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Credit-Suisse- February 2013


February 2013

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									                                                                                                                         Global Research
                                                                                                                         Private Banking
                                                                                                       Investment horizon: 6-12+ months

Research Monthly                               February 2013
        Quality Japanese exporters:
 Buy    Toyota, Honda, Bridgestone
        Beneficiaries of a weaker JPY
        and US recovery.

        Google, Intel, Infineon, Len-
 Buy    ovo, Oracle,,
        Qualcomm, Samsung and TS-
        Stocks with a strong market posi-
        tion in secular growth themes,
        such as Mobile Internet, Cloud
        Computing, Big Data, Virtualiza-
        tion and Social Media.

        Megatrend Champions
 Buy    Invest in our Champions portfolio,
        which reflects the optimal tactical
        allocation of megatrend invest-
        ments, according to our Traffic
        Light system.

        Platinum with a time horizon
 Buy    of 6–12 months                            Investment Strategy
        The market is undersupplied and
                                                  Stock rally to continue as
                                                  economy improves                                          page 3

This month’s featured topic                    Investment theme                                 Credit Suisse Megatrends

Can                                            IT spending to                                   Introducing our
“Abenomics”                                    benefit from                                     new
revive Japan                                   secular                                          Megatrends
and                                            technology                                       Framework                        page 11

overcome                                       growth
deflation?                  page 9             themes                 page 10

  Important disclosures are found in the Disclosure appendix. Credit Suisse does and seeks to do business with companies
  covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could af-
  fect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
  For a discussion of the risks of investing in the securities mentioned in this report, please refer to the following Internet link:
2                                                                                                         29/01/2013   Credit Suisse - Research Monthly

    Editorial                                                               In this issue

                            Giles Keating                                   Investment Strategy
                            Head of Research for Private Banking and        Stock rally to continue as economy improves             page 3
                            Wealth Management

                  ,                Investment summary             page 5

                            +41 44 332 22 33
                                                                            Gradual global pick-up to continue          page 7

                                                                            This month’s featured topic
    It is human nature to be impatient and investors have been              Can “Abenomics” revive Japan and overcome
    keen for rapid results from the monetary stimulus of recent             deflation?  page 9
    years and skeptical when little happened. An exception was
    last year’s positive reaction to the ECB’s special bank loans           Investment theme
    (LTROs) and bond-buying offer (OMT). But a sense of failure             IT spending to benefit from secular technology growth
    surrounds the near-zero interest rates imposed by the Fed,              themes  page 10
    ECB, BoE and BoJ several years ago and subsequent bond-
    buying (QE). Such measures are widely seen as financial al-             Credit Suisse Megatrends

    chemy with little real economic impact. Yet, Nobel Prize-win-           Introducing our new Megatrends Framework                page 11

    ner Milton Friedman stressed that monetary policy operates
                                                                            Fixed income
    with “long and variable lags.” These can be exceptionally long
                                                                            Credits start the year on a positive note        page 12
    when there are deep problems in banking and credit – the key
    transmission mechanism to the real economy – but as they re-            Equities
    turn to health, monetary policy should finally become effective.        Strong start to the year bodes well for equities          page 14
    That now seems to be happening in the US, with banks re-cap-
    italized and lending again, credit card loan securitization re-         Alternative investments
    starting, and record issuance of high yield bonds.                      Directional hedge fund styles and US REITS offer
         All this is a bit like flooring the gas pedal on a car with mal-   opportunities  page 16
    functioning fuel injection. Nothing happens and you think that
                                                                            Foreign exchange
    your foot pressure is useless, but when a mechanic fixes the
    problem, the car suddenly goes forward even though you do               Diversification into emerging market currencies            page 17

    not push the pedal anymore. By analogy, the US economy can
                                                                            Risk disclaimer        page 19
    accelerate without the Fed adding extra stimulus. Europe is
    similar, but perhaps 6–12 months behind the US, as the com-
    plex credit problems take longer to fix. In short, as investors         Editorial deadline: 29 January 2013
    we should not be ruled by our own impatience: Monetary
    policy is at last becoming effective, and the throttle is open far
    wider than ever before. As broken banking and credit systems
    heal, positive monetary impetus can overwhelm the negative ef-
    fects of tighter fiscal policy, boosting the economy more than
    people expect, and raising stock markets during a “sweet
    spot” that could last a couple of years before inflation be-
    comes a threat.
3    Investment Strategy                                                                           29/01/2013    Credit Suisse - Research Monthly

                                                                           Top investment ideas for 2013 – January update
    Investment Strategy                                                    Our set of Top investment ideas for 2013 published in our pre-
                                                                           vious edition have recorded absolute returns of 1%–12%
    Stock rally to                                                         since we recommended them in late 2012, with only our for-
                                                                           eign exchange idea in flattish territory. Despite the strength
    continue as                                                            and rapidity of these market moves, we keep the status of all
                                                                           of our ideas unchanged on Green (which means “Continue to
    economy improves                                                       accumulate”). The emphasis on stocks (Idea No. 2, “Recovery
                                                                           stocks,” Idea No. 3, “Dividend stocks” and Idea No. 4, “New
                                                                           gas and oil sources”), real estate (Idea No. 5, “US real estate”)
                                                                           with less fixed income (Idea No. 1, “Beyond cash: Credit, not
                                                                           duration”) in combinations reflective of respective investor risk
                                                                           profiles should continue to perform well, in our view.

                                                                           Fixed income: First trading weeks confirming our “cred-
                                                                           it, not duration” call
                                                                           Yields on core government bonds increased at the start of the
                                                                           year in the wake of a general “risk-on” investor mode, while
                                                                           credit spreads continued to compress. We do not expect the
                                                                           same pace in core yields and credit spreads to continue. After
                                                                           all, while improving, global growth is still likely to be moderate
                                                                           in 2013, inflation to remain low and central banks generally
      Gradual global economic pick-up to con-                             stick to their accommodative stance. So, core yields should
    tinue with no imminent inflation and ex-                               have some upside risks, albeit limited, except for Switzerland,
                                                                           where a further depreciation of the CHF would induce a fur-
    pansive central banks.                                                 ther normalization of Eidgenossen yields. These are still signi-
                                                                           ficantly below fair value. Credit spreads, too, are unlikely to
     Stocks, US real estate remain in focus                               compress at the same pace. As a result, carry (or coupon con-
    as investments on a 6–12+ month hori-                                  tribution) will be key in fixed income returns, which we anticip-
                                                                           ate to be in the low single-digit area. Therefore, we maintain
    zon. In bonds, favor short maturity credits.                           our strategic focus on short maturity credits down to BB credit
                                                                           quality. We also highlight European convertibles as a fixed in-
      CHF correcting weaker; EUR gaining                                  come alternative likely to perform well.
    and emerging market currencies set to
                                                                           Equities: Japan upgraded to neutral in our regional
    rise.                                                                  strategy
                                                                           Equities have continued with strong advances at the start of
    Nannette Hechler-Fayd'herbe                                            the year and have benefited from falling credit spreads and bet-
    Head of Global Financial Markets Research
    nannette.hechler-fayd', +41 44 333 17 06        ter investor sentiment. Temporary short-term setbacks of small
                                                                           magnitude are possible any time, but in the broader picture,
                                                                           equities are among the more attractively valued asset classes
    The first weeks of trading in 2013 saw a strong rebound in in-         and one of the few opportunities left offering investors a re-
    vestor risk appetite. Economic headwinds have ebbed, as the            turn. In our regional focus, we have changed our views with re-
    credit crunch ends and the fiscal outlook becomes clearer in           gard to Japanese stocks, which are unlikely to underperform
    the USA, euro break-up dangers fade and China growth con-              global markets if the JPY stays around current levels. Our cur-
    solidates. Equity funds hence registered significant inflows,          rency outlook suggests positive consequences on earnings in
    new bond issues of riskier creditors continued to be oversub-          Japan. Our sector strategy and our preferred equity themes re-
    scribed and European peripheral sovereign and corporate                main unchanged and are reflected in our Top ideas for 2013,
    bonds traded at significantly tighter spreads to German Bunds.         Nos. 2–4. In this issue, we provide more details on the techno-
    Core government bond yields, in contrast, rose and all safe-           logy sector, on which we have a positive view.
    haven assets – the CHF, the JPY, gold – have underper-
    formed or lost ground. It seems as if investors are finally show-      Alternative investments: US REITS still our favorite
    ing willingness to commit their excess cash holdings to finan-         This month, we confirm US real estate as our favorite alternat-
    cial investments. Meanwhile, last year’s fall in credit spreads        ive investment. We would also expect hedge funds to benefit
    has left bonds less attractive, while equity multiples are still not   from persistently low volatility on stock markets and good liquid-
    stretched.                                                             ity conditions. Directional strategies are likely to fare best in
                                                                           this investment category. In commodities, our moderate global
                                                                           growth picture still justifies a neutral outlook.
4    Investment Strategy                                                                        29/01/2013   Credit Suisse - Research Monthly

    Foreign exchange: Weaker CHF vs. EUR, selected emer-
    ging market currencies stronger                                     Strategic asset allocation (SAA)
    The CHF has depreciated markedly vs. EUR and we expect              The neutral allocations serve as a guideline and represent the
    more. Falling risk premia on the EUR should lead to gradual         average weighting over an entire market cycle. Since the glob-
                                                                        al strategy is based on a medium-term investment horizon, it
    capital outflows from Switzerland. The EUR and selected Asi-
                                                                        deviates from the neutral position. We recommend an over-
    an and interest-bearing emerging market currencies are likely       weight in equities and alternative assets, particularly hedge
    to benefit the most, the USD less. In our optimal currency port-    funds and real estate (selected markets). Conversely, we re-
    folios, we add CNH, MXN, PLN and TRY as providing good di-          commend underweighting fixed income investments and liquid-
    versification. The JPY has entered a technical downtrend and        ity.
    even though there are reasonable doubts about how effective         Fixed Income
    the BoJ can be, we see USD/JPY at 94 in 12 months. Tactic-
    ally, we prefer to await a correction to go short JPY.               (BM)
                                                                                                    SAA                          BM     SAA
                                                                                                                 Cash            5%      2%
                                                                                                                 Fixed Income   80%     80%
    Risk review                                                                                                  Equity          0%      0%
                                                                                                                 Alternative    15%     18%
    Risks in relation with the Eurozone debt crisis have declined
    materially, in our view. If peripheral countries disappoint on
    their deliverables, credit spreads could still widen again from
    current levels. But the Outright Monetary Transactions frame-
    work of the European Central Bank provide a credible back-
    stop to a more devastating movement. In the US, while the           Income
    debt ceiling could provide some temporary drama, we still anti-       Benchmark
                                                                                                                                 BM     SAA
                                                                          (BM)                                   Cash            5%      2%
    cipate muddling-through from both the Republicans and Demo-
                                                                                                                 Fixed Income   55%     53%
    crats. In our view, geopolitical risks in both the Near and Far                                              Equity         20%     22%
    East therefore remain the least easily predictable. For in-                                                  Alternative    20%     23%
    vestors who are overly concerned about the potential impact of
    any event on global stock markets, we again highlight the relat-
    ively cheap short-term protection opportunity offered by derivat-
    ives, given persistently low volatility.          (25/01/2013)

                                                                         Benchmark                 SAA                           BM     SAA
                                                                         (BM)                                    Cash            5%      2%
                                                                                                                 Fixed Income   35%     32%
                                                                                                                 Equity         40%     43%
                                                                                                                 Alternative    20%     23%

                                                                        Capital Gain

                                                                          Benchmark               SAA                            BM     SAA
                                                                                                                 Cash            5%      2%
                                                                                                                 Fixed Income   15%     12%
                                                                                                                 Equity         60%     63%
                                                                                                                 Alternative    20%     23%


                                                                          Benchmark                SAA                           BM     SAA
                                                                          (BM)                                   Cash            5%      2%
                                                                                                                 Fixed Income    0%      0%
                                                                                                                 Equity         80%     81%
                                                                                                                 Alternative    15%     17%

                                                                        Source: Credit Suisse
5     Investment Strategy                                                                                                                              29/01/2013            Credit Suisse - Research Monthly

                                                                                                                Equities: Selected indices
    Investment summary                                                                                          Index                          Price          MTD          YTD           12M fair             12M out-
                                                                                                                                                              (%)          (%)             value                  look
    Short interest rates 3M LIBOR / 10-year government bonds
                                                                                                                S&P 500                   1,502.96           5.4%         5.4%               1,513          Overweight
                     3M                                             10Y
                                                                                                                SMI                       7,458.66           9.3%         9.3%               6,477         Underweight
                  LIBOR                                           bonds
                                                                                                                FTSE-100                  6,284.45           6.6%         6.6%               5,954               Neutral
    in %             Spot              3M           12M             Spot               3M           12M
                                                                                                                Euro Stoxx 50             2,744.18           4.1%         4.1%               2,570               Neutral
    CHF              0.02        0.0-0.2        0.0-0.2             0.70         0.6-0.8        0.9-1.1
                                                                                                                Nikkei 225               10,926.65           5.1%         5.1%             10,600                Neutral
    EUR *            0.21        0.1-0.3        0.1-0.3             1.57         1.5-1.7        1.6-1.8
                                                                                                                MSCI EM                   1,069.12           1.3%         1.3%               1,039               Neutral
    USD              0.30        0.3-0.5        0.3-0.5             1.85         1.6-1.8        1.8-2.0
                                                                                                                China H-Shares           12,001.81           4.9%         4.9%             12,000           Overweight
    GBP              0.51        0.5-0.7        0.5-0.7             2.01         1.8-2.0        2.1-2.3
                                                                                                                Prices as of 25/01/2013; 12M fair value: scenario analysis available; 12M outlook: relative to MSCI World
    JPY              0.17        0.1-0.3        0.1-0.3             0.73         0.8-1.0        0.9-1.1
                                                                                                                Index (USD)
    Spot rates are closing prices as of 24/01/2013. Forecast date: 24/01/2013. * 3M Euribor                                                                                              Source: Bloomberg, Credit Suisse
                                                                          Source: Bloomberg, Credit Suisse

                                                                                                                Foreign exchange
    Bonds: Selected indices
                                                                                                                                                                 Spot                     3M                        12M
    Index                          YTM         Spread to              Total return          12M TR out-
                                                                                                                EUR/USD                                          1.34            1.36-1.40                   1.35-1.39
                                   (%)           bench-                  YTD (%)                  look
                                               mark (bp)                                                        USD/CHF                                          0.93            0.89-0.93                   0.93-0.97
    USD (CS LUCI)                    2.7                110                     -0.6                           EUR/CHF                                          1.24            1.24-1.28                   1.28-1.32

    EUR (CS LEI)                     2.1                133                     -0.9                           USD/JPY                                             90                90-94                       92-96

    CHF (CS LSI)                     0.8                 46                     -0.8                            EUR/JPY                                           120              125-129                     127-131
                                                                                                                EUR/GBP                                          0.85            0.84-0.88                   0.84-0.88
    GBP(CS LEI)                      3.6                158                     -0.6                  
                                                                                                                GBP/USD                                          1.58            1.58-1.62                   1.58-1.62
    EM HC (JPM EMBI                  4.6                256                     -0.1                   
    Global)                                                                                                     EUR/SEK                                          8.68            8.73-8.77                   8.78-8.82
    EM LC hedged in                  5.5                n.a.                    -0.4                           AUD/USD                                          1.05            0.98-1.02                   0.96-1.00
    USD (JPM GBI)                                                                                               USD/CNY                                          6.22            6.05-6.25                   5.90-6.10
    High Yield (CS HY In-            5.8                509                      1.8                           Spot rates: London close 24/01/2013
    dex)                                                                                                                                                                                 Source: Bloomberg, Credit Suisse
    Prices as of 28/01/2013
                                                                          Source: Bloomberg, Credit Suisse
                                                                                                                Real GDP growth and inflation
                                                                                                                                    GDP                                         Inflation
    Commodities                                                                                                                   growth
                                                       Spot                   3M                    12M         in %               2012E         2013E         2014E              2012E          2013E            2014E
    Gold (USD)                                    1,658.70                1,750                   1,800         CH                     0.9           1.5           2.0                -0.7           0.4              1.0
    Silver (USD)                                      31.20                   34                      32        EMU                   -0.4           0.0           1.1                 2.5           1.8              1.7
    Platinum (USD)                                1,694.75                1,750                   1,850         USA                    2.1           2.0           2.5                 2.1           1.6              2.1
    Oil (USD)                                         95.88                   96                     100        UK                     0.0           1.0           1.5                 2.8           2.3              2.3
    Spot prices: London close 25/01/2013                                                                        Japan                  1.7           1.4           1.2                 0.0          -0.4              1.8
                                                                          Source: Bloomberg, Credit Suisse                                                                               Source: Bloomberg, Credit Suisse

    Global Research asset category strategy
                            By region/strategy                                                    Comments and comparison of weightings                                              Tactical          Strategic
                                                                                                                                                                                     1–6 M             6–12+ M
    Fixed income            Overweight: USA; Underweight: CH & Canada.                            We keep our focus on shorter maturities. We recommend focus-                                        
                                                                                                  ing on corporates.
    Equities                Overweight: USA; Underweight: Switzerland.                            Equity markets at important technical levels: Limited consolida-                                    
                                                                                                  tion is equally as likely before further rises.
    Commodities             Overweight: Energy, precious metals; Underweight: Ag-                 Tactically positive on short-term price rebound potential. Strategic-                               
                            riculturals.                                                          ally neutral but technicals improving for cyclicals.
    Real estate             Overweight: USA, Asia-Pacific and Germany; Under-                     Equities: Some upside strategically, but valuations richer. Direct                                   
                            weight: UK.                                                           real estate: Attractive rental carry.
    Private equity          Focus on secondaries, natural resources, SME LBOs,                    Selected private equity themes are particularly suitable to take ad-                                 
                            emerging markets, and private debt funds.                             vantage of the current economic environment.
    Hedge funds             We maintain our positive stance on global macro and dir-              We overweight directional strategies such as EM and long-short.                                      
                            ectional strategies.                                                  We maintain our positive stance for global macro.
    Foreign ex-             EUR/USD  , USD/CHF , GBP/USD ,                                     We expect EUR/USD to rise to 1.37. CAD fundamentals are pos-
    change                  USD/JPY .                                                            itive now.
                                                                                                                                                             Source: Credit Suisse Investment Committee/Global Research
6     Investment Strategy                                                                                                                                            29/01/2013              Credit Suisse - Research Monthly

    Top Investment Ideas for 2013
    Fixed Income                          Status           Action                                                           Rationale/Update
    1. Beyond cash: Credit                                Buy short dated AA- to BBB financials and A                      Cash should continue to be unremunerative (near-zero yields) in most markets.
    not duration                                           to BB non-financials excluding auto.                             Whereas credit spreads have come down further in recent weeks, bringing yields of
                                                                                                                            many bonds into very low territory, corporate bonds of short maturities still offer a de-
                                                                                                                            cent yield pick-up versus cash. With default rates expected to marginally increase in
                                                                                                                            2013, conservative investors should focus on investment grade credits.

    2. Recovery stocks                                    Buy US consumer, M&A and cyclical stocks.                        We expect equity market sentiment to improve further in 2013, especially after US
                                                                                                                            politicians find a solution to the debt ceiling issue. We recommend US consumer
                                                                                                                            stocks and recovery stocks benefiting from the US and Asia recovery. We expect ro-
                                                                                                                            bust M&A activity as stocks are cheap and cash levels high.
    3. Dividends and beyond                               Buy high dividend yielding stocks, high free                     For investors who are interested in absolute return and with an expectation of relat-
                                                           cash flow generating stocks or European high                     ively high cash flow disbursements from dividends.
                                                           yield convertible bonds.
    4. New gas and oil                                    Invest in upstream energy stocks.                                Oil and gas companies with new exploration technologies or which have interest in as
    sources                                                                                                                 yet unexploited shale gas, tight oil, deepwater oil, etc.
    Alternative Invest-
    5. US real estate                                     Invest in commercial and residential real es-                    Very affordable prices, easy monetary policy and solid economic growth to support
                                                           tate.                                                            US housing. German real estate also appears relatively cheap and can benefit from
                                                                                                                            capital inflows.
    Foreign Exchange

    6. The new hard curren-                               Buy selected Asian currencies and other selec-                   We continue to recommend diversification into selected EM currencies out of tradition-
    cies                                                   ted EM currencies.                                               al hard currencies like EUR and USD.
    Key to status symbols: green = attractive investment opportunities – continue to invest in theme; yellow = keep holdings but do not add to existing positions; red = reduce /exit existing positions.
                                                                                                                                                                                                             Source: Credit Suisse
7    Economics                                                                                   29/01/2013    Credit Suisse - Research Monthly

                                                                        confidence and “hard” economic data. We expect a return to
    Economics                                                           modest growth in the second half of 2013, with continuing
                                                                        large differences between countries. Growth is likely to remain
    Gradual global                                                      weak in those countries, where planned deficit cuts are
                                                                        largest, unemployment highest and structural banking sector is-
    pick-up to continue                                                 sues still present (e.g. Spain).

                                                                        US: Solid underlying improvement despite fiscal head-
                                                                        Several positive forces, including the housing and labor market
                                                                        recovery, should continue to support US growth. The corpor-
                                                                        ate sector looks very healthy, with low leverage and a substan-
                                                                        tial amount of cash on the balance sheet. Less fiscal uncer-
                                                                        tainty should result in stronger investment spending growth
                                                                        this year. Importantly, the full impact of the fiscal cliff – a com-
                                                                        bination of expiring tax relief and automatic spending cuts –
                                                                        has been averted. In addition, the statutory debt limit has been
                                                                        temporarily suspended (effectively until the summer) and
                                                                        pending decisions on spending cuts look unlikely to result in a
                                                                        meaningful growth impact this year. While household incomes
                                                                        and spending are likely to be affected by higher taxes in the
                                                                        first half of this year, the positive developments described
     Easing Eurozone stress and better finan-                          above should lead to stronger growth thereafter. As inflation is
    cial conditions should support the global                           set to remain low, the Fed still looks likely to continue its bond
                                                                        purchases at the current pace throughout 2013.
                                                                        Emerging markets: Better growth momentum, some in-
     Growth momentum continues in the US,                              flation pick-up
    despite fiscal headwinds, and emerging                              Supported by demand from other emerging markets, exports
                                                                        from China and smaller Asian economies (e.g. Malaysia) have
    Asia; Europe lags.                                                  rebounded. This should also be reflected in stronger industrial
                                                                        production. Some acceleration in China, supported by the
    Thomas Herrmann                                                     structural trend toward stronger domestic demand, should be, +41 44 333 50 62
                                                                        good for Japan (for more details on Japan, please see this
                                                                        month’s featured topic). Several emerging markets face great-
    Signs of financial stress in the Eurozone continued to abate        er-than-expected inflation pressure (e.g. Brazil) and are thus
    over the past few weeks. Government bond yields fell further        less likely to ease policy further. They are also likely to tolerate
    and the deposit and capital flight that had intensified last year   tighter policy in the form of stronger currencies. Eastern
    continued to reverse over the past months in Italy and Spain.       Europe, (especially the economies most exposed to Eurozone
    Actual data releases point to a weak last quarter of 2012, with     weakness, such as the Czech Republic and Hungary), remains
    weakness likely persist into the start of the year. However, as     an exception in all this with growth still weak, inflation low and
    time progresses, significantly lower risks of extreme outcomes      an easing bias persisting.                          (24/01/2013)
    and improved financial conditions should be reflected in better
8     Economics                                                                                                                                                     29/01/2013             Credit Suisse - Research Monthly

    Selected ideas from previous months

    December 2012 (27/11/2012)
    Recommendation                                                                                                                                                                                  Action to be taken
    BUY Top 30 portfolio stock: Chevron. A leading energy-related recovery investment.                                                                                                     EQ       Neutral
    BUY US Real Estate Investment Trusts. US real estate has upside potential, as the rental market has bottomed out. REITS still offer value.                                             RE       Add exposure

    November 2012 (30/10/2012)
    Recommendation                                                                                                                                                                                  Action to be taken
    BUY Undervalued cyclical stocks in China. We recommend domestically-driven cyclical stocks to benefit from China’s growth stabilization.                                               EQ       Add exposure
    BUY Exposure to non-investment grade convertible bonds from European issuers.                                                                                                          EQ       Add exposure
    BUY Asset managers with a strong EM presence: Partners Group. The alternative investment manager is currently expanding its client rela-                                               EQ       Add exposure
    tionships throughout Asia.
    BUY CS Top 30 stock: Schlumberger. Occupies a leading position in the diversified energy services market.                                                                              EQ       Add exposure

    October 2012 (25/09/2012)
    Recommendation                                                                                                                                                                                  Action to be taken
    BUY Selected EM currencies. For emerging market currencies, the Fed’s action tends to be positive, but we are selective as some coun-                                                  FX       Add exposure
    tries will counter with their own monetary expansion.
    BUY Retailer linked to housing recovery: Home Depot. Home Depot is the world’s largest home improvement specialty retailer, which                                                      RE       Add exposure
    should benefit from a pick-up in US homebuilding.
    BUY Microsoft – CS Top 30 company. Trades at a valuation discount and is poised to benefit from the upcoming Windows 8 release.                                                        EQ       Add exposure

    FI Fixed income, EQ Equities, AI Alternative investments, FX Foreign exchange, RE Real estate
    For further information, including disclosures with respect to any other issuers, please refer to the Credit Suisse Global Research Disclosure site at:
                                                                                                                                                                                                               Source: Credit Suisse
9    This month’s featured topic                                                              29/01/2013    Credit Suisse - Research Monthly

                                                                      nomic power and regional influence in the face of China’s as-
    This month’s featured topic                                       cendancy. The recent escalation of the dispute over the
                                                                      Diaoyu/Senkaku islands is a manifestation of the intensifying
    Can “Abenomics”                                                   rivalry in the Asia-Pacific region.

    revive Japan and                                                  Cyclical economic boost likely, but long-term success in
    overcome                                                          The announced increase in government expenditure of more
                                                                      than 2% of GDP, combined with monetary easing measures,
    deflation?                                                        has prompted us to raise the growth forecast for Japan by
                                                                      0.6% in 2013. Financial markets were initially disappointed by
                                                                      the limited size of the BoJ’s announced (additional) “open
                                                                      ended asset purchases,” as well as the lack of a time frame or
                                                                      other milestones to achieve the upwardly revised inflation tar-
                                                                      get. However, we believe that plans for added asset pur-
                                                                      chases may be announced once a new BoJ governor takes
                                                                      over in April. Whether Japan can decisively emerge from defla-
                                                                      tion remains to be seen. Given Japan’s demographic head-
                                                                      winds, its rising debt burden and political resistance to structur-
                                                                      al reform, a more lasting boost to economic growth also re-
                                                                      mains in doubt.

     Added fiscal and monetary stimulus                              New Japanese reflation theme suggests JPY weakness
    should boost growth in the short term, but                        could persist
                                                                      While we harbor some doubts as to whether the BoJ can deliv-
    long-term revival faces structural head-                          er the policy outcomes demanded, the new reflationary theme
    winds.                                                            does shift the risk-reward on USD/JPY to the upside. The re-
                                                                      cent JPY depreciation trend could therefore persist – even if
     The reflationary monetary policy bias                           our models no longer indicate JPY overvaluation. Minimally,
                                                                      we would expect any significant JPY strength to be met with a
    could reinforce negative JPY sentiment.                           more forceful central bank response. That said, direct foreign
                                                                      currency intervention, including significant foreign bond pur-
     Japanese equities have moderate up-                             chases are fairly unlikely given their foreign policy sensitivity.
    side potential on monetary easing, a weak-                        We revise our forecasts for 3M and 12M higher to 92 and 94,
                                                                      from 89 and 90, previously. However, given still substantial
    er JPY and favorable fund flows.                                  speculative net JPY short positions as well as upcoming event
                                                                      risks – including the February G20 meeting and the appoint-
    Marcel Thieliant                                                  ment process for the new BoJ governor – we may well see, +65 6212 6071
                                                                      transitional JPY gains.
    Soichiro Matsumoto, +81 3 4550 5462
                                                                      Quality Japanese exporters with good upside potential
    Koon How Heng
                                                                      More expansionary policy, a weaker JPY and favorable fund, +65 6212 6003
                                                                      flows should further reduce the risk premium on Japanese
                                                                      equities. At break-even levels of USD/JPY 89–90, or weaker,
                                                                      earnings for exporters should improve. Our overall stance on
             Quality Japanese exporters: Toyota, Honda,
     Buy     Bridgestone                                              Japanese equities remains neutral. Within the market, we re-
             Beneficiaries of a weaker JPY and US recovery.           commend quality Japanese exporters, including Toyota,
                                                                      Honda and Bridgestone, which are likely to benefit from JPY
                                                                      weakness and a recovery in the US and China. We also favor
    The new LDP government under Prime Minister Shinzo Abe in-        beneficiaries of reflation policies, especially major banks like
    tends to boost the Japanese economy by implementing ag-           Sumitomo Mitsui Financial Group, Mitsubishi UFJ Financial
    gressive fiscal stimulus and overcoming long-entrenched defla-    Group, Mizuho Financial Group, as well as highly leveraged
    tion. This policy shift appears, more generally, to reflect the   firms like Softbank.                             (25/01/2013)
    wish to reverse the perceived secular decline of Japan’s eco-
10       Investment theme                                                                            29/01/2013      Credit Suisse - Research Monthly

                                                                        Media, likely to be disproportionately high. Companies benefit-
     Investment theme                                                   ing from these secular growth themes should continue to out-
                                                                        perform in the longer term (see our Research Alert, “‘Ten
     IT spending to                                                     Tech Titans’ monetizing IT megatrends,” dated 14 August
                                                                        2012). However, in the current “risk-on” market environment,
     benefit from                                                       cyclical technology stocks, such as semiconductors and select-
                                                                        ive mid-quality technology stocks, may outperform the IT sec-
     secular technology                                                 tor in the mid term, benefiting from an economic tailwind
                                                                        through margin leverage (see our Research Alert, “Information

     growth themes                                                      Technology Outlook 2013: A three-tier society,” dated 22
                                                                        January 2013) and/or IT spending that was postponed during
                                                                        the recession.
                                                                            In IT Hardware, we expect the mobile device market to con-
                                                                        tinue to grow strongly whilst the PC market declines, with
                                                                        growth rates in the smartphone market likely to drop to the low
                                                                        teens. Combined with rising competitive pressure (a large num-
                                                                        ber of “iPhone-like” smartphones were launched in Q4 2012),
                                                                        margins in this segment could decline as well. Software and In-
                                                                        ternet should perform well throughout 2013, due to their nu-
                                                                        merous structural secular growth trends.

                                                                        Historically low valuation supports our constructive view
      We expect IT spending growth to recov-                           Historically low spending levels in 2012 and 2013E explain to
     er in 2013 to at least in line with global                         some extent the compression of the 12-month forward P/E
                                                                        valuation premium. The sector appears to be valued quite at-
     GDP growth.                                                        tractively against its historic base and the broader market.
                                                                        Since IT remains one of the most fundamentally attractive sec-
      The IT sector trades in line with the                            tors, with strong balance sheets and high net-cash positions,
     broad market; we think it deserves a                               we are still of the opinion that the sector deserves a premium.
     premium given its good growth prospects.
     Uwe Neumann                                                        Valuation does not reflect solid fundamentals, +41 44 334 56 45
                                                                        12-month forward P/E
     Ulrich Kaiser, +41 44 334 56 49


               Google, Intel, Infineon, Lenovo, Oracle,                 20
      Buy, Qualcomm, Samsung and TSMC
               Stocks with a strong market position in secular growth   15
               themes, such as Mobile Internet, Cloud Computing,
               Big Data, Virtualization and Social Media.               10

     Cyclical technology stocks to prevail in the mid term                Apr 04          Apr 06            Apr 08      Apr 10         Apr 12
     We expect global IT spending to recover (our estimate: 3.4%),                                     IT      MSCI World
     with spending related to technology themes, such as Mobile In-     Source: Datastream, Credit Suisse / IDC
     ternet, Cloud Computing, Big Data, Virtualization and Social
11       Credit Suisse Megatrends                                                                              29/01/2013           Credit Suisse - Research Monthly

                                                                       derlying trends. Investors can become enthusiastic about se-
     Credit Suisse Megatrends                                          curities related to a megatrend theme, driving valuations to
                                                                       high levels, and then become disenchanted, causing a major
     Introducing our                                                   sell-off even as the underlying theme remains in place. The
                                                              bubble provides an illustration of this behavior (see
     new Megatrends                                                    chart).

     Framework                                                         Guiding investors
                                                                       Understanding these investment cycles allows for a strategic
                                                                       and sustainable approach to investment in megatrends. With
                                                                       this in mind, we recently introduced our new tactical Traffic
                                                                       Light system, which helps long-term investors navigate
                                                                       through these market fluctuations by signaling optimal entry
                                                                       points or times to reduce exposure. The Traffic Light system
                                                                       considers a variety of metrics, including relative valuation, earn-
                                                                       ings revisions, long-term growth prospects, price momentum
                                                                       and risk profile.

                                                                       Nasdaq Computer index since 1993
                                                                        Index level
      Megatrends can last for decades, but as-                        3'000

     set prices related to them can have boom,                         2'500

     bust and growth phases lasting only a few                         2'000                 Capital
     months or years.                                                  1'500
                                                                                                                          Bubble burst

     Based on our new Traffic Light system,                           1'000           Start-up

     we introduce our Megatrend Champions.                               500

     Markus Stierli
                                                                            Oct 93    Oct 95      Oct 97   Oct 99  Oct 01  Oct 03     Oct 05   Oct 07    Oct 09    Oct 11, +41 44 334 88 57                                                         NASDAQ Computer Index

     Antonios Koutsoukis                                               Source: Datastream, Credit Suisse / IDC, +44 20 7883 6647

                                                                       Megatrend Champions
                                                                       We recently launched our Megatrend Champions portfolio,
               Megatrend Champions
                                                                       which includes our top picks from all stocks exposed to the
      Buy      Invest in our Champions portfolio, which reflects the
                                                                       megatrends. We selected stocks using a rigorous screening
               optimal tactical allocation of megatrend investments,
                                                                       process that includes the following factors: Stock recommend-
               according to our Traffic Light system.
                                                                       ation, environmental, social and governance-related perform-
                                                                       ance, as well as valuation and profitability as measured by
     The lifecycle of megatrend investments                            HOLT. The portfolio has a beta slightly above that of the mar-
     Megatrends are major economic, social and political forces,       ket, and strong exposure to emerging markets and growth
     which are relevant across decades. We believe that the analys-    stocks. For the current status of the Traffic Light system and
     is of megatrends enables us to identify attractive investment     an overview of the portfolio, please see our publication, “Intro-
     opportunities in growing markets. It should be also understood    ducing our Megatrend Champions basket,” published 22 Janu-
     that markets move on a very different timescale than these un-    ary 2013.                                        (25/01/2013)
12       Fixed income                                                                           29/01/2013    Credit Suisse - Research Monthly

                                                                        other fixed income asset classes, with lower-rated issuers lead-
     Fixed income                                                       ing the way. Consequently, our Top 2013 Investment Idea
                                                                        No.1, “Beyond cash: Credit, not duration,” delivered strong re-
     Credits start the                                                  turns compared to cash or money markets.

     year on a positive                                                 Still positive on credits, but more cautious in February
                                                                        As we expect both stimulus from the major central banks and
     note                                                               global growth recovery to continue, our default rate outlook re-
                                                                        mains benign. Hence, we maintain our constructive strategic
                                                                        view on risky credits and have a neutral outlook for govern-
                                                                        ment bonds, since we do not expect yields to increase sharply
                                                                        from here. For more risk tolerant investors, we recommend fo-
                                                                        cusing on BBB and BB credits up to around four years matur-
                                                                        ity as well as selected Italian, Spanish and Portuguese bonds.
                                                                        In emerging markets, we favor local currency exposure to Mex-
                                                                        ico, Russia and Turkey, given expected yield stability and cur-
                                                                        rency appreciation potential. Further out the risk curve, convert-
                                                                        ible bonds still offer good opportunities, especially in Europe,
                                                                        given our positive view on high yield and equities. Less risk-tol-
                                                                        erant investors may want to either hold or enter positions of
                                                                        our Top 2013 investment idea “Beyond cash,” a broadly diver-
                                                                        sified basket of AA- to BBB rated financials and A to BB rated
      Significant credit spread tightening and                         corporates. The continuing yield advantage of credits is likely
     higher core government bond yields at the                          be the dominating source of outperformance against cash.
                                                                        Despite our strategically positive view on credits, especially on
     start of the year.                                                 high yield bonds, we recommend a more cautious stance
                                                                        ahead of the US debt ceiling debate and Italian elections.
       We keep our positive view on lower-
     rated credits, but would wait for more clar-                       Surge in LBO activity: A real threat, but not yet
                                                                        A material increase in leveraged buyout (LBO) activity (current
     ity on the US debt ceiling and Italian elec-                       case: Dell) usually coincides with the maturing of the credit
     tions before adding exposure.                                      cycle. Low yields and a positive stock market outlook are LBO
                                                                        supportive drivers. In an LBO environment, single name risk in-
     Maurice Jiszda                                                     creases significantly, since credit spreads of targeted compan-, +41 44 333 21 41                 ies usually rise sharply, given the highly leveraged structure of
                                                                        such transactions. However, since the credit cycle and the as-
                                                                        sociated corporate leverage are just entering expansionary ter-
     “Credit, not duration” best describes recent markets               ritory and banks are still reluctant to lend to private equity, we
     Since the US government managed to negotiate a budget              do not expect an LBO wave to be unleashed anytime soon. All
     deal, fixed income markets have essentially headed in one dir-     the same, we take the case of Dell as a clear warning sign of
     ection. While major ten-year government bond yields in-            more to come later in the year or in 2014.
     creased significantly, credit markets remained on a strong foot-                                                      (24/01/2013)
     ing amid positive economic data releases. Credit outperformed
13       Fixed income                                                                                                                                                 29/01/2013             Credit Suisse - Research Monthly

     Selected bond recommendations
     ISIN                     Curr.         Issuer                                              Rating                 Coup.             Maturity            Min. de-         Vol.         Ask          YTM/         Bench-         Dura-
                                                                                                                                                             nomina-          (m)         price          YTC          mark           tion
                                                                                                                                                          tion/incre-                       (1)          (%)         spread
                                                                                                                                                             ment (in
     CH0181738904 CHF                       RCI BANQUE SA                                       BBB / Baa3              2.500        07/16/2015                   5/5         200        102.70          1.37           144            2.4
     CH0197482711 CHF                       UNICRED BANK IRELAND PLC                            NR / Baa2e              3.375        10/25/2017                   5/5         185        102.60          2.78           262            4.3
     USF42768GN96 USD                       GDF SUEZ (3)                                        A / A1                  1.625        10/10/2017                   2/1         750        100.40          1.54             77           4.5
     US05565QCC06 USD                       BP CAPITAL MARKETS PLC (3)                          A / A2                  1.375        11/06/2017                   1/1         1000 102.15                0.91             13           4.6
     US36962G6K56 USD                       GENERAL ELEC CAP CORP (3)                           AA+ / A1                1.600        11/20/2017                   1/1         1000 100.17                1.56             77           4.6
     US06051GET22 USD                       BANK OF AMERICA CORP (3)                            A- / Baa2               2.000        01/11/2018                   2/1         2000       99.64           2.08           125            4.7
     US34540UAA79 USD                       FORD MOTOR CREDIT CO LLC                            BB+ /                   2.375        01/16/2018                200 / 1        1250       99.47           2.49           166            4.7
                                            (3)                                                 Baa3e
     US46115HAJ68 USD                       INTESA SANPAOLO SPA (2, 3)                          BBB+ /                  3.875        01/16/2018                200 / 1        1500       99.27           4.04           321            4.5
     US46625HJG65 USD                       JPMORGAN CHASE & CO (3)                             A / A2                  1.800        01/25/2018                   2/1         1250       99.94           1.81             98           4.8
     XS0856173546             EUR           RCI BANQUE SA                                       BBB / Baa3              2.125        11/24/2014                   1/1         750        101.08          1.52           134            1.8
     XS0235605853             EUR           LAFARGE SA                                          BB+ / Ba1               4.250        03/23/2016                  50 / 1       500        105.17          2.52           227            2.8
     XS0838847381             EUR           FCE BANK PLC                                        #N/A N/A /              2.875        10/03/2017                100 / 1        500        103.20          2.15           155            4.3
     XS0852993285             EUR           INTESA SANPAOLO SPA (2)                             BBB+ /                  4.000        11/09/2017                100 / 1        1711 102.69                3.38           276            4.3
     XS0866278921             EUR           CARREFOUR SA                                        BBB / NR                1.875        12/19/2017                100 / 1        1000       98.90           2.11           145            4.6
     XS0863482336             EUR           UNICREDIT SPA (2)                                   BBB+ /                  3.375        01/11/2018                100 / 1        750        100.42          3.28           263            4.5
     XS0872705057             EUR           BNP PARIBAS                                         A+ / A2                 1.500        03/12/2018                   1/1         1000       98.52           1.80           109            4.9
     XS0800572454             EUR           CARLSBERG BREWERIES A/S                             #N/A N/A /              2.625        07/03/2019                100 / 1        500        102.13          2.26           133            5.8
     XS0862681755             GBP           DAIMLER AG                                          A- / A3                 1.375        12/10/2015                   1/1         250        100.08          1.35             89           2.8
     XS0853680527             GBP           NORDEA BANK AB                                      AA- / Aa3               2.125        11/13/2019                100 / 1        500        99.21           2.25             85           6.2
     XS0856595961             GBP           BNP PARIBAS                                         A+ / A2                 2.375        11/20/2019                   1/1         300        99.91           2.39             98           6.2
     AU3CB0201366 AUD                       JPMORGAN CHASE & CO (3)                             A / A2                  4.650        11/07/2017                10 / 10        450        101.24          4.36           157            4.2
     AU3CB0201838 AUD                       TELSTRA CORP LTD (3)                                A / A2                  4.000        11/15/2017                10 / 10        750        99.11           4.21           140            4.3
     AU3CB0204691 AUD                       GE CAP AUSTRALIA FUNDING (3)                        #N/A N/A /              4.500        01/30/2018                10 / 10        500        100.00          4.50           166            4.4
     XS0875625062             CAD           NEDER WATERSCHAPSBANK                               AAA / Aaae              2.125        01/22/2018                   1/1         100        100.02          2.12             67           4.7
     DE000A1HDA43 NOK                       BMW US CAPITAL LLC                                  NR / A2                 2.375        12/04/2015                10 / 10        1500       99.11           2.70           105            2.7
     XS0878575900             NOK           RABOBANK NEDERLAND                                  AA- / #N/A              2.875        01/29/2018                10 / 10        500        99.17           3.06           115            4.6
     EM/Below IG
     CH0188931916 CHF                       GAZPROMBK (GPB FINANCE)                             BBB- / Baa3             3.375        08/05/2015                   5/5         500        102.91          2.17           221            2.4
     CH0190653870 CHF                       OJSC RUSS AGRIC BK(RSHB)                            NR / Baa1               3.125        08/17/2015                   5/5         450        102.04          2.29           232            2.4
     CH0148606160 CHF                       SBERBANK (SB CAP SA)                                NR / A3                 3.100        09/14/2015                   5/5         410        103.35          1.78           183            2.5
     CH0123431709 CHF                       VNESHECONOMBANK(VEB)                                BBB / NR                3.750        02/17/2016                   5/5         500        103.92          2.40           238            2.8
     XS0804472057             CHF           SUNRISE COMMUNICATIONS I (3)                        BB- / Ba3               5.625        12/31/2017                150 / 1        370        105.21          3.86           412            2.3
     XS0231264275             EUR           MOL HUNGARIAN OIL & GAS                             BB+ / NR                3.875        10/05/2015                  50 / 1       750        102.35          2.95           279            2.5
     XS0805582011             EUR           GAZPROM (GAZ CAPITAL SA)                            BBB / Baa1              3.755        03/15/2017                100 / 1        1400 106.04                2.20           174            3.7
     XS0686703736             EUR           HEIDELBERGCEMENT FIN LUX                            NR / Ba2                9.500        12/15/2018                50 / 50        500        129.94          3.77           300            4.7
     XS0873432511             EUR           FRESENIUS FINANCE BV (3)                            #N/A N/A /              2.875        07/15/2020                   1/1         500        99.97           2.88           175            6.7
     XS0832993397             EUR           UPC HOLDING BV (3)                                  B- / B2                 6.375        09/15/2022                100 / 1        600        104.65          5.62           458            5.9
     XS0877974062             EUR           UNITYMEDIA HESSEN / NRW (3)                         BB- /                   5.125        01/21/2023                100 / 1        500        99.86           5.14           362            7.7
     USY97279AA45 USD                       YANCOAL INTL RES DEV (3)                            BBB- / Baa3             4.461        05/16/2017                200 / 1        450        103.95          3.46           286            3.9
     XS0861979440             USD           YAPI VE KREDI BANKASI (3, 7)                        NR / Ba1                5.500        12/06/2022                200 / 1        1000 103.80                5.01           313            7.5
     XS0877983642             RUB           GAZPROMBANK OJSC (3)                                BBB- / Baa3             7.875        07/25/2016                 5000 /        20000 100.37               7.75           200            3.0
     MX0MGO0000F3 MXN                       MEX BONOS DESARR FIX RT (3)                         A- / Baa1               7.750        12/14/2017              0.1 / 0.1        75826 112.98               4.77              1           4.1
     1) Indicated prices as of 25. January 2013; 2) Subject to withholding tax; 3) Semi-annual coupon; 4) Quarterly coupon; 5) Corporate subordinated hybrid debt, yield to call, duration to call; 6) Junior subordinated debt, yield to
     call, duration to call; 7) Subordinated debt, LT2; 8) e = expected rating, subject to final documentation / n.a. = not applicable / NR = not rated; 9) 3M-LIBOR in respective currency; 10) Callable
                                                                                                                                                                                                         Source: Bloomberg, Credit Suisse
14       Equities                                                                                29/01/2013    Credit Suisse - Research Monthly

                                                                        active corporates and a steadier macro climate. The initial
     Equities                                                           boost that ECB President Mario Draghi gave to the markets
                                                                        has been supplemented by hopes of a turnaround in Japan’s
     Strong start to the                                                fortunes, a partial settlement of the fiscal cliff debate and
                                                                        more solid macro data from China.
     year bodes well for                                                    At this stage, the issue is whether the rally can develop in-
                                                                        to a more durable and formidable bull market for equities. In
     equities                                                           the short term, some measures of sentiment are looking
                                                                        stretched, though any correction in the coming months should
                                                                        be regarded as a buying opportunity. For example, the VIX in-
                                                                        dex of volatility is at its lowest level in over five years. Equally,
                                                                        our equity risk appetite indicator is close to historic highs. Oth-
                                                                        er tactical indicators, such as earnings momentum, are not
                                                                        convincing. At this point in the rally, many equity markets are
                                                                        close to fair value levels, and would require a sustained period
                                                                        of low volatility and rising risk appetite to push higher toward
                                                                        our “optimistic” targets.

                                                                        Maintain cyclical stance
                                                                        In that respect, with the “spending cliff” and Italian elections on
                                                                        the horizon, it may be reasonable to see some short-term con-
                                                                        solidation in the rally. However, should the business cycle con-
       Equity rally driven by strong risk appet-                       tinue to recover in at least the US and Asia, and importantly,
     ite, low volatility.                                               corporate spending (on capex and mergers/acquisitions) pick
                                                                        up in a meaningful way, we believe that the stage would be
      Shorter-term indicators becoming                                 set for a very significant shift in sentiment toward equities.
                                                                             We therefore maintain our cyclical bias at the equity sector
     stretched, any correction is a buying oppor-                       level, preferring sectors like industrials and energy to more de-
     tunity.                                                            fensive telecoms and utilities. At the regional level, we are over-
                                                                        weight the US, where the macro outlook is promising, and un-
                                                                        derweight Switzerland, which now looks expensive for a tradi-
     Michael O'Sullivan
     Head of Portfolio Strategy & Thematic Research
                                                                        tionally defensive market. We have recently upgraded Japan
     michael.o', +44 20 7883 8228             from underweight to neutral, given the potential for an econom-
                                                                        ic and market re-rating. We have downgraded Australia to un-
                                                                        derweight, as it appears expensive and unattractive from an
               Schlumberger                                             earnings momentum point of view. Our CS Top 30 portfolio
      Buy      A CS Top 30, Megatrend and key energy call.              has also become more cyclical – at the end of last year, we ad-
                                                                        ded EM consumer facing companies like Sberbank and BMW.
                                                                        Finally, better risk appetite and a recovering business cycle
                                                                        bode well for our Megatrend stocks (please see Megatrends
     The strong equity market rally of the first three weeks of Janu-
                                                                        article for a list of our Megatrend Champions).
     ary gives a distinct taste for what the rest of the year may
     bring – rising risk appetite, growing flows into equities, more
15       Equities                                                                                                                                                 29/01/2013             Credit Suisse - Research Monthly

     Global equity sector strategy and top picks
     Sector (strategic           Industry (strategic weight)                          Europe (N) /                Switzerland (U)             USA (O)                     Latin America             Asia ex Japan (N) / Ja-
     weight)                                                                          UK (N)                                                                              (U)# / Emer-              pan (N)# / Australia (N)
                                                                                                                                                                          ging Europe &
                                                                                                                                                                          Africa (N)
     Energy (O)                  Energy (O)                                           Royal Dutch Shell           -                           Anadarko Petro-             Novatek*, Ultra-          Cnooc Ltd
                                                                                                                                              leum+, Apache+,             par*+
     Materials (N)               Chemicals (N)                                        Linde                       -                           -                           Mexichem*+                -
                                 Construction Materials (N)                           -                           Holcim                      -                           -                         China National Building+
                                 Metals & Mining (N)                                  Rio Tinto                   -                           -                           -                         BHP Billiton Limited
                                 Pulp & Paper (N)                                     -                           -                           -                           -                         -
     Industrials (O)             Capital Goods (O)                                    Schneider Elec-             ABB, Schindler              Caterpillar, Gener-         -                         Keppel Corp, Gamuda*
                                                                                      tric+, Siemens+                                         al Electric, Honey-
                                 Commercial Services & Supplies (N)                   -                           Adecco                      -                           -                         -
                                 Transportation, incl. Logistics (N)                  -                           -                           -                           -                         Air China -H
     Consumer discre-            Automobiles & Components (N)                         BMW                         -                           -                           -                         Toyota Motors, Bridge-
     tionary (U)                                                                                                                                                                                    stone
                                 Consumer Durables & Apparel, Tex-                    -                           -                           -                           -                         -
                                 tiles, Apparel & Luxury (N)
                                 Hotels, Restaurants & Leisure (N)                    -                           -                           -                           -                         -
                                 Media (N)                                            -                           -                           Time Warner                 -                         -
                                 Retailing (U)                                        -                           Dufry                       Home Depot+                 -                         -
     Consumer staples            Food & Staples Retailing (N)                         -                           -                           -                           -                         -
                                 Beverages (N)                                        SABMiller                   -                           -                           AmBev*                    -
                                 Food Products (U)                                    -                           Aryzta, Nestlé              Mondelez+                   Brasil Foods*             -
                                 Tobacco (U)                                          -                           -                           -                           -                         -
                                 Household & Personal Products (N)                    Reckitt Benckiser           -                           Procter &                   -                         -
     Healthcare (N)              Healthcare Equipment & Services (N)                  -                           -                           Zimmer+                     -                         -
                                 Biotechnology (N)                                    -                           -                           -                           -                         -
                                 Pharmaceuticals (N)                                  Bayer, Hikma                Roche                       Merck & Co.                 -                         Astellas Pharma+
                                                                                      Pharmaceuticals             (Genussscheine),
                                                                                                                  Lonza+, Tecan+
     Financials (O)              Banks (N)                                            Unicredit+                  -                           -                           Sberbank*                 China Construction Bank,
                                                                                                                                                                                                    Sumitomo Mitsui Financial
                                                                                                                                                                                                    Group, Kasikornbank*,
                                                                                                                                                                                                    Bank Mandiri*, DBS, HD-
                                                                                                                                                                                                    FC Bank+, Mitsubishi+
                                                                                                                                                                                                    Mizuho Financial Group+
                                 Diversified Financials (N)                           -                           Partners Group+             Citigroup, JPMor-           -                         -
                                 Insurance (O)                                        Allianz, AXA                Zurich Insurance            -                           -                         -
                                 Real Estate (O)                                      -                           -                           -                           -                         Asian Property Develop-
                                                                                                                                                                                                    ment, Henderson Land De-
                                                                                                                                                                                                    velopment, Swire Proper-
     IT (O)                      Software & Services (O)                              -                           -                           Mastercard        *+                 -
                                 Technology Hardware & Equipment                      -                           -                           -                           -                         Samsung*, Lenovo,
                                 (O)                                                                                                                                                                Toshiba
                                 Semiconductors & Semiconductor                       Infineon Technolo-          -                           Intel+                      -                         -
                                 Equipment (N)                                        gies+
     Telecom services            Diversified Telecoms (U)                             -                           -                           -                           -                         -
                                 Wireless Telecoms(U)                                 -                           -                           -                           America Movil*+           Softbank
     Utilities (U)               Utilities (U)                                        Iberdrola                   -                           -                           -                         -
     This is our sector strategy and top picks as of 28 January 2013 recommended by Credit Suisse, Private Banking division. Our sector/industry strategy shows our sector/industry preferences with recommendations relative to re-
     gional benchmarks: Global: (MSCI World in USD), Europe (MSCI Europe in EUR), Switzerland (Swiss Market Index in CHF), USA (S&P 500 in USD), Asia/Pacific (MSCI AC Asia/Pacific in USD). An overweight (underweight) is
     a recommendation to invest more (less) than in a neutral position indicated by the market-cap weights of the respective benchmarks. The sector/industry weights as well as the neutral positions in figures are available upon re-
     quest; please contact your relationship manager. The Top Picks is a selection of our favorite stocks within our coverage. The selection was made to reflect the sector/industry and regional preferences. Regular full updates are
     provided via our Research Monthly publications as well as in our Equity Research reports. Additionally, we publish our adds and drops in our Research Daily publication. Legend: (O) = Overweight, (N) = Neutral, (U) = Under-
     weight. (*) = Emerging Markets top picks. Changes are marked as follows: (+) = additions to the top picks, (#) = changes to sector/industry/country weightings. For further information, including disclosures with respect to any
     other issuers, please refer to the Credit Suisse Global Research Disclosure site at: Please note that trading facilities in certain securities may be limited.
                                                                                                                                                                                                                 Source: Credit Suisse
16       Alternative investments                                                                                  29/01/2013          Credit Suisse - Research Monthly

                                                                        outlook is neutral. Within commodities, gold has modest up-
     Alternative investments                                            side, given the ongoing real interest rate regime. However,
                                                                        platinum and palladium should perform better, given structural
     Directional hedge                                                  supply side problems, combined with recovering demand and
                                                                        undervaluation. Oil could also trade moderately higher amid
     fund styles and US                                                 economic stabilization. Surging US oil and gas production
                                                                        should limit the upside, but creates opportunities in energy
     REITS offer                                                        equities (Top 2013 Investment Idea No. 4).

     opportunities                                                      Hedge funds: Good liquidity conditions to help hedge
                                                                        funds in 2013
                                                                        The DJ CS Hedge Fund Index ended 2012 with a slightly be-
                                                                        low average performance of 7.7%. Given the low volatility and
                                                                        good liquidity conditions, the market environment for hedge
                                                                        funds continues to look favorable. Directional strategies that
                                                                        benefit from rising stock markets and flexible global macro
                                                                        strategies should perform particularly well. We have upgraded
                                                                        managed futures strategies to neutral. This trend-dependent
                                                                        strategy suffered from whipsawing markets in 2012, but
                                                                        should do better this year amid steadier market conditions.

                                                                        Real estate: US REITs remain attractive
      Real estate, directional hedge funds and                         Global Real Estate Investment Trusts have started the year
     selected precious metals offer the most                            well, and we see further upside despite richer valuations. Glob-
                                                                        al REITs continue to offer attractive dividend yields of 4.3% on
     upside among alternative investments.                              average. Regionally, we prefer the USA due to more favorable
                                                                        growth prospects. Recently, the US NAREIT total return index
      US REITS remain attractive – even after                          reached its pre-financial crisis high of 2007. However, there
     the recent rally.                                                  are major differences to the situation back then: Today, US
                                                                        equity REITs’ balance sheets are far healthier (indicated by
     Tobias Merath                                                      lower leverage), commercial real estate rents are increasing
     Head Commodities & Alternative Investments Research                and monetary policy should remain supportive., +41 44 333 13 62                                                                     (24/01/2013)

               Platinum with a time horizon of 6–12 months              Performance of Alternative Investments
      Buy      The market is undersupplied and undervalued.             Indexed performance in USD, January 2004 = 100

     Selectivity remains key
     Plentiful liquidity, low volatility and a recovering US housing    250

     market should support certain hedge fund styles as well as         200
     Real Estate Investment Trusts (REITS). But growth is unlikely
     to pick up strongly enough to trigger a lasting commodity rally.   150

     Selectivity remains key.

     Commodities: Neutral, but some selected opportunities              50
                                                                          Dec 03     Dec 04      Dec 05      Dec 06      Dec 07   Dec 08    Dec 09      Dec 10    Dec 11   Dec 12
     exist                                                                     Commodities (Credit Suisse Commodity Benchmark)       Real Estate (Global REITS)
                                                                               Hedge funds (DJ Credit Suisse Hedge Fund Index)
     Commodities started reasonably well into the new year.
                                                                        Source: Bloomberg, Credit Suisse / IDC
     Growth is picking up, but not strongly enough to trigger a last-
     ing commodity rally. So, beyond the tactical time horizon, our
17       Foreign exchange                                                                                      29/01/2013             Credit Suisse - Research Monthly

                                                                          against a softer USD, there are risks of a further decline vs. a
     Foreign exchange                                                     stronger EUR, given signs of a resumption of capital outflows
                                                                          from Switzerland. We raise our 12M EUR/CHF forecast from
     Diversification into                                                 1.24 to 1.30.
                                                                              The JPY has entered a long-term technical downtrend,
     emerging market                                                      supported by the new government’s pledge to overcome defla-
                                                                          tion. But the BoJ’s actions have disappointed so far.
     currencies                                                           USD/JPY spot levels currently near 90 are thus not an attract-
                                                                          ive entry point, in our view.                   (24/01/2013)

                                                                          USD model currency portfolio
                                                                          Our USD-based currency portfolio shows an assumed 60%
                                                                          benchmark home bias and 40% exposure to a broader uni-
                                                                          verse of foreign currencies, against which we allocate strategic-
                                                                          ally and tactically, according to our views and portfolio analyt-

                                                                                                SEK      SEK

                                                                                          TRY         TRY
     EUR forecasts raised to USD 1.37 and                                                                    FX         USD                  USD
                                                                                                   PLN                   base
     CHF 1.30 in 12 months.                                                               PLN

      Currency portfolio extended to include                                                            EUR

     EM, with allocations to CNH, MXN, PLN                                                       EUR                     MXN

     and TRY.                                                                                                      MXN      CAD

     Joe Prendergast                                                             Core                                    Strategic          Tactical          Optimal
     Head of Global FX, Fixed Income and Credit Research                         Diversification                         Allocation    +    Overlay    =      Portfolio, +41 44 332 83 18                       Americas     USD        60%           USD        46%          -1%             USD   45%
                                                                                                         0%          CAD        0%            6%             CAD    6%
                                                                                                         0%          MXN        7%           -3%             MXN    4%
     Extreme liquidity conditions among the major central banks are            EMEA                      0%          EUR        18%          -2%             EUR   16%

     set to undermine the value of traditional “hard” currencies relat-                                  0%          PLN        8%           -2%             PLN    6%
                                                                                                         0%          TRY        6%           -1%             TRY    5%
     ive to emerging market currencies – especially of those coun-
                                                                                                         0%          SEK        6%           -1%             SEK    5%
     tries where external and fiscal balances are healthy and in-                                        0%          CHF        0%            4%             CHF    4%
     terest rates are not zero. To reflect this diversification theme                                    0%          GBP        0%            0%             GBP    0%
     clearly in our model currency portfolios, we have expanded the                                      0%          NOK        0%            0%             NOK    0%
     currency universe to include the most accessible emerging                                           0%          RUB        0%            0%             RUB    0%
                                                                                                         0%          ZAR        0%            0%             ZAR    0%
     market currencies. We add our most-favored currencies to the
                                                                               APAC                      0%          CNH        5%            1%             CNH    6%
     chosen allocation: CNH and MXN (Top 2013 Investment Idea                                            0%          JPY        0%            0%             JPY    0%
     No.6), PLN and TRY, due to carry.                                                                   0%          AUD        0%            0%             AUD    0%
          Our USD-based model currency allocation also diversifies                                       0%          NZD        0%            0%             NZD    0%
     notably to EUR, which we expect to stay firm as ECB easing                                          0%          SGD        0%            0%             SGD    0%
                                                                               Gold                      0%          XAU        4%           -1%             XAU    3%
     expectations are wound down and risk premia fade. We ex-
                                                                               FX                      40%           FX
     pect EUR/USD to rise to 1.38 over 3M, and raise our 12M
                                                                          Source: Credit Suisse
     forecast to 1.37 (from 1.35). While the CHF should hold up
18      Foreign exchange                                                                                                    29/01/2013         Credit Suisse - Research Monthly

     Important information on derivatives

     Pricing                                Option premiums and prices mentioned are indicative only. Option premiums and prices can be subject to very rapid changes:
                                            The prices and premiums mentioned are as of the time indicated in the text and might have changed substantially in the mean-
     Risks                                  Derivatives are complex instruments and are intended for sale only to investors who are capable of understanding and assuming
                                            all the risks involved. Investors must be aware that adding option positions to an existing portfolio may change the characteristics
                                            and behavior of that portfolio substantially. A portfolio’s sensitivity to certain market moves can be heavily impacted by the lever-
                                            age effect of options.
     Buying calls                           Investors who buy call options risk the loss of the entire premium paid if the underlying security trades below the strike price at ex-
     Buying puts                            Investors who buy put options risk loss of the entire premium paid if the underlying security finishes above the strike price at expir-
     Selling calls                          Investors who sell calls commit themselves to sell the underlying for the strike price, even if the market price of the underlying is
                                            substantially higher. Investors who sell covered calls (own the underlying security and sell a call) risk limiting their upside to the
                                            strike price plus the upfront premium received and may have their security called away if the security price exceeds the strike
                                            price of the short call. Additionally, the investor has full downside participation that is only partially offset by the premium received
                                            upfront. If investors are forced to sell the underlying they might be subject to taxing. Investors shorting naked calls (i.e. selling
                                            calls but without holding the underlying security) risk unlimited losses of security price less strike price.
     Selling puts                           Put sellers commit to buying the underlying security at the strike price in the event the security falls below the strike price. The
                                            maximum loss is the full strike price less the premium received for selling the put.
     Buying call spreads                    Investors who buy call spreads (buy a call and sell a call with a higher strike) risk the loss of the entire premium paid if the underly-
                                            ing trades below the lower strike price at expiration. The maximum gain from buying call spreads is the difference between the
                                            strike prices, less the upfront premium paid.
     Selling naked call spreads             Selling naked call spreads (sell a call and buy a farther out-of-the-money call with no underlying security position): Investors risk a
                                            maximum loss of the difference between the long call strike and the short call strike, less the upfront premium taken in, if the un-
                                            derlying security finishes above the long call strike at expiration. The maximum gain is the upfront premium taken in, if the secur-
                                            ity finishes below the short call strike at expiration.
     Buying put spreads                     Investors who buy put spreads (buy a put and sell a put with a lower strike price) also have a maximum loss of the upfront premi-
                                            um paid. The maximum gain from buying put spreads is the difference between the strike prices, less the upfront premium paid.
     Buying strangles                       Buying strangles (buy put and buy call): The maximum loss is the entire premium paid for both options, if the underlying trades
                                            between the put strike and the call strike at expiration.
     Selling strangles or straddles         Investors who are long a security and short a strangle or straddle risk capping their upside in the security to the strike price of the
                                            call that is sold plus the upfront premium received. Additionally, if the security trades below the strike price of the short put, in-
                                            vestors risk losing the difference between the strike price and the security price (less the value of the premium received) on the
                                            short put and will also experience losses in the security position if they owns shares. The maximum potential loss is the full value
                                            of the strike price (less the value of the premium received) plus losses on the long security position. Investors who are short na-
                                            ked strangles or straddles have unlimited potential loss since, if the security trades above the call strike price, investors risk losing
                                            the difference between the strike price and the security price (less the value of the premium received) on the short call. In addi-
                                            tion, they are obligated to buy the security at the put strike price (less upfront premium received) if the security finishes below the
                                            put strike price at expiration.
                                                                                                                                                                   Source: Credit Suisse
19                                                                                                   29/01/2013    Credit Suisse - Research Monthly

     Risk disclaimer                                                        sume this risk. Structured securities are complex instruments,
                                                                            typically involve a high degree of risk and are intended for sale
     Investors should consider this report as only a single factor in       only to sophisticated investors who are capable of understand-
     making their investment decision. For a discussion of the risks        ing and assuming the risks involved. The market value of any
     of investing in the securities mentioned in this report, please        structured security may be affected by changes in economic,
     refer to the following Internet link:                                  financial and political factors (including, but not limited to, spot
                                                                            and forward interest and exchange rates), time to maturity,
                                                                            market conditions and volatility, and the credit quality of any is-
                                                                            suer or reference issuer. Any investor interested in purchasing
     CS may not have taken any steps to ensure that the securities
                                                                            a structured product should conduct their own investigation
     referred to in this report are suitable for any particular investor.
                                                                            and analysis of the product and consult with their own profes-
     CS will not treat recipients as its customers by virtue of their re-
                                                                            sional advisers as to the risks involved in making such a pur-
     ceiving the report. The investments or services contained or re-
     ferred to in this report may not be suitable for you and it is re-
                                                                                 Some investments discussed in this report have a high
     commended that you consult an independent investment ad-
                                                                            level of volatility. High volatility investments may experience
     visor if you are in doubt about such investments or investment
                                                                            sudden and large falls in their value causing losses when that
     services. Nothing in this report constitutes investment, legal,
                                                                            investment is realized. Those losses may equal your original in-
     accounting or tax advice or a representation that any invest-
                                                                            vestment. Indeed, in the case of some investments the poten-
     ment or strategy is suitable or appropriate to your individual cir-
                                                                            tial losses may exceed the amount of initial investment, in such
     cumstances or otherwise constitutes a personal recommenda-
                                                                            circumstances you may be required to pay more money to sup-
     tion to you.
                                                                            port those losses. Income yields from investments may fluctu-
          The price, value of and income from any of the securities
                                                                            ate and, in consequence, initial capital paid to make the invest-
     or financial instruments mentioned in this report can fall as well
                                                                            ment may be used as part of that income yield. Some invest-
     as rise. The value of securities and financial instruments is sub-
                                                                            ments may not be readily realizable and it may be difficult to
     ject to exchange rate fluctuation that may have a positive or ad-
                                                                            sell or realize those investments, similarly it may prove difficult
     verse effect on the price or income of such securities or finan-
                                                                            for you to obtain reliable information about the value, or risks,
     cial instruments. Investors in securities such as ADR’s, the val-
                                                                            to which such an investment is exposed.
     ues of which are influenced by currency volatility, effectively as-
20                                                                                                            29/01/2013   Credit Suisse - Research Monthly

     Disclosure Appendix                                                              Company                 Rating               Date
                                                                                                              BUY                  01/08/2012
                                                                                                              BUY                  17/07/2012
     Analyst certification
                                                                                                              BUY                  06/12/2011
     The analysts identified in this report hereby certify that views about the       INFINEON TECHNOLO-      BUY                  10/01/2013
     companies and their securities discussed in this report accurately reflect       GIES (IFX GR)
     their personal views about all of the subject companies and securities. The                              HOLD                 20/11/2012
     analysts also certify that no part of their compensation was, is, or will be                             HOLD                 26/09/2012
     directly or indirectly related to the specific recommendation(s) or view(s) in
                                                                                                              HOLD                 01/08/2012
     this report.
                                                                                                              HOLD                 27/06/2012
                                                                                                              HOLD                 26/06/2012
     Knowledge Process Outsourcing (KPO) Analysts mentioned in this report                                    HOLD                 04/05/2012
     are employed by Credit Suisse Business Analytics (India) Private Limited.
                                                                                                              HOLD                 02/02/2012
                                                                                                              HOLD                 01/02/2012
     Important disclosures                                                                                    HOLD                 31/01/2012
     Credit Suisse policy is to publish research reports, as it deems appropri-                               HOLD                 30/01/2012
     ate, based on developments with the subject company, the sector or the                                   BUY                  23/11/2011
     market that may have a material impact on the research views or opinions         INTEL (INTC US)         BUY                  21/01/2013
     stated herein. Credit Suisse policy is only to publish investment research                               BUY                  18/10/2012
     that is impartial, independent, clear, fair and not misleading.                                          BUY                  11/09/2012
     The Credit Suisse Code of Conduct to which all employees are obliged to                                  BUY                  18/07/2012
     adhere, is accessible via the website at:
                                                                                                              BUY                  18/04/2012
                                                                                                              BUY                  18/04/2012
                                                                                                              BUY                  23/01/2012
     For more detail, please refer to the information on independence of finan-       LENOVO (992 HK)         BUY                  24/01/2013
     cial research, which can be found at:
                                                                                                              BUY                  09/11/2012
                                                                                                              BUY                  16/03/2012
                                                                                                              BUY                  13/01/2012
     The analyst(s) responsible for preparing this research report received com-
                                                                                      MICROSOFT (MSFT US)     BUY                  19/10/2012
     pensation that is based upon various factors including Credit Suisse's total
                                                                                                              BUY                  20/07/2012
     revenues, a portion of which is generated by Credit Suisse Investment
                                                                                                              BUY                  19/06/2012
     Banking business.
                                                                                                              BUY                  20/04/2012
                                                                                                              BUY                  19/03/2012
     Equity rating history as of (29/01/2013)                                                                 BUY                  24/01/2012
                                                                                      MITSUBISHI UFJ FINAN-   BUY                  17/12/2012
     Company                    Rating                    Date                        CIAL GROUP (8306 JP)
     BMW (BMW GY)               BUY                       07/11/2012                                          BUY                  21/02/2012
                                BUY                       03/08/2012                                          BUY                  30/09/2010
                                BUY                       04/05/2012                  MIZUHO FINANCIAL        BUY                  23/02/2012
                                                                                      GROUP (8411 JP)
                                BUY                       15/03/2012
                                                                                                              BUY                  30/09/2010
                                BUY                       09/03/2012
                                                                                      ORACLE (ORCL US)        BUY                  19/12/2012
                                BUY                       11/01/2012
                                                                                                              BUY                  21/09/2012
     BRIDGESTONE (5108 JP)      BUY                       16/01/2013
                                                                                                              BUY                  19/06/2012
                                BUY                       13/11/2012
                                                                                                              HOLD                 23/03/2012
                                BUY                       08/08/2012
                                                                                                              HOLD                 23/12/2011
                                BUY                       14/05/2012
                                                                                      PARTNERS GROUP HOLD- BUY                     04/12/2012
                                BUY                       24/10/2011
                                                                                      ING (PGHN SW)
     CHEVRON (CVX US)           BUY                       05/11/2012
                                                                                                              RESTRICTED           05/11/2012
                                BUY                       02/08/2012
                                                                                                              BUY                  04/09/2012
                                BUY                       04/05/2012
                                                                                                              BUY                  24/07/2012
                                BUY                       31/01/2012
                                                                                                              BUY                  04/04/2012
                                BUY                       01/11/2011
                                                                                                              BUY                  12/01/2012
     GOOGLE (GOOG US)           BUY                       24/01/2013
                                                                                      PRICELINE.COM INC       BUY                  05/11/2012
                                BUY                       23/10/2012                  (PCLN US)
                                BUY                       20/07/2012                                          BUY                  09/08/2012
                                BUY                       03/05/2012                                          BUY                  10/05/2012
                                BUY                       13/04/2012                                          BUY                  30/03/2012
                                BUY                       23/01/2012                                          BUY                  02/03/2012
     HOME DEPOT (HD US)         BUY                       14/11/2012                                          BUY                  17/02/2012
                                BUY                       27/08/2012                  QUALCOMM (QCOM US)      BUY                  08/11/2012
                                BUY                       14/08/2012                                          BUY                  24/07/2012
                                BUY                       16/05/2012                                          BUY                  09/05/2012
                                BUY                       23/02/2012                                          BUY                  03/02/2012
                                BUY                       16/11/2011                                          BUY                  02/02/2012
     HONDA MOTOR (7267          BUY                       15/01/2013                                          BUY                  03/11/2011
                                BUY                       30/10/2012
21                                                                                                               29/01/2013      Credit Suisse - Research Monthly

     Company                    Rating                    Date                       FINANCIAL GROUP, MIZUHO FINANCIAL GROUP, ORACLE, PART-
                                                                                     NERS GROUP HOLDING, SBERBANK, SUMITOMO MITSUI FINAN-
     SAMSUNG ELECTRONICS BUY                              11/01/2013
                                                                                     CIAL GROUP, TOYOTA MOTOR) within the past three years. Credit
     (005930 KS)
                                                                                     Suisse has managed or co-managed a public offering of securities for the
                                BUY                       29/10/2012
                                                                                     subject issuer (BMW, HONDA MOTOR, LENOVO, MITSUBISHI UFJ FIN-
                                BUY                       27/08/2012                 ANCIAL GROUP, MIZUHO FINANCIAL GROUP, ORACLE, PARTNERS
                                BUY                       27/04/2012                 GROUP HOLDING, SBERBANK, SUMITOMO MITSUI FINANCIAL
                                BUY                       23/03/2012                 GROUP, TOYOTA MOTOR) within the past 12 months. Credit Suisse has
                                HOLD                      08/02/2012                 received investment banking related compensation from the subject issuer
                                BUY                       28/11/2011                 (BMW, CHEVRON, GOOGLE, HONDA MOTOR, INFINEON TECHNO-
     SBERBANK (SBER RU)         BUY                       06/12/2012                 LOGIES, INTEL, LENOVO, MICROSOFT, MITSUBISHI UFJ FINANCIAL
                                BUY                       24/09/2012                 GROUP, MIZUHO FINANCIAL GROUP, ORACLE, PARTNERS GROUP
                                RESTRICTED                17/09/2012                 HOLDING, SBERBANK, SCHLUMBERGER, SUMITOMO MITSUI FIN-
                                                                                     ANCIAL GROUP, TOYOTA MOTOR) within the past 12 months. Credit
                                BUY                       31/08/2012
                                                                                     Suisse has received compensation for products and services other than in-
                                BUY                       31/05/2012
                                                                                     vestment banking services from the subject issuer (BMW, HOME DEPOT,
                                BUY                       30/03/2012
                                                                                     INTEL, MICROSOFT, PARTNERS GROUP HOLDING) within the past 12
                                BUY                       21/03/2012                 months. Credit Suisse expects to receive or intends to seek investment
                                BUY                       02/12/2011                 banking related compensation from the subject issuer (BMW, BRIDGE-
     SCHLUMBERGER (SLB          BUY                       22/01/2013                 STONE, CHEVRON, GOOGLE, HOME DEPOT, HONDA MOTOR, IN-
     US)                                                                             FINEON TECHNOLOGIES, INTEL, LENOVO, MICROSOFT, MIT-
                                BUY                       22/10/2012                 SUBISHI UFJ FINANCIAL GROUP, MIZUHO FINANCIAL GROUP, OR-
                                BUY                       23/07/2012                 ACLE, PARTNERS GROUP HOLDING, PRICELINE.COM INC, QUAL-
                                BUY                       23/04/2012                 COMM, SAMSUNG ELECTRONICS, SBERBANK, SCHLUMBERGER,
                                BUY                       24/01/2012                 SOFTBANK, SUMITOMO MITSUI FINANCIAL GROUP, TOYOTA MO-
     SOFTBANK (9984 JP)         BUY                       02/11/2012                 TOR) within the next three months. As at the date of this report, Credit
                                BUY                       17/10/2012                 Suisse acts as a market maker or liquidity provider in the securities of the
                                                                                     subject issuer (CHEVRON, GOOGLE, HOME DEPOT, HONDA MOTOR,
                                BUY                       11/10/2012
                                                                                     INTEL, MICROSOFT, MITSUBISHI UFJ FINANCIAL GROUP, ORACLE,
                                BUY                       04/09/2012
                                                                                     PRICELINE.COM INC, QUALCOMM, SCHLUMBERGER, TOYOTA MO-
                                BUY                       29/06/2012
                                                                                     TOR). Credit Suisse holds a trading position in the subject issuer (BMW,
                                BUY                       17/08/2011                 BRIDGESTONE, CHEVRON, GOOGLE, HOME DEPOT, HONDA MO-
     SUMITOMO MITSUI FINAN- BUY                           04/01/2013                 TOR, INFINEON TECHNOLOGIES, INTEL, LENOVO, MICROSOFT, MIT-
     CIAL GROUP (8316 JP)                                                            SUBISHI UFJ FINANCIAL GROUP, MIZUHO FINANCIAL GROUP, OR-
                                BUY                       21/02/2012                 ACLE, PARTNERS GROUP HOLDING, PRICELINE.COM INC, QUAL-
                                BUY                       16/11/2011                 COMM, SAMSUNG ELECTRONICS, SBERBANK, SCHLUMBERGER,
     TOYOTA MOTOR (7203         BUY                       14/01/2013                 SOFTBANK, SUMITOMO MITSUI FINANCIAL GROUP, TOYOTA MO-
     JP)                                                                             TOR, TSMC). As at the end of the preceding month, Credit Suisse benefi-
                                BUY                       06/11/2012                 cially owned 1% or more of a class of common equity securities of (PART-
                                BUY                       07/08/2012                 NERS GROUP HOLDING).
                                BUY                       10/05/2012
                                BUY                       13/02/2012                 Additional disclosures for the following jurisdictions
                                BUY                       06/12/2011
                                                                                     United Kingdom: For fixed income disclosure information for clients of
     TSMC (2330 TT)             BUY                       18/01/2013
                                                                                     Credit Suisse (UK) Limited and Credit Suisse Securities (Europe) Limited,
                                HOLD                      26/10/2012
                                                                                     please call +41 44 333 33 99.
                                HOLD                      20/07/2012                 For further information, including disclosures with respect to any other is-
                                BUY                       09/05/2012                 suers, please refer to the Credit Suisse Global Research Disclosure site
                                HOLD                      03/02/2012                 at:
                                BUY                       19/01/2012       

     The subject issuer (BMW, CHEVRON, GOOGLE, HOME DEPOT,                           Guide to analysis
     CIAL      GROUP,      ORACLE,        PARTNERS         GROUP       HOLDING,      Equity rating allocation as of (29/01/2013)
     SCHLUMBERGER, SUMITOMO MITSUI FINANCIAL GROUP, TOYOTA                                                                                  Investment banking
     MOTOR) currently is, or was during the 12-month period preceding the                                                      Overall            interests only
     date of distribution of this report, a client of Credit Suisse. Credit Suisse   BUY                                      40.26 %                   41.32 %
     provided investment banking services to the subject company (BMW,               HOLD                                     49.76 %                    48.5 %
     CHEVRON, GOOGLE, HOME DEPOT, HONDA MOTOR, INFINEON                              SELL                                      7.57 %                    7.58 %
                                                                                     RESTRICTED                                2.42 %                    2.59 %
     TRONICS, SBERBANK, SCHLUMBERGER, SUMITOMO MITSUI FINAN-                         Relative stock performance
     CIAL GROUP, TOYOTA MOTOR) within the past 12 months. Credit
                                                                                     At the stock level, the selection takes into account the relative attractive-
     Suisse provided non-investment banking services, which may include
                                                                                     ness of individual shares versus the sector, market position, growth pro-
     Sales and Trading services, to the subject issuer (BMW, HOME DEPOT,
                                                                                     spects, balance-sheet structure and valuation. The sector and country re-
                                                                                     commendations are "overweight," "neutral", and "underweight" and are as-
     months. Credit Suisse has managed or co-managed a public offering of
                                                                                     signed according to relative performance against the respective regional
     securities for the subject issuer (BMW, GOOGLE, HOME DEPOT,
                                                                                     and global benchmark indices.
22                                                                                                                       29/01/2013      Credit Suisse - Research Monthly

     Absolute stock performance                                                             fault variables may also be adjusted to produce alternative warranted
                                                                                            prices, any of which could occur. Additional information about the Credit
     The stock recommendations are BUY, HOLD and SELL and are depend-
                                                                                            Suisse HOLT methodology is available on request.
     ent on the expected absolute performance of the individual stocks, gener-
                                                                                            CFROI(r), CFROE, HOLT, HOLTfolio, HOLTSelect, HS60, HS40, Value-
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                                                                                            or registered trademarks of Credit Suisse or its affiliates in the United
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     BUY                                       10% or greater increase in absolute          ation advisory service of Credit Suisse.
                                               share price
     HOLD                                      variation between -10% and +10% in
                                               absolute share price                         For technical research
     SELL                                      10% or more decrease in absolute             Where recommendation tables are mentioned in the report, "Close" is the
                                               share price                                  latest closing price quoted on the exchange. "MT" denotes the rating for
     RESTRICTED                                In certain circumstances, internal and ex-   the medium-term trend (3-6 months outlook). "ST" denotes the short-term
                                               ternal regulations exclude certain types     trend (3-6 weeks outlook). The ratings are "+" for a positive outlook (price
                                               of communications, including e.g. an in-
                                                                                            likely to rise), "0" for neutral (no big price changes expected) and "-" for a
                                               vestment recommendation during the
                                                                                            negative outlook (price likely to fall). Outperform in the column "Rel perf"
                                               course of Credit Suisse engagement in
                                               an investment banking transaction.           denotes the expected performance of the stocks relative to the bench-
     TERMINATED                                Research coverage has been concluded.
                                                                                            mark. The "Comment" column includes the latest advice from the analyst.
                                                                                            In the column "Recom" the date is listed when the stock was recommen-
                                                                                            ded for purchase (opening purchase). "P&L" gives the profit or loss that
     Absolute bond performance                                                              has accrued since the purchase recommendation was given.
                                                                                            For a short introduction to technical analysis, please refer to Technical Ana-
     The bond recommendations are based fundamentally on forecasts for total
                                                                                            lysis Explained at:
     returns versus the respective benchmark on a 3-6 month horizon and are
     defined as follows:

     BUY                                       Expectation that the bond issue will out-
                                                                                            Global disclaimer / important information
                                               perform its specified benchmark
     HOLD                                      Expectation that the bond issue will per-    For a discussion of the risks of investing in the securities mentioned in this
                                               form in line with the specified bench-       report, please refer to the following Internet link:
     SELL                                      Expectation that the bond issue will un-
                                               derperform its specified benchmark
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     RESTRICTED                                In certain circumstances, internal and ex-
                                               ternal regulations exclude certain types
                                                                                            ates. For more information on our structure, please use the following link:
                                               of communications, including e.g. an in-
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                                               course of Credit Suisse engagement in        The information and opinions expressed in this report were produced by
                                               an investment banking transaction.           the Global Research department of the Private Banking division at Credit
                                                                                            Suisse as of the date of writing and are subject to change without notice.
                                                                                            Views expressed in respect of a particular security in this report may be dif-
     Credit Suisse HOLT
                                                                                            ferent from, or inconsistent with, the observations and views of the Credit
     With respect to the analysis in this report based on the HOLT(tm) method-              Suisse Research department of Investment Banking division due to the dif-
     ology, Credit Suisse certifies that (1) the views expressed in this report ac-         ferences in evaluation criteria. This report is not directed to, or intended
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     etary quantitative algorithms and warranted value calculations, collectively           subsidiaries or its affiliates (“CS”) to any registration or licensing require-
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     derlying economics of firm performance. These adjustments provide con-
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     third-party data are updated, the warranted price may also change. The de-
                                                                                            CS believes the information and opinions in the Disclosure Appendix of
                                                                                            this report are accurate and complete. Information and opinions presented
                                                                                            in the other sections of the report were obtained or derived from sources
                                                                                            CS believes are reliable, but CS makes no representations as to their ac-
                                                                                            curacy or completeness. Additional information is available upon request.
                                                                                            CS accepts no liability for loss arising from the use of the material presen-
23                                                                                                                   29/01/2013       Credit Suisse - Research Monthly

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24                                                                                                     29/01/2013    Credit Suisse - Research Monthly

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