Avian Flu Lessons Learned From SARS in 2003

Singapore and Hong Kong, 16 April 2013

Asia Pacific

Global Research

Investment horizon: 6 – 12+ months

Important disclosures are found in the Disclosure appendix

Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be

aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this

report as only a single factor in making their investment decision. For a discussion of the risks of investing in the securities

mentioned in this report, please refer to the following Internet link: https://research.credit-suisse.com/riskdisclosure

Concerns about avian flu outbreak in China

Rising death toll, disease spreads to Beijing and Henan

The recent outbreak of avian flu in China has dampened

investment sentiment towards Chinese equities. By 14 April,

the number of confirmed H7N9 cases in China had increased

to 60, with the death toll rising to 13 and the disease

spreading from Eastern China to Beijing and the central

province of Henan (Figure 1). The recent outbreak of avian flu

has taken a tragic toll on human lives. Both the Chinese

government and the World Health Organization (WHO) are

stepping up coordinated precautionary efforts to contain the

disease. Credit Suisse is not providing an investment

recommendation in anticipation of a further spread of the

disease. However, for informational purposes and in response

to increasing investor concerns about the potential market

implications of the bird flu outbreak, we examine in this report

the lessons learnt from the deadly Severe Acute Respiratory

Syndrome (SARS) epidemic in 2003, which infected 8,096

Research Weekly Asia Avian flu: Lessons learned from SARS in 2003

Private Banking

Highlights

The recent outbreak of avian flu in China

has dampened investment sentiment

towards Chinese equities.

It is too early to assess the pandemic

potential of the current avian flu outbreak in

China and its fundamental impact.

We examine the market and economic

performance during the SARS crisis in

2003 and find that market reactions and

the macroeconomic impact tend to be

short-lived, market-focused and sector-

specific.

Top investment ideas

FX: We recommend investors short JPY, mainly through

the option market, and SELL JPY on bouts of strength

with our USD/JPY forecasts at 102 in 3 months and

105 in 12 months.

EM Bonds: BUY Bank of Ceylon 5.325%

04/16/2018

The largest commercial bank in Sri Lanka with good

asset quality and a strong capital base.

Figure 1

Number of reported H7N9 cases in China (as of 14 April)

Source: China's National Health and Family Planning Commission, Credit Suisse

Number of reported cases

24

1615

2 21

0

5

10

15

20

25

Shanghai Jiangsu Zhejiang Anhui Henan Beijing

https://research.credit-suisse.com/riskdisclosure


2

people and claimed 774 lives worldwide. At this point, the

WHO says that there is no evidence yet of human-to-human

transmission of the H7N9 virus, and the organization is not

recommending any travel restrictions be applied.

Short-term market jitters

We believe that it is too early to assess the pandemic potential

of avian flu and estimate the market impact of a real and

widespread pandemic, which is not our base-case scenario.

But the SARS crisis in 2003 shows us that market reactions

to the pandemic were short-lived, while the fundamental

impact was very market-focused and sector-specific. The

SARS experience shows us that markets generally perceive

emerging markets as more vulnerable to pandemic risks, due

to their lower spending on healthcare and medical services.

Since China and Hong Kong were at the epicenter of the

SARS outbreak, the Hang Seng Index underperformed the

global markets by 15% during the crisis period, but sharply

turned around to outperform the MSCI World in the post-

SARS recovery period in H2 2003 (Figure 2).

What can we learn from SARS?

As the current avian flu outbreak is concentrated in the

Eastern China region, the Chinese and Hong Kong equity

markets are the most sensitive to the news flow related to the

outbreak. The SARS example suggests that the market impact

of the pandemic should be temporary and very sector-specific.

From the pre-SARS peak on 24 February until 27 April 2003,

when the WHO declared that the SARS epidemic was under

control, both the MSCI Asia ex-Japan and the Hang Seng

Index declined by only 9% from peak to trough (Figure 3).

While the SARS-induced market correction was pronounced

and brief, the MSCI Asia ex-Japan sharply rebounded 58%

from the SARS-trough on 25 April 2003 to 255 at the end of

2003, thanks to strong government stimulus measures to

revive the economy across Asia. From the pre-SARS peak on

24 February until 27 April 2003, the MSCI China lost 10.7%,

but the index strongly rebounded by 30.6% three months after

27 April.

SARS impact was market-focused and sector-specific

With respect to sector implications, Asian aviation,

transportation, travel and hotel stocks were hit the hardest by

the SARS crisis. During the SARS epidemic, tourist arrivals

plunged across Asia, falling 60%–80% year-on-year (YoY) in

Q2 2003 in Hong Kong, Malaysia, Singapore and Taiwan, and

30%-50% YoY in South Korea, Thailand, Indonesia and the

Philippines (Figure 4). The fundamental impact of H7N9 on

the travel and tourism-related sectors will largely hinge on

whether the WHO recommends travel restrictions. Based on

the SARS example, the sectors which are expected to

underperform during a more severe and widespread avian flu

outbreak are aviation, transportation, tourism and travel, while

the consumer staples, energy and utilities sectors are

expected to stay relatively resilient.

Fan Cheuk Wan, [email protected]

Economic impact of SARS on China and Asia

Temporary impact of SARS on Chinese economy

Whereas the first known case of SARS in China was detected

in November 2002, the outbreak only gained wider public

attention in late-February 2003. The outbreak peaked in April

2003, and by June, the disease had been largely contained.

The negative impact on economic activity in China and other

Asian economies was thus mainly confined to Q2 2003, and

pent-up demand helped drive a sharp rebound in economic

activity in H2 2003.

China's gross domestic product (GDP) growth rate fell

abruptly from 10.8% YoY in Q1 2003 to 7.9% YoY in Q2 as

a result of a drop in economic activity, ranging from passenger

travel to retail sales and industrial production (Figure 5). After

accounting for Q2 seasonal effects, the impact was estimated

to be around –2.4% points, or about 0.6% points on an

Figure 2 Figure 3

Relative performance of Asian markets during the SARS crisis Correction of MSCI Asia ex-Japan during the SARS crisis

Source: Bloomberg, Credit Suisse


75

85

95

105

115

125

Jul 02 Jan 03 Jul 03 Jan 04

MSCI Asia ex-Japan Index MSCI World Index

Hang Seng Index Straits Times Index MSCI AC ASIA x JAPAN

100

200

300

400

500

600

700

Jul 9

7

Jul 9

8

Jul 9

9

Jul 0

0

Jul 0

1

Jul 0

2

Jul 0

3

Jul 0

4

Jul 0

5

Jul 0

6

Jul 0

7

Jul 0

8

1997-1998

financial crisis

+153.3%

2000-2002

TMT crisis

-57.3%

2003 SARS crisis

+74.9%

+207%

2007-2008 global credit crisis

-9%

-66.4%

+34.9%

-66.4%


3

annualized basis. By Q4 2003, growth had normalized with

GDP growing by 9.9% YoY.

The impact of SARS varied across the different sectors of

the Chinese economy. The impact on passenger travel was

most pronounced, but also short-lived. Railway and airline

passenger volume plunged 61% and 71% YoY, respectively,

in May, but by August, passenger traffic had normalized. YoY

retail sales growth fell by more than half, dropping from an

average of 14% in January–February 2003 to reach 6.5%

YoY in May, although it bounced back quickly to 14.6% YoY

in July. On a relative basis, industrial production (IP) and trade

appeared least affected by the SARS outbreak. IP growth

moderated from an average of 17.3% YoY in January–

February 2003, reaching a low of 13.7% YoY in May, before

recovering to 16.9% in June. Exports were barely affected,

with growth rates remaining high at around 34% YoY in Q2

2003.

Limited impact of SARS on China’s inflation

The crisis had limited discernible effect on inflation during the

crisis period in Q2 2003, but inflation rose quickly in H2 2003,

when demand rebounded. Prices of meat and poultry in the

Consumer Price Index (CPI) were stable in Q2, despite a

sharp drop in poultry demand, as there was likely some

substitution effect that led to higher prices of pork and other

meat products. CPI meat prices rose sharply in H2 2003,

however, due to an undersupply of poultry as demand

gradually normalized. In general, the pricing power of retailers

in Q2 2003 was weak as a result of reduced consumer

spending during the crisis. As such, inflation was low at 0.7%

YoY in Q2, but rose steadily in H2 2003 to reach 3.3% in

December (Figure 6).

Small open economies in Asia were hardest hit in 2003

During the SARS outbreak, other Asian economies were

temporarily hurt by the slowdown in tourist arrivals and retail

spending. In particular, the small open economies of Hong

Kong and Singapore witnessed the sharpest swings in growth

outcomes. Singapore's economy contracted by 4.7% QoQ

(saar basis) in Q2 2003, but staged a strong growth recovery

in Q3 of 23.5%. The recovery extended into 2004, with QoQ

growth averaging 11.5% in the next two quarters. In Hong

Kong, the economy contracted at a seasonally adjusted annual

rate of 2.4% QoQ in Q2 2003, but similarly rebounded by

6.1% in Q3. Property sales fell sharply, with prices falling to

the lowest point in July 2003. Hong Kong's deflation cycle

also bottomed at –4.0% in July 2003.

Dennis Tan, [email protected]

Implications of avian flu for Asian aviation sector

Do not panic by selling Chinese and Hong Kong airlines

In the absence of a widespread outbreak of the disease, we

maintain our positive fundamental view on Chinese airlines. In

our view, the market’s response to the risk of a pandemic has

become more rational since the SARS outbreak. During the

SARS crisis, the shares of Asian airlines tumbled 25%–43%.

During the 2009 swine flu episode, the share prices of

Figure 4 Figure 5

Tourist arrivals declined sharply but recovered quickly in 2003 SARS impact on China’s GDP growth in 2003


Source: CEIC, Credit Suisse

Figure 6

SARS impact on China’s inflation rate in 2003

Source: CEIC, Credit Suisse

-100

-80

-60

-40

-20

0

20

40

Jan 03 Apr 03 Jul 03 Oct 03 Jan 04

HK ID KR MY

PH SG TW TH

Tourist arrivals % YoY

Real GDP growth

6

7

8

9

10

11

12

Sep 02 Mar 03 Sep 03 Mar 04 Sep 04

SARS

crisis

Economy

rebounded after

SARS

YoY %

CPI inflation

-2

-1

0

1

2

3

4

5

6

Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04

YoY %

SARS

outbreak

Economy

rebounded

after SARS


4

Chinese airlines briefly dipped 15%–20%, followed by sharp a

rebound within two weeks. Therefore, we advise against panic

selling Chinese and Hong Kong airline stocks at this point,

particularly when a stream of positive factors, including lower

fuel prices, a strengthening CNY and stabilizing outbound

traffic to Japan, are in play to boost profitability. On a 6–12

month strategic investment horizon, we maintain our positive

fundamental view on Cathay Pacific (293 HK, BUY) and Air

China (753 HK, BUY), as their prevailing price-to-book

valuations of 0.85 and 1.2, respectively, are at the lower end

of their respective historical valuation ranges.

Yu Wenchi, [email protected]

ASEAN airlines with company-specific drivers

In Southeast Asia, we expect the potential impact of avian flu

on aviation stocks to be relatively short-lived, barring an

escalation of the outbreak. The swine flu outbreak in 2009

saw ASEAN airline stocks initially decline by 5%–10% before

rebounding firmly a month later. However, the swine flu

episode indicates that share price performance, even within

the airline sector, can be expected to remain very company-

specific. Between March and September 2009, SIA’s (SIA

SP, HOLD) underperformance relative to the Straits Times

Index troughed at around –37%, while AirAsia (AIRA MK,

BUY) was far more resilient, with its performance relative to

the Kuala Lumpur Composite Index reaching a trough of just

4.7%. We believe that as a full-service carrier, SIA could

continue to face headwinds from a challenging operating

environment and high fuel costs. Despite rising competition,

we believe AirAsia remains well positioned to capture growing

demand for low-cost air travel in Asia, supported by rising

income levels, superior brand equity and its leading position

among low-cost airlines.

Adam Quek, [email protected]

mailto:[email protected]


5

Short-term currency and commodity strategy

Marcus Hettinger,

marcus.hettinger@credit-

suisse.com

Heng Koon How,

koonhow.heng@credit-

suisse.com

Stefan Graber,

stefan.graber@credit-

suisse.com

The table below summarizes our short-term (one-month) directional views and targets for selected

key exchange rates, based on a weighted blend of technical and fundamental inputs. A more

comprehensive list of currencies and commodities was covered in the weekly publication of

Currency and Commodity Strategy dated 15 April 2013.

JPY: Fundamentals and technicals indicate further weakness. We recommend being short JPY,

mainly through the option market, and selling JPY on bouts of strength.

EUR still supported by technicals. Key support remains at 1.27, next resistance at 1.32/1.33.

We remain bullish EUR/USD.

Short-term currency and commodity views

Currency pair /

Precious metal Hi/Low Last 30 days 12/04/13 Hi/Low Last 30 days 12/04/13

1.3124 9.3%

1.2772 8.0%

99.730 13.4%

92.870 11.4%

1.5400 8.5%

1.4902 6.9%

0.9538 8.8%

0.9273 7.6%

1.0556 7.5%

1.0312 6.9%

0.8634 9.5%

0.8214 8.6%

1.0279 6.4%

1.0103 5.9%

1.2517 4.8%

1.2368 3.9%

6.3127 1.6%

6.2575 1.3%

Source: Credit Suisse/IDC, Bloomberg

* Data as of London close, with band representing +/- 1 standard deviation from 30-day average.

** 1-month view is a weighted combination of technical and fundamental inputs.

*** 12-month non-deliverable forward rate is used for USD/CNY.

Bearish: SNB intervention caps CHF strength vs. EUR,

technical momentum is CHF positive.

Neutral: BoE could ease further, rating downgrade and

external deficit. But technicals still neutral.

Neutral: Technical momentum is neutral AUD. Cycle view

also neutral as RBA to ease less.

6.25

7.8%

0.83-0.87

Bearish: Economic numbers in China continue to improve.

Growth likely to have stabilized around 7.5%.

Neutral: MAS to maintain SGD appreciation path to

counter sticky inflation. Momentum now positive USD.

0.91

1.00-1.04

1.02-1.06

1.23-1.26

1.0508 7.0%

Neutral: Technical momentum is neutral NZD. Central

bank is still concerned about currency strength.

6.1%Neutral: Technical momentum is bullish USD, but CAD to

benefit from high oil price.1.0136

6.9%

8.8%

0.9273

1.6%

3.9%

1.5343

0.8589

6.2575

1.2368

12.9% Bullish: Technical momentum is USD positive. BoJ easing

to lead to capital outflows.98.370

USD/CHF

AUD/USD

NZD/USD

USD/CNY***

USD/SGD

EUR/USD

1.51-1.55

101.0

Bullish: Rising EUR risk premium gives a more neutral

view, but technical momentum is positive EUR.

USD/JPY

GBP/USD

8.1% 1.33

USD/CAD

1M target or range 1M view** CommentSpot* 3M implied volatility*

1.3113

Hi/Low Last 30 days 12/04/13 Hi/Low Last 30 days 12/04/13 <1M 1-6M 6-12M+ 1M 3M 12M

1615 16.0%

1506 11.7%

29.26 24.4%

26.44 20.5%

1597 17.5%

1495 14.9%

784 25.4%

708 23.5%

97.23 22.9%

91.29 16.0%

1979 18.7%

1854 17.5%

7800 18.2%

7388 16.1%

17225 22.2%

15850 20.7%

741.25 24.5%

629.00 11.3%

92.50 28.6%

84.64 20.2%

Source: Credit Suisse/IDC, Bloomberg

1) Data as of London close. Spot prices for precious metals, 3M forwards for industrial metals, front month futures for all other markets with band representing +/- 1 standard deviation from 30-day average.2) Views are a weighted combination of technical and fundamental inputs.3) Forecasts as published in the latest Research Monthly - Commodities.

Supply and demand dynamics warrant neutral rating. However, the

market has gathered momentum and trend is positive.

Momentum remains negative. The market is expensive and

fundamentals are beyond the peak. Risks are to the downside.

Neutral momentum. Supply is plentiful but global growth is improving.

Valuation is supportive over 12M.

8200Neutral momentum. Correction appears overdone but trading could

remain choppy for now. Some upside later on.

Neutral momentum. While the market should benefit from economic

stabilization, sideways trading is the most likely pattern for now.

78007500

21002000

17000 19000

Copper 7407

Palladium

Aluminum 1854

91.29

707.85Momentum downgrade to neutral. Technicals not as strong anymore

but uptrend remains intact and fundamentals are positive. 780 850

94 93 100Momentum downgrade to neutral. Cycle is neutral as US market is

well supplied. Neutral view but pullback appears advanced.

Nickel

Corn

15850

1750

20.8%

25.1%

21.0%

16.7%

17.5%

Short-term Strategy

Momentum remains negative. Investor selling has intensified.

Negative outlook. Watch for key support at USD 1520/1530.

Momentum remains negative. Silver's outlook remains closely

correlated to that of gold. Watch for key support at USD 26.

Momentum remains negative but fundamentals remain firmly positive.

Near-term uncertainty but renewed upside later on.

Forecasts3)

1530

30.00

1650

30.00

1600 1600

26.00

Views2)

720

1525

1870

16500

100 95

740 600

15.6%

Market

16.0% Gold

24.4%

Current price1)

3M implied volatility1)

Cotton

Silver

85.58

1506.25

1494.99 Platinum

WTI Crude

Oil

26.44

658.50

25.9%

21.5% 610

90


6

The Trade recap / new trades

This week, we have one new FX trade:

Buy 3M EUR/SEK put spread: Buy EUR put/SEK call 3M option with strike at 8.30 and sell

EUR put/SEK call 3M option at strike 8.00. Approx. Premium: -0.9%.

Please note trade ideas and follow-up actions published in the Research Weekly - Currency &

Commodity Strategy (reprinted in this document), our Research Monthlies and Investment Idea

publications for execution "at current spot rate" are presumed to be actioned at the next fixing

following the publication of the document.


7

New trades

Publication Entry date BUY /

SELL

Underlying Entry

FX rate

Premium Target Stop-

loss

Spot

underlying*

P/L Comment

CCS/15/04/13 15/04/13 BUY 3M EUR/SEK put spread ~-0.9% 8.326 Long EUR put / SEK call strike at 8.30;

Short EUR put / SEK call strike at 8.00.

RA/10/04/13 10/04/13 BUY 6M CAD/JPY risk-reversal 98.076 +0.21% 98.149 0.03% Long call strike 101; Short put strike 95.

RA/12/03/13 Pending SELL EUR/HUF 310.00 300.89 Limit entry at 310.

Source: Credit Suisse, Bloomberg; CCS = Currency & Commodity Strategy, RM = Research Monthly, RF = Research Flash * Spot rate of underlying instrument as of London open on Friday preceding publication of document.

Open trades


SELL

Underlying Entry

FX rate


loss

Spot

underlying*

P/L Comment

CCS/08/04/13 08/04/13 BUY 3M EUR/JPY risk-reversal 128.73 -2.51% 129.71 0.58% Long call strike 128, short put strike

120.

CCS/08/04/13 08/04/13 BUY 3M EUR/CHF zero-cost risk-

reversal

1.2170 0.0% 1.2177 -0.01% Long call strike 1.2352; Short put strike

1.2089.

RM/26/03/13 26/03/13 BUY A basket of equally-weighted

12-month forwards in MXN,

BRL, TRY, PLN and RUB

versus GBP

100.00 108.00 96.500 100.58 0.58% Long MXN, BRL, TRY, PLN and RUB

12M forwards against GBP.

RW/26/03/13 26/03/13 BUY XPD/XPT 0.4810 0.5600 0.4365 0.4737 -1.52%

RA/19/03/13 19/03/13 SELL 3M USD/BRL risk-reversal 1.9879 +1.11% +1.2% -2.00% 1.9779 0.34% Short call strike 2.00; long put strike

1.95; Stop-loss at -2% P&L. Take profit

at 1.2% P&L.

CCS/18/03/13 18/03/13 SELL GBP/TRY 12M NDF 2.8655 2.7300 2.9500 2.8628 0.10% Entry at 2.8655 on 18/03/2013.

CCS/04/03/13 04/03/13 BUY 3M USD/JPY bullish risk-

reversal

93.280 -0.61% 99.290 4.23% Long call strike 95, short put strike

90.5.

CCS/04/03/13 04/03/13 SELL June 2013 put option on Brent

oil, strike: 103.0

108.13 +2.2% 104.04 0.42%

RW/26/02/13 26/02/13 BUY 3M EUR/GBP bullish risk

reversal

0.8642 -0.11% 0.8498 -0.51% Long call strike 0.89; short put strike

0.84.

RW/26/02/13 26/02/13 BUY 3M GBP put option/USD call

strike 1.45

1.5127 -0.65% 1.5374 -0.62%

CCS/25/02/13 25/02/13 SELL 12M USD/TRY risk reversal 1.8031 +4.47% +1.7% -2.00% 1.7896 1.44% Short call strike 1.81. long put strike at

1.79; Stop-loss at -2% P&L. Take-profit

at +1.7% P&L.

CCS/25/02/13 25/02/13 SELL 6M USD/RUB risk reversal 30.380 +2.96% 30.947 -0.12% Short call strike 30.90. long put strike at

29.50.

RW/19/02/13 19/02/13 BUY 3-legged EUR/CHF bullish

diagonal calendar call spread

structure

1.2342 +0.41% 1.2177 -0.17% Short 1M EUR/CHF call strike 1.2375;

Long 3M EUR/CHF call strike 1.2725

Short 3M EUR/CHF put strike 1.2210.

RW/05/02/13 05/02/13 BUY EUR/CHF 1.2302 1.2900 1.1980 1.2177 -1.02%

CCS/04/02/13 04/02/13 BUY 3M USD put / CAD call, strike

0.98

0.9991 -0.45% 1.0116 -0.44%

RA/23/01/13 23/01/13 BUY 3M EUR/CZK butterfly 25.591 -1.24% 25.867 0.68% Long call strike 25.0, short two calls

both strikes at 25.7, long call strike

26.3.

CCS/21/01/13 21/01/13 BUY 3M USD put / CHF call, strike

0.91

0.9321 -0.78% 0.9321 -0.77%

CCS/14/01/13 14/01/13 BUY 3M AUD put / NZD call, strike

1.23

1.2572 -0.55% 1.2243 -0.14%

CCS/14/01/13 14/01/13 BUY 3M EUR call / USD put, strike

1.35

1.3367 -1.18% 1.3064 -1.18%

CCS/17/12/12 17/12/12 BUY 6M EUR/CHF zero-cost risk

reversal

1.2078 0.00% 1.2177 0.57% Long call strike at 1.2162, short put

strike at 1.2000.

CCS/10/12/12 10/12/12 BUY EUR/CHF 1.2066 1.1900 1.2177 0.92% Covered call strategy on EUR/CHF.

CCS/10/12/12 10/12/12 SELL 6M EUR call / CHF put option,

strike 1.23

1.2066 +0.45% 1.2177 0.03% Covered call strategy on EUR/CHF.

CCS/19/11/12 19/11/12 BUY 6M XPT call / USD put, strike

1650

1578.0 -4.15% 1522.8 -4.02%

CCS/01/10/12 01/10/12 SELL AUD/USD 1.0383 1.0000 1.0650 1.0541 -1.52% Changed the stop-loss from 1.055 to

1.065 on 10/12/12.

CCS/03/09/12 03/09/12 BUY Equally-weighted 12M forward

basket of Asian FX + MXN

against EUR and USD (equal

weights)

100.00 105.00 100.00 102.29 2.29% Top investment idea for 2012. Long

CNY, SGD, KRW, MXN against EUR

and USD (equal weights).

CCS/21/05/12 21/05/12 BUY 12M AUD/USD zero-cost

bearish 3-legged option

structure for AUD downside

hedge

0.9856 0.00% 1.0540 -0.54% Buy 12M 0.95 AUD put, sell 12M 0.90

AUD put, sell 12M 1.0589 AUD call.

CCS/05/12/11 05/12/11 BUY December 2014 call option on

Brent oil, strike 111.0

96.740 -10.45% 98.950 -7.88% Trade takes advantage of the steep

backwardation in Brent. Call strike at

111.0.



8

Closed trades since last Currency & Commodity Strategy


SELL

Underlying Entry

FX rate


loss

Closing

FX rate

P/L Comment

CCS/14/01/13 14/01/13 BUY 3M XPD call / USD put, strike

740

703.50 -3.29% 732.5 -2.43% Closed at spot rate on 08/04/13.



9

Fixed income trading corner (1–6 months)

Currently open trades (1–6 months) – 9 April 2013

Trade Rec. ISIN no.

Security no.

Security description

Issuer

Rating S&P /

Moody’s /

Fitch*

Min.

denom.

('000)

Dura-

tion

S/L Open date YTM/

YTC

Price** BM spread (bp)*** Total

return

**** Open Curr. Open Curr. Target

CHF

BUY CH0190653870

19065387

RSHB 3.125% 8/17/2015

OJSC RUSS AGRIC BK (RSHB)

NR / Baa1 /

BBB

5 / 5 2.2 100.0 7.01.2013 2.24 101.95 101.85 253 225 200 0.67%

BUY CH0193724280

19372428

VTB 3.15% 12/16/2016

VTB BANK (VTB CAPITAL SA)

NR / Baa1 /

BBB

5 / 5 3.4 100.0 7.01.2013 2.64 101.70 101.00 275 268 200 0.09%

BUY CH0195512519

19551251

UCGIM 4.25% 10/19/2022

UNICRED BANK IRELAND PLC

NR / Baa2 / NR 5 / 5 7.6 100.0 7.01.2013 4.07 102.50 100.85 344 346 300 -0.56%

EUR

BUY DE000A0D1KX0

2120036

UBS 4.28% 04/15/2015

UBS AG JERSEY BRANCH

BBB- / Ba2 /

BB+

1 / 1 1.8 98.0 7.01.2013 4.07 97.75 99.85 527 400 400 3.14%

BUY IT0004576978

11056087

ENELIM 3.5% 2/26/2016

ENEL SPA

BBB+ / Baa2 /

BBB+

1 / 1 2.7 101.0 7.01.2013 2.26 102.97 103.40 233 211 170 1.22%

BUY XS0260057285

002618914

AXASA 5.777% 7/6/2016

AXA SA

BBB- / Baa1 /

BBB

50 / 1 2.8 98.0 11.03.2013 5.46 100.10 99.50 554 527 525 0.91%

BUY XS0872702112

20383727

BBVASM 3.75% 1/17/2018

BBVA SENIOR FINANCE SA

BBB- / Baa3 /

BBB+

100 / 100 4.3 98.5 7.01.2013 3.58 100.13 100.33 317 324 250 1.04%

BUY DE000A1R08U3

20749018

TKAGR 4% 8/27/2018

THYSSENKRUPP AG

NR / Ba1e /

BBB-

1 / 1 4.8 100.0 18.02.2013 3.54 100.20 102.16 329 315 250 2.42%

BUY XS0686703736

13994137

HEIGR 9.5% 12/15/2018

HEIDELBERGCEMENT FIN LUX

NR / Ba2 /

BB+

50 / 50 4.4 126.0 4.02.2013 3.63 124.50 129.65 391 319 300 5.44%

USD

BUY ARARGE03F144

2335938

ARGBOD 7% 10/3/2015

REPUBLIC OF ARGENTINA

NR / NR / B- 0.001 / 0.001 2.2 86.0 18.02.2013 12.51 88.90 88.75 1306 1204 1100 3.77%

BUY XS0813929782

20144910

SOCGEN 6.625% 6/11/2018

SOCIETE GENERALE

BBB / NR /

BBB-

200 / 1 4.3 99.0 4.03.2013 6.11 100.75 102.21 558 535 500 2.04%

*) e stands for expected rating while p stands for provisional rating, both are subject to receipt of final documentation; u stands for unsolicited rating. **) Prices are indicative only and subject to normal

market volatility. Current Price is stop loss closing price for bonds whose SL is triggered. ***) G-spreads refer to the yield spread of the relevant government benchmark bond. ****) Calculated since open

date. +) S/L triggered during the week.



10

Emerging market debts update

Recent news and commentaries

Wing-son Cheng, [email protected]

Daniel Tam, [email protected]

Neel Gopalakrishnan, [email protected]

Fitch lowers China’s

local currency debt

rating

On 9 April, Fitch lowered China’s local currency debt rating by one notch to A+ from AA- with a

stable outlook. Fitch’s local currency rating on China is now one notch below that assigned by S&P

and Moody’s. For Ministry of Finance (MoF)-issued dim sum bonds, the Fitch rating will now be

capped at A+, lowered from AA-. Fitch’s foreign currency rating for China’s external debt remains

A+, which is also lower than the ratings assigned by Moody’s (Aa3) and S&P (AA-). According to

Fitch, the rating action was driven by its concerns about a buildup in bank credit to the private sector,

which reached 135.7% of the gross domestic product (GDP) at end-2012. Including various forms

of shadow banking activities, Fitch said that the ratio would be even higher.

Moody’s reviews the

ratings of the senior and

subordinated notes of

Sberbank, VTB, RSHB

and Alfa Bank

Moody’s placed the senior and subordinated notes issued by several Russian banks, including

Sberbank, VTB, Russian Agricultural Bank (RSHB) and Alfa Bank (subordinated only), on review for

a possible downgrade on 2 April. According to the rating agency, the action was driven by its

concerns that “the Russian government’s capacity and willingness to provide systemic support to

large banks in times of systemic stress could potentially be lower than previously anticipated by the

rating agency.” Moody’s is concerned that lower oil prices could impair the Russian state’s ability to

support its banking system, and the implementation of a privatization plan “may lead to a somewhat

higher likelihood of the inclusion of market solutions regarding the provision of support for large

troubled banks in the event of need.” Our view is that during the 2008–2009 financial crisis, the

state’s willingness to support systemic banks was never in doubt. Moreover, privatization is a gradual

process which is not going to be completed in the near term, and some caution is warranted. Market

participants have noted Moody’s tendency to overrate Russian banks in contrast to the other two

rating agencies. We note that Moody’s rating on Sberbank is two notches above the BBB rating

assigned by Fitch, while the Baa1 rating of VTB and RSHB is one notch above Fitch’s (BBB). We

believe the rating actions by Moody’s on 2 April might have some impact on the market if they are

coupled with weak market sentiment, but they should not trigger a selloff in bonds issued by these

banks. In the medium term, we still believe the three state-controlled banks will continue to receive

state support. Sberbank was the first top Russian bank to announce its 2012 results.

S&P is concerned about

Vedanta’s refinancing of

its upcoming debt

maturities

S&P has placed its BB rating on Vedanta Resources PLC on CreditWatch with negative implications,

as it believes the company has made slower-than-expected progress in funding its upcoming debt

maturities. However, S&P also said that it understood that Vedanta “has tied up the majority of the

funds for its USD 809 million debt maturing on 29 April” and was in the “process of securing

funding” for USD 1.35 billion due in June 2013. It also said that it expected Vedanta to “eventually

garner funding for the debt maturities.” S&P’s action follows that of Moody’s which placed Vedanta’s

Ba3 rating on review for a possible downgrade (see Research Daily dated 27 March 2013).

Vedanta’s upcoming refinancing is not new information and we believe the rating agencies are taking

a conservative view on the rating. We have a BUY recommendation on Vedanta’s 5.5% 2016

convertible bond, given its reasonably attractive yield.

BUY Bank of Ceylon

5.325% 04/16/2018

ISIN: XS0914798268

Bank of Ceylon is 100%-owned by the government of Sri Lanka and is rated B1 and BB- by

Moody’s and Fitch respectively. It is the largest commercial bank in the country with assets of USD

8.5 bn as at end-2012. The bank has good asset quality as evidenced by its low non-performing

loans ratio of 2.8% as of year-end 2012, compared with 2.20% as of December 2011. With healthy

profitability ratios with a net interest margin of 3.8% in 2012, the bank reported net income of USD

115 m on operating income of USD 419 m. Its capitalization is satisfactory with Tier 1 ratio of 8.9%

and total capitalization ratio 12.4% in December 2012. The key risk to the credit stems from its link

to the Sri Lanka sovereign and the country’s dependence on international funding. We view this bond

attractive for carry.


11

Classic recommendations

Current CLASSIC portfolio recommendations – 9 April 2013

Trade ISIN no.

Security no.

Curr. Security description

Issuer

Rating

S&P/Moody’s/

Fitch***

Coupon Min. denomi-

nation /

increment

(thousands)

Vol.

(m)

Dur-

ation

Price

ask**

YTM /

YTC

BM-

spread

(bp)*

Total

return

****

CHF

CH0181738904

18173890

CHF RENAUL 2.5% 7/16/2015

RCI BANQUE SA

BBB / Baa3 / NR 2.500% 5 / 5 200 2.2 102.09 1.55% 169 4.08%

CH0148560995

14856099

CHF IBESM 3% 2/13/2017

IBERDROLA INTL BV

BBB / Baa1 /

BBB+

3.000% 5 / 5 250 3.6 104.21 1.85% 188 0.16%

CH0204477274

20447727

CHF SBERRU 2.065% 2/28/2017

SBERBANK (SB CAP SA)

NR / A3 / BBB 2.065% 5 / 5 250 3.7 100.33 1.98% 199 -1.82%

CH0197482711

19748271

CHF UCGIM 3.375% 10/25/2017

UNICRED BANK IRELAND PLC

NR / Baa2e / NR 3.375% 5 / 5 185 4.1 101.42 3.03% 303 -0.96%

CH0204574914

20457491

CHF GASSM 2.125% 2/8/2019

GAS NATURAL FENOSA FIN B

BBB / Baa2 /

BBB+

2.125% 5 / 5 250 5.4 100.15 2.10% 192 -0.19%

EUR

XS0901738392

20881289

EUR BBVASM 3.25% 3/21/2016

BBVA SENIOR FINANCE SA

BBB- / Baa3 /

BBB+

3.250% 100 / 100 1'500 2.8 100.61 3.03% 292 0.01%

XS0838847381

4991768

EUR F 2.875% 10/3/2017

FCE BANK PLC

NR / Baa3 / BBB- 2.875% 100 / 1 500 4.1 105.03 1.70% 145 5.32%

XS0866278921

20248792

EUR CAFP 1.875% 12/19/2017

CARREFOUR SA

BBB / NR / BBB 1.875% 100 / 1 1'000 4.4 101.83 1.47% 118 2.64%

XS0863482336

20189830

EUR UCGIM 3.375% 1/11/2018

UNICREDIT SPA

BBB+ / Baa2 /

BBB+

3.375% 100 / 1 750 4.3 99.31 3.53% 317 -1.38%

XS0905797113

20936583

EUR RENAUL 2.875% 1/22/2018

RCI BANQUE SA

NR / Baa3e / NR 2.875% 1 / 1 600 4.4 101.17 2.61% 231 0.48%

XS0901370691

20881331

EUR MS 2.25% 3/12/2018

MORGAN STANLEY

A- / Baa1e / A 2.250% 1 / 1 1'250 4.6 100.53 2.14% 178 0.17%

XS0872705057

20381543

EUR BNP 1.5% 3/12/2018

BNP PARIBAS

A+ / A2 / A+ 1.500% 1 / 1 1'000 4.7 99.71 1.56% 119 0.66%

XS0873432511

20444777

EUR FREGR 2.875% 7/15/2020

FRESENIUS FINANCE BV

BB+ / Ba1 / NR 2.875% 1 / 1 500 6.4 100.33 2.82% 212 0.71%

GBP

XS0872706881

20380762

GBP EIB 1.375% 1/15/2018

EUROPEAN INVESTMENT BANK

AAA / Aaa / AAA 1.375% 0.1 / 0.1 1'750 4.6 102.09 0.92% 28 1.77%

XS0853680527

19985125

GBP NDASS 2.125% 11/13/2019

NORDEA BANK AB

AA- / Aa3 / AA- 2.125% 100 / 1 500 6.1 101.15 1.94% 89 1.16%

XS0856595961

20035318

GBP BNP 2.375% 11/20/2019

BNP PARIBAS

A+ / A2 / A+ 2.375% 1 / 1 300 6.1 101.04 2.20% 114 0.94%

USD

USF42768GN96

19736378

USD GSZFP 1.625% 10/10/2017

GDF SUEZ

A / A1 / NR 1.625% 2 / 1 750 4.3 101.20 1.35% 73 0.51%

US06051GET22

20423876

USD BAC 2% 1/11/2018

BANK OF AMERICA CORP

A- / Baa2 / A 2.000% 2 / 1 2'000 4.5 101.22 1.73% 106 0.79%

US46115HAJ68

20413078

USD ISPIM 3.875% 1/16/2018

INTESA SANPAOLO SPA

BBB+ / Baa2 /

BBB+

3.875% 200 / 1 1'500 4.3 96.98 4.59% 378 -1.42%

US34540UAA79

20423854

USD F 2.375% 1/16/2018

FORD MOTOR CREDIT CO LLC

BB+ / Baa3 /

BBB-

2.375% 200 / 1 1'250 4.5 100.06 2.36% 170 0.92%

DE000A1HGXL7

20855060

USD SIEGR 1.5% 3/12/2018

SIEMENS FINANCIERINGSMAT

NR / Aa3 / A+ 1.500% 2 / 2 500 4.7 100.83 1.33% 65 1.67%

US377372AH03

20956705

USD GSK 2.8% 3/18/2023

GLAXOSMITHKLINE CAP INC

A+ / A1 / NR 2.800% 2 / 1 1'250 8.6 102.41 2.52% 77 2.65%

*) e stands for expected rating while p stands for provisional rating, both are subject to receipt of final documentation; u stands for unsolicited rating. **) Prices are indicative only and subject to

normal market volatility. ***) BM stands for benchmark. BM spreads refer to the yield spread of the relevant government benchmark bond. ****) Calculated since added to the portfolio. n.a. = not

available.



12

Global equity strategy

US earnings season commences

Alcoa kicked off the US earnings season with decent headline earnings, although its revenue figures disappointed. This may set

the tone for the rest of the quarter as companies try to squeeze costs against a background of muted headline growth. Compared

to this time last year, earnings are expected to grow by less than 1%, with cyclicals weaker and financials, telecoms and staples

stronger on a relative sector basis. In recent months, corporate outlook updates have tended to err on the negative side (by a

factor of 3 to 1 according to Bloomberg), with FedEx being a case in point. The latest significant reports were JPMorgan and

Wells Fargo last Friday. In both cases, earnings growth was impressively higher compared with the same time last year, though

revenue growth fell short of expectations.

Globally, earnings momentum is still negative, though pointing up, led by Japan. The US and Switzerland are the next best

regions, with the Eurozone being the weakest of the large regions in terms of earnings revisions.

Market performance has tended to follow earnings momentum trends and, of course, central bank policy. There is a marked

difference in performance between regions where monetary and/or fiscal policy is becoming less accommodative, either by

accident or design, and where weak earnings momentum is weak. Europe and parts of the EM complex stand out in this respect.

Conversely, regions with positive earnings momentum and very easy monetary policy continue to do well and, here again, Japan

and the US are the leading regions.

Michael O'Sullivan, michael.o'[email protected]


13

Asia investment summary

Global research asset category strategy IC1 view

Strategic

6–12+ M

Overview Tactical

1–6M

Fixed income Overall we stay neutral, but following a small rise in yields for highyield and hard currency EM, we now favor these bond

classes.

Equities We stay positive, as valuations stay undemanding despite downward revisions to earnings, and easy money supports investor

inflows.

Commodities We downgrade tactically to neutral as demand suffers from the temporary growth slowdown.

Real estate Equities: Valuations richer, but some upside strategically. Direct real estate: Attractive rental carry.

Private equity We favor small/mid-sized LBOs, emerging markets and private debt funds.

Hedge funds We overweight directional strategies, such as Ems and long-short. We maintain our positive stance for global macro.

Foreign exchange Technicals favor a mild upward bias to EUR/USD. Decisive BoJ action suggests JPY is vulnerable to further weakness.

Economics

Global data is softening as we expected but we see this as temporary,with a re-acceleration later as monetary expansion by BoJ and others, plus better US investment and

housing, offset fiscal headwinds.

1 = Investment Committee Source: Credit Suisse, Bloomberg

CSPB macroeconomic forecasts

Major economies GDP growth Average CPI Policy rates

2013E 2014E 2013E 2014E Current 3M 12M

US 2.0 2.5 1.6 2.1 0.0-0.25 0.0-0.25 0.0-0.25

Eurozone -0.3 1.1 1.8 1.8 0.75 0.75 0.75

Japan 1.4 1.2 -0.4 1.8 0.10 0.0-0.1 0.0-0.1

Australia 2.4 2.4 2.7 2.6 3.00 2.75 2.75

Asia Pacific GDP growth Average CPI Policy rates

2013E 2014E 2013E 2014E Current 3M 12M

China 8.1 7.8 3.2 3.3 6.00 6.00 6.00

Hong Kong 3.1 3.6 4.0 3.9 - - -

India 6.0 7.0 7.2 7.2 7.50 7.50 7.25

Indonesia 6.3 5.9 5.6 5.4 5.75 5.75 6.00

Malaysia 5.2 5.1 2.7 2.4 3.00 3.00 3.00

Philippines 6.0 5.9 4.0 4.2 3.50 3.50 3.75

Singapore 2.2 3.3 3.4 2.6 - - -

South Korea 2.7 3.5 2.3 3.0 2.75 2.75 2.75

Taiwan 3.3 3.6 2.0 2.0 1.88 1.88 1.88

Thailand 5.0 5.0 3.8 4.0 2.75 2.75 3.00

Non-Japan Asia 6.5 6.7 4.0 4.1 - - -

Asia Pacific 5.6 5.8 3.3 3.7 - - -

^FY ending March Source: Credit Suisse

Global foreign exchange rate

Major foreign exchange rate Spot (11 Apr 13) 3M 12M Asian foreign exchange rates Spot (11 Apr 13) 3M 12M

EUR/USD 1.31 1.35 1.35 USD/SGD 1.24 1.26 1.22

USD/CHF 0.93 0.93 0.95 USD/THB 29.04 29.00 29.50

EUR/CHF 1.22 1.25 1.28 USD/IDR 9,703 9950.0 10100.0

USD/JPY 99.67 102.00 105.00 USD/PHP 40.98 40.50 40.00

EUR/JPY 130.62 138.00 142.00 USD/TWD 29.95 29.00 28.30

EUR/GBP 0.85 0.92 0.93 USD/KRW 1129.9 1115.0 1050.0

GBP/USD 1.54 1.46 1.45 USD/INR 54.52 53.50 53.00

EUR/SEK 8.32 8.20 8.00 USD/HKD 7.76 7.75 7.75

EUR/NOK 7.48 7.60 7.60 USD/CNY 6.20 6.15 6.00

AUD/USD 1.05 1.00 0.98 USD/MYR 3.04 3.09 3.00

NZD/USD 0.86 0.80 0.80

USD/CAD 1.01 1.05 1.02

Source: Credit Suisse, Bloomberg The Research Monthly – Foreign Exchange publication contains a more comprehensive list of our currency forecasts.


14

Asia investment summary (continued)

Global indices targets

Global indices Weighting Closing as of 11 Apr 13 12M target Asian indices Weighting Closing as of 11 Apr 13 12M target

S&P 500 Overweight 1,593.4 1,518 Hang Seng Overweight 22,101 25,000

Euro Stoxx 50 Neutral 2,674.3 2,654 HSCEI Neutral 10,708 13,000

DAX Overweight 7,871.6 7,773 SHCOMP Neutral 2,220 2,500

CAC 40 Neutral 3,775.7 3,693 STI Neutral 3,309 3,500

FTSE-100 Neutral 6,416.1 6,317 KLCI Neutral 1,707 1,800

SMI Underweight 7,815.3 7,325 SET Overweight 1,517 1,650

JCI Underweight 4,924 5,400

Nikkei 225 Overweight 13,549 14,500

ASX 200 Underweight 5,007 5,100

TWSE Neutral 7,858 8,200

KOSPI Underweight 1,950 2,150

SENSEX Overweight 18,542 22,000

PCOMP Neutral 6832 7,400


Technical outlook of Asian stock markets

Country Stock markets 11 Apr 13 Long term Short term Comment

Japan TOPIX 1,147.29 Sharply higher with 1,200 now attracting.

Japan NIKKEI 225 13,549.16 Accelerating higher with 14,000 now attracting.

Hong Kong Hang Seng 22,101.27 Bouncing from 21,600, but immediate gains limited in range as momentum points lower.

China HSCEI 10,708.25 Reached 10,400 with tactical stabilization seen. Risk of further losses.

China SSE A SHARE 2,323.10 Bouncing from ~2,280, but upside scope seen as limited as momentum continues to point lower.

China SHCOMP 2,219.55 Reached 2,180 with a tactical stabilization seen. Downside risks are still in force.

Singapore STI 3,308.80 Consolidating beneath 3,330. Further ranging before a clear break is seen.

S. Korea KOSPI 1,949.80 Bouncing from 1,900, but gains capped in consolidation.

Taiwan TWSE 7,857.98 Sharp bounce from 7,715, but 8,000 should remain a barrier. Consolidation should develop.

India SENSEX 18,542.20 Still lower with 18,000 in view. Risk of further losses as momentum continues to deteriorate.

Australia ASX 200 5,007.07 Finding support at 4,900. Corrective bounce seen as limited in range.

Malaysia KLCI 1,707.04 Pushing above 1,700. Momentum is strong, but overbought areas are approaching.

Thailand SET 1,516.81 Choppy in range, but downside risks are increasing. ST downgrade below 1,450.

Indonesia JCI 4,924.26 Settling back from below 5,000 in tactical profit-taking. Consolidation should turn higher.

Philippines PSEi 6,831.74 Balanced beneath 7,000. Consolidation before higher.


Trading recommendations – 1–3 months

Company Ticker Rec. Open date Open

price

Last price

11 Apr 13 Perf. Target

price

Stop-

loss

Status Next reporting

date

Rationale

Greater China

CNOOC 883 HK BUY 28 Mar 2013 15.10 14.26 -5.6% 18.00 12.50 open 21 Aug 2013 (Est) Benefits from a potential increase in

crude oil prices due to its unique

position as a pure upstream oil

company.

Japan

Bridgestone 5108 JP BUY 11 Apr 2013 3,490 3,685 5.6% 3,700 2,130 open 8 May 2013 Defensive replacement tire business

with attractive exposure to specialty

tires to improve margin.

Mitsubishi UFJ Financial

Group

8306 JP BUY 11 Apr 2013 692 672 -2.9% 730 460 open 15 May 2013 Solid growth in overseas commercial

banking business and JGB trading.

Toshiba 6502 JP BUY 11 Apr 2013 518 534 3.1% 550 300 open 8 May 2013 Turnaround in NAND flash memory

prices expected to reverse earnings

momentum.

Toyota Motor 7203 JP BUY 11 Apr 2013 5,330 5,640 5.8% 5,250 3,650 open 8 May 2013 Attractive valuation in light of EPS

growth potential.

North America / Europe

Diageo DGE LN BUY 30 Oct 2012 1,780 2,001.50 13.5% 2,100 1,600 open 31 Jul 2013 Attractive medium-term catalysts

ahead.

Southeast Asia

Far East Hospitality Trust FEHT SP BUY 23 Jan 2013 1.02 1.14 11.8% 1.20 0.90 open 15 May 2013 (Est) Growth supported by AEIs and

acquisition pipeline.

Semen Gresik SMGR IJ BUY 4 Apr 2013 18,250 17,850 -2.2% 20,000 15,000 open 6 May 2013 (Est) Positioned to capture growing

demand as new capacity comes on

stream.

Note: (1) "Open price" will be the closing price on the "Open date". (2) Performance includes dividend cash payment. *Please note that trading facilities for these securities may be limited.

*EST = the estimated next reporting date from Bloomberg



15


APAC long-term top picks list – 6–12+ months


price

Last price

11 Apr 13

Perf. Target

price

Stop-

loss


date

Rationale

Australia

BHP Billiton Limited BHP AU BUY 5 Sep 2012 31.05 33.40 11.2% 42.00 30.00 open 20 Aug 2013 Leading mining giant offers quality and

diversification.

Greater China

China Construction Bank

– H

939 HK BUY 9 Feb 2011 6.39 6.20 0.4% 7.55 5.00 open 29 Apr 2013 (Est) Valuation is supported by strong

profitability.

CNOOC 883 HK BUY 18 Oct 2012 15.98 14.26 -10.8% 18.00 12.50 open 21 Aug 2013 (Est) Benefits from a potential increase in crude

oil prices due to its unique position as a

pure upstream oil company.

Henderson Land 12 HK BUY 23 Aug 2012 49.05 54.35 11.5% 68.00 45.00 open 22 Aug 2013 (Est) Project launches in H2 2012 generate

sizable development profit.

Lenovo 992 HK BUY 13 Sep 2012 6.19 7.09 15.3% 9.20 5.00 closed 23 May 2013 (Est) Earnings growth story remains intact,

driven by solid PC demand in China.

Tencent Holdings 700 HK BUY 4 Apr 2013 242.80 250.40 3.1% 298.00 230.00 open 15 May 2013 WeChat monetization expected to be a

game changer.

India

HDFC Bank* HDFCB IN BUY 24 Jan 2013 660.30 639.25 -3.2% 735.00 600.00 open 23 Apr 2013 Aggressive branch expansion should

help maintain above-industry growth

trajectory.

ITC Ltd* ITC IN BUY 31 Jan 2013 300.75 285.30 -5.1% 325.00 250.00 open 24 May 2013 (Est) Recovery in cigarettes and reducing FMCG

losses help improve the outlook.

Japan

Astellas Pharma 4503 JP BUY 22 Nov 2012 4,075 5,570.00 38.3% 5,350 4,000 open 13 May 2013 Recent pipeline delivery increases visibility

on future sales growth.

Bridgestone 5108 JP BUY 15 Nov 2012 1,807 3,685.00 103.9% 3,700 2,130 open 8 May 2013 Defensive replacement tire business with

attractive exposure to specialty tires to

improve margin.

Honda Motor 7267 JP BUY 7 Mar 2013 3,565 3,945.00 11.2% 3,950 3,000 open 26 April 2013 New models and weak JPY should

support Honda's volume growth.

Mitsubishi UFJ Financial

Group

8306 JP BUY 2 Jan 2013 461 672.00 47.1% 730 460 open 15 May 2013 Solid growth in overseas commercial

banking business and JGB trading.

Mizuho Financial Group 8411 JP BUY 9 Jan 2013 163 219.00 36.2% 220 140 open 15 May 2013 Low credit costs and overseas loan growth

pave the way for a steady recovery.

Seven & I 3382 JP BUY 11 Apr 2013 3,605 3,785.00 5.0% 3,900 1,800 open 4 Jul 2013 (Est) Well positioned to benefit from Japan's

demographic trends.

Softbank 9984 JP BUY 7 Nov 2012 2,772 4,765.00 74.4% 4,700 2,000 open 30 Apr 2013 Growth is well supported by data

demand, strong balance sheet.

Sony 6758 JP BUY 7 Mar 2013 1,451 1,685.00 16.1% 1,650 800 closed 9 May 2013 Improving business outlook on JPY

weakness.

Sumitomo Mitsui Financial

Group

8316 JP BUY 22 Feb 2012 2,698 4,695.00 77.7% 5,400 3,250 open 15 May 2013 No credit risks observed, with Asia

expected to drive revenue growth.

Toshiba 6502 JP BUY 15 Nov 2012 273 534.00 97.1% 550 300 open 8 May 2013 Turnaround in NAND flash memory

prices expected to reverse earnings

momentum.

Toyota Motor 7203 JP BUY 11 Jul 2012 3,080 5,640.00 83.1% 5,250 3,650 open 8 May 2013 Attractive valuation in light of EPS

growth potential.

South Korea

Samsung Electronics 005930 KS BUY 13 Sep 2012 1,301,000 1,540,000 18.4% 1,800,000 1,300,000 open 5 Jul 2013 (Est) Strong Galaxy S3 shipments imply

robust earnings momentum.

Southeast Asia

Asian Property

Development

AP TB BUY 28 Sep 2012 9.05 8.75 -3.3% 12.00 9.00 open 14 May 2013 (Est) Housing demand expected to remain

robust owing to structural trend of rural

migration.

Bank Mandiri BMRI IJ BUY 13 Sep 2012 7,700 10,200.00 32.5% 11,000 8,000 open 26 Apr 2013 (Est) Consumer and micro loan growth, a

stable NIM and low provisions drive

earnings.

DBS DBS SP BUY 7 Nov 2012 14.06 15.65 11.3% 16.20 12.70 open 2 May 2013 Q3 earnings beat expectations on lower

provisions, higher fee income.

Gamuda GAM MK BUY 18 Jul 2012 3.56 4.15 18.3% 4.50 3.70 open 27 Jun 2013 (Est) Strong start to FY 2013 on broad-

based earnings growth.

Kasikornbank KBANK TB BUY 19 Jul 2012 165.50 203.00 24.3% 224.00 160.00 open 18 Apr 2013 (Est) Strengthening investment cycle and a

recovery in domestic consumption

support credit growth.

Keppel Corp KEP SP BUY 24 May 2012 9.99 11.40 15.9% 12.90 9.70 open 18 Apr 2013 Benefits from the constructive outlook

for the rig-building cycle.


*Est = the estimated next reporting date from Bloomberg



16


CS Top 30 portfolio


price

Last price

11 Apr 13

Perf. Target

price

Stop-

loss


date

Rationale

Asia Pacific

National Australia Bank NAB AU HOLD 23 Aug 2012 25.31 31.60 28.4% 30.0 20.0 open 9 May 2013 Offers an attractive fully franked yield with a

sustainable payout ratio.

Tencent 700 HK BUY 28 Mar 2011 192.50 250.40 30.8% 298.0 230.0 open 15 May 2013 WeChat monetization expected to be a

game changer.

North America

Caterpillar Inc CAT US BUY 28 Jun 2011 103.84 85.70 -13.8% 110.0 70.0 open 22 Apr 2013 Significant strength to leverage operating

performance.

Chevron CVX US BUY 7 Feb 2011 97.66 120.95 31.5% 135.0 100.0 open 26 Apr 2013 Chevron has financial strength and holds

an impressive project portfolio.

Coca-Cola KO US BUY 13 Dec 2010 64.85 41.18 -30.8% 42.0 30.0 open 16 Apr 2013 Leading global brand company with strong

growth potential in emerging markets.

Deere DE US BUY 15 Sep 2011 78.64 87.58 14.2% 105.0 70.0 open 15 May 2013 A beneficiary of higher demand for

agricultural machinery.

EMC EMC US BUY 11 Jul 2012 23.55 22.89 -2.8% 28.0 19.5 open 24 Apr 2013 EMC remains on a solid growth path,

despite the tough economic environment.

General Electric Co GE US BUY 29 Apr 2011 20.45 23.59 20.2% 27.0 20.0 open 19 Apr 2013 Underestimated earnings contribution from

GE Capital; industrial business likely to further

recover from slowdown.

Google GOOG US BUY 7 Mar 2012 606.80 790.39 30.3% 800.0 550.0 open 18 Apr 2013 Mobile advertising and YouTube monetization

are long-term growth drivers.

JPMorgan Chase & Co JPM US BUY 6 May 2010 40.81 49.31 24.4% 55.0 40.0 open 12 Apr 2013 Capital strength is a differentiating factor

for better-positioned banks.

MasterCard MA US BUY 23 Aug 2012 418.33 541.24 29.6% 575.0 400.0 open 1 May 2013 Taking advantage of long-term growth in

the payments industry.

Merck & Co MRK US BUY 7 Mar 2012 37.31 47.21 29.9% 50.0 35.0 open 1 May 2013 Solid execution leaves room for multiple

expansions.

Oracle ORCL US BUY 2 Jan 2013 34.69 33.62 -3.1% 38.0 30.0 open 18 Jun 2013 (Est) Market-leading database franchise with

impressive cross-selling capabilities.

Pfizer PFE US HOLD 21 Jan 2011 18.24 30.64 70.5% 29.0 23.5 open 30 Apr 2013 Solid cash flow generation supports

dividend payout.

Philip Morris International PM US BUY 15 Sep 2011 68.29 95.60 45.7% 99.0 80.0 open 18 Apr 2013 Robust earnings growth in combination

with high cash returns for shareholders.

Procter & Gamble PG US BUY 25 Nov 2011 61.00 79.67 36.0% 81.0 48.0 open 24 Apr 2013 Accelerating product pricing supports

margin development.

Schlumberger SLB US BUY 24 Jan 2012 74.59 77.14 5.3% 95.0 65.0 open 19 Apr 2013 Set to benefit from growing worldwide

drilling activity.

Starbucks SBUX US BUY 23 Aug 2012 47.90 58.58 22.3% 62.0 50.0 open 25 Apr 2013 A perfect brewing growth story.

Suncor Energy SU CN BUY 2 Jan 2013 33.41 29.25 -12.1% 45.0 25.0 open 30 Apr 2013 Strong growth profile supported by Firebag

expansion.

Europe

Adidas ADS GR HOLD 15 Sep 2011 49.33 79.05 62.3% 74.0 42.0 open 3 May 2013 The world's second largest sporting goods

company with a strong position in

emerging markets.

Allianz ALV GY BUY 2 Jan 2013 108.30 108.00 -0.3% 115.0 75.0 open 15 May 2013 Attractive valuation despite peripheral euro

exposure.

BMW BMW GY BUY 2 Jan 2013 75.93 69.03 -9.1% 85.0 70.0 open 2 May 2013 Volume growth supported by new models

and premium car exposure.

Centrica PLC CNA LN HOLD 7 Mar 2012 307.60 376.40 26.0% 340.0 270.0 open 31 Jul 2013 Growth strategy focuses on small

acquisitions.

HSBC HSBA LN HOLD 2 Jul 2010 600.10 692.00 21.1% 750.0 500.0 open 8 May 2013 (Est) Well-capitalized bank with a diversified

international set-up.

Rio Tinto RIO LN BUY 3 Aug 2010 3433.50 3,140.00 -3.8% 4700.0 2800.0 open 8 Aug 2013 The group is well positioned for years to

come.

Roche (Genussscheine) ROG VX BUY 23 Aug 2012 173.20 226.40 35.0% 225.0 185.0 open 25 Jul 2013 Benefits from a unique portfolio of

oncology drugs and a better-than-average

patent expiration profile.

Royal Dutch Shell-A RDSA NA BUY 21 Jan 2011 25.27 24.91 3.7% 32.0 23.0 open 2 May 2013 A diversified energy company with high-

quality upstream and downstream assets

plus an attractive dividend yield.

Sberbank SBER RU HOLD 2 Jan 2013 3.07 3.24 5.6% 3.7 2.0 open 30 May 2013 (Est) Solid earnings growth should drive

valuation.

Vodafone VOD LN BUY 25 Nov 2011 166.35 189.80 20.0% 198.0 148.0 open 21 May 2013 Resilient free cash flows, despite structural

and cyclical challenges.


*Est = the estimated next reporting date from Bloomberg



17

Global equity sector strategy and top picks list

Sector

(weight

strategic)

Industry

(weight strategic) Europe (N) UK (N)

Switzerland (U) USA (O) Latin America (U) Emerging

Europe/Africa (N)

Asia ex Japan (N) Japan (N)

Australia (U)

Energy (N) Energy (N) Royal Dutch Shell - Anadarko Petroleum,

Schlumberger

Novatek*, Ultrapar Adr*,

Pacific Rubiales Energy

CNOOC

Materials (N) Chemicals (N) - Lonza - Mexichem* -

Construction Materials (N) - Holcim - - -

Metals & Mining (N) BHP Billiton - - - BHP Billiton Limited

Pulp & Paper (N) - - - - -

Industrials (O) Capital Goods (O) Schneider Electric,

Siemens

ABB, Schindler PC,

Georg Fischer

General Electric,

Honeywell International,

Masco Corp

- Keppel Corp, Gamuda*

Commercial Services &

Supplies (N)

- - - - -

Transportation, incl. Logistics

(N)

- - - - -

Consumer

discretionary

(N)

Automobiles & Components (O) - - - - Toyota Motor, Bridgestone,

Honda Motor

Consumer Durables & Apparel,

Textiles, Apparel & Luxury (N)

- - - - -

Hotels, Restaurants & Leisure

(N)

- - McDonald's - -

Media (N) - - Time Warner - -

Retailing (U) - - Home Depot - -

Consumer

staples (U)

Food & Staples Retailing (N) - - - - Seven & I

Beverages (U) SAB Miller, Diageo - Coca-Cola AmBev* -

Food Products (U) Unilever Nestlé, Lindt &

Spruengli PC

- Brasil Foods* -

Tobacco (U) - - - - ITC Ltd*

Household & Personal Products

(N)

Reckitt Benckiser - Procter & Gamble - -

Healthcare (N) Healthcare Equipment &

Services (N)

Fresenius SE Tecan Baxter International - -

Biotechnology (N) - - Gilead Sciences - -

Pharmaceuticals (N) Hikma Pharmaceuticals Roche

(Genussscheine),

Novartis

Abbvie Inc. - Astellas Pharma

Financials (N) Banks (N) BNP Paribas - - Sberbank*,

ITAU Unibanco Adr

China Construction Bank,

Sumitomo Mitsui Financial Group,

Kasikornbank*, Bank Mandiri*,

DBS, Mitsubishi UFJ Financial

Group, Mizuho Financial Group,

HDFC Bank

Diversified Financials (N) - - JPMorgan Chase & Co,

Invesco Ltd.

- -

Insurance (O) Allianz, AXA Zurich Insurance

Group, Swiss Re

- - -

Real Estate (N)) - - - - Henderson Land,

Asian Property Development*

IT (O) Software & Services (O) Mail.Ru Group* - Mastercard - Tencent Holdings*

Technology Hardware &

Equipment (O)

- - - - Toshiba

Semiconductors &

Semiconductor Equipment (O)

- - Intel - Samsung Electronics*

Telecom

services (U)

Diversified Telecoms (U) - - - - -

Wireless Telecoms (U) Vodafone - - MTN Group Limited* SoftBank

Utilities (U) Utilities (U) - - - - -

Source: Credit Suisse Legend to weights: O: Overweight, N: Neutral, U: Underweight * = Emerging Markets focus list

This is our sector strategy and focus list as of 11 April 2013 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 (MSCI Europe in EUR), Switzerland (Swiss Market Index in CHF), USA (S&P 500 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. 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 Research reports. Additionally, we publish our adds and drops in our Research Equity Daily. The changes

are highlighted in bold.

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

Please note that trading facilities in certain securities may be limited.

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


18

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 would 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 web links 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 would be set at -

5%. If 2x standard deviation is >= 5% of the stock price since

inception, then a stop loss would 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 would be expressed in

percentage terms.

Weighting: All recommendations would have a full weight

with the following exceptions: 1) A single stock

recommendation would have systematically a weight of 0.5 if

the stop loss at inception is at - 5%; 2) A single stock

recommendation would 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% would systematically have a

weight of 0.5.

Key to technical charts used in this report

Source: Metastock, Reuters

2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5

-3 0 0 0

-2 0 0 0

-1 0 0 0

0

1 0 0 0

2 0 0 0

3 0 0 0

7 5 0

8 0 0

8 5 0

9 0 0

9 5 0

1 0 0 0

1 0 5 0

1 1 0 0

1 1 5 0

1 2 0 0

M e d iu m -te rm

m o m e n tu m

1 1 -w e e k

m o v in g ave rag e

4 0 -w e e k


Lo n g -te rm

m o m e n tu m

2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5

-3 0 0 0

-2 0 0 0

-1 0 0 0

0

1 0 0 0

2 0 0 0

3 0 0 0

7 5 0

8 0 0

8 5 0

9 0 0

9 5 0

1 0 0 0

1 0 5 0

1 1 0 0

1 1 5 0

1 2 0 0

M e d iu m -te rm

m o m e n tu m

1 1 -w e e k


4 0 -w e e k


Lo n g -te rm

m o m e n tu m

Jul Aug Sep O ct N ov

-300

-200

-100

0

100

200

300

1060

1070

1080

1090

1100

1110

1120

1130

114011 & 40-day

m oving average

Short- and

m edium - term

m om entum

Jul Aug Sep O ct N ov

-300

-200

-100

0

100

200

300

1060

1070

1080

1090

1100

1110

1120

1130

114011 & 40-day

m oving average

Short- and

m edium - term

m om entum


19

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]

Chew Soon Gek Head of Strategy and Economic Research Asia Pacific Tel: +65 6306 8611 E-mail: [email protected]

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

Kum Soek Ching Head of Southeast Asia Equity Research Tel. +65 6212 6067 E-mail: [email protected]

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

Heng Koon How Senior FX Strategist Asia Pacific Tel: +65 6212 6327 E-mail: [email protected]

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

Neel Gopalakrishnan Emerging Market Bonds Analyst Tel: +65 6212 2045 E-mail: [email protected]

Soichiro Matsumoto Head of Japan Research Tel. +81 3 4550 5462 E-mail: [email protected]

David McDonald Head of Strategy and Research Australia Tel. +61 2 8205 4296 E-mail: [email protected]

Dennis Tan Asian Economist Tel. +65 6212 6150 E-mail: [email protected]

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

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

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

Daisy Wu China Equity Analyst Tel: +852 3407 8194 E-mail: [email protected]

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

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

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

Stefan Graber Commodity Analyst Tel. +65 6306 7073 E-mail: [email protected]

Michael O'Sullivan Head of Portfolio Strategy & Thematic Research Tel. +44 20 7883 8228 E-mail: michael.o'[email protected]

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

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

Marcel Thieliant Global Economics Analyst Tel: +65 6212 6071 E-mail: [email protected]

Toral Munshi Head of Indian Equity Research Tel. +91 22 6777 3842 E-mail: [email protected]

Editor

Daphne Li Research Assistant Tel: +852 3407 8285 E-mail: [email protected]

We wish to thank Shishir Malik and Rizwan Siddiqui of Credit Suisse Business Analytics (India) Private Limited for contributing to this publication.

Information about other research publications

Credit Suisse AG

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


20

Important information on derivatives

Pricing: Option premiums and prices mentioned are indicative

only. Option premiums and prices can be subject to very rapid

changes: The prices and premiums mentioned are as of the

time indicated in the text and might have changed substantially

in the meantime.

Risks: Derivatives are complex instruments and are intended

for sale only to investors who are capable of understanding

and assuming all the risks involved. Investors must be aware

that adding option positions to an existing portfolio may

change the characteristics and behavior of that portfolio

substantially. A portfolio’s sensitivity to certain market moves

can be heavily impacted by the leverage effect of options.

Buying calls: Investors who buy call options risk the loss of the

entire premium paid if the underlying security trades below the

strike price at expiration.

Buying puts: Investors who buy put options risk loss of the

entire premium paid if the underlying security finishes above

the strike price at expiration.

Selling calls: Investors who sell calls commit themselves to sell

the underlying for the strike price, even if the market price of

the underlying is substantially higher. Investors who sell

covered calls (own the underlying security and sell a call) risk

limiting their upside to the strike price plus the upfront

premium received and may have their security called away if

the security price exceeds the strike price of the short call.

Additionally, the investor has full downside participation that is

only partially offset by the premium received upfront. If

investors are forced to sell the underlying they might be

subject to taxing. Investors shorting naked calls (i.e. selling

calls but without holding the underlying security) risk unlimited

losses of security price less strike price.

Selling puts: Put sellers commit to buying the underlying

security at the strike price in the event the security falls below

the strike price. The maximum loss is the full strike price less

the premium received for selling the put.

Buying call spreads: Investors who buy call spreads (buy a call

and sell a call with a higher strike) risk the loss of the entire

premium paid if the underlying trades below the lower strike

price at expiration. The maximum gain from buying call

spreads is the difference between the strike prices, less the

upfront premium paid.

Selling naked call spreads (sell a call and buy a farther out-of-

the-money call with no underlying security position): Investors

risk a maximum loss of the difference between the long call

strike and the short call strike, less the upfront premium taken

in, if the underlying security finishes above the long call strike

at expiration. The maximum gain is the upfront premium taken

in, if the security finishes below the short call strike at

expiration.

Buying put spreads: Investors who buy put spreads (buy a put

and sell a put with a lower strike price) also have a maximum

loss of the upfront premium paid. The maximum gain from

buying put spreads is the difference between the strike prices,

less the upfront premium paid.

Buying strangles (buy put and buy call): The maximum loss is

the entire premium paid for both options, if the underlying

trades between the put strike and the call strike at expiration.

Selling strangles or straddles: Investors who are long a security

and short a strangle or straddle risk capping their upside in the

security to the strike price of the call that is sold plus the

upfront premium received. Additionally, if the security trades

below the strike price of the short put, investors risk losing the

difference between the strike price and the security price (less

the value of the premium received) on the short put and will

also experience losses in the security position if they owns

shares. The maximum potential loss is the full value of the

strike price (less the value of the premium received) plus

losses on the long security position. Investors who are short

naked strangles or straddles have unlimited potential loss

since, if the security trades above the call strike price,

investors risk losing the difference between the strike price

and the security price (less the value of the premium received)

on the short call. In addition, they are obligated to buy the

security at the put strike price (less upfront premium received)

if the security finishes below the put strike price at expiration.


21

Risk disclosure

Investors should consider this report as only a single factor in

making their investment decision. For a discussion of the risks

of investing in the securities mentioned in this report, please

refer to the following Internet link:


CS may not have taken any steps to ensure that the securities

referred to in this report are suitable for any particular investor.

CS will not treat recipients as its customers by virtue of their

receiving the report. The investments or services contained or

referred to in this report may not be suitable for you and it is

recommended that you consult an independent investment

advisor if you are in doubt about such investments or

investment services. Nothing in this report constitutes

investment, legal, accounting or tax advice or a representation

that any investment or strategy is suitable or appropriate to

your individual circumstances or otherwise constitutes a

personal recommendation to you.

The price, value of and income from any of the securities or

financial instruments mentioned in this report can fall as well

as rise. The value of securities and financial instruments is

subject to exchange rate fluctuation that may have a positive

or adverse effect on the price or income of such securities or

financial instruments. Investors in securities such as ADRs, the

values of which are influenced by currency volatility, effectively

assume this risk.

Structured securities are complex instruments, typically involve

a high degree of risk and are intended for sale only to

sophisticated investors who are capable of understanding and

assuming the risks involved. The market value of any

structured security may be affected by changes in economic,

financial and political factors (including, but not limited to, spot

and forward interest and exchange rates), time to maturity,

market conditions and volatility, and the credit quality of any

issuer or reference issuer. Any investor interested in

purchasing a structured product should conduct their own

investigation and analysis of the product and consult with their

own professional advisers as to the risks involved in making

such a purchase.

Some investments discussed in this report have a high level of

volatility. High volatility investments may experience sudden

and large falls in their value causing losses when that

investment is realized. Those losses may equal your original

investment. Indeed, in the case of some investments the

potential losses may exceed the amount of initial investment,

in such circumstances you may be required to pay more

money to support those losses. Income yields from

investments may fluctuate and, in consequence, initial capital

paid to make the investment may be used as part of that

income yield. Some investments may not be readily realizable

and it may be difficult to sell or realize those investments,

similarly it may prove difficult for you to obtain reliable

information about the value, or risks, to which such an

investment is exposed.



22

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.

Knowledge Process Outsourcing (KPO) Analysts mentioned in this report are

employed by Credit Suisse Business Analytics (India) Private Limited.

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/doc/code_of_conduct_en.pdf

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 is generated by Credit Suisse Investment Banking business.

Equity rating history as of 15/04/2013

Company Rating Date

ADIDAS (ADS GR) HOLD since 13/03/2013

HOLD since 08/11/2012



AIR CHINA -H (753 HK) BUY since 14/12/2012

BUY since 01/11/2012





AIRASIA (AIRA MK) BUY since 18/12/2012




ALLIANZ (ALV GY) BUY since 17/12/2012




ASIAN PROPERTY DEVELOPMENT (AP

TB) BUY since 27/02/2013







ASTELLAS PHARMA (4503 JP) BUY since 11/02/2013



AXA (CS FP) BUY since 21/02/2013






BANK MANDIRI (BMRI IJ) BUY since 05/03/2013







BANK OF AMERICA (BAC US) HOLD since 18/01/2013





BHP BILLITON LIMITED (BHP AU) BUY since 27/02/2013





BMW (BMW GY) BUY since 10/04/2013






BNP PARIBAS (BNP FP) BUY since 14/02/2013





BRIDGESTONE (5108 JP) BUY since 14/03/2013







CARREFOUR (CA FP) HOLD since 08/03/2013




SELL since 13/04/2012

CATERPILLAR INC (CAT US) BUY since 13/02/2013







CATHAY PACIFIC (293 HK) BUY since 15/03/2013



CENTRICA PLC (CNA LN) HOLD since 28/02/2013






CHEVRON (CVX US) BUY since 04/02/2013





CHINA CONSTRUCTION BANK - H (939

HK) BUY since 25/03/2013


https://www.credit-suisse.com/governance/doc/code_of_conduct_en.pdf

https://www.credit-suisse.com/legal/pb_research/independence_en.pdf


23





CNOOC LTD (883 HK) BUY since 03/04/2013






COCA-COLA (KO US) BUY since 13/02/2013






DBS (DBS SP) BUY since 06/02/2013






DEERE & CO (DE US) BUY since 27/02/2013





DIAGEO (DGE LN) BUY since 31/01/2013






EMC (EMC US) BUY since 30/01/2013





ENEL SPA (ENEL IM) HOLD since 13/03/2013






FAR EAST HOSPITALITY TRUST (FEHT

SP) BUY since 07/02/2013


FRESENIUS SE (FRE GY) BUY since 28/02/2013





GAMUDA (GAM MK) BUY since 05/04/2013





GDF SUEZ (GSZ FP) HOLD since 01/03/2013




GENERAL ELECTRIC CO (GE US) BUY since 09/04/2013







GLAXOSMITHKLINE (GSK LN) HOLD since 12/02/2013





GOOGLE (GOOG US) BUY since 24/01/2013





HDFC BANK LIMITED (HDFCB IN) BUY since 18/01/2013




HENDERSON LAND DEVELOPMENT

(12 HK) BUY since 26/03/2013



HONDA MOTOR (7267 JP) BUY since 01/02/2013






HSBC (HSBA LN) HOLD since 08/03/2013





IBERDROLA (IBE SM) HOLD since 15/02/2013





INTESA SANPAOLO (ISP IM) HOLD since 18/03/2013





ITC LTD (ITC IN) BUY since 24/01/2013





JPMORGAN CHASE & CO (JPM US) BUY since 17/01/2013







KASIKORNBANK (KBANK TB) BUY since 22/01/2013






KEPPEL CORP (KEP SP) BUY since 28/01/2013


24






LENOVO (992 HK) BUY since 12/04/2013




MASTERCARD (MA US) BUY since 06/02/2013






MERCK & CO (MRK US) BUY since 05/02/2013




MITSUBISHI UFJ FINANCIAL GROUP

(8306 JP) BUY since 12/03/2013



MIZUHO FINANCIAL GROUP (8411 JP) BUY since 05/02/2013


MORGAN STANLEY (MS US) HOLD since 21/01/2013







NATIONAL AUSTRALIA BANK (NAB AU) HOLD since 08/02/2013







ORACLE (ORCL US) BUY since 26/03/2013





PFIZER (PFE US) HOLD since 11/02/2013

RESTRICTED since 08/06/2012


PHILIP MORRIS INTERNATIONAL (PM

US) BUY since 14/02/2013





PROCTER & GAMBLE (PG US) BUY since 06/03/2013







RIO TINTO (RIO LN) BUY since 18/02/2013






ROCHE (GENUSSSCHEINE) (ROG VX) BUY since 12/04/2013





ROYAL DUTCH SHELL-A (RDSA NA) BUY since 01/02/2013





SAMSUNG ELECTRONICS (005930 KS) BUY since 08/04/2013






SBERBANK (SBER RU) BUY since 02/04/2013





RESTRICTED since 17/09/2012




SCHLUMBERGER (SLB US) BUY since 22/01/2013





SEMEN INDONESIA (SMGR IJ) BUY since 01/04/2013





SEVEN & I (3382 JP) BUY since 08/04/2013






SIA (SIA SP) HOLD since 15/03/2013





SIEMENS (SIE GY) BUY since 29/01/2013





SOCIETE GENERALE (GLE FP) HOLD since 13/02/2013





SOFTBANK (9984 JP) BUY since 03/04/2013





25





SONY (6758 JP) HOLD since 10/04/2013










STARBUCKS (SBUX US) BUY since 29/01/2013






SUMITOMO MITSUI FINANCIAL GROUP

(8316 JP) BUY since 12/03/2013



SUNCOR ENERGY (SU CN) BUY since 11/02/2013





TENCENT (700 HK) BUY since 21/03/2013






THYSSEN KRUPP (TKA GR) HOLD since 14/02/2013







TOSHIBA (6502 JP) BUY since 27/03/2013




TOYOTA MOTOR (7203 JP) BUY since 06/02/2013






UBS (UBSN VX) HOLD since 05/02/2013






UNICREDIT (UCG IM) HOLD since 19/03/2013









VODAFONE (VOD LN) BUY since 13/02/2013






Fundamental and/or long-term research reports are not regularly produced for

(INTESA SANPAOLO). The Global Research department reserves the right to

terminate coverage at short notice. Please contact your Relationship Manager for the

specific risks of investing in securities of these companies.

As at the end of the preceding month, Credit Suisse beneficially owned 1% or more

of a class of common equity securities of (VODAFONE , SIEMENS, CARREFOUR,

UBS, THYSSEN KRUPP, AXA, DIAGEO, ALLIANZ).

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 (SONY, SOCIETE GENERALE, SIEMENS, SIA, INTESA

SANPAOLO, IBERDROLA, ENEL SPA, EMC, CHINA CONSTRUCTION BANK -

H, CHEVRON, CENTRICA PLC, CATHAY PACIFIC, CATERPILLAR INC,

CARREFOUR, UNICREDIT, UBS, TOYOTA MOTOR, TOSHIBA, THYSSEN

KRUPP, TENCENT, SUMITOMO MITSUI FINANCIAL GROUP, SEVEN & I,

SEMEN INDONESIA, SCHLUMBERGER, SBERBANK, SAMSUNG

ELECTRONICS, ROYAL DUTCH SHELL-A, ROCHE (GENUSSSCHEINE), RIO

TINTO, PROCTER & GAMBLE, ORACLE, NATIONAL AUSTRALIA BANK,

MORGAN STANLEY, LENOVO, KEPPEL CORP, KASIKORNBANK, JPMORGAN

CHASE & CO, GOOGLE, GLAXOSMITHKLINE, GENERAL ELECTRIC CO, GDF

SUEZ, FRESENIUS SE, DEERE & CO, DBS, COCA-COLA, CNOOC LTD, BANK

OF AMERICA , BANK MANDIRI, AXA, ASIAN PROPERTY DEVELOPMENT ,

ADIDAS, PHILIP MORRIS INTERNATIONAL, PFIZER, HSBC, HONDA MOTOR,

HENDERSON LAND DEVELOPMENT, HDFC BANK LIMITED, DIAGEO, BNP

PARIBAS, BMW, BHP BILLITON LIMITED, ALLIANZ, AIRASIA, AIR CHINA -H,

MIZUHO FINANCIAL GROUP, MITSUBISHI UFJ FINANCIAL GROUP, MERCK &

CO, MASTERCARD) currently is, or was during the 12-month period preceding the

date of distribution of this report, a client of Credit Suisse.

Credit Suisse provided investment banking services to the subject company

(SOCIETE GENERALE, SIA, INTESA SANPAOLO, ENEL SPA, EMC, CHINA

CONSTRUCTION BANK - H, CHEVRON, CENTRICA PLC, CATERPILLAR INC,

CARREFOUR, UNICREDIT, TOYOTA MOTOR, TOSHIBA, THYSSEN KRUPP,

SUMITOMO MITSUI FINANCIAL GROUP, SEVEN & I, SEMEN INDONESIA,

SCHLUMBERGER, SBERBANK, SAMSUNG ELECTRONICS, ROCHE

(GENUSSSCHEINE), PROCTER & GAMBLE, ORACLE, NATIONAL AUSTRALIA

BANK, MORGAN STANLEY, LENOVO, KEPPEL CORP, KASIKORNBANK,

JPMORGAN CHASE & CO, GOOGLE, GLAXOSMITHKLINE, GENERAL

ELECTRIC CO, GDF SUEZ, FRESENIUS SE, DEERE & CO, DBS, COCA-COLA,

CNOOC LTD, BANK OF AMERICA , BANK MANDIRI, AXA, ADIDAS, PHILIP

MORRIS INTERNATIONAL, PFIZER, HSBC, HONDA MOTOR, HDFC BANK

LIMITED, DIAGEO, BNP PARIBAS, BMW, BHP BILLITON LIMITED, ALLIANZ,

AIRASIA, AIR CHINA -H, MIZUHO FINANCIAL GROUP, MITSUBISHI UFJ

FINANCIAL GROUP, MERCK & CO) within the past 12 months.

Credit Suisse provided non-investment banking services, which may include Sales

and Trading services, to the subject issuer (SONY, SOCIETE GENERALE,

SIEMENS, SIA, INTESA SANPAOLO, IBERDROLA, ENEL SPA, EMC, CHINA

CONSTRUCTION BANK - H, CENTRICA PLC, CATHAY PACIFIC, CARREFOUR,

UNICREDIT, UBS, TOYOTA MOTOR, THYSSEN KRUPP, TENCENT, SUMITOMO

MITSUI FINANCIAL GROUP, SAMSUNG ELECTRONICS, ROYAL DUTCH

SHELL-A, ROCHE (GENUSSSCHEINE), RIO TINTO, PROCTER & GAMBLE,

NATIONAL AUSTRALIA BANK, MORGAN STANLEY, LENOVO, KEPPEL CORP,

KASIKORNBANK, JPMORGAN CHASE & CO, GLAXOSMITHKLINE, GENERAL

ELECTRIC CO, GDF SUEZ, DEERE & CO, DBS, COCA-COLA, BANK MANDIRI,

AXA, ASIAN PROPERTY DEVELOPMENT , ADIDAS, PHILIP MORRIS

INTERNATIONAL, PFIZER, HSBC, HONDA MOTOR, HENDERSON LAND

DEVELOPMENT, DIAGEO, BNP PARIBAS, BMW, BHP BILLITON LIMITED,

ALLIANZ, MIZUHO FINANCIAL GROUP, MITSUBISHI UFJ FINANCIAL GROUP,

MERCK & CO, MASTERCARD) within the past 12 months.

Credit Suisse has managed or co-managed a public offering of securities for the

subject issuer (SOCIETE GENERALE, SIEMENS, SIA, INTESA SANPAOLO,

IBERDROLA, ENEL SPA, CHINA CONSTRUCTION BANK - H, CENTRICA PLC,

CATHAY PACIFIC, UNICREDIT, UBS, TOYOTA MOTOR, SUMITOMO MITSUI

FINANCIAL GROUP, SEMEN INDONESIA, SBERBANK, PROCTER & GAMBLE,

ORACLE, NATIONAL AUSTRALIA BANK, MORGAN STANLEY, LENOVO,


26

KEPPEL CORP, JPMORGAN CHASE & CO, GOOGLE, GLAXOSMITHKLINE,

GENERAL ELECTRIC CO, FRESENIUS SE, DEERE & CO, DBS, COCA-COLA,

CNOOC LTD, BANK OF AMERICA , AXA, PHILIP MORRIS INTERNATIONAL,

PFIZER, HSBC, HONDA MOTOR, DIAGEO, BNP PARIBAS, BMW, BHP

BILLITON LIMITED, MIZUHO FINANCIAL GROUP, MITSUBISHI UFJ FINANCIAL

GROUP, MERCK & CO) within the past three years.

Credit Suisse has managed or co-managed a public offering of securities for the

subject issuer (SOCIETE GENERALE, INTESA SANPAOLO, ENEL SPA, CHINA

CONSTRUCTION BANK - H, CENTRICA PLC, UNICREDIT, TOYOTA MOTOR,

SUMITOMO MITSUI FINANCIAL GROUP, SBERBANK, PROCTER & GAMBLE,


KEPPEL CORP, JPMORGAN CHASE & CO, GLAXOSMITHKLINE, GENERAL

ELECTRIC CO, FRESENIUS SE, DEERE & CO, DBS, COCA-COLA, CNOOC LTD,

BANK OF AMERICA , AXA, PHILIP MORRIS INTERNATIONAL, PFIZER, HONDA

MOTOR, DIAGEO, BNP PARIBAS, BMW, MIZUHO FINANCIAL GROUP,

MITSUBISHI UFJ FINANCIAL GROUP, MERCK & CO) within the past 12 months.

Credit Suisse has received investment banking related compensation from the

subject issuer (SOCIETE GENERALE, SIA, INTESA SANPAOLO, ENEL SPA,

EMC, CHINA CONSTRUCTION BANK - H, CENTRICA PLC, CARREFOUR,

UNICREDIT, TOYOTA MOTOR, TOSHIBA, SUMITOMO MITSUI FINANCIAL

GROUP, SEMEN INDONESIA, SCHLUMBERGER, SBERBANK, SAMSUNG

ELECTRONICS, PROCTER & GAMBLE, ORACLE, NATIONAL AUSTRALIA BANK,

MORGAN STANLEY, LENOVO, KEPPEL CORP, JPMORGAN CHASE & CO,

GOOGLE, GLAXOSMITHKLINE, GENERAL ELECTRIC CO, FRESENIUS SE,

DEERE & CO, DBS, COCA-COLA, CNOOC LTD, BANK OF AMERICA , BANK

MANDIRI, AXA, PHILIP MORRIS INTERNATIONAL, PFIZER, HSBC, HONDA

MOTOR, DIAGEO, BNP PARIBAS, BMW, AIRASIA, MIZUHO FINANCIAL GROUP,

MITSUBISHI UFJ FINANCIAL GROUP, MERCK & CO) within the past 12 months.

Credit Suisse has received compensation for products and services other than

investment banking services from the subject issuer (SONY, SOCIETE GENERALE,

SIEMENS, SIA, INTESA SANPAOLO, IBERDROLA, ENEL SPA, EMC, CHINA

CONSTRUCTION BANK - H, CENTRICA PLC, CATHAY PACIFIC, CARREFOUR,

UNICREDIT, UBS, TOYOTA MOTOR, THYSSEN KRUPP, TENCENT, SUMITOMO

MITSUI FINANCIAL GROUP, SAMSUNG ELECTRONICS, ROYAL DUTCH


NATIONAL AUSTRALIA BANK, MORGAN STANLEY, LENOVO, KEPPEL CORP,

KASIKORNBANK, JPMORGAN CHASE & CO, GLAXOSMITHKLINE, GENERAL

ELECTRIC CO, GDF SUEZ, DEERE & CO, DBS, COCA-COLA, BANK MANDIRI,

AXA, ASIAN PROPERTY DEVELOPMENT , ADIDAS, PHILIP MORRIS


DEVELOPMENT, DIAGEO, BNP PARIBAS, BMW, BHP BILLITON LIMITED,

ALLIANZ, MIZUHO FINANCIAL GROUP, MITSUBISHI UFJ FINANCIAL GROUP,

MERCK & CO) within the past 12 months.

Credit Suisse expects to receive or intends to seek investment banking related

compensation from the subject issuer (SOFTBANK, SOCIETE GENERALE, SIA,

INTESA SANPAOLO, FAR EAST HOSPITALITY TRUST, ENEL SPA, EMC, CHINA

CONSTRUCTION BANK - H, CHEVRON, CENTRICA PLC, CATHAY PACIFIC,

CATERPILLAR INC, CARREFOUR, UNICREDIT, TOYOTA MOTOR, TOSHIBA,

THYSSEN KRUPP, TENCENT, SUMITOMO MITSUI FINANCIAL GROUP,

STARBUCKS, SEVEN & I, SEMEN INDONESIA, SCHLUMBERGER, SBERBANK,

SAMSUNG ELECTRONICS, ROCHE (GENUSSSCHEINE), PROCTER & GAMBLE,


KEPPEL CORP, KASIKORNBANK, JPMORGAN CHASE & CO, GOOGLE,

GLAXOSMITHKLINE, GENERAL ELECTRIC CO, GDF SUEZ, FRESENIUS SE,

DEERE & CO, DBS, COCA-COLA, CNOOC LTD, BANK OF AMERICA , BANK

MANDIRI, AXA, ASIAN PROPERTY DEVELOPMENT , ADIDAS, PHILIP MORRIS


DEVELOPMENT, HDFC BANK LIMITED, DIAGEO, BRIDGESTONE, BNP

PARIBAS, BMW, BHP BILLITON LIMITED, ALLIANZ, AIRASIA, AIR CHINA -H,

MIZUHO FINANCIAL GROUP, MITSUBISHI UFJ FINANCIAL GROUP, MERCK &

CO) within the next three months.

As at the date of this report, Credit Suisse acts as a market maker or liquidity

provider in the securities of the subject issuer (SONY, EMC, CHEVRON,

CATERPILLAR INC, TOYOTA MOTOR, TOSHIBA, SUNCOR ENERGY,

STARBUCKS, SCHLUMBERGER, RIO TINTO, PROCTER & GAMBLE, ORACLE,

MORGAN STANLEY, JPMORGAN CHASE & CO, GOOGLE, GENERAL

ELECTRIC CO, DEERE & CO, COCA-COLA, PHILIP MORRIS INTERNATIONAL,

PFIZER, HONDA MOTOR, MITSUBISHI UFJ FINANCIAL GROUP, MERCK & CO).

Credit Suisse holds a trading position in the subject issuer (VODAFONE , SONY,

SOFTBANK, SOCIETE GENERALE, SIEMENS, SIA, INTESA SANPAOLO,

IBERDROLA, FAR EAST HOSPITALITY TRUST, ENEL SPA, EMC, CHINA

CONSTRUCTION BANK - H, CHEVRON, CENTRICA PLC, CATHAY PACIFIC,

CATERPILLAR INC, CARREFOUR, UNICREDIT, UBS, TOYOTA MOTOR,

TOSHIBA, THYSSEN KRUPP, TENCENT, SUNCOR ENERGY, SUMITOMO

MITSUI FINANCIAL GROUP, STARBUCKS, SEVEN & I, SEMEN INDONESIA,

SCHLUMBERGER, SBERBANK, SAMSUNG ELECTRONICS, ROYAL DUTCH



KEPPEL CORP, KASIKORNBANK, JPMORGAN CHASE & CO, ITC LTD,

GOOGLE, GLAXOSMITHKLINE, GENERAL ELECTRIC CO, GDF SUEZ,

GAMUDA, FRESENIUS SE, DEERE & CO, DBS, COCA-COLA, CNOOC LTD,

BANK OF AMERICA , BANK MANDIRI, AXA, ASTELLAS PHARMA, ASIAN

PROPERTY DEVELOPMENT , ADIDAS, PHILIP MORRIS INTERNATIONAL,

PFIZER, HSBC, HONDA MOTOR, HENDERSON LAND DEVELOPMENT, HDFC

BANK LIMITED, DIAGEO, BRIDGESTONE, BNP PARIBAS, BMW, BHP BILLITON

LIMITED, ALLIANZ, AIRASIA, AIR CHINA -H, MIZUHO FINANCIAL GROUP,

MITSUBISHI UFJ FINANCIAL GROUP, MERCK & CO, MASTERCARD).

Additional disclosures for the following jurisdictions

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:

https://www.credit-suisse.com/disclosure

Guide to analysis

Equity rating allocation as of 15/04/2013

Overall Investment banking interests only

BUY 40.10% 40.75%

HOLD 52.40% 50.98%

SELL 5.27% 5.71%

RESTRICTED 2.24% 2.56%

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

https://www.credit-suisse.com/disclosure


27

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.

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

For a discussion of the risks of investing in the securities mentioned in this report,

please refer to the following Internet link:


References in this report to Credit Suisse include subsidiaries and affiliates. For more

information on our structure, please use the following link:

http://www.credit-suisse.com/who_we_are/en/

The information and opinions expressed in this report were produced by the Global

Research department of the Private Banking division at Credit Suisse as of the date

of writing and are subject to change without notice. Views expressed in respect of a

particular security in this report may be different from, or inconsistent with, the

observations and views of the Credit Suisse Research department of Investment

Banking division due to the differences in evaluation criteria. This report is not

directed to, or intended for distribution to or use by, any person or entity who is a

citizen or resident of or located in any locality, state, country or other jurisdiction

where such distribution, publication, availability or use would be contrary to law or

regulation or which would subject Credit Suisse AG, the Swiss bank, or its

subsidiaries or its affiliates (“CS”) to any registration or licensing requirement within

such jurisdiction. All material presented in this report, unless specifically indicated

otherwise, is under copyright to CS. None of the material, nor its content, nor any

copy of it, may be altered in any way, transmitted to, copied or distributed to any

other party, without the prior express written permission of CS. All trademarks,

service marks and logos used in this report are trademarks or service marks or

registered trademarks or service marks of CS or its affiliates.

The information, tools and material presented in this report are provided to you for

information purposes only and are not to be used or considered as an offer or the

solicitation of an offer to sell or to buy or subscribe for securities or other financial

instruments. CS does not offer advice on the tax consequences of investment and

you are advised to contact an independent tax adviser. Please note in particular that

the bases and levels of taxation may change.

CS believes the information and opinions in the Disclosure Appendix of this report are

accurate and complete. Information and opinions presented in the other sections of

the report were obtained or derived from sources CS believes are reliable, but CS

makes no representations as to their accuracy or completeness. Additional

information is available upon request. CS accepts no liability for loss arising from the

use of the material presented in this report, except that this exclusion of liability does

not apply to the extent that liability arises under specific statutes or regulations

applicable to CS. This report is not to be relied upon in substitution for the exercise of

independent judgment. CS may have issued, and may in the future issue, a trading

idea regarding this security. Trading ideas are short term trading opportunities based

on market events and catalysts, while company recommendations reflect investment

recommendations based on expected total return over a 6 to 12-month period as

defined in the disclosure section. Because trading ideas and company

recommendations reflect different assumptions and analytical methods, trading ideas

may differ from the company recommendations. In addition, CS may have issued,

and may in the future issue, other reports that are inconsistent with, and reach

different conclusions from, the information presented in this report. Those reports

reflect the different assumptions, views and analytical methods of the analysts who

prepared them and CS is under no obligation to ensure that such other reports are

brought to the attention of any recipient of this report. CS is involved in many

businesses that relate to companies mentioned in this report. These businesses

include specialized trading, risk arbitrage, market making, and other proprietary

trading.

Information, opinions and estimates contained in this report reflect a judgment at its

original date of publication by CS and are subject to change without notice. This

report may provide the addresses of, or contain hyperlinks to, websites. Except to the

extent to which the report refers to website material of CS, CS has not reviewed the

linked site and takes no responsibility for the content contained therein. Such

address or hyperlink (including addresses or hyperlinks to CS’s own website material)

is provided solely for your convenience and information and the content of the linked

site does not in any way form part of this document. Accessing such website or

following such link through this report or CS’s website shall be at your own risk.

Distribution of research reports

Except as otherwise specified herein, this report is distributed by Credit Suisse AG, a

Swiss bank, authorized and regulated by the Swiss Financial Market Supervisory

Authority. Australia: This report is distributed in Australia by Credit Suisse AG,

Sydney Branch (CSSB) (ABN 17 061 700 712 AFSL 226896) only to "Wholesale"

clients as defined by s761G of the Corporations Act 2001. CSSB does not

guarantee the performance of, nor makes any assurances with respect to the

performance of any financial product referred herein. Bahamas: This report was

prepared by Credit Suisse AG, the Swiss bank, and is distributed on behalf of Credit

Suisse AG, Nassau Branch, a branch of the Swiss bank, registered as a broker-

dealer by the Securities Commission of the Bahamas. Bahrain: This report is

distributed by Credit Suisse AG, Bahrain Branch, authorized and regulated by the

Central Bank of Bahrain (CBB) as an Investment Firm Category 2. Brazil: Any

information contained herein does not constitute a public offer of securities in Brazil

and securities mentioned herein may not be registered with the Securities

Commission of Brazil (CVM). Dubai: This information is distributed by Credit Suisse

AG Dubai Branch, duly licensed and regulated by the Dubai Financial Services

Authority (DFSA). Related financial products or services are only available to

wholesale customers with liquid assets of over USD 1 million who have sufficient

financial experience and understanding to participate in financial markets in a

wholesale jurisdiction and satisfy the regulatory criteria to be a client. France: This

report is distributed by Credit Suisse (France), authorized by the Autorité de Contrôle

Prudentiel (ACP) as an investment service provider. Credit Suisse (France) is

supervised and regulated by the Autorité de Contrôle Prudentiel and the Autorité des

Marchés Financiers. Germany: Credit Suisse (Deutschland) AG, authorized and

regulated by the Bundesanstalt fuer Finanzdienstleistungsaufsicht (BaFin),

disseminates research to its clients that has been prepared by one of its affiliates.

Gibraltar: This report is distributed by Credit Suisse (Gibraltar) Limited. Credit Suisse

(Gibraltar) Limited is an independent legal entity wholly owned by Credit Suisse and

is regulated by the Gibraltar Financial Services Commission. Guernsey: This report

is distributed by Credit Suisse (Guernsey) Limited, an independent legal entity

registered in Guernsey under under 15197, with its registered address at Helvetia

Court, Les Echelons, South Esplanade, St Peter Port, Guernsey. Credit Suisse

(Guernsey) Limited is wholly owned by Credit Suisse and is regulated by the

Guernsey Financial Services Commission. Copies of the latest audited accounts are

available on request. India: This report is distributed by Credit Suisse Securities

(India) Private Limited ("Credit Suisse India"), regulated by the Securities and

Exchange Board of India (SEBI) under SEBI registration Nos. INB230970637;

INF230970637; INB010970631; INF010970631, with its registered address at

9th Floor, Ceejay House, Plot F, Shivsagar Estate, Dr. Annie Besant Road, Worli,

Mumbai 400 018, India, Tel. +91-22 6777 3777. Italy: This report is distributed in

Italy by Credit Suisse (Italy) S.p.A., a bank incorporated and registered under Italian

law subject to the supervision and control of Banca d’Italia and CONSOB, and also

distributed by Credit Suisse AG, a Swiss bank authorized to provide banking and

financial services in Italy. Jersey: This report is distributed by Credit Suisse

(Guernsey) Limited, Jersey Branch, which is regulated by the Jersey Financial

Services Commission. The business address of Credit Suisse (Guernsey) Limited,

Jersey Branch, in Jersey is: TradeWind House, 22 Esplanade, St Helier, Jersey JE2

3QA. Luxembourg: This report is distributed by Credit Suisse (Luxembourg) S.A., a

Luxembourg bank, authorized and regulated by the Commission de Surveillance du

Secteur Financier (CSSF). Mexico: The information contained herein does not

constitute a public offer of securities as defined in the Mexican Securities Law. This

https://www.credit-suisse.com/legal/pb_research/technical_tutorial_en.pdf



28

report will not be advertised in any mass media in Mexico. This report does not

contain any advertisement regarding intermediation or providing of banking or

investment advisory services in Mexico or to Mexican citizens. Qatar: This

information has been distributed by Credit Suisse Financial Services (Qatar) L.L.C,

which has been authorized and is regulated by the Qatar Financial Centre Regulatory

Authority (QFCRA) under QFC No. 00005. All related financial products or services

will only be available to Business Customers or Market Counterparties (as defined by

the Qatar Financial Centre Regulatory Authority (QFCRA)), including individuals, who

have opted to be classified as a Business Customer, with liquid assets in excess of

USD 1 million, and who have sufficient financial knowledge, experience and

understanding to participate in such products and/or services. Russia: The research

contained in this report does not constitute any sort of advertisement or promotion for

specific securities, or related financial instruments. This research report does not

represent a valuation in the meaning of the Federal Law On Valuation Activities in the

Russian Federation and is produced using Credit Suisse valuation models and

methodology. Singapore: Distributed by Credit Suisse AG Singapore Branch,

regulated by the Monetary Authority of Singapore. Spain: This report is distributed in

Spain by Credit Suisse AG, Sucursal en España, authorized under number 1460 in

the Register by the Banco de España. Thailand: This report is distributed by Credit

Suisse Securities (Thailand) Limited, regulated by the Office of the Securities and

Exchange Commission, Thailand, with its registered address at 990 Abdulrahim

Place Building, 27/F, Rama IV Road, Silom, Bangrak, Bangkok Tel. 0-2614-6000.

United Kingdom: This report is issued by Credit Suisse (UK) Limited and Credit

Suisse Securities (Europe) Limited. Credit Suisse Securities (Europe) Limited and

Credit Suisse (UK) Limited, both authorized and regulated by the Financial Services

Authority, are associated but independent legal entities within Credit Suisse. The

protections made available by the Financial Services Authority for retail clients do not

apply to investments or services provided by a person outside the UK, nor will the

Financial Services Compensation Scheme be available if the issuer of the investment

fails to meet its obligations.

UNITED STATES: NEITHER THIS REPORT NOR ANY COPY THEREOF MAY BE

SENT, TAKEN INTO OR DISTRIBUTED IN THE UNITED STATES OR TO ANY US

PERSON.

JAPAN: NEITHER THIS REPORT NOR ANY COPY THEREOF MAY BE SENT,

TAKEN INTO OR DISTRIBUTED IN JAPAN.

Local law or regulation may restrict the distribution of research reports into certain

jurisdictions.

This report may not be reproduced either in whole or in part, without the written

permission of Credit Suisse. Copyright © 2013 Credit Suisse Group AG and/or its

affiliates. All rights reserved.

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Avian Flu Lessons Learned From SARS in 2003

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Transcript of Avian Flu Lessons Learned From SARS in 2003