CS Research Monthly

March 2011 Zurich Global Research Investment horizon: 612+ months

Research Monthly Still positive for stocks, but on alert for tactical volatilityPrivate Banking

Fixed income

Overview

02/16 u in EUR.Equities

BUY MORGAN STANLEY 4.5%u page

8

Global economy: Growth robust; inflation rising but under control. US, EU interest rates trend slowly up as implied by market. Equities: Strategic overweight (6 12+ months) given growth, low rates, valuation. Fixed income: Favor short- to mediumdated lower quality credits. FX strategic view: EUR more positive, CHF topping out vs. EUR. Favor GBP and Asian emerging currencies. Popular uprisings bring risks but also opportunities. We monitor and will signal tactical strategy changes via Investment Committee if needed.

u

BUY HPQ more clarity on management structure, potential as a tablet player. u page 10

Alternative investments

momentum strategies. uForeign exchange

BUY exposure to commodityu page

12

MYR, u KRW and CNY vs. USD. Target 105, stop loss 97.

BUY a 12M forward basket of SGD,u page

16

Important disclosures are found in the Disclosure Appendix

| ResearchMonthly | March011 | Editorial

Editorial

fromcurrenteventsforcompaniesaroundthewholeofthe broaderMediterraneanregion. G ilesKeating,HeadofResearchforPrivateBankingandAssetManagement +41(0)443333,[email protected]

Photographer:MartinStollenwerk

ArethepopularuprisingsintheMiddleEastandSouthern Mediterraneangoodorbadforstockmarkets?Inanutshell: theymaycauseatleastamodestdeclineintheshortterm, butwewouldseethisasabuyingopportunityforthemediumtolongterm.Near-termconcernsfocusonoilsupply, refugeesandEuropean /UScompanieswhosebusinesses maytemporarilybeaffected.Wewillmonitordevelopments closely and if we feel these negative factors are strong enough, we will announce a change in our tactical (1 6 month)strategyviatheInvestmentCommitteeReport.But for the medium-to-long term, we think the uprisings can be positive for global equities. While every country in the region is different, there is a clear common factor across mostofthem:economicdevelopmenthaslaggedtheglobal economyandhaslaggedlocaldemographicgrowth.Politicalchangecanmeanshort-termuncertaintyandtemporary output loss, but over a period of time is likely to unleash fasterlong-termgrowth,especiallyincountrieswherethere arecivilinstitutionswithdeephistoricalroots,suchasEgypt. Whilepastmarketmovesareanimperfectguide,theygive an idea of what is possible. As the collapse of the Soviet Uniongatheredpace,globalemergingmarketequitiesfell about5%overthemonthto19August1991,whenPresidentGorbachevwasbrieflyarrested,butweresome0% up within a year and over 50% up within two years. In Indonesia, the local stockmarket fell about 40% in USD in themonthupto1May1998whenPresidentSuhartoleft, recoveringmuchoftheselossesoverthenextsixmonths, andwasupwellover100%withinayearandenjoyed0% annual compound growth over ten years. We believe longer-sightedinvestorswillseemoreopportunitiesthanrisks

In this issue Global strategy.

Stillpositiveforstocks,butonalertfortactical

volatility

page 4

Strategic asset allocation page 5 Recent Research Monthly investment ideas page 6 Economics.

Solidgrowthbroadeninggeographically

page 7 page 8

Fixed income. Equities.

Continuetofavorcreditoverdurationrisk

Revenuerisesreflectstrongbusinesscycle

page 10

Alternative investments. Realestateandcommodityrallyto c ontinue,butbecomemorefragileduetovaluation page 12 Foreign exchange.

Wideningyieldspreadsunderpinmorestable

euro

page 13

Investment themes

Differentiationbetweenemergingmarketsandhighyieldbonds u page

14

GainunhedgedUKequityexposure u page 15 WeremainoptimisticonAsianandCEEFXstrengthoverthe mediumterm u page 16Credit Suisse Megatrends.

Frontiermarkets:Thenextbeneficiaries

ofamultipolarworld

page 17

Editorialdeadline:February011

| ResearchMonthly | March2011

Investment summary March 2011Cycle Clock: Recovery TheCreditSuisseCycleClockakeydriverofourinvestmentstrategyiscurrentlyinRecovery(since August2009).DuringtheRecoveryphase,equitiesandcommoditieshavehistoricallyperformedbest,while governmentbondsandcashinvestmentshavetendedtounderperform.Global Research asset category strategy Strategic By region/strategy 612+ M Fixed income Equities Comments and comparison of weightings Bettereconomicdataandimprovinginvestorsentimentshouldcontinueto weighonbondprices.Continuetofavorcreditoverdurationrisk. IC1 view Tactical 16 M

AustraliaandEurozoneoutperform;USA,UK,SwitzerlandandJapanneutral.Canadaunderperform.

USAoverweight;Europe,Switzerland,Japan,Australia Weremainstrategicallypositiveonequities.Theyshouldoutperformbonds andEmergingMarketsneutral;Canadaunderweight. goingforward,supportedbysolidearningsgrowthaswearestillintheRecoveryphaseofourBusinessCycleClock.Cyclicalbiasinsectorstrategy. Industrialmetalssettooutperform,preciousmetalsand Ourtacticalviewispositiveasphysicalconsumptionisimproving.Longeragricultureneutral.Energyshouldunderperformthe termfundamentalsremainpositive.Supply/demandbalancesaretightening, overallindex. butmarketsarelikelytobecomemorevolatile. USA, Asia-Pacific, EM overweight; Europe (excl. UK, CH),Switzerland,Japanneutral;UKunderweight. Focusonsecondaries,small/mediumLBOs,infrastructure,EManddistressedrealestate. Wefavorglobalmacro,convertiblearbitrageand distresseddebt. EUR / USD GBP/ USD USD/CHF USD/JPY Realestateequities:Weseefurtherupside.Directrealestate:growthin rentstobecomethemaindriverofreturns.Wearepositivestrategically. ReturnprospectsfornewLBOinvestmentsareattractiveasdealvaluations havecomedown. Convertible arbitrage benefits from mispricing and distressed debt from bad debtrecoverycycle.Globalmacrocanreactquicklytopolicychanges. GBP:CyclicalrecoverywestaybullishonGBP/USD,targetingamoveinto thehigh1.60s.

Commodities

Real estate Private equity Hedge funds Foreign exchange Economics

Recent economic data is strong. Potential for more positive surprises is limited. Problematic US fiscal situation will attract more attention during budget discussions in comingweeks. Real GDP growth in % 2009E CH EMU USA UK Japan 1.9 4.0 2.4 4.9 6. 2010E 2.8 1.5 2.9 1.4 .9 2011E 1.9 2.1 .0 1.8 1.4 CH EMU USA UK Japan Inflation in % 2009E 0.5 0.4 0.4 2.2 1.4 2010E 0.7 1.6 1.6 .2 0.9 2011E 1.1 1.9 1.8 . 0.4 CHF EUR USD GBP JPY Short interest rates 3M LIBOR Spot2 0.17 1.08 0.1 0.80 0.19 3M 0.20.4 1.01.2 0.0.5 0.81.0 0.10. 12 M 0.4 0.6 1.41.6 0.0.5 1.61.8 0.10. CHF EUR USD GBP JPY Bonds: 10-year government Spot 2 1.9 .25 .58 .81 1.1 3M 1.82.0 .0.2 .4.6 .5.7 1.01.2 12 M 2.1 2. .1 . .4 .6 .8 4.0 1.1 1.

Bonds: Selected indices Index YTM (%) Total return YTD (%) Spread to Spread Tech. Tech. 12 M benchmark change YTD support resistance spread (bp) (bp) outlook 126.5 152. 51.7 160.5 262.1 n.a. 492.0 15.1 4.2 .7 22.5 14.1 n.a. 77.0 95.0 145.0 48.0 160.0 240.0 n.a. 465.0 140.0 165.0 54.0 180.0 275.0 n.a. 565.0

Foreign exchange & commodities Spot2 3M 12 M EUR/USD 1.7 1.61.40 1.9 1.4 USD/CHF 0.950.940.98 0.9 0.97 EUR/CHF USD/JPY EUR/JPY 1.29 1.11.5 1.4 1.8 8 81 85 81 85 117121 114 11 117

Investment grade USD(CSLUCI) EUR(CSLEI) CHF(CSLSI) GBP(CSLEI) EMUSD(JPMEMBI+) EMLocalMarkets(JPMELMI+) HighYield(CSHYIndex) Equities: Selected indices Snapshot S&P500 SMI FTSE-100 EuroStoxx50 Nikkei225 Price 4 MTD (%) 1,4.01 6,717.25 6,082.99 ,068.00 10,842.80 4.4 .7 .8 .9 5.9 YTD (%) 6.8 4.4 .1 9.9 6.0 Tech. support 1,205 6,195 5,445 2,665 11,140 Tech. resistance 1,410 6,945 6,255 ,245 9,750 Fair value 12 M forward5 1,101,446 7,00 6,142 6,729 2,96,288 12,00012,500 12 M outlook6 Overweight Neutral Neutral Neutral Neutral 4.11 .68 1.69 5.21 6.29 2.4 6.80 0.28 0.1 0.18 0.65 0.97 1.06 .2

EUR/GBP 0.840.800.84 0.81 0.85 GBP/USD 1.62 1.661.70 1.70 1.74 EUR/SEK AUD/USD Gold (USD) Oil(USD) 8.758.08.70 8.10 8.50 1.01 1.011.05 0.98 1.02 1,89.5 1,400 1,500 86.20 8590 1,450 1,550 85 90

Emerging markets / below investment grade

USD/CNY 6.576.406.60 6.20 6.40

Equities: Sectors & stocks, 12 M

< =

Energy,Industrials,Information Technology TelecommunicationServices, Utilities,ConsumerStaples, ConsumerDiscretionary

1 5

InvestmentCommittee 2 Londonclose18/02/2011 Outlook:Absolutetotalreturndirection 4 Pricesasof18/02/2011 CentralOptimisticscenarios 6 Rel.toMSCIWorldIndex(USD) =Directionfromcurrentlevels n.a.=notavailable


Global strategy Still positive for stocks, but on alert for tactical volatility

Overview

Global economy: Growth robust; inflation risingbutundercontrol.US,EUinterest ratestrendslowlyupasimpliedbymarket. Equities:Strategicoverweight(6 12+ months)givengrowth,lowrates,valuation. Fixedincome:Favorshort-tomedium-dated lowerqualitycredits.FXstrategicview:EUR morepositive,CHFtoppingoutvs.EUR. FavorGBPandAsianemergingcurrencies. Popularuprisingsbringrisksbutalso opportunities.Wemonitorandwillsignal tacticalstrategychangesviaInvestment Committeeifneeded.

CPI inflation: BRIC vs. G3 markets% YoY 10 8 6 4 2 0 2 01/00

01/02

01/04 G3 CPI

01/06

01/08

01/10

BRIC CPI

Source: Bloomberg, Credit Suisse /IDC

Inflationindevelopedeconomiesremainslowbyhistoric standards,butpressuresaremountinginemerging markets.

Majorstockmarketsandkeycommoditypriceshave,atthe timeofwriting,continuedtotrendupward.Investorshave tendedtoshrugoffrisingglobalinflationandregionalpoliticaluncertainties(atleastuntiltheescalationoftensionin Libya,occurringaswewenttopress).Insteadtheyhavefocussedontheimprovingglobaleconomy,healthycorporate earnings, and a benign interest rate outlook. With the US S&P500indexreachingmorethandoubleitsMarch2009 lowandBrentoiltradingsignificantlyaboveUSD100,itis clearly appropriate to ask whether this positive trend can continueorisatriskofsignificantreversal. Ourrecommendationistoremainpositiveonstockmarketsonastrategichorizon(612+months),sincewebelieve thepositivedriverswillremainbroadlyinplacewiththerisks contained.Wethinktheglobaleconomycankeepgrowing astherelayraceofstrongestgrowthsurprisesinemerging markets last year and in developed markets early this year,movesthebatonbacktoemergingcountriesinthe second half, with EM equity markets anticipating this. We also see current concerns over inflation though perhaps correctlyreflectingaturnintheverylong-termcyclefading by around mid-year. By then, we think it will become apparent that the acceleration in US inflation is a healthy endingofdeflationriskratherthanthestartofanimmediate pricesurge,andwealsoseecommoditypricerisesbecomingmorepatchywithperiodicsetbacksinsomeareas.This inflation outlook would allow the Fed and ECB to stick to the market-friendly timetable of very slow rate rises currentlydiscountedinbondprices.Theresultingcombination ofhealthygrowthandlowinterestrates,withvaluationsstill undemandingevenafterrecentrises,underpinsourpositive strategicviewonequities. Turning to our tactical view (1 6 months), we also remainpositivefornow,butaftersuchstrongmarketperformance we become more watchful. In the coming weeks, price action may be more volatile, the negative effects of profit-taking perhaps alternating with the positive effects from deployment of cash. We will monitor such market movesandupdateyouviatheInvestmentCommitteeminutesifwethinkthetrendischanging.Butfornowwethink the underlying tactical direction could remain upward for some weeks and perhaps months, before a more marked correctionoccurs. In fixed income markets, healthy economic news has tendedtodepresslonger-datedgovernmentbondpricesin coremarketssuchastheUSandGermany,pushingyields towards the highs of the current cycle. Meanwhile good economieshavehelpedcreditassets,withspreadsagainst governmentsnarrowingfurther.Thesemarketmoveshave fittedourstrategicandtacticalrecommendationtounderweightfixedincomeinoverallportfolios,andtooverweight lower-quality shorter-dated credits within fixed income. Looking ahead, with likely rate rises over the next couple

| ResearchMonthly | March2011 | Global strategy

of years now broadly priced in, we expect to shift to a less negative overall tactical view for fixed income before long, though we expect to retain our recommended allocations within the asset category. In foreign exchange, we now take our recent directional views a bit further with EUR/USD seen approaching the mid-1.40s over 12 months. We also see EUR/CHF near the mid-1.30s, reflecting an unwinding of capital account pressures that have kept CHF (and JPY) so strong during the recent years of ultra-low rates. Elsewhere, GBP has performed well. It has a strong historic tendency to rise during global economic upswings, despite internal UK difficulties, and we remain positive. We also continue to favor many emerging Asian units and MXN. There remain as usual many risks. March will see two key European summit meetings aiming to codify the Grand Bargain, in which strong countries effectively underwrite current debt of weak ones in return for ongoing fiscal probity. Much positive news is already discounted here, so there is scope for disappointment, though strategic political commitment seems strong. US fiscal discussions may also cause concern as we approach the deadline for raising the debt ceiling, likely to be in the coming weeks. Inflation pressures may remain a focus alongside political uncertainties in some countries. These and other issues can certainly contribute to the tactical volatility discussed above. But we believe they would have to show outcomes at the extreme end of expectations to throw our strategic market view off course, underpinned by the combination of a healthy growth outlook, benign interest rates, and for at least some assets, still undemanding valuations. [email protected], +41 (0)44 332 22 33

Strategic asset allocation

Timehorizon:6 12+months

Fixed incomeCash Bonds Alternative investments

Risk profile: Low Recommended Neutral

80% 16% 4%

% 80% 1%

IncomeCash Bonds Equities Alternative investments

Risk profile: Moderate Recommended Neutral

3% 54% 22% 21%

% % 20% 20%

BalancedCash Bonds Equities Alternative investments

Risk profile: Medium Recommended Neutral

34% 43% 21% 2%

% 35% 40% 20%

Capital gainCash Bonds Equities Alternative investments

Risk profile: Enhanced Recommended Neutral

14% 63% 21% 2%

% 1% 60% 20% Risk profile: High

EquityCash Equities Alternative investments

Recommended

Neutral

2% 82% 16%

% 80% 1%

The neutral allocations serve as a guideline and represent the average weighting over an entire market cycle. Since the global strategy is based on a medium-term investment horizon, it deviates from the neutral position. We recommend an overweight in equities and alternative assets. At the same time, we recommend underweighting fixed income assets and cash. In our view, investments in emerging markets remain attractive, both in fixed income and equities. We recommend overweighting US equities vs. the Eurozone.

Source:CreditSuisse


Recent Research Monthly investment ideasSelected recommendations from this months issue Recommendation BUYMORGANSTANLEY4.5%02/1inEUR. BUYHPQmoreclarityonmanagementstructure,potentialasatabletplayer. BUYexposuretocommoditymomentumstrategies. BUY Argentinashort-datedbondsandVenezuelalower-pricedbonds. FI AI FI Action to be taken Addexposure. Cross-commoditycorrelationisfalling.Momentumstrategiesshouldoutperform. Risk-tolerantinvestorsshouldaddexposure. Addexposure. EQ Targetprice:USD52;stoploss:USD41.

BUY highyieldcorporatebondswithshorter-tomid-datedmaturitiesthataretrading FI belowtheirrespectivecalls.

BUYCableandWirelessWorldwide.Telecomsoperatorandpotentialtake-overtarget EQ Targetprice:GBp95;stoploss:GBp0. (25%targetupside). BUYa12MforwardbasketofSGD,MYR,KRWandCNYvs.USD. FX Target105,stoploss97.

Selected ideas from previous months February 2011 (25/01/2011) Recommendation BUYHEIDELBERGCEMENTFINANCE.5%08/18inEUR. BUY Pfizer one of our dynamic dividend stocks. BUY diversified hedge fund investments. BUY EUR/JPYasratespreadsarelikelytomoveinfavorofEUR. BUYBNP5.18%perpcall0/15inUSD. BUY Coca-Cola:Amultinationalleaderwithstronginnovationsinthehealthyliving segment. BUYDeere,aglobalmanufactureroffarmmachinery. December 2010 / January 2011 (30/11/2010) Recommendation BUY Sberbank(SBCAPSA)5.4%03/2017inUSD. BUYTheCSTop30portfolio. BUY GoldatpricesbelowUSD1,400withatimehorizonofmorethanmonths. BUYBKMoscow(BOMCapital)4.5%09/2013inCHF. BUY St. Gobain, a leader in energy efficiency in buildings. FI AI FI Action to be taken Addexposure. BUYrecommendationstillvalidafteratemporarydip. Addexposure. EQ Continuetoaccumulate. FI AI FX FI Action to be taken Addexposure. BUY fund of hedge funds or certificate on hedge fund index. HOLD onpositionwithatarget122,stoploss108. Addexposure. EQ Targetprice:USD23;stoploss:USD15.

EQ Targetprice:USD71;stoploss:USD55. EQ Targetprice:USD110;stoploss:USD81.

EQ Targetprice:EUR4,stoploss:EUR33.

FI EQ AI FX

Fixedincome Equities Alternativeinvestments Foreignexchange Forfurtherinformation,includingdisclosureswithrespecttoanyotherissuers,pleaserefertotheCreditSuisseGlobalResearchDisclosuresiteat: http://www.credit-suisse.com/research/disclaimer


Economics Solid growth broadening geographically

Overview

Growthbroadeningasadvancedeconomies accelerate.China,Indiashowtentativesigns oflowermomentum. Laterintheyear,advancedeconomy m omentumlikelytoslowbutre-accelerating EMsshouldkeepexpansiongoing.

Business survey data around the globe continue to imply solid economic expansion. The expansion continues to broaden in terms of demand composition with less government impetus and inventory re-building and more consumerandinvestmentspending.Importantly,itisalsogaininggeographicbreadth.Advancedeconomieshavelately shown a bigger improvement in both economic indicators and actual data than emerging markets. In the latter, the worry about inflation and (probably more importantly) the policyresponsetoit,hasbeenthekeyconcernforinvestors. Weviewthemorevisiblebroadeningofgrowthtoadvanced economiesasapositive,whichshouldbesupportiveforEM aswell. US growth and employment improving, fiscal concerns remain USindicatorsarestrongandwhilegrowthisprobablyabit weakerthansuggestedbythePMIdata,cash-richnessof thecorporatesectorsupportsinvestmentspendingandemploymentgrowth.Recentlyannouncedgovernmentbudget plansanddeficitreductiontargetsarebasedonoptimistic medium-termassumptions,inourview.Moreneedstobe done to ensure long-term debt sustainability and market focusmightatsomepointturntothis.Fornow,thedeficitis risingcomparedtolastyearandthisisgrowthsupportive. Europe still divided, Japan expanding after dip in Q4 InEurope,abnormallycoldweatherweighedonactivityin Q4 and this contributed to a decline of activity in the UK. Growth in core Europe (i.e. Germany and France) was nevertheless fairly solid in Q4 and some of the weakness should be reversed in Q1. In contrast, weaker European economies with immediate fiscal challenges continue to contract (e.g. Greek GDP 6.6% YoY in Q4). Japanese GDP also contracted in Q4 of last year but the PMI has improved again and greater reliance on exports to Asia is supportive.

Inflation moving higher, global tightening ongoing but gradual Inflation has increased everywhere but risks beyond commodity-relatedeffectsareconcentratedinEM.Measuresof EMcapacityutilizationaremostlynearorabovepre-crisis averages and wage growth is picking up. China has tightenedpolicymoredecisivelyvialowercreditgrowthandhigherinterest /reserverequirementrates.Policytighteningisa generaltrendinemergingmarkets(e.g.Brazil,Indonesia). While the commodity driven economies have started and will continue to tighten (e.g. BoC, RBA) and the Bank of EnglandislikelytostartraisingratesbyMay,wethinkthe ECBisstillmorelikelytowaituntilthefourthquarterand theFedprobablyevenuntilnextyear. [email protected],+41(0)443335062

PMI G3 vs. BRIC (Brazil, Russia, India, China)Manufacturing PMI 60 55 50 45 40 35 30 2006

2007

2008

2009 BRIC

2010

2011

G3 (USA, Eurozone, Japan)Source: Bloomberg, PMIPremium, Credit Suisse

Businesssurveydataintheadvancedeconomieshas improvedvisiblywhilethesameindicatorshavebeen stableorslightlyweakerintheemergingmarketsworld offlate(butstillconsistentwithgrowth).

| ResearchMonthly | March2011 | Asset categories

Fixed income Continue to favor credit over duration risk

Overview

Bondyieldsexpectedtotrademorerangebound. Focusonhighyield,emergingmarketand subordinated financial bonds.

stanceonemergingmarkets(EM).Afterhavinglaggedotherriskycredits,EMbondsofferinterestinginvestmentopportunities(seepage14).Onthesovereignside,weexpect highbetaVenezuelaandArgentinatoshowthestrongest performance. In credits, we like, among others, Russian commercialbankswithalargestateownership(e.g.VTB). Ininvestmentgrade,wecontinuetofocusonsubordinated bondsfromfirsttierbanks,suchasBNPParibasorHSBC. [email protected],+41(0)443345437 Also see the investment ideas on a similar topic on page 14

Market update and outlook Global benchmark rates continued to trend upward last month, fueled by growing inflation concerns and a consequentre-pricingofcentralbankexpectations.Atthesame time, strong macroeconomic and corporate data have led to a further tightening in credit spreads. In this environment,lower-ratedcorporatebondsandsubordinatedfinancialdebthavepostedpositivereturns,contrastingwiththe negativeperformanceoflong-datedhighgradebonds. We still see the long-term trend in benchmark government bond yields as up, but short to medium-term bonds looktohavefullydiscountedthelikelyextentofcentralbank tightening over the next 12 1 months. Credit spreads shouldcontinuetotighten,supportedbythepositivedefault outlook,thoughataslowerpace.Whilesentimenttowards sovereigndebtissueshasgenerallyimprovedsincethebeginningoftheyear,weanticipatethatfiscalconcernswill remainthemajordriverofspreadvolatility. Strategy We continue to find value in fixed-coupon bonds (as opposedtofloaters)butrecommendfocusingonshorttomedium maturities given risks of yield rises in future years. With corporate bond yields expected to trade more rangebound, we prefer high yield over investment grade bonds tobenefitfromhighercouponreturns.WerecentlyrecommendedbondsfromMOLHungarianOil&GasinEURand Swissport (Aguila) in CHF. We also reiterate our positiveTop investment ideas

Recommended yield-curve positioning 1

CHF AAA/AA A /BBB EUR AAA /AA A /BBB GBP AAA/AA A /BBB USD AAA/AA A /BBB 0 1 2 3 4 5 6 7 8 9 10

Preferred maturities (years)Source: Credit Suisse

u u1

BUY SWISSPORT(Aguila)7.75%01/1call 01/14inCHF. BUY MORGANSTANLEY4.5%02/16inEUR.

Weprefershorttomedium-termmaturitiesforbonds withhighratings(AAA/AA),whileforA/BBB,slightly longermaturitiescanbeconsidered.

Recommendationsexpresstherelativeattractivenessofparticularsegmentsacrossthesovereignyieldcurvesonathree-tosix-monthhorizon.Investorsshouldbe awarethatrecommendationsdonotconsiderexchangeraterisks.

| ResearchMonthly | March2011 | Fixed income

Selected bond recommendationsSec. no. ISIN No. Curr. Issuer Rating 8 S & P/ Moodys A/A3 BBB/Baa3 BB/(P)Ba3 Be/B2e A/Baa1 A+/Aa2 AAe/Aa1 BBB/Baa2 A/Baa1 AAA/Aaa A+/Aa3 BB+/n.r. A+/A1 A/A2e A/A3 AAA/Aaa A+/Aa2 A/A2 AA/Aa2 AA/Aa1 BBB/Baa1 BBB/Baa2 BBB/Baa1 n.r./A3 AAAe/n.r. AAA/Aaa Coupon (%) 3 2.375 7 7.875 2.582 2.2 2.125 6.5 5.186 2 3.25 6.5 3.875 2.75 4.5 Maturity Min. denomination / increment 5,000/5,000 5,000/5,000 150,000/1,000 150,000/1,000 Vol. (m) Ask YTM/ Benchprice 1 YTC mark (%) spread 2.46 5.4 5.65 6.5 2.13 2.05 1.4 3.14 6.5 7.01 0.10 2.71 5.13 5.63 3.08 4.54 5.10 5.64 8.17 0.51 4.25 6.5 6.17 6.47 2.3 3.2 3.88 3.43 4.7 5.15 .27 4.85 162 447 437 553 132 104 72 85 350 521 214 146 27 336 75 216 287 402 674 10 151 122 82 10 235 256 268 166 25 250 330 72 Dur.

CHF 1814087 227685 CH0018140878 CHF CITIGROUPINC CH002276853 CHF ROYALBKOFSCOTLANDPLC7 17/12/2014 02/11/2015 31/12/2017 31/01/2018 26/04/2013 14/0/2013 10/01/2014 15/02/2016 14/0/2020 Perpetual 15/01/2016 26/11/2012 03/08/2015 05/10/2015 01/12/2015 23/02/2016 2/07/2105 Perpetual 15/04/2016 17/12/2015 17/03/2015 02/02/2015 20/01/2015 16/08/2013 10/0/2013 17/02/2016 15/01/2016 24/03/2017 14/0/2012 11/0/2013 650 101.5 700 87.40 300 106.63 350 105.00 3.55 4.21 4.70 5.30 2.0 2.45 2.77 4.5 6.77 3.76 2.33 1.67 3.83 4.01 4.37 4.38 3.78 2.63 2.35 2.40 4.26 3.30 3.40 3.35 2.30 2.34 4.46 3.81 4.28 5.03 1.35 2.26

118666 XS0548100246 CHF SUNRISECOMMUNICATIONSI3 1240024 XS0585440430 CHF AGUILA3SA(SWISSPORTINT)3 USD 1122408 US8738WAK USD TELEFONICAEMISIONESSAU2,3 11738727 USF8586CAE24 USD SOCIETEGENERALE3 1227754 US05252BBJ70 USD AUST&NZBANKINGGROUP3 11736486 US5347QAA58 USD LLOYDSTSBBANKPLC3,7 216662 240614 EUR 1075348 XS04612388 EUR LLOYDSTSBBANKPLC 22221 XS0231264275 EUR MOLHUNGARIANOIL&GAS USF1058YHV32 USD BNPPARIBAS3,6 US12828ET33 USD TSYINFLIXN/B2,3

75,000/1,000 1,200 100.6 100,000/1,000 1,000 100.38 100,000/1,000 1,000 100.52 1,000/1,000 500 8.7 6.87 3.25 100,000/1,000 2,000 1,000/1,000 1,350

1236747 US03523TBA51 USD ANHEUSER-BUSCHINBEVWOR2,3 BBB+/Baa2 2.875

100/100 17,001 10.27 50,000/1,000 1,500 100.1 1,000/1,000 50,000/1,000 650 105.38 750 3.00 8.55 .83 .60 .25 3.50

1013124 XS0478802548 EUR HEIDELBERGCEMENTFINANCE3 BB/Ba3 12052262 XS0562884733 EUR SCHLUMBERGERFINANCEBV 12526456 XS05451566 EUR MORGANSTANLEY 2225125 167252 1704571 2480346 XS022536403 EUR BAYERAG5 XS017840473 EUR HSBCCAPITALFUNDINGLP6 XS017207583 EUR SGCAPITALTRUSTIII2,6 DE0001030500 EUR DEUTSCHLANDI/LBOND

50,000/1,000 1,000 50,000/1,000 1,500 1,000/1,000 1,300 1,000/1,000 1,400 1,000/1,000 650

BBB/Baa3 5 BBB+/Baa2 5.41 1.5 3.875 6 6 6.25 4 4.5 3.625 5.4 8 6.5

5.3687 Perpetual

0.01/0.01 15,000 105.03 50,000/50,000 2,000/1,000 1,000/1,000 2,000/1,000 5,000/5,000 5,000/5,000 5,000/5,000 100,000/1,000 5,000/5,000 350 325 100 100 8.40 7.6 .40 .26

Other currencies 11225406 XS0503530874 GBP SOCIETEGENERALE 1104667 XS043321144 AUD BPCAPITALMARKETSPLC 123806 XS0584680887 AUD TOYOTAMOTORCREDITCORP 12281727 XS0577454878 AUD COMMONWEALTHBANKAUST Emerging markets / Below investment grade 11530545 CH0115305457 CHF VTBCAPITALSA(VTBBANK 11631712 CH0116317121 CHF BKMOSCOW(BOMCAPITAL) 12343170 CH012343170 CHF VNESHECONOMBANK(VEB) 1125355 XS050454180 USD RUSSIAFOREIGNBOND3 11523006 USY3860XAB2 USD ICICIBANKLIMITED3 1177 XS054356717 USD SBERBANK(SBCAPSA)3 1165743 XS0536053118 BRL KOMMUNALBANKENAS 10532836 XS045134331 MXN INTLBKRECON&DEVELOP 400 102.50 350 102.0 500 .40

BBB/Baa1e 3.75 BBB/Baa2 5

2/04/2015 100,000/100,000 2,000 100.75 500 100.1 150 8.15 100,000/1,000 1,250 101.28 1,000/1,000 3,600 103.83

Forthedetailedanalysisaccompanyingtherecommendationslisted,pleaserefertothelatestGlobalResearchCreditUpdatesandInvestmentIdeas. 1 Indicativepricesasof18February2011 2 Subjecttowithholdingtax 3 Semi-annualcoupon 4 Quarterlycoupon 5 Subordinateddebt,yieldtocall,durationtocall 6 Subordinateddebt,Tier-1,yieldtocall,durationtocall 7 Subordinateddebt,LT2 8 e=Expectedrating,subjecttofinaldocumentation,(P)=provisional n.a.=notapplicable n.r.=notrated

Currently attractive convertibles ISIN Issuer (rating) S&P / Moodys Underlying Coupon Maturity (%) Par value Current Yield to price 1 maturity (%) USD1,000 104.13 CHF5,000 103.75 USD100,000 114.77 Parity Delta Conversion (%) ratio Equity CS price equity rec. 2 22.11 BUY BUY

Core ideas US458140AD22 INTELCORP (A+/n.a.) CH0105537671 XS056388062 ALLREALHOLDING (n.r./n.r.) LUKOILINTLFIN (n.r./n.r.) INTELCORP ALLREAL HOLD-REG LUKOILOAOADR 2.5 2.13 2.63 15/12/20353 0/10/2014 16/06/20154 2.72 72.12 1.06 6.4 0.74 8.07 74 25 46 32.52

35.0 137.50 1,356.6

65.65 HOLD

1 Allpricesasof18February2011c.o.b. 2 Equityratingofunderlying 3 SoftcallafterDecember2012ifstockexceedsUSD40.476 4 SoftcallafterDecember2013ifstockexceedsUSD103.00 n.a.=notavailable n.r.=notrated Source:Bloomberg,CreditSuisse

10


Equities Revenue rises reflect strong business cycle

Overview

USearningsseasonrevealsrisingrateof companiesexceedingrevenueexpectations. Volatilitynowbelowlong-termaverage levels,riskappetiteclosetoeuphoria.

outtocompaniesthatshowadisappointingcontractionin margins(e.g.Cisco),whileontheotherhand,institutional money flows and expectations of merger and acquisition activityresultinamarketthatisdifficulttoshort. michael.o'[email protected],+44(0)2078838228 Also see the investment ideas on a similar topic on page 15

Theequitymarketrallyofthepastfivemonthspersists,and isevolving.USandEuropeanmarketshaverecentlyestablished new highs, though the new development is weaker performance from emerging equity markets. A racheting upofpolicytightening,highfoodprices,fundoutflowsand geopoliticalconcernshavecombinedtopushtheMSCIEM indexdowntothelevelsofearlyOctober. Wehaveaneutralstanceonemergingmarketequities, butflagthattheyaremovingtowardmoreattractivelevels again. In many respects, the weakness in emerging market equitiesisanaturalconsequenceofthemoodsthathave drivenassetpricessinceAugustdeflation,reflationand inflation. The inflation phase is often followed by fears of monetary tightening, and this is what appears to have depressedtheAsianmarkets,inparticular. Inthedevelopedworld,fewofthemajorcentralbanks are likely to accelerate into tightening rounds this year, though long bond yields have sold off aggressively in the pastthreemonths.Shouldthiscontinue,itwillconstrainequityvaluations,thoughouranalysisshowsthata1%risein theUS10-yearyield(whichissignificantlyhigherthanour yieldforecast)willnothurtequityvaluations.Thissupports ourstrategicallypositivestanceonequities. Two related points are worth mentioning the ratio of positive surprises to disappointments in the US earnings seasonisnowdowntoaveragelevels,somethingweconsidernormalforthisstageinthebusinesscycle.Morepositively,revenuesurprisesaretouchinganimpressive70%. Acrosstheequitymarket,broadvolatilitycontinuesto pushlowerwiththeVIXindexnowwellbelowits20-yearaverage.Withintheequitymarket,volatilityisdrivenbyatleast twointerestingdevelopments.OneisthepunishmentmetTop investment idea

Revenue surprises as a % of total reports for S&P 500 companies% 100 80 60 40 20 0 Cons disc Energy Healthcare Staples Financials Industrials Materials Telco Utilities

US revenue surprises as a % of reportsSource: Credit Suisse

RevenuesurprisesbyUScompanieshavebeenledby cyclicalsectorslikeIT.

potentialasatabletplayer. u

BUY HPQmoreclarityonmanagementstructure,

IT

11

| ResearchMonthly | March2011 | Equities

Equities at a glance Regional, sector and individual stocksGlobal equity sector strategy and focus list (612+ months) Strategic weight (612+ months) Sector (weight) Industry Europe Switzerland USA Asia ex Japan/ overweight Japan neutral Australia neutral ChinaCoalEnergy (H-Shares),PTTEP, Santos Orica RioTintoLimited

neutral

neutral

overweight

Energy (O)

Energy

O

BGGroup,Royal DutchShell BASF RioTinto,Xstrata

SuncorEnergy, Hess,Petrobras (ADR) Vale(ADR)

Materials (N)

Chemicals ConstructionMaterials Metals&Mining Pulp&Paper

O N N N O

Industrials (O)

CapitalGoods

Siemens,Schneider ABB,Kaba Electric WPP Anheuser-Busch Danone BritishAmerican Tobacco FreseniusPref Bayer HSBC Kuehne+Nagel SwatchGroup (Bearer) Nestl Sonova Roche(Genussscheine),Novartis UBS

Honeywell IJM,UnitedTractors, International,General Fanuc,KeppelCorp. Electric,Caterpillar Starbucks,Carnival Wal-Mart Coca-Cola KraftFoods PhilipMorris International BaxterInternational Pfizer SIA,ChinaShipping TataMotors Li&Fung IndofoodSukses Kasikornbank,CIMB Group,Overseas Chinese Banking Corp. SunHungKai Properties,Frasers CentrepointTrust, MitsuiFudosan SamsungElectronics, HTC,Nidec

CommercialServices&Supplies Transportation,incl.Logistics Consumer discretionary (U) Automobiles&Components ConsumerDurables&Apparel,Textiles,Apparel& Luxury HotelsRestaurants&Leisure Media Retailing Consumer staples (U) Food&StaplesRetailing Beverages FoodProducts Tobacco Household&PersonalProducts Health care (N) HealthcareEquipment&Services Biotechnology Pharmaceuticals Financials (N) Banks

N O O N U O U U N U O N N N N N

Diversified Financials Insurance RealEstate

N N N

DeutscheBank,ING Allianz National Suisse

JPMorganChase

IT (O)

Software&Services TechnologyHardware&Equipment Semiconductors&SemiconductorEquipment

O O N U U ULegend to weights: O

SAP Telefonica GDF SuezOverweight N

Logitech Neutral U Underweight

Microsoft,Google Qualcomm AT&T

Telecommuncation services (U) Utilities (U)Source:CreditSuisse

Diversified Telecoms WirelessTelecoms Utilities

Thisisoursectorstrategyandfocuslistasof21/02/ 2011recommendedbyCreditSuisse,PrivateBankingdivision.Oursectorstrategyshowsoursectorpreferenceswithrecommendationsrelativetoregional benchmarks:Global:(MSCIWorldinUSD),Europe / EMEA(MSCIEuropeinEUR),USA / LatinAmerica(S&P500 /MSCIUSAinUSD),Asia /Pacific(MSCIACAsia /PacificinUSD).Anoverweight(underweight) isarecommendationtoinvestmore(less)thaninaneutralpositionindicatedbythemarket-capweightsoftherespectivebenchmarks.Thesectorweightsaswellastheneutralpositionsinfiguresareavailable uponrequest;pleasecontactyourrelationshipmanager.TheFocusListisaselectionofourfavoritestockswithinourcoveragewhichhaveaBUYrecommendation.Theselectionwasmadetoreflectthesector andregionalpreferences.UpdatesareprovidedviaourResearchMonthlyandResearchWeeklypublicationsaswellasinourEquityResearchreports.Additionally,wepublishouraddsanddropsinourResearch EquityDaily.Thechangesarehighlightedinbold. Please note that trading facilities in certain securities may be limited.

Forfurtherinformation,includingdisclosureswithrespecttoanyotherissuers,pleaserefertotheCreditSuisseGlobalResearchDisclosuresiteat: http://www.credit-suisse.com/research/disclaimer

12


Alternative investments Real estate and commodity rally to continue, but become more fragile due to valuationOverview Hedge funds: Positive start Hedge funds started the year 2011 on a positive note. In spiteoffrequentreversalsinequityandforeignexchange markets,theygenerallypostedpositivereturnsinJanuary. Arbitragestrategies,whichstrivetoachievealowtomoderatedirectexposuretoassetmarkets,performedbest.We reiterateourpreferenceforglobalmacro,convertible arbitrageanddistresseddebtstrategies. Private equity: LBO market remains on recovery track Leverage buyout (LBO) activity picked up in 2010 and shouldgainfurthermomentumin2011.Marketsforleveraged loans and high yield bonds provide good conditions for LBO financing. We maintain our preference for small andmedium-sizedtransactions.Bothacquisitionpricesand financingconditionsaremorefavorablethanforlargecap companies,whileexitopportunities(IPOs)areimprovingfor highqualitycompanies. [email protected],+41(0)443331362

Hedgefundshadagoodstartinto2011and shouldcontinuetodelivergoodrisk-adjusted returns. Correlationamongcommoditymarketsis falling.Momentumstrategiesshouldperform well.

Alternative investment outlook Alternative investments had a good start into 2011. However,afterthestrongrallyofthepastfewmonths,valuation for commodities and real estate equities no longer looks cheap.Bothassetcategoriesremainattractivestrategically, inourview,butrisksarerising.Hedgefundsshouldprovide betterriskadjustedreturns. Commodities: Uptrend to become less steady Commoditieshavestartedtheyearonastrongfootingbut risksarerising.Inthenearterm,pricescouldbevolatile,but thestrategiclong-termoutlookremainspositive.Inrecent months, inventories in many markets have fallen substantially. As a result, prices are reacting increasingly sensitivelytoevensmallchangesinthesupply/demandbalance. The uptrend is becoming less steady and riskier. Momentum strategies, which switch between commodity sectors, shouldoutperformpassivestrategies.Intermsofindividual sectorswecontinuetopreferindustrialmetals,givendeterioratingavailability.Overa1-yearhorizon,goldshouldalso be a good store of value given low real interest rates. Oil pricesshouldtradeerraticallyamidcurrentgeopoliticaltensionsintheMiddleEastNorthAfrica(MENA)region. Real estate equities: We see further upside The economic re-acceleration is spurring rental growth. Thus,realestateequitycontinuestohaveupsidepotential. Butrelativetooverallequitymarkets,propertystockscould underperform in the coming months, given already richer valuations. Strategy: We recommend holding a diversified portfolio with a focus on markets and regions with good growthinrents,suchasLondonandAsia / Pacific.

Performance of alternative investmentsIndexed performance in USD (31/01/04 = 100) 220 200 180 160 140 120 100 80 60 12/03 REITsSource: Bloomberg, Credit Suisse / IDC

12/04

12/05

12/06

12/07 Hedge funds

12/08

12/09

12/10

Commodities

Hedge funds (investable)

Top investment idea

Alternativeinvestmentsstarted2011withsolidmomentum.Commoditieshaveoutperformedrecently.

u

BUY exposuretocommoditymomentumstrategies.

13


Foreign exchange Widening yield spreads underpin more stable euro

Overview

Wideningyieldspreadsunderpinmorestable euro.Yentounderperformoncrossesand withinAsia. Majorcurrencymodelportfoliostrategic allocationsunchanged.Tacticalallocation toNZDcutduetoweakermomentum.

WideningofyieldspreadsbetweentheEurozoneandtheUS suggestsfurtherupwardpressureonEUR / USDincoming months,particularlyifEurozonedebtconcernseasefurther. Overthepastmonth,theone-yearEUR-USDLIBORspread haswidened17basispointsandtheone-yearFXswapyield spreadhasrisenbysome38basispointsascross-currency fundingpressuresonEuropeanbankseased.Uncertainties remainoneurodebtprospects,butprospectiveagreement onreformsoverthenexttwomonthscouldaddtopositive sentiment.Ourmodelportfoliothuscontinuestooverweight Europeancurrenciesandoureuroforecastshavebeenrevisedmodestlyhigher.WeexpectEUR/USDtoriseto1.43 overthecomingyear. MuchofourfavoredEuropeanexposureiscurrentlyheld in the pound sterling and the Swedish krona, where we seethemostfavorablecombinationsofvalueandcyclical improvement.TheSwissfranchasrelativelylessappealin 2011, thanks to rich valuation readings and a clear divergencebetweenthestrongcurrencyandafallingyieldspread versustheeuro.Whilethefrancisstillfavoredversusthe dollarin2011,allocationsinportfoliosaresmall,asfurther reliefofeurodebtconcernscouldtriggerfurthercorrection USD-based model currency portfolioXAUAU D

of2010sstrongfrancgainsversustheeuro.Weexpectthe franctoweakenmoderatelyversustheeurothisyear. In contrast, Central and Eastern European (CEE) currenciescouldgainfromreliefofEMU-relatedstresses.We believe recent CEE underperformance reflects a risk premium from these issues. Consolidation may still dominate thisblocinthecomingmonth,butstrongrecoverypotential remainsona6 12+monthsview. We have not yet seen a sufficient rise in global yields toturntheJapaneseyentrendvisiblybearishyet,butthis isakeyriskfor2011.Hence,whilewehavenotyetraised ourUSD /JPYforecastsfromflat,wemaintainmodestyen underweightpositions,andwillcontinuetomonitoryielddevelopmentsclosely,awaitingaclearersignaltounderweight theyenfurther.Onefavoreduseofyenfundingatthistime isversuslongpositionsintherestofAsia,wherewesee ongoinglocalcurrencyappreciation,albeitslowed(butnot reversed)byFXinterventionandcapitalcontrols. [email protected],+41(0)443328318 Also see the investment ideas on a similar topic on page 16

EUR EUR EUR SEK USD base GBP

Core DiversificationSEK

Strategic Allocation EUR 16% SEK 7% GBP 3% CHF 0% NOK 0% USD 52% CAD 0% JPY 13% SGD 3% AUD 0% NZD 0% XAU 6%

Tactical + Overlay = 5% 0% 2% 4% 5% 2% 3% 2% 0% 2%

Optimal Portfolio EUR 11% SEK 7% GBP 5% CHF 4% NOK 5% USD 41% CAD 2% JPY 9% SGD 6% AUD 2% NZD 0% XAU 8%

SGD JPY

XAU

Europe

EUR

20%

SGJPY

D

JPY

GBP CHF NOK

CAD

Americas

USD 62% 15%

11% 4%

USD USD USDSource: CreditSuisse

Asia-Pacific JPY

Gold

XAU

3%

14


Investment theme Differentiation between emerging markets and high yield bonds

Overview

Investorsshiftingassetsfromemerging marketstodevelopedmarkets,butdemand forhigh-yieldremainsrobust. Weexpectemergingmarketbondperformancetomovemoreinlinewithotherrisky assets.

Afternearlytwoyearsofstrongperformanceandabsorbing largeamountsofinvestmentcapital,emergingmarket(EM) assetshavestartedshowingsomeweakening,withEMequitiesunderperformingandEMsovereignbondsflattening out. While fundamentals in EMs are still strong, investors areincreasinglyconcernedthatcreepingsignsofinflation could spur government policy makers to tighten monetary policy, thus impeding growth. This fear of inflation stems fromtwosources:theimpactofhigherfoodprices,which couldboostoverallinflationexpectations,andthepick-upin therecoveryofdevelopedmarkets(DM),leadingtostronger global demand and adding further pressure to EMs, especiallyinthoseeconomiesalreadyfacingoverheating.While coreinflationremainsmutedinmanyEMs,thegeneralperceptionthatcommoditypriceswillremainhighovertheyear andthat global growth isexpanding, is setting achallengingpictureforEMpolicymakersandmakinginvestorsuneasy.Asaresult,investorshavebeenmoreactivelyshifting assets between EMs and DMs, with EMs facing outflows, whichhashadanimpactonsovereignbonds,butaneven greatereffectonEMequities.Thisreallocationprocesshas heightenedinvestorsinterestinseekingalternativestoEM sovereigns,includinghigh-yieldbonds. Whereas EM sovereigns are facing changing investor sentiment,theoverallhigh-yieldmarketisbenefitingfrom the search for higher returns, low default rates and the close association with the US economic cycle. Approximately80%ofallhighyieldoutstandingisinUSD,andas theUSslowlyemergesfromadeeprecessionandgrowthTop investment ideas

returns,investorsarefavoringgrowth-relatedassetclasses, suchashighyieldandDMequities.Thisisalsoreflectedin investment-grade fixed income declines. The result is the recentoutperformancebyhighyieldversusEM.Thiscanbe seeninthechartwherewecomparespreadsonacreditratingneutralbasis,capturingthecreditqualitytransformation thatmostemergingmarketsexperienceovertime. Weexpectthisoutperformancetocontinueintheshort term,afterwhichEMperformanceisexpectedtostabilize. ForEMs,webelievethathigher-betacountrieswilloutperformhigher-ratedcountries,whileforhighyieldwecontinue torecommendshortertomid-datedmaturities,withaclear preferenceoverinvestmentgradebonds. [email protected],+41(0)443335604 [email protected],+41(0)443329283 Part of the Multipolar world Megatrend. See page 17

High-yield corporates have tightened relative to emerging marketsBp 1,400 1,200 1,000 800 600 400 200 0 04/00 08/01 12/02 04/04 08/05 12/06 04/08 08/09 12/10 EMBI+Source: Bloomberg, Credit Suisse

Synthetic corporate index

lowerpricedbonds. u

BUY Argentinashort-datedbondsandVenezuela

mid-datedmaturitiesthataretradingbelowtheir u respectivecalls.

BUY highyieldcorporatebondswithshorterto

Thesyntheticcorporateindexallowsaconsistent comparisonbetweencorporatebondsandEMsovereignbecauseitcapturesthecreditqualitytransformationthatmostEMsexperiencedinrecentyears.

15


Investment theme Gain unhedged UK equity exposure

Overview

Werecommendinvestorswithotherbase currenciesbuyunhedgedUKequities. Thepoundsterlingisamongourfavorite majorcurrenciesfor2011.

terialssectors(whichtendtodowellintheRecovery phaseoftheCycleClock)andabetaofjust0.88versus the global benchmark, the FTSE presents a good possibilitytogainequityexposureataslightlyreduced overallrisklevel. ThecombinationofcurrencyandequityvaluecouldbeexpressedthroughunhedgedpurchasesofpotentialUKequity acquisition targets. Also, with corporate cash levels at recordhighs,wealsofavorexposuretoUKcompanies,which continuetodirectlyreturncapitaltoshareholders.Thiscould beachieved,forexample,throughaUKhighdividendsindex orselectedUKcompanies [email protected],+41(0)443328318 [email protected],+44(0)2078839225

Thepoundsterlingisamongourtopcurrencypicksfor2011 wealsohighlightUKequitiesasanattractiveproposition forinvestors.Asaresultofthesetwoinvestmentthemes, we recommend investors with other base currencies buy unhedgedUKequitiestobenefitfromthepotentialdouble effectofgoodcurrencyandequityperformance. AccordingtoourCSFVmodel,thepoundischeapestof themajorcurrenciesintrade-weightedterms.WhileBankof Englandtighteningmightbeacontributortofurthersterling recovery, UK short-term interest rates are still very low. Other UK assets are more appealing, notably the equity market, where strong earnings and cheap valuation may supportcapitalinflowandthepound. Despitethelong-termdifficultiesfacingtheUKeconomy,2011earningsgrowthestimatesfortheFTSE100 are18%,trailingonlyCanadaandLatinAmerica.Earnings revisions data is also better for UK equities than for most other regions, with the exceptions of Japan andtheUS. UKequitieshavebeentheweakestperformersamong developedmarketsthisyear,underperformingtheMSCI World equities benchmark by almost 3%. On forward P/Evaluation,theFTSEnowappearscheapataround 14%belowitslong-termaverage. With a combined overweight of 13% compared to the MSCI World in the cyclically exposed energy and maTop investment ideas

UK FTSE is a lower beta equity investment with attractive value12M Fwd EPS growth (%) 24 22 20 18 16 14 12 10 0.70 Switzerland (SMI) 0.75 0.80 UK (FTSE 100) Australia (ASX 200) Canada (MSCI)

Latin America (MSCI) Japan (NIKKEI 225) ASIA ex. Japan (MSCI) EM EMEA (MSCI) US (S&P 500)

Europe ex. UK ex Swiss (MSCI) 0.85 0.90 0.95 1.00 1.05 1.10

Global equity betaSource: Datastream, Credit Suisse

u

BUY CableandWirelessWorldwide.Telecoms operatorandpotentialtake-overtarget(25%target upside). BUY CentricaPLCUKutilitycompanybetter

p ositionedforgrowthcomparedtoitspeers. u Takeovertarget.1

Despitehavinganoveralllowermarketbeta,agenerousoverweightinenergyandminingstockscontributes tothestrongEPSgrowthexpectationsforthe FTSE100in2011.

S eeourreportof14December2010,titledM&Againingmomentum:Recordcashlevels,attractivevaluationsandlowdebtfinancingcosts.Pleasealsoseeour 9December2010report,titledDynamicDividends.

16


Investment theme We remain optimistic on Asian and CEE FX strength over the medium termOverview astheyarepositivelycorrelatedwiththeEURduetotheir closeintegrationwithintheEMUviatradeandthefinancial sector.Moreover,thesedevelopmentsshouldbodewellfor lagginghigheryieldingcurrencies(TRYandINR).Wefind thatifEURappreciatesvs.theUSDby1%,HUFandPLN tend to appreciate by approximately +0.45% vs. EUR. In addition, these currencies offer a carry of 4% 5% over 12M. [email protected],+41(0)443335228 [email protected],+6562126482 Part of the Multipolar world Megatrend. See page 17

Asiancurrencyappreciationtrendis backedbycurrentaccountsurplusesand continuedCNYgains. CEEcurrencies,whileriskier,tendto performwellwhenEURisrising.

Asian FX and MXN strength are fundamentally backed WerecommendbeinglongabasketofSGD,MYR,KRW, CNY, JPY and MXN vs. the USD. The currency basket tradewasopenedon13/12/2010andhasnowgained1%. We expect gains of 4% 5% over 12M. Strong growth in Asia and Mexico are likely to attract increased capital inflows.Inaddition,aseconomicrecoveryinG3economies strengthens, we expect export growth and remittance-relatedinflowsintheseemergingmarketstopickup.Moreover,furtherCNYstrengthwilllikelyanchorgainsinother Asian currencies without creating concerns of a loss of competitiveness.Currencystrengthwillbetoleratedtolimit commodity-ledinflationwhilefront-loadedratehikesinH1 2011 raise interest rate differentials vs. the USD. Overall, we expect a gradual appreciation trend as the currencies areundervaluedaccordingtoourCreditSuisseFairValue Modelandmoremeasurestomanagetheflowofcapitalare unlikelytobedraconian. Increase beta by adding exposure to EMEA and INR currencies Werecommendrisk-tolerantinvestorswithastrategicinvestment horizon (6 12M+) gain exposure to selective EMEA currencies of PLN, HUF and TRY and INR vs. the USD. Thecurrencybaskettradewasopenedon13/12/2010but has seen flat performance thus far due to the weak EUR. WethinkthatanenvironmentinwhichEMUdebtissuesare beingsolvedandEuropeangrowthpicksup,EURwouldrecoverabove1.40.ThiswouldbodewellforCEEcurrenciesTop investment ideas

Valuation of emerging market currenciesDeviation in % 40 30 20 10 0 10 20 30 40 50 CNY Undervaluation vs. USD EUR ZAR CHF KRW TWD SGD MXN GBP HUF THB JPY CAD PLN NZD AUD SEK NOK CZK Overvaluation vs. USD

17 February 2011Source: Datastream, IMF, Credit Suisse /IDC

andCNYvs.USD.Target105,stoploss97. u

BUY a12MforwardbasketofSGD,MYR,KRW

forwardbasketofHUF,INR,PLN,andTRYvs. u USD.Target105,stoploss97.

BUY (formorerisk-tolerantinvestors)a12M

Asiancurrenciesareundervaluedaccordingtoour estimatedCSFairValue.HUF,PLNareovervalued, butofferhighyield.

17


Credit Suisse Megatrends Frontier markets: The next beneficiaries of a multipolar world

Overview

Rebalancingtowardsamultipolarworldalso opensopportunitiesinso-calledfrontier markets. Frontiermarketsofferattractivegrowth opportunitiesforrisk-tolerantequity investors.

The rebalancing towards a multipolar world gained further momentuminthewakeofthecreditcrisis.However,this processnotonlyincreasestheimportanceoflargeemergingmarkets,suchasChinaorIndia,butalsoopensopportunities for the smaller, less developed emerging markets theso-calledfrontiermarkets.Theycanofferinteresting growthdrivers,suchasyoungpopulationswithincreasing literacy,improvinggovernance,commoditywealth,growing consumermarkets.Wethereforeexpectsomefrontiermarketstoproducestronglong-termreturnsastheygraduate toemergingmarketstatus. Equity markets of frontier markets still trade roughly 50% below their 2007 peak (whereas EM are only 17% belowthepreviouspeak).Theytypicallyperformwellinthe second half of a market upswing, but are more impacted duringmarketdownturnsandthereforerequirecarefulmonitoring:Politicalandliquidityrisksarestillsignificantlyhigher in frontier markets than in more developed markets. This canleadtotemporarymarketdistortions,asseenrecently withtheturmoilintheMiddleEastandNorthAfrica(MENA) region. However, such events can start painful structural changes with the potential to act as a trigger for a more sustainable development. This was the case, for example, withIndonesiaafterthetopplingofSuhartoin1998. Forrisk-tolerantinvestorswithalong-terminvestment horizon, frontier markets offer interesting potential longtermvaluecreation. [email protected],+41(0)443357298

Demographics Urbanization 21stcenturylifestyle Education Agriculture

Multipolar world Emergingmarkets Frontiermarkets Emergingproducers Emergingconsumers Logistics

Sustainability Innovation Environment Community

TheCreditSuisseMegatrendsarelong-terminvestment themes.Thebestwaytocapitalizeonthesethemesis themes.Thebestwaytocapitalizeonthemisthrough throughequityinvestments.Accordingly,theratingsysequityinvestments.Theratingsystemoutlinedbelowretemoutlinedbelowreflectstheattractivenessofequity flectstheattractivenessoftherelevantstocks(valuation, momentum,bubblebuildingetc.)withineachtheme: investmentswithineachtheme:Top investment idea

ttractiveinvestmentopportunitiescontinueto A

investintheme

u

BUY Kazmunaigas:Offersthebesttraded exposuretoKazakhstansoilandgasindustry.

eepholdingsbutdonotaddtoexistingpositions KReduce /exitexistingpositions

istockphoto.com

18


Disclosure appendixAnalyst certification Theanalystsidentifiedinthisreportherebycertifythatviewsaboutthecompaniesandtheirsecuritiesdiscussedinthisreportaccuratelyreflecttheirpersonal viewsaboutallofthesubjectcompaniesandsecurities.Theanalystsalsocertify thatnopartoftheircompensationwas,is,orwillbedirectlyorindirectlyrelated tothespecificrecommendation(s)orview(s)inthisreport. Knowledge Process Outsourcing (KPO) Analysts mentioned in this report are employedbyCreditSuisseBusinessAnalytics(India)PrivateLimited. Important disclosures Credit Suisse policy is to publish research reports, as it deems appropriate, basedondevelopmentswiththesubjectcompany,thesectororthemarketthat may have a material impact on the research views or opinions stated herein. CreditSuissepolicyisonlytopublishinvestmentresearchthatisimpartial,independent,clear,fairandnotmisleading. The Credit Suisse Code of Conduct to which all employees are obliged to adhere,isaccessibleviathewebsiteat: 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,whichcanbefoundat: https://www.credit-suisse.com/legal/pb_research/independence_en.pdf Theanalyst(s)responsibleforpreparingthisresearchreportreceivedcompensationthatisbaseduponvariousfactorsincludingCreditSuissestotalrevenues, aportionofwhichisgeneratedbyCreditSuisseInvestmentBankingbusiness.Equity rating history as of 22/02/11 Company BNPPARIBAS (BNPFP) Rating BUY BUY BUY BUY BUY BUY CABLE& WIRELESS WORLDWIDE (CW/LN) BUY BUY BUY Date (since) 17/02/11 04/11/10 02/08/10 06/07/10 06/05/10 18/02/10 16/11/10 26/03/10 02/02/10 HSBC (HSBALN) BUY BUY BUY HOLD BUY INTEL(INTCUS) BUY BUY BUY BUY BUY BUY BUY 02/02/11 01/02/11 10/02/11 09/02/11 19/10/10 21/07/10 20/04/10 26/02/10 25/02/10 09/02/10 21/02/11 24/01/11 16/12/10 25/11/10 02/09/10 21/05/10 11/05/10 25/11/10 23/11/10 15/09/10 03/09/10 20/08/10 10/08/10 09/08/10 19/05/10 29/04/10 18/02/10 MORGAN STANLEY (MSUS) PFIZER (PFEUS) BUY BUY BUY BUY BUY BUY BUY KAZMUNAIGAS BUY EXPLORATION& REST PRODUCTION BUY (KMGLI) BUY BUY LUKOILADR (LKODLI) HOLD HOLD HOLD HOLD HOLD HOLD BUY BUY BUY HOLD HOLD 05/11/10 02/08/10 07/05/10 01/03/10 10/11/09 01/02/11 31/01/11 17/01/11 14/01/11 15/10/10 13/10/10 30/08/10 24/08/10 20/08/10 15/07/10 14/07/10 16/04/10 14/04/10 11/02/10 23/11/10 01/11/10 15/07/10 17/03/10 01/12/09 21/01/11 06/09/10 25/03/10 09/12/09 21/10/10 11/08/10 03/02/11 03/11/10 03/08/10 11/05/10 03/02/10

SAINTGOBAIN BUY (SGOFP) BUY BUY BUY BUY BUY BUY BUY BUY

20/12/10 22/10/10 14/10/10 02/09/10 02/08/10 30/07/10 11/05/10 23/04/10 22/09/09

SBERBANK (SBERRU)

BUY BUY BUY BUY BUY BUY BUY BUY

26/01/11 07/12/10 27/08/10 26/08/10 16/07/10 08/06/10 19/04/10 26/01/10

CENTRICAPLC BUY (CNALN) BUY COCA-COLA (KOUS) BUY BUY BUY BUY HOLD HOLD BUY BUY DEERE&CO (DEUS) BUY BUY BUY BUY BUY BUY BUY HEWLETTPACKARD (HPQUS) BUY BUY BUY BUY BUY BUY BUY BUY BUY BUY

Theanalyst(s)and/oramemberoftheanalystshouseholdholdapositioninthe securitiesof(CENTRICAPLC). Asattheendoftheprecedingmonth,CreditSuissebeneficiallyowned1%or moreofaclassofcommonequitysecuritiesof(HSBC,SBERBANK). Forthefollowingdisclosures,referencestoCreditSuisseincludeallofthesubsidiariesandaffiliatesofCreditSuisseAG,theSwissbank,operatingunderits InvestmentBankingdivision. Thesubjectissuer(BNPPARIBAS,CABLE&WIRELESSWORLDWIDE,CENTRICA PLC, COCA-COLA, DEERE & CO, HEWLETT-PACKARD, HSBC, INTEL, KAZMUNAIGAS EXPLORATION & PRODUCTION, LUKOIL ADR, MORGAN STANLEY, PFIZER, SAINT GOBAIN, SBERBANK) currently is, or was during the 12-month period preceding the date of distribution of this report, a clientofCreditSuisse. Credit Suisse provided investment banking services to the subject company (BNPPARIBAS,CABLE&WIRELESSWORLDWIDE,CENTRICAPLC,COCACOLA, DEERE & CO, HEWLETT-PACKARD, HSBC, INTEL, KAZMUNAIGAS EXPLORATION&PRODUCTION,LUKOILADR,MORGANSTANLEY,PFIZER, SAINTGOBAIN,SBERBANK)withinthepast12months. Credit Suisse provided non-investment banking services, which may include SalesandTradingservices,tothesubjectissuer(BNPPARIBAS,COCA-COLA, DEERE&CO,HEWLETT-PACKARD,HSBC,INTEL,LUKOILADR,MORGAN STANLEY,PFIZER,SBERBANK)withinthepast12months. CreditSuissehasmanagedorco-managedapublicofferingofsecuritiesforthe subjectissuer(BNPPARIBAS,CENTRICAPLC,COCA-COLA,DEERE&CO, HEWLETT-PACKARD,HSBC,INTEL,KAZMUNAIGASEXPLORATION&PRODUCTION,MORGANSTANLEY,PFIZER)withinthepastthreeyears. CreditSuissehasmanagedorco-managedapublicofferingofsecuritiesforthe subjectissuer(BNPPARIBAS,COCA-COLA,DEERE&CO,HSBC,KAZMUNAIGASEXPLORATION&PRODUCTION)withinthepast12months. Credit Suisse has received investment banking related compensation from the subjectissuer(BNPPARIBAS,CENTRICAPLC,COCA-COLA,DEERE&CO, HEWLETT-PACKARD, HSBC, INTEL, KAZMUNAIGAS EXPLORATION & PRODUCTION,MORGANSTANLEY,PFIZER)withinthepast12months. Credit Suisse has received compensation for products and services other than investment banking services from the subject issuer (BNP PARIBAS, COCACOLA, DEERE & CO, HEWLETT-PACKARD, HSBC, INTEL, LUKOIL ADR, MORGANSTANLEY,PFIZER,SBERBANK)withinthepast12months. CreditSuisseexpectstoreceiveorintendstoseekinvestmentbankingrelated compensation from the subject issuer (BNP PARIBAS, CABLE & WIRELESS WORLDWIDE, CENTRICA PLC, COCA-COLA, DEERE & CO, HEWLETTPACKARD,HSBC,INTEL,KAZMUNAIGASEXPLORATION&PRODUCTION, LUKOIL ADR, MORGAN STANLEY, PFIZER, SAINT GOBAIN, SBERBANK) withinthenextthreemonths. Asatthedateofthisreport,CreditSuisseactsasamarketmakerorliquidity provider in the securities of the subject issuer (COCA-COLA, DEERE & CO, INTEL,MORGANSTANLEY,PFIZER). Credit Suisse holds a trading position in the subject issuer (BNP PARIBAS, CABLE&WIRELESSWORLDWIDE,CENTRICAPLC,COCA-COLA,DEERE& CO,HEWLETT-PACKARD,HSBC,INTEL,KAZMUNAIGASEXPLORATION& PRODUCTION,LUKOILADR,MORGANSTANLEY,PFIZER,SAINTGOBAIN, SBERBANK). Additional disclosures for the following jurisdictions Hong Kong:Otherthananyinterestsheldbytheanalystand/orassociatesas disclosed in this report, Credit Suisse Hong Kong Branch does not hold any disclosableinterests.United Kingdom:Forfixedincomedisclosureinformation forclientsofCreditSuisse(UK)LimitedandCreditSuisseSecurities(Europe) Limited,pleasecall+41443333399. Forfurtherinformation,includingdisclosureswithrespecttoanyotherissuers, pleaserefertotheCreditSuisseGlobalResearchDisclosuresiteat: http://www.credit-suisse.com/research/disclaimer

TERMINATED 22/01/09

TERMINATED 28/01/09

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Guide to analysisEquity rating allocation as of 22/02/2011 Overall BUY HOLD SELL RESTRICTED 46.48% 48.24% 4.55% 0.73% Investment banking interests only 47.08% 47.77% 4.30% 0.86%

tries.HOLTisacorporateperformanceandvaluationadvisoryserviceofCredit Suisse. For technical research Whererecommendationtablesarementionedinthereport,Closeisthelatest closingpricequotedontheexchange.MTdenotestheratingforthemediumtermtrend(36monthsoutlook).STdenotestheshort-termtrend(36weeks 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 likelytofall).OutperforminthecolumnRelperfdenotestheexpectedperformanceofthestocksrelativetothebenchmark.TheCommentcolumnincludes thelatestadvicefromtheanalyst.InthecolumnRecomthedateislistedwhen thestockwasrecommendedforpurchase(openingpurchase).P&Lgivesthe profitorlossthathasaccruedsincethepurchaserecommendationwasgiven. Forashortintroductiontotechnicalanalysis,pleaserefertoTechnicalAnalysis Explainedat: https://www.credit-suisse.com/legal/pb_research/ technical_tutorial_en.pdf

Relative stock performance Atthestocklevel,theselectiontakesintoaccounttherelativeattractivenessof individualsharesversusthesector,marketposition,growthprospects,balancesheet structure and valuation. The sector and country recommendations are overweight,neutral,andunderweightandareassignedaccordingtorelative performanceagainsttherespectiveregionalandglobalbenchmarkindices. Absolute stock performance ThestockrecommendationsareBUY,HOLDandSELLandaredependenton theexpectedabsoluteperformanceoftheindividualstocks,generallyona6 12 monthshorizonbasedonthefollowingcriteria: BUY: HOLD: SELL: RESTRICTED: 10%orgreaterincreaseinabsoluteshareprice variationbetween10%and+10%inabsoluteshareprice 10%ormoredecreaseinabsoluteshareprice Incertaincircumstances,internalandexternalregulationsexclude certain types of communications, including e.g. an investmentrecommendationduringthecourseofCreditSuisse engagementinaninvestmentbankingtransaction. Researchcoveragehasbeenconcluded.

Global disclaimer / important informationReferencesinthisreporttoCreditSuisseincludesubsidiariesandaffiliates.For moreinformationonourstructure,pleaseusethefollowinglink: http://www.credit-suisse.com/who_we_are/en/ The information and opinions expressed in this report were produced by the GlobalResearchdepartmentofthePrivateBankingdivisionatCreditSuisseas ofthedateofwritingandaresubjecttochangewithoutnotice.Viewsexpressed inrespectofaparticularstockinthisreportmaybedifferentfrom,orinconsistentwith,theobservationsandviewsoftheCreditSuisseResearchdepartment ofDivisionInvestmentBankingduetothedifferencesinevaluationcriteria.The report is published solely for information purposes and does not constitute an offeroraninvitationby,oronbehalfof,CreditSuissetobuyorsellanysecurities or related financial instruments or to participate in any particular trading strategyinanyjurisdiction.Ithasbeenpreparedwithouttakingaccountofthe objectives, financial situation or needs of any particular investor. Although the informationhasbeenobtainedfromandisbaseduponsourcesthatCreditSuisse believes to be reliable, no representation is made that the information is accurateorcomplete.CreditSuissedoesnotacceptliabilityforanylossarising fromtheuseofthisreport.Thepriceandvalueofinvestmentsmentionedand anyincomethatmightaccruemayfluctuateandmayriseorfall.Nothinginthis reportconstitutesinvestment,legal,accountingortaxadvice,orarepresentation that any investment or strategy is suitable or appropriate to individual circumstances, or otherwise constitutes a personal recommendation to any specificinvestor.Anyreferencetopastperformanceisnotnecessarilyindicativeof futureresults.Foreigncurrencyratesofexchangemayadverselyaffectthevalue,priceorincomeofanyproductsmentionedinthisdocument.Alternativeinvestments, derivative or structured products are complex instruments, typically involveahighdegreeofriskandareintendedforsaleonlytoinvestorswhoare capable of understanding and assuming all the risks involved. Investments in emerging markets are speculative and considerably more volatile than investments in established markets. Risks include but are not necessarily limited to: politicalrisks;economicrisks;creditrisks;currencyrisks;andmarketrisks.In jurisdictionswhereCreditSuisseisnotalreadyregisteredorlicensedtotradein securities,transactionswillonlybeeffectedinaccordancewithapplicablesecuritieslegislation,whichwillvaryfromjurisdictiontojurisdictionandmayrequire thatthetradebemadeinaccordancewithapplicableexemptionsfromregistration or licensing requirements. Before entering into any transaction, investors shouldconsiderthesuitabilityofthetransactiontoindividualcircumstancesand objectives.CreditSuisserecommendsthatinvestorsindependentlyassess,with aprofessionalfinancialadvisor,thespecificfinancialrisksaswellaslegal,regulatory,credit,taxandaccountingconsequences.ACreditSuissecompanymay, to the extent permitted by law, participate or invest in other financing transactionswiththeissuerofthesecuritiesreferredtoherein,performservicesorsolicitbusinessfromsuchissuers,and/orhaveapositionoreffecttransactionsin thesecuritiesoroptionsthereof. Distribution of research reports Exceptasotherwisespecifiedherein,thisreportisdistributedbyCreditSuisse AG,aSwissbank,authorizedandregulatedbytheSwissFinancialMarketSupervisory Authority. Australia: This report is distributed in Australia by Credit SuisseAG,SydneyBranch(CSSB)(ABN17061700712AFSL226896)only toWholesaleclientsasdefinedbys761GoftheCorporationsAct2001.CSSB doesnotguaranteetheperformanceof,normakesanyassuranceswithrespect totheperformanceofanyfinancialproductreferredherein.Bahamas:Thisre-

TERMINATED:

Absolute bond recommendations The bond recommendations are based fundamentally on forecasts for total returnsversustherespectivebenchmarkona36monthhorizonandaredefined asfollows: BUY: Expectation that the bond issue will outperform its specified benchmark Expectation that the bond issue will perform in line with the HOLD: specifiedbenchmark SELL: Expectation that the bond issue will underperform its specifiedbenchmark RESTRICTED: Incertaincircumstances,internalandexternalregulationsexclude certain types of communications, including e.g. an investmentrecommendationduringthecourseofCreditSuisse engagementinaninvestmentbankingtransaction. Credit Suisse HOLT WithrespecttotheanalysisinthisreportbasedontheHOLTmethodology, CreditSuissecertifiesthat(1)theviewsexpressedinthisreportaccuratelyreflecttheHOLTmethodologyand(2)nopartoftheFirmscompensationwas,is, orwillbedirectlyrelatedtothespecificviewsdisclosedinthisreport.TheCredit SuisseHOLTmethodologydoesnotassignratingstoasecurity.Itisananalyticaltoolthatinvolvesuseofasetofproprietaryquantitativealgorithmsandwarranted value calculations, collectively called the Credit Suisse HOLT valuation model,thatareconsistentlyappliedtoallthecompaniesincludedinitsdatabase. Third-party data (including consensus earnings estimates) are systematically translatedintoanumberofdefaultvariablesandincorporatedintothealgorithms availableintheCreditSuisseHOLTvaluationmodel.Thesourcefinancialstatement,pricing,andearningsdataprovidedbyoutsidedatavendorsaresubjectto qualitycontrolandmayalsobeadjustedtomorecloselymeasuretheunderlying economics of firm performance. These adjustments provide consistency when analyzingasinglecompanyacrosstime,oranalyzingmultiplecompaniesacross industriesornationalborders.ThedefaultscenariothatisproducedbytheCreditSuisseHOLTvaluationmodelestablishesthebaselinevaluationforasecurity, andauserthenmayadjustthedefaultvariablestoproducealternativescenarios, anyofwhichcouldoccur.TheCreditSuisseHOLTmethodologydoesnotassign apricetargettoasecurity.ThedefaultscenariothatisproducedbytheCredit SuisseHOLTvaluationmodelestablishesawarrantedpriceforasecurity,and asthethird-partydataareupdated,thewarrantedpricemayalsochange.The defaultvariablesmayalsobeadjustedtoproducealternativewarrantedprices, anyofwhichcouldoccur.AdditionalinformationabouttheCreditSuisseHOLT methodologyisavailableonrequest. CFROI ,CFROE,HOLT,HOLTfolio,HOLTSelect,HS60,HS40,ValueSearch, AggreGator,SignalFlagandPoweredbyHOLTaretrademarksorregistered trademarksofCreditSuisseoritsaffiliatesintheUnitedStatesandothercoun-

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port was prepared by Credit Suisse AG, the Swiss bank, and is distributed on behalfofCreditSuisseAG,NassauBranch,abranchoftheSwissbank,registered as a broker-dealer by the Securities Commission of the Bahamas. Bahrain:ThisreportisdistributedbyCreditSuisseAG,BahrainBranch,authorized and regulated by the Central Bank of Bahrain (CBB) as an Investment Firm Category 2. Dubai: This information is distributed by Credit Suisse AG Dubai Branch, duly licensed and regulated by the Dubai Financial Services Authority (DFSA). 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Russia: The research contained in this report does not constitute any sort of advertisement or promotion for specific securities,orrelatedfinancialinstruments.Thisresearchreportdoesnotrepresenta valuationinthemeaningoftheFederalLawOnValuationActivitiesintheRussianFederationandisproducedusingCreditSuissevaluationmodelsandmethodology. Singapore: Distributed by Credit Suisse AG Singapore Branch, regulatedbytheMonetaryAuthorityofSingapore.Spain:Thisreportisdistributedin SpainbyCreditSuisseAG,SucursalenEspaa,authorizedundernumber1460 intheRegisterbytheBancodeEspaa.Thailand:Thisreportisdistributedby CreditSuisseSecurities(Thailand)Limited,regulatedbytheOfficeoftheSecuritiesandExchangeCommission,Thailand,withitsregisteredaddressat990 AbdulrahimPlaceBuilding,27/F,RamaIVRoad,Silom,Bangrak,BangkokTel. 0-2614-6000. 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ImprintPublisher GilesKeating,ManagingDirector HeadofResearchforPrivateBankingandAssetManagement Tel.+41(0)443322233 E-mail:[email protected] LarsKalbreier,CFA,ManagingDirector HeadofGlobalEquityandAlternativesResearch Tel.+41(0)443332394 E-mail:[email protected] Editors Dr.OliverAdler,ManagingDirector Dr.NannetteHechler-Faydherbe,ManagingDirector LarsKalbreier,CFA,ManagingDirector JoePrendergast,ManagingDirector EricGller,Director Information about other research publications CreditSuisseAG Editorial&Publications Uetlibergstrasse231,P.O.Box300,CH-8070Zurich E-mail [email protected] Internet http://www.credit-suisse.com/research Intranet (for employees only) http://research.csintra.net Subscription (clients) Subscriptions to printed copies or the PDF version of this publication may be orderedviayourcustomeradvisor. Subscription (internal) Subscriptionsforprintedcopies(bothforclientsandinternally)canbemadevia HostWR10withPublicodeROE.ForsubscriptionstothePDFversion(distributed by E-mail), please visit http://research.csintra.net Subscriptions. For assistance,pleasecalltheinternalResearchhotlineat+41(0)443333399.

AuthorsDr.OliverAdler,ManagingDirector HeadGlobalEconomics&RealEstateResearch Tel.+41(0)443330961,E-mail:[email protected] MarianoArrieta,AssistantVicePresident FixedIncomeStrategy,EmergingMarketStrategist Tel.+41(0)443329283,E-mail:[email protected] RobertCronin,AssistantVicePresident EquityResearch;ResearchUK&GlobalAssetAllocation Tel.+44(0)2078839225,E-mail:[email protected] SylvieGolayMarkovich,CFA,VicePresident FixedIncomeStrategy,CreditStrategist Tel.+41(0)443345437,E-mail:[email protected] EricGller,CEFA,Director EquityResearch;HeadofEmergingMarketsexAsiaEquityResearch Tel.+41(0)443329059,E-mail:[email protected] ElenaGuglielmin,Director GlobalCreditResearch;Banks,Insurance,CoveredBonds Tel.+41(0)443335767,E-mail:[email protected] Dr.NannetteHechler-Faydherbe,ManagingDirector HeadofGlobalFixedIncomeandCreditResearch Tel.+41(0)443331706 E-mail:nannette.hechler-fayd'[email protected] ThomasHerrmann,VicePresident GlobalEconomics Tel.+41(0)443335062,E-mail:[email protected] LarsKalbreier,CFA,ManagingDirector HeadofGlobalEquityandAlternativesResearch Tel.+41(0)443332394,E-mail:[email protected] ThomasKeller,VicePresident GlobalCreditResearch,ResearchAnalyst Tel.+41(0)443345437,E-mail:[email protected] TobiasMerath,CFA,Director HeadofGlobalCommodityResearch Tel.+41(0)443331362,E-mail:[email protected] JoePrendergast,ManagingDirector HeadofCurrencyandCommodityStrategy Tel.+41(0)443328318,E-mail:[email protected] SvenSchubert,VicePresident EmergingMarkets,Economics&Forex Tel.+41(0)443335228,E-mail:[email protected] RogerSigner,CFA,VicePresident EquityResearch;EuropeanandUSConstruction,Convertibles,Derivatives Tel.+41(0)443357298,E-mail:[email protected] MichaelOSullivan,ManagingDirector HeadofUKResearchandPortfolioAnalysis Tel.+44(0)2078838228,E-mail:michael.o'[email protected] ShivaniTharmaratnam,VicePresident GlobalResearchSingapore Tel.+6562126482,E-mail:[email protected]

Asset Allocation and Global Strategy Publications Guide14 September 2009 Zurich Global Research

Research Monthly Equities stay strong, double-dip unlikelyPrivate Banking

Foreign exchange

Overview

u 1.46) with a target at 1.52 and stoploss at 1.4390.page 8 Fixed Income

BUY EUR/USD at spot (currently

Double-dip unlikely, as low interest rates and buoyant capital markets offset weak banks and future fading of scal / inventory stimulus. Stay overweight equities. Positive economic surprises, ows out of cash outweigh negatives (but setbacks possible). Stay underweight xed income. Opportunities mainly in some higher-risk credits. Avoid long maturities given gentle but volatile rates uptrend. Dollar trend down. Diversify broadly into other currencies including emerging markets.

u u

BUY METRO 3 5/8% 06/11 in EUR.page 10

Equities

BUY Lafarge, world leader in building materials with an attractive valuation. page 17

Alternative investments

u

BUY Platinum at prices below USD 1,300 with a target of USD 1,500. page 21

Research Monthly Main investment horizon: Strategic 6 12+ months Covers global strategy & investment themes Produced by Credit Suisse Private Banking Research Available in English, German, French, Italian, Spanish, Chinese, Russian, Greek and Polish

Important disclosures are found in the Disclosure Appendix

Zurich, 24 September 2009 Global Research

The Investment Committee Meeting of 23 September 2009

Stefan Keitel (Chair) CIO, Private Banking & Asset Management (MACS) Giles Keating (Vice-Chair) Head of Research for Private Banking and Asset Management Rolf Bertschi Head of Technical Research, Private Banking Patrick Bucher Deputy CIO, Asset Management (MACS) Michel Degen Co-Head Fixed Income MACS, Asset Management Dr. Nannette Hechler-Fayd'herbe Head of Global Fixed Income and Credit Research, Private Banking Dr. Anja Hochberg Head of Investment Strategy, MACS Lars Kalbreier Head of Global Equity and Alternatives Research, Private Banking Robert Parker Vice Chairman, Asset Management Joe Prendergast Chief Currency Strategist, Private Banking Filippo Rima Head Global Equities MACS, Asset Management

Overview

Global Macro Data still improving, central banks acknowledge this and become more optimistic, but most still signal rates staying low for a long time. Forex EUR/USD has broken up, may establish 1.44-1.52 range into Q4. Occasional USD rebounds still likely but uptrend to extend again through 2010. Fixed Income Credit spreads may still narrow, but barely enough to offset rising government yields. Equities Still positive given cash overhang, markets breaking long-term moving averages, and valuations on balance neutral. Brief setbacks possible. Commodities Base metals, oil consolidate before resuming uptrend. Gold has at least some further upside./ Commodities: / Real Estate: Next IC meeting: 2 October 2009

Investment Committee Report (bi-weekly) Main investment horizon: Tactical 1 6 months Produced by Credit Suisse Asset Management (MACS) in conjunction with Credit Suisse Private Banking Research Available in English and German (PDF only)

Fixed Income:

/ Equities:

Retail and institutional money market funds as % of market cap Cash levels are falling, although still relatively high.in % 35 30 25 20 15 10 5 0 Jun 83

Investment Committee view With most central banks signaling their determination to keep interest rates very low for a prolonged period despite improving economic data, with cash holdings still high and valuations not yet sounding a strong warning, the trend in equity markets still looks up for now. Many investors remain cautious, hoping to buy on dips, and this adds to the upward pressure by tending to make setbacks short-lived. So does the worsening riskreward now offered in fixed income: credit spreads still look somewhat wide when compared to likely default rates, so there is still scope to narrow, but much less than before, and probably not enough to properly compensate for the danger that government yields look likely to at least edge up.Guests attending the IC Meeting this week: Guido Bchli, Stefan Braunschweig.

Jun 87

Jun 91

Jun 95

Jun 99

Jun 03

Jun 07

Retail Money Market mutual funds/US Eq. Market cap

Inst. Money Market mutual funds/US Eq. Market cap

Source: Datastream, Credit Suisse / IDC

29 September 2009 Zurich Asset Management

Mandates Monthly Uptrend to continue in the near term, slow down expectedAsset Management

Current vs. neutral allocation Fixed Income20 5

Overview

20

5

Asset Allocation: We prefer equities over bonds, thereby keeping our moderate equity overweight. Fixed Income: We are keeping our moderately short duration stance. No change in the long EUR/short USD bond position. Equities: No monthly rebalancing of the total equity overweight. Further profits taken on Emerging markets. UK equities reduced in favor of EU equities as a more cyclical region.

7575

Income Oriented20 7

2015

5 5558

20

Alternative Investments: We remain overweight. Commodities: We remain neutral on commodities and are maintaining our positive view on gold.

Balanced20

8

20 3835

7 3537

Currencies: We are maintaining mostly neutral views. USD: neutral stance. GBP: underweight.

Capital Gains Oriented15 9

15 8

20

21

5755

Equities15

10

15 7

7875

Current Neutral Cash Bonds Equities Alternative investments

Mandates Monthly Main investment horizon: Tactical 1 6 months Covers tactical asset allocation and implementation of investment strategy in discretionary portfolios Produced by: Credit Suisse Asset Management (MACS) Available in English, German, French, Italian and Spanish

Important disclosures are found in the Disclosure appendix

ROE

CS Research Monthly

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