emerging market

Source: Credit Suisse



3

not have a major impact on the local currency compared to a few years ago. For instance, in South Africa, the risk of a more left-wing shift in government did not deter the rally of the rand. Indonesian rupiah (IDR)

The Indonesian rupiah has gained 18.6% since March against the backdrop of improving risk appetite and favorable domestic factors. We expect the IDR's relative outperformance in Asia to continue for the following reasons - First, the Indonesian economy has been fairly resilient, making it an outperformer in Asia after China and India. We expect Indonesia's balance of payments inflows to continue to improve gradually this year due to current account and foreign direct investment (FDI) inflows. Second, the government has manageable fiscal risks. It has completed 85% of its gross debt issuance for this year, supported by a strong demand for its bonds. Third, President Yudhoyono is likely to win the upcoming presidential election in early July, partnering former central bank governor Boediono as his running mate. Fourth, Bank Indonesia's (BI) foreign exchange reserves increased only marginally in May, confirming its less "interventionist" exchange rate stance. Recent BI comments also indicate that the IDR is undervalued. This, along with expectations that the BI is nearing the end of its rate-cutting cycle, is likely to pressure USD/IDR into approaching 9,500 in the near term. Turkish lira (TRY)

We remain optimistic that the Turkish lira (TRY) will recover further in the upcoming 3-12 months. The collapse of domestic demand in Turkey, prior to the lira's depreciation, and our expectations for oil prices to be capped, should narrow the current account deficit further in the coming months. This takes away some refinancing pressure. Moreover, the Turkish corporate sector might continue to convert some of its USD cash into TRY as domestic economic prospects improve and the lira is still trading near historically low levels. This may lend further support to the TRY. Stabilizing international financial

markets led to a recent recovery of portfolio inflows but, a global equity market correction could probably interrupt portfolio inflows. Nevertheless, we view the attractiveness of high yield and Turkey's improving fundamentals as reasons to sell the USD/TRY pair when it moves higher. In the short term, a minor negative factor would be the absence of an agreement on a new USD 25-30 bn IMF loan. On this, we view that Turkey might be more willing to accept the IMF's conditions, if a prolonged period of falling risk appetite were to ensue. South African rand (ZAR)

The South African rand is the second-best performing currency to date this year after the Brazilian real, with an appreciation of 18%. As an African currency far removed from the epicenter of a potential crisis in Central and Eastern Europe (CEE), with a solid banking industry and less export dependence on the EU, the ZAR has managed to outperform from an extremely undervalued starting point. However, on a 3M to 12M horizon, we expect the ZAR to consolidate around 8.40 versus the USD as central bank governor Mboweni has signaled that a further currency appreciation could hurt export competitiveness. Hence, we expect the South African Reserve Bank to intervene to stem a ZAR appreciation, which would in turn help to build up the low currency reserves. We expect a more sustainable ZAR appreciation beyond the 12M horizon on the back of a stronger global economic recovery and still relatively cheap valuation. Furthermore, South Africa will host the 2010 Soccer World Cup and balance of payment inflows are likely to be boosted as investments, domestic demand and exports rise.

While BRICs have led the global recovery, we see limited appreciation prospects for their currencies this year

The BRIC countries (Brazil, Russia, India and China) have led the global business cycle in terms of their PMIs improving. We expect resilient domestic demand growth from these emerging markets to be one of the key driving forces behind the global

Figure 4 Figure 5 Attractiveness of positive carry FX performance of BITS, BRIC and EM regions

3M FX forward implied rates

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Turkey Indonesia Brazil SouthAfrica

Mexico India China SouthKorea

in % , annualized

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Jan 08 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09

Latin American currencies Asian currenciesCEE currencies CIS currenciesBITS BRIC

Depreciation vs. USD

Appreciation vs. USD

Index 2008 = 100




4

recovery. However, the appreciation prospects of their currencies are likely to be limited in the coming months. China's central bank (PBoC) is likely to keep the USD/CNY pair stable between 6.80-6.85 in the coming months until the export sector recovers. The Indian rupee has appreciated 5.6% since the mid-May election victory for the incumbent Congress party. However, India's central bank (RBI) has been intervening to stem the INR's strength after the elections. We expect limited further INR gains over the next 12 months to 45.00 versus the USD. The Russian ruble is expected to trade sideways in the immediate future due to the still-bleak global economic outlook and oil prices are likely to correct back to USD 55-60 per barrel. This means that the ruble is likely to trade around 36 against the FX basket (55% USD and 45% EUR). Taking our bearish USD outlook into account, a flat basket performance suggests a ruble appreciation against the USD but a depreciation against the EUR. The Brazilian real, in our view, has the most potential among the BRIC currencies to appreciate in the coming months due to its solid fundamentals and the fact that it has one of the highest yield in the EM universe (see Figure 4). Conclusion Against a backdrop of still-high market volatility, we recommend diversifying EM currency exposure across regions and in particular, across fundamentally strong countries. In phases of relatively high risk appetite, the attractiveness of

high yield is likely to fuel an outperformance of the BITS basket against other EM FX baskets. In addition, a BITS basket is comparatively better than taking a long position in any single currency (BRL, IDR, TRY or ZAR). Yield levels are similar across the four BITS currencies, but a basket strategy should help to diversify the risk especially since these currencies are each from a different region. Looking ahead, a possible correction in the global equity markets will impact risk appeitite and EM currencies are also likely to correct versus the USD. This should then provide better entry levels to position for medium-term appreciation.

Joe Prendergast, [email protected] Shivani Tharmaratnam,

[email protected] Sven Schubert, [email protected]

Figure 6 Figure 7 Asian FX forecasts vs. USD EMEA and Latam FX forecasts vs. USD Currency

vs. USD 12.06.2009 3M* 12M*

USD/SGD 1.45 1.47 1.43

USD/THB 34.10 35.00 34.00

USD/IDR 10068 10500 9800

USD/PHP 47.87 48.00 46.00

USD/TWD 32.79 33.00 31.50

USD/KRW 1254 1250 1150

USD/INR 47.61 48.00 45.00

USD/HKD 7.75 7.75 7.75

USD/CNY 6.84 6.83 6.70

USD/MYR 3.50 3.55 3.45

*Forecast date: 03.06.2009

Currency

vs. USD 12.06.2009 3M 12M

USD/CZK 19.01 17.33 16.88

USD/HUF 198 190 181

USD/PLN 3.19 2.80 2.59

USD/TRY 1.53 1.45 1.50

USD/RUB 30.94 30.60 28.40

USD/ZAR 8.02 8.40 8.50

USD/BRL 1.93 1.90 1.95

USD/MXN 13.40 12.50 12.00

USD/ARS 3.77 3.90 4.10*Forecast date: 03.06.2009

Source: Credit Suisse, Bloomberg Source: Credit Suisse, Bloomberg


5

USA market update

US market outlook

The US yield curve has steepened sharply and the 2-year-10-year spread is now very wide by historical standards. Importantly, much of the impetus for the steepness of the curve comes from the long end of the curve. After the period of extreme risk aversion in Q4 2008, which led to 10-year yields falling to close to 2%, the improved risk appetite means that investors are leaving safe havens and investing in risky assets. This is considered to be a positive factor to the extent that it is driving the increase at the long end of the curve. Of course, rising inflation expectations (a normalization from very low levels) and some concerns about the sustainability of public finances and reserve diversification out of the US dollar have played a role as well. However, loosening financial conditions remain the dominant positive. Mortgage rates remain at low levels, despite the recent pick-up. In addition, US corporate bond yields have been on a downtrend since their November peak. Bond issuance (investment-grade and sub-investment-grade) and equity issuance have been solid in the past weeks. Furthermore, with the Fed's TALF program now making an impact, ABS issuance volumes have also increased. Money market rates have broadly continued their downtrend, which is relevant for floating-rate mortgages. In terms of data releases, this week started with a downside surprise in the New York Empire index for June, which we view as a temporary setback against an overall trend of indicators that are likely to remain up.

Thomas Herrmann, [email protected]

Inflation is not something we are worried about in the near term. However, it has now become clear that the US economy is no longer in a downward spiral, thanks to the unprecedented fiscal and monetary stimulus. The market's response was a 180-degree shift, with deflation fears transforming into hopes of reflation, and a growing tendency to worry about inflation. There is even talk of asset price bubbles.

Sector/industry performance has been relatively consistent during inflationary episodes. Table 1 shows that commodity-linked industries (oil and mining) typically outperform. The reason is that commodities are a real asset and in limited supply. In addition, defensive industries (consumer staples, healthcare and utilities) usually do relatively well. Revenue streams and the margins of many of these companies are somewhat less cyclical, and the eventual monetary policy response to inflation proves to provide a better environment for these sectors. The increase in interest rates seen during inflation episodes reduces borrowing and therefore consumption. Consequently, consumer cyclical industries (such as autos, homebuilders and retailers), as well as banks and brokers typically perform relatively poorly. In general, we would expect these sector outperformance patterns to occur again on the back of any future inflation concerns.

Paul Danis, [email protected]

Table 1: US Industry performance during the five main inflationary periods since 1973*

Industry Ranking by median return

Episodesoutperformed (%)

Industry Median return (%) Episodesoutperformed (%)

Tobacco 1 100 Real Estate 22 40Oil & Gas Producers 2 100 Construction & Materials 23 40Healthcare Providers 3 80 Industrial Transport 24 40Medical Supplies 4 80 Travel & Leisure 25 40Oil Equip. & Services 5 80 Software & Computer Services 26 20Pharma & Biotech 6 80 Medical Equip. 27 20Utilities 7 80 General Industrials 28 20Nondurable Household 8 80 Technology hardware & Equip. 29 20Food Producers 9 60 Banks 30 20Mining 10 60 Chemicals 31 20Food & Drug Retail 11 60 Support Services 32 20Aerospace 12 60 Broadcast & Entertainment 33 20Telecom 13 60 Forestry & Paper 34 20Personal Goods 14 60 Publishing 35 20Defense 15 60 Financial Services (Mostly Brokers) 36 20Beverages 16 40 Durable Household Products 37 20Electronic & Electrical 17 40 General Retailers 38 20Media Agencies 18 40 Home Construction 39 20Insurance 19 40 Leisure Goods 40 0Industrial Metals & Mines 20 40 Consumer Finance 41 0Industrial Engineering 21 40 Autos & Parts 42 0

Source: Credit Suisse, Datastream. *Note: includes Jan. 73 – Feb. 75, Jan. 77 – June 80, Aug. 83 – June 84, Sept. 89 – Feb. 91, and Dec. 03 – Sept. 06.


6

Investment idea: Novartis (NOVN VX, BUY, Target Price CHF 53)

Thomas C. Kaufmann, [email protected] Beat Grunder, [email protected]

Fundamentals Thesis: Novartis is a diversified healthcare company with good underlying growth. Its Pharmaceuticals division shows solid underlying growth trends as investments in newly launched products start to deliver. Going forward, we see little regulatory risk and a good ability to deliver on tempered consensus expectations, despite the loss of patent protection for its top-selling drug, Diovan (hypertension), starting in 2011 (EU) and likely pressures on the franchise arising from generic Cozaar (Merck & Co) in 2010. With the acquisition of Alcon, Novartis has already addressed this major patent loss and, in our view, it is not a question of if but when Novartis will acquire the remaining stake from Nestlé. The dividend yield of roughly 5% should provide support to the shares. Novartis' marketed products perform broadly in line with expectations, bolstered by solid sales growth in emerging markets. However, dramatic currency movements mask the underlying improvement in trends. Investments in newly launched products, as well as pipeline products in the Vaccines division (Menveo and especially MenB) represent significant opportunities for additional growth. Consensus expectations for Tekturna (Diovan follow-on) and FTY-720 (multiple sclerosis) are at reasonable levels. The cost-cutting program, Forward, has delivered ahead of expectations with the targeted USD 1.3 bn savings by the end of 2009 already exceeded in Q1 2009. This was key to offsetting the pressures on margins, as profitable products were lost to generic competition. The company has already put in place multiple new initiatives to further deliver on an improved profitability, the most notable being the program,"Compete", which aims to improve margins in the Sandoz division. Valuation: Based on our conservative (non-adjusted) assumptions, Novartis' shares are currently trading at a P/E 2009E/2010E of 11.7 and 11.1 respectively – a premium to the European sector average of 9.7 and 9.1. Using adjusted (cash) EPS numbers, Novartis trades in line with the sector. In our HOLT-DCF model, we assume a sales CAGR 2008-2012 of 5.5% (including Alcon from 2011 onward) and roughly flat EBIT margins. From this, we derive our target price of CHF 53. We have a BUY recommendation on Novartis.

Technicals After a three-month consolidation below the 45 resistance level, the stock is currently re-testingthis key mark. The short and medium-term price trends have turned positive and are supported by the corresponding momentum cycles. The constructive technical pattern favors a breakout soon and a resumption of the medium-term upmove. The next key technical resistances are at 46.50, 48 and 50.50.

Figure 1 Figure 2 Novartis in CHF (weekly bar chart) Novartis in CHF (daily bar chart)

2007 2008 2009-2500-2000-1500-1000-5000500100015002000

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See key to charts on page 12

Source: Metastock, Reuters


7

Emerging market debts update

Recent news and commentaries

Wing-son Cheng, [email protected]

Daniel Tam, [email protected]

Rating changes

Issuer Current rating Agency Action From To

KazMunaiGaz National BBB-, Watch Neg / Baa2, Watch Neg / BBB- Neg S&P Watch BBB-, Stable BBB-, Watch Neg

Moody's changed Indonesia's rating outlook to positive from stable

Moody's has changed the outlook on Indonesia's Ba3 sovereign ratings to Positive from Stable. The event was prompted by the country's relatively strong growth prospects, an increasingly effective macroeconomic policy framework, and an effective and pro-reform policy stance that will likely outlast the election cycle. The improvement in Indonesia's credit fundamentals was also a crucial factor in the outlook change, according to Moody's. Both general government and external debt are expected to decline to 31% and 25% of GDP respectively by the end of 2009, while Indonesia's GDP is expected to grow by 4% this year, supported by strong domestic demand and a balanced economy. According to Moody's, "these developments highlight the growing creditability and predictability of government policies." Overall, the rating agency sees Indonesia's growth dynamics as steadier and better positioned than many Ba-rated peers and most other regional economies.

Russian Standard Bank plans to buy back some of its 2010 Eurobonds

Interfax and Reuters News Agency reported that Russian Standard Bank was set to announce a Dutch tender auction to repurchase up to USD 175 million of its 2010 bonds – the RUSB 7.5% 2010 bond (at a minimum price of USD 87.5) and the RUSB 8.485% 2010 bond (at a minimum price of USD 92). The total outstanding amount of these two issues is USD 900 million. The fact that Russian Standard Bank is buying back its own bonds on the secondary market indicates that the bank does not face any short-term liquidity issues and if it can now offer to buy back bonds at these levels, it is reasonable to suppose that it should be able to repay at par when these bonds mature.

Turkey’s central bank cuts its benchmark interest rate by 50 bp to a record low of 8.75%

Turkey’s central bank has cut its benchmark interest rate by 50 bp to a record low of 8.75%. Economists surveyed by Bloomberg were expecting only a 25 bp cut. Over the past eight months, the central bank has lowered its benchmark rate by a total of 800 bp. In its statement, the bank pointed to “clearer signs of an economic recovery,” which may hint at a pause in further rate cuts.

Ecuador buys back 91% of its defaulted bonds due in 2012 and 2030

Ecuador Finance Minister Maria Elsa Viteri said the government bought back 91% of the defaulted bonds due in 2012 and 2030 and would re-open its offer to bondholders who did not participate. Ms. Viteri said that 18.7% of the 2012 bondholders and 7.2% of the 2030 bondholders did not participate in the offer.

BUY UkrSibbank 2010 and 2011 USD-denominated bonds

BNP Paribas (AA/Aa1/AA) increased its stake in Ukraine-based UkrSibbank to 75.5% after Ukrainian businessman Ernest Galiyev sold his 24.5% stake in the bank. The news is credit-positive for UkrSibbank on the expectation of strong parent support. As at 30 September 2008, UkrSibbank reported Tier 1 and total capital adequacy ratios of 12.44% and 15.52% respectively. As at 1 March 2009, UkrSibbank was the fourth largest bank in Ukraine with 6.34% of the banking system's total assets. It is also the sixth largest bank in the country in terms of deposits with total market share of 3.94%. In our view, BNP will continue to provide UkrSibbank with support. We have raised our recommendation on the bank's 2010 and 2011 USD-denominated bonds to BUY from HOLD and recommend emerging market bond investors add these bonds to diversified portfolios.


8

Classic recommendations

Classic recommendations

Change ISIN No. Valor Curr. Issuer Rating S&P / Moody’s

Cpn(%)

Maturity Vol.(m)

Askprice

Benchspread

Duration YTM (%) BenchmarkYTM (%)

Asset Swap Spread

CH0021667396 2166739 CHF CIE FINANCEMENT FONCIER AAA / Aaa 1.875 27.04.2012 775 100.75 87.94 2.76 1.60% 0.80% 48.57

CH0048787532 4878753 CHF SANOFI-AVENTIS AA- / A1 3.25 19.12.2012 525 104.70 130.76 3.26 1.85% 1.14% 52.05

CH0049757328 4975732 CHF RABOBANK NEDERLAND AAAe / Aaa 2.5 19.02.2013 850 101.95 92.97 3.45 1.94% 1.14% 41.78

CH0032136399 3213639 CHF PHILIP MORRIS INTL INC A / A2 3.25 11.03.2013 500 102.90 130.14 3.46 2.43% 1.14% 100.16

CH0049666503 4966650 CHF FRANCE TELECOM A- / A3 3.375 06.09.2013 500 103.55 123.45 3.85 2.48% n.a. 108.55

CH0025164739 2516473 CHF SWEDISH EXPORT CREDIT AA+ / Aa1 2.625 12.05.2014 350 101.65 76.85 4.55 2.27% 1.43% 46.64

CH0101108105 10110810 CHF NEDER WATERSCHAPSBANK AAA / Aaa 2.25 13.05.2014 450 101.20 61.20 4.60 1.99% 1.43% 31.58

XS0434069497 10264698 EUR RWE FINANCE BV Ae / A1e 2.5 16.09.2011 1,500 99.90 89.17 2.15 2.55% 1.59% 50.54

XS0430329507 10206935 EUR E.ON INTL FINANCE BV A / A2 2.5 30.11.2011 750 100.13 72.00 2.34 2.45% 1.90% 31.93

XS0419179972 10047726 EUR PHILIP MORRIS INTL INC A / A2 4.25 23.03.2012 1,250 102.61 142.09 2.56 3.24% 1.90% 100.34

FR0010757427 10191010 EUR SFEF AAAe / Aaa 2.125 20.05.2012 5,000 99.47 43.96 2.79 2.31% 1.90% 1.33

DE000A0XXM87 10195443 EUR KFW AAA / Aaa 2.25 21.05.2012 5,000 99.74 40.29 2.79 2.34% 1.90% 0.15

XS0428146442 10174576 EUR SHELL INTERNATIONAL FIN AA+ / Aa1 3 14.05.2013 2,500 99.66 68.31 3.62 3.09% 2.41% 41.43

XS0428037666 10172462 EUR SANOFI-AVENTIS AA- / A1 3.5 17.05.2013 1,500 101.64 65.40 3.60 3.05% 2.41% 38.36

XS0432069747 10234542 EUR PFIZER INC AAA / Aa2 3.625 03.06.2013 1,850 101.16 89.67 3.63 3.31% 2.41% 62.21

XS0247138224 2474545 GBP KFW AAA / Aaa 4.375 07.03.2011 3,050 104.00 60.71 1.66 1.98% 1.41% -17.04

XS0413219899 2632751 GBP GENERAL ELEC CAP CORP AAAe / Aaa 2.75 07.12.2011 1,400 100.96 34.11 2.37 2.34% 2.32% -29.56

XS0413861930 3375876 GBP EUROPEAN INVESTMENT BANK AAA / Aaa 2.875 07.03.2013 1,425 98.62 37.66 3.49 3.27% 2.88% -10.38

XS0414238898 3571481 GBP KFW AAA / Aaa 3.25 24.02.2014 875 98.86 75.11 4.30 3.52% 2.77% -7.47

XS0422703347 10114835 GBP LLOYDS TSB BANK PLC A+ / Aa3 6.375 15.04.2014 403 102.08 318.56 4.07 5.87% 2.77% 235.84

XS0412068453 1555197 GBP NATIONAL GRID PLC BBB+ / Baa1 6.125 15.04.2014 400 102.84 263.97 4.17 5.43% 2.77% 182.75

XS0431040392 10218360 GBP NATIONAL AUSTRALIA BANK AA / Aa1 5.375 08.12.2014 500 101.60 224.32 4.75 5.04% 2.77% 129.42

US717081CZ40 10048226 USD PFIZER INC AAA / Aa2 4.45 15.03.2012 3,500 105.20 91.82 2.55 2.47% 1.78% 57.66

XS0431986701 10234525 USD BK NEDERLANDSE GEMEENTEN AAAe / Aaa 2.375 04.06.2012 1,500 99.56 77.64 2.85 2.53% 1.78% 31.37

XS0431833119 10234968 USD BNP PARIBAS AA / Aa1 2.875 11.06.2012 700 98.85 154.30 2.85 3.29% 1.78% 109.07

new XS0434415070 10269381 USD E.ON INTL FINANCE BV Ae / A2e 3.125 22.06.2012 300 100.82 106.51 2.87 2.84% 1.78% 64.55

XS0433029906 10250330 USD UNILEVER NV A+ / A1e 3.125 11.02.2013 450 100.86 82.92 3.45 2.88% 2.67% 40.58

XS0412484163 1954578 USD RABOBANK NEDERLAND AAA / Aaa 3.375 19.02.2013 750 100.79 104.10 3.43 3.14% 2.67% 63.80

XS0431157584 10222518 USD KFW AAA / Aaa 2.5 28.05.2013 1,000 98.32 72.45 3.74 2.96% 2.67% 24.31

XS0433908562 10264669 USD BP CAPITAL MARKETS PLC AA / Aa1 3.75 17.06.2013 325 101.14 119.36 3.72 3.44% 2.67% 72.77

out US38141EA331 10161051 USD GOLDMAN SACHS GROUP INC A / A1 6 01.05.2014 2,115 103.98 238.60 4.17 5.07% 2.67% 199.47



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11

Global equity sector strategy and focus list

Sector Industry

Glo

bal w

eigh

ts

EU

/EM

EA

Sw

itzer

land

US

A/L

atA

m

Asi

a/P

acifi

c

Europe/EMEA Regional weight: Underweight

Switzerland Country weight: Underweight

USA/ Latin America Regional weight: Neutral

Asia/Pacific Regional weight: Overweight

Energy Energy O O - O O BG Group, BP, Galp Energia

- Anadarko Petroleum, Exxon Mobil, Petrobras

CNOOC

Chemicals N N O N N BASF Syngenta, Lonza - Orica

Construction Materials N N N N N Lafarge - - -

Metals & Mining N O - N N ArcelorMittal - Companhia Vale do Rio Doce

Zijin Mining

Materials

Pulp & Paper N N - N N - - - -

Capital Goods O O N O O Alstom, Siemens - Honeywell China Railway Construction, IJM, Mitsui & CO, Sembcorp Industries

Commercial Services & Supplies

N N N N N - SGS - -

Industrials

Transportation, incl. Logistics N N N N N - - - Transurban

Automobiles & Components N N N N U Daimler - - -

Consumer Durables & Apparel, Textiles, Apparel & Luxury

N N N U N LVMH - Nike -

Hotels Restaurants & Leisure N N - N N - - McDonald's -

Media N N - N U WPP - Walt Disney -

Consumer discretionary

Retailing N N N U N - Dufry - -

Food & Staples Retailing N N - N N - - - -

Beverages N N - N N Heineken, SAB Miller

- PepsiCo -

Food Products N N N N N - Nestlé General Mills -

Tobacco N N - N N - - Philip Morris International

-

Consumer staples

Household & Personal Products

N N - N N Reckitt Benckiser - Procter & Gamble, Colgate-Palmolive

-

Healthcare Equipment & Services

N O N N N Fresenius Medical Care

- - -

Biotechnology N N N N N - - - -

Healthcare

Pharmaceuticals N N N N U Merck KGaA Novartis, Roche Gilead, Medtronic, Teva Pharmaceuticals

-

Banks U U U N N BNP Paribas Julius Baer - Bank of China

Diversified Financials N N N N N - - Goldman Sachs, JPMorgan

-

Insurance U U U N U Allianz Swiss Life Travelers -

Financials

Real Estate N N N N N - - - -

Software & Services O O N O N - Temenos Oracle Tencent

Technology Hardware & Equipment

O O N O O Nokia - Cisco Systems, Qualcomm

HTC

IT

Semiconductors & Semiconductor Equipment

O N - O O - - Intel TSMC

Diversified Telecoms N N N U N - - - - Telecommuni-cation services Wireless Telecoms U N - U O Vodafone - - China Mobile

Utilities Utilities U U - N N E.ON - - -

Source: Credit Suisse. Legend to weights: O: Overweight, N: Neutral, U: Underweight This is our sector strategy and focus list as of 17/06/2009 recommended by Credit Suisse, Private Banking division. Our sector strategy shows our sector preferences with recommendations relative to regional benchmarks: Global: (MSCI World in USD), Europe/EMEA (MSCI Europe in EUR), USA/Latin America (S&P 500 / MSCI USA in USD), Asia/Pacific (MSCI AC Asia/Pacific in USD). An overweight (underweight) is a recommendation to invest more (less) than in a neutral position indicated by the market-cap weights of the respective benchmarks. The sector weights as well as the neutral positions in figures are available upon request; please contact your relationship manager. The Focus List is a selection of our favorite stocks within our coverage which have a BUY recommendation. The selection was made to reflect the sector and regional preferences. Updates are provided via our Research Monthly and Research Weekly publications as well as in our Equity Strategy Research reports. Additionally, we publish our adds and drops in our Research Equity Daily. The changes are highlighted in bold.


12

Moving averages are popular and versatile for identifying price trends. They smooth out fluctuations in market prices, thereby making it easier to determine underlying trends. Their other function is to signal significant changes in direction as early as possible. Generally, if the market were in an uptrend or downtrend, a longer time period would be used. If it is consolidating, the shorter time frame will catch the minor moves more easily. Moving averages are lagging indicators and give signals after the price trend has already turned. Momentum indicators lead the price trend. They give signals before the price trend turns. Once momentum provides a signal, it has to be confirmed by a moving-average crossover. For a short introduction to technical analysis, we refer readers to “TECHNICAL ANALYSIS EXPLAINED” at http://www.credit-suisse.com/techresearch Please note that due to local regulatory requirements access to these weblinks may be restricted for clients in certain countries.

Stop loss rules: Stop losses are based on the 3-month historical volatility. If 2 x weekly standard deviation is <= 5% of the stock price at inception, then a stop loss will be set at -5%. If 2x standard deviation is >= 5% of the stock price since inception, then a stop loss will be set at – 2 times standard deviations. At the start of a trade, the stop loss is applied per recommendation, i.e. for the whole group of stocks comprised in the same recommendation. Once the whole trade turns positive and the stop loss moves to positive territory, we apply a new stop loss on an individual basis, i.e. per stock and not per recommendation. For long/short positions, please note that as of 20.09.05, the stop loss applies to the performance spread between long and positions and will be expressed in percentage terms.

Weighting: All recommendations will have a full weight with the following exceptions: 1) A single stock recommendation will have systematically a weight of 0.5 if the stop loss at inception is at - 5%; 2) A single stock recommendation will have systematically a weight of 0.25 if the stop loss at inception is < -5%; 3) A group of stocks (i.e., a recommendation comprising more than one stock), where all stop losses at inception are < -5% will systematically have a weight of 0.5.

Key to technical charts used in this report

2002 2003 2004 2005

-3000-2000-1000

0100020003000750

800

850

900

950

10001050110011501200

Medium-termmomentum

11-weekmoving average


Long-termmomentum

2002 2003 2004 2005

-3000-2000-1000

0100020003000750

800

850

900

950

10001050110011501200

Medium-termmomentum



Long-termmomentum

Jul Aug Sep Oct Nov-300-200-100

0100200300

1060

1070

1080

1090

1100

1110

1120

1130

114011 & 40-daymoving average

Short- andmedium- termmomentum

Jul Aug Sep Oct Nov-300-200-100

0100200300

1060

1070

1080

1090

1100

1110

1120

1130

114011 & 40-daymoving average

Short- andmedium- termmomentum

Source: Metastock, Reuters


13

Imprint

Publisher

Fan Cheuk Wan Head of Research Asia Pacific Tel: +852 2841 4841 E-mail: [email protected]

Authors

Fan Cheuk Wan Head of Research Asia Pacific Tel: +852 2841 4841 E-mail: [email protected]

Kum Soek Ching Head of Southeast Asia Equity Research Tel. +65 6212 6065 E-mail: [email protected]

Joseph Tan Asian Chief Economist Tel: +65 6212 6727 E-mail: [email protected]

Shivani Tharmaratnam FX Strategist Asia Pacific Tel: +65 6212 6482 E-mail: [email protected]

Wing-son Cheng Head of Fixed Income Research Asia Pacific Tel. +852 2841 4881 E-mail: [email protected]

Daniel Tam Emerging Market Bonds Analyst Tel. +852 3407 8058 E-mail: [email protected]

Lili Fan Emerging Markets Bond Analyst Tel. +852 3407 8257 E-mail: [email protected]

Marc-Antoine Haudenschild Japan Equity Strategist Tel. +81 3 4550 5132 E-mail: [email protected]

David McDonald Australia Equity Strategist Tel. +61 2 8205 4296 E-mail: [email protected]

Simon Clark Australia Equity Analyst Tel. +61 2 8205 4314 E-mail: [email protected]

Michael Macdonald Asian Technical Analyst Tel. +65 6212 6655 E-mail: [email protected]

Maggie Yeo Southeast Asia Equity Analyst Tel. +65 6212 6070 E-mail: [email protected]

Justin Yeoh Southeast Asia Equity Analyst Tel. +65 6212 6072 E-mail: [email protected]

Irene Chow Greater China Equity Strategist Tel: +852 2841 4036 E-mail: [email protected]

Timothy Fung China Equity Strategist Tel: +852 2841 4812 E-mail: [email protected]

Yu Wen Chi China Equity Analyst Tel: +852 3407 8245 E-mail: [email protected]

Michael Mak Korea and Taiwan Equity Analyst Tel. +852 3407 8268 E-mail: [email protected]

Alfred Chow Marketing Analyst Asia Pacific Tel. +852 3407 8243 E-mail: [email protected]

Silvia Fun Research Assistant Tel: +852 2841 8285 E-mail: [email protected]

Angelina Chang Global Metal & Mining Equity Strategist Tel. +65 6212 6071 E-mail: [email protected]

Michael O'Sullivan Head of Global Asset Allocation & UK Research Tel. +44 20 7883 8228 E-mail: michael.o'[email protected]

Olivier Müller Head of Consumer Staples Team Tel. +41 44 333 01 46 E-mail: [email protected]

Paul Danis US Equity Strategist Tel. +44 20 7883 2458 E-mail: [email protected]

Herrmann Thomas Global Economist Tel. +41 44 333 50 62 E-mail: [email protected]

Toral Munshi India Equity Strategist Tel. +91 22 6777 3842 E-mail: [email protected]

Chirag Shah India Equity Analyst Tel. +91 22 6777 3841 E-mail: [email protected]

Adam Quek Research Assistant Tel: +65 6212 6067 E-mail: [email protected]

Editor

Silvia Fun Research Assistant Tel: +852 2841 8285 E-mail: [email protected]

Ratings: Credit Suisse Prices: Bloomberg

Information about other research publications

Credit Suisse Research & Publications Uetlibergstrasse 231 P.O. Box 300 CH-8070 Zurich

E-Mail [email protected]

Internet http://www.credit-suisse.com/research

Intranet Credit Suisse employees only http://research.csintra.net


14

Disclosure appendix

Analyst certification The analysts identified in this report hereby certify that views about the companies and their securities discussed in this report accurately reflect their personal views about all of the subject companies and securities. The analysts also certify that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.

Important disclosures Credit Suisse policy is to publish research reports, as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein. Credit Suisse policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. The Credit Suisse Code of Conduct to which all employees are obliged to adhere, is accessible via the website at: https://www.credit-suisse.com/governance/en/code_of_conduct.html For more detail, please refer to the information on independence of financial research, which can be found at: https://www.credit-suisse.com/legal/pb_research/independence_en.pdf The analyst(s) responsible for preparing this research report received compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse Investment Banking business.

Equity rating history as of 18/06/2009 Company Rating Date

BUY since 21/04/2009



HOLD since 28/07/2008

ASCENDAS REAL ESTATE INVESTMENT TRUST (AREIT SP)






BANGKOK BANK PUBLIC COMPANY LIMITED (BBL TB)





BANK OF CHINA - H (3988 HK)














BNP PARIBAS (BNP FP)






BP (BP/ LN)

HOLD since 29/04/2008 CHINA CONSTRUCTION BANK - A (601939 CH)










CHINA MOBILE (941 HK)


BUY since 29/04/2009 CHINA RAILWAY CONSTRUCTION (CRC) - H (1186 HK) BUY since 27/11/2008







CISCO SYSTEMS (CSCO US)








CNOOC LTD (883 HK)







COLGATE-PALMOLIVE (CL US)

















DANONE (BN FP)


Abbreviations frequently used in reports

Abb. Description Abb. Description Abb. Description

CAGR Compound annual growth rate EPS Earnings per share P/B Price-to-book value

CFO Cash from operations EV Enterprise value P/E Price-earnings ratio

CFROI Cash flow return on investment FCF Free cash flow PEG P/E ratio divided by growth in EPS

DCF Discounted cash flow FFO Funds from operations ROE Return on equity

EBITDA Earnings before interest, taxes, depreciation and amortization IBD Interest-bearing debt ROIC Return on invested capital


15









E.ON (EOAN GY)








FRANCE TELECOM (FTE FP)




SELL since 20/01/2009










GENERAL ELECTRIC CO (GE US)









GOLDMAN SACHS GROUP INC (GS US)







HONEYWELL INTERNATIONAL INC (HON US)




HTC CORPORATION (2498 TT)






IJM CORP (IJM MK)






INDOFOOD SUKSES MAKMUR TERBUKA (INDF IJ)







INTEL (INTC US)













KELLOGG (K US)











LLOYDS TSB (LLOY LN)









LVMH MOET HENNESSY LOUIS VUITTON (MC FP)







MAANSHAN IRON & STEEL CO LTD - H (323 HK)









MITSUI & CO. (8031 JP)









NATIONAL AUSTRALIA BANK (NAB AU)




NATIONAL GRID (NG/ LN)








NESTLE (NESN VX)



16




















NINTENDO (7974 JP)

















NOKIA OYJ (NOK1V FH)











NOVARTIS (NOVN VX)










ORACLE (ORCL US)







ORICA LTD (ORI AU)

BUY since 29/04/2008 PFIZER (PFE US) HOLD since 29/04/2009












PHILIP MORRIS INTERNATIONAL (PM US)







POSCO (005490 KS)







RECKITT BENCKISER (RB/ LN)






ROYAL DUTCH SHELL-A (RDSA NA)











RWE (RWE GR)







SANOFI-AVENTIS (SAN FP)





SEMBCORP INDUSTRIES (SCI SP)









SIEMENS (SIE GY)





SINGAPORE AIRLINES LIMITED (SIA SP)

BUY since 19/12/2008 SWISSCOM (SCMN VX) BUY since 06/05/2009


17



















SYNGENTA (SYNN VX)







TELEFONICA SA (TEF SM)






TENAGA NASIONAL BHD (TNB MK)



TERMINATED since 28/01/2009


TENCENT HOLDINGS LIMITED (700 HK)






TEVA (ADR) (TEVA US)







TRANSURBAN GROUP (TCL AU)








TSMC (2330 TT)











UNILEVER (UNA NA)









RESTRICTED since 10/07/2008

VALE SA ADR PFD (VALE/P US)







ZIJIN MINING GROUP COMPANY LTD - H (2899 HK)

BUY since 07/04/2008 As at the end of the preceding month, Credit Suisse beneficially owned 1% or more of a class of common equity securities of (SIEMENS, ZIJIN MINING GROUP COMPANY LTD - H, BANK OF CHINA - H, FRANCE TELECOM, NATIONAL AUSTRALIA BANK, NATIONAL GRID, NESTLE, NOKIA OYJ). For the following disclosures, references to Credit Suisse include all of the subsidiaries and affiliates of Credit Suisse AG, the Swiss bank, operating under its Investment Banking division. The subject issuer (ASCENDAS REAL ESTATE INVESTMENT TRUST, BANGKOK BANK PUBLIC COMPANY LIMITED, ORICA LTD, PFIZER, PHILIP MORRIS INTERNATIONAL, POSCO, RECKITT BENCKISER, ROYAL DUTCH SHELL-A, RWE, SANOFI-AVENTIS, SEMBCORP INDUSTRIES, SIEMENS, SINGAPORE AIRLINES LIMITED, SWISSCOM, SYNGENTA, TELEFONICA SA, TENAGA NASIONAL BHD, TENCENT HOLDINGS LIMITED, TEVA (ADR), TSMC, UNILEVER, VALE SA ADR PFD, ZIJIN MINING GROUP COMPANY LTD - H, BANK OF CHINA - H, BNP PARIBAS, BP, CHINA CONSTRUCTION BANK - A, CHINA RAILWAY CONSTRUCTION (CRC) - H, CISCO SYSTEMS, CNOOC LTD, COLGATE-PALMOLIVE, DANONE, E.ON, FRANCE TELECOM, GENERAL ELECTRIC CO, GOLDMAN SACHS GROUP INC, HONEYWELL INTERNATIONAL INC, HTC CORPORATION, IJM CORP, INDOFOOD SUKSES MAKMUR TERBUKA, INTEL, KELLOGG, LLOYDS TSB, LVMH MOET HENNESSY LOUIS VUITTON, MAANSHAN IRON & STEEL CO LTD - H, MITSUI & CO., NATIONAL AUSTRALIA BANK, NATIONAL GRID, NESTLE, NOKIA OYJ, NOVARTIS, ORACLE) currently is, or was during the 12-month period preceding the date ofdistribution of this report, a client of Credit Suisse. Credit Suisse provided investment banking services to the subject company (ASCENDAS REAL ESTATE INVESTMENT TRUST, ORICA LTD, PFIZER, PHILIP MORRIS INTERNATIONAL, POSCO, RECKITT BENCKISER, ROYAL DUTCHSHELL-A, RWE, SANOFI-AVENTIS, SEMBCORP INDUSTRIES, SIEMENS, SINGAPORE AIRLINES LIMITED, SWISSCOM, SYNGENTA, TELEFONICA SA, TENAGA NASIONAL BHD, TENCENT HOLDINGS LIMITED, TEVA (ADR), UNILEVER, VALE SA ADR PFD, ZIJIN MINING GROUP COMPANY LTD - H, BANK OF CHINA - H, BNP PARIBAS, BP, CHINA CONSTRUCTION BANK - A, CHINA RAILWAY CONSTRUCTION (CRC) - H, CISCO SYSTEMS, CNOOC LTD, COLGATE-PALMOLIVE, DANONE, E.ON, FRANCE TELECOM, GENERAL ELECTRIC CO, GOLDMAN SACHS GROUP INC, HONEYWELL INTERNATIONAL INC, HTC CORPORATION, IJM CORP, INDOFOOD SUKSES MAKMUR TERBUKA, INTEL, KELLOGG, LLOYDS TSB, LVMH MOET HENNESSY LOUIS VUITTON, MAANSHAN IRON & STEEL CO LTD - H, MITSUI & CO., NATIONAL AUSTRALIA BANK, NATIONAL GRID, NESTLE, NOKIA OYJ, NOVARTIS, ORACLE) within the past 12 months. Credit Suisse provided non-investment banking services, which may include Sales and Trading services, to the subject issuer (ASCENDAS REAL ESTATE INVESTMENT TRUST, BANGKOK BANK PUBLIC COMPANY LIMITED, PFIZER, PHILIP MORRIS INTERNATIONAL, RWE, SIEMENS, SYNGENTA, TELEFONICA SA, TENCENT HOLDINGS LIMITED, TEVA (ADR), TSMC, VALE SA ADR PFD, BNP PARIBAS, BP, CISCO SYSTEMS, DANONE, E.ON, FRANCE TELECOM, GENERAL ELECTRIC CO, GOLDMAN SACHS GROUP INC, HONEYWELL INTERNATIONAL INC, INDOFOOD SUKSES MAKMUR TERBUKA, INTEL, LLOYDS TSB, LVMH MOET HENNESSY LOUIS VUITTON, MITSUI & CO., NATIONAL AUSTRALIA BANK, NESTLE, NOKIA OYJ) within the past 12 months.Credit Suisse has managed or co-managed a public offering of securities for the subject issuer (PFIZER, PHILIP MORRIS INTERNATIONAL, RWE, SWISSCOM, TELEFONICA SA, TSMC, UNILEVER, VALE SA ADR PFD, BANK OF CHINA - H, BNP PARIBAS, BP, CHINA CONSTRUCTION BANK - A, CHINA RAILWAY CONSTRUCTION (CRC) - H, CISCO SYSTEMS, CNOOC LTD, COLGATE-PALMOLIVE, DANONE, E.ON, FRANCE TELECOM, GENERAL ELECTRIC CO, GOLDMAN SACHS GROUP INC, INDOFOOD SUKSES MAKMUR TERBUKA, LLOYDS TSB, LVMH MOET HENNESSY LOUIS VUITTON, MAANSHAN IRON &


18

STEEL CO LTD - H, NATIONAL AUSTRALIA BANK, NESTLE, NOKIA OYJ,ORACLE) within the past three years. Credit Suisse has managed or co-managed a public offering of securities for thesubject issuer (PFIZER, PHILIP MORRIS INTERNATIONAL, SWISSCOM,UNILEVER, VALE SA ADR PFD, BANK OF CHINA - H, BNP PARIBAS, BP,CHINA CONSTRUCTION BANK - A, CHINA RAILWAY CONSTRUCTION (CRC) -H, CISCO SYSTEMS, CNOOC LTD, FRANCE TELECOM, GENERAL ELECTRICCO, LLOYDS TSB, MAANSHAN IRON & STEEL CO LTD - H, NESTLE, NOKIAOYJ) within the past 12 months. Credit Suisse has received investment banking related compensation from thesubject issuer (ORICA LTD, PFIZER, PHILIP MORRIS INTERNATIONAL, RECKITTBENCKISER, ROYAL DUTCH SHELL-A, RWE, SEMBCORP INDUSTRIES,SIEMENS, SINGAPORE AIRLINES LIMITED, SWISSCOM, SYNGENTA,TELEFONICA SA, UNILEVER, VALE SA ADR PFD, BANK OF CHINA - H, BNP PARIBAS, BP, CHINA CONSTRUCTION BANK - A, CHINA RAILWAYCONSTRUCTION (CRC) - H, CISCO SYSTEMS, CNOOC LTD, COLGATE-PALMOLIVE, DANONE, E.ON, FRANCE TELECOM, GENERAL ELECTRIC CO,INDOFOOD SUKSES MAKMUR TERBUKA, INTEL, LLOYDS TSB, LVMH MOETHENNESSY LOUIS VUITTON, MAANSHAN IRON & STEEL CO LTD - H, NATIONAL AUSTRALIA BANK, NESTLE, NOKIA OYJ, NOVARTIS, ORACLE)within the past 12 months. Credit Suisse has received compensation for products and services other thaninvestment banking services from the subject issuer (ASCENDAS REAL ESTATEINVESTMENT TRUST, BANGKOK BANK PUBLIC COMPANY LIMITED, PFIZER,PHILIP MORRIS INTERNATIONAL, RWE, SIEMENS, SYNGENTA, TELEFONICASA, TENCENT HOLDINGS LIMITED, TEVA (ADR), VALE SA ADR PFD, BNPPARIBAS, BP, CISCO SYSTEMS, DANONE, E.ON, FRANCE TELECOM,GENERAL ELECTRIC CO, GOLDMAN SACHS GROUP INC, HONEYWELLINTERNATIONAL INC, INDOFOOD SUKSES MAKMUR TERBUKA, INTEL,LLOYDS TSB, LVMH MOET HENNESSY LOUIS VUITTON, MITSUI & CO.,NATIONAL AUSTRALIA BANK, NESTLE, NOKIA OYJ) within the past 12 months.Credit Suisse expects to receive or intends to seek investment banking relatedcompensation from the subject issuer (ASCENDAS REAL ESTATE INVESTMENTTRUST, BANGKOK BANK PUBLIC COMPANY LIMITED, ORICA LTD, PFIZER,PHILIP MORRIS INTERNATIONAL, POSCO, RECKITT BENCKISER, ROYALDUTCH SHELL-A, RWE, SANOFI-AVENTIS, SEMBCORP INDUSTRIES,SIEMENS, SINGAPORE AIRLINES LIMITED, SWISSCOM, SYNGENTA,TELEFONICA SA, TENAGA NASIONAL BHD, TENCENT HOLDINGS LIMITED,TEVA (ADR), TRANSURBAN GROUP, TSMC, UNILEVER, VALE SA ADR PFD,ZIJIN MINING GROUP COMPANY LTD - H, BANK OF CHINA - H, BNP PARIBAS, BP, CHINA CONSTRUCTION BANK - A, CHINA RAILWAYCONSTRUCTION (CRC) - H, CISCO SYSTEMS, CNOOC LTD, COLGATE-PALMOLIVE, DANONE, E.ON, FRANCE TELECOM, GENERAL ELECTRIC CO,GOLDMAN SACHS GROUP INC, HONEYWELL INTERNATIONAL INC, HTC CORPORATION, IJM CORP, INDOFOOD SUKSES MAKMUR TERBUKA, INTEL,KELLOGG, LLOYDS TSB, LVMH MOET HENNESSY LOUIS VUITTON,MAANSHAN IRON & STEEL CO LTD - H, MITSUI & CO., NATIONAL AUSTRALIABANK, NATIONAL GRID, NESTLE, NINTENDO, NOKIA OYJ, NOVARTIS,ORACLE) within the next three months. As at the date of this report, Credit Suisse acts as a market maker or liquidityprovider in the securities of the subject issuer (TEVA (ADR), CISCO SYSTEMS,INTEL, ORACLE). Credit Suisse holds a trading position in the subject issuer (ASCENDAS REALESTATE INVESTMENT TRUST, BANGKOK BANK PUBLIC COMPANY LIMITED,ORICA LTD, PFIZER, PHILIP MORRIS INTERNATIONAL, POSCO, RECKITTBENCKISER, ROYAL DUTCH SHELL-A, RWE, SANOFI-AVENTIS, SEMBCORPINDUSTRIES, SIEMENS, SINGAPORE AIRLINES LIMITED, SWISSCOM,SYNGENTA, TELEFONICA SA, TENAGA NASIONAL BHD, TENCENTHOLDINGS LIMITED, TEVA (ADR), TRANSURBAN GROUP, TSMC, UNILEVER,VALE SA ADR PFD, ZIJIN MINING GROUP COMPANY LTD - H, BANK OFCHINA - H, BNP PARIBAS, BP, CHINA CONSTRUCTION BANK - A, CHINA MOBILE, CHINA RAILWAY CONSTRUCTION (CRC) - H, CISCO SYSTEMS,CNOOC LTD, COLGATE-PALMOLIVE, DANONE, E.ON, FRANCE TELECOM,GENERAL ELECTRIC CO, GOLDMAN SACHS GROUP INC, HONEYWELLINTERNATIONAL INC, HTC CORPORATION, IJM CORP, INDOFOOD SUKSESMAKMUR TERBUKA, INTEL, KELLOGG, LLOYDS TSB, LVMH MOETHENNESSY LOUIS VUITTON, MAANSHAN IRON & STEEL CO LTD - H, MITSUI & CO., NATIONAL AUSTRALIA BANK, NATIONAL GRID, NESTLE, NINTENDO,NOKIA OYJ, NOVARTIS, ORACLE).

Additional disclosures for the following jurisdictions Hong Kong: Other than any interests held by the analyst and/or associates as disclosed in this report, Credit Suisse Hong Kong Branch does not hold any disclosable interests. United Kingdom: For fixed income disclosure information for clients of Credit Suisse (UK) Limited and Credit Suisse Securities (Europe) Limited, please call +41 44 333 33 99.

For further information, including disclosures with respect to any other issuers, please refer to the Credit Suisse Global Research Disclosure site at: http://www.credit-suisse.com/research/disclaimer

Guide to analysis

Equity rating allocation as of 18/06/2009 Overall Investment banking

interests only

BUY 31.18% 32.67%HOLD 60.54% 59.39%SELL 7.50% 7.18%RESTRICTED 0.78% 0.76% Relative stock performance At the stock level, the selection takes into account the relative attractiveness of individual shares versus the sector, market position, growth prospects, balance-sheet structure and valuation. The sector and country recommendations are “overweight,” “neutral”, and “underweight” and are assigned according to relative performance against the respective regional and global benchmark indices. Absolute stock performance The stock recommendations are BUY, HOLD and SELL and are dependent on the expected absolute performance of the individual stocks, generally on a 6-12 months horizon based on the following criteria: BUY: 10% or greater increase in absolute share price HOLD: variation between -10% and +10% in absolute share price SELL: 10% or more decrease in absolute share price RESTRICTED: In certain circumstances, internal and external regulations

exclude certain types of communications, including e.g. an investment recommendation during the course of Credit Suisse engagement in an investment banking transaction.

TERMINATED: Research coverage has been concluded. Absolute bond recommendations The bond recommendations are based fundamentally on forecasts for total returns versus the respective benchmark on a 3–6 month horizon and are defined as follows: BUY: Expectation that the bond issue will outperform its specified

benchmark HOLD: Expectation that the bond issue will perform in line with the

specified benchmark SELL: Expectation that the bond issue will underperform its specified

benchmark RESTRICTED: In certain circumstances, internal and external regulations

exclude certain types of communications, including e.g. an investment recommendation during the course of Credit Suisse engagement in an investment banking transaction.

Credit Suisse HOLT With respect to the analysis in this report based on the HOLT(tm) methodology, Credit Suisse certifies that (1) the views expressed in this report accurately reflect the HOLT methodology and (2) no part of the Firm's compensation was, is, or will be directly related to the specific views disclosed in this report. The Credit Suisse HOLT methodology does not assign ratings to a security. It is an analytical tool that involves use of a set of proprietary quantitative algorithms and warranted value calculations, collectively called the Credit Suisse HOLT valuation model, that are consistently applied to all the companies included in its database. Third-party data (including consensus earnings estimates) are systematically translated into a number of default variables and incorporated into the algorithms available in the Credit Suisse HOLT valuation model. The source financial statement, pricing, and earnings data provided by outside data vendors are subject to quality control and may also be adjusted to more closely measure the underlying economics of firm performance. These adjustments provide consistency when analyzing a single company across time, or analyzing multiple companies across industries or national borders. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes the baseline valuation for a security, and a user then may adjust the default variables to produce alternative scenarios, any of which could occur. The Credit Suisse HOLT methodology does not assign a price target to a security. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes a warranted price for a security, and as the third-party data are updated, the warranted price may also change. The default variables may also be adjusted to produce alternative warranted prices, any of which could occur. Additional information about the Credit Suisse HOLT methodology is available on request.


19

CFROI(r), CFROE, HOLT, HOLTfolio, HOLTSelect, HS60, HS40, ValueSearch, AggreGator, Signal Flag and "Powered by HOLT" are trademarks or registered trademarks of Credit Suisse or its affiliates in the United States and other countries. HOLT is a corporate performance and valuation advisory service of Credit Suisse. For technical research Where recommendation tables are mentioned in the report, “Close” is the latest closing price quoted on the exchange. “MT” denotes the rating for the medium-term trend (3 – 6 months outlook). “ST” denotes the short-term trend (3 – 6 weeks outlook). The ratings are “+” for a positive outlook (price likely to rise), “0” for neutral (no big price changes expected) and “-“ for a negative outlook (price likely to fall). Outperform in the column “Rel perf” denotes the expected performance of the stocks relative to the benchmark. The “Comment” column includes the latest advice from the analyst. In the column “Recom” the date is listed when the stock was recommended for purchase (opening purchase). “P&L” gives the profit or loss that has accrued since the purchase recommendation was given. For a short introduction to technical analysis, please refer to Technical Analysis Explained at: https://www.credit-suisse.com/legal/pb_research/technical_tutorial_en.pdf

Global disclaimer / important information

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singapore and hong kong, 18 june 2009 asia pacific

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