June Quarter 2015 - PNG...2015/07/09  · Tourism is an economic driver in the Pacificregion, given...

8
PACIFIC ECONOMIC & MARKET INSIGHTS Contents Global Economy 2 Commodies 2 Pacific Overview 3 Papua New Guinea 4 Fiji 5 Solomon Islands 5 Samoa 6 Tonga 7 Cook Islands 7 Market Rates 8 Macro Forecasts 8 Highlights Global economic growth forecasts for 2015 were lowered to 3.3% while 2016 growth was raised to 3.8% by the Internaonal Monetary Fund (IMF). The distribuon of risks is skewed to the downside, with financial market volality being a major near term risk. Commodies connued to remain at their lows, and suscepble to volality. Most of PNG export commodity prices fell over the year to August 2015, with crude oil falling by 49% year on year. The Pacific region has enormous opportunies for growth given its proximity to one of the fastest growing regions of the world, Asia. All Pacific Islands economies are expected to grow in 2015 and 2016, except for Vanuatu and Cook Islands. The economic impact of the disasters is prolonged, though we see recovery in reconstrucon. The key challenge remains to build resilience to natural disasters, while taking advantage of the Asian Century. PNG economic growth projecons for 2015, have been downgraded to 11.0% from 15.5% projected in the 2015 Budget. Government revenue was revised downwards, with taxaon revenue lower than expected. According to the Asian Development Bank (ADB), Pacific economies are among the most vulnerable to natural hazards in the world. Esmates indicate that an average cyclone reduces per capita income by 3.6% and a catastrophic cyclone by 7.4% to 15%. GDP Growth (%, annual) June Quarter 2015 Source: ADB, BSP | 1

Transcript of June Quarter 2015 - PNG...2015/07/09  · Tourism is an economic driver in the Pacificregion, given...

Page 1: June Quarter 2015 - PNG...2015/07/09  · Tourism is an economic driver in the Pacificregion, given a competitiveadvantage in tourism. Australia continuedits dominance as the largest

PACIFIC ECONOMIC & MARKET INSIGHTS

| 1

Contents

Global Economy 2

Commodities 2

PacificOverview 3

PapuaNewGuinea 4

Fiji 5

SolomonIslands 5

Samoa 6

Tonga 7

CookIslands 7

MarketRates 8

MacroForecasts 8

Highlights

• Globaleconomicgrowthforecastsfor2015were loweredto3.3%while2016growthwasraisedto3.8%bytheInternationalMonetaryFund(IMF). The distribution of risks is skewed to the downside,withfinancialmarketvolatilitybeinga majorneartermrisk.

• Commoditiescontinuedtoremainattheirlows, andsusceptibletovolatility.MostofPNGexportcommoditypricesfellovertheyeartoAugust2015,withcrudeoilfallingby49%yearonyear.

• The Pacific region has enormous opportunities forgrowthgivenitsproximitytooneofthefastest growingregionsoftheworld,Asia.

• All Pacific Islands economies are expected to growin2015and2016,exceptforVanuatuand CookIslands.Theeconomicimpactofthedisasters is prolonged, though we see recovery in reconstruction. The key challenge remains to buildresiliencetonaturaldisasters,whiletaking advantageoftheAsianCentury.

• PNGeconomicgrowthprojectionsfor2015,have been downgraded to 11.0% from 15.5% projected in the 2015 Budget. Government revenuewas revised downwards, with taxation revenuelowerthanexpected.

• AccordingtotheAsianDevelopmentBank(ADB), Pacificeconomiesareamongthemostvulnerable to natural hazards in the world. Estimates indicatethatanaveragecyclonereducesper capitaincomeby3.6%andacatastrophiccyclone by7.4%to15%.

GDPGrowth(%,annual)

June Quarter 2015

Source: ADB, BSP

| 1

Page 2: June Quarter 2015 - PNG...2015/07/09  · Tourism is an economic driver in the Pacificregion, given a competitiveadvantage in tourism. Australia continuedits dominance as the largest

PACIFIC ECONOMIC & MARKET INSIGHTS

2 |

Global Economy

Global growth is now projected to be 3.3% (downfrom 3.5% in April) in 2015, compared to 3.4% in2014.Thedownwardrevisionwasduetoasetbackineconomicactivity,mostlyinNorthAmerica.TheIMFcommentedinitsAprilupdatethatitwasatemporaryslowdownwithrecoveryremainingontrack.

Growth in advanced economies is expected toincrease to 2.1% in 2015, from 1.8% in 2014. Theunderlyingdriversforgrowthincludeeasedfinancialconditions, more neutral fiscal policy in the euroarea, lower fuel prices, and improving confidenceandlabourmarketconditions.

Emerging and developing economies are projectedto moderate to 4.2% in 2015, from 4.6% in thepreviousyear.Theslowdownreflectsthedampeningimpactof lower commodityprices,tighterexternalfinancialconditions(particularlyinLatinAmericaandoil exporting countries), the re-balancing in China,andstructuralbottlenecks.

TheAustralianeconomyisestimatedtogrowby2.7%in2015,beforeimprovingto3.0%in2016.GrowthinNZ is expected to growby 2.9% in 2015 and by3.1 % in 2016 due to lower government spendingandfixedcapitalformationdespitetheriseinprivateconsumptionandnetexports.

Commodities

The IMF Commodity Market Monthly (16 June)reportedthatcommoditypricesfellby1.6%inJune,drivenbypricedropsinmetalsandenergy.

Crudeoilpricesfell1.9%inJune,averaging$61.3perbarrel,duetostrongOPECproductionandpossiblesuspensionofsanctionsagainstIran.Crudeoilpricefellby49%to$49.2perbarrel(y-o-y)toAugust2015.

Metal prices are expected to remain broadlyunchangedowing to slowingdemand in China andincreasesinnewcapacity,althoughtherehavebeensomesupplydisruptions.

Overthe12-monthstoAugust2015,thegoldpricefellby12%toUS$1,135.TheGoldpriceisexpectedto increaseby3%toUS$1,231at theendof2016.SomeanalystshaveforecastthegoldpricetoaverageUS$1,220anouncein2015.

Palm Oil declined by 5% over the 12 months toRM1,928 per metric ton as at August 2015. PNGcommoditiespricesare forecast to fall in the shortterm, with crude oil expected to be hardest hit.Prices for PNG’s main commodities were mostlydownin2015YTD,drivenbychanges inthesupplyanddemandfundamentals.

Pacific Overview

The Pacific region is expected to grow by 9.9% in2015, compared to 6.1% in 2014. The downgradeinPNGgrowthexpectationshasloweredthePacificregions,growthestimatesfromthe10.7%projectedinMarch2015(ADBPacificEconomicMonitor,July15).

Figure1:GlobalGDPGrowth(%,annual)

Figure2:CommodityPriceIndices(2015=100)Source: IMF Data, BSP.

Source: IMF commodity market monthly, June 2015

Page 3: June Quarter 2015 - PNG...2015/07/09  · Tourism is an economic driver in the Pacificregion, given a competitiveadvantage in tourism. Australia continuedits dominance as the largest

PACIFIC ECONOMIC & MARKET INSIGHTS

| 3

AccordingtotheADB,annualgrowthrateshavebeenhighlyvolatile inthesmallerPacificeconomies,buthave generally averaged around 2%. Larger Pacificeconomieshaveperformedbetter,withresource-richPNG,Timor-Leste,and, toa lesserextent,SolomonIslands, all enjoying high growth since 2005. Thenatural disaster in Vanuatu is expected to dampeneconomicactivityintheshortterm.

Inflationeased inmostPacific Islandcountries, theresult of falling international oil prices. Inflationis expected to increase to 4.7% in 2015 and slowslightlyto4.0%in2016.ThisisprojectedtobedrivenbygovernmentspendingandcurrencydepreciationinPNG.

Tourism isaneconomicdriver in thePacificregion,givenacompetitiveadvantageintourism.Australiacontinueditsdominanceasthelargesttouristsourcemarket (34.7%) followed by New Zealand (19%).ChinesetouristsvisitingPacificIslandCountries(PIC)has increased as well. Recent data from the ADBshowedthatdeparturesfromNewZealandtoSouthPacificcountriesroseby7.9%inJanuary-April2015compared with the same period last year. PacificcurrencieshavebroadlyweakenedoverthequarterreflectingastrongerUSD,weakercommoditypricesandsofterAUDandNZD.

Papua New Guinea

PNG economic growth projections for 2015 wereloweredto11.0%intheMidYearEconomic&FiscalOutlook Report 2015 (MYEFO) compared to 15.5%estimatedinthe2015Budget.Thefallincommodityprices, especially the oil price, will impact growth,withPNGDepartmentofTreasurydirectedtofurnishamini-budget.

Totalnon-miningGDP isexpectedtogrowat4% in2015, rebounding from the slower growth of 1.4%in2014.Thepick-upinthenon-miningsectorisdueto the rebound in the construction sector, leadingtowards the Pacific Games 2015 and associatedinfrastructurespending.

On 18 May, Moody’s credit ratings agency movedPNG’ssovereigncreditratingtoa‘negativeoutlook’.The rating agency cited fiscal deterioration, aweakenedexternalpaymentspositionandincreasedexternal vulnerability as the main factors for themove.

Consumer Price IndexAnnual headline inflation increased by 6.1% inthe March quarter of 2015, compared to 6.6% inDecember 2014. According to BPNG, retail priceindex(RPI)toJuneincreasedby5.9%,comparedtoanincreaseof2.7%inMay2015.Thisoutcomewasdrivenbyincreasesinthe‘food’,and‘drink,tobaccoand betelnut’ expenditure groups, combined withincreases in the ‘non-durable goods’ and ‘medicalandhealthcare(exc.Hospital)’sub-groups.

Inflation expectations for 2015 are between 5.0%and 6.0%. Bank of PNG projects trimmed-meaninflationandtheexclusion-basedinflationtobe3.0%and 4.0%, respectively. High inflationary pressureis likely to be exerted from high import demandcompounded by relatively lower supply of foreignexchangeliquidityinthemarket.

Figure3:PacificGDPGrowth(%,annual)

Figure4:Inflation(%quarterly)

Source: Bank of PNG, BSP.

Source: IMF Data, BSP.

Page 4: June Quarter 2015 - PNG...2015/07/09  · Tourism is an economic driver in the Pacificregion, given a competitiveadvantage in tourism. Australia continuedits dominance as the largest

PACIFIC ECONOMIC & MARKET INSIGHTS

4 |

PNG Exchange RatePNGKinacontinuedtodepreciateagainstUSD,duetohighimportdemandresultingfromhigheconomicgrowthandlowcommodityprices.TheaveragekinaexchangeratedepreciatedagainsttheUSDby7%to0.3565,whileithasappreciatedagainstAUDby5%to0.4891overtheyearto31stAugust2015.Cross-currencymovementsimpactedPGK/AUD.

Since the introduction of the trading band in June2014,theexchangeratehasmovedinlinewiththesupplyanddemandfor foreigncurrency.BPNGhasintervenedwithUS$570.9m (PGK1.48b) to supportkinain2014.SincetheFXband,PGKdepreciatedby14% toUSD0.3565. Therewerenoted shortagesofforeigncurrenciesinthemarket.

ThedepreciationofKinawill impactPNG’sexternaldebt position, interest payments and foreignexchangereserves.GrossforeignexchangereserveswereUS$2,058.8mattheendofMay2015(sufficientfor 9.0 months of total and 13.9 months of non-mineralimportcover).

Fiscal Position

Thegovernmentcontinuedexpansionaryfiscalpolicyin2015,withthedeficitbudgettobefundedmainlyfrom domestic sources. The government’s revenuewas impacted by the fall in oil price, with 2016expectedtobeachallengingyear.

AccordingtoMYEFO2015,totalgovernmentrevenuewaspressuredbythecontinuedfall inoilpriceandhigh expenditure plans. Revenuewas estimated atPGK2.4b,whiletotalexpenditurewasPGK5.5battheendofMarch2015.ThedebtfinancingrequirementstoodatPGK3.1b,whichwillmostlyberaisedonthedomesticmarket.

Total expenditure for the first three months toMarch 2015 was PGK1.8b, 4.9% lower than in thecorrespondingperiodof2014.Thiswasduetolowerrecurrent expenditure, which more than offset anincreaseindevelopmentexpenditure.

Fiji

AccordingtoReserveBankofFiji(RBF),Fiji’seconomyisprojectedtogrowby4.3%(ADB:4.0%,IMF:3.3%)in2015,withaslightaccelerationto4.5%expectedin2016.Growthisexpectedtobebroad-based,withtourismandsugarsectorsattheforefront.

Inflationwas up by 2.5%overApril, resulting fromthe increase indomesticand imported inflation. Inannual terms, the inflation rate declined by 1.5%due to global energy prices being 25% lower thantheprevious year. Inflation is expected to continueremaininglowbetween0-3%.

Tourismremainstheprimarydriverofgrowth,withvisitorarrivalsincreasingby7.5%(y-o-y)overthefirst4monthsof2015(ADB,PEM,July2015).FijireceivesthehighestnumberofvisitorsfromAustralia.

Figure5:PNGExchangerate(%,monthly)

Figure6:FiscalOperations

Source: Bank of PNG, BSP.

Source: MYEFO 2015, PNG Dept. of Treasury.

Page 5: June Quarter 2015 - PNG...2015/07/09  · Tourism is an economic driver in the Pacificregion, given a competitiveadvantage in tourism. Australia continuedits dominance as the largest

PACIFIC ECONOMIC & MARKET INSIGHTS

| 5

Thegovernment’sfiscalstimulusinthe2015budgetwillincreasepublicexpenditureontransport,energy,and water supply and sanitation infrastructure.Whilstmonetarypolicyremainsaccommodative,thefiscal stimuluswill increase demand and economicactivity. According to RBF, investment to GDP willremainabove25%whilethedeficitisexpectedtobearound2%ofGDPin2015.

The banking sector in Fiji continued to grow, withRBF data indicating an increase in new lending forconsumption and investment purposes. Accordingto the RBF Governor, new lending for investmentpurposescumulativetoApril2015hasgrownby75%from2014compared toannualgrowthof11% lastyear(Governor’sspeech,16July,LaunchofBSPLife).Thecommercialbanks’weightedaverageoutstandinglendingrate increasedto5.78%in June2015, from5.72%inDecember2014.

Creditconditionsareexpectedtoremainconduciveforgrowthandinvestmentthisyear.Fiji’sinterestratespreadislowerthanmostPacificIslandcountries.

Solomon Islands

Economic growth is expected to remain at 3.0%in 2015, supported by foreign direct investment,resumption in mining, donor or governmentinvestmentandmajorinfrastructure.

Loggingisstillasignificantandimportantpartoftheeconomyaccountingfor15%ofGDPandlogexportsaccountforaround14%ofrevenue.

AccordingtotheCentralBankofSolomonIslands(CBSI),monthlyproduction indexdeclinedby9%inMarch2015to75points,comparedto21%surgeinFebruary.Thedeclinewasdrivenbyfallsinlogoutputandfishcatch,supportedbytheslowdownincopraoutput.

Log production, measured by export volumesreached a highof 2.1 billion cubicmeters in 2014,a12%increasefromthepreviousyearof1.9billioncubicmeters.TheIMFprojectslogpricetoincreasein2015,howeverthereisconcernonthedepletionoflogs.

Headlineinflationdeceleratedtonegative3%inApril,from-0.3%inthepriormonth.Thiswasattributedtodomesticinflationfallingbelowzeroto-3.3%,whileimportedinflationremainednegativeatminus1.8%.Thefall infood,drinksandtobaccopriceswerethemain contributors. CBSI reported that the averagefuelpriceinHoniaraeasedinMayto$8.50perlitre,followinganincreaseinthepreviousmonth.

Figure9:GDPGrowth(%,annual)

Source: IMF data, BSP.

Figure8:BankingsectorinFiji

Source: RBF Deputy Governor’s presentation, 15 July 2015.

Figure7:VisitorArrivals(%,quarterly)

Source: Fiji Bureau of Statistics, BSP.

Page 6: June Quarter 2015 - PNG...2015/07/09  · Tourism is an economic driver in the Pacificregion, given a competitiveadvantage in tourism. Australia continuedits dominance as the largest

PACIFIC ECONOMIC & MARKET INSIGHTS

6 |

On the foreign exchange market, the SolomonIslandsdollar(SBD)appreciatedagainsttheUSDby2% and 4.8% to 0.1255 over the month and yearto July respectively. It has depreciated against theAUDby2% (mom)and6.4%(ytd) to0.1689at theendofJuly.Thegovernmentrecordedapreliminarydeficitof$40minMaydrivenbya24%increase intotal expenditure to $240m against the previousmonth. Total revenue collection remained broadlyunchangedat$200m.

Samoa

Economic growth is expected to grown by 2.3% in2015, driven by higher tourism earnings andremittance-relatedspending’s.Thetsunami in2009andCycloneEvanin2012causedestimateddamageand losses equivalent to 25% to 30% of GDP, andledtosharpcontractionsoftheeconomy.Recoveryis underway supported by development partnerfundedreconstruction.

ADB (PEM, July 2015) projects growth in Samoato moderate to 1.9% in 2016, driven by weakagriculture and non-food manufacturing output inrecentmonths.Inaddition,thegovernmentplantoreduceoverallexpenditurebyabout2%inresponseto lower external grants and higher external debtservicepaymentsaslargebilateralloanscomedue.

Tourismremainstheprimarydriverofgrowth,withvisitor arrivals increasing by 6.1% (y-o-y) over thefirstthreequartersof2015.Visitorarrivalspurposescontinuedtobefor ‘holidays’withtourismreceiptsrecordedatWST22mat theendofMar’15,havingrisenby7.7%(y-o-y).

Inflationwas up by 2.2% in the first 10-months of2015,mainlyfromimportedinflation.

Inflation is projected to remain at 2.0% in 2016.AccordingtotheCentralBankofSamoa(CBS),totalcommercial bank lending increased by WST136mor 18% to WST905m over the 12 months to May2015.CBS(March2015)notedthattheincreasewasdueentirelytoexpansionsofcreditdirectedtotheprivatesectorandpublicinstitutions.

On market interest rates, the weighted averagedeposit rate also declined to 2.47% in June 2015,down from 3.11% in May 2015. Likewise, theweighted average lending rate dropped to 9.43%from10.32%inMay2015.

Tonga

The Tongan economy remains stable, with alleconomic indicators reflecting positive growth.Tonga’s external position also strengthened, asgrantsandremittanceinflowsbolsteredinternationalreservestoTOP287mattheendofJanuary2015.

Inflationfellby0.7%inJun’15,andby0.6%YTDasaresultof low importedanddomesticprices.Bothimportedanddomesticpricesdroppedby1.0%and0.2% respectively, with low food prices being thedominantdriver.Thefallinglobalcommoditypriceshas also impacted inflation. The total remittancesreceipt for the month of April was $16.3m,representing44.5%of theTotalOverseasExchangeTransaction (OET) Receipts. Remittances continuedtobeoriginatedmainlyfromNZfollowedcloselybyAustralia.

Figure10:EconomicGrowth(y-o-y%change)

Figure11:EconomicGrowth

Source: ADB data, BSP.

Source: IMF data, BSP.

Page 7: June Quarter 2015 - PNG...2015/07/09  · Tourism is an economic driver in the Pacificregion, given a competitiveadvantage in tourism. Australia continuedits dominance as the largest

PACIFIC ECONOMIC & MARKET INSIGHTS

| 7

NationalReserveBankofTongareported(May2015)thattotallendingincreasedslightlyoverMayby0.9%,drivenmainlybya1.1%riseinhouseholdloans.Theincreaseinhouseholdloanswaslargelyattributedtoariseinotherpersonalloans,whichwassupportedbylendingactivities.

Weighted average interest rate spread widenedinMay from5.92% to6.27%, reflectinga5.3basispoints increase in weighted lending rate to 8.32%,anda2.7basispointsriseinweighteddepositrate.The increase was due to a significant increase inbusiness loans interest, whilst increases in savingsand term deposit rates drove the rise in weightedaveragedepositrates.

Cook Islands

Real GDP is forecast to grow by 1.4% in 2015/16,drivenlargelybyshiftsinpublicspendingespeciallytheTeMatoVaiandtheSouthernGroupRenewableEnergyProject. This is expected tooffset theweakgrowth in tourism. Tourism remains the largestindustry in theCook Islands,accountingforaround60%of the economy. According to ADB (PEM, July2015)visitorarrivalsdroppedby2.2% in thefirst3quartersofFY2015(ended30June)fromthesameperioda year earlier.According to2014/15budgetestimates,growthintouristarrivalsisforecasttoslowto1.7%in2014/15and1.9%in2015/16,reflectingtheongoingsoftnessinkeymarkets.

Continued efforts have been made to boostthe tourism industry, with the Prime Minister,Honourable Henry Puna, announcing streamliningof department document requirement, effective1 Aug’15. This is expected to boost tourism in theeconomy.Inflationincreasedby1.3%inJunequarter2015, and by 3.04% on an annual basis. Transportgroup and apparels showed the highest increaseinMarch,withtheformercausedbyanincreaseinInternational airfares (up by 8.5%). To discouragesmokers, the government raised the excise tax ontobaccoby33.0%inJuly2014,whichwillpositivelyimpactgovernmentrevenue.

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

Malakai Naiyaga-MD,BSPLife,[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

KEY CONTACTS

COUNTRY MANAGERS

Figure12:TourismGrowth

Source: Cook Islands Statistics office, ADB, BSP.

Page 8: June Quarter 2015 - PNG...2015/07/09  · Tourism is an economic driver in the Pacificregion, given a competitiveadvantage in tourism. Australia continuedits dominance as the largest

PACIFIC ECONOMIC & MARKET INSIGHTS

8 |

FOREIGN EXCHANGE APRIL MAY JUNE LATEST(31/08/15)PGK/USD 0.3715 0.3675 0.3645 0.3565FJD/USD 0.4874 0.4893 0.4809 0.4634SBD/USD 0.1319 0.1294 0.1292 0.1255WST/USD 0.4045 0.3993 0.4025 0.3891TOP/USD 0.5072 0.5072 0.4777 0.4851NZD/USD 0.7602 0.7309 0.689 0.6454

COMMODITIESAPRIL MAY JUNE LATEST(31/08/15)

Oil(US$perbarrelWTI) 59.6 60.3 59.5 49Gold(US$perounce) 1,184 1,190 1,172 1,135Copper(US$permetricton) 6,335 6,015 5,765 5,135Nickel(US$permetricton) 13,915 12,588 11,932 10,033PalmOil(MYRpermetricton) 2,070 2,170 2,224 1,928Coffee(US$perLB) 144 132 136 124Cocoa(US$permetricton) 2,914 3,066 3,262 3,099Sugar(US$permetricton) 375 349 365 341Lumber(US$per1,000feet) 256 274 288 223

Real GDP Growth (%, annual)2013 2014 2015F 2016F

PNG 5.0 8.4 11.0 5.0Fiji 4.6 4.5 4.0 4.5SolomonIslands 3.2 1.0 3.0 3.5Samoa 0 1.9 2.3 1.9Tonga 0.8 2.4 2.4 2.6CookIslands 1.2 2.1 2.1 -0.3

Fiscal Balance (% of GDP)2013 2014 2015F 2016F

PNG -7.8 -6.9 -9.4 2.5Fiji -0.5 -2.0 -2.5 -2.0SolomonIslands 2.3 -1.3 -3.5 3.0Samoa -6.1 -4.8 -4.2 -3.9Tonga -1.1 -0.2 -0.1 -0.2CookIslands - -5.4 -7.4 -6.1

Foreign Exchange Reserves (USD m)2013 2014 2015F 2016F

PNG 2,750 2,296 2,059* 3,373Fiji 937 913 872 780SolomonIslands 515 530 550 550Samoa 137 155 156 160Tonga 140 138 140 140CookIslands na na na na

Inflation (%)2013 2014 2015F 2016F

PNG 4.7 6.6 4.9* 6.0Fiji 3.4 0.1 2.5 3.0SolomonIslands 5.8 4.8 3.0 5.5Samoa -0.2 -1.2 2.0 2.0Tonga 1.0 1.5 0.4 1.0CookIslands 1.9 2.1 2.4 1.4

*MYEFO2015

MACRO FORECASTS

MARKET RATES

Economic Data Sources:PNG: Department of Treasury, Bank of PNG, Asia Development Bank (ADB), BSPFiji: Reserve Bank of Fiji Solomon Is: Central Bank of Solomon Islands, ADB, BSPSamoa: Samoa Bureau of Statistics, ABD, IMF, BSPCook Is: Financial Supervisory Commission, ADB, IMF BSPCommodity Prices: Bloomberg

DISCLAIMER: This research is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. This research has been prepared for the use of the clients of the BSP and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient, you must not use or disclose this research in any way. If you received it in error, please tell us immediately by return e-mail and delete the document. We do not guarantee the integrity of any e-mails or attached files and are not responsible for any changes made to them by any other person. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. This research is based on information obtained from sources believed to be reliable, but BSP does not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. The BSP accepts no liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research.