Market Overview

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					Capital Markets Overview
October 2006




Martin Vozar
Global Trends
Commodities:

•        Crude oil: Crude oil rose after a six OPEC members, led by Saudi Arabia,
         agreed to cut output by about 3.4 percent to stem a two month slide in prices.
•        Gold: Gold rose after North Korea carried out its first nuclear weapons and as
         higher base metals prices boosted purchases of commodities as a basket. Gold
         prices decreased to $577 from the peak 715 USD at 5/12/06 (-19.2 percent) and
         is up 11 percent this year.

                     WTI Crude Oil                                                                       GOLDS Comdty
    78
                                                     725
    73
                                                     675
    68
                                                     625

    63                                               575

    58                                               525
                                                           24.4.2006




                                                                                  22.5.2006




                                                                                                         19.6.2006




                                                                                                                                17.7.2006

                                                                                                                                            31.7.2006

                                                                                                                                                        14.8.2006

                                                                                                                                                                    28.8.2006

                                                                                                                                                                                11.9.2006

                                                                                                                                                                                            25.9.2006

                                                                                                                                                                                                        9.10.2006
                                                                       8.5.2006




                                                                                              5.6.2006




                                                                                                                     3.7.2006
15 00 6




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17




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24



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18




                                                                                                                                                                                                  2
Global Trends
Fixed income:
•   US: As expected, the FOMC held policy rates unchanged at 5.25%. New
    meeting is planed at 10/25/06.
    “…inflation pressures seem likely to moderate over time, reflecting reduced
    impetus from energy prices, contained inflation expectations, and the cumulative
    effects of monetary policy actions and other factors restraining aggregate
    demand."
                                                 9/20/2006 FOMC Statement


•   Japan: The BoJ held its key interest rate at 0.25% on 8 September monetary
    policy meeting.
•   Europe: As expected, the ECB increased its key policy rate by 25bp to 3.25%
    on 5 October meeting.




                                                                                   3
Global Trends
Stocks Markets:

•   US Equities: U.S. stocks rallied, pushing the Dow Jones Industrial Average to a
    record, as oil fell the most since March and investors predicted the Federal
    Reserve will soon reduce its benchmark interest rates.

•   Japan: Nikkei 225 stock Average climbed to a four-week high on speculation the
    federal reserve will cut U.S. interest rates. Nikkei rose 2.3 percent to 16.449, its
    highest close since May 15. Other Asian stocks (South Korea’s, China’s) dropped
    after North Korea said it carried out a nuclear weapons test.


•   Europe equities: European stocks dropped from a five-year high after North
    Korea said it detonated a nuclear bomb. European Socks rose last week, sending
    the DJ STOXX 50 to the highest since March 2002, as takeover speculation
    picked up oil prices retreated. The index has gained 7.3 percent this year.




                                                                                           4
                                                                                                                               1150
                                                                                                                                        1190
                                                                                                                                                  1230
                                                                                                                                                                 1270
                                                                                                                                                                           1310
                                                                                                                                                                                   1350




                              12000
                                      13000
                                              14000
                                                      15000
                                                               16000
                                                                         17000
                                                                                 18000
                                                                                                                        1.9.2005
                   1.9.2005
                                                                                                                       1.10.2005
                  1.10.2005
                                                                                                                       1.11.2005
                  1.11.2005




                                                                                                              S&P500
                                                                                                                       1.12.2005




    Nikkei 225
                  1.12.2005
                                                                                                                        1.1.2006
                   1.1.2006
                                                                                                                        1.2.2006
                   1.2.2006
                                                                                                                        1.3.2006
                   1.3.2006
                                                                                                                        1.4.2006
                                                                                                                                                                                              SPX Index Px Last




                   1.4.2006




                                                                                         NKY Index Px Last
                   1.5.2006                                                                                             1.5.2006


                   1.6.2006                                                                                             1.6.2006


                   1.7.2006                                                                                             1.7.2006


                   1.8.2006                                                                                             1.8.2006
                                                                                                                                                                                                                  Global Trends




                   1.9.2006                                                                                             1.9.2006




                          3100
                                      3200
                                              3300
                                                        3400
                                                                  3500
                                                                            3600
                                                                                                                               10000
                                                                                                                                       10300
                                                                                                                                               10600
                                                                                                                                                         10900
                                                                                                                                                                   11200
                                                                                                                                                                           11500
                                                                                                                                                                                   11800




                   1.9.2005                                                                                             1.9.2005

                  1.10.2005                                                                                            1.10.2005
                                                                                                              DJIA




                  1.11.2005                                                                                            1.11.2005

                  1.12.2005                                                                                            1.12.2005

                   1.1.2006                                                                                             1.1.2006


    DJ STOXX 50    1.2.2006                                                                                             1.2.2006

                   1.3.2006                                                                                             1.3.2006

                                                                                                                        1.4.2006
                                                                                                                                                                                           INDU Index Px Last




                   1.4.2006
                                                                                         SX5P Index Px Last




                   1.5.2006                                                                                             1.5.2006

                   1.6.2006                                                                                             1.6.2006

                   1.7.2006                                                                                             1.7.2006


                   1.8.2006                                                                                             1.8.2006


                   1.9.2006                                                                                             1.9.2006
5
    US – Economy
•    Initial jobless claims for the week of September 30 declined to 302.000 from a
     319.000 the week before 9/23 (9/16, 322,000). 4 week avg. 313.500.
•    Housing starts in August declined by 7.2% to 1.665 million annualized units
     (July 1.795 mil.). From beginning of the year Housing Starts dropped by 26.4%.
•    The University of Michigan’s preliminary index of consumer sentiment
     increased to 85.4 from 84,4 in August (average level from 1978 is at 88.3).
     Confidence among U.S. consumers supported declining gasoline prices and
     strength in the labour market.
•    The U.S. unemployment rate matched a five-year low in September 4.6%
     (August 4.7%)
•    The national US Homebuilders survey for September dropped to a 15-year low
     this month as sales slowed and profits dropped. Index fell to 30 from 33 in August.
     It was the eight consecutive monthly drop in the index.




                                                                                       6
US – Economy
•         American CPI prices rose in August at half the pace of the previous month.
          The CPI MoM rose 0.2% following July's 0.4%. The Core CPI climbed
          0.2% for a third consequently month a row.
•         Headline CPI prices rose 3.8 percent during the 12 months ended in
          August compared with 4.1% in the period ended in July. Core prices rose
          2.8 percent from a year earlier, the biggest 12-month jump since November
          2001 (July 2.7%).
•         The PPI core fell in August by -0.4% (MoM), the second decrease since
          October. Headline PPI decreased to 3.7% from 4.2% a month earlier.

     5                                               8
    4,5                                              7
      4                                              6
    3,5                                              5
     3                                               4
    2,5                                              3
      2                                              2
    1,5                                              1
     1                                               0
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                                                     VI
                   CPI YOY Index   CPI XYOY Index            PPI YOY Index   PPI XYOY Index



                                                                                              7
       US – FX Market
       •                       The dollar posted the biggest gain since July against the yen and euro after a
                               report showed the U.S. jobless rate unexpectedly fell in September.
       •                       evidence of quicker economic growth prompted traders to pare bets the FED
                               will reduce interest rates early next year, making dollar denominated assets
                               more attractive to international investors.



                                                                     EURUSD Curncy Px Last                                                                                                                                                                           USDJPY Curncy Px Last

 1,4                                                                                                                                                                                             125

1,35                                                                                                                                                                                             120

 1,3                                                                                                                                                                                             115

1,25                                                                                                                                                                                             110

 1,2                                                                                                                                                                                             105

1,15                                                                                                                                                                                             100




                                                                                                                                                                                                                                           23.10.2004

                                                                                                                                                                                                                                                        23.12.2004




                                                                                                                                                                                                                                                                                                                      23.10.2005

                                                                                                                                                                                                                                                                                                                                   23.12.2005
                                                                                                                                                                                                       23.4.2004

                                                                                                                                                                                                                   23.6.2004

                                                                                                                                                                                                                               23.8.2004




                                                                                                                                                                                                                                                                      23.2.2005

                                                                                                                                                                                                                                                                                  23.4.2005

                                                                                                                                                                                                                                                                                              23.6.2005

                                                                                                                                                                                                                                                                                                          23.8.2005




                                                                                                                                                                                                                                                                                                                                                23.2.2006

                                                                                                                                                                                                                                                                                                                                                            23.4.2006

                                                                                                                                                                                                                                                                                                                                                                        23.6.2006

                                                                                                                                                                                                                                                                                                                                                                                        23.8.2006
                                           23.10.2004

                                                        23.12.2004




                                                                                                                       23.10.2005

                                                                                                                                    23.12.2005
       23.4.2004

                   23.6.2004

                               23.8.2004




                                                                       23.2.2005

                                                                                   23.4.2005

                                                                                               23.6.2005

                                                                                                           23.8.2005




                                                                                                                                                 23.2.2006

                                                                                                                                                             23.4.2006

                                                                                                                                                                         23.6.2006

                                                                                                                                                                                     23.8.2006




                                                                                                                                                                                                                                                                                                                                                                                    8
US – Fed funds rate
•   Fed leave’s its benchmark interest rates at 5.25% on 20 September FOMC
    meeting.


                                              Two-year T-bond yield (Reuters Poll)
                                          Q406                                                          Q107                                                               Q207
    Median                                5.00%                                                         4.85%                                                           4.73%
    Max                                   5.40%                                                         5.75%                                                           5.60%
    Min                                   4.10%                                                         4.05%                                                           3.80%



             8
             7
             6
             5
             4
             3
             2
             1
             0
                             24.10.2000




                                                      24.10.2001




                                                                               24.10.2002




                                                                                                        24.10.2003




                                                                                                                                 24.10.2004




                                                                                                                                                           24.10.2005
                 24.4.2000




                                          24.4.2001




                                                                   24.4.2002




                                                                                            24.4.2003




                                                                                                                     24.4.2004




                                                                                                                                               24.4.2005




                                                                                                                                                                        24.4.2006


                                             USGG10Y Index                                   USGG2Y Index                                     FDTR Index                            9
            -0,2
                   -0,1
                              0,1
                                    0,2
                                          0,3
                                                0,4
                                                      0,5
                                                            0,6
                                                                  0,7




                          0
          25.4.2005




                                                                                                3,7
                                                                                                3,9
                                                                                                4,1
                                                                                                4,3
                                                                                                4,5
                                                                                                4,7
                                                                                                4,9
                                                                                                5,1
                                                                                                5,3
          25.5.2005                                                                      7.9.2005
          25.6.2005
                                                                                        7.10.2005
          25.7.2005
          25.8.2005                                                                     7.11.2005

          25.9.2005                                                                     7.12.2005
         25.10.2005
                                                                                         7.1.2006
         25.11.2005
                                                                                         7.2.2006
         25.12.2005
          25.1.2006                                                                      7.3.2006

                                                                        USGG10Y Index
          25.2.2006




SPREAD
                                                                                         7.4.2006
          25.3.2006
                                                                                         7.5.2006
          25.4.2006
          25.5.2006                                                                      7.6.2006

          25.6.2006                                                                      7.7.2006
                                                                        USGG2Y Index




          25.7.2006
                                                                                         7.8.2006
          25.8.2006
                                                                                         7.9.2006
          25.9.2006
                                                                                        7.10.2006
                                                                                                      US – Money and Bond Markets




10
US - Yield Curve Changes




                           11
EU – Economy
•   The Euro area GDP was reported to have grown at a 3.7%q/q pace, after a
    2.5% pace in 1Q. In the 2Q, the strength was broad based across countries and
    sectors. France and the Netherlands reported annualized gains of 4.7%q/q and
    4% respectively. The German data are close to 4%q/q.




                                                                               12
EU – Economy
•   Euro area industrial production was weaker than expected in July. Eurostat
    estimates that output declined 0.4% on the month in July (consensus: +0.3%)
    while the June outcome was 0.0%. Germany (+2.4%m/m), France (-1.3%m/m),
    Italy (-0.3%m/m). Average rate for 3Q +0.5%, 2Q +4.1%.
•   Euro area capacity utilization in manufacturing has risen sharply in the past few
    quarters and now stands at 83.6%. In the last upswing, capacity utilization
    reached this level in early 2000.
•   Euro area unemployment in June declined to the lowest since the common
    currency began. The jobless rate fell to 7.8% from 7.9% in May.




                                                                                   13
EU – Economy
•   The Euro area service PMI came down a bit in September to a reading of 56.7
    from 57.4 in August. The PMI readings add to the evidence that the Euro area
    economy remains very healthy at the end of the third quarter.
•   Euro area non-auto retail spending rose a solid 0.7%m/m in August following a
    revised gain of 0.4% in July.
•   The solid performance registered during the summer months leaves the level of
    non - auto spending 3.2% above the second quarter average after 2.3% in 2Q.
    This confirms that Euro area retail sales have been firmer in the third quarter,
    which is particularly encouraging for the Euro area growth outlook.




                                                                                  14
EU – Economy
•   German IP (including construction) increased 1.9% on the month in August,
    beating overall expectations (consensus: 0.3%). In the details, manufacturing
    production was particularly strong, up 2.3% MoM in August. The level of
    manufacturing output in July-August is up 8.2% relative to last spring after a gain
    of 5.9% in 2Q. Construction output rose a solid 1.2% in the same month after
    3.4% MoM in July.




                                                                                      15
EU – Economy
•   Euro area HICP inflation rose 2.3% YoY in August, down a tenth from July's
    level. The move reflected some easing in the energy component, down from
    9.5% YoY in July to 8.1% YoY in August, partly offset by a further pickup in food
    prices, up to 2.9% YoY in August from 2.6% YoY in July.
•   Core inflation moved down slightly from 1.6% YoY in July to 1.5% YoY in
    August, driven by lower transport & communication prices.
•   Euro area headline inflation will fall smartly in the next few months, most likely
    below 2.0% in the autumn, on the back of lower energy prices.




                                                                                    16
    ECB
•    As expected, the ECB changed basic rate by 25bp to 3.25% on 5 October
     meeting.
                                                         ECB Refi Rates (Reuters Poll)
                                            4Q 06                                                        1Q 07                                                        2Q 07
      Median                                3.50%                                                        3.50%                                                        3.50%
      Max                                   3.50%                                                        4.00%                                                        4.00%
      Min                                   3.25%                                                        3.25%                                                        3.25%

                                                  Two-year schatz yeld (Reuters Poll)
                                             Q406                                                         Q107                                                           Q37
      Median                                3.78%                                                        3.75%                                                        3.75%
      Max                                   4.10%                                                        4.25%                                                        4.25%
      Min                                   3.25%                                                        3.25%                                                        3.20%

                 6
               5,5
                 5
               4,5
                 4
               3,5
                 3
               2,5
                 2
               1,5
                                2.11.2000



                                                         2.11.2001



                                                                                2.11.2002



                                                                                                         2.11.2003



                                                                                                                                2.11.2004



                                                                                                                                                       2.11.2005
                     2.5.2000



                                              2.5.2001



                                                                     2.5.2002



                                                                                              2.5.2003



                                                                                                                     2.5.2004



                                                                                                                                            2.5.2005



                                                                                                                                                                   2.5.2006


                                                                                                                                                                               17
                                            GECU10Y Index                                   GECU2Y Index                            EURR002W Index
                  0,2
                        0,4
                        0,6
                              0,8
                                    1,2
                                    1,4




                    0
                                1
                                                                  1,5
                                                                  2,5
                                                                  3,5
                                                                  4,5
                                                                  5,5




                                                                    1
                                                                    2
                                                                    3
                                                                    4
                                                                    5
          25.5.2005                                        2.5.2000 6

          25.6.2005
                                                          2.11.2000
          25.7.2005
                                                           2.5.2001
          25.8.2005

          25.9.2005                                       2.11.2001

         25.10.2005                                        2.5.2002
         25.11.2005
                                                          2.11.2002
         25.12.2005
                                                           2.5.2003


                                          GECU10Y Index
          25.1.2006
          25.2.2006                                       2.11.2003




SPREAD
          25.3.2006
                                                           2.5.2004
          25.4.2006
                                                          2.11.2004
          25.5.2006
                                                                        EU – Bond Market




                                          GECU2Y Index




          25.6.2006                                        2.5.2005

          25.7.2006                                       2.11.2005
          25.8.2006
                                                           2.5.2006
          25.9.2006




    18
EU - Yield Curve Changes




                           19
US vs. EU Yield Curve Changes




                                20
                                                                                  -0,5
                                                                                             0,5
                                                                                                       1,5




                                                                           -1
                                                                                         0
                                                                                                   1
                                                                                 1.4.2000

                                                                                 1.9.2000

                                                                                 1.2.2001

                                                                                 1.7.2001

                                                                                1.12.2001

                                                                                 1.5.2002

                                                                                1.10.2002

                                                                                 1.3.2003

                                                                                 1.8.2003
                                                   SPREAD 10YUS vs 10YEU
                                                                                 1.1.2004

                                                                                 1.6.2004

                                                                                1.11.2004

                                                                                 1.4.2005

                                                                                 1.9.2005
     150 per. Mov. Avg. (SPREAD 10YUS vs 10YEU )
                                                                                                             US vs. EU Spread Changes




                                                                                 1.2.2006

                                                                                 1.7.2006
21
Japan - Yield Curve Changes




                              22
Slovak MM, Fixed income and FX
7
6
                                                                                                                                                                                                  •   August PPI decreased to 8.8 %
5
                                                                                                                                                                                                      from July’s level 9.0% YoY. The
4
                                                                                                                                                                                                      monthly PPI was constant on
3
                                                                                                                                                                                                      July’s level at 0.6 %.
2
1
                                                                                                                                                                                                  •   The central bank surprised
0                                                                                                                                                                                                     markets and increased repo rate
                                                            5.11.2004




                                                                                                                               5.11.2005
    5.1.2004

               5.3.2004
                          5.5.2004

                                     5.7.2004

                                                5.9.2004



                                                                        5.1.2005
                                                                                   5.3.2005

                                                                                              5.5.2005
                                                                                                         5.7.2005

                                                                                                                    5.9.2005


                                                                                                                                           5.1.2006
                                                                                                                                                      5.3.2006

                                                                                                                                                                 5.5.2006
                                                                                                                                                                            5.7.2006
                                                                                                                                                                                       5.9.2006
                                                                                                                                                                                                      by 25bp to 4.75% in the last
                                                                                                                                                                                                      week of September
                                                           SKBRREPO Index                                           BBOR3M Index                                                                  •   Budget balance in September
                                                                                                                                                                                                      was better than previous month.
    5,5                                                                                                                                                                                               –5.1 bill. from -5.7 bill in August
    4,5
                                                                                                                                                                                                      (YoY).
    3,5
                                                                                                                                                                                                  •   Unemployment rate fall under
                                                                                                                                                                                                      10%, 9.9% in August, 10.2% in
    2,5
                                                                                                                                                                                                      July.
    1,5
                                                                                                                                                                                                  •   Real wage was up +3.1% in July,
    0,5                                                                                                                                                                                               June +2.4%.
-0,5
             5




     IV 6
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                                                            SLCPLYOY Index                                           SLCPCOYY Index
                                                                                                                                                                                                                                   23
 Slovak MM, Fixed income and FX

• Slovak koruna was traded in a narrow range and appreciated recently in line with
the positive mood for Central Europe



                         EURSKK Curncy                                                                 EURSKK Curncy
     40                                                                   39
   39,5                                                               38,5
     39
                                                                          38
   38,5
     38                                                               37,5
   37,5
                                                                          37
     37
   36,5                                                               36,5
     36                                                                   36
   35,5




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                             .0




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                                                                                                                                                 2.
                             EURSKK Curncy                                                                       EURSKK Curncy




                                                                                                                                                            24
Slovak MM, Fixed income and FX




                                 25
    CEE
Central Banks from CEE region, interest rates:


•   SKK changed 4.75 % (+0.25bp, new meeting 10/31/2006)
•   HUF changed 7.75% (+0.5bp, new meeting 10/24/2006)
•   PLN unchanged 4% (new meeting 10/25/2006)
•   CZK changed 2.50% (+0.25bp, new meeting 10/26/2006)




                                                           26
CEE Yield curves comparison




                              27
Credit Markets Overview




                          28
  Credit trends
Moody’s Speculative Grade Default rate
• The default rate slipped to 1.6% in August from 1.7% in July, as only two, relatively
small, US-based corporate defaults occured in August

                            S pe c -Grade De fault Rate
     6%




     4%




     2%




     0%
          II-04   VIII-04         II-05         VIII-05         II-06    VIII-06

                     Global S pec         US S pec        Europe S pec


 August: 2 corporate defaults
 • Radnor Holdings Corp.                                      $135mil.
 • Atlantic Mutual Insurance Company                          $100mil.                    29
  Credit trends
Moody’s Speculative Grade Default rate
• Moody's predicts only a marginal rise in corporate defaults over the next twelve months
– compared to the forecast from the beginning of 2006.
• Moody's forecasting model for global speculative-grade default rate predicts that the
default rate will finish 2006 at 2.1%, rising to only 2.4% by the end of August 2007.


    4,00%
    3,50%
    3,00%
    2,50%
    2,00%
    1,50%
    1,00%
    0,50%
    0,00%
             04




             05




             06




             07
           .04




           .05




           .06
            05




            06




            07
           04




           05




           06




           07
         II.




         II.




         II.




         II.
        II .




        II .




        II .
       V.




       V.




       V.




       V.
       XI




       XI




       XI
      VI




      VI




      VI




      VI


              Actual rate   Forecas t rate   Former forecas t(beginning 2006)
                                                                                      30
                                                          0
                                                               200
                                                                      400
                                                                            600
                                                                                  800
                                                                                        1000
                                                                                               1200
                                                                                                      1400
                                                                                                             1600
                                                                                                                                                                                     •
                                            11.2.2005


                                            11.4.2005


                                            11.6.2005                                                                                                                                                                     Auto sector
                                            11.8.2005


                                           11.10.2005




            10
            15
            20
            25
            30
            35
            40
            45




             0
             5
                                           11.12.2005
 1.7.2005

 1.8.2005                                   11.2.2006
                                                                                                                      GM 5Y CDS spre a d




 1.9.2005
                                            11.4.2006
1.10.2005
                                                                                                                                                                                                                                        Credit trends




1.11.2005                                   11.6.2006
1.12.2005
                                            11.8.2006
 1.1.2006

 1.2.2006

 1.3.2006

 1.4.2006
                                                          15
                                                                     20
                                                                             25
                                                                                        30
                                                                                                 35
                                                                                                             40




                 Nissa n 5Y CDS spre a d

 1.5.2006                                     1.7. 2005

 1.6.2006                                     1.8. 2005

 1.7.2006                                     1.9. 2005

 1.8.2006                                   1.10.2005

 1.9.2006                                   1.11.2005

1.10.2006                                   1.12.2005

                                              1.1. 2006

                                              1.2. 2006

                                              1.3. 2006
                                                                                                                    GN sha re price




                                              1.4. 2006

                                              1.5. 2006

                                              1.6. 2006
                                                                                                                                           increased 75%, while CDS spread tightened from around 1200 down to 600.




                                              1.7. 2006

                                              1.8. 2006
                                                                                                                                           Since GM announced a possible partnership with Renault and Nissan, GM shares




    31




                                              1.9. 2006

                                            1.10.2006
Credit trends
• The traditionally busy period of new supply approached, but is expected to have
no big influence on spreads’ stability – new issuance manageable, only few large
deals.

• The credit spreads remained within a tight trading range for last month and in a
current environment of low default rates and good credit quality – it’s hard to see a
factor which would push spreads significantly wider.


New series of iTraxx started to be traded on 20 September 2006:
• iTraxx Europe (125 names) – Series 6 +2bp wider than Series 5
                             - 8 names differ
• iTraxx Crossover (45 names) – Series 6 +41bp wider than Series 5
                             - 7 names differ




                                                                                        32
Credit trends                                                                        European CDS s preads
             45                                                                                                                                                                                                                      350
                                                                                                                                                                                                                                           Europe
             40
                                                                                                                                                                                                                                     300

             35
                                                                                                                                                                                                                                     250
             30

                                                                                                                                                                                                                                     200
             25

             20                                                                                                                                                                                                                      150
                           5


                                           5

                                                           5
           05




                                                                        06


                                                                                       06

                                                                                                      06


                                                                                                                     06

                                                                                                                                        06


                                                                                                                                                           06

                                                                                                                                                                              06

                                                                                                                                                                                                 06


                                                                                                                                                                                                                    06
                        00


                                        00

                                                        00
         0




                                                                         0


                                                                                        0

                                                                                                       0


                                                                                                                      0

                                                                                                                                         0


                                                                                                                                                            0

                                                                                                                                                                               0

                                                                                                                                                                                                  0


                                                                                                                                                                                                                     0
                         2


                                         2

                                                         2
      .2




                                                                      .2


                                                                                     .2

                                                                                                    .2


                                                                                                                   .2

                                                                                                                                      .2


                                                                                                                                                         .2

                                                                                                                                                                            .2

                                                                                                                                                                                               .2


                                                                                                                                                                                                                  .2
                      0.


                                      1.

                                                      2.
    .9




                                                                  .1


                                                                                .2

                                                                                              .3


                                                                                                             .4

                                                                                                                             .5


                                                                                                                                                .6

                                                                                                                                                                  .7

                                                                                                                                                                                     .8


                                                                                                                                                                                                        .9
                .1


                                 .1

                                                .1
  20




                                                                20


                                                                              20

                                                                                            20


                                                                                                           20

                                                                                                                           20


                                                                                                                                              20

                                                                                                                                                                20

                                                                                                                                                                                   20


                                                                                                                                                                                                      20
              20


                               20

                                              20




             IG - iTra xx Europe Ma in Se rie s 4 5Y                                                               HY - iTra xx Europe Cros s ove r Se rie s 4 5Y (rhs )
                                                                                            US CDS s preads
 55
                                                                                                                                                                                                                                     250
 50                                                                                                                                                                                                                                        U.S.
 45                                                                                                                                                                                                                                  220

 40                                                                                                                                                                                                                                  190

 35                                                                                                                                                                                                                                  160

 30                                                                                                                                                                                                                                  130
         20.9.2005




                                                                         20.1.2006

                                                                                        20.2.2006

                                                                                                       20.3.2006

                                                                                                                          20.4.2006

                                                                                                                                             20.5.2006

                                                                                                                                                                20.6.2006

                                                                                                                                                                                   20.7.2006

                                                                                                                                                                                                      20.8.2006

                                                                                                                                                                                                                         20.9.2006
                         20.10.2005

                                         20.11.2005

                                                         20.12.2005




                     IG - DJ CDX.NA.IG Se rie s 5 5Y                                                         HY - DJ CDX.NA Cros s ove r Se rie s 5 5Y (rhs )                                                                                       33
Credit trends
•   CDO spread change:




30.9.2006
                AAA       AA        A        BBB
US CLO           25       40        68       150
EUR CLO          24       38        60       145
S F CDO          32       50       135       315
S YN CDO         40       70       110       260
ONE MONTH
CHANGE          AAA       AA       A         BBB
US CLO                0        0         0         0
EUR CLO               0        0         0         0
S F CDO               0        0         0         5   Almost no change in
S YN CDO              0        0         0         0   CDO in September



                                                                             34
Investment portfolio management

Contacts:


Jan Pataky          Head of Investment portfolio management   (+421 2) 5850 5463   pataky.jan@slsp.sk

Andrea Osuchova     Portfolio Manager                         (+421 2) 5850 5392   osuchova.andrea@slsp.sk

Lubomir Golany      Portfolio Manager                         (+421 2) 5850 5412   golany.lubomir@slsp.sk

Alena Teplicanova   Quant Analyst                             (+421 2) 5850 5382   teplicanova.alena@slsp.sk

Martin Vozar        Research                                  (+421 2) 5850 5388   vozar.martin@slsp.sk

Michal Klestinec    Research                                  (+421 2) 5850 5403   klestinec.michal@slsp.sk
Disclaimer:


This report is meant as supplementary economic information for our clients and is based on information
available on the date of printing. Our analysis and conclusions are of a general nature and do not take into
account the individual circumstances or needs of investors such as income potential, tax situation or the
level of risk he or she is prepared to undertake. Information about previous performance does not
guarantee future performance. Although we judge our sources to be reliable, we do not accept any
responsibility for the completeness and accuracy of our information. This report is neither an offer to sell
nor an offer to buy any securities. Erste Bank der oesterreichischen Sparkassen AG confirms that it has
approved any investment advertisements contained in this material. Erste Bank der oesterreichischen
Sparkassen AG is regulated by the Financial Securities Authority for the conduct of investment business in
the UK.

				
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